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Thursday, 14 May 1987
Page: 3270


Dr BLEWETT (Minister for Health)(9.01) —I move:

That the Bill be now read a second time.

The Social Security and Veterans' Entitlement Amendment Bill 1987 Bill contains amendments to the Social Security Act 1947, the Veterans' Entitlements Act 1986, and the Seamen's War Pensions and Allowances Act 1940 to implement decisions which are to come into effect before or shortly after October 1987. Other measures which were announced by the Treasurer (Mr Keating) in the May economic statement will be implemented in Budget legislation or, where legislation is not required, administratively. Amendments in this Bill will lead to some new directions for social security while producing considerable savings. There will be changes building on administrative measures aimed at reducing the risk of wrong payments and welfare fraud. Other changes will encourage people to obtain employment and thereby combat long term dependence on social security.

The Government retains its deeply held commitment to disadvantaged people and children in poverty. In order to protect and improve their living standards we must ensure that social security payments are well targeted. In line with this objective, the Government has decided to income test family allowances for families where the parental taxable income exceeds $50,000 a year. This threshold will be indexed. To protect large families the threshold before the income test applies will be increased by $2,500 for each dependent child after the first child. Where the income test applies the family allowance payable will be reduced by 25 per cent of the income in excess of the threshold.

In the area of unemployment benefits, amendments in this Bill will give effect to the following measures:

the waiting period before benefit is payable will begin after registration with the Commonwealth Employment Service;

an `education leaver' waiting period of 13 weeks will be introduced for most claimants under 21 years of age without work experience; and

an increased postponement period will apply for successive occasions on which claimants leave their employment voluntarily, are dismissed for misconduct or fail the work test for unemployment benefit.

New measures will facilitate obtaining written confirmation of the circumstances of termination of employment from previous employers of claimants for benefit. There will be some changes to eligibility for pension and benefit for sole parents and widows. Eligibility for supporting parents' benefit and class A widows' pension will be restricted to those with children aged under 16. Class B widows' pensions will be phased out. This will be done gradually and will generally not affect the future eligibility of women currently aged 45 or over with dependants or of other women currently aged 50 or over.

Amendments to rationalise the social security system and produce considerable savings include:

measures by which sickness benefits will become more closely aligned to unemployment benefit rates for unmarried people without dependants:

the strengthening of residency requirements:

changes to eligibility for invalid pension-medical impairment will have to constitute the major part of the incapacity for work; and

the removal of the savings provision which currently enables those in government housing to receive rent assistance.

Other amendments in this Bill enhance actions against welfare fraud and extend the powers of the Departments of Social Security and Veterans' Affairs to recover overpayments. The information gathering powers in the legislation will be extended to allow for greater access to external records.

Amendments will enable the passing on of relevant information, subject to secrecy provisions, to other Commonwealth departments and authorities. Administrative arrangements between the Department of Social Security, the Australian Taxation Office and the Department of Education will produce immediate savings by facilitating the earlier detection of incorrect payments and fraud. The powers in the legislation to acquire information from ex-clients will be extended. There will be power to recover debts from a wider variety of sources. A penalty will be levied on persons who do not repay an overpayment within three months.

Provisions relating to arrears of pension, benefit and allowances will be standardised and there will be limits on arrears payable following appeals.

Amendments to the Veterans' Entitlements Act 1986 and the Seamen's War Pensions and Allowances Act 1940 made by this Bill will mirror amendments made to the Social Security Act 1947 in relation to debt recovery and information gathering powers, disclosure powers, and residence requirements. This Bill will result in estimated net savings of $236m in 1987-1988 and further net savings of $342m in 1988-1989. I present the explanatory memorandum to this Bill. This contains details of the amendments I have outlined. I commend this Bill to the House.

Debate (on motion by Mr Shack) adjourned.