Studies of health care expenditure often exclude explanatory variables measuring wealth, despite the intuitive importance and policy relevance. We use the Household, Income and Labour Dynamics in Australia Survey to assess impacts of income and wealth on health expenditure. We investigate four different dependent variables related to health expenditure and use three main methodological approaches. These approaches include a first difference model and introduction of a lagged dependent variable into a cross-sectional context. The key findings include that wealth tends to be more important than income in identifying variation in health expenditure. This applies for health variables which are not directly linked to means testing, such as spending on health practitioners and for being unable to afford required medical treatment. In contrast, the paper includes no evidence of different impacts of income and wealth on spending on medicines, prescriptions or pharmaceuticals. The results motivate two novel policy innovations. One is the introduction of an asset test for determining rebate eligibility for private health insurance. The second is greater focus on asset testing, rather than income tests, for a wide range of general welfare payments that can be used for health expenditure. Australia's world-leading use of means testing can provide a test case for many countries.

Australian social policy has seen apparently contradictory developments over the period of economic restructuring. Social spending has increased based on a highly redistributive model while inequality has grown. This article explores the relationship between Australia’s experience of economic restructuring and the political dynamics of an emerging ‘dual welfare state’. Importantly, the article argues that Australian reformers did not reject the state per se, nor egalitarianism as an objective. Instead, reform sought to combine greater competition with compensation, generating larger inequalities in market incomes alongside growing social spending. The article explores how Labor combined neoclassical ideas about competition with a commitment to a ‘small state’ version of social democracy. This did moderate inequalities through the period of restructuring, but it also altered the dynamics of political contestation. The article provides two typologies to understand this political dynamic, arguing forms of marketisation opened the door to a political contest over the nature, rather than the extent, of public provision, while the model of targeting reinforced paternalist tendencies inherent in neoliberal reform.

Adequate income is a social determinant of health. In the United States, only Social Security beneficiaries receive inflation-protected guaranteed income. Social Security needs another 1983 compromise in which stakeholders accepted “shared pain” to avoid insolvency. We propose indexing the benefit using the chained consumer price index (CPI) for all urban consumers and providing a one-time bonus of 8% to 10% for beneficiaries in their mid-80s, when needs become greater. The chained CPI has little impact when beneficiaries start receiving benefits, but older beneficiaries need protection. The estimated 75-year savings from this restructured benefit amount to 14.2% to 18% of Social Security deficits. Modest increases in payroll taxes and maximum earnings taxed should make up most of the shortfall. Including unearned income with wages and salaries subject to the 6.2% individual tax would produce much more revenue. The discussion explores the proposal’s political feasibility, grounding in current policy and political science literature, and the role of income as a social determinant of health.

Universal Credit is a major change in the UK's social security system which will affect around eight million households by replacing six existing means-tested benefits and tax credits with a single benefit, based on income, assets and circumstances, and paid monthly. Much commentary about Universal Credit has supported the principle but raised concerns about delivery. This consensus about the principles and the focus on delivery have resulted in less attention being paid to key policy choices informing the design. This article examines two aspects of the design of Universal Credit: the aim to make Universal Credit as much ‘like work’ as possible, and the architecture of the means test. The focus here is the gap between the assumptions underlying the design of Universal Credit, on the one hand, and the research evidence about life on a low income, and in low-waged and often insecure employment, on the other. Finally, we discuss the most significant contradiction between the ‘transformational’ aim for Universal Credit, to help people achieve greater ‘independence’ from the state, and the realities of deepening and widening control of claimants’ lives.