The Government's work-focused welfare reforms are effectively creating a new class of economically vulnerable, invisible and unequal children, a Child Poverty Action Group report says.
The report, released today, looked at the impact on children of benefit sanctions, which can include the reduction, suspension or cancellation of benefits payments if certain conditions are not met.
CPAG's researchers concluded the sanctions regime put children's needs in second place, behind the "ideologically driven desire" to move sole parents and other beneficiaries into paid work.
They said that would create "a class of economically vulnerable, invisible and unequal children whose wellbeing is intimately tied to the welfare/labour market status of their caregivers".
The report's title asked whether benefit sanctions would create an "invisible underclass" but the report itself stopped short of using the term, which it said had no factual or theoretical basis.
The authors also raised concerns that the sanctions regime was not clear or transparent.
The report cited figures which showed the number of beneficiaries being sanctioned was increasing, but said it was unclear whether that was due to greater efforts on the part of Work and Income staff, or whether the sanctions were failing to change beneficiaries' behaviour.
Between September 2010 and January 2012, 2977 people on the domestic purposes benefit (DPB) were sanctioned for work test failures.
Over a longer period, between October 2010 and November 2012, 6567 DPB-related beneficiaries were sanctioned.
The report said that meant 3590 more beneficiaries were sanctioned in the 10 months from January and November 2012 than were sanctioned in the previous two years.
It was not known how many children were affected by the sanctions, the report said.
CPAG called on the sanctions to be repealed given what it called a "lack of transparency and accountability of their use".
Beneficiaries currently have to meet a number of obligations in order to avoid sanctions.
They include being available to take up suitable employment, ensuring children over three attend early childhood education, and later school, and ensuring children are enrolled with a primary health care provider.
Beneficiaries can also have their benefits cut if they have outstanding arrest warrants or fail a drug test.
The report said the failure to comply with these social obligations led to benefit cuts which added to threats to children's income security.
"The nature and scale of the changes to social assistance since 2010 require that more attention must be paid to outcomes for children and their families, not least because the figures here clearly show hundreds of children have already been affected by sanctions."
Speaking ahead of the report's release, CPAG spokesman Associate Professor Mike O'Brien said the children of beneficiaries were being singled out for different treatment under the welfare reforms.
Dr O'Brien said the Government continued to state its commitment to vulnerable children, but the benefit sanctions left struggling families to fend for themselves.
"The reality of reducing or cancelling a benefit is that children of struggling parents are placed at greater risk."
The CPAG report urged that the sanctions be monitored, particularly for sole parents, Dr O'Brien said.
"The Government needs to assess whether the system is creating additional hardship by churning people in and out of the benefit system."