This book explores the legal meaning of the radical new laws which have transformed the social security system in the last decade. It analyses legislation and case law and lays out the legal principles and concepts, which underpin the sweeping reforms, culminating in the ‘welfare reform’ package announced in the 2005 Budget. It also explores the policy foundations of these reforms and key administrative changes, such as the creation of a privatised ‘job network’ and of Centrelink as a ‘payment agency’ . This book also explores the tension between traditional ‘protective’ functions of social security and the contemporary focus on ‘activation’, reciprocity and ‘capacity-building’, and the extent to which social changes have altered the form of Australian welfare. It reviews the history and transformation of the welfare state, the ideas about the nature of poverty and need, and the policy choices to be made. Detailed case studies are made of the law and policy affecting key groups such as the unemployed, people with illness or disability, and sole parents, as well as the administration and review rights of welfare recipients, and the workings of income and means tests.