The authors gratefully acknowledge the assistance of Jocelyn Pech, as well as staff from the Families and Children Branch:

The views expressed in this paper are those of the authors and do not necessarily represent the views of the Department of Family and Community Services and, of course, cannot be taken in any way as expressions of government policy.

The needs of families with dependent children and (in most cases) their rights to assistance through the social security system have always been fundamental to the provision of income support payments and supplementary forms of family assistance in Australia. The issue of mutual obligation is primarily about what responsibilities should accompany these rights. The discussion of mutual obligation in this paper aims to clarify the nature of the social contract between the community and the people who receive community-funded assistance, specifically assistance from the Department of Family and Community Services. It asks the question 'What can the community reasonably expect of those whom it assists?' These expectations may reflect a number of factors, such as the types of activities people in receipt of income support are engaged in, the stated purpose of a particular payment, social objectives (like increasing immunisation rates or reducing child poverty), and/or community norms (such as whether mothers work outside the home).

The aim of this paper is to canvass the debate about mutual obligation and the role it may have for families receiving assistance from the Department of Family and Community Services (DFCS). Its focus is primarily on two forms of assistance - Parenting Payment (the main type of income support payment for low income parents) and Family Allowance (a supplement to income support and/or private income for low to middle income families). The paper does not advocate any particular policy position on mutual obligation and these payments, but rather attempts to be a starting point for community discussion and debate on the issues. Exploring the issues surrounding mutual obligation is not only important in considering possible directions in social policy, but also reveals the complexities of both parenting and labour force participation that is the reality for many in the 1990s.

Mutual obligation is an expression of the social contract that underlies the social security system — that is, a contract between the community and those who rely on social security payments (Pech, 1998). This is a two-way contract, with obligations on both the recipient and the community. One example is the social contract that requires those who receive Newstart Allowance to be making a genuine effort to improve their prospects of finding suitable paid employment and/or contributing to the community through other forms of participation. In return, the community provides the infrastructure and opportunities for social inclusion and participation (such as through labour market assistance, work-for-the-dole schemes). Another example is that in order to receive the Childcare Cash Rebate or Childcare Assistance, parents must ensure their children have received the age-appropriate immunisation requirements.

As these examples show, the notion of mutual obligation as it may apply to income support payments and supplementary forms of family assistance is quite different. In the context of income support payments, perhaps the most fundamental objective of a social contract is to promote social inclusion and mutuality of the recipients within society as a whole. Social inclusion is promoted by the provision of adequate incomes, recognition of efforts to self-provide and of social contribution, and assistance and encouragement for recipients to engage in economic and social activity. A mutual obligation framework grants income support to people as members of the community on the basis of their participation in the community, rather than as people who have been excluded from economic and/or social participation (Pech, 1998). The most explicit and visible mutual obligation arrangements have, to date, been for people in receipt of unemployment and youth income support payments, who must participate in certain activities in order to receive their payment.

There are a number of broad principles underlying the provision of income support in Australia, which include requirements that generally must be met before people can access social security payments. These include:

• an emphasis on self-provision, that is, the use of personal resources as a first resort. This translates to tightly targeting payments through income and assets tests and imposing waiting periods. This ensures that people with a moderate level of resources do not have immediate access to income support payments;

• an understanding (either explicit or implicit) that income support recipients undertake activities that are commensurate with their payment type. For example, people in receipt of unemployment benefits are expected to maximise their chances for return to the labour force; and

• minimisation of dependency on income support. Disincentives to work or save are minimised and customers are required or encouraged to actively undertake behaviours which will reduce the need for social security payments, for example, activity testing for Newstart Allowance and Youth Allowance.

The consideration of mutual obligation suggests the addition of another broad principle. It is the principle that the community is making payments to the individual and, in return, the individual is expected to give something back to the community. Like the other principles, not all social security payments need to incorporate mutual obligation requirements. Indeed, many payments, such as Parenting Payment, do not currently exist within an explicit mutual obligation framework. The crucial question is, therefore, whether this principle should be applied to income support payments for parents, and if so, in what form?

Parents are valued by the community for the contribution they make by caring for their children. The question being asked is whether additional obligations are reasonable and of value to the individual and the community? For example, should the community also expect parents in receipt of income support to, in addition to their caring roles, participate in activities such as seeking or preparing for work? Is it unreasonable for a government to specify how parents on income support divide their time between childcare and other activities?

The concept of mutual obligation has quite different meanings and applications in the area of supplementary assistance to families with children. In regard to family assistance programs, the most explicit and visible forms of obligations to date have been:

• linking eligibility for two different Childcare Assistance (CA) and the Childcare Cash Rebate (CCR) to the social objective of increasing child immunisation rates, and;
• ensuring that people seeking to receive Family Allowance (FA) attempt to obtain child support from their former partner (the maintenance action test) and that this support is applied in the calculation of the rate of FA (the maintenance income test).

The first obligation is designed to influence the behaviour of parents for a 'social good'. Linking eligibility for CA and CCR to the meeting of age-appropriate immunisation requirements was part of a Government package of measures announced in February 1997 which aimed to significantly boost child immunisation rates in Australia. Part of this strategy is to encourage immunisation by providing a financial incentive, through the Maternity Immunisation Allowance (a cash payment of $200 paid only when a child is 18 months old and has received the age-appropriate immunisation requirements), and by in most cases removing assistance to child care payments if the required immunisations are not met. Maternity Immunisation Allowance (MIA) was originally conceived as a second instalment to Maternity Allowance (DSS, 1997). Maternity Allowance was spilt into two separate parts: the first instalment of $750 is paid shortly after birth, and the second instalment of $200 is paid after 18 months subject to the child having received age-appropriate immunisation. It is debatable whether MIA is a payment with an ‘obligation’ on parents which determines entitlement, or whether the immunisation-requirements of MIA are simply a criteria for payment.

Since the commencement of the Child Support Scheme in 1988, social security recipients have been required to take reasonable maintenance action to qualify for FA (at more than the minimum rate). The application of the maintenance action and income tests can fall under two broad principles:

• that people self-provide for the costs of their children prior to seeking assistance from the State; and
• that parents, regardless of whether they are the resident or non-resident parent, have a moral and social obligation to provide financial support for their children. If they do not fulfil this obligation voluntarily, then the State intervenes.

Apart from this requirement, and the administrative obligations required of FA recipients (such as to notify of changes in circumstances which may affect their entitlement), there are no other explicit obligations attached to the receipt of FA. The origins of the minimum rate of FA are grounded in the principle of horizontal equity - that is, assistance is provided in recognition of the costs of families with children compared to those without children. FA was originally paid as a universal benefit through both the social security and tax system. Tax benefits were abolished in 1976 when rates of FA were increased and paid directly to the primary carer in the family. FA has always had a crucial role in the redistribution of income, both from families without children to those with children, and from families with children who had higher incomes to those who were reliant on lower incomes. Since the introduction of significantly higher rates of assistance to low income families - income support and working families - FA has also had a wage supplementation role and acted to provide a financial incentive to parents to take up work (Cass, 1996).

There are a number of principles which underlie the provision of FA in Australia, including:

• that the community is prepared to assist families with children to raise children by recognising the costs involved in this activity;
• that delivering assistance to the primary carer of the children ensures that the children receive the benefit of that assistance;
• that people receiving assistance use their own financial resources in the first instance, as State provided assistance is a supplement to the family's income; and
• that children should not live in poverty.

The minimum rate of FA is provided in recognition of the costs of families with children, not as full compensation for those costs. The nature of the social contract is that families rear children (who are likely to become fully-participating citizens and taxpayers) and in return, the community provides some degree of financial support for these families to assist with the costs involved. Around two-thirds of FA recipients are not in receipt of income support payments and hence are self-supporting families. Therefore, obligations that related to minimising dependency on assistance and the engagement in activities to promote social inclusion are not applicable to supplementary family assistance in the same way as they are to income support payments. For example, a family with two children may be entitled to receive FA for up to 18 years, and this long-term receipt of FA is quite consistent with the payment's objective of providing assisting to families with the additional costs of children.

The notion of long-term dependency on FA may become more of an issue in the context of the higher rates of FA (received by income support families and other low income families). FA paid at more than the minimum rate (MMR_FA) is additional assistance for families who are assumed to have insufficient income to meet the basic needs of their children. In some families, MMR_FA can be a considerable component of the family income. The number of families in receipt of MMR_FA, particularly low income working families, is growing. With changes to the labour market resulting in more families undertaking low paid, part time and/or casual employment, this trend is likely to continue. However, this concern is probably best addressed by seeking to minimise the impact of such disincentives within the design of the payment structure. This is the thinking behind some of the family assistance initiatives contained in the Government’s tax reform package.

The community would need to articulate if any more explicit types of obligations should be imposed on recipients of FA, and if so, whether these obligations should be general notions (such as 'to be a good parent and provide for the needs of one's children') or specific expectations (such as ensuring FA is spent on children's needs or linking payment of FA to a child's attendance at school, or whatever the desired social objective is).

However, the principle that families in receipt of FA undertake activities that are commensurate with their payment type is a complex issue. FA is paid to families who are raising children. The community does not require, under current arrangements, that in return families raise their children in a particular way. Judgements about 'good' parenting are subject to a wide range of economic, social and cultural factors, but may encompass on a base level a requirement that parents financially support their children, provide for their children's physical and psychological needs, and provide a positive role model.

FaCS policy to date has been that parents, in particular the primary carer, are in the best position to determine how FA will provide the greatest benefit for their children. Telling people how to live, or how to spend their money, plainly conflicts with individual rights and assumes that the Government knows how to serve the families’ own interests better than the family would themselves.

A number of reasons can be advanced for imposing a mutual obligation model on income support recipients, including recipients of Parenting Payment:

• the belief that long-term dependence on income support payments has negative consequences for both the individual and the state, as it perpetuates poverty for the former, and risks burgeoning expenditure for the latter;
• the belief that labour force participation can act as a powerful role-model to children, thereby arresting intergenerational welfare dependence and poverty;
• the belief that labour force participation is 'good' for people - those who do not work often feel demoralised, suffer from low self-esteem and social marginalisation (Whiteford, 1998a);
• the belief that imposing mandatory requirements may counteract a view that receipt of income support is a "soft option" - by imposing a rigorous system of requirements a person should tend to view welfare as a last resort;
• the notion of individual empowerment via a contractual agreement - that in the management of his/her return to paid work, a recipient of income support gains a sense of empowerment and "becomes an active entrepreneur of his/her own self...and is thus able to combat the risk of dependency" (Rodgers and Powlay, 1995); and
• concern over the sustainability of the income support system and a desire to reduce welfare expenditure through assisting and encouraging income support recipients to undertake paid work.

Welfare dependence

Over the last 22 years, the proportion of families with children headed by a lone parent has increased from around 9 per cent to 20 per cent (DSS, 1998). The number of sole parent families in receipt of income support has been increasing by an average of 5 per cent a year since 1989, but this largely reflects the growth in the number of lone parents in this period. In fact, the proportion of lone parent families in receipt of income support has declined since 1989. While the average duration on Parenting Payment (single) 3.4 years, 20 per cent have been on payment for more than five years, and some six per cent of recipients have been on payment for more than 10 years.

Around 37 per cent of couple families with children aged under 15 are in receipt of PP (partnered). This smaller proportion of couple families in receipt of income support compared to lone parent families reflects the larger population base of couple families with children and the wider spread of incomes among couple families.

These data, particularly regarding lone parents, have concerned a number of social commentators (Maley et al, 1996; Tapper, 1993). In particular, concern has focused on increases in the number of parents not in work for long periods, particularly lone parents and partners of the unemployed. This is expressed both as a concern that lone parent families are among those most likely to live in poverty, and that the longer these families are reliant on income support, the greater the danger of poverty; and because of the "moral hazard" of welfare dependency, which has become the subject of a wealth of literature (Brown, 1989, Dennis & Erdos, 1992, Murray, 1984). While the incidence of lone parenthood in Australia has not increased in the same proportions as in the US, UK and NZ, resentment of lone parent families and a popular mythology of teenage lone parents has been on the increase. However, the fact is that teen lone parenthood has declined in Australia and this group now makes up only three per cent of all lone parent families (DSS 1998).

The concern regarding families with an unemployed parent is that the other parent is also likely not to be in the labour force, hence these families are at considerable disadvantage and face greater risks of poverty (Bradbury, 1993). Passive receipt of income support payments, particularly to the partners of other income support recipients, has been associated with less access to skills development and training opportunities, thereby compounding future labour market disadvantage, and the reduced capacity of families to supplement their income support with earnings (Douglas et al, 1993).

There may be a danger of intergenerational welfare dependence in families where children have not had the experience of parent(s) in paid work. There is little evidence either supporting or discounting this theory. Evidence is needed about the incidence of intergenerational welfare dependency, as well as any causes, such as whether it is parent(s)' workforce status or other factors such as environment, geographical location, poverty, educational standards, etc which are its main determinants. The Department of Social Security is currently undertaking research to examine the incidence of intergenerational dependency and its contributing factors.

Social exclusion

Another driving force for introducing a form of mutual obligation on PP recipients is to prevent social exclusion, which is a product of long-term labour market withdrawal. One of the aims of mutual obligation is to foster individuals' continuing engagement with the wider community. The vast majority of PP recipients are women, and a mutual obligation model may be beneficial in terms of improving the long-term economic (and social) situation of women. For example, PP eligibility ceases once the youngest child reaches 16 years. If they have been long-term recipients, and with a background of poor education and limited work skills, then the transition off PP is likely to be particularly difficult.

Anomalies

There are also certain anomalies inherent in the categorical approach of the social security system which are of concern and add to the pressures to consider a framework of mutual obligation. For example, PP is currently paid free of any activity test. However, PP is not payable when a recipient's youngest child turns 16. At this point, PP recipients are expected to participate in a much more active way with the labour market, such as return to work or transfer onto an activity-tested payment, such as Newstart Allowance. Are the circumstances of a parent of a 15 year old child so different from one of a 16 year old child, to warrant the imposition of an activity test on the latter but not the former? In addition, it could be seen as curious that a PP recipient with all children at high school does not have to engage in mandatory activities while an NSA recipient, who does not have children but whose circumstances are similar in other ways, is obliged to move towards self-support.

This anomaly in the treatment of parents is accentuated where separated parents are sharing the care of their child(ren). In this case, only one parent is entitled to receive PP, while the other (if s/he is not working) must receive Newstart or another payment. This is the case even where the care is evenly distributed. A mutual obligation requirement for PP recipients could facilitate greater sharing of care and workforce participation between separated parents, with consequent benefits for both parents and children. A paper on the issue of shared care is being presented at this conference.

The methods through which income support programs encourage, or even compel, individuals to take up paid work vary around the world. Many countries use a combination of financial incentives and, increasingly, compulsory work in one form or another. In some countries, notably the US, programs have been established which require people receiving income support to undertake paid work as they move towards self-sufficiency. Other countries, such as New Zealand and the UK, have opted for the "work for benefit" principle, under which people can volunteer or be required to perform work or engage in training or work preparation activities in return for payment.

The frameworks for mutual obligations in these three countries are discussed in more detail below.

Welfare reform in the United States (US) has emphasised the notion of personal responsibility, in addition to the importance of work. A major element of this reform is the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), 1996, which incorporates the concept of mutual obligation in the "welfare-to-work" model. Social policy directions in the US have identified long term welfare dependency as a key concern, and initiatives have been designed to require welfare recipients to work in return for benefits.

With specific regard to parents, reforms have included:

• replacement of the AFDC (Assistance to Families with Dependent Children) permanent entitlement program with Temporary Assistance for Needy Families (TANF);

• TANF has a five year lifetime limit, unlike AFDC which was available as long as families met the eligibility criteria;
• States are able to impose a family cap, and refuse assistance to families in respect of children born while the family is in receipt of benefits; and
• State TANF plans vary in their detail, but universally include a component of personal responsibility and the requirement to work for up to thirty hours per week. For example, Tennessee's Welfare reform Plan requires eligible families to enter into a performance based Personal Responsibility Plan which requires a work plan and imposes conditions on parents, particularly parents in their teens.

Conditions may extend beyond those associated with paid work. For example, the program in Virginia requires mothers to identify the fathers of their children, children to be in school, minor mothers to be in a nurturing environment and children to be immunised.

The effectiveness of these reforms is difficult to judge at this relatively early stage, especially since evaluation is no longer mandatory. There is risk of a focus on immediate outcomes, whose results can be questionable. Questions remain about what happens to welfare recipients when they leave welfare, their ability to retain jobs, or what happens when they reach the end of the time limits. What evidence is available (for example, as cited in Kalisch 1998) suggests that a "work-first" approach seems to be successful in getting initial job outcomes and raising earnings for individuals.

However, there is a high rate of job loss in the short and medium term. Consequently there has been an increase in recognition of the need for case management and training to increase the skill levels of job searchers. Wisconsin is a case in point, where significant requirements for welfare recipients are combined with the provision of education and training programs, childcare, health care and transportation, to assist in the transition to work (ibid).

As part of its first Budget (March 1998) the new Labour Government introduced measures for reform of the welfare state. The New Deal was designed to address the three problems with the existing system that the Government had identified and wished to reform:

• increased inequality and social exclusion, despite more spending;
• people trapped on benefit, rather than being helped off benefit; and
• benefit fraud diverting resources from genuine clients (Family Policy Studies Centre, 1998).

The basis of the New Deal is a contract of mutual obligation (see Figure 1 below). It targets young unemployed people, long term unemployed people, lone parents, people with a disability or long term illness, and partners of the unemployed, with the introduction of activity testing and labour market programs, including subsidising employers for six months. Participation is compulsory for all target groups, except lone parents (Family Policy Studies Centre, 1998).

Lone parents have also been affected by the decision to abolish the One Parent Benefit. A higher Child Benefit incorporating the One Parent Benefit is still payable to lone parents, but only if they have started work with the aim of removing entitlement to income support. Income support continues to be available to lone parents who are not working. This has resulted in suggestions that mutual obligation principles are now being applied to lone parents, but in the context of financial incentives to seek work rather than mandatory job search requirements (Family Studies Policy Centre, 1998).

The Government is also in the process of replacing the existing Family Credit in-work benefit transfer program with a larger, more costly tax-based Working Family Tax Credit (to be introduced in 1999). The complex changes will include reduction of very high effective marginal tax rates through a change in the taper and substantial childcare rebates. The payment process will be delivered through employers rather than social security.

The New Zealand approach to mutual obligation for families, while like the US model in introducing obligations to work, places greater emphasis on family and parenting responsibilities.

In February 1998, the New Zealand Government published a discussion document entitled, "Towards a Code of Social and Family Responsibility", which outlines the Government's perspective on people's obligations towards society, particularly in the context of family relationships and responsibilities. The document also outlines current government activities to assist families and individuals, but without explicitly stating the Government's obligations. The "Code" document, which included a survey, was circulated to all householders for comment, and a discussion booklet was produced.

The New Zealand Government has recently decided not to go ahead with the Code. However, the questions for discussion in the document provide an interesting insight to the policy options that the Government appeared to be considering. Some examples of these include:

• pregnant women to protect their unborn babies from the adverse effects of cigarette smoke, drugs or alcohol;
• parents to provide a safe and supervised environment for their children to protect them from intentional and non-intentional injuries (eg child abuse, hot water burns);
• parents to teach children basic skills such as toileting, dressing, eating, managing emotions and controlling behaviour, and knowing right from wrong; and
• parents to provide their children with unconditional affection and consistent limit setting.

In addition, an extended system of work requirements is coming into effect from 1 February 1999 for lone and partnered parents in receipt of income support:

• recipients whose youngest child is aged 0 to 6 years will be required to attend one mandatory interview per year;
• recipients whose youngest child is aged 6 to 13 will be required to search for and take up part-time work; and
• those with a youngest child aged 14 years and over will be required to seek full time work.

In return, income support recipients will be assisted with childcare subsidies, case management and training, to find work and keep it. New Zealand is also introducing childcare subsidies for low-income working parents whose children are aged 5 to 13 years for out of school care.

It is important that the discussion of mutual obligation in the Australian context does not result in uncritically importing developments from overseas without understanding their context. Clearly there are many important differences between the US, NZ, the UK and ourselves. The US and NZ developments have been promoted by a number of factors, including the incidence of teenage/unwed parenthood and/or child neglect. In all three countries, concerns about the intergenerational effects of poverty and welfare dependence have driven the desire to break that cycle where it exists.

The rate of teenage unwed parenthood in Australia is not as high as in the UK, US or NZ. Whiteford (1998b) has undertaken extensive research, which compares lone parenthood in the United States, New Zealand and the United Kingdom in the last decade. His data show that the rate of teenage pregnancy fell in Australia by about two-thirds over the years 1972 to 1995, compared with increases in US, NZ and the UK since the mid-1980s. In addition, over the last decade Australia presents a lower incidence of teenage pregnancy than any of the three countries. There is also a much lower rate of "never married" lone parent families in Australia, compared to the other countries, and very few teenage mothers in receipt of income support — less than three per cent.

Another key factor that has influenced the NZ perspective is that the Department of Social Welfare is responsible for child welfare and protection as well as income support. In Australia, these responsibilities lie with the State Governments and any connections between income support receipt and child neglect may be less apparent, at least at the Commonwealth level.

The Australian social security system is unique among OECD countries, as it is largely based on the social assistance model, rather than the social insurance model (Jackson and Bozic, 1997). For example, payments are not based on prior contributions and are not limited in their duration. Therefore, any meaningful overseas comparisons, particularly with regard to lone parents, need to take into account the fact that social insurance schemes do not typically cover the specific contingency of being a lone parent. The exceptions are widows' or survivors' payments, which are based on the loss of a "breadwinner", rather than lone parent status per se.

In countries where social insurance schemes exist (the US, for example), this has resulted in lone parents being more likely to depend on social assistance payments, which are typically subject to means tests significantly more stringent than Australian income and assets tests. In view of this, the debate about mutual obligation has included the view that income support for lone parents has not been perceived as "earned" through social insurance contributions, and is more likely to be stigmatised.

One of the largest groups of workforce age income support customers for whom there are no activity requirements are parents - lone and partnered. The provision of non-activity tested income support for primary carers of children has its origins in historical assumptions of female dependency. For example, Parenting Payment (single) used to be a pension-based payment, and pensioners were assumed to be unable to enter the workforce to support themselves, and hence were dependent on the State (Douglas et al, 1993). Similarly, Parenting Payment (partnered) recipients used to be considered dependent on their unemployed partners, and hence their partner's allowance was paid at a married rate (Douglas et al, 1993). This led to a participation dichotomy — some people (mostly men) were considered able to work, while others (mainly women, the aged and people with a disability) were not. It is now widely accepted that such assumptions are largely outdated, and that income support provisions based on the model of a (male/State) breadwinner and dependent female are inappropriate. In the specific context of parents, such a dichotomy no longer reflects reality; most parents are both child carers and labour force participants (if not actually, at least potentially).

The provision of a payment that is not subject to a mandatory activity test currently provides parents in receipt of income support a choice as to how they balance their work and family responsibilities (until their youngest child turns 16). Introducing a mandatory set of requirements on recipients of PP is somewhat contradictory to this notion, at least where children are young. However, the principle of choice must be seen in the context of community norms - should it, for example, include the choice of labour force non-participation and consequent reliance on income support from the birth of the first child until the last child turns 16?

Imposing on parents a prescriptive mix of child rearing and other activities also runs the risk of accusations that the Government is infringing on a decision-making process which some would argue should be exclusively private. While the Government and some community organisations (such as the Australian Council of Social Service) support mothers being able to combine work and caring, other sectors of the community tend to have different views on the workforce activities of women with young children (for example, the Australian Family Association, and findings of Probert (1996) and Chan & Wilson (1996).

Consideration needs to be given to whether the income support system should still embody assumptions about labour force capacity and behaviour of parents that are increasingly at odds with the contemporary experience of mothers (and fathers) in the labour market. Around 67 per cent of mothers are currently participating in the labour force, an increase from 41 per cent in 1974 (ABS, 1974; 1997). Government policies on the provision of income support do have the potential to affect mothers’ decisions about their labour force participation and long periods out of paid work can have adverse consequences for mothers in the longer term.

In terms of assisting PP recipients to enter or re-enter the workforce, the approach taken has been one of encouraging voluntary participation in labour-force related activities, such as work or training (for example, the Jobs, Education and Training Scheme).

The main activity of PP recipients is child rearing. It is widely recognised that mothers are more likely than fathers to undertake child care as their primary role, or joint role, in conjunction with labour force participation. As various research studies show, women continue to undertake more hours of child care relative to men, regardless of their labour force or marital status (Harding, 1997; ABS, 1993). In addition, mothers, regardless of their labour force status, generally perform the majority of household maintenance work (ABS, 1993).

However, it needs to be recognised that while this is the main activity, parents also have varying capacities to undertake other types of activities. Some PP recipients are engaged in other activities, such as paid work, voluntary work, caring for other relatives, study etc. In 1998, 27 per cent of PP(s) recipients and an estimated 18 per cent of PP(p) recipients were in paid work (DSS, 1998). In fact, the structure of the income test, particularly for PP(s), is designed to encourage the take-up of part time paid work in addition to income support. Perhaps a mutual obligation framework for PP could recognise the many and varied activities that parents undertake.

However, this does not negate the reality that many PP recipients still face a number of barriers to on-going participation. For example, while the presence of children per se is not necessarily a barrier to labour force participation, particularly if they are of school age, they inject an unpredictable element into a parent's life which can make prescribed, regular activity difficult. What happens when a child becomes ill or injures themselves, or are in need of higher than usual parental attention? This can be particularly problematic for a lone parent who does not have a partner, or other support, to help balance family needs with other responsibilities. Other potential hurdles that are common to PP recipients are the costs involved in training, jobsearch or working, the lack of employment and/or infrastructure in some regions, and the costs of child care.

These barriers are not peculiar to the principle of mutual obligation. Indeed, it could be argued that introducing mutual obligation for PP recipients would heighten the moral and political obligation on Government and community to address such factors that impede recipients from undertaking other activities. Nevertheless, to be successful in achieving its objectives, any mutual obligation model applying to PP must be flexible and reflect the reality of parents’ lives. Some of the key issues that need to be considered in this context are discussed below, including factors relating to individual circumstances and their environmental context, and attitudes, values and preferences based on individual and community beliefs.

Labour market considerations

The patterns of women's labour force participation have changed significantly over the past 20 or 30 years, particularly for married mothers. In the thirty years up to 1996, the following changes occurred:

• the labour force participation of all women increased from 41 per cent to 64 per cent. This increase was entirely due to the increased participation of married women, which rose from 31 to 62 per cent;
• the employment of married mothers rose while their unemployment rate fell; and
• the fact that most new jobs created in the last 20 years have been part time is reflected in women's participation. Whereas in 1966, nine per cent of women aged 15-64 were working part time, by 1996 this proportion had almost tripled to 25 per cent. The full time employment rate remained relatively steady. Women now make up the majority of part time employees — in 1996, 73 per cent of all part time employees were women (ABS, various).

However, this marked increase in women's workforce participation has not translated into parity with men's participation patterns. In general, men are more likely to be involved in the labour force, regardless of whether or not they have a role as a parent. This results in a comparatively consistent labour force participation rate throughout their lifecycle. Women in contrast are much more likely to be affected by the birth of their children. Thus, while the labour force participation rates of young women and young men have been converging over time, the rates diverge between the ages of 25 and 44 years, the major child bearing and rearing years, as women withdraw from the workplace, either permanently or temporarily.

Age of youngest child

Probably one of the most salient of factors affecting participation is the age of the youngest child in a family. As at April 1998, the average labour force participation rates of lone and partnered mothers with dependent children were 49.6 per cent and 61 per cent respectively (ABS, 1998). However these rates increase markedly with the age of the youngest child, particularly once that child reaches school age.

As can be seen by Table 1, the participation and employment rates of partnered mothers are consistently higher than for lone mothers. This is not surprising, given that lone parents need to manage both their caring and their income earning roles. However, the reverse is true for mothers on income support (see Table 2) - PP(s) recipients are more likely to be in the labour force. This may be due to the greater proportion of PP(p) recipients with children under 5 and/or their ability to rely on a partner who can earn income. It may also be due to the PP(s) income test being more compatible with part-time work. Nevertheless, income support recipients display the same relationship between employment and age of youngest child.

Education and workforce skills

Limited education and/or workforce skills militate against an individual's ability to gain employment, or at least reasonably paid employment. The ABS Transition to Work Survey found that, as at May 1997, the labour force participation rate for persons with recognised post-school qualifications was 85.3 per cent, compared to 69.5 per cent for persons without qualifications. The unemployment rate for these two groups was 5.4 per cent and 11.2 per cent respectively.

Surveys of PP recipients indicate that these parents, particularly PP (s) recipients, are less likely to have post-school qualifications. For example, the Jobs, Education and Training (JET) Evaluation (DSS, 1997) indicated that among customers entering the program in February 1996, 76 per cent had junior high school qualifications or less and only 10 per cent had gained a vocational or post-school qualification (reference). The PgA longitudinal survey found that 58 per cent of respondents had never completed high school and 20 per cent had gained a vocational or post-school qualification (Chan and Wilson, 1996).

Focus group research undertaken by DSS confirms that even if mothers with different levels of educational attainment share similar attitudes towards the workforce, their ability to return to work is determined by past educational and employment opportunities. For example, women who are more successful in returning to work are those on higher incomes and in senior positions. By comparison, women on lower incomes, with lower levels of education or workplace skills, extended absences from the workforce or no employer continuity, found returning to the workplace more difficult.

The ease with which families combine work and family responsibilities is to some extent a function of the structure of the workplace. For example, while many parents have access to unpaid parental leave, this provision does not provide parents with the flexibility needed on a day-to-day basis. As argued by Wolcott (1997):

much of the way work is organised - the hours and scheduling of jobs, and the expectations about what it means to be committed to a job and a career - stem from assumptions that the majority of full-time workers are either men whose partners are available to take care of everyday family responsibilities, or single men and women without family distractions.

A University of Newcastle academic (as quoted in The Sydney Morning Herald 23 June 1998) has claimed that 'the move to a deregulated industrial relations system has not delivered the flexibility required by parents who are trying to juggle work and family responsibilities'. It indicated that fewer than 400 of Australia's 18,000 awards and enterprise agreements contained child care provisions.

The lack of flexible work conditions can impede women from re-entering the workforce, or may mean that they take up part time work, because it places fewer demands upon their time. For some this is the ideal balance, allowing them to maintain a presence in the workplace, but also meet their child care responsibilities. For others it represents a compromise, work of less interest and career potential, and/or less security than full time work.

Where family friendly arrangements do exist, they are more likely to be available to people in managerial or professional positions, rather than those in lower status jobs. Zanetti (1994) argued that one reason for lone parents returning to pension is the difficulty they have maintaining a job that lacks "family friendly" work arrangements.

The decision to remain or re-enter the workforce has financial implications. For example, returning to work may mean a loss of government support such as PP and a reduction in the level of FA, as well as increased costs of child care and travel. Once trade-off calculations are performed, many women may find that re-entering the workforce for a low paying job is not financially rewarding.

Opinion is divided on whether people understand these trade-offs, particularly the interaction between the tax and social security system, and the extent to which they take them into account in their decisions around labour force participation. DSS customer research suggests, however, that parents do make these calculations, not only to determine when they should return to the workforce, but also to decide the hours to work in order to minimise loss of government support.

The cost and availability of childcare is a significant issue for parents considering (re)entering the paid workforce, particularly lone parents who may not be able to share childcaring responsibilities. The Commonwealth-funded child care sector has been subject to considerable reform within the last two years. These changes, combined with a general increase in childcare fees, have sparked media speculation that working parents (mostly mothers) are dropping out of the workforce and abandoning formal child care because it has become too expensive. There are no data yet available to support this claim (the number of working mothers with dependent children has remained relatively constant since June 1996 — ABS 1996-98). However, it is possible that some mothers are moving from full to part time work, and/or are moving their children from formal to cheap, informal care provided by relatives, neighbours or friends.

A closely related factor is a parent's belief about whether, and until what age, children need full time parental care. For example, in Probert and Macdonald's (1996) focus group work, women who did not work, or only worked a few hours, cited a need to "simply be there". While this attitude is likely to be affected by the age of the child, parents with similar age children may arrive at different conclusions about the level of care that these children require. In the PgA longitudinal survey (Chan and Wilson, 1996), when respondents were questioned about when children would be "old enough" for them to return to work, the answers ranged from one year old to kindergarten to high school. However, other DSS customer research identified three milestones that could prompt a mother to consider a return to work:

• the end of maternity leave (typically a period of one year) is an 'acceptable' time to go back to work;

• after the child reaches two years of age, when the social and intellectual benefits of formal child care are recognised; and
• when the child reaches school age, a stage of a child's development which represents a major psychological milestone for the mother.

The PgA longitudinal survey (Chan and Wilson, 1996) also showed that of those recipients at home, 43 per cent would prefer to be in this role, while 57 per cent would prefer to be in part-time or full-time work. The main reasons given for these parents not working related to their belief that they should look after their children or that their children were too young for them to work. Scenario testing conducted as part of the evaluation indicated that respondents would be more likely to seek work if all their children were at school.

A principal reason why decisions on how to combine work and family life are so difficult for many parents, particularly women, is that attitudes towards child rearing often conflict with attitudes towards work. When parents in the Australian Life Course Study (Glezer and Wolcott, 1997) were asked: "if you had a reasonable income without having to work, would you still prefer to have a paid job?", 72 per cent of fathers and 64 per cent of mothers answered "yes". The researchers concluded that this indicates "a strong degree of work attachment and the importance of employment to a sense of personal identity for both men and women." The Glezer and Wolcott (1997) study also found that of those mothers not in paid work and with a child aged under five years, 87 per cent planned to return to work.

DSS customer research on women and families' workforce participation decisions^, found similar attitudes, with many young mothers defining themselves through their work before they have children, regardless of their level of education, socio-economic status, career prospects or ethnic background.

In comparison, a group of older women in Probert and MacDondald's (1996) study indicated that they never identified strongly with work and always planned to spend a significant proportion of their adult life running homes and families. These women had few marketable skills and viewed the world of work as "hostile to women like themselves."

The application of mutual obligation requirements in the overseas countries mentioned in this paper has focused on lone parents, rather than the partners of other income support recipients or the low waged. This has partly been due to such social phenomena as increases in the numbers of teenage lone mothers which, as previously mentioned, has not occurred to the same extent in Australia as in other Western countries. Although lone parents often figure in public discourse as examples of entrenched welfare dependency, there does not appear to be much objective argument for singling them out to the exclusion of partnered parents. Indeed, there are a number of reasons why it may make sense to consider mutual obligation principles regardless of marital status.

Lone parents stand out as being more at risk of poverty than their partnered counterparts, mainly because more than 80 per cent (DSS, 1998) are dependent on income support. In addition, they face particular difficulties in balancing their child care responsibilities with participation in training or employment. However, a number of studies have shown (for example, Bradbury 1992) that partners of the unemployed are more likely to be out of the labour force than partners of the employed, and hence are also at risk of family poverty.

The data presented in this paper and other research (Carberry et al, 1996) show that in terms of labour market barriers (such as number and age of children and educational background), it would seem that lone and partnered parents in receipt of income support are more alike than different. In addition, all low income parents receive the same payment - PP, albeit with different income tests and rates of payment. It may therefore be appropriate to provide as similar assistance as possible to each. Imposing similar requirements on both lone and partnered parents also ensures equal treatment to all low income parents.

It is also relevant that a recent survey of lone mothers' employment in 20 countries (University of York UK, 1995) found that lone mothers do best (in terms of relative incomes and living standards) in countries where they are treated in the same way as married mothers. Outcomes were also better where all mothers/parents are supported to be both parents and paid workers, not one or the other.

Perhaps lone parents' needs could be addressed by specific design elements of the mutual obligation model, by the inclusion of specific purpose exemptions, or by providing extra assistance. For example, temporary exemptions could be applied where a customer has recently separated, or is exposed to or threatened by domestic violence.

Parents have a diverse range of circumstances, needs and preferences, and therefore a mutual obligation model would need to be focussed on individual circumstances rather than a blanket application across all members of the group. Any framework must also be flexible enough to cater for unpredictable or unforeseen events that are more likely to occur with children. One version of mutual obligation would allow PP recipients to retain a choice between employment-related activities and those classified as socially valuable. Parents with primary responsibility for the care of their children would be able to find their own balance between their parenting work and paid employment (Pech, 1998). Under such an arrangement, the majority of people might be expected to increase their labour market involvement over time, and eventually exit the income support system.

Under such a model, people would be able to qualify for income support by undertaking an appropriate combination of activities — for example, care of a school-aged child and part-time work or vocational training. Pech and Innes (1998) suggest a participation continuum model (see Figure 2), where most people would naturally move along the continuum, in either direction, as their circumstances change or evolve.

Under this model, the income support system could encourage and support more gradual transitions into and out of the labour force, while still taking account of the many factors that may constrain participation for any individual at any point in time.

The issues discussed in this paper suggest that the income support system could be better structured to reflect the duality of parents' roles, by avoiding categorising income support customers as either workers (actual or potential), or child carers. If a mutual obligation model were introduced, it should also recognise this duality of parents' roles. This suggests that requirements should exist in an environmental context that provides adequate support and recognition of parents' family responsibilities. This translates to such factors as adequate and affordable childcare and the provision of accessible training and labour market assistance, as well as broader economic factors such as family-friendly workplaces. Indeed, it could be argued that the imposition of a set of mandatory activities on a customer group heightens the moral and political obligation on their government and community to address such factors that impede customers from undertaking those activities. One of the interesting features of the welfare tightening for lone mothers in the US is that it has involved significantly higher levels of expenditure on case management, training, education and child care to ensure that individuals subject to the obligations are able to benefit.

The issues are no less complicated or controversial in the area of supplementary family assistance. The maintenance action test is still subject to concerns in the community about equity and the rights that might accompany the obligations of the non-resident parent (for example, the rights to access of children and the rights of the non-resident parent's new family to assistance). In relation to the linking of assistance (MIA, CA and CCR) to influencing parental behaviour (child immunisation), it is still too early to assess the success of the obligations in increasing immunisation rates and community acceptance of such an initiative. The introduction of the initiative did raise some community concern from parents who had ideological objections to child immunisation (for whom there is an exemption from the obligation).

These examples highlight the sensitivities in linking financial entitlements to a socially desired change in a family or parent's behaviour. The use of obligations to influence behaviour involves value-judgements and community consensus about what is socially desirable and undesirable. The linking of receipt of FA to certain parenting behaviours or requirements to use FA in specified ways may not be widely acceptable to the community and could be viewed as an unacceptable breakdown between the public and private spheres. The application of such obligations to only low-income families also raises particularly difficult moral issues about how society treats disadvantaged families.

The final point to be made is that in any consideration of mutual obligation and the social security system, widespread community debate and consensus is essential.

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