The Energy Supplement Remains Under Fire

Article published 24 February 2018

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End of Supplement Getting Closer?

The end of the Energy Supplement for many seems to be near, with the Social Services Legislation Amendment (Ending Carbon Tax Compensation) Bill 2017 being considered again in the Senate.

The Senate referred the Bill to the Senate Community Affairs Legislation Committee in June 2017, which recommended that the Bill be passed.

If the Energy Supplement is removed, over two million recipients of income support payments will be affected over the next three years. Although anyone eligible for the Energy Supplement before 20 September 2016 will continue to get the Energy Supplement, new recipients of social security payments will not receive it.

The Energy Supplement cut was first proposed in the 2016 Budget with a commencement date of 20 September 2017. There has not been a new start date proposed for the cut. If it goes ahead, the cut is expected to produce budget savings of $933.4 million from 2016-17 to 2019-20.

The Energy Supplement was introduced in 2013 to compensate social security recipients for the increased cost of electricity due to the carbon tax.

Although the carbon tax has been repealed, the cost of electricity has risen significantly and is still rising. The average Australian’s electricity bill increased by 65 per cent in real terms between 2006 and 2016.

Electricity is not a choice but a necessity. Many low-income households are already forced to compromise on medical treatment and medication, transport, heating and hot water to pay for electricity bills. If the Energy Supplement is removed it will create an additional burden on those already struggling to afford the rising cost of living.

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