Poverty in Australia

Everybody should have enough money or resources for the basic needs of life – enough food for oneself and for one’s family; a roof over one’s head; and resources to cover clothing, education and health expenses.

Poverty is a relative concept used to describe the people in a society that cannot participate in the activities that most people take for granted. While many Australians juggle payments of bills, people living in poverty have to make difficult choices – such as skipping a meal to pay for a child’s textbooks.

Poverty can be defined in different ways. ACOSS and UNSW use two international poverty lines to measure poverty in Australia. These lines are set as a proportion of median income, and define a level of income, below which people are regarded as living in poverty. We use two poverty lines – 50% of median income and 60% of median income, whereby people living below these incomes are regarded as living in poverty.

We also take into account the costs of housing when calculating income – referring to income before or after housing costs are taken into account. We mostly use ‘after housing costs’, because housing is the largest fixed costs for most households. We also refer to this as ‘income minus housing costs’. Those households with lower housing costs are able to afford a higher standard of living than those on the same income with higher housing costs. Find out more about housing cost measures here. 

You can find out more about other ways of measuring poverty in two presentations from our recent dialogue on poverty measurement: Defining and measuring poverty and Towards a multidimensional approach to poverty measurement.

Australia is a signatory to the United Nations’ Sustainable Development Goals. The first of these goals is “No poverty”. However, Australia has the 15^th highest poverty rate out of the 34 wealthiest countries in the OECD – higher than the average for the OECD; higher than the UK, Germany and New Zealand. People living in poverty in Australia often miss out on essentials such as food or a roof over their heads. Children living in poverty often miss out on items such as school excursions.

Our Poverty in Australia 2025: Overview found that there are 3.7 million people (14.2%) living below the poverty line of 50% of median income, including 757,000 children (15.6%). In dollar figures, the poverty line works out to $584 a week for a single adult and $1,226 a week for a couple with 2 children.

The report further found that:

• One one in seven adults and one in six children are living in poverty.
• Many of those affected are living in deep poverty – the average ‘poverty gap’ (the difference between the incomes of people in poverty in various types of families and the poverty line) is $390pw.
• The poverty rate soared to 14.6% in the March quarter of 2020, due to COVID-19 restrictions.
• After the COVID lockdowns, from 2020-21 to 2022-23, poverty increased due to the removal of COVID income supports and large increases in rents. From June 2021 to June 2023, the median advertised rent for units rose from $486 per week to $680 in Sydney (40%), from $395 to $528 in Melbourne (34%), and from $394 to $554 in Brisbane (41%).
• The proportion of all people in poverty rose by 1.8 percentage points from 12.4% (one in eight) in 2020-21 to 14.2% (one in seven) in 2022-23.
• The depth of poverty (average gap between incomes of people in poverty and the poverty line) increased from $372 per week to $390 over the same two-year period.
• Although the real increases in social security payments introduced by the Government in 2023 reduced the gaps between payments and the poverty line, these gaps remain substantial, especially for people on Youth Allowance or JobSeeker Payment.
  ° After the increases in September 2023, maximum Youth Allowance payments for a person living away from the parental home were $279 per week below the poverty line, JobSeeker for a single person was $205 below the line, and JobSeeker and Family Tax Benefits for a couple with two school age children were $299 below the line.
  ° The largest increases in payments were for sole parents with school-age children, which rose by $134 per week in the case of a sole parent family with two children (8-12 years) but were still $163 below the poverty line.

Most people living below the poverty line in Australia rely on social security for their income. People’s type of housing tenure also plays a part. Our report Poverty in Australia 2023: Who is affected  found that the following groups of people faced the highest risk of poverty (20% or more) in 2019-20:

• People in households whose main income-earner was of working age and unemployed (62%) or not in the labour force (47%);
• People in households receiving income support including Newstart Allowance / JobSeeker Payment (60%), Parenting Payment (72%), Youth Allowance (34%), Disability Support Pension (43%) or Carer Payment (39%)¹
• Tenants in public housing (52%) and private rental (20%, and 50% for those aged 65 years and over);
• People in sole parent households (34%, and 39% among children in those households);
• Single people without children (25%, and 26% among those under 65 years);
• People with disability and a ‘core activity restriction’ (20%).

The research additionally found that, In the March quarter of 2020, COVID lockdowns dramatically increased poverty

Poverty rose from 13.2% of all people (16.2% among children) in the September quarter of 2019 to 14.6% (19% among children) in the March quarter of 2020 as people lost paid hours in COVID lockdowns.

And that, in the June quarter of 2020, COVID income supports (especially Coronavirus Supplement) greatly reduced the deepest poverty:

• Poverty fell to 12% (13.7% among children) in the June quarter due to COVID income supports, especially the Coronavirus Supplement and greatly reduced the deepest poverty:
• By one-fifth among people in households whose main income was social security (35% were in poverty on average in 2019-20, but poverty among them fell by 8 percentage points or by 389,000 people between March and June quarters 2020 when COVID income supports began);²
• By more than half in households mainly relying on JobSeeker Payment (60% in poverty in 2019-20, reducing by 49 percentage points or 262,000 people);
• By around one-third among people in households relying mainly on Parenting Payment (72% in poverty in 2019-20 – reducing by 29 percentage points or 128,000 people);
• By one-third among people in households whose main income earner was unemployed (62% in poverty in 2019-20 – reducing by 25 percentage points or 94,000 people);
• By one-quarter among people renting their homes privately (20% of those renting privately were in poverty in 2019-20 – reducing by 6% or 349,000 people).

The overall poverty rate in Australia wavered between 11.5% and 14.5% from 1999 to 2017. Poverty declined substantially from 13.1% in 1999
to 11.5% in 2003, then rose sharply during the boom years to 14.4% in 2007. Following the Global Financial Crisis in 2007-08 and a pension increase in 2009, it fell to 12.6%, then rose modestly to 13.1% in 2017.

The main influences on this have been changes to economic conditions and to Australia’s social security system. In 2009 an increase of $32 a week was granted to the single rate of pensions (excluding the Parenting Payment). This increase, combined with the ongoing indexation of pensions to wage movements, played a large part in the decline in the poverty rate between 2007-08 and 2009-10, although we are unable to measure its impact precisely due to other factors such as economic conditions and rent levels.

Poverty declined from 13.4% in 2017-19 to 12.1% in 2019-20, then rose to 12.4% in 2020-21, and even further to 14.1% in 2021-22. Estimates derived from the Survey of Income and Housing suggest no significant change between 2017-18 and 2019-20 (a slight fall from 13.5% to 13.4%). A study of trends in poverty through each quarter of 2019-20 found that poverty rose from 13.2% in the n the September quarter of 2019 (pre-COVID) to 14.6% in the March quarter of 2020 (during the first COVID lockdowns), then fell by 2.6 percentage points (646,000 people) to 12% in the June quarter of 2020 (after COVID income supports were introduced).

Poverty rose from 12.4% of all people in 2020-21 to 14.2% in 2022-23. The number of people in poverty increased by 593,000.

Child poverty has fluctuated at a higher rate, between 14.3% and 18.6% from 1999-00 and 2015-16. It followed a similar path to the overall poverty rate before the GFC, decreasing from 18.6% in 1999-00 to 14.3% in 2003-04, then increasing sharply to 18.1% in 2007-08. However, after the GFC child poverty took a different path to overall poverty. It fell only slightly to 17.8% in 2009-10, decreased to 16.5% in 2013-14, then increased to 17.7% in 2015-16.

These changes in child poverty were influenced by economic conditions, as was the total poverty rate, but changes to the social security system since the GFC have had a direct impact on the increase of child poverty.

Find out more on our Causes and Solutions page.

In the most recent data from the Organisation for Economic Co-operation and Development (OECD) (2021 or latest data), Australia had the 15th highest poverty rate of 36 OECD countries. The OECD estimated Australia’s poverty rate then as 12.6% (compared with our estimate for 2019-20 of 13.4%, as the OECD uses a different measure of poverty which does not take account of housing costs).

Among the more wealthy OECD countries, Australia is part of an English speaking group, which has poverty rates above the OECD average of 11.9%.

[infogram id=”_/Xd48aJpgkLnpVZZcd60A” prefix=”LL8″ format=”interactive” title=”Copy: Poverty rates in OECD countries in 2016 (% of people)”]