Understanding welfare and wellbeing
Australian Institute of Health and Welfare (2023) Understanding welfare and wellbeing, AIHW, Australian Government, accessed 11 December 2023.
Australian Institute of Health and Welfare. (2023). Understanding welfare and wellbeing. Retrieved from https://www.aihw.gov.au/reports/australias-welfare/understanding-welfare-and-wellbeing
Understanding welfare and wellbeing. Australian Institute of Health and Welfare, 07 September 2023, https://www.aihw.gov.au/reports/australias-welfare/understanding-welfare-and-wellbeing
Australian Institute of Health and Welfare. Understanding welfare and wellbeing [Internet]. Canberra: Australian Institute of Health and Welfare, 2023 [cited 2023 Dec. 11]. Available from: https://www.aihw.gov.au/reports/australias-welfare/understanding-welfare-and-wellbeing
Australian Institute of Health and Welfare (AIHW) 2023, Understanding welfare and wellbeing, viewed 11 December 2023, https://www.aihw.gov.au/reports/australias-welfare/understanding-welfare-and-wellbeing
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The terms welfare and wellbeing are often used interchangeably. In the broadest sense, welfare refers to the wellbeing of individuals, families and the community. Wellbeing can be considered as ‘a positive state experienced by individuals and societies. Similar to health, it is a resource for daily life and is determined by social, economic and environmental conditions’ (WHO 2021).
Welfare is understood by some people to mean wellbeing, while others see welfare as primarily government-funded income support payments and welfare services. However, support and services in many areas of life aid welfare in the broader sense and are critical to the wellbeing of an individual and their family. Wellbeing can influence, and be influenced by, a person’s interaction with services and formal and informal supports.
A person’s wellbeing can be influenced by environmental, social and economic factors at the individual, family and community level, and each person’s unique circumstances and experiences contributes to their wellbeing. Wellbeing is multidimensional, covering aspects of life including housing, income, work and job quality, health, knowledge and skills, civic engagement, social connections, safety and work-life-balance (OECD 2020). Analysis of data from the Household, Income and Labour Dynamics in Australia Survey showed social relationships and connectedness are positively associated with subjective wellbeing, as measured by self-reported life satisfaction (AIHW 2021). The analysis showed other factors also play an important role for better life satisfaction – such as employment (unemployed people reported notably lower life satisfaction than employed people) and mental health (which, on average had a greater impact on life satisfaction than physical health) (AIHW 2021).
Health, welfare and wellbeing are strongly interrelated. The World Health Organization (WHO) defines health as ‘a state of complete physical, mental and social wellbeing and not merely the absence of disease or infirmity’ (WHO 1946), recognising that a person’s health status is linked to their wellbeing. See Health and welfare links.
Not only is current wellbeing and day-to-day factors affecting it important, so too are the resources that support future wellbeing such as natural, economic and social capital (OECD 2020).
Wellbeing and COVID-19
From early-2020 onwards, a range of public health interventions were put in place to help contain the spread of COVID-19. These included border controls; closure of non-essential businesses; work-from-home orders; school closures; density limits within businesses and workplaces; stay-at-home orders; mandated mask use; and test, trace, isolation and quarantine measures. Governments and public health officials aimed to balance the benefits from these interventions in reducing harm from the infectious disease, with the potential harm caused by the interventions themselves.
The indirect impacts of the pandemic and associated interventions extend to social, economic and environment factors, and include adverse effects on education, employment, housing, social connections and income (AIHW 2022). For example, according to the 2021 Families in Australia Survey, almost 1 in 5 (19%) respondents aged 20–21 reported needing more financial help from family during the early stage of the pandemic in 2020 – compared with 1 in 10 (9%) 16–17-year-olds (Baxter and Carroll 2022). Some interventions were minimally disruptive to individuals and society. Others have unintended harms – in particular, stay-at-home orders (‘lockdowns’). For this reason, it is difficult to assess the impact of COVID-19 on wellbeing. For example, while lockdowns had an adverse impact on factors like loneliness, if lockdown measures were not introduced, mortality rates may have been higher.
It is useful to look at wellbeing-related measures like loneliness, life satisfaction and psychological distress; to see how they changed during the course of the pandemic and how these levels compare with pre-pandemic levels. For example, average life satisfaction scores and average levels of psychological distress worsened during the pandemic:
- Life satisfaction fluctuated considerably over the COVID-19 period. In August 2023, life satisfaction among Australian’s was higher (average of 6.6 on a scale of 0 to 10) compared with the lowest points during the pandemic (April 2020 and August 2021; 6.5). Between January and August 2023 average life satisfaction declined slightly, remaining lower than in late 2020 and prior to the onset of COVID-19 (Biddle 2023; Biddle and Gray 2023a; 2023b).
- Average levels of psychological distress worsened during the pandemic, but then improved; in January 2023, average psychological distress had returned to pre-pandemic levels and was no longer significantly higher than in prior to the onset of the pandemic (Biddle and Gray 2023a). However, in August 2023, the average psychological distress score was again above pre-pandemic levels and similar to the peaks in April and October 2020 when average levels of psychological distress were at their highest (Biddle 2023; Biddle and Gray 2023b).
In April 2023, financial stress was at a higher rate than at any time during the pandemic, with 32% of ANUPoll survey respondents reporting they were finding it difficult or very difficult on their current income; by August 2023, it was 30% (with 10% finding it very difficult to live on their current income) (Biddle 2023; Biddle and Gray 2023b). This was higher than pre-COVID (February 2020 26.7%) and much higher when compared with the lowest proportion during the pandemic period of 17.3% in November 2020 (Biddle and Gray 2023a). For more on wellbeing, life satisfaction and COVID-19, see: ‘Chapter 2 Social isolation, loneliness and wellbeing’ and ‘Chapter 3 Employment and income support following the COVID-19 pandemic’ in Australia’s welfare 2023: data insights.
Welfare support can come from:
- informal assistance from family, friends and the community
- formal assistance from government and non-government organisations.
This section focuses primarily on formal services and support. See also Informal carers.
While the responsibility for funding and managing welfare services and support mainly lies with the Australian Government or state and territory governments, arrangements for delivering welfare services are complex. Government welfare assistance in Australia is a network of government payments and services. A person’s wellbeing can be boosted by the assistance they receive in time of need.
The level of formal welfare assistance a person receives depends on their life stage, level of disadvantage, and the interactions among these factors. Welfare services and supports are designed to assist people from a variety of backgrounds, including new parents needing time off work or help with the costs of raising children, to people leaving their home due to a crisis such as domestic violence, or those living with permanent disability who receive support to aid independence and economic participation (DSS 2022).
A person’s need for assistance can be change over time. People may access welfare services and support temporarily when circumstances and need arise (for instance, emergency temporary accommodation for bushfire affected communities), or longer term (for instance, Age Pension) (see DSS 2023). When an event triggers a change in a person’s life, it is often the point at which that person contacts government support services (Qu et al. 2012).
Government payments aim to support people at different points in their life and those who cannot, or cannot fully, support themselves. This social security system supports these people by providing targeted payments and assistance. This includes working age payments (such as the JobSeeker payment), family assistance (such as Family Tax Benefit), rent assistance and payments for seniors, people with disability, carers and students (DSS 2022). They can be available short or long term, or for a transitional period, and the eligibility requirements and amounts received vary. Payments are available to eligible people at different stages of life.
Age Pension is an example of a major income support payment that helps eligible people with living costs. As at 31 March 2023, around 2.6 million people aged 65 and over received Age Pension, equating to around 58% of the population aged 65 and over (see Income support for older Australians).
Unemployment payments, such as JobSeeker and Youth Allowance (other), also provide income support. They are the main income support payments for working-age Australians (aged over 16 but under the Age Pension qualifying age) who are looking for work or earning under the income and assets threshold. See Employment services, Unemployment payments and Parenting payments.
For more information on government payments, see the Australia’s welfare Employment and income topic summaries.
Tax offsets and concession cards
Tax offsets are available to support a person financially for welfare purposes. For example, a taxpayer may be entitled to claim a tax offset if a close family member receiving a disability support pension or invalidity service pension is a dependent (ATO 2022). The Australian Government can also provide support with tax and super obligations for people experiencing personal crisis – including experiencing family and domestic violence or serious financial hardship (ATO 2021). Governments at all levels, and some non-government organisations, also issue concession and health care cards to eligible Australians for certain discounts (Services Australia 2022).
Welfare services are provided to people and families of widely differing ages and social and economic circumstances. Services aim to encourage participation and independence and can help enhance a person’s wellbeing (DSS 2022). As well as helping people and families directly, services may also indirectly help by, for example, supporting a diverse and harmonious society.
Services respond to need across a person’s life. The need and demand for welfare services are mediated by informal supports and the availability of other services at community or individual levels. For example, programs that help people with disability to maintain their housing tenancy can lead to more secure long-term housing arrangements and greater independence. This lessens the demand for informal and other formal support services.
Examples of welfare services include:
- employment services to help people secure and maintain stable employment
- disability services to help people with disability and their carers participate in society
- aged care services to help elderly people with their living arrangements
- child protection services to assist vulnerable children
- youth justice services to support young people to rehabilitate and reintegrate into the community
- family support services to support with family, domestic and sexual violence circumstances
- homelessness services to provide people who are homeless or at risk of homelessness with support and accommodation
- social housing to provide people with low incomes and housing need with affordable and secure housing.
In many cases, profit or not-for-profit non-government organisations (NGOs) deliver services. These NGOs are predominantly ‘approved providers’, meaning they have been formally authorised, contracted and/or funded by government to provide particular services. Further, service delivery can be shared between NGOs and local governments or state and territory governments.
Good data about welfare and wellbeing are important for understanding how different factors interact and affect a person’s life. Data at the national, community, service and individual level can provide a strong evidence base, help measure progress over time, and enable better policies and decision making for improved outcomes for Australians. For example, understanding how individuals engage with and navigate welfare services can help those responsible for planning, implementing, delivering and evaluating policies and programs.
Certain elements of wellbeing can be particularly difficult to measure (for example, happiness, confidence and fair treatment). Other factors that shape wellbeing tend to be easier to measure. As such, a range of indicators can be used to provide insights on, and track changes in, wellbeing more broadly and at the national level. Some frequently measured wellbeing outcomes include:
- housing status
- labour force participation
- perception of safety in the community
- disposable income and
- community engagement.
A number of frameworks for measuring welfare and wellbeing exist, including:
- The Treasury’s Measuring what matters: Australia’s first wellbeing framework (Treasury 2023)
- the Australian Capital Territory Wellbeing Framework (ACT Government 2020)
- New Zealand Treasury’s Living Standards Framework (New Zealand Treasury 2022)
- Stats NZ’s Indicators Aotearoa framework (Stats NZ 2022)
- the Organisation for Economic Co-operation and Development’s wellbeing framework and biennial How’s Life? report (OECD 2020).
Measuring what matters
In July 2023, the Australian Government released the Measuring what matters statement (Measuring what matters). Measuring what matters ‘is the first iteration of Australia's national wellbeing framework' (Treasury 2023). Its purpose is to help understand how Australia is tracking and give a better foundation for understanding Australia’s economy and society in ways that will support policy making at all levels (Treasury 2023).
Measuring what matters presents a framework tailored to the Australian context for measuring what matters to, and for, Australians. It was informed by extensive research and consultation to reflect what matters to Australians and to identify the best available indicators of Australia’s wellbeing, as outlined in submissions, community meetings and research, and to embed learnings from the experience of international approaches (Treasury 2023). The consultation process informed the framework with 5 wellbeing themes:
- Healthy: A society in which people feel well and are in good physical and mental health, can access services when they need, and have the information they require to take action to improve their health.
- Secure: A society where people live peacefully, feel safe, have financial security and access to housing.
- Sustainable: A society that sustainably uses natural and financial resources, protects and repairs the environment and builds resilience to combat challenges.
- Cohesive: A society that supports connections with family, friends and the community, values diversity, and promotes belonging and culture.
- Prosperous: A society that has a dynamic, strong economy, invests in people’s skills and education, and provides broad opportunities for employment and well-paid, secure jobs (Treasury 2023).
The 5 themes are supported by 50 key indicators, to monitor and track progress, which will be updated over time. The indicators have been selected for having consistent, comparable and reliable data, including logical alignment with available indicators already captured through existing strategies and plans. The indicators are available on an online dashboard which will be updated annually (Treasury 2023).
The Measuring what matters framework will be refined over time with ongoing engagement. For more information, see The Treasury website.
The AIHW has presented statistics about the performance of Australia’s welfare system in Australia’s welfare reports since 1993, and Australia’s welfare reports have included reporting on welfare indicators since 2003, with evolutions to the indicators over time – including the addition of a ‘wellbeing’ domain and indicators in 2017. The AIHW last updated it’s Australia’s welfare indicators in 2021. In light of the development of this national wellbeing framework by The Treasury, Australia’s welfare 2023 does not include an indicator set. Rather, Australia’s welfare 2023 complements Measuring what matters by bringing together statistics and contextual information to present a holistic, contemporary picture of the wellbeing of Australians and of the role of government services.
For more information on income support and welfare services, see the following topics at Australia’s welfare: topic summaries:
- Employment and income
- Social support
- Justice and safety.
ACT (Australian Capital Territory) Government (2020) ACT Wellbeing Framework, ACT Government, accessed 26 June 2023.
AIHW (Australian Institute of Health and Welfare) (2021) Australia’s welfare 2021: data insights, AIHW, Australian Government, accessed 15 March 2023. doi:10.25816/zghn-md15
AIHW (2022) Australia’s health 2022: data insights, AIHW, Australian Government, accessed 21 March 2023. doi:10.25816/ggvz-vr80
ATO (Australian Taxation Office) (2021) Personal crisis support, ATO, Australian Government, accessed 16 May 2023.
ATO (2022) Calculate an invalid and invalid carer tax offset, ATO, Australian Government, accessed 14 March 2023.
Baxter J and Carroll M (2022) Financial support between family members (Research snapshot), Australian Institute of Family Studies, Australian Government, accessed 21 March 2023.
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Biddle N and Gray M (2023a) Taking stock: Wellbeing and political attitudes in Australia at the start of the post-COVID era, January 2023, accessed 31 March 2023.
Biddle N and Gray M (2023b) Hangovers and hard landings: Financial wellbeing and the impact of the COVID-19 and inflationary crises, August 2023, ANU Centre for Social Research and Methods, accessed 29 August 2023.
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