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Wednesday, 29 June 1994
Page: 2253

Senator CROWLEY (Minister for Family Services) (11.43 a.m.) —I thank Senator Patterson for her question; it takes us back to the substance of the legislation. I would like to make it clear to the committee that the government does not support the amendments moved by either Senator Woodley or Senator Patterson.

  To spell it out, immediately following the government statement that has just been referred to—the government's security in retirement statement on superannuation in June 1992—the then Minister for Social Security announced changes to the treatment of allocated pensions and allocated annuities under the social security income and assets tests. Amendments to give effect to those changes were enacted by the parliament in division 19 of the Social Security Legislation Amendment Act (No. 3) 1992, but they have not commenced as their implementation was deferred until the later of 1 October 1993 or the date of the report to the Senate by a Senate standing or select committee on the application of division 19. To date no report has been made to the Senate.

  The amendments to the Social Security Act 1991 and the Social Security Legislation Amendment Act (No. 3) 1992 provide, from 1 July 1994—I think this goes to Senator Patterson's question—for the repeal of the amendments made by division 19 and its commencement provision, and the account balance of allocated pensions and allocated annuities to be subject to the assets test. These amendments mean that there is no change to the current income test treatment of allocated pensions and allocated annuities. The only changes are to the treatment of allocated pensions and allocated annuities under the assets test. We estimate that some 300 social security clients would be affected, with an annual reduction in outlays of about $0.3 million.

  The government does not support opposition amendments to those proposed by the government because we consider that the savings provisions, particularly those proposed by the Democrats, would introduce additional complexity and confusion for many social security clients yet benefit only several hundred people. They also run counter to an objective of the social security incomes and assets test review that is currently under way, and that is the promotion of greater simplicity in this area of social security law and administration.

  While I am on my feet, could I make it clear that, as I have said, while the government would have a strong preference for a no savings provision—that is, we would want to oppose both of the amendments—on balance, if necessary, we would prefer the amendment proposed by Senator Woodley for the reasons so succinctly outlined by the honourable senator.