158,000 people will be put on lower payments (Newstart or Austudy rather than Parenting Payment or Disability Support Pension) after 1 July 2006. This includes 81,000 people with disabilities (who will get $45 a week less) and 77,000 single parents (who will get $30 a week less).

As part of the new 1 July rules, a new compliance and penalty regime will be implemented for people on payments including a maximum eight-week no payment penalty, applied after ‘3 strikes’ (participation failures) or after ‘one strike’ if this is a failure to take a job or a failure to participate in Full Time Work for the Dole.

ACOSS President Lin Hatfield Dodds said: “ACOSS supports the goal of moving more people back into work but we are greatly concerned that lower payments and severe financial penalties are going to create unnecessary hardship.”

ACOSS Director Andrew Johnson said: “With good economic times and a large Budget surplus, it is unfair that disadvantaged Australians will be placed on lower payments and face high effective marginal tax rates. This week a person on $150,000 gets a tax cut of $120 a week while a jobless person with a disability will be on lower payments and face a taper rate which means they lose 60 cents in every dollar they earn.”

Anglicare Australia Executive Director Sue Leppert said: “Welfare-to-work should be about equality of opportunity. But whenpeople who already face so many obstacles to finding and staying in jobs are punished further, where’s the equality? Where’s the opportunity? Workforce participation should encourage just that – and suspending income support payments will only make it harder to participate.”

Australian Federation of Disability Organisations CEO Maryanne Diamond said: “Not only will people get less money each week, they'll also keep less if they work, and will be forced to run down their assets. No-one wants to work for $2.27 an hour, but it’s even worse for people with disability who have higher costs in the workforce because of their disability.”

Australian Federation of Homelessness Organisations Acting Executive Officer Elena Rosenman said: "Left with no income and no support for eight weeks, the Welfare to Work reforms will leave up to 14 000 Australians at imminent risk of homelessness. Already, each day 100,000 Australians are homeless. Each night, only 15 000 of these people find a bed in the homeless service system. Homeless assistance services turnaway 1 in every 2 people requesting support every day - the system simply cannot cope with any additional demand. These 14 000 Australians with no income and no support will have nowhere to go but the streets of our cities and towns."