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Social Security Legislation Amendment (Job Seeker Compliance) Bill 2011
05-07-2011 07:23 PM
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Social Security Legislation Amendment (Job Seeker Compliance) Bill 2011
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THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SOCIAL SECURITY LEGISLATION AMENDMENT (JOB SEEKER COMPLIANCE) BILL 2011
REVISED EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment Participation and Childcare)
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE OF REPRESENTATIVES TO THE BILL AS INTRODUCED
SOCIAL SECURITY LEGISLATION AMENDMENT (JOB SEEKER COMPLIANCE) BILL 2011
This Bill implements the Government’s election commitment to introduce tougher rules for job seekers, which was announced on 11 August 2010 as part of the “Modernising Australia’s Welfare System” policy statement.
The amendments in this Bill will enhance the current job seeker compliance framework by providing additional incentives for job seekers to engage with their employment services providers and to participate fully in activities designed to improve their employment prospects.
This Bill will introduce suspension of payment for job seekers following an initial failure to attend an appointment or, in some circumstances, an activity such as training or Work for the Dole. As soon as the job seeker agrees to attend this appointment, their payment will be restored with full back payment. All job seekers will be required to attend a rescheduled appointment, regardless of their reason for missing the first appointment. If the job seeker attends the rescheduled appointment, they will not be penalised.
If the job seeker does not attend the rescheduled appointment, payment will again be suspended but this time, if they do not have a reasonable excuse for missing the appointment, they will incur a reconnection failure and lose payment for each day from the second missed appointment until they do attend a rescheduled appointment. That is, there will be no back payment for this period.
The reconnection penalty will be deducted from the payment for the period in which the job seeker was notified of the failure. This will ensure that the impact of the penalty is more immediate and will provide a more direct deterrent than under current legislation, which requires that the penalty amount be deducted from a later instalment period.
Reasonable excuse provisions will also be tightened so that, even if a job seeker has a reasonable excuse on the day for not attending an appointment or activity, it will not be accepted if they could have given advance notice that they couldn’t attend but didn’t do so.
FINANCIAL IMPACT STATEMENT
Departmental expenses associated with this Bill are to be absorbed.
Expense ($ million)
SOCIAL SECURITY LEGISLATION AMENDMENT (JOB SEEKER COMPLIANCE) BILL 2011
For ease of description, this Explanatory Memorandum uses the following terms:
‘ Bill ’ means this Bill, i.e. the Social Security Legislation Amendment (Job Seeker Compliance) Bill 2011 .
‘Administration Act’ means the Social Security (Administration) Act 1999
Clause 1 - Short title
This clause provides for the Bill, when it is enacted, to be cited as the Social Security Legislation Amendment (Job Seeker Compliance) Act 2011 .
Clause 2 - Commencement
This clause inserts a three column table setting out commencement information for various provisions of the Bill. Each provision of the Bill 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.
The table has the effect of providing for clauses 1 to 3 and any other provisions of the Bill not otherwise covered by the table to commence on Royal Assent; and for Schedule 1 to commence the later of: the day after Royal Assent; and 1 July 2011.
A note makes it clear that these commencement times will not be amended by any later amendments of the Bill.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to the Bill is amended or repealed as set out in applicable items of the Schedule concerned, and any other item in a Schedule to the Bill has effect according to its terms.
Schedule 1 -Amendments
Social Security (Administration) Act 1999
Item 1 - At the end of section 42A
This item inserts a new dot point into the table in section 42A.
Section 42A contains a simplified outline of the items in Division 3A of Part 3 of the Administration Act, that relates to compliance with obligations in relation to participation payments. This Item will clarify that the Secretary may determine that a participation payment is not payable to a person for certain failures.
This item is consequential to the amendments being made Item 14 .
Item 2 - At the end of subsection 42C(4) (before the note)
This item inserts new paragraph (c) to the end of paragraph 42C(4) (circumstances in which the Secretary may not determine that a person commits a no show no pay failure). The new paragraph (c) will provide that the Secretary must not determine that a person commits a no show no pay failure on a day if the day is in a reconnection failure period for the person.
Currently, as a matter of policy, Centrelink does not determine no show no pay failures for days in a person’s reconnection failure period, and the current no show no pay penalty amount for a failure on such a day is set by the Social Security (Administration) (Penalty Amount) Determination 2009 (No. 1) at nil. However, the amendment made by Item 2 will confirm the policy in the Act.
Items 4 and 18 - Paragraph 42E(2)(a); note to subsection 63(7)
Section 42E provides for when the Secretary may determine that a person commits a connection failure. The connection failures are listed in subsection 42E(2) and, at paragraph (a), includes where the person fails to comply with a requirement that was notified to the person under subsection 63(2) or (4), and the notice did not inform the person of the effect of section 64, which concerns the consequences of failing to comply with a requirement.
As part of the ‘Tougher Rules for Job Seekers’ policy, where a person fails to comply with a mandatory requirement to attend an appointment or activity, their payment may be suspended and a connection failure may be applied. Notices imposing mandatory requirements on people will provide warning of the consequences of failure to comply. Hence, a notice issued under subsection 63(2) or (4) of the Administration Act imposing a requirement on a person to attend an appointment etc. will contain a warning that failure to comply with it could result in payment suspension (under section 64) and could also constitute a connection failure (under section 42E).
Therefore, there is a need to amend paragraph 42E(2)(a) to ensure that failure to comply with a notice issued under section 63 that warns of payment suspension (under section 64) can also constitute a connection failure.
As a further consequence, Item 18 deletes the note under subsection 63(7) that stipulated that failure to comply with a section 63 notice that did not contain a warning of suspension under section 64 could result in a connection failure.
Item 6 - Section 42G
Item 6 repeals and replaces section 42G (reconnection requirements).
Section 42G currently provides that if the Secretary determines that a person commits a connection failure, then the Secretary may require the person to comply with a requirement (a reconnection requirement ).
The new subsection 42G will expand the circumstances in which the Secretary will be able to issue reconnection requirements. Paragraph (a) replicates the current section 42G, but the Secretary no longer needs to find a connection failure (including that the person did not have a reasonable excuse for the failure) before issuing a reconnection requirement. Instead, so long as the Secretary considers that a person has failed to participate in an activity or attend an appointment mandated by their employment pathway plan (EPP), or has failed to comply with a requirement under a section 63 notice - whether or not the person has a reasonable excuse for the failure - the Secretary can issue the person with a reconnection requirement.
In the case that the Secretary has suspended a person’s payment for a failure to comply with a requirement in the person’s EPP, the Secretary must issue the person with a reconnection requirement (s 42G(e)), as the usual way in which such a suspension will be lifted will be by the person telling the Secretary that they intend to comply with the reconnection requirement (see Item 14 ).
Item 8 - Subsection 42H(5)
This item will remove the words ‘provided that the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the reconnection failure’ from subsection 42H(5).
Section 42H deals with reconnection failures. A reconnection failure will occur where a person fails to comply with a reconnection requirement without a reasonable excuse and will result in the imposition of a penalty amount.
Currently, subsection 42H(5) provides that the Secretary must include in a determination under this section the instalment period in which a penalty amount for the reconnection failure is to be deducted from the person’s instalment of a participation payment; however, the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the reconnection failure.
The result is that a penalty amount for a reconnection failure will typically not be deducted until at least 15 days after the reconnection failure, and frequently much longer. This means that the deduction is so far removed from the failure that it has lost its impact as a sanction, and penalised job seekers are confused as to why their payment is lower than it would normally be.
This amendment will allow for any loss of payment as a result of a reconnection failure to be deducted from a person’s income support payment immediately. The intention of this amendment is to ensure that the impact of the loss of payment is more immediate and therefore provides a stronger and more direct deterrent for the reconnection failure.
Items 9, 10 and 11 - Section 42J
Section 42J empowers the Secretary to issue further reconnection requirements. Currently, the Secretary is only able to do so if she finds that a person has committed a reconnection failure without a reasonable excuse or has failed to comply with an earlier further reconnection failure. Insofar as the Secretary can give a person a further reconnection requirement for failure to comply with an earlier further reconnection requirement, the Secretary can do so even if the person has reasonable excuse for the failure (current subsection 42J(2)).
The amendments to section 42J made by Items 9, 10 and 11 modify the basis on which the Secretary can give a person a further reconnection requirement. As for the amendments made to section 42G by Item 6 , the principle is that a further reconnection requirement can be issued to a person merely because the person has failed to do something they were required to do, irrespective of whether the person has a reasonable excuse. So, in proposed section 42J, the Secretary will be able to issue a further reconnection requirement to a person who has failed to comply with a reconnection requirement or earlier further reconnection requirement, and will not have to consider whether the person has a reasonable excuse for the failure.
Thus, the Secretary can impose a further reconnection requirement on a person without having to apply a reconnection failure, which is currently required. The Secretary will still be required to determine whether a reconnection failure should be applied and a reconnection penalty amount deducted from the person’s payment, and reasonable excuse will be relevant to this question.
Items 12 and 13 - Section 42K
Section 42K lists what the Secretary must notify a person about when imposing a reconnection requirement or further reconnection requirement on the person, and when that notice must be given.
Items 12 and 13 amend section 42K to achieve two purposes. First, since the consequence of a person failing to comply with a reconnection requirement or further reconnection requirement can be either or both payment suspension (under new section 42SA) and deduction of a reconnection penalty amount (under existing section 42L), subsection 42K(1) is amended it provide that a reconnection or further reconnection requirement must be accompanied by notice of both potential consequences.
Second, current subsection 42K(2) provides that the reconnection or further reconnection requirement cannot occur before the day on which notice of the requirement is given to the person. Item 13 removes the words ‘the day’ from subsection 42K(2). The effect of this amendment is that the notification will not need to occur before the day the requirement occurs. Instead, notice of a requirement will only need to occur before the requirement must be complied with. This will allow greater flexibility as to when the notice can be issued requiring a person to comply with a reconnection requirement or further reconnection requirement as the notification of the requirement and the requirement will be able to occur on the same day. This is particularly beneficial in remote areas, where a job seeker may only be in town to see Centrelink and their employment services provider every few weeks, allowing Centrelink to give the job seeker a reconnection requirement that requires them to attend an appointment with the provider on the same day.
Item 14 - After subdivision E of Division 3A of Part 3
This item inserts new subdivision EA, consisting of section 42SA. The new section establishes a key component of the new compliance regime for job seekers, that of payment suspension for failure to attend an appointment or activity.
New subsection 42SA(1) allows the Secretary to determine that a participation payment is not payable to a person if:
· the person fails to participate, on a day, in an activity that the person is required to undertake by an employment pathway plan that is in force in relation to the person (new paragraph 42SA(1)(a)); or
· the person fails to attend an appointment that the person is required to attend by an employment pathway plan that is in force in relation to the person (new paragraph 42SA(1)(b)); or
· the person fails to comply with a reconnection requirement or a further reconnection requirement (new paragraph 42SA(1)(c)).
There are two notes at the end of this section. Note 1 provides that if new paragraph 42SA(1)(a) or 42SA(1)(b) apply, a reconnection requirement must be imposed for that failure (see section 42G). Note 2 clarifies that the participation payment may not be payable to the person, as per section 64, if the person fails to comply with a notice under section 63.
New subsection 42SA(2) provides for the period for which the participation payment is not payable where new subsection (1) applies. A participation payment is not payable from the day on which the person first commits the failure referred to in subsection (1). Where the Secretary decides that the person’s payment is not payable under subsection (1), the Secretary will give the person a reconnection requirement (see new section 42G). Typically, a person’s period of non-payability will end when the person notifies the Secretary of their intention to comply with the reconnection requirement (new paragraph 42SA(2)(a)). However, the Secretary can end the period of non-payability on an earlier day (including the day on which it started) if satisfied that another day is more appropriate.
New subsection 42SA(3) provides that, if the period of non-payability ends under subsection (2), then (subject to the social security law), the payment becomes payable to the person for that same period. In effect, the person becomes entitled to back-pay for the period that their payment was suspended. Note, however, that the entitlement to payment for the period is subject to the rest of the social security law - which means that the payment may not be payable for another reason (for example, because the person ceased to qualify for the payment, or earned income sufficient to reduce their rate of payment to nil). It is intended that, in order to remain eligible to receive back payment during the period of non-payability the person should continue to meet all qualification criteria during that period, including meeting any applicable activity test or participation requirements.
Items 3, 5, 7, and 15 - Job seekers to given prior notice of reasonable excuse
Item 15 inserts new section 42UA. The purpose of this item is to motivate job seekers to give prior notice of any excuse they may have not to attend a mandatory appointment, contact or activity.
The effect of the section is to provide that, when the Secretary is determining whether a job seeker has a reasonable excuse for any of the failures mentioned in new subsection (1), an excuse cannot be a reasonable excuse unless the job seeker has notified a specified person (‘contact person’) of that excuse prior to the appointment, contact or activity to which the failure relates. That is, in order to avail him- or herself of a reasonable excuse for failing to attend an appointment, make a contact, or attend an activity on a particular day, a job seeker must tell the relevant contact person of their excuse before the appointment, contact or activity, as the case may be. The contact person will be specified in the notice given to the job seeker, or EPP signed by the job seeker, that imposes the requirement to attend the appointment, make contact, or participate in the relevant activity.
Note that the Secretary can still consider a person’s excuse to be a reasonable excuse in the absence of prior notice of the excuse being given by the person, if the Secretary is satisfied that there were circumstances in which it was not reasonable for the person to give prior notification.
Items 3, 5 and 7 simply amend notes to other provisions in Division 3A of Part 3 (subsection 42C(4), 42E(4) and 42H(3) respectively) to point out to readers that, when considering reasonable excuse under those provisions, regard should be had to the effect of new section 42UA.
Item 16 - After section 42Y
This item inserts new section 42YA that provides that no subdivision of Division 3 limits any other subdivision in Division 3. This is a technical amendment that is intended to clarify that simply because one subdivision of provides for something (say, the issue of a notice, or the imposition of a sanction), no implication can be drawn that another subdivision is limited in providing for that or something similar. In particular, suspension of payment under subdivision EA can be done whether or not reconnection failures are found and reconnection penalty amounts deducted, and vice-versa.
Item 17 - Subdivision G of Division 3A of Part 3
This item repeals Subdivision G of Division 3A of Part 3, i.e. section 42ZA. This subdivision is being repealed as the review mentioned in this subdivision has been completed, and the report of that review tabled and published, and the subdivision is therefore no longer required.
For further information, see Independent Review of the Job Seeker Compliance Framework at:
Item 19 - Paragraph 64(1)(e)
This item inserts the words ‘except if the person is receiving, or has made a claim for, a participation payment’ into paragraph 64(1)(e).
Subsection 64(1) provides that a payment that a person is receiving or has claimed is not payable where the circumstances listed in that subsection exist. This includes, at paragraph 64(1)(e) the circumstance where the Secretary is not satisfied that the person has a reasonable excuse for not complying with the requirement.
The effect of this amendment is to enable the Secretary to decide that a person’s participation payment is not payable for failure to comply with a requirement imposed under a section 63 notice without first having to consider whether the person had a reasonable excuse for that failure. This amendment is tied to the introduction of the new section 42SA, that enables the Secretary to decide that a person’s participation payment is not payable for the failures listed in new subsection 42SA(1), irrespective of reasonable excuse.
As for new section 42SA, where the Secretary determines that a person’s payment is not payable under section 64, the Secretary will issue the person with a reconnection requirement (under the new section 42G), and will resume payment and provide back-pay (under subsection 63(4)) when the person tells the Secretary that he or she intends to comply with the requirement.
Item 20 - Application
This item inserts application provisions for the amendments contained in this bill.
Subitem (1) provides that the amendments made by Items 2 and 8 apply in relation determinations made on or after the commencement of those items. The effect of this provision is to:
- prevent, from commencement, no show no pay failures being determined during reconnection failure periods, even if the no show no pay failure, or reconnection failure period, or both, occurred prior to commencement; and
- enable, from commencement, reconnection failure penalty amounts to be deducted from a person’s instalment of participation payment as soon as possible, even if the reconnection failure or the determination of failure occurred before commencement.
Subitem (2) provides that the amendment made by Item 4 applies in relation to notifications made on or after the commencement of that item. The effect of this provision is prevent connection failures being determined, after commencement, for failure to comply with section 63 notices issued before commencements that informed the person of the effect of section 64 (i.e. suspension of payment).
Subitem (3) provides that reconnection requirements given under section 42G as in force prior to commencement have effect on and after commencement as if they had been given under the new section 42G. That is, reconnection requirements issued before commencement are “saved” despite the repeal and re-making of section 42G by Item 6 , and are dealt with under the new provisions as if they were issued under the new section 42G.
Subitem (4) provides that paragraphs 42G(b), (c) and (d) of the Social Security (Administration) Act 1999 , as amended by this Act, apply in relation to failures that are first committed on or after the commencement of this item (whether the requirements arose before, on or after that commencement). The effect of this provision is to allow, from commencement, reconnection requirements to be given for the failures to meet requirements mentioned in paragraphs 42G(b), (c) and (d), even if the requirements to which the failures relate were given before (or on or after) commencement.
Subitem (5) provides that the amendments made by Items 9, 14, 15 and 19 apply in relation to failures that are first committed on or after the commencement of those items (whether the requirements arose before, on or after that commencement). The effect of this provision is to:
· enable, from commencement, the giving of further reconnection requirements for failures to comply with reconnection requirements or earlier further reconnection requirements that occur on or after commencement, even if the reconnection or earlier further reconnection requirements to which the failures relate were given before (or on or after) commencement;
· enable, from commencement, suspension of payment under new section 42SA or section 64 for failures to comply with relevant requirements that occur on or after commencement, even if the relevant requirements to which the failures relate were given before (or on or after) commencement;
· mandate  , from commencement, prior notification of excuses for failures that occur on or after commencement even if the relevant requirements to which the failures relate were given before (or on or after) commencement.
Subitem (6) provides that the amendments made by Items 12 and 13 apply in relation to requirements imposed under section 42G or 42J of the Social Security (Administration) Act 1999 on or after the commencement of those items. The effect of this provision is to require all reconnection and further reconnection requirement notices given from commencement to comply with the new section 42K. However, reconnection and further reconnection requirements given before commencement will remain valid after commencement even if they do not comply with the new section 42K.
 This is short-hand for ease of understanding. Of course, new section 42UA does not actually mandate prior notification of excuses. Rather, it provides that an excuse will not be a reasonable excuse unless prior notification of the excuse is given.