Abstract: Australian youth income support and educational policies have focused on increasing participation and retention in schools. The assumptions and rationales underpinning these policies assert a positive relationship between educational engagement, employment and social inclusion. This paper examines these assumptions and rationales and, drawing upon Australian and international research (particularly the UK) over the past decade, questions the efficacy of these policies in achieving their stated goals. Furthermore, the paper argues that the neo-liberal philosophical underpinnings of these policies, particularly the emphasis on responsibilisation, can undermine disadvantaged young people’s engagement with school and does little to create positive pathways to employment. Moreover, it is clear that disadvantaged young people are not assisted by these policies to make empowered social transitions.