Take-Up Down Under: Hits and Misses of Means-Tested Benefits in Australia

Research has revealed considerable non-take-up rates of benefits in western welfare states, which has raised concern that benefits fail to reach their objectives. Most research has focused on means-tested benefits, partly because they are believed to be subject to high stigma deterring people from take-up. I study the take-up of such benefits in Australia, where virtually all cash benefits are means-tested. Using data from the first two waves of the Household, Income and Labour Dynamics Australia (HILDA) survey, I estimate the general take-up rate of benefits among people with low assets and incomes and carry out a detailed analysis of take-up of one particular benefit, Parenting Payment. Contrary to the traditional conception of selective welfare states as highly stigmatizing, I find no evidence of a particularly low degree of take-up, and I suggest that stigma of means-tested benefits in Australia may on average be low because they target a relatively large proportion of the population. However, non-take-up appears to be considerable in some population categories where stigma is likely to be relatively high.