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Social Security Legislation Amendment (Connecting People with Jobs) Bill 2010

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2010

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

SOCIAL SECURITY LEGISLATION AMENDMENT (CONNECTING PEOPLE WITH JOBS) BILL 2010

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment Participation and Childcare the Honourable Kate Ellis MP)

 

 



SOCIAL SECURITY legislation amendment (connecting people with jobs) bill 2010

 

OUTLINE

 

The Social Security Legislation Amendment (Connecting People with Jobs) Bill 2010 (the Bill) puts in place the compliance component of the Government’s Connecting People with Jobs proposal, an election commitment announced by the Prime Minister on 11 August 2010.

 

The Connecting People with Jobs proposal is an active regional labour market strategy establishing a trial relocation assistance package aimed at connecting job seekers with employment opportunities elsewhere in Australia.

 

The trial is proposed to run over two years from 1 January 2011 and offer additional support to up to 2,000 job seekers who have been unemployed for more than 12 months to relocate to take up an identified on-going full time job, including an apprenticeship. Reimbursement of up to $6,000 for actual expenses incurred relocating ($3,000 for relocation to metropolitan areas) is available. Families with dependent children will have access to an additional $3,000.

 

To be eligible to participate in this trial job seekers must come from areas with unemployment rates higher than the national unemployment rate.

 

Job seekers who receive relocation assistance and subsequently leave the position within six months from commencement without reasonable excuse will not be paid unemployment benefits for 12 weeks (up from the current 8 weeks for leaving employment voluntarily).  Amendments to social security legislation are required to implement this increased non-payment period.

 

Employers who employ job seekers who receive relocation assistance will receive a subsidy of up to $2,500 in recognition of the additional support and assistance individuals will need in the early stages of their employment.

 

 

FINANCIAL IMPACT

 

The estimated administered cost of the trial is $14.6 million from 2010-11 to 2012-13 as reflected in costings done under the Charter of Budget Honesty.

 

Part of the Employment Pathway Fund (EPF) under Job Services Australia arrangements has been quarantined for New Enterprise Incentive Scheme (NEIS) funding based on the forecast flows of job seekers into Job Services Australia. However, as a result of higher than anticipated job seeker inflows more funds have been quarantined than necessary to meet NEIS funding requirements.  As a result, $14.6 million of the quarantined NEIS funds is  being reallocated within the EPF to fund the Connecting People with Jobs trial. This is not a savings measure, rather a reallocation of existing approved EPF funding. Consequently, the Connecting People with Jobs trial will have no impact on the Government budget.

 

 

Year

Expense ($ million)

2011-12

$0.0

2012-13

$0.0

TOTAL:

$0.0



 

SOCIAL SECURITY LEGISLATION AMENDMENT (CONNECTING PEOPLE WITH JOBS) BILL 2010

 

 

 

 

NOTES ON CLAUSES

 

Clause 1 - Short title

 

Provides for the Act to be cited as the Social Security Legislation Amendment (Connecting People with Jobs) Act 2010 .

 

 

Clause 2 - Commencement

 

Subclause 2(1) inserts a three column table setting out commencement information for various provisions in the Act.  Each provision of the Act specified in column 1 of the table commences (or is taken to have commenced) in accordance with column 2 of the table and any other statement in column 2 has effect according to its terms.

 

Subclause 2(2) provides that column 3 of the table is for additional information which may be added to or edited in any published version of the Act but that information in this column is not part of the Act.

 

The Bill is intended to commence on 1 January 2011, the day from which relocation assistance under the Connecting People with Jobs trial will be made available to eligible job seekers. However, if the Bill has not been passed by Parliament by 1 January 2011, it will commence the day after it receives the Royal Assent following passage.

 

Clause 3 - Schedule(s)

 

Provides that each Act that is specified in a Schedule is amended or repealed as set out in the applicable items in the Schedule and that any other item in a Schedule has effect according to its terms.

 

 

 

 

 

 

 

 

 

 

 

 



Schedule 1 — Amendments

 

Social Security (Administration) Act 1999

 

Item 1 - Section 42A

 

Section 42A of the Social Security (Administration) Act 1999 (Administration Act) sets out a simplified outline of Division 3A of Part 3 of the Act. Item 1 repeals and replaces the dot point in that simplified outline that relates to unemployment non-payment periods (UNPPs). The new dot point notes that a UNPP can be either 8 weeks long, or 12 weeks long, depending on the circumstances.

 

Item 2 - Subsection 42S(3)

 

Proposed item 1 repeals and substitutes subsection 42S(3) of the Administration Act and adds new subsections 42S(3A), (3B) and (3C).

 

Currently under section 42S of the Administration Act, a person who leaves employment - whether because they resign, or because they are sacked for misconduct - is unable to be paid an income support payment (newstart allowance, parenting payment, youth allowance, and special benefit) for a period of 8 weeks.  Centrelink, as delegate of the Secretary, has the discretion to reduce or not impose this 8-week UNPP for a number of reasons, including where the person has a reasonable excuse for their actions, or is in financial hardship and otherwise is in a class of particularly vulnerable people.

 

The new subsection 42S(3) allows for either an 8-week UNPP or a 12-week UNPP to be imposed on a person if the person becomes unemployed as a result of the person’s voluntary act or misconduct.

 

The 8-week UNPP will be imposed on a person in most circumstances of voluntary unemployment or unemployment due to misconduct, consistent with the current law.  However, a 12-week UNPP will be imposed on a person if, during the period of 6 months ending on the day before the day that the person becomes unemployed, the person has been paid specified relocation assistance in relation to the employment to which the voluntary act or misconduct related.  Thus, if a person receives relocation assistance under the Connecting People with Jobs trial to take up a job, and resigns or is sacked from that job for misconduct within 6 months of receiving that assistance, the person will be subject to a 12-week UNPP.

 

Note that, in order to incur a 12-week UNPP, the relocation assistance a person receives must be of a kind specified by the Secretary by legislative instrument under the proposed subsection 42S(3B). That is, only relocation assistance of a kind specified will attract 12-week UNPPs; relocation assistance generally will not.

 

There is no change being made to the exceptions that allow the Secretary to decide not to impose, or to reduce the length of, a UNPP - these will be equally applicable to 12-week UNPPs as to 8-week UNPPs.

 

Subsection 42S(3A) specifies the initial day upon which a non-payment period is to commence.  These are identical to the current start day under subsection 42S(3), that is, either the day the person becomes unemployed, or another day determined by the Secretary in accordance with paragraph (b).

 

Subsection 42S(3B) defines the term ‘relocation assistance’ in relation to employment to mean a payment made by the Commonwealth to a person to assist the person to take up the employment, that has been specified by the Secretary by legislative instrument. In order to give effect to the Connecting People with Jobs trial, the Secretary will make an instrument under this subsection specifying payments made under that trial as ‘relocation assistance’.

 

 

Item 3 - Section 42Y

 

Proposed paragraph 42S(3A)(b) replaces (and relevantly replicates) existing paragraph 42S(3)(b).  Item 3 amends the relevant reference in section 42Y. This amendment is consequential to item 2.

 

 

Item 4 - Section 110A

 

This amends a reference in section 110A in which reference is made to the day after a serious failure period or unemployment non-payment period ends. A serious failure period or unemployment non-payment period can end under either subsection 42S(3) or (4). This amendment is a technical amendment.  

 

 

Item 5 - Application

 

Inserts an application provision which provides that the amendments made by items 2 and 3 apply to persons who become unemployed on or after the day on which the instrument specifying the relocation assistance to which the measure applies takes effect. Since such an instrument cannot be made before this Bill receives the Royal Assent, and the Bill commences on the later of Royal Assent or 1 January 2011, this application provision ensures that only people who become unemployed on or after the date that the measure comes into operation can be subject to 12-week UNPPs.