Is long-term benefit dependence increasing?

Authors: Pelin Akyol and Matt Nolan

The number of unemployment benefit recipients who remained on the unemployment benefit long-term (for two or more years) has climbed from 150,000 to nearly half a million between 2006 and early 2023. Does such a steep rise reflect a growing culture of benefit dependency in Australia? We find that it does not.

  • Most of the increase in long-term JobSeeker Payment (JSP) receipt can be explained by policy changes – with individuals being shifted from, or deemed ineligible for, other benefit payments. This has made the JSP a ’catch all’ payment for many people who would have previously received support with less strict work testing.
  • Accounting for these policy changes, we find that long-term benefit receipt rates are historically low – even as long-term unemployment has risen. Furthermore, individuals have been leaving the benefit system more quickly in recent years.