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Wednesday, 11 May 1994
Page: 597


Senator WOODLEY (12.30 p.m.) —We are dealing with two bills today—the Student Assistance Amendment Bill 1994 and the Commonwealth Reciprocal Recovery Legislation Amendment Bill 1994. It is the second bill that I want to speak to today. The explanatory memorandum to the bill states that it will `facilitate the reciprocal recovery of overpayments covered by the three main Commonwealth Acts dealing with income maintenance'. They are the Social Security Act, the Student Assistance Act and the Veterans' Entitlement Act.

  In speaking to the bill, I do not want to look at the provisions of it but, rather, to make a few comments on social security legislation in general. As veterans legislation closely mirrors that of social security, I am sure my comments will be just as relevant to that legislation. No doubt they will have some relevance to the Student Assistance Act as well, although that has been covered very adequately by my colleague Senator Bell.

  So far this year, with just six weeks of sitting, the parliament has already dealt with two major social security bills. Before us today is yet another bill amending the Social Security Act, and in our next sitting week we are scheduled to debate the Social Security Legislation Amendment Bill (No. 2) 1994. With more and more changes being made to the Social Security Act and the Veterans' Entitlements Act, it seems to me that we are beginning to weave an even more tangled web of legislation and regulations. They are becoming unintelligible to the average person, despite the many attempts to convert the act into so-called `plain English' style. It is frightening to think what must be taught in English lessons at school these days—I will have to ask Senator Bell to explain it to me—if our current Social Security Act falls within the definition of plain English.


Senator Bell —I could not explain it.


Senator WOODLEY —I thank Senator Bell and I accept his explanation. Late last year my attention was drawn to an article that appeared in the Canberra Times entitled `Social security rewrite `a failure'.' It seems that, in the course of conducting a hearing on a compensation case involving the Department of Social Security, judges of the full Federal Court encountered great difficulty in sifting through the relevant sections of the act. One possible reason for that is that the judges themselves were illiterate, but I suspect that that was not the problem. I suspect that it was the plain English version of the act that these judges were having difficulty with. They said:

Regrettably, the replacement—

that is, the plain English version—

consists of a maze of provisions made the more complex by prolix definitions, provisos and exceptions.

The judges concluded that, despite being a plain English version, no-one seriously believed that a lay person could ever master the act unaided. I think the judges included themselves in the definition of lay persons.

  I admit that anyone can throw brickbats at legislation and that it is easy to criticise. I acknowledge that the act is attempting to implement a highly complex range of programs. As those judges conceded, the first requirement of legislation is that it express with clarity the rules the parliament intends. However, the point we need to keep in mind is that every day there are thousands of people trying to make sense of this legislation and the interconnected regime of payments it establishes.

  First of all, there are 20,000 staff members of the Department of Social Security. I have great sympathy for the DSS staff. They are the ones who are daily required to work within this tangled web, to make correct decisions based on the legislation and to be able to justify those decisions. Of course, they have the department's guide to the administration of the act to assist them in that task. I have not read it in detail but, if honourable senators take the trouble to look through that guide, they will see that it is a fairly complex document, running to some 2,000 pages in length.

  The changes to the act that we have put through mean more courses for these DSS staff, who are being trained to be multiskilled and find that when they return to the job, after rotating to other positions, all the rules and regulations governing that particular section have changed. These changes are not just minor adjustments to levels of payment or to the conditions of those payments. They also include the introduction of major new programs and the abolition or modification of others. I am well aware that staff at DSS offices are already under great stress; they have to deal with more people today than ever before. While we continue to shift the goal posts we are making their jobs much more difficult, and we are creating an environment of stress and confusion in which these people are required to work.

  Then there are the problems the recipients themselves must have in trying to come to grips with this legislation and its myriad intricate provisions. Some may have had an application for a pension or benefit turned down and want to try to understand why they failed to qualify. Some may be thinking about lodging an appeal against a particular decision made by the department. Others may simply want to understand what payments are available, what conditions those allowances are paid under, and what the individual's obligations are under the current system. What chance do these people have when the Federal Court judges are struggling to understand the legislation? The answer is: probably no hope at all. I wonder how many people have failed to comply with one of the requirements for the payment of a pension or benefit because they did not know the requirement existed or, if they did, did not fully understand it.

  Another aspect is the personal effect that changes to the legislation have on people who are affected. The best example of this is the government's change to the treatment of unrealised capital gains on shares held by pensioners. There is a real feeling of uncertainty among the entire pensioner community with regard to their retirement incomes, and this comes at a time in their lives when certainty of income is absolutely paramount to them. We need to take note not only of the change but also of the process of change which affects these people. This is particularly true when making changes to the rules governing age pensions.

  The third group affected by the complexity of the Social Security Act is composed of the people here, the legislators. We have seen a number of examples recently where the intent of amendments has been clear but the complexity of the act has made those amendments very difficult to draft. With the home child-care allowance, the opposition actually requested the government's assistance in drafting highly complex amendments. I can understand its asking for that help.

  Finally, those involved in the welfare sector are affected by the changes made to the social security legislation. We know that many groups operating in this sector do so on inadequate budgets and deal with many more people than they are really equipped to handle. Constant changes to the legislation are simply making that job much harder. One person affected is Michael Raper, who is from the Welfare Rights Centre in Sydney. Last year, Michael put out a paper entitled Welfare yachts and band-aids: the cause and effects of crippling complexity in the social security system. I would certainly encourage honourable senators, and indeed anyone in the press or public galleries with an interest in the social security area, to read this paper. I would be happy to provide a copy to them if they would like one. The report contains some real-life examples of clients with whom the Welfare Rights Centre has dealt that clearly illustrate the sorts of problems I have been talking about. I seek leave to have the document incorporated in Hansard.

  Leave granted.

  The document read as follows

Liang and his search for the elusive payment

After having been paid Sickness Allowance for six months, Liang's eligibility was reviewed by a Commonwealth Medical Officer. The CMO considered Liang to be fit for light work, of up to 15 hours per week, and also considered his incapacity, a lower back condition, to be permanent. Liang's Sickness Allowance was therefore cancelled, and he was asked to apply for Disability Support Pension. Liang also applied for Special Benefit so as to guarantee income support while the claim was considered.

Liang was found not to qualify for DSP, as he was not considered to have the required 20% impairment. Special Benefit was cancelled and Liang was asked to claim JSA.

When he registered at the CES, Liang took with him the DSS letter which explained he was no longer entitled to Sickness Allowance, due to the permanent nature of his back condition and his apparent fitness for light work. Liang's English is poor, so he felt this would explain why he was claiming JSA. The CES's reaction was to issue Liang with a form on which his own doctor could stipulate whether he was, in fact, fit for light duties, as the DSS letter clearly stated the CMO's opinion to be at odds with Liang's own doctor.

Liang had the form completed, took it back to the CES and was informed that he wouldn't be registered unless he signed a form disclaiming his own doctor's opinion.

Liang went back to DSS to explain, and was told that he was not eligible for anything if he "refused" to look for work. Liang then contacted the Welfare Rights Centre.

After intervention, DSS accepted that at the time his Sickness Allowance was cancelled Liang had no capacity to work due to the flaring up of his back condition. Fortunately, Sickness Allowance was restored and back payment was made.

Overall, Liang faced almost two months of confusion, numerous visits to DSS, the CES, and his doctor and countless calls to the Welfare Rights Centre. By the time he contacted us he was firmly convinced that the only way to secure income support was to lie to the CES which he was not prepared to do.

Many clients confronted with the reality that the CES will in all probability not be able to refer them for jobs anyway, sign medical certificate disclaimers despite their view that they could not present themselves to a prospective employer as fit for work. Such manipulation of the system promotes cynicism in the community regarding the role of the CES and the impact of DSS policy. It is those who do not show that cynicism who suffer the effects of the system's complexity.

Neville's Hardship—and the Hardship Rules

Neville's claim for Job Search Allowance was refused as his assets precluded entitlement. The assets affecting consisted of a half share in the property he owns with his estranged wife.

Due to the nature of the questions on the claim forms completed by Neville, he was given no opportunity to explain that the property in question was then the subject of property settlement negotiations.

Neville believed there to be no way around the apparently black and white JSA assets test, so he proceeded to live on his savings and hoped only to be unemployed for a short time. Seven weeks later when he was down to $600 in the bank, a friend advised him to ring us.

We advised Neville to lodge a claim form for payment under the Hardship Rules. This claim was processed quickly, but payment can only be made under these Rules from the date the Hardship Rules claim was lodged unless "special circumstances" apply.

Neville's experience of DSS staff not automatically turning their minds to any possible means of paying a client with either no or inadequate current sources of income is not rare. A typical response to a client mentioning actual or potential hardship is to give advice regarding Special Benefit, rather than to examine whether the Hardship Rules may apply. The effect is that often only the persistent, well-informed client is given access to information that may secure payment.

A universal claim for social security income support would have solved Neville's problem, by placing the onus on DSS staff to consider the full range of possibilities.

Fatima gets the Jobskills blues

Fatima attended a social security office for advice as her husband had just been accepted into a Jobskills labour market program, organised by the CES. He had been in receipt of JSA. Fatima advised that her husband "had a full-time job" through CES Jobskills, and asked what other assistance they may be eligible for, as the wages were low. She was advised that she should have a continuing entitlement to Additional Family Payment and was informed that her husband should advise that he had started full-time work on his next continuation form, stating the date of commencement. He did so. Fatima's husband's JSA was cancelled accordingly, and Fatima continued to receive Additional Family Payment. Family disposable income had not increased despite her husband's 40 hour working week.

Three months later, when Fatima's husband was chatting to his workmates about their financial problems, it came to light that some of their wives were eligible to receive JSA. Fatima, who had been desperately seeking work, claimed JSA and was found to have an entitlement due to the low rate of pay under the Jobskills program.

Fatima's experience exemplifies the tendency of many DSS staff to take a minimalist approach to responding to client enquiries. This is understandable to a degree, considering the complexity of the system about which clients seek advice. For Fatima to have elicited the responses that would have given her comprehensive, accurate advice so as to maximise her entitlement was virtually impossible given her poor English and the pressure under which counter staff operate.

William—DSS proves its efficiency!

William, who is 83, was called into DSS so as to invite him to claim Age Pension, as he had been in Australia, receiving Special Benefit, for the required ten years.

On examining William's passport, it was noticed that William had been out of Australia for three brief periods over the last six years. William was advised that he had been ineligible for payment during those absences.

Concerned and distressed, he visited the Welfare Rights Centre. We assured him that DSS would not take any action without interviewing him, as DSS had no information about the reasons for his absences—information crucial to establishing whether the overpayment in fact came under one of the 18 categories of debt.

The very next day, DSS efficiency excelled itself and William received a letter advising him of a substantial overpayment and requesting immediate repayment. Two weeks later recovery commenced from his Special Benefit.

The vigour with which DSS currently approaches debt recovery, even where the client is elderly and in fragile health is cause for concern. As William pointed out, the Department goes to great pains reviewing his eligibility for Special Benefit, and he appreciates the need carefully to examine his situation from time to time. Had similar efficiency and attention been exercised when William's overseas absences came to light, his distressing experience would have been avoided. In the end we were able to assist William to demonstrate that on each occasion that he left Australia, he in fact remained eligible for Special Benefit and that no overpayment had occurred, therefore no debt existed.

Cases raise profound questions about the system

What sort of a system is it that throws up cases like this with disturbing regularity. Is this the system our Ministers boast so proudly about as being one of the finest in the world? This is a system that has taken "selectivity" and the Australian practice of "targeting those most in need" to extremes that are no longer workable. This is a system that has become far too complex for its own good. It is a system that is riddled with anomalies that get compounded every time there is yet another nip here, or budgetary tuck there. It is a system that is beyond the comprehension of many, many DSS counter staff and many at higher levels. It forces staff into defensive aggressive attempts to hide their own (at times understandable) ignorance and embarrassment. And it forces elaborate, daunting and intrusive questionnaires onto clients seeking mountains of information to satisfy the voracious appetite of the complex monster we have created.

It is a system in which even the advantages of beneficial measures (like the new additional free area for income from earnings and earnings credit scheme for allowees) are lost both to the client and the system because they are now so complex that people do not understand them and therefore can not take advantage of them. It is a system which takes the presence of five relatively senior DSS officers at a Senate committee hearing just to try and explain to six Senators the effect of one would-be Budget change (the retention of 16 year old at home students in the Family Payment system instead of in Austudy).

But most importantly, it is a system in which people fail to get income support to which they are entitled; in which people get saddled with debts that are overpayments but not debts; in which people are so disenfranchised by change and complexity that they can't understand, and can't check and can't get help so that the value of an otherwise fair and good appeal system is diminished to the point of inaccessibility and irrelevance for so many. They won't start the process for the simple reason that it's all too complex.

Are we to go on with each and every Budget "targeting (still further) to those most in need", compounding complexity with more layers of complexity, building even more anomalies into the system as we `refine' it still further? Are we to go on accepting and accommodating measures which are either motivated primarily by a savings target or were caused by the need partially to fix up problems caused by earlier cuts and which, although rationalised in some policy garment, have little policy merit at all?

Attachment 1

Examples of a Number of Anomalies in the Social Security System

1.Sole parent family income reduces by $37.30 when child turns 16.

Family income for a sole parent pensioner with a 15 year old child:

    Pension, $316.20

    BFP, $20.90

    AFP, $87.40

    GA, $29.00

    Total, $453.50

Family income when child turns 16; parent goes to JSA and child goes to JSA or AUSTUDY.

    Parent JSA, $286.40

    16 year old JSA, $129.80

    Total, $416.20

The anomaly continues until child turns 21, although the gap decreases from $37.30 to $11.00 when child turns 18.

Anomaly dates from 1987 targeting; reduction in Sole Parents Pension eligibility and freezing of JSA rates for three years to allow AUSTUDY rates to catch up. Compounded by: omission of Guardian Allowance to sole parents of 16 and 17 year old JSA/AUSTUDY children when Family Payment introduced; and greater than CPI increases to FAS/AFP for children under 16 during this period.

This anomaly does not apply to two parent families where the family income rises gradually as the child gets older and there is a gradual shift in income to the child.

Family Income: when child is:

15—    $634

16-17—  $657

18-20—  $683

2.Payment of Family Payment overseas

Rules applying to payment of Family Payment overseas are complex and vary between Basic Family Payment and Additional Family Payment. They also vary according to family situation.

Sole parents are not entitled to receive Additional Family Payment overseas even if they go home for one week to attend a funeral whereas two parent families can if one parent stays behind.

3.Allowance—income test

The pension income test free area of $88 p.f. increases by $24 p.f. for each dependent child.

The income test basic free area of allowees is $60 for a single, $60 for a couple without children and $60 for a couple with four children.

The income of one partner is counted as the income of the other, whereas with pensioners, only half the income of one partner is treated as the income of the other.

4.Annual Leave waiting period

One person's 15 day unused annual leave might provide $1,000 on which to live during the 15 day (+7 day) waiting period. Another person's 15 day unused annual leave might provide $2,000. No account is taken of the person's circumstances (eg. Debts, commitments, outstanding bills, mortgage payments etc).

5.Liquid Assets Test

A difference of $200 between $4,900 and $5,100 in liquid assets makes a difference of either a one week waiting period or a five week waiting period applied equally to all regardless of individual circumstances.

6.Half married rate paid when dependent spouse not qualified

A single allowee with a child would receive $316.20 p.f., the same rate as the pension. But a married person, whose spouse is not residentially qualified, even though he is a dependent and another adult mouth to feed, only gets half married rate, which is $263.70 p.f., a drop of $52.00 p.f. A well targeted provision? (to those most in need?!)

7.People with disabilities—square pegs and round holes

People who have been on Sickness Allowance for 12 months are often judged to have a permanent disability. If they are unable to jump the two high hurdles to get onto Disability Support Pension, they are dumped into the unemployment payments system and denied access to CES programs specially targeted to people with disabilities, despite significant, medially confirmed disabilities.

8.Clients required to disclaim their own doctor's medical opinion

When a client who has a medical certificate from his/her treating doctor seeks to register for JSA because s/he is no longer eligible for Sickness Allowance, the CES requires the client to sign a Medical Disclaimer, the CES is not able to register someone as fit for work when their doctor says they are not, but the Social Security Act (on CMO opinion) won't allow Sickness Allowance to be paid. The CES then has a dilemma. It has been solved by getting clients to sign to the effect that notwithstanding their doctor's medical opinion, they really are fit for work.


Senator WOODLEY —I thank the Senate. Michael concludes his paper with a number of suggestions for reform of the social security system. Really, I think this is the most important part of what I want to say today, because they are very practical suggestions he makes. I briefly conclude by outlining two of them. Firstly, in the light of the complex eligibility criteria for the various pensions, benefits and allowances, he advocates the introduction of a universal claim form. Under such a system, clients would provide the department with the necessary personal and financial information, and an experienced DSS officer would then determine which payment, if any, the person was entitled to. This would avoid the problem of people being confused as to which pension or benefit they may be eligible for and applying incorrectly, and would make it far easier for those with English language difficulties or psychiatric or intellectual disabilities to access the social security system.

  The second recommendation put forward is for a comprehensive review to be undertaken. I know that we all get very frustrated with the number of reviews that we have, but surely this is one which is far overdue. It would be a review designed to develop a simpler system, free from anomalies and protected from indiscriminate budgetary cutbacks. In line with comments I have already made, I certainly support the undertaking of such a review. I notice that in the House of Representatives, some time back, the Labor member for Moreton, Garrie Gibson, pointed out that DSS sends out some 80 million letters per year to its clients. He called on the Minister for Social Security to conduct a review of that DSS correspondence. I would argue that the enormous number of letters being sent out are yet another symptom of an overly complex system, a symptom which would disappear once the complexity had been removed by an overall review of the system.

  I am sure both the department and the Minister for Social Security (Mr Baldwin) are aware of many of the problems and criticisms of the Social Security Act. I notice the minister wandering round from time to time with a worried look on his face, and I am sure that is part of the reason. I hope that they give some considerations to the issues I have raised today and I can pledge the support of the Democrats to any further measures designed to address these issues.

  Debate interrupted.