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Community Affairs Legislation Committee - 19/11/2015 - Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015

BEAUMONT, Ms Katherine Louise (Kate), President, National Welfare Rights Network

BELCHER, Ms Christine Anne, Welfare Rights Advocate, National Welfare Rights Network

WEBBER, Ms Ruth, Chief Executive Officer, Down Syndrome Australia


Evidence from Ms Beaumont and Ms Belcher was taken via teleconference—

CHAIR: Welcome. Can I get each of you to please confirm that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you.

Ms Beaumont : Yes, it has.

Ms Belcher : Yes, it has.

Ms Webber : Yes.

CHAIR: Thank you. Perhaps starting with those from the National Welfare Rights Network, I now invite each of you to make a short opening statement and then we will move to questions.

Ms Beaumont : Thank you for the opportunity to speak to the committee today. The National Welfare Rights Network is the peak community organisation in the area of social security law, policy and administration. Our members provide front-line legal services to people experiencing social security problems.

Family tax benefit helps with the cost of raising children. While this bill is not as regressive as the 2014 family tax budget changes, it should not be supported as the payment cuts will have a disproportionate and unfair impact on low-income and sole parent families and, as a consequence, on the children in these families. Although there is provision for increases to some payment rates from July 2018, the other cuts far outweigh the beneficial aspects of this bill. This legislation purports to be about structural reform of the family payment system and encouraging participation in the workforce. However, it will mainly impact on the adequacy of payments to low-income families, without providing the necessary reforms of problems which exist within the family payment system. The thrust of some of the proposed changes are directed towards reducing payments for families when the youngest child turns 13 by encouraging those impacted into workforce participation. While this may work for some, it will mean further deprivation for those who are unable to secure employment whether because of skills or a personal situation, such as disability or caring responsibilities. There are recognised disincentives to participation in the family payment system such as the combined effect of having two separate family payments with different withdrawal rates, combined with tax rates and withdrawal of other income support payments, which reduce the returns from employment, especially for second earners in couple families. Unfortunately, again, the government has focused on rates of payment and restricting eligibility rather than on genuine structural reform, taking into account other parts of the welfare system.

The families who will lose the most in the changes are those whose eldest child has turned 13, with those with younger children losing less. It must also be recognised that there will be significant losses to families generally with the abolition of the part A and part B family tax benefit supplements over the next two years. Although there will be increases to the part A based rates from 1 July 2018, this will not make up for those losses. The impact on families with older children is very significant. From modelling by Professor Peter Whiteford, a sole parent with one child aged 13 to 16 will lose roughly $2,500 per year once the combined effect of the reduction in FTB PB and loss of the supplements take effect. A sole parent with two children will lose roughly $3,000 per year and low-income couples will lose approximately $3,500 to $4,000 per year.

It seems entirely illogical that payments for children over 13 will be significantly lower than for children under that age, when it is well recognised that the cost of children increases with age rather than diminishes. These reductions also happen at a critical time for students in early high school by putting additional pressure on the budget for families. Reducing eligibility for the family tax benefit part B to students over 16 to the end of the school year will further disadvantage families with children doing year 11 and 12. At such a time, it is important for governments to be providing adequate support to families to provide the means for successful school retention and educational attainment, which are helpful in improved employment outcomes in the long run.

The rationale that the savings reached by the measures in this bill are required to pay for the government's childcare reform package is deeply flawed. The previous minister for social services said that child care is not welfare, yet it is to be paid for by significant cuts to the welfare budget over coming years. The National Welfare Rights Network supports genuine reform of the family payment system and measures to increase the workforce participation rate, but the bill fails to address this issue other than by reducing payment rates and eligibility in a way that affects low-income families the most. The starting point must be adequacy for families and children as a matter of our community's responsibility to ensure that all children get a basic, acceptable standard of living, regardless of the parent's circumstances. This bill fails this moral and fairness test. Thank you.

CHAIR: Thank you. Ms Webber.

Ms Webber : I would like to agree with a lot of what has just been said by the Welfare Rights Network. Can I start by thanking the committee for the opportunity to appear. And I particularly thank Stephanie Gotlib from Children with Disability Australia, who sends her apologies that she is unable to be here today because she is being consulted by the Department of Social Services on something else entirely. So conflicting diaries mean that I am here.

Down Syndrome Australia was not specifically aware of the impact that this legislation may have on our community until it was brought to our attention by Children with Disability Australia. Whilst we acknowledge and support the parts of the package that look at a slight increase in the disability support pension for recipients under the age of 18, which a lot of our members are, we share the concerns of the Welfare Rights Network that, whilst on the one hand some families may get an increase in payment, they will also significantly lose when you look at the cuts to family tax benefit A and B.

Down Syndrome Australia represents 40,000 people with Down syndrome and their families throughout the nation. Apart from the fact that families, in our estimation, may end up being worse off—and the whole tenor of this package is that it is actually about supporting children rather than families, and that is the reason we are here today—we are particularly concerned for children with intellectual disability. Points of transition in schooling are particularly difficult. I personally have some sympathy for governments, no matter of what persuasion, in trying to work out where arbitrary cut-off details are, but important points of transition for our community, say, from primary school to high school, are particularly disruptive and particularly traumatic. So we would ask that some further consideration be given to our communities in that respect, and I am sure that it applies to other organisations or other disability cohorts.

We also want to put on the table that, whilst the government's stated reason is that there need to be changes here to pay for the childcare package, we are not sure where our community fits into the childcare package. We are not sure whether there is actually going to be any benefit for people with Down syndrome and their families as the entirety of this package—both these savings here and the childcare package—is rolled out.

Senator MOORE: I will start with Welfare Rights. Thank you, Ms Beaumont and Ms Belcher, as always, for coming to our hearings. You actually answered some of the questions that I have been putting to all of the witnesses this morning about what your understanding of the intent of the package is. In terms of the information available from the department, have you been able to do any particular analysis of the impact at different levels on the different parts of the community that you work with so closely? Certainly one of the problems we have is that there has been very little information about the impact and modelling of where the increases to the payments—which are being lauded as one of the major aspects of the package—intersect with reductions in eligibility.

Ms Beaumont : I think that ACOSS, in their submission, have fairly well addressed where the cuts will be. From the client base that we work with, we have seen, over a number of years, dramatic changes to the income support for sole parents, particularly with the changes a few years ago that put them onto the lower Newstart allowance rate with a different income test. So we have seen these things kind of stacked up against each other. Then, when you also introduce these family tax benefit changes, it just adds almost insult to injury—as in, it means that families that are in poverty and low-income families are going to struggle even more. With the increases to the rates, eventually, that will be basically to all people. We believe that it should be a more targeted system but also that the brunt of it should not be held on the shoulders of low-income families and sole parents. Those are the particular issues that we have.

With this money coming out of this particular system and then going into child care—and with Ruth speaking on behalf of the Down syndrome organisation—we cannot necessarily see how this age group that the money is being taken away from are going to benefit from these childcare changes, because really it is directed at lower age children. It is almost as if, when children get to 13, they are not of the same consequence after that time. We think that it is a particularly important time as far as schooling and that ability to participate in education are concerned. If there is not enough money in the budget, how can a young person participate fully in education? I think that this is where the thrust of some of our arguments is.

Senator MOORE: The other area that I have asked about is around the bonus payment and—in the limited explanation we have had at this stage—the link between the removal of the bonus payment and easier access to the taxation system. We have had some evidence this morning about people's views around how this change to the taxation system is going to be easier and more effective. I would like some comment from you about the general access to the electronic age, which is the basis on which it is going to be so much easier for people to work.

Ms Beaumont : I will start with the ending of the supplements. The supplements were originally developed because of the issues in the Family Tax Benefit system where families were faced with debts each year, and a lot of our casework was involved with that—with people getting debts. Over the period of time since the Family Tax Benefit came in, back in 2001, we have seen change after change after change, and a lot of that has been piecemeal change. For a lot of people, it is a very complex system. It is difficult for people to estimate their income, especially if they are in casual work or intermittent work; it makes it very difficult for them to do the estimates. We know Centrelink are going through their digital transformation with WPIT at the moment, but we have seen for years—and we have been raising for a number of years with both the Department of Social Services and also with DHS—the issues where one part of the system does not talk to the other part of the system and people end up with debts. Even with something such as, say, Child Support, if someone gets an arrears payment of Child Support or a different estimation to say how much Child Support they should be getting, they end up with a huge debt. One of the things that the supplement does is to ameliorate some of those issues for people because it is not expected that, 'Okay, I've put my tax in and I'm going to get a debt for Family Tax Benefit for the year,' and it can be quite difficult. It can also be because of the actions of another person, so it is not necessarily even within that person's influence. So I think that the supplements need to be there. There are also people who it allows, once a year, to buy particular things that they need for their children that they would not be able to afford at other times.

Ms Belcher : We see a lot of clients who use the money to pay for the winter school activities—they might need a winter uniform or new books for their children or new clothes—and a lot of them use that money for that. We see a lot of people who try their best—and I will talk about the electronic system: a lot of our clients do use the electronic system, and they are encouraged to use it. We support that they use it, if they understand the implications of how it works and if they understand the effects of reading their letters or where they can get everything on the system. We find that a lot of clients think they have done it right when they report their income or do their Family Tax Benefit estimate, but they have actually not done it properly because they do not have the mathematical skills to do the calculations. Even though there is a calculator there now on the app, it depends on what data they put in. Most of the clients that we see are often very confused. We have had a lot of grandparents say, 'I worked in a job and I am well educated—I have had to give up work to look after the children—but this family tax benefit estimate is well beyond me.' So it is not that simple. And, for clients who have numeracy and literacy problems, it is often very fraught and they often end up with debt. So the supplements alleviate the debt, and it makes it better for them; they do not end up with a big debt.

Senator MOORE: My reading of the legislation is that the reductions happen before the increase—some of the reductions in this legislation happen before the $10 a fortnight increase which is actually the sweetener in the whole program. That is how I read it, but I will check with the department.

In terms of your evidence, you pointed at the transitional phase, which is something that I had not thought of before—I mean, I had thought of it for everybody, but I had not thought of it particularly for families with disabilities. Has this argument being taken to the department?

Ms Webber : As I alluded to before, the impact of this bill was actually brought to our attention by Children with Disability Australia. We have not had the opportunity to have any discussions with the department—or with anyone from government, for that matter—around these issues, and we would be more than willing to work with them to try and work through a possible accommodation. But there are significant issues around transition into primary education and also from primary to high school education. For people with an intellectual disability, particularly Down syndrome, routine is a very important thing. So, when all of a sudden you change where your child goes to school and the routine of that school day, that can create all sorts of complexities for the entire family. There is running away from school and there are a whole range of things that are not deliberately disruptive—that is just the way some young people with Down syndrome respond and react to a change. We would be particularly concerned if at that point of transition the economic circumstances of the family were to be significantly impacted as well, because that can lead to enormous consequences for the community.

Senator MOORE: In the past, Ms Gotlib has provided detail to this committee, in other inquiries, about the data on the economic levels where children with disabilities are, in terms of the overall scheme. There seemed to be quite a preponderance, in the past, in middle- to low-income families.

Ms Webber : Middle- to low-income families—because, if families have two parents, there is usually one at home looking after the child with the disability, assuming there is only one in that family. Often, of course, some of the trauma around having a child with a disability means that the relationship does not last anyway, so they end up being single-income families. In the Down syndrome community, of course, you add to that that often—not always but sometimes—the child with Down syndrome is the last of three children, or what have you, born to older parents. I know you have been given evidence that the best form of welfare is a job—well, if you are an older parent with a child with a disability, particularly if you have stayed home to care for them, you have been out of the workforce for a very long time before this transition comes into place. I, for one, am not sure where those jobs are.

Senator MOORE: Yes, and also the greater pressure at a time of most need is one more level.

Ms Webber : Absolutely. One of our concerns, to be blunt, is—yes, I accept what you were saying, Senator Moore, about the cuts coming before the sweetener of the payment, although we do support the increase in the DSP and we like the recognition that some of our membership have complex health needs and still live at home and, therefore, they are granted the DSP earlier—that, at a point where we are potentially altering a family's income, we are also meant to be transitioning people into the NDIS. This is just a huge amount of change for one family unit to have to go through all at once, because it all seems to be around 2017 to 2018. I think there is a lot of work to be done by different competing government agencies about how much information these families and these young people with disability have to digest, what the transition looks like and what support we are going to give them to take them on that journey.

ACTING CHAIR ( Senator Siewert ): I just want to continue on the point you were just talking about with Senator Moore and, in fact, a conversation that you and I, Ms Webber, were having last week about the NDIS transition and some areas focusing very strongly on requiring informal care. Yes, NDIS is coming in, but perhaps still remaining focused on informal care. In those circumstances, it seems to me that they are relying on someone actually being at home with a younger person.

Ms Webber : Absolutely. The government of Western Australia are on the record as saying that one of the ways they prefer to roll out their My Way scheme is around a network of informal support. Informal support means family, on the whole, and so we would have real concerns: on the one hand, we are saying that the family has to stay engaged and provide that informal support to this young person with a disability—Down syndrome in our case—but, on the other hand, we are going to actually start to take away the recognition of their caring role by looking at changes to the family tax benefit scheme or other schemes. So I think there is a real job to work out how those two things come together.

Senator SIEWERT: That takes me also to the issue of carers per se. This morning we have been discussing the fact that grandparent carers seem to have been highlighted as one of the groups here that have some level of exemption or special pointing out, whereas you have foster carers and other kinship carers, and we know that there are a high proportion of children with disability going into out-of-home care. You may need to take this question on notice, given your comments you just made a bit earlier about when you found out about these changes: what impact do you think this would have on that group of carers, particularly for those carers that are caring for children with disability?

Ms Webber : I will need to take that on notice so that I can come back to you with some more detailed information, but certainly groups like ours will be really concerned about the impact it has, because it is a wider community network, and a lot of our young adults with Down syndrome are often cared for or have an informal caring arrangement where either they are put up for adoption—although not so much these days—or are cared for by other family members or foster carers. There would be other organisations—for instance, NOFASD, the organisation that deals with foetal alcohol spectrum disorder. Their membership has an intellectual disability and a lot of the caring that is done in that community is foster caring or is picked up by grandparents—or, as I say, official foster caring.

Senator SIEWERT: If you could take that on notice, that would be appreciated. We know from our inquiry into out-of-home care that certainly the evidence suggests that there are a disproportionately high number of children with disability that are entering into out-of-home care. Ms Beaumont, I want to follow up on the issues around consultation and what level of consultation you have been involved with not only to the run-up to this but also subsequently. Has there been any consultation and any further data provided around an evidence base for these changes?

Ms Beaumont : We have not had that much consultation with the government in the intervening period. There has obviously been some brief meeting, but not to go into the detail of it and also how it is going to impact on particular groups as well. Often with changes we have meetings with the department, but in this instance we really have not had those meetings.

Senator SIEWERT: Okay. Thank you. I will also ask you the question about the other groups of carers.

Ms Beaumont : I guess that was one of the groups that we highlighted in our opening address. We see a lot of people who are caring for younger children as well as older children, and our concern is that with these caring responsibilities they may not qualify for the particular carer payment, but often we see people who may be looking after multiple young children, so a number of children that may not qualify them for the payment, but it is that combination of looking after three children even with something like cerebral palsy and how they manage that, and this is really going to take money out of their budgets each week. They struggle already in managing that disability and looking after the children, but this is going to take money out, and these people do not have a spare minute in the day, so I am not sure how they are going to participate more fully, because they are really not in a situation to be able to do that. Similarly, we find even with grandparent carers—and I know that there is the exception for grandparent carers—that we see a lot of children who come into grandparents' care who are highly traumatised, and the grandparents have to be basically on call and also available to take them to psychologists' appointments and various other appointments, because they are transitioning them after coming into the household and things like that, and that ongoing work with young people. That is why removing that support as they are saying—we just think that it is ludicrous for it to be there. As far as we are concerned, it is a savings measure to pay for the childcare reform. We are not sure that the money should be taken out of this space.

Senator SIEWERT: I think this question is probably more for the National Welfare Rights Network but, Ms Webber, please feel free to comment. The National Council for Single Mothers and their Children made the point that child support is calculated on the basis that it costs more to raise a child over the age of 12, whereas there now seems to be an assumption that it costs less to support a child over the age of 13. We have now got contradictory approaches. Have you got any thoughts on that?

Ms Beaumont : It does seem ludicrous that, when the child support reforms were done a number of years ago, government said, 'It costs more to raise a child as they get the older.' The Henry review found that too. I am not quite sure what evidence was used to suggest that children over 13 cost less. Further, the question is on changes around eligibility ages. For older students, that is going to have an impact, especially at a time when government are also talking about a four-week waiting period for under-25-year-olds. It is almost as if it is fair game to take the money out of this particular area and put it into child care. But, if we are looking at the future of Australia and the educational outcomes and having a smarter Australia, I do not think this is going to assist in that approach.

Ms Webber : We would say that children with a disability have a variety of complex needs. I could not pinpoint a time from zero to whenever where they are actually going to cost less. Depending on the complexities and when they arise—and you cannot time-line exactly when they are going to arise—there is a fair cost and care burden.

Senator CAROL BROWN: Ms Beaumont, you touched on this in your opening statement, but one of the questions that I have been asking some of the witnesses is: have you had an opportunity to have a look at the original set of measures from the 2014 budget? It has been put to me that these measures that we are considering now will actually leave some families worse off than the original ones that were stalled in the Senate. Have you had an opportunity to look at and analyse the measures?

Ms Beaumont : We have not necessarily looked at it. Having the change to 13-year-olds as opposed to six is obviously a much better approach; however, we still do not think that the approach should be taken as it is. We can probably do it a little bit more. Our submission will come in tomorrow, so we can probably do some more work around that. I guess, it is the concern that, with the first lot of measures it was about savings, whereas this one is to fund the childcare package. That is one of the movements that we have seen, anyway. The rationale for it has modified so it is to pay for the child care. One thinks it is: 'We need the childcare reform package, but then we have to find the savings elsewhere and we'll take it away from children.' That is ultimately what this is about.

Senator CAROL BROWN: Just touching on the childcare package, Ms Webber, you said, in response to one of the questions, that child care is not really affected by the cohort that you represent.

Ms Webber : We have not had any discussions with government around how our families would access a childcare package, whether there will be special provision for looking after children with a disability or whether it is just going to be a general package. I am not sure how we would access it, whether it is going to impact on our families or what is to happen. But most of our families look for their own informal supports now, because these are children with special needs. You cannot just take them to your local YWCA childcare centre. So I am not sure how—and I would welcome a discussion with government about how—the overall package is going to fit in and meet the needs of our membership.

CHAIR: As there are no further questions, we thank you very much for your evidence.