Just desserts? Social security and ‘deservingness’

Who ‘deserves’ income  support and why? An important new study on the social legitimacy of benefits sheds light on why some groups and some benefits are more favoured than others. This helps explain why the Newstart Allowance is $160pw less than the pension, why there are periodic ‘moral panics’ over the so-called ‘rorting’ of the DSP, and why people are concerned when millionaires receive Age Pensions. It also helps inform the design of social security payments.

It’s well known in Australia that some social security payments receive more support from policy makers and the public than others. For example, people receiving Age Pensions attract more support and respect than those relying on Newstart Allowance. Also, some groups of recipients (such as older unemployed people) are looked upon more favourably than others (such as younger unemployed people).

A new working paper from Wim van Oorschot and Femke Roosma from the University of Antwerp called ‘The social legitimacy of differently targeted benefits‘ explains why. It provides a useful framework for predicting which benefits and groups who attract the most (least) support. These issues are always at the back of the minds of social security officials as they design and reform benefits, and front of mind among politicians and the media. It’s time we understood them better.

Who is ‘deserving’

The paper begins by gathering the research evidence on public support for different social security payments and social groups in Europe and the USA (but the arguments are very relevant to Australia). It starts with common stereotypes about groups considered ‘undeserving’ of benefits: the ‘undeserving poor’, ‘lazy unemployed’, ‘black welfare queens’ (in the US), and migrants (especially in Europe). It then divides social security payments into those deemed more legitimate (pensions for retired people, payments that extend universally, payments for people with disabilities) and those deemed less so (payments for unemployed people, payments for single parents – especially in the US, and heavily means-tested payments).

All familiar stuff! It gets more interesting when they look at the history of European benefits. In virtually all wealthy nations, including Australia, the first social security payments were the ones that are still regarded as the most legitimate today:

‘from the end of the 19th century onwards first the schemes for the commonly most deserving categories of old, sick and disabled people were introduced, than family benefits and unemployment compensation, and lastly (if at all) social assistance for the least deserving category of poor people.’

Another revelation – religion played a role:

“social assistance arrangements in the Catholic European countries differ from those in Calvinistic countries based on different perceptions of the poor: in the Catholic perspective the poor are more seen in a traditional Christian way as a pitiful and deserving group of ‘children of God’, while in the Calvinistic perspective poverty is associated with the laziness and immorality of an irresponsible and therefore undeserving ‘underclass’.”

How benefit systems strengthen (and weaken) their own legitimacy

What they’re saying is that notions of deservingness were inscribed into the structure of social security payments from the beginning, and remain with us today. In Australia, the original Age Pension legislation required recipients to be ‘of good character and deserving of a pension’ . In the US, pensions for retired people are called ‘social security’ while payments for low-income sole parents are called ‘welfare’. The implication is that benefit categories can reinforce the stereotyping and stigma faced by many recipients.

Most wealthy countries have social insurance benefits where employees, employers and governments contribute jointly to social security funds to cover social risks such as old age, disability and unemployment. These contributions lend legitimacy to payments, since the recipients at one stage contributed to their cost – in accord with the principle of ‘reciprocity‘.

The trouble with these systems is that they are costly (since payments are often based on previous wages and are usually not means tested) and people unfortunate enough to lack a recent employment history (such as many unemployed young people, recently separated sole parents, and people with disabilities)  miss out.

Almost uniquely, Australian social security payments are funded out of general public revenue. That means they are less legitimate in the eyes of many, but the system is more cost efficient in preventing poverty, and (in theory) noone in financial need is left out.

Yet the Australian system still classifies people according to a well-known hierarchy of deservingness:

  • At the top are ‘pensions’ for older people, people with disabilities and caring roles which mean that people (supposedly) can’t undertake paid work.
  • In the middle are family payments, traditionally paid regardless of the employment status of the parent.
  • At the bottom are ‘allowance’ payments (formerly called ‘benefits’) for people who are deemed ‘able to work’.

Pensions are about $160 a week higher than allowances, despite the fact that financial disadvantage is more common among people on the lower allowance payments.

See the logic? Pensioners have a good ‘excuse’ for not supporting themselves financially through paid work. They are too old, or have disabilities or are caring for someone. Unemployed people don’t have a good excuse. This is the ‘control principle‘: payments attract less support the more we assume that recipients have control over their circumstances. It explains the ‘moral panic’ over the so-called ‘rorting’ of disability pensions by people who have less visible or easily classified conditions such as a mental illness or back pain. If they’re ‘able to work’, they don’t deserve a pension.

On the other hand, a recurring theme in Australian social security debate is our anxiety over ‘middle class welfare’. We have grown so used to having the most tightly targeted (means tested) social security system in the OECD that extending payments to people deemed well-enough off to look after themselves is frowned upon. Hence our concern about millionaires claiming Age pensions and families on $150,000 a year or more receiving family payments. This is the ‘need‘ principle.

Five tests of ‘deservingness’

In all, the paper identifies five dimensions of ‘deservingness’ that have an impact on social security policy (shown below): need, control, identity, attitude, and reciprocity.

deservingnessThis is of more than academic interest. If deservingness is inscribed into the payment structure as the diagram below suggests, then the benefit system itself may be reproducing and magnifying common stereotypes. Policy makers and the media quickly work out which payments are for ‘bludgers’ or the ‘undeserving or ungrateful poor’ and set out to make reliance on those payments ‘nasty, brutish and short’.

deservingness model

The pension – allowance divide

The historic distinction in Australia between pensions and allowances is based on deservingness. The idea behind this payment hierarchy is that people who ‘can’t work’ can be ‘looked after’ without encouraging long term reliance on benefits among those who can. The McClure Report’s proposal to introduce an intermediate stream of payments for people who ‘cant’ work right now but could with some help, including people with partial work capacity and parents caring for a school-age child, is a refinement of this idea.

Of course, policy makers claim economic and fiscal benefits for the present benefit hierarchy: that keeping payments low for unemployed people improves work incentives and reduces social security spending. The main problem with proposals for a universal ‘basic income’ that’s paid regardless of work capacity or job search effort is that people might not be encouraged to do what they can to support themselves.

As I explained in a previous blog, there are several problems with the pension-allowance hierarchy. An obvious one is that it undermines a core principle of our social security system that payment levels should be based on financial need.

Another serious challenge to the present payment structure has emerged in the last two decades. ‘Employment participation’ or ‘activation’ policies call into question the very basis on which people are classified into pension and allowances. Put simply, we no longer assume that people with disabilities, and parents of young children ‘can’t work’ (paid work, that is). Public policies over the last two decades have tried to remove barriers to employment for people who were previously excluded. This is a good thing.

Activation policies – requiring and supporting people on income support make the transition to employment – are  a better solution to the so-called ‘free rider’ problem in social security than imposing poverty upon people. People who have at least some employment capacity can be helped through training, job placements, and other support to find stable employment. In return, it’s reasonable to expect that they take up those opportunities.

Trouble is, the pension-allowance distinction throws up hurdles to activation. If you have a disability and receive the DSP you stand to lose $160 a week once assessed as ‘able to work’ and transferred to Newstart Allowance. Activation strategies require governments to keep moving the goalposts between the two systems as more groups are ‘activated’. Sounds fine in theory but until the labour market adjusts to employing people with disabilities, these ‘welfare to work’ policies have left around 100,000 people on lower benefits with no improvement in their job prospects. The same goes for the 100,000 or sole sole parents shifted onto Newstart a few years ago, many of whom struggle to find paid work that is secure (not casual) and fits in with their caring responsibilities. Meanwhile they and their children have to live on a payment that’s at least $60 a week less than they would receive on the former ‘pension’ for single parents (now called Parenting Payment).

There’s another flaw in the system: two thirds of people on the lower Newstart Allowance are long-term unemployed. They have received this very low payment for more than a year. Not all of them have a disability or caring responsibilities. Many are simply the wrong age, have the wrong skills, or live in the wrong place to secure a job. And when the labour market is as ‘slack’ as it is now, even young, highly skilled workers face a high risk of prolonged unemployment.

Here’s where the categorical system falls down. We can’t invent a payment category to deal with every ‘legitimate’ reason that a person relies on income support for a long time. Nor can we accurately predict in advance which groups are most likely to do so. As activation policies are extended to more people who previously received pensions, the population on Newstart Allowance starts to look more and more like yesterday’s pensioners.

The explanatory power of ‘deservingness’

What policy insights can we glean from the research on perceptions of legitimacy of social security payments?  It’s easy enough the say the present system’s unfair but the reality is that these perceptions of legitimacy drive much of the social security policy we’ve seen in recent years. Social security policy is shaped by stereotypes as much as rigorous analysis and research. These stereotypes are based on anecdotes, gossip, and often the family backgrounds and experiences of key Ministers. This wouldn’t be accepted in economic policy, but it’s par for the course in social policy and has been so for many years.

Why else has it proved so hard to raise the level of Newstart Allowance when every expert knows it’s way too low to meet basic living costs? Why did the previous Labor government review and increase pensions but not allowances? Why did the present Coalition government propose in last year’s Budget to remove income support altogether from young unemployed people for six months of every year? The answers are to be found in studies like this one rather than dry economic debates about the perennial trade-off between adequacy and work incentives (important as these are). Behind every work incentive argument lies a shadow debate over deservingness.

The paper cites research suggesting that perceptions of the legitimacy of benefits are deeply rooted in human psychology:

“in pre-historical, small-scaled societies we developed the skills to detect reciprocators who contribute to food sharing, and cheaters who violated the rules of cooperation by taking advantage of the collective gains. Dealing with these reciprocators and cheaters is assumed to have structured cognitive categories and created judgmental shortcuts, called ‘deservingness heuristics’ .Today we still apply these heuristics, which allows us to make more or less instant judgements about deservingness, also in relation to deservingness of social benefits. In these deservingness heuristics emotions play an important role.”

This doesn’t mean that social security policy is destined to be dominated by shock jocks and TV current affairs producers. The paper offers a way out:

‘deservingness heuristics can be ‘learned’ in the sense that being exposed to a certain ideology, culture of institutional setting leads to the development of certain deservingness logics.’

Tips for social security reform

The question this raises for social security policy – and it’s a topical one now that the Government is considering the proposals in the McClure Report – is ‘how can the benefit system be re-designed to improve fairness and workforce participation while at the same time reduce stereotyping and restore legitimacy?’ The stereotypes will always be there, but the social security system need not reinforce them in the way it does now.

Here are some suggestions:

1. Continue with the ‘activation’ strategy and strengthen it by investing in better employment assistance and training for people who have a longer road to travel to reach employment.

Activation is consistent with the ‘reciprocity principle‘: if it is implemented in a balanced and not harsh way it should strengthen the legitimacy of payments for unemployed people. It’s also a better way to maintain work incentives than keeping benefits too low to live on.

2. Remove the distinction between pensions and allowances for people of working age.

The base rate of payment for everyone of working age in need of income support should be the same. Additional costs faced by, for example, people with disabilities and sole parents, can be met using supplements that target those costs. This is consistent with the ‘need‘ principle.
It removes the ‘beauty contest’ over which groups ‘deserve’ a higher (or lower) level of payment. It also means that people can be ‘activated’ without bumping them down to a lower payment.

3. Retain population based categories to help determine what, if any, activity requirements should apply.

One potential problem with a standard base rate of payments from a legitimacy point of view is that the whole population of income support recipients might come to be viewed as ‘undeservedly poor’ (as are recipients of Municipal ‘welfare’ payments in many parts of Europe). Factors such as disabilities and caring roles do affect people’s ability to secure employment and this should be publicly acknowledged and taken into account. One way to do so is to retain payment categories such as disability, parenting and caring, and use them to decide what activity requirements (if any) should apply rather than levels of payment.

4. Keep family payments separate from income support payments for adults.

The purpose of family payments is to help parents with the costs of children. This purpose has more social legitimacy than income support for adults of working age, who might be able to support themselves (the ‘control’ principle). If blame is being apportioned for unemployment, children share no part of it.

Social security policy-makers of the 1980s and 90s  were wise to separate family payments from income support, if only for this reason. Another strength of the family payment system is that it extends more broadly than a ‘welfare’ payment, to middle income families. This is widely accepted – provided they don’t extend to high-income families – since this is how the tax-transfer system takes account of the costs of children.

Extending family payments to middle income families also forges a bond between low and middle income families, consistent with the ‘identity‘ principle.

5. Be careful with language.
Call them social security payments, not ‘welfare’.

It’s time to end ‘welfare as we know it.’

5 thoughts on “Just desserts? Social security and ‘deservingness’

  1. Pingback: Just desserts? Social security and ‘deservingness’ | The Power To Persuade

  2. As someone with a background in social work and social policy over the last 40 years, and therefore considerably older than you, I take issue with a couple of the points you raise in the first section of this article and so far continuing throughout the article. (I have not quite finished it when writing this reply)
    First, you seem to take it as a ‘given’ that some rates are higher than others, and why this might now be the case, when the historical fact in Australia is that all ‘base rates’ of all types of payments were once the same. This was not in ancient history, but was in the 1970s as well as before that.
    The base rate remained the same, for all categories of payment, pension or benefit, until the Fraser government in 1975 decided to use the ‘dole bludger’ myth, perpetuated by them, as an excuse to remove the indexed status of unemployment benefit. Sickness benefit, for a time, was kept at the same level as pensions. For many decades, the married rates of both were identical.
    Throughout the Menzies period, when there was virtually zero inflation, indexation increases had not been necessary.
    In the 1970s and 80s, inflation had begun to severely reduce the value of some payments, notably the child allowances which were added to pensions or benefits, as well as some other allowances, such as Rent Assistance.
    This was in large part rectified under Bob Hawke’s social security review and his child poverty promise in the late 1980s.
    Payments for children, whether their parents were pensioners, beneficiaries or in the low-paid workforce (receiving what was then called Family Income Supplement), were approximately doubled, and an indexation formula to maintain their value over time was put in place.
    This was also done for pensions, but unfortunately not for benefits. For benefits, there were periodic ‘catch-up’ increases, usually announced on Budget night.
    As far as I am aware, the last of these increases was in 1994 under Paul Keating.
    So it is now 21 years since benefits, now called allowances, have been increased in the same way as pensions. In 1994, they were about the same rate.
    There was never any argument that called for different base rates of payment – indeed, the whole idea is ludicrous. A pensioner couple raising a grandchild has exactly the same income requirement as a beneficiary couple raising a child.
    It may be convenient to look at categories and the relative deservingness of them, but historically this definitely was not the case.
    During the Social Security Review of 1986 to 1989 (approximately), various principles and objectives were defined to underpin any changes that would result from the Review:
    These were:
    1. Adequacy of payments
    2. Equity across payment categories, in particular Horizontal Equity and Vertical Equity
    3. Intra-Family Equity
    4. Reducing Workforce Disincentives created by income tests.
    Research measuring the costs of children was considered and discussed. Sole parent families were treated with respect (rather than judgement) and their needs and those of their children were at least seen as equal to the needs of two-parent families.
    Bob Hawke’s government, like that of Whitlam, recognised the need to support all members of the community. Sole parents were not treated with discrimination as they are now.
    At all times, the objectives of Adequacy and Equity remained paramount.
    I worry when I read an article like yours which seems to confuse the present system with what was historically the case, and, indeed what is the logical approach to defining income support needs.
    There is only one reason our present Newstart Allowance is so low: lack of appropriate indexation. Our payments for people on ‘the dole’ are the lowest in the developed world, and one of the three lowest in the OECD. We need to improve this. We live in Australia, not South Korea (one of the few lower than Australia).
    The base rate of allowances, both the married rate and the single rate, should be equal to the base rate of pensions. The child allowance, family allowance supplement, now called the Family Tax Benefit, also needs this protection to be retained, not ‘frozen’ as proposed by the present government.
    Poverty rates in Australia, child poverty rates, as well as child homelessness rates, are currently increasing to unacceptable levels in Australia. This is simply caused by non-indexation.
    Some of us are still fighting against this.
    The deserving poor and the undeserving poor were categories used under British Poor Laws in the 1800s. They are no longer appropriate in the 21st Century.
    Susan J Barclay
    Member, Australian Unemployment Union, Fair Go For Pensioners, Council of Single Mothers and their Children, United Sole Parents and Anti-Poverty Network.


    • Thanks Susan,
      To begin with it’s heartening to think I still look young enough not to have experienced the swings and roundabouts of social security policy since pension and allowance rates were aligned by the Whitlam Government. Sadly, that’s not true!
      It’s a matter of much deeper concern that we have to go all the way back to the Hawke Government, which made a commitment as part of the Prices and Incomes Accord to equalise these payments, to find a serious commitment to that goal. It would have been achieved if the Howard Government’s ‘Simpler System’ reforms were implemented in the early 2000s but that government baulked at paying for the reform, and instead shifted the goalposts between pensions and allowances, and many people with disabilities and sole parents onto lower payments, in the 2006 ‘Welfare to Work’ policy. When the Rudd Government was elected it made matters worse by increasing pensions but not allowance payments. In the process, the Parenting Payment Single payment for sole parents ‘lost’ its pension status and was excluded from the rise.

      It’s true that many of the inequities in our social security system are a direct result of failures of indexation (and the sordid history of how the payments gaps emerged and became entrenched is detailed in one of the references I’ve used: ACOSS’s 2012 submission on the (in)adequacy of Allowance payments, at: )
      But as you know governments didn’t simply ‘forget’ to index payments properly and consistently. The Rudd Government didn’t ‘forget’ to include allowances or Parenting Payment Single in its 2009 ‘Pension Review’.

      When pressured, Governments and officials have at times come up with formal justifications for the pension-allowance payment divide. The Henry Report and McClure Report#2 were recent examples. They used such arguments as the ‘reduced work capacity’ of people with disabilities, carers and parents; the need for stronger work incentives for those with the greatest ‘capacity to work’, and the greater financial need of people with less ‘capacity’ because they would need to rely on income support for longer (even though 70% of people on Newstart Allowance have received income support for more than a year).

      I don’t believe any of these was the main reason for the growing gaps between these payments. And as you point out, all of them can be refuted. People’s financial needs do not vary simply because they receive different payments, and the single Newstart rate is about half the minimum wage so the work incentive arguments are vastly over-cooked. All of these arguments have been made, including by ACOSS in the above report.

      The purpose of the blog was not to review them, rather to explore the reasons these arguments have not borne fruit. I believe that notions of ‘deservedness’ have played a big role here so it’s worth exploring where those arguments come from and how they work. The ‘Poor Law’ mentality is still with us!

      On one point I do disagree with you: the ‘pension’ and ‘benefit/allowance’ categories were from the beginning based on notions of ‘ability to work’ and hence deservedness. The word was actually used in the first pension legislation. People ‘deserved’ a higher payment because they were no longer ‘able to work’. Rates of payment were aligned under Whitlam but that didn’t last long.

      If that’s right then we need to confront the possibility that nothing short of the removal of the pension-allowance distinction (as was proposed in the Simpler System model) and its replacement with a common needs-based rate of payment (otherwise called a basic income) will restore equity between payments. This would have to be done without ‘levelling down’ and without losing the important distinctions between groups of social security recipients that determine the activity requirements (if any) that should apply. For example, these requirements should still depend on the age of a ‘qualifying child’.

      Activity requirements should depend on people’s distance from paid employment; payment rates should depend on their financial needs. The old pension-allowance divide confuses the two, due in large part to misplaced notions of ‘deservedness’.

      Liked by 1 person

      • Hi Peter,

        Thanks very much for your long and considered reply to my comment!

        Having now read all of your blog of 24.6.2015, as well as your reply to my comment, I agree that I have not done much clear-headed research about the pre-Whitlam era and how much notions of deserving or undeserving poor came into play when income support systems and payments were first introduced in Australia, nor how they changed over time in the decades before the 1970s.

        From the perspective of a sole parent, entitlement to a pension was the basis of the formation of the Council of Single Mothers and their Children (CSMC) in Victoria in the 1960s, and their lobbying to extend the existing Widow’s Pension to all sole parents regardless of their marital status.
        I have been fortunate to have had some of the ‘founding mothers’ of CSMC as my mentors (and now friends) in the 1980s.

        The pension/benefit (or allowance) distinction was a major issue and sole parents and their children were at that time not seen as marginal or undeserving in public policy as they are now. Most people understood that sole parents needed a secure income, a pension.

        Indeed, I well remember that there used to be a pension supplement called the Guardian’s Allowance, which was intended to supplement the single rate of pension in recognition of the higher costs faced by a one-parent family, compared with a single person without children. There was also a Sole Parent Tax Rebate for many years.

        I agree absolutely that children, and their needs, should be seen as separate from the situations of their parents. I have heard Joseph Stiglitz talk about this as well. It is very difficult to say that children should be blamed for their poverty.

        Yet this is what we are seeing right now. Adult poverty rates are about 14%, or one in seven, while child poverty rates are around 18%, or one in six. [ACOSS 2014] Child homelessness rates (children under 12) were quoted as around 18,000 in 2011.


        Yet it is children who suffer the consequences the most, which is why we are still fighting for restoration of pension entitlements for one-parent families.

        The damage done to families and children who live in those families since the 2006 euphemistically called “welfare to work” attacks is still being lived by those children on a daily basis.

        If children cannot go to school because their parent(s) cannot afford books, transport or food, the long-term consequences of this will affect generations to come.

        When evictions from private rental accommodation cause child homelessness, it is difficult to see how anyone can close their eyes to the multiple factors which lead to this. Many of these are structural (like Howard’s halving of the Capital Gains Tax, for example).

        Child poverty and homelessness is blighting Australia’s future.

        I am at least grateful that the rest of the world is seeing the consequences of inequality, and the OECD’s Conference this year raised the issue of poverty and inequality as central. I saw one of the introductory sessions, with Secretary General Angel Gurria speaking, as well as Thomas Piketty and Joseph Stiglitz.

        Thank you very much again for writing your article (blog), which raises these issues with clarity. We need this in our society where the Murdoch and even the Fairfax media is not even worth reading.

        I have not yet had time to read all of your other blogs on related topics, but will do so over the coming months. I came across this one as it was shared on Facebook.

        Susan Jennifer Barclay
        (aka Susan Holah – I may have inadvertently set up my own blog page in trying to post my reply. I will sort that out later)


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