Mr RUDDOCK (Minister for Immigration and Multicultural Affairs)(4.27 p.m.) —I move:

That the bill be now read a second time.

This bill introduces many initiatives affecting the social security portfolio that were announced either as part of the government's 1996 election commitments or as part of the 1996 budget. The government made election commitments to carers. It is now proposed to give effect to these commitments by changing the name of the carer pension to the carer payment and by extending from 10 to 20 hours per week the number of hours that carers may spend in employment, voluntary work, education or training without affecting their qualification for carer payment. There will also be an increase in the number of days in a calendar year, from 42 to 52 days a year, that a carer may temporarily cease caring without affecting their qualification for carer payment. These initiatives will commence on 1 July 1997.

At the moment, youth training and sickness allowees receive a rate of $65.75 a fortnight, even if their parents' income and assets would have otherwise either resulted in a lower rate or precluded them from payment. The bill provides for the abolition from 1 January 1997 of this minimum payment for customers aged under 18. The parental income test will then be applied to determine the actual rate of payment. This will ensure that there is a more consistent payment structure for youth, as there is no such minimum for Austudy recipients.

The Social Security Act 1991 and the Student and Youth Assistance Act 1973 will be amended from 20 September 1997 to consolidate and simplify voluntary work provisions in those acts. A person aged 50 and over, who is not subject to an activity agreement, will be able to satisfy the newstart allowance activity test by undertaking approved full-time unpaid voluntary work for an approved organisation for an unlimited number of days per year for at least 32 hours in a fortnightly period or by a combination of unpaid voluntary work with an approved organisation and suitable paid work for at least 40 hours in a fortnightly period.

Similarly a person aged under 50 who is not subject to an activity agreement and who has received income support for at least three months will be able to satisfy the activity test by undertaking full-time voluntary work with an approved organisation for six fortnights in their first 12 months of income support. A person will still be required to be available and willing to undertake suitable paid work.

Mr Deputy Speaker, the government made an election commitment to improve and tighten administration of the activity test for unemployment payments. This commitment was made in response to community concerns that only those people who are genuinely unemployed and actively seeking to participate in the work force should receive payment. The measures contained in this bill seek, as part of a wider package of initiatives, to increase community support for assistance to the unemployed by enhancing the integrity of the program.

The measures will tighten the definition of `unsuitable paid work' for job seekers, change the non-payment period for activity test breaches, replace the current deferment period arrangements for administrative breaches with rate reduction provisions, tighten activity test breach provisions relating to voluntary unemployment and refusal of a job offer, reclassify certain breaches as activity test breaches, extend the non-payment period for moving to an area of lower employment prospects from 12 to 26 weeks and clarify the operation of the employer contact certificate provisions.

In addition, amendments are included in the bill to change the industrial action provisions in the Social Security Act and the Student and Youth Assistance Act to ensure that where a person is unemployed as a result of industrial action the person will remain disqualified for payment for six weeks after the industrial action has ceased.  These measures relating to the unemployed will commence on 1 January 1997.

Mr Deputy Speaker, the bill also contains two discrete measures dealing with waiting periods to be implemented from 20 September 1997. First, the unused annual leave waiting period will be abolished and replaced with an income maintenance period. The new income maintenance period rules will ensure that leave payments are treated as income from the date of payment over a period equal to that for which the leave refers and apply to newstart, sickness, partner, widow and parenting allowances. Secondly, the maximum length of the liquid assets test waiting period, which applies to claimants of newstart allowance, youth training allowance and sickness allowance, will be extended to 13 weeks and will be variable depending upon the person's available funds.

Mr Deputy Speaker, the bill gives effect, from 20 March 1997, to a number of measures relating to people who are sick and who claim, or are receiving, certain social security payments.  A 14-day grace period will be introduced so as to allow a person to renew qualification for sickness allowance, or to renew exemption from the newstart or youth training allowance activity tests, through providing the necessary medical certificate after the expiry of the person's previous medical certificate.

The sickness allowance qualification rules will be amended by removing the loss of income qualification. Also to be amended are the sickness allowance qualification rules and newstart allowance and youth training allowance activity test exemption rules so that the sole criterion for the continuation of sickness allowance, or exemption from the newstart or youth training allowance activity test, will be a continuing temporary incapacity for work.

Lastly, backdating of disability support pension, newstart allowance, sickness allowance and youth training allowance will be permitted through the deemed earlier date of lodgment of a claim in circumstances where a sick or disabled person makes a telephone inquiry about claiming payment and then lodges a claim formally and qualifies for payment.

Due to its conceptual and procedural complexity, the earnings credit scheme is difficult to administer and is also difficult for social security recipients to understand. The limited understanding of the scheme by social security recipients puts in doubt its value as a significant incentive to take up casual work opportunities. Given this, as well as the relatively high costs involved in the administration of the scheme, the government has decided to abolish the earnings credit scheme in respect of both pensions and benefits.

Mr Deputy Speaker, the bill introduces amendments to abolish the earnings credit scheme from 20 March 1997. The government has also decided to abolish the employment entry payment from 20 March 1997 and the education entry payment for all but certain pensioners from that date.

Provisions for assistance to widows and partners were reviewed in the 1996 budget context in response to the need to develop a more rational and integrated social security system, simplify the payment structure and improve services to customers. As a result, the bill gives effect to a number of measures designed to provide common payment conditions for older women without recent work force experience who either are a dependent partner or who lose the support of a partner later in life, as well as ensuring common payment arrangements when customers attain age pension age.

First, qualification for widow allowance will be extended to women who are aged at least 50 years of age and who were widowed, divorced or separated after turning 40 years of age. Secondly, conditions of payment of widow allowance and partner allowance will be aligned, including common phase-out arrangements, a common definition of recent work force experience and common access to ancillary payments.

Thirdly, qualification for partner allowance will be extended to Austudy, Abstudy and student financial supplement scheme partners. Fourthly, there will be an earlier phase-out of widow B pension such that there will be no new entrants to this payment and by automatically transferring widow B pensioners of age pension age to age pension.

Finally, arrangements for customers of age pension age will be rationalised by no longer granting widow allowance and partner allowance to people of age pension age and by automatically transferring widow, partner and mature age allowance recipients attaining age pension age to age pension. These measures are to be implemented from 20 March 1997.

Mr Deputy Speaker, the bill provides for the assessment processes for disability support pension to be tightened to ensure that those people whose impairments have only a relatively small impact on their overall ability to work will not qualify for that pension. Rather, they will receive a more appropriate income support payment. To assist in this process, revised impairment tables, which are used to assess whether a person's impairment is 20 per cent or more, are being introduced from 1 January 1997.

The government decided in the 1996 budget to limit payment of child disability allowance arrears to a period of up to three months where a person has made an earlier claim for a payment similar to child disability allowance and was qualified to receive child disability allowance at the time of this earlier claim. Currently, child disability allowance arrears of up to 12 months may be paid in such circumstances. The bill gives effect to that decision from 1 January 1997 and will result in child disability allowance being treated consistently with other social security payments.

Mr Deputy Speaker, the bill provides for the amendment of the compensation recovery provisions of the Social Security Act so as to include age pension as a compensation affected payment. The proposal will only apply to age pensioners who receive compensation for economic loss. Age pensioners who receive compensation for non-economic loss only will not be affected. The proposal will only affect an age pension if the compensation is received on or after 20 March 1997 and the person's provisional commencement date for age pension is on or after 20 March 1997.

The compensation recovery provisions of both the Social Security Act and the Student and Youth Assistance Act will also be amended from 20 March 1997 to enhance the treatment of lump sum compensation payments by using a single pension cut-out point as the compensation lump sum preclusion period divisor.

For compensation lump sum payments received on or after 20 March 1997, the divisor used to calculate preclusion periods will be changed from the all persons average weekly earnings to the amount above which no pension is payable to a single person under the income test, currently $397 a week. Further, the preclusion period will be applied to the compensation recipient only and not to his or her partner. This means that for lump sums received on or after 20 March 1997, recovery of past payments to partners will not be made, nor will partners be precluded from receiving any future entitlement they may have during their partner's preclusion period. The existing rules will apply in respect of those compensation lump sum payments received before 20 March 1997.

The bill also includes a number of amendments to the Student and Youth Assistance Act so as to align the compensation provisions of that act with corresponding provisions in the Social Security Act.

Mr Deputy Speaker, the bill includes a number of amendments that are designed to improve the targeting of non-cash assistance to retirees and low income earners, restore equity by preventing cards being given to people otherwise not entitled and simplify card administration.

The health benefits card will be abolished and health care cards will be issued to sickness allowees. The `savings provisions' that allow people receiving family allowance supplement prior to January 1992 to receive a health care card will be repealed. These people will now have to test their eligibility under the normal four-weekly income test. Similarly, the modified income test and savings provisions that allow certain social security pensioners to receive concession cards after cancellation of pension will be repealed. These measures will take effect on 1 July 1997.

The bill provides for the removal of the concessional treatment applied to `deposit concession money', as defined in the Social Security Act and the Student and Youth Assistance Act, from 20 March 1997. As a result, the `below threshold rate' of extended deeming will apply to the first $2,000 of available money or deposit money of a person other than a person who is a member of a `pensioner couple' as defined in the Social Security Act. The `below threshold rate' will also apply in all cases to the first $4,000 of available money or deposit money of a `pensioner couple'.

Mr Deputy Speaker, the Social Security Act and the Student and Youth Assistance Act will be amended, from 1 October 1997, to provide for recovery of social security payments that have been paid to persons in excess of their correct entitlement but which are not currently recoverable as debts. In addition, where possible, the debt creation provisions will be rationalised.

The recovery of overpayments will occur according to the means of a person to pay. This will improve equity between customers, some of whom are now able to retain more than their correct entitlement even though they have ample capacity to repay, while others with limited finances are obliged to repay their debts.

Finally, Mr Deputy Speaker, the bill provides for the modification of the advance payment scheme for recipients of social security entitlements. The modifications include removal of a `permitted purpose' as a qualification requirement for an advance payment, reduction of the maximum advance amount to $500 and restriction of the number of advances payable to a person to one advance in 12 months. This measure will take effect on 1 January 1997.

I commend the bill to the House. I also present the explanatory memorandum in relation to the bill.

Debate (on motion by Ms Macklin) adjourned.