Ruqayyah Snyder
Poverty in Australia is a complex issue that affects a significant portion of the population. While the country has made progress in addressing poverty, particularly among Indigenous communities, various factors contribute to the persistence of this problem. The rising cost of housing, income inequality, unemployment, and insufficient social security payments are key drivers of financial instability and poverty in the country. Australia's poverty line is $489 per week for a single adult and $1027 per week for a couple with two children. Relative income poverty, measured as those earning less than 50% of the median wage, affects approximately 13-14% of Australians, with certain groups, such as Indigenous communities, children, the elderly, and single-parent families, being more vulnerable.
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What You'll Learn
Elderly poverty rate
Australia's poverty rate has wavered between 11.5% and 14.5% from 1999 to 2017. In 2019-2020, 3.3 million people, or 13.4% of the population, were living below the internationally accepted relative poverty threshold of 50% of a country's median income. This figure includes 761,000 children (16.6%) under the age of 15.
The poverty rate among citizens over 66 is more than double the national average at 0.257. This is comparatively high among OECD nations, ranking 4th, and is 8 times the lowest ranking of 0.031 for France, the Netherlands, and Denmark. The rate is more comparable to that of other liberal economies, with the US at 0.229 and the UK at 0.142.
The high elderly poverty rate in Australia is attributed to the country's low pension rates. In 2016, an OECD report found that Australia spends more than 50% less of its GDP on pensions than other OECD countries, with only 3.5% of its GDP going toward pensions. This results in pension payments that are less than the median household income for Australia, with an annual payment for one person of around $22,000. Considering the relatively high cost of living in Australia, this leaves many pensioners in need.
The main factor determining the poverty status of older people is their housing status. 41% of renters aged 65 and over are in poverty, compared with just 10% of all people aged 65 and over. For people aged 65 and older, renting in the private market increases their risk of poverty and homelessness. Additionally, sudden life events such as the death of a partner can cause those without pensions to become homeless.
While Australia does not have an official poverty line, the OECD defines the poverty line as half of the median household income. In Australia, this works out to be $489 per week for a single adult and $1027 per week for a couple with two children.
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Indigenous poverty rates
Poverty in Australia is defined as having a lack of resources or money to fulfil immediate basic needs – such as food, housing, clothing – and for long-term savings or wealth. Relative income poverty is typically measured as the percentage of the population earning less than the median wage of the working population.
Indigenous Australians have faced discrimination, genocide, and marginalization within their own lands since the British colonization of the continent in 1788. The Australian government did not recognize Aboriginal Australians as their own people until 1967, and even after that, they continued to face discrimination and inequality.
Indigenous Australians are the most disadvantaged group in the country across all indicators of poverty, including material and non-material, absolute and relative measures. Income poverty has been the primary method of measuring poverty in Australia, but this approach has been criticized for not adequately capturing the non-material aspects of poverty resulting from racism, oppression, and dispossession.
The overall low income of Indigenous Australians is widely acknowledged, with Aboriginal people earning, on average, half the income of other Australians. The 1986 Census showed that the median and mean Aboriginal individual income was 65% of the total population's income. The national Poverty Inquiry in the early 1970s found that between 22.3% and 58.3% of Aboriginal people in selected cities had a weekly income below the Henderson Poverty Line, compared to 12.5% for the total population.
In 2016, 31% of Aboriginal and Torres Strait Islander Australians lived in households whose income was below the poverty line, using the "50% of the median equivalized disposable household income before housing" poverty line. Nationally, Indigenous poverty rates in Australia declined slowly over the decade from 2006 to 2016, falling from 34% in 2006 to 33% in 2011 and 31% in 2016. However, there is substantial geographical variation, with poverty rates being lowest in urban areas and highest in very remote areas.
The limited completion of secondary education has also been linked to poverty among Indigenous Australians. While the gap is closing, Indigenous peoples were less likely to obtain a Year 12 or equivalent level of education, with 45% achieving this level in 2008, rising to 62% in 2014-2015.
Recent research highlights the growing divergence in Indigenous income, poverty, and inequality between urban and remote areas. While Indigenous incomes are rising in urban areas, they are falling in very remote areas, leading to a growing prevalence of poverty among Indigenous people in remote Australia.
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Poverty and children
According to a 2022 study, 3.3 million people in Australia live below the poverty line, including 761,000 children. This means that one in six Australian children and young people are living in poverty, facing difficulties in fulfilling their basic needs. The OECD defines the poverty line as half the median household income, which in Australia is $489 per week for a single adult and $1027 per week for a couple with two children.
Children in single-parent households are more vulnerable to poverty. One in three single-parent families live below a 50% median poverty line, and the risk of significant and severe poverty is much higher for children in these households. The rising cost of housing and rental costs further exacerbate the situation, making it challenging for families to meet their basic needs.
Poverty has detrimental effects on children's education, wellbeing, health, and future prospects. They may struggle to purchase new clothes, lunches, or school supplies, impacting their ability to fit in and succeed academically. By the age of 15, children in poverty can be up to three years behind their peers in school, and this gap tends to widen as they get older, limiting their opportunities in life.
Breaking the cycle of disadvantage is possible through early intervention and ongoing support. Educational programs can help children in poverty stay engaged in their learning, improve their outcomes, and increase their chances of completing their education. This, in turn, can enhance their options for further education, employment, and pursuing their goals.
Addressing child poverty requires a comprehensive national framework with targets and publicly reported figures to measure progress and evaluate the effectiveness of policies. By tackling child poverty as a national priority, Australia can reduce the educational inequality and negative impacts on children's lives caused by financial disadvantage.
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Poverty and housing
Housing is a significant factor in poverty in Australia. The high cost of housing in Australia can leave people with insufficient money for essentials such as food, transport, and education. The median weekly rent in Australia is $627 a week, an increase of 8.5% since 2023. This is unaffordable for families living under the poverty line, and many face the difficult choice between paying rent or buying food. Over 2 million households in Australia have experienced severe food insecurity in the last 12 months.
In 2019, the Australian Housing and Urban Research Institute reported that the government needed to build at least 200,000 additional homes over the next 10 years to meet the needs of very low-income households. The rising cost of housing is a significant driver of poverty and homelessness in Australia, as it becomes increasingly difficult for families to make ends meet.
In 2019-2020, one-fifth of tenants in private rentals and half of public housing tenants were in poverty. The risk of poverty and homelessness increases for older people who are renting in the private market. For those without pensions, sudden life events such as the death of a partner can cause them to become homeless. Sole-parent families who rely on a single income are also more likely to face disadvantages, especially if the female is the main income earner.
High housing costs can further entrench some groups in poverty, while poor-quality housing can make poverty outcomes worse. Living in inappropriate or inadequate housing can incur additional expenses and further entrench poverty, causing regular episodes of ill-health, frailty, premature ageing, and even preventable deaths.
However, Australia's high homeownership rates and low mortgage rates may be a factor in the relatively low elderly poverty rate. The Australian Bureau of Statistics' 2009-2010 Survey of Income and Housing indicates that 33% of households own their homes without a mortgage, while 36% own a home with a mortgage (21% of all homeowners).
To address housing poverty, Habitat for Humanity partners with low-income Australian families to build simple, decent, and affordable homes. They have built over 140 homes in Australia in 25 years, with a current construction rate of around 10 homes per year.
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Poverty and employment
Australia's poverty rate is difficult to define due to the absence of an official poverty line. However, according to the Australian Council of Social Service (ACOSS), an estimated 3.3 million people or 13.4% of the population were living below the relative poverty threshold in 2019-2020. This included 761,000 children (16.6%) under the age of 15.
When examining the relationship between poverty and employment, it is important to note that unemployment is a key factor contributing to welfare reliance. In 2016, only 46% of Aboriginal and Torres Strait Islander people over 15 years old were employed, with just 27.7% in full-time work. While they represent 3% of the population, they account for a disproportionately high percentage of welfare recipients. Additionally, almost 45% of this demographic over 15 years of age experience disabilities, which can further complicate employment prospects.
For employed households, the poverty rate was 5% for those with a full-time main earner and 19% for those with a part-time main earner. The introduction of COVID income supports reduced poverty by 2.5 percentage points for full-time employed households but only slightly increased it for part-time employed households. This discrepancy may be attributed to ongoing job losses among part-time workers and gaps in support, such as the exclusion of short-term casual staff from the JobKeeper Payment.
Poverty rates also vary across different demographic groups. For instance, older people who rent, sole-parent families, and families with children reliant on part-time earnings are more likely to experience poverty. In particular, children in lone-parent families are more than three times as likely to live in poverty compared to those from couple families. Furthermore, the geographical location plays a role, with poverty rates being lowest in urban areas and higher in very remote regions.
The rising cost of housing is a significant driver of poverty and homelessness in Australia. The median weekly rent increased by 8.5% between 2023 and 2024, reaching $627 per week. This exacerbates financial instability for families living below the poverty line, forcing them to choose between paying rent and buying food. Consequently, over 2 million households in Australia experienced severe food insecurity in the last year, often reducing their food intake or skipping meals entirely.
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Frequently asked questions
According to a 2023 report by the Australian Council of Social Service (ACOSS), 3.3 million people, or 13.4% of the population, were living below the poverty line in 2019-2020. This is a relative poverty threshold of 50% of a country's median income.
The rising cost of housing is a significant driver of poverty in Australia. In 2024, the median weekly rent increased by 8.5% to $627 per week. Other factors include unemployment, social security payments that do not keep pace with the cost of living, and geographical location.
Children under 15 and older people over 65 have generally had the highest poverty rates in Australia. Aboriginal and Torres Strait Islander Australians are also disproportionately affected by poverty, with an estimated 31% living below the poverty line in 2016.
