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Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018



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ISSN 1328-8091

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BILLS DIGEST NO. 104, 2017-18 8 MAY 2018

Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018 Lauren Cook and Henry Sherrell Social Policy Section

Contents

Purpose of the Bill ............................................................... 3

Background ......................................................................... 3

Newly Arrived Resident’s Waiting Period (NARWP) ................ 3

History of the NARWP ........................................................... 3

Current state of the NARWP ................................................. 4

Table 1: exemptions from the NARWP.................................. 4

Impact of the NARWP............................................................ 5

Migration in Australia and the NARWP ................................... 6

Table 2: various pathways from temporary to permanent visas, 1991-2014 ................................................ 7

Table 3: income support by immigrant category, 2011 ........ 8

Committee consideration .................................................... 8

Senate Standing Committee for the Scrutiny of Bills .............. 8

Senate Community Affairs Legislation Committee .................. 8

Policy position of non-government parties/independents ..... 8

Position of major interest groups ......................................... 9

Australian Council of Social Services ....................................... 9

Federation of Ethnic Communities’ Councils of Australia ....... 9

Financial implications .......................................................... 9

Table 4: impact on the fiscal balance for each schedule ..... 10

Statement of Compatibility with Human Rights .................. 10

Parliamentary Joint Committee on Human Rights ................ 10

Impact of the changes ........................................................... 10

Numbers affected ................................................................ 10

Behavioural change ............................................................. 10

Date introduced: 15 February 2018

House: House of Representatives

Portfolio: Social Services

Commencement: 1 July 2018 or, if the Act receives Royal Assent on or after 1 July 2018, on the first 1 January or 1 July to occur after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at

May 2018.

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Schedule 1 - Social security amendments ........................... 11

Table 5: impact of Schedule 1 of the Bill ............................. 11

Key Provisions...................................................................... 12

Increasing social security NARWPs ................................... 12

Introducing social security NARWPs ................................. 12

Amendment to special benefit NARWP exemption .......... 13

Schedule 2—Farm household support amendments ........... 14

Table 6: impact of Schedule 2 of the Bill ............................. 14

Key Provisions...................................................................... 14

Schedule 3 - Family assistance amendments ...................... 14

Table 7: impact of Schedule 3 of the Bill ............................. 14

Key Provisions...................................................................... 14

Schedule 4 - Paid parental leave amendments ................... 15

Table 8: impact of Schedule 4 of the Bill ............................. 15

Key Provisions...................................................................... 15

Appendix 1 ........................................................................ 17

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Purpose of the Bill The purpose of the Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018 (the Bill) is to:

• amend the Social Security Act 1991 to increase the existing newly arrived resident’s waiting period (NARWP) from two to three years and introduce a NARWP for carer allowance, bereavement allowance, widow allowance and parenting payment

• amend the Farm Household Support Act 2014 to increase the existing NARWP for farm household allowance from two to three years

• amend the A New Tax System (Family Assistance) Act 1999 to introduce a NARWP for family tax benefit and

• amend the Paid Parental Leave Act 2010 to introduce a NARWP for parental leave pay, and dad and partner pay.

The measures were announced in the 2017-18 Mid-Year Economic and Fiscal Outlook (MYEFO) and are expected to commence on 1 July 2018.1

The changes to NARWPs are expected to provide combined savings over the forward estimates of approximately $1.3 billion.2

Background Newly Arrived Resident’s Waiting Period (NARWP)

History of the NARWP In January 1993, the then Labor Government introduced a 26 week NARWP for migrants after arrival in Australia for job search allowance, newstart allowance, and sickness allowance. From their inception in 1995, youth training allowance, parenting allowance and widow allowance were also subject to the 26 week NARWP.3 This meant that newly arrived migrants, other than humanitarian and refugee migrants, were unable to access these payments until they had resided in Australia for 26 weeks.

The extension of the NARWP to two years had its genesis in the Coalition’s Fightback policy released in 1991. In this policy, the Coalition stated it would ‘not permit future migrants access to benefits for two years after they first arrive, unless they are given refugee or humanitarian entry status. Access to Family Allowances will however be maintained’.4

Prior to the 1993 election, the Coalition released the following statement further outlining this policy:

The immediate availability of social security benefits to new arrivals has been a significant "pull factor", attracting people who could achieve a higher standard of living than they could in their country of origin.

In order to reduce the incidence of migration motivated by such factors, the Liberal/National party Government will extend the current qualifying period before newly arrived migrants are eligible for social security benefits, from 6 months to 2 years.

Exempt from this would be those who have been accepted as refugees or humanitarian entrants. There will be access to special benefits for those who find themselves in exceptional circumstances. 5

In a doorstop interview from 16 February 1996, then Leader of the Opposition John Howard defended the waiting period increase against criticism that it could force people to seek support from charities stating:

1. S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2017-18, pp. 178-9. 2. Explanatory Memorandum, Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018, p. 2. 3. Student Assistance (Youth Training Allowance) Amendment Act 1994, section 101; Social Security (Parenting Allowance and Other Measures) Legislation Amendment Act 1994, Schedules 1 and 4.

4. Liberal Party of Australia and The Nationals, Fightback: taxation and expenditure reform for jobs and growth, Coalition policy document, 21 November 1991, p. 289. 5. Liberal Party of Australia and The Nationals, Immigration and ethnic affairs policy, Coalition policy document, Election 1993, p. 6.

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Take the migrant waiting periods - it doesn't apply to refugees, it doesn't apply in humanitarian circumstances, it reinforces the contract or the covenant that exists between the Government and those who sponsor people to settle in this country. It, of course, doesn't apply to family allowance and other benefits and it does have a safety net provision. The policy cannot lead to that kind of result because it does provide, if through inadvertent circumstances somebody is thrown out of work, then the safety net provisions of it will operate.

6

When the Coalition Government was elected in March 1996, this policy was implemented and, in March 1997, legislation was passed extending the 26 week NARWP to two years.7 The NARWP was also extended to cover partner allowance, carer’s pension, mobility allowance, special benefit, mature age allowance, and the senior’s and health care cards.

Since 1997, substantial changes to the NARWP have included the following:

• from 26 February 2001, all New Zealand citizens who arrived in Australia were required to be a permanent resident before accessing certain social security payments, and were subject to the NARWP8

• from 1 January 2012, the Government removed a NARWP family member exemption for special benefit, which had exempted family members of Australian citizens, permanent residents and refugees from the NARWP without the need to prove a substantial change in circumstances since arriving in Australia9 and

• from 16 September 2016, the Government removed the exemption from the NARWP for the remaining applicable benefits, for new migrants who are family members of Australian citizens or long-term permanent residents.10

Current state of the NARWP Under the NARWP, a person is generally not eligible to receive specified benefits until the person has been an Australian resident and in Australia for two years. A two-year NARWP currently applies to carer payment, youth allowance, austudy payment, newstart allowance, sickness allowance, special benefit, mobility allowance, pensioner education supplement, seniors health card, health care card, and farm household allowance.

There are a number of exemptions from the NARWP, depending on the particular benefit.

Table 1: exemptions from the NARWP

Benefit

Qualifying residence exemption (a)

Refugee (b) Australian citizen

Subclass 104 or 806 visa holder

Holder of a visa determined by Minister

Lone parent (c)

Became a handicapped person while in Australia

Substantial change in circumstances since arrival

Carer payment Yes Yes Yes Yes Yes

(d)

- - -

Youth allowance Yes Yes Yes - - Yes - -

Austudy payment

Yes Yes Yes - - - - -

Newstart allowance Yes Yes Yes - - Yes - -

Sickness allowance Yes Yes Yes - - - - -

Special benefit

- Yes Yes - Yes

(e)

- - Yes

6. J Howard (Opposition Leader), Doorstop interview - St Gregory’s Primary School Queanbeyan, transcript, 16 February 1996, p. 6. The ‘safety net provision’ mentioned in this speech is the exemption from the NARWP for special benefit if the person has a substantial change in circumstances since arriving in Australia (see subsection 739A(7) of the Social Security Act 1991). 7. Social Security Legislation Amendment (Newly Arrived Resident’s Waiting Periods and Other Measures) Act 1997. 8. J Howard (Prime Minister of Australia) and H Clark (Prime Minister of New Zealand), New Australia/New Zealand social security

arrangements: joint Prime Ministerial communique, media release, 27 February 2001. 9. Social Security and Other Legislation Amendment Act 2011, Schedule 2. 10. Budget Savings (Omnibus) Act 2016, Schedule 10.

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Benefit

Qualifying residence exemption (a)

Refugee (b) Australian citizen

Subclass 104 or 806 visa holder

Holder of a visa determined by Minister

Lone parent (c)

Became a handicapped person while in Australia

Substantial change in circumstances since arrival

Mobility allowance Yes Yes Yes - - - Yes -

Pensioner education supplement Yes Yes Yes - - - - -

Seniors health card Yes Yes Yes - - - - -

Health care card Yes Yes Yes - Yes - - -

Farm household allowance Yes Yes Yes - - Yes - -

(a) A person may have a qualifying residence exemption if the person resides in Australia and is a refugee, former refugee or family member of a refugee; or if the person is the holder of a visa determined by the Minister. See Social Security (Class of Visas - Qualifying Residence Exemption) Determination 2016. (b)

This includes refugees, former refugees and family members of refugees. (c) Exemption applies if the person becomes the lone parent of one or more children after becoming an Australian resident, and is not a member of a couple. (d)

See Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Carer Payment) Determination 2017. (e) See Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Special Benefit) Determination 2015 (No. 2).

Source: Social Security Act 1991, sections 201AA, 549D, 575D, 623A, 696B, 739A, 1039AA, 1061PU, 1061ZH and 1061ZQ; Farm Household Support Act 2014, section 42.

For bereavement allowance, widow allowance, and parenting payment a 104 week qualifying residence period applies.11 While this period is different from the NARWP, its effect is the same. Under this period, a person must be an Australia resident, and reside in Australia for a period of 104 weeks before they qualify for these payments.

A person may be exempt from this period if they have a qualifying residence exemption12 or, in the case of parenting payment, if the person becomes the lone parent of one or more children after becoming an Australian resident, and is not a member of a couple.13

For an overview of residency requirements for benefits in New Zealand, the United Kingdom, the United States, and Canada, please see Appendix 1.

Impact of the NARWP On 2 October 1997, the Department of Social Services (DSS) and Centrelink held a community consultation meeting on the two year NARWP.14 The following impacts of the two year NARWP were identified at this meeting by community representatives:

• an increase in newly arrived migrants seeking financial and other assistance from charities

• an increase in family breakdown due to the additional financial pressure

• instances of newly arrived migrants being abused or exploited by family members

• evidence that newly arrived migrants with young children were using the money received from the Family Payment to buy food

• evidence of poor and deteriorating health among newly arrived migrants, due to undernourishment, anxiety and depression and

11. Social Security Act 1991, paragraphs 315(1)(d), 408BA(2)(d) and 500(1)(d). 12. A person may have a qualifying residence exemption if the person resides in Australia and is a refugee, former refugee or family member of a refugee; or if the person is the holder of a visa determined by the Minister. See Social Security (Class of Visas - Qualifying Residence Exemption) Determination 2016.

13. Social Security Act 1991, subparagraph 500(1)(d)(i). 14. R Kritikos, E Lavie and M Papagrigoriou, Newly arrived migrants and the ‘two year waiting period’, Research paper, Ethnic Communities’ Council of NSW Inc., December 1997, p. 43.

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• an increase of people being driven to the ‘black economy’.15

In December 1997, the Ethnic Communities’ Council of NSW published a research paper on the impact of the NARWP. In this research project, service providers16 were asked to complete a questionnaire regarding their clients who were subject to the NARWP.17 When asked whether the two year NARWP had negatively contributed to their clients’ settlement process, 91.4% of the service providers responded in the affirmative.18 The negative impacts reported by the service providers included financial issues (98.2%), settlement issues (42.1%), physical and psychological issues (32.6%) and family issues (30.5%).19

In 2008, data from the Longitudinal Survey of Immigrants to Australia was used to analyse new migrant job outcomes. 20 In this study, the researchers noted the following regarding migrants subject to the two-year NARWP, referred as ‘cohort 2 migrants’, in comparison with ‘cohort 1 migrants’ who had arrived in Australia between 1993 and 1995 and who had a shorter, six-month waiting period:

Our main results show that the sole effect of being a second cohort migrant is beneficial for the probability to both find a job and a ‘good job’. They are more likely to move upward earlier than first cohort migrants. However, a large part of this result is due to the higher employability of second cohort migrants. As a consequence, they out-perform first cohort migrants but only up to about 1.5 years after settlement. After this, cohort 2 migrants who have not found a good job see their prospect of improving their situation decrease sharply below that of first cohort individuals. Therefore, even though migrants arriving after the policy change are indeed of slightly better quality, those who do not land a good job quickly have to wait longer before experiencing a significant upward occupational mobility.

21

However, the improved employment prospects are unlikely to be solely due to the introduction of the two-year NARWP. This may also be due to improved economic conditions in Australia, as well of a raft of other changes to immigration policy since the late 1990s.

Migration in Australia and the NARWP Australian immigration trends have undergone substantial change since the introduction and extension of the NARWP. In his second reading speech, Minister for Social Services, Dan Tehan provided the following justification for the Bill:

The welfare payments system is already subject to a number of targeting provisions, which include residency requirements designed to ensure that payments are made to people who are residing in Australia and have an established and ongoing connection to Australia.

For this reason, waiting periods for new migrants already exist for a number of welfare payments. These waiting periods—known as the newly arrived resident's waiting period—are designed to ensure that people who decide to apply for a permanent visa take steps to provide for their own financial support during their initial settlement period.

22

One major change to immigration trends has been how ‘initial settlement periods’ have increased for some recent migrants since the introduction of the NARWP. In the early 1990s, approximately four in five permanent visas were granted to people outside of Australia.23 This reflected the traditional model of permanent settler immigration, where recent migrants mostly gained permanent residency on arrival.

15. Ibid., pp. 46-7. 16. While the term ‘service providers’ was not defined in the study, respondents to the questionnaire included the Bangladesh Islamic Centre, Chinese Community in Australia, Vietnamese Community in Australia, and Welfare Rights Centre. 17. Kritikos, Lavie and Papagrigoriou, Newly arrived migrants and the ‘two year waiting period’, op. cit.

18. Ibid., p. 27. 19. Ibid., p. 28. 20. S Mahuteau and P Junankar, ‘Do migrants get good jobs in Australia? The role of ethnic networks in job search’, The Economic Record [Special Issue], 84, September 2008, pp. S115-S130. 21. Ibid., p. S117. 22. D Tehan (Minister for Social Services), ‘Second reading speech: Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly

Arrived Migrants) Bill 2018’, House of Representatives, Debates, 15 February 2018, p. 1605. 23. Department of Immigration and Ethnic Affairs, Population Flows: Immigration aspects, January 1994, p. 15.

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However by 2016-17, approximately one in two permanent residency visas were granted to people already in Australia.24 This refers to the phenomenon of ‘two-step’ migration, where a new migrant arrives on a temporary visa and then transitions to a permanent visa after some time.

In a 2016 report, the Productivity Commission explored the link between temporary and permanent visas, examining how long recent migrants spent in Australia before moving to a permanent visa:25

Table 2: various pathways from temporary to permanent visas, 1991-2014

Number Average number of

visas in pathway Average duration of the pathway (years)

Student to employer-sponsored permanent

Direct 34 340 3.6 4.4

Via temporary skilled (non-457) 29 173 4.5 5.2

Via temporary skilled (457) 12 870 4.6 5

Student to non-employer-sponsored permanent

Direct 79 652 3.8 3.9

Via temporary skilled (non-457) 58 209 4.7 4.9

Via temporary skilled (457) 4 149 4.7 5.2

Temporary skilled (457) to employer-sponsored permanent

Direct 111 537 2.3 2.7

Via 457 to visitor to 457 visas 555 4.7 6.2

Via visitor to 457 visas 539 3.3 3.8

Temporary skilled (457) to non-employer-sponsored permanent

Direct 19 529 2.5 2.7

Via visitor visa 253 3.6 4.8

Via student visa 196 4.3 5.7

Source: Productivity Commission, Migrant intake into Australia, Report, 77, ‘Table 12.1 Use of specific pathway sequences’, Canberra, April 2016, p. 418.

The Productivity Commission’s analysis shows how recent migrants to Australia can spend considerable time already in Australia before gaining a permanent residency visa. Compared to when the NARWP was introduced, the ‘initial settlement period’ now often includes a number of years spent on a temporary visa.

The other major change is the composition of recent migrants, away from family migration and towards skilled migration. In the year the NARWP was introduced, approximately two-thirds of permanent residency visas were

24. Department of Immigration and Border Protection, 2016-17 Migration programme report: programme year to 30 June 2017, 2017, p. 3. 25. Productivity Commission, Migrant intake into Australia, Report, 77, ‘Table 12.1 Use of specific pathway sequences’, Canberra, April 2016, p. 418.

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allocated to the Family stream.26 In the 2017-18, the Family stream is allocated less than one-third of permanent residency visas.27

According to Productivity Commission analysis of 2011 Census data, family permanent visa holders receive income support and unemployment benefits at a rate three times higher than skilled permanent visa holders. However the rate of income support for family permanent visa holders is below the general population:

Table 3: income support by immigrant category, 2011

Proportion receiving any

form of income support(a)

Proportion receiving unemployment benefits Average family income support payment(b)

Skilled 3 1 25

Family 13 4 30

Humanitarian 65 24 30

General population 17 4 33

(a) Table population includes immigrants who arrived between 1 January 2000 and 2011 Census night, who are aged 15- 64 years receiving income support payments on Census date, 9 August 2011

(b) Average daily income support payment is only for those who are receiving income support.

Source: Productivity Commission, Migrant intake into Australia, op. cit., ‘Table 9.1 Income support by immigrant category, 2011’, p. 317.

When these social security and migration trends are viewed together, a smaller proportion of recent migrants in 2017-18 compared to when the NARWP was introduced would be drawing on income support. However the aggregate number of recent migrants is higher in 2017-18 compared to any point in the 1990s.28

These trends outline how the ‘initial settlement period’ and propensity to receive income support for recent migrants to Australia today are markedly different to recent migrants to Australia in the early 1990s.

Committee consideration Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) reported on the Bill on 21 March 2018.29 The Scrutiny of Bills Committee did not have any comment on the Bill.

Senate Community Affairs Legislation Committee On 28 March 2018, the Senate Standing Committee for the Selection of Bills recommended that the Bill be referred to the Community Affairs Legislation Committee for inquiry and report by 4 May 2018, due to the impact on newly arrived migrants.30 The Community Affairs Committee has sought an extension to the reporting date and will now report on 18 May 2018.31 At the time of publication of this Digest, the Committee had received 20 submissions.32 Further details are at the inquiry homepage.33

Policy position of non-government parties/independents At the time of writing, no official policy position appears to have been released by the non-government parties or independents on the Bill.

26. Department of Immigration and Ethnic Affairs, Population Flows: Immigration aspects, op. cit., p. 9. 27. Department of Immigration and Border Protection, 2016-17 Migration programme report: programme year to 30 June 2017, op. cit., p. 3. 28. J Phillips and J Simon-Davies, Migration to Australia: a quick guide to the statistics, Research paper series, 2016-17, Parliamentary Library, Canberra, 2017.

29. Standing Committee for the Scrutiny of Bills, Scrutiny digest, 3, 2018, The Senate, Canberra, 21 March 2018, p. 45. 30. Senate Standing Committee for the Selection of Bills, Report, 4, 2018, The Senate, 28 March 2018. 31. Senate Community Affairs Legislation Committee, Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018, The Senate, Canberra, 2018.

32. Senate Community Affairs Legislation Committee, Submissions to the Senate Standing Committee on Community Affairs, Inquiry into the Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018, The Senate, Canberra, 2018. 33. Senate Community Affairs Legislation Committee, Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018, op. cit.

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During an interview on 18 December 2017, the Shadow Minister for Finance, Jim Chalmers indicated that the Australian Labor Party was yet to form a policy view on this measure, adding:

We do have concerns about the Government's willingness, or the relish really with which they attack the most vulnerable people in our community. But we'll go through it properly and have proper discussions with our colleagues before we announce a view. 34

In a Senate Estimates hearing on 1 March 2018, Labor Senator Kristina Keneally said:

The title of the bill is about encouraging self-sufficiency, and I should say, for transparency's sake, that I came to Australia as a skilled migrant and drew immediately upon social services when I arrived here. So, I have some experience in this area. I would like to know how the bill actually encourages self-sufficiency, when it seems to be withdrawing support from newly arrived migrants?

In my circumstance, I arrived here and sought assistance in terms of finding a job and accommodation. My entire intent was to be able to support myself. I was seeking employment and found employment. But, without those types of supports when I first arrived here, those two things would have been much more difficult. So, I'm trying to understand. You have people coming here as skilled migrants. They are arriving on our shores, and, if they come in as a skilled migrant, you've assessed their ability to work. How is denying them access to these types of supports encouraging self-sufficiency?

35

Position of major interest groups Australian Council of Social Services The Australian Council of Social Services (ACOSS) has criticised the NARWP changes, stating that they will ‘create an underclass of migrants - new arrivals who find themselves at even more risk financially as they try to settle into Australia’. 36 ACOSS further stated that the changes will disproportionately affect women and see more children live in poverty. Concern was also raised that the changes ‘will drive more people to our charities for meeting the essentials of life, such as food and shelter’.37

Federation of Ethnic Communities’ Councils of Australia The Federation of Ethnic Communities’ Councils of Australia (FECCA) is also opposed to the amendments to the NARWP, stating that they ‘will hit the most vulnerable of new arrivals’.38 FECCA stated that the changes would ‘make it harder for migrants to settle in this country—for the sake of what is a relatively modest Government budget saving’.39

Financial implications According to the Explanatory Memorandum, the changes to the NARWPs will provide savings of approximately $1.3 billion over the forward estimates.40

34. J Chalmers (Shadow Minister for Finance), Interview Samantha Maiden, Sky News, MYEFO, transcript, 18 December 2017. 35. K Keneally (Labor Senator), Additional Senate Estimates, Community Affairs Legislation Committee, 1 March 2018, p. 86. 36. Australian Council of Social Services (ACOSS), Good news in MYEFO undone by more mean-spirited social security cuts, media release, 18 December 2017.

37. Ibid.

38. Federation of Ethnic Communities’ Councils of Australia (FECCA), Waiting period measure to hit vulnerable migrants, media release, 10 December 2017. 39. Ibid.

40. Explanatory Memorandum, op. cit., p. 2.

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Table 4: impact on the fiscal balance for each schedule

Measure Financial impact over the forward estimates(a)

Schedule 1 - Social security amendments Savings of $141.8 million

Schedule 2 - Farm household support amendments No impact

Schedule 3 - Family assistance amendments Savings of $898.4 million

Schedule 4 - Paid parental leave amendments Savings of $241.4 million

(a) The financial impact is for DSS administered impacts only

Source: Explanatory Memorandum, Social Services Legislation Amendment (Encouraging Self-sufficiency for Newly Arrived Migrants) Bill 2018, p. 2.

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.41

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights (Human Rights Committee) reported on the Bill on 27 March 2018.42

The Human Rights Committee found that limiting access to social security payments by increasing or introducing a NARWP raised questions regarding compatibility with:

• the right to social security

• the right to an adequate standard of living

• the right to paid parental leave and

• the right to equality and non-discrimination.

The Human Rights Committee sought advice from the Minister regarding the reasoning and objectives behind the Bill, whether the Bill is effective to achieve that objective, whether the limitation on rights is reasonable to achieve this objective, and whether alternatives to reducing access to social security have been fully considered. At the time of writing, the Committee had received but not yet published the Minister’s response to this request.43

Impact of the changes

Numbers affected On 18 December 2017, then Minister for Social Services, Christian Porter announced that when fully implemented in 2020-21, ‘approximately 50,000 families would potentially be serving a waiting period for family payments and approximately 30,000 people would be serving waiting periods for other payments’.44

In March 2018, the Department of Social Services confirmed these figures, adding that they have ‘estimated there to be 110,000 children in those 50,000 families’.45

Behavioural change There may be some behavioural change in response to the proposed legislation. As Australian citizens are exempt from social security waiting periods, the Bill may create an incentive to become an Australian citizen.

41. The Statement of Compatibility with Human Rights can be found at page 27 of the Explanatory Memorandum to the Bill. 42. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 3, 2018, op. cit., pp. 70-8. 43. Parliamentary Joint Committee on Human Rights, ‘Correspondence register’, Australian Parliament website. 44. C Porter (Minister for Social Services), New migrant welfare access to reinforce residence-based welfare, media release, 18 December 2017. 45. Senate Community Affairs Legislation Committee, Official committee Hansard, 1 March 2018, p. 84.

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Currently, to become a citizen by conferral, the general residency requirement must be met (unless an exemption applies). This requires a person to be:

• lawfully present in Australia for four years immediately prior to the application date and

• a permanent resident for 12 months immediately preceding the application date.46

While the Australian Government is proposing to change the general residency requirement to include four years of permanent residency, the relevant legislation did not pass the Parliament when introduced in 2017.47

Unlike the general residency requirement for citizenship purposes, the NARWP generally does not take into account the time a person has spent in Australia prior to becoming a permanent resident.48 As the period of permanent residency required for citizenship is shorter than both the current NARWP and the proposed NARWP, it may be the case that recent migrants seek citizenship after obtaining permanent residency more quickly to avoid the NARWP. This is particularly pertinent to the extension of the Family Tax Benefit and Parental Leave payments to NARWP given the amount of support provided.

Example:

• a single parent arrives in Australia on a temporary skilled work visa in 2015, transitioning to a permanent visa in 2019. This person is eligible for citizenship 12 months after obtaining their permanent residency visa, in 2020

• if they do not obtain citizenship, they will be excluded from relevant family assistance payments until 2022. If this person earns $60,000 per annum and has one dependent child aged six years in 2020, the foregone financial assistance from not seeking citizenship in 2020 is approximately $14,500 in Family Tax Benefits until the NARWP expires in 2022.49

Given the income support available for citizens compared to non-citizens, extending the NARWP with the current general residency criteria in place will likely create an incentive to become a citizen for those recent migrants who arrived on temporary visas and now meet the general residency requirement.

Key issues and provisions Schedule 1 - Social security amendments Schedule 1 will increase the existing NARWP from 104 weeks to 156 weeks for various social security payments and concession cards, and introduce a 156 week NARWP for bereavement allowance, widow allowance, parenting payment and carer allowance.

Table 5: impact of Schedule 1 of the Bill

Payment / Concession Card Current NARWP New NARWP

Carer payment 104 weeks 156 weeks

Youth allowance 104 weeks 156 weeks

Austudy payment 104 weeks 156 weeks

Newstart allowance 104 weeks 156 weeks

Sickness allowance 104 weeks 156 weeks

46. Australian Citizenship Act 2007, subsection 21(1) and section 22. 47. Parliament of Australia, ‘Australian Citizenship Legislation Amendment (Strengthening the Requirements for Australian Citizenship and Other Measures) Bill 2017 homepage’ Australian Parliament website, Schedule 1, items 54 to 56. For further information see C Petrie and H Sherrell, Australian Citizenship Legislation Amendment (Strengthening the Requirements for Australian Citizenship and Other Measures) Bill 2017, Bills

digest, 23, 2017-18, Parliamentary Library, Canberra, 1 September 2017. 48. Though note that a limited number of temporary visa classes are entitled to social security payments, and in these cases the waiting period is calculated differently. 49. Parliamentary Library estimates based on current rates and thresholds in, Department of Human Service (DHS), A guide to Australian

Government payments, DHS, Canberra, last updated 20 March 2018, pp. 2-6.

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Payment / Concession Card Current NARWP New NARWP

Special benefit 104 weeks 156 weeks

Mobility allowance 104 weeks 156 weeks

Pensioner education supplement 104 weeks 156 weeks

Seniors health card 104 weeks 156 weeks

Health care card 104 weeks 156 weeks

Carer Allowance None 156 weeks

Bereavement Allowance None(a) 156 weeks

Widow Allowance None(a) 156 weeks

Parenting Payment None(a) 156 weeks

(a) These payments are currently subject to a 104 week qualifying residence period, which will run concurrently with the new NARWP. Accordingly persons applying for these payments must already have resided in Australia for 104 weeks before being eligible, unless an exemption applies.

Key Provisions

Increasing social security NARWPs Items 1 to 20 amend the Social Security Act to increase the 104 week NARWP to 156 weeks for carer payment, youth allowance, austudy payment, newstart allowance, sickness allowance, special benefit, mobility allowance, pensioner education supplement, seniors health card, and health care card.

The application provision at item 21 provides for the above amendments to apply:

• for carer payment, youth allowance, austudy payment, newstart allowance, sickness allowance, mobility allowance, and pensioner education supplement—in relation to a person who becomes the holder of a permanent visa on or after the commencement of the Bill

• for seniors health care card and health care card—in relation to a person who becomes the holder of a permanent visa or special category visa on or after commencement of the Bill and

• for special benefit—in relation to a person who applies for or become the holder of an applicable visa, or becomes the holder of a permanent visa on or after commencement of the Bill (as applicable).

Additionally, the application provision at item 21 provides that the above amendments do not apply in relation to a special category visa holder who is a protected SCV holder.50 This means that certain New Zealanders who were in Australia on 26 February 2001, and who are treated as permanent residents for the purposes of Australia’s social security laws, will not be subject to the change.

Introducing social security NARWPs Items 28 to 31 insert new sections into the Social Security Act, which will introduce a 156 week NARWP for bereavement allowance, widow allowance, parenting payment and carer allowance.51 This period will start on the day the person first became an Australian resident, and end when the person has been an Australian resident and in Australia for a total of 156 weeks.52

Under the proposed sections, the NARWP will not apply to:

50. A person is a protected SCV holder if they are: an SCV holder who was in Australia on 26 February 2001; an SCV holder who was in Australia as an SCV holder for a period of, or periods totalling, 12 months during the period two years immediately before 26 February 2001; an SCV holder who commenced or recommenced residing in Australia within three months from 26 February 2001; or an SCV holder who was residing in Australia on 26 February 2001, but was temporarily absent. See Social Security Act 1991, subsections 7(2A), (2B) and (2C).

51. Proposed sections 322, 323, 408CGA, 408CGB, 500X, 500Y, 966 and 967 of the Social Security Act. 52. Proposed sections 323, 408CGB,500Y and 967 of the Social Security Act.

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• a person who has a qualifying residence exemption53 (see above)

• refugees, former refugees, or family members of refugees54 and

• Australian citizens.

Reflecting these changes, items 23 to 27 amend the definitions of newly arrived resident’s waiting period and waiting period under subsection 23(1), to include references to each of these types of payments.

Some specific exemptions apply to particular payments. Under proposed section 500X, inserted by item 30, the NARWP will not apply for parenting payment if the person becomes the lone parent of one or more children after becoming an Australian resident, and is not a member of a couple.

Under proposed section 966, the NARWP will also not apply for carer allowance if the person is:

• the holder of a visa that is in a class of visas determined by the Minister55 or

• the recipient of a social security pension or benefit, farm household allowance, parental leave pay, or dad and partner pay.

The application provision at item 32 provides for the above amendments to apply in relation to a person who becomes the holder of a permanent visa on or after the commencement of the Bill. However, the amendment will not apply in relation to a special category visa holder who is a protected SCV holder (see discussion above).

Amendment to special benefit NARWP exemption Item 33 repeals current subsection 739A(7) that exempts a person from the NARWP for the special benefit if the person, in the Secretary’s opinion, has suffered a substantial change in circumstances beyond the person’s control after the person first entered Australia.

In its place, proposed subsection 739A(7) will exempt a person from the NARWP for the special benefit if the person, in the Secretary’s opinion, is suffering a substantial change in circumstances beyond the person’s control that occurred after:

• if the person holds a visa determined by the Minister:56

- if the person applied for the visa while outside Australia— the day the person entered Australia - if the person applied for the visa while in Australia—the day the person applied for the visa or • if the person holds a permanent visa— the later of:

- the day the person first entered Australia or - the day the person became the holder of that visa. The Explanatory Memorandum states that the change is aimed at ensuring the ‘substantial change in circumstance’ event occurs after the commencement of the person’s NARWP (or what would have been their NARWP if this exemption did not apply). The existing provision, in contrast, captures events occurring at any time after the person has first entered Australia, which may include events occurring to them outside Australia and years before they return to take up residency.57

The application provision at item 34 provides for these amendments to apply in relation to claims for special benefit made on or after the commencement of the Bill.

53. A person may have a qualifying residence exemption if the person resides in Australia and is a refugee, former refugee or family member of a refugee; or if the person is the holder of a visa determined by the Minister. See Social Security (Class of Visas - Qualifying Residence Exemption) Determination 2016. 54. Refugee is defined under subsection 7(6B) of the Social Security Act to include the holder of a permanent protection visa or permanent visa of

another specified class. It does not capture people who hold temporary protection visas, such as the Temporary Protection Visa (subclass 785) or Safe Haven Enterprise Visa (subclass 790). 55. Under the Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Carer Payment) Determination 2017, the Minister has determined subclass 116 (Carer) and subclass 836 (Carer) visas to be exempt from the NARWP for carer allowance. 56. See Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Special Benefit) Determination 2015 (No. 2), clause 5—

currently the visas specified are temporary Partner visas (subclasses 309 and 820). 57. Explanatory Memorandum, op. cit., p. 11.

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Schedule 2—Farm household support amendments Schedule 2 will increase the existing NARWP from 104 weeks to 156 weeks for farm household allowance.

Table 6: impact of Schedule 2 of the Bill

Payment / Concession Card Current NARWP New NARWP

Farm household allowance 104 weeks 156 weeks

Key Provisions Items 1 and 2 amend the Farm Household Support Act 2014 to increase the existing NARWP from 104 weeks to 156 weeks for farm household allowance.

The application provision at item 3 provides for the above amendments to apply in relation to a person who becomes the holder of a permanent visa on or after the commencement of the Bill.

Additionally, it provides that the above amendments do not apply in relation to a protected SCV holder (see discussion above).

Schedule 3 - Family assistance amendments Schedule 3 will introduce a 156 week NARWP for family tax benefit.

Table 7: impact of Schedule 3 of the Bill

Payment / Concession Card Current NARWP New NARWP

Family tax benefit None 156 weeks

Key Provisions Item 2 inserts proposed section 30 into the A New Tax System (Family Assistance) Act 1999, which will introduce a 156 week NARWP for family tax benefit. Depending on the individual circumstances, this period will start on the day the person applied for a particular visa,58 the day the person first entered Australia, or the day the person became the holder of a permanent visa.59 The NARWP will end when the person has been in Australia for a total of 156 weeks.60

Under proposed subsection 30(2), an individual is subject to the NARWP if, on or after the commencement of the Bill, the person becomes the holder of a permanent visa or a visa determined by the Minister.61 The Minister’s determination currently specifies a number of temporary visa classes, including partner, protection and humanitarian visas. However, some of these are also subject to an NARWP exemption.

Under proposed subsections 30(6), 30(7) and 30(8), the NARWP will not apply to a person if:

• the person holds, or was the former holder of a visa determined by the Minister under subsection 739A(6) of the Social Security Act 1991—note that this currently includes temporary protection and humanitarian visas, as well as some bridging visas62

• the person is receiving a social security pension or benefit, farm household allowance, parental leave pay, or dad and partner pay

• the person is a refugee, former refugee, or a family member of a refugee

• the person is an Australian citizen or

58. Proposed subsection 30(3) of the A New Tax System (Family Assistance) Act 1999. This currently includes subclass 309 (Partner (Provisional)) and subclass 820 (Partner) visas: See Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Special Benefit) Determination 2015 (No. 2), clause 5.

59. Proposed subsection 30(5) of the A New Tax System (Family Assistance) Act 1999. 60. Proposed subsections 30(3) to (5) of the A New Tax System (Family Assistance) Act 1999. 61. See Social Security (Class of Visas - Qualification for Special Benefit) Determination 2015 (No. 2), clause 4.

62. See the Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Special Benefit) Determination 2015 (No. 2), clause 6.

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• the person is residing in Australia when claiming family tax benefit, and has held a special category visa at any time before they make the claim—this means New Zealanders in Australia who have previously held a special category visa will be exempt. As the Explanatory Memorandum notes, New Zealanders who currently hold a special category visa will also not be subject to the NARWP for family tax benefit, as they do not fall within the scope of proposed subsection 30(2).63

Items 3 and 5 insert proposed subsection 36(1A) into the A New Tax System (Family Assistance) Act 1999 and subsection 999(1A) into the Social Security Act, which provide that the NARWP does not apply for stillborn baby payment or double orphan pension.

Item 6 inserts proposed paragraph 1061ZQ(2)(b) into the Social Security Act, which provides that the NARWP does not apply for the health care card if the person has an ‘FTB child’ for the purposes of the A New Tax System (Family Assistance) Act 1999.64

Schedule 4 - Paid parental leave amendments Schedule 4 will introduce a 156 week NARWP for paid parental leave, and dad and partner pay.

Table 8: impact of Schedule 4 of the Bill

Payment / Concession Card Current NARWP New NARWP

Paid Parental Leave None 156 weeks

Dad and Partner Pay None 156 weeks

Key Provisions Items 2 to 5 insert new sections into the Paid Parental Leave Act 2010 that will introduce a 156 week NARWP for paid parental leave, and dad and partner pay. Depending on the individual circumstances, this period will start on the day the person applied for a particular visa,65 the day the person first entered Australia, or the day the person became the holder of a permanent visa.66 The NARWP will end when the person has been in Australia for a total of 156 weeks.67

Under proposed subsections 31A(1) and 115CBA(1), an individual is subject to the NARWP if, on or after the commencement of the Bill, the person becomes the holder of a permanent visa or a visa determined by the Minister—this captures the same visa classes that are subject to the NARWP for family tax benefit.68

Similar exemptions to the NARWP will apply as for the family tax benefit. The NARWP will not apply to a person if:

• the person holds, or was the former holder of a visa determined by the Minister under subsection 739A(6) of the Social Security Act 199169

• the person is receiving a social security pension or benefit, or farm household allowance

• the person is a refugee, former refugee, or a family member of a refugee

• the person is an Australian citizen or

• the person is residing in Australia at the time of claim, and has held a special category visa at any time before they make the claim.

63. Explanatory Memorandum, op. cit., p. 18. 64. See the definition of ‘FTB child’ at section 23 of the Social Security Act 1991. 65. Proposed subsections 31A(2)-(3) and 115CBA(2)-(3) of the Paid Parental Leave Act 2010. This currently includes subclass 309 (Partner (Provisional)) and subclass 820 (Partner) visas: See Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Special Benefit)

Determination 2015 (No. 2), clause 5. 66. Proposed subsections 31A(4) and 115CBA(4) of the Paid Parental Leave Act 2010. 67. Proposed subsections 31A(2)—(4) and 115CBA(2)-(4) of the Paid Parental Leave Act 2010. 68. See Social Security (Class of Visas - Qualification for Special Benefit) Determination 2015 (No. 2), clause 4. 69. See the Social Security (Class of Visas - Newly Arrived Resident’s Waiting Period for Special Benefit) Determination 2015 (No. 2), clause 6.

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The application provision at item 6 provides that the above amendments will not apply in respect of a child who is born or becomes entrusted to the care of a person either before the commencement of the Bill, or in the six months after the Bill commences.

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Appendix 1 This table provides summary information about residency requirements (including waiting periods) for various social security benefits in New Zealand, the United Kingdom, United States and Canada. As residency requirements are quite complex, this table should not been seen as comprehensive. Further details are available in links.

Country Benefit Residency requirements

New Zealand Jobseeker Support Claimant must have continuously lived in NZ for two years or more since becoming a NZ citizen or permanent resident.

However, a person may be exempt from this requirement if they are suffering hardship, and do not qualify for any other benefit.

Working for Families Tax Credits Either claimant must be: • NZ resident and have been in NZ continuously for at least 12

months at any time and

• both a tax resident and resident in NZ

or all children being claimed for must be residents and present in NZ.

United Kingdom

Jobseeker’s Allowance

Claimant must have been living in the UK, the Isle of Man, the Republic of Ireland or the Channel Islands for at least three months, and must be either:

• a UK national or

• a European Economic Area (EEA) national and have the right to live in the UK, the Isle of Man, the Republic of Ireland or the Channel Islands.

Child Tax Credit Claimant must have been living in the UK for three months before being eligible to claim Child Tax Credit if they moved to the UK on or after 1 July 2014 and do not have a job. A range of exemptions apply to this requirement, including where the claimant:

• is a family member of someone who works or is self-employed

• is a refugee

• has been granted discretionary leave to enter or stay in the UK and can get benefits

• has been granted humanitarian protection

• was made (or has a family member who was made) redundant in the UK and is looking for a job or in training

• was working in the UK before but temporarily can’t work because of their health or an accident.

Child Benefit Claimant must have right to reside in the UK and live in the UK as main home. Claimants who do not have a job when they arrive in the UK must have been living in the UK for three months if they arrived on or after 1 July 2014 (unless an exemption applies).

Universal Credit There is no waiting period.

Aside from persons subject to immigration control (who are excluded from universal credit) claimants must have a right to reside in Great Britain.

United States (US) Unemployment benefit/insurance

Each state operates its own unemployment benefit program.

However, generally, eligibility requires the individual to have worked and earned a minimum amount of wages over a specified time period (for example, 18 months in Iowa).

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Temporary Assistance for Needy Families (TANF)

Legal permanent residents (LPRs) entering after August 22, 1996, are barred from TANF for five years, after which their coverage becomes a state option. States have the option to cover LPRs who are children or who are pregnant during the first five years.

Child tax credit No waiting period.

Canada Employment

Insurance

While there is no specific waiting period, a claimant is only entitled if they have worked the required number of hours within the last 12 months (this number varies, but is usually 420-700 hours).

Canada child benefit The person or their spouse must be a Canadian citizen, a permanent resident, a protected person (refugee), a temporary resident who has lived in Canada for the previous 18 months, or an Indian within the meaning of the Indian Act.

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