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Social Security and Other Legislation Amendment (Disability Support Pension Participation Reforms) Bill 2012

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2010-2011-2012

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT ( DISABILITY SUPPORT PENSION PARTICIPATION REFORMS) BILL 2012

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Families, Community Services and Indigenous Affairs, Minister for Disability Reform, the Hon Jenny Macklin MP)



SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT ( DISABILITY SUPPORT PENSION PARTICIPATION REFORMS) BILL 2012

 

 

OUTLINE

 

The Bill contains the measures set out below.

 

Work rule for disability support pension

 

This measure from the 2011-12 Budget package, Building Australia’s Future Workforce , allows all disability support pensioners to work up to 30 hours a week without having their payment suspended or cancelled.  This extends the ‘30 hour rule’ to people granted disability support pension since the introduction of the Welfare to Work changes (that is, on or after 11 May 2005), who currently have their pension suspended or cancelled once they work more than 15 hours a week.

 

Participation requirements for disability support pension

 

This is a further measure from the Building Australia’s Future Workforce package.  It i ntroduces a requirement for certain disability support pensioners under age 35 with a work capacity of at least eight hours a week to engage with Centrelink through an initial participation interview and development of a participation plan, tailored to their individual circumstances, to help build their work capacity .

 

Portability of disability support pension

 

This measure introduces more generous rules, for disability support pensioners with a severe impairment that is likely to continue for at least five years and result in the person having no future work capacity, allowing them to retain access to their disability support pension if they travel overseas for more than 13 weeks.

 

Average weekly earnings and other amendments

 

The Bill also contains minor amendments - changing references in the child support legislation to Average Weekly Earnings data derived from an Australian Bureau of Statistics publication because of a change in the frequency of that publication, and making minor corrections to veterans’ entitlements and social security legislation.

 



Financial impact statement

 

Work rule for disability support pension

 

This measure will cost $7.6 million over the four years from 1 July 2011.

 

Participation requirements for disability support pension

 

This measure will cost $92.8 million over the four years from 1 July 2011.

 

Portability of disability support pension

 

These changes deliver a net saving of $19.0 million over the four years from 1 July 2011.

 

Average weekly earnings and other amendments

 

There is no financial impact from these amendments.

 

 

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

 

The statements of compatibility with human rights appear at the end of this explanatory memorandum.

 

 

 



SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT ( DISABILITY SUPPORT PENSION PARTICIPATION REFORMS) BILL 2012

 

 

NOTES ON CLAUSES

 

Abbreviations used in this explanatory memorandum

  • Legislative Instruments Act means the Legislative Instruments Act 2003
  • Social Security Act means the Social Security Act 1991
  • Social Security Administration Act means the Social Security (Administration) Act 1999

 

Clause 1 sets out how the new Act is to be cited, that is, as the Social Security and Other Legislation Amendment (Disability Support Pension Participation Reforms) Act 2012.

 

Clause 2 provides a table that sets out the commencement dates of the various sections in, and Schedules to, the new Act.

 

Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in that Schedule.

 



Schedule 1 - Work rule for disability support pension

 

 

Summary

 

This measure from the 2011-12 Budget package, Building Australia’s Future Workforce , allows all disability support pensioners to work up to 30 hours a week without having their payment suspended or cancelled.  This extends the ‘30 hour rule’ to people granted disability support pension since the introduction of the Welfare to Work changes (that is, on or after 11 May 2005), who currently have their pension suspended or cancelled once they work more than 15 hours a week.

 

Background

 

Disability support pension provides income support to people who, because of an ongoing physical, intellectual or psychiatric impairment, are prevented from working or from being re-trained to work.  The current qualification criteria for disability support pension require that a person, amongst other things, has a continuing inability to work, where work is defined to be work of at least 15 hours per week in open employment.

 

Prior to the commencement of the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Act 2005 , the definition of work was work of at least 30 hours per week.  Recipients of disability support pension whose claims were granted before 11 May 2005 continue to be assessed under the previous qualification criteria.

 

The Government believes long-term dependence on disability support pension is not the best option for people who have skills and capacity to participate in the workforce.  The measure in this Schedule is focused on ensuring that people who wish to test their capacity to increase the number of hours they work may do so without affecting their ongoing qualification for disability support pension.  The measure therefore provides an incentive for workforce participation while acknowledging that disability support recipients may not be able to maintain an increased work capacity and providing disability support pension as a safety net. 

 

The amendments made by this Schedule commence on 1 July 2012.

 

Explanation of the changes

 

Amendments to the Social Security Act

 

Item 1 inserts new section 96 into the Social Security Act.  Section 96 allows for the continuation of a person’s qualification for disability support pension if the person obtains paid work of at least 15 hours but less than 30 hours per week.

 

Subsection 96(1) sets out that section 96 applies to a person who is receiving disability support pension and who would (if not for the new provision) lose qualification for the pension because of obtaining paid work of at least 15 hours per week but less than 30 hours per week.

 

Subsection 96(2) specifies that people to whom section 96 applies continue to be qualified for disability support pension.  This means that disability support pension recipients who participate in paid work for between 15 and 30 hours per week can do so without affecting their qualification for disability support pension despite the increased number of hours worked.

 

Items 2, 3 and 4 are consequential to the insertion of new section 96 of the Social Security Act by item 1.  Item 2 omits from paragraph 1035A(4)(b) the number 15 and substitutes the number 30.  Item 3 omits from subparagraph 1035A(4)(e)(i) the number 15 and substitutes the number 30.   Item 4 omits from paragraph 1061ZD(2)(b) the number 15 and substitutes the number 30.

 

The substitution of the number 30 for the number 15 by items 2, 3 and 4 amends provisions of the Social Security Act relating to extended qualification for the pensioner concession card and qualification for mobility allowance. 

 

Amendments to the Social Security Administration Act

 

Items 5, 6 and 7 are consequential to the insertion of new section 96 of the Social Security Act by item 1.   Item 5 omits from paragraph 96(1)(a) of the Social Security Administration Act the number 15 and substitutes the number 30.   Item 6 omits from paragraph 97(1)(a) of the Social Security Administration Act the number 15 and substitutes the number 30.   Item 7 omits from paragraph 97A(2)(b) of the Social Security Administration Act the number 15 and substitutes the number 30.

 

The substitution of the number 30 for the number 15 by items 5, 6 and 7 amends provisions of the Social Security Administration Act relating to suspension instead of cancellation for disability support pension.  These amendments reflect the ability of recipients of disability support pension to work for up to 30 hours per week without affecting their qualification.

 

Item 8 contains the transitional provisions.

 

Subitems 8(a) and 8(b) set out the people to whom the transitional provisions apply.  The transitional provisions apply to a person if the Secretary suspended that person’s disability support pension before the commencement of item 1 , because the person obtained paid work of between 15 and 30 hours per week, and the suspension is in effect immediately before the commencement of item 1 .

 

Subitems 8(c) and 8(d) provide that the Secretary must reconsider the suspension for the purposes of section 85 of the Social Security Administration Act as soon as practicable after 1 July 2012 and, if the Secretary is satisfied that disability support pension is payable to the person, the Secretary must determine under section 85 that the disability support pension is payable to the person.

 

Subitem 8(e) provides that section 114 of the Social Security Administration Act applies to any determination made by the Secretary in accordance with item 8 .

 

 



Schedule 2 - Participation requirements for disability support pension

 

 

Summary

 

This Schedule contains a further measure from the Building Australia’s Future Workforce package.  It i ntroduces a requirement for certain disability support pensioners under age 35 with a work capacity of at least eight hours a week to engage with Centrelink through an initial participation interview and development of a participation plan, tailored to their individual circumstances, to help build their work capacity .

 

Background

 

The measure in this Schedule is aimed at improving support for Australians with disability, to help them into work where possible, while continuing to provide an essential safety net for those who are unable to support themselves fully through work.

 

Working helps boost people's self-esteem, improves social contact, provides more income, and leads to improved health and financial security.  The Government is committed to ensuring people with disability can access these opportunities wherever they are able.

 

Many people with disability want to work if they can, but they may need extra support.

 

This measure is targeted specifically at disability support pension recipients under the age of 35 years because this group is considered to be at the greatest risk of spending extended periods of time dependent on income support.  Further, this group of people is considered to be more likely to have had a recent connection with the paid workforce, education or training, and is considered to have the greatest potential to benefit from additional support and services to build their capacity. 

 

Under the measure, the disability support pension recipients affected will be required to maintain regular contact with Centrelink to ensure that they are able to be informed about vocational and non-vocational supports and services to help them overcome barriers and build their capacity.  This will be done through regular participation interviews and an agreed participation plan.

 

The amendments made by this Schedule commence on 1 July 2012.

 

Explanation of the changes

 

Amendments to the Social Security Act

 

Item 1 inserts new paragraph 94(1)(da).  New paragraph 94(1)(da) has the effect that, in order to qualify and to continue to qualify for disability support pension, a person who is aged under 35, whose youngest dependent child is aged six or over, and who the Secretary is satisfied is able to work at least eight hours per week on wages at or above the relevant minimum wage, must, in addition to satisfying the existing qualification provisions in section 94 of the Social Security Act, meet any participation requirements that apply to the person.

 

Item 2 inserts new sections 94A, 94B, 94C, 94D, 94E and 94F into the Social Security Act.

 

Participation requirements

 

New section 94A sets out the participation requirements that will apply to those people to whom new paragraph 94(1)(da) applies.  New paragraph 94A(1)(a) provides that the person to whom new paragraph 94(1)(da) applies must enter into a participation plan when required to do so by the Secretary. 

 

New paragraph 94A(1)(b) provides that, where a person has already entered into a participation plan, the Secretary may require the person to enter into a new participation plan.  A new plan will be required where a participation plan is amended, updated or replaced, to reflect changes in the person’s circumstances or to include further voluntary activities that may be suitable for the person. 

 

New paragraph 94A(1)(c) clarifies that, while a participation plan is in force, the person must comply with the requirements of the plan.

 

New subsection 94A(2) provides that new section 94A will not apply where a participation exemption under new section 94C (illness or accident), section 94D (pre-natal and post-natal relief), section 94E (supported employment) or section 94F (special circumstances) applies to the person.

 

Participation plans

 

New section 94B sets out the requirements of a participation plan.  New subsection 94B(1) provides that the Secretary may require a person to enter into a participation plan where that person does not presently have a participation plan in force.

 

New subsection 94B(2) provides that, where the person currently has a participation plan in force, the Secretary may nevertheless require the person to enter into a new participation plan, that is, an amended or revised plan.

 

New subsection 94B(3) provides that, where the Secretary has determined that a person must enter into a participation plan, the Secretary is to give that person notice of both the requirement to enter into a participation plan and details of the place and time at which the participation plan is to be entered into.

 

New subsection 94B(4) provides that a participation plan that is in force must contain one or more terms that the person is required to comply with and that the Secretary regards as suitable for the person.  The only compulsory requirement in a participation plan will be attendance at further interviews.

 

New subsection 94B(5) provides that the Secretary must approve all the requirements inserted in a participation plan.

 

New subsection 94B(6) provides that a participation plan may include one or more terms that a person may comply with but is not required to.  It is anticipated that the majority of terms within a participation plan will set out activities which the person may undertake.  The purpose of the measure is to ensure that the relevant disability support pension recipients are made aware of employment and vocational and non-vocational supports and services which may build their capacity and assist them to engage with the workforce.

 

New subsection 94B(7) provides that a participation plan must be in a form approved by the Secretary.  Note that the Secretary may change the structure of the form from time to time.

 

Exemptions from entering into a participation plan

 

New subsections   94C, 94D, 94E and 94F set out the exemptions to entering into a participation plan. 

 

There are four exemptions:

 

·          illness or accident;

 

·          pre-natal and post-natal relief;

 

·          supported employment; and

 

·          special circumstances.

 

New section 94C provides for an exemption from participation where a person is temporarily affected by an illness or accident.  New subsection 94C(1) provides that a person is covered by a participation exemption and is therefore not required to enter into a participation plan, or, if a plan has already been entered into, to fulfil the requirements of the participation plan, if that person satisfies the Secretary that he or she is suffering from an illness or has been involved in an accident.  The Secretary is to determine the period that the person is covered by a participation exemption (new subsection 94C(2)). 

New subsection 94C(5) clarifies that a determination made under new subsection 94C(2) is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act.  Subsection 94C(5) is inserted to assist readers and is merely declaratory of the law.

 

When determining that a person is exempt from participation, the Secretary may request that the person provide a certificate from a medical practitioner.  New subsection 94C(4) provides that nothing in new subsection 94C(3) limits new subsection 94C(1).

 

New section 94D sets out pre-natal and post-natal exemptions from participation.  New subsection 94D(1) provides that a pregnant woman is covered by a participation exemption and is therefore not required to enter into a participation plan, or, if a plan has already been entered into, to fulfil the requirements of the participation plan, for the period starting six weeks prior to the expected date of confinement and ending on the day she gives birth.

 

New subsection 94D(2) provides that, if a woman gives birth, the woman is covered by a participation exemption and is therefore not required to enter into a participation plan, or, if a plan has already been entered into, to fulfil the requirements of the participation plan, for the period that starts on the day she gives birth and ends six weeks after that date.

 

This exemption applies whether or not the child is born alive.

 

New section 94E provides for an exemption from participation where the person is in supported employment.  New subsection 94E(1) provides that a person who is employed and is receiving wages set in accordance with the program known as the supported wage system is covered by a participation exemption and is therefore not required to enter into a participation plan, or, if a plan has already been entered into, to fulfil the requirements of the participation plan.

 

New subsection 94E(2) provides that a person who is in employment that is supported by a supported employment service within the meaning of section 7 of the Disability Services Act 1986 is covered by a participation exemption and is therefore not required to enter into a participation plan, or, if a plan has already been entered into, to fulfil the requirements of the participation plan.  These supported employment services are currently known as Australian Disability Enterprises.

 

New subsection 94F provides an exemption from participation where there are special circumstances.  It is not practical to provide an exhaustive list of what may constitute special circumstances.  However, subsection 94F(1) provides that the circumstances (which must actually exist as a matter of fact) that the person is relying upon not to participate in a participation plan must be beyond the person’s control, and satisfy the Secretary that it would be unreasonable to expect the person to comply with their participation plan as a result of those special circumstances for a period of time. 

New subsection 94F(2) provides that any single period of exemption from participation determined under subsection 94F(1) is not to exceed 13 weeks.

 

New subsection 94F(3) clarifies that any determination made under subsection 94F(1) is not a legislative instrument.  Any determination made under subsection 94F(1) is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act.  This provision is inserted to assist readers and is merely declaratory of the law.

 

Item 3 is an application provision, which provides that the amendments made by this Schedule apply for the purposes of establishing or continuing a person’s qualification for disability support pension in respect of any time on or after 1 July 2012.

 



Schedule 3 - Portability of disability support pension

 

 

Summary

 

This Schedule introduces more generous rules, for disability support pensioners with a severe impairment that is likely to continue for at least five years and result in the person having no future work capacity, allowing them to retain access to their disability support pension if they travel overseas for more than 13 weeks.

 

Background

 

Currently, Division 2 of Part 4.2 of Chapter 4 of the Social Security Act sets out the length of time that social security payments can be paid to a person while that person is outside of Australia.  Payment of a social security pension or benefit to a person while they are overseas is referred to as portability.

 

Generally, disability support pension can only be paid to a person for 13 weeks after they leave Australia.  However, there are some existing exceptions to the general portability rule.

 

Existing section 1218AA of the Social Security Act enables the Secretary to determine that a disability support pensioner’s maximum portability period is unlimited if a person has a severe disability, has a terminal illness and returns to their country of origin or moves overseas to be near family.

 

The amendments made by this Schedule establish a new category of people who can access an unlimited portability period that is similar to the existing section 1218AA.  The Secretary will be able to determine that a person who has a severe impairment that is likely to continue for at least five years and who, as a result of the impairment, is not able to undertake any work, has an unlimited portability period.  This will mean that a person who meets the criteria can live outside Australia indefinitely and continue to be paid disability support pension.

 

The amendments made by this Schedule commence on 1 July 2012.

 

Explanation of the changes

 

Items 1 to 6 make technical amendments to the qualification criteria for disability support pension in sections 94 and 95 of the Social Security Act.  The effect of these items is to ensure that a person continues to qualify for disability support pension even after the person ceases to be an Australian resident.  A severely impaired disability support pensioner, as determined in accordance with new section 1218AAA of the Social Security Act (inserted by item 10 below), can live outside Australia and continue to be paid disability support pension.

 

Item 7 inserts a definition of a severely impaired disability support pensioner into section 1212 of the Act.  The term severely impaired overseas disability support pensioner is defined by reference to the new section 1218AAA, inserted by item 10 below.

 

Item 8 makes a technical amendment to item 2 in the table at the end of section 1217 of the Act.  The table sets out the maximum length of time that a particular social security payment can be paid to a person who is overseas, known as the maximum portability period .  The amendment made by this item establishes that a person who is a severely impaired overseas disability support pensioner will have an exception to the general 13-week maximum portability period for disability support pension.

 

Item 9 provides for the amendment of the table at the end of section 1217, by inserting a new table item 2A to provide that the maximum portability period for a severely impaired overseas disability support pensioner is unlimited.

 

Item 10 inserts a new section 1218AAA into the Social Security Act at the start of Subdivision B of Division 2 of Part 4.2. 

 

New subsection 1218AAA(1) provides that the Secretary may determine that a person is a severely impaired disability support pensioner if:

(a)   they are in receipt of disability support pension; and

(b)   they have a severe impairment as defined in subsection 94(3B) of the Social Security Act; and

(c)   the severe impairment is expected to last for at least five years; and

(d)   they have no capacity to work independently of a program of support (as defined in subsection 94(4) of the Social Security Act) as a result of their severe impairment.

 

It is generally intended that, before the Secretary makes a determination under new section 1218AAA, the disability support pensioner would be required to undergo an assessment in Australia to determine whether they meet the criteria for a severely impaired overseas disability support pensioner.

 

However, in relation to a person who is outside Australia, new subsection 1218AAA(2) prevents the Secretary from making a determination unless satisfied that the person is unable to return to Australia because the person has had a serious accident, or has been hospitalised, before the end of the person’s portability period.

 

New subsection 1218AAA(3) allows the Secretary to revoke a determination made under new subsection 1218AAA(1) if the Secretary becomes aware that a severely impaired overseas disability support pensioner no longer meets the criteria set out in new subsection 1218AAA(1).

 

A determination by the Secretary that a person is a severely impaired overseas disability support pensioner is not a legislative instrument, as noted in new subsection 1218AAA(4).  This provision is inserted to assist readers and is merely declaratory of the law.  The determination of the Secretary under new section 1218AAA is not a legislative instrument within the meaning of the Legislative Instruments Act.

 

New subsection 1218AAA(5) inserts a definition of work for the purposes of this new section.  For the purposes of new section 1218AAA, work means employment that is available in Australia for a wage that is at or above the appropriate minimum wage.  This includes work that is in a location away from where the person ordinarily lives.

 

Item 11 repeals the heading to section 1218AA and substitutes a new heading to the provision to take account of the amendments made in this Schedule.  The amendments in this Schedule provide for a new category of people who can have an unlimited portability period for disability support pension.  The new heading for the existing unlimited portability period in section 1218AA distinguishes the provision from new section 1218AAA.

 

Item 12 amends subsection 1220B(1) to provide that the Pension Portability Rate Calculator at the end of section 1221 of the Social Security Act applies to a person who has an unlimited portability period as a result of new section 1218AAA.

 

Item 13 is an application provision, which provides that the amendments made by this Schedule will only apply to qualification for disability support pension, and absences from Australia, on or after 1 July 2012.

 

 



Schedule 4 - Average weekly earnings and other amendments

 

 

Summary

 

This Schedule contains minor amendments - changing references in the child support legislation to Average Weekly Earnings data derived from an Australian Bureau of Statistics publication because of a change in the frequency of that publication, and making minor corrections to veterans’ entitlements and social security legislation.

 

Background

 

Average weekly earnings

 

Part 5 of the Child Support (Assessment) Act 1989 (Child Support Assessment Act) provides for the administrative assessment of child support and includes formulas for assessing the rate of child support payable by a parent for a child for a day in a child support period.  The formulas take into account each parent’s child support income and the costs of the child.  The annualised Male Total Average Weekly Earnings (MTAWE) figure for the relevant September quarter is used in calculating a parent’s self-support amount , which is taken into account in working out their child support income.  The Costs of the Children Table in Schedule 1 of the Child Support Assessment Act, which provides for the costs of the children, identifies amounts based on the parents’ combined child support income (or, in some cases, the parent’s child support income), and is also updated each year in accordance with the annualised MTAWE figure for the relevant September quarter. 

 

The Average Weekly Earnings (AWE) amount for a September quarter of a year of income is defined in subsection 58AA(1) and is used in working out the ATI indexation factor .  The ATI indexation factor is relevant to the determination of a parent’s adjusted taxable income for the last relevant year of income in relation to a child support period, under section 58 if relevant tax assessments are not available. 

 

Both the annualised MTAWE figure for a relevant September quarter and the AWE amount for a September quarter of a year of income are defined by reference to amounts published for the reference period in the quarter by the Australian Statistician in the document, Average Weekly Earnings, Australia .  The frequency of this publication will change in 2012 from quarterly to biannually.  Publications will be for the April-June and October-December quarters.  This means that amounts for the July-September quarter for 2012 and for subsequent years will no longer be published.  In response to the change in the frequency of this publication, amendments will be made to change references to the September quarter to references to the June quarter with respect to the annualised MTAWE figure, and references to the September quarter to references to the December quarter in respect of the AWE amount. 

 

The amendments made by Division 1 of this Part will commence on Royal Assent.  The amendments made by Division 2 of this Part will commence on 1 January 2013, and the amendments made by Division 3 will commence on 1 July 2013.

 

Other amendments

 

Social Security Act

 

Currently, the pension loan scheme debt recovery provisions in Division 4 of Part 3.12 of the Social Security Act provide that, in certain circumstances, a debt that is payable to the Commonwealth is not recoverable.  Subparagraph 1139(2)(b)(iv) of the Social Security Act provides that one of the exceptions to the Commonwealth being entitled to recover a debt until after the person’s death is if the person’s partner has reached pension age.  Sub-subparagraphs 1139(2)(b)(iv)(A) and (B) refer to pension age for women as 60 years and 65 years for a man.  These ages are incorrect.

 

This Schedule will remove these incorrect and currently redundant references to particular ages.  The note following subparagraph 1139(2)(b)(iv) correctly refers to pension age as being defined in subsections 23(5A), (5B), (5C) and (5D).  The pension age for women and men is determined by referring to the date of birth of the person, as set out in the tables under these subsections.

 

Therefore, the Commonwealth will not be entitled to recover a section 1135 debt until the conditions in subsection 1139(2) are met.  For the purposes of subparagraph 1139(2)(b), the Commonwealth would not be entitled to recover a debt until after the person and their partner had died, provided all the conditions of paragraph 1139(2)(b) are met.

 

By making the amendment, the reference to pension age would then link to the definition referred to in the note.

 

This amendment commences on Royal Assent.

 

V eterans’ Entitlements Act 1986

 

Lastly, an amendment will be made to align the rules in the Veterans’ Entitlements Act 1986 (Veterans’ Entitlements Act) for working out the minimum instalment for a service pensioner who is receiving either or both pension supplement and clean energy supplement with corresponding rules for pensioners under the Social Security Act.

 

This amendment commences immediately after the commencement of item 15 in Schedule 3 to the Clean Energy (Household Assistance Amendments) Act 2011.

 

Explanation of the changes

 

Part 1 - Average weekly earnings

 

Amendments to the Child Support Assessment Act

 

Division 1 - Amendments commencing on Royal Assent

 

Item 1 repeals subsection 155(2A) of the Child Support Assessment Act.  Subsection 155(2A) requires that, before the end of the calendar year, the Secretary must publish in the Gazette the AWE amount (within the meaning of subsection 58AA(1)) for the quarter ending 30 September of that year.  As there will no longer be a publication, Average Weekly Earnings, Australia for the September quarter, this provision is repealed, meaning that the Secretary will not be required to publish the AWE amount for the quarter ending 30 September 2012 before the end of the 2012 calendar year.  Item 17 of Division 2 of this Part inserts a new subsection 155(2A), which commences on 1 January 2013 and sets out the new publication requirements for the Secretary in relation to the AWE amount. 

 

Item 2 is a transitional provision for the publication of the annualised MTAWE figure by the Secretary in the calendar year ending 31 December 2012, in the transition from the use of an annualised MTAWE figure for the relevant September quarter to the figure for the relevant June quarter.  Currently, subsection 155(2) requires that, before the end of each calendar year, the Secretary must publish in the Gazette for all child support periods starting in the next calendar year, the annualised MTAWE figure for the relevant September quarter, and the Costs of the Children Table incorporating this figure.

 

From 1 January 2013, the annualised MTAWE figure will be defined by reference to a relevant June quarter.  This will apply in relation to child support periods starting on or after 1 January 2013.  Amendments will be made by Division 2 of this Part to give effect to this, and to require the Secretary, before the end of the calendar year for all child support periods starting in the next calendar year, to publish in the Gazette the annualised MTAWE figure for the relevant June quarter (and the Costs of the Children Table incorporating this figure).  These amendments will not commence until 1 January 2013.

 

This transitional provision provides that, in the 2012 calendar year, subsection 155(2) applies as if the amendments made by Division 2 of this Part of Schedule 4 to this new Act apply to sections 5 and 5A as if subsection 155(2) had already commenced.  The effect of this is that, before the end of the 2012 calendar year, the Secretary will be required to publish in the Gazette, for all child support periods starting in the 2013 calendar year, the annualised MTAWE figure for the relevant June quarter (that is, the quarter ending on 30 June 2012) and the Costs of the Children Table incorporating this figure.

 

Item 3 is also a transitional provision.  The Registrar may make or amend an administrative assessment for a child support period before that period starts.  This allows a person to be notified of their new assessment before their child support period starts.  This transitional provision enables the annualised MTAWE figure for the relevant June quarter (which is the figure that will apply for child support periods starting on or after 1 January 2013) to be used in the making or amending, before 1 January 2013, of an administrative assessment for a child support period that starts on or after 1 January 2013.  Under this provision, the Child Support Assessment Act applies in relation to the making or amending, before 1 January 2013, of an administrative assessment for a child support period starting on or after 1 January 2013, as if the amendments made by Division 2 of this Part of Schedule 4 to this new Act had already commenced.

 

Division 2 - Amendments commencing on 1 January 2013

 

Items 4 and 5 amend subsection 5(1) to insert a definition of relevant June quarter and to repeal the definition of relevant September quarter respectively.  Relevant June quarter is defined to have the meaning given by subsection 5A(2).  As the annualised MTAWE figure will be defined by reference to a relevant June quarter from 1 January 2013, the definition of relevant September quarter will be redundant, and is therefore repealed.

 

Items 6, 7 and 8 amend section 5A, which defines the annualised MTAWE figure, so that the annualised MTAWE figure will be defined by reference to the relevant June quarter, rather than a relevant September quarter.  Subsection 5A(1) provides a definition for the annualised MTAWE figure for a relevant September quarter.  Item 6 omits the reference to ‘September’ in subsection 5A(1) and substitutes ‘June’. 

 

Item 7 repeals subsection 5A(2), and substitutes a definition of the relevant June quarter in relation to a child support period.  The relevant June quarter in relation to a child support period, means the quarter ending on 30 June of the last calendar year ending before the child support period begins.  Item 8 omits the reference to ‘September’ in paragraph 5A(5)(a) and substitutes ‘June’.

 

Item 9 repeals and substitutes section 45 of the Child Support Assessment Act.  Section 45 provides a method for working out a parent’s self-support amount for a day in a child support period.  New section 45 substitutes a method for calculation of the self-support amount based on the annualised MTAWE figure for the relevant June quarter.  Under new section 45, a parent’s self-support amount is one third of the annualised MTAWE figure for the relevant June quarter.  The note to new section 45 notifies the reader that a parent’s self-support amount can be varied by a determination or order under section 98S or 118.

 

Items 10 and 11 amend section 58 of the Child Support Assessment Act.  Both paragraph 58(4)(d) and subsection 58(5) contain a reference to the annualised MTAWE figure for the relevant September quarter in relation to a child support period.  These items amend paragraph 58(4)(d) and subsection 58(5) respectively, by omitting ‘September’ and substituting ‘June’.

 

Item 12 similarly amends subsection 58D(2), which also contains a reference to an amount that is at least two-thirds of the annualised MTAWE figure for the relevant September quarter.  ‘September’ is omitted and ‘June’ is substituted.

 

Items 13 and 14 amend subparagraphs 98S(1)(e)(i) and 118(1)(e)(i) respectively.  Both of these provisions currently contain a reference to the annualised MTAWE figure for the relevant September quarter.  ‘September’ is omitted and substituted with ‘June’.

 

Items 15, 16 and 17 make various amendments to section 155.  Item 15 omits the reference to ‘September’ in paragraph 155(2)(a) and substitutes it with ‘June’, and item 16 makes the same substitution for subparagraph 155(2)(b)(i).  The effect is that, by the end of each calendar year, the Secretary must publish in the Gazette for all child support periods starting in the following calendar year, the annualised MTAWE figure for the relevant June quarter, and the Costs of the Children Table incorporating this figure, rather than the annualised MTAWE figure for the relevant September quarter.  As these amendments commence on 1 January 2013, item 2 in Division 1 of this Part provides for a transitional provision to address the publication of the relevant annualised MTAWE figure in the 2012 calendar year for child support periods starting in the next calendar year.

 

Item 17 inserts new subsection 155(2A).  Currently, subsection 155(2A) requires that, before the end of each calendar year, the Secretary must publish in the Gazette the AWE amount (within the meaning of subsection 58AA(1)) for the quarter ending 30 September of that year.  This provision is repealed by item 1A of Division 1 of this Part, from Royal Assent, to remove the requirement to publish the September figure in 2012, which will be irrelevant from 2013.  New subsection 155(2A) instead requires the Secretary to publish in the Gazette , before the end of each financial year, the AWE amount (within the meaning of subsection 58AA(1)) for the quarter ending 31 December of that year.  Item 22 of Division 3 of this Part will amend subsection 58AA(1) so that, from 1 July 2013, AWE amount will be defined by reference to a December quarter of a year of income. 

 

Item 18 is a transitional provision addressing the Secretary’s publication requirements of the AWE amount (within the meaning of subsection 58AA(1)) in the financial year ending 30 June 2013.  The amendments made by Division 3 of this Part to substitute a new subsection 58AA(1), including a new definition of the AWE amount for a December quarter of a year of income, will not commence until 1 July 2013.  It is intended that the Secretary publish the AWE amount for the quarter ending 31 December 2012 by the end of the 2012-13 financial year.  Therefore, this item provides that new subsection 155(2A) of the Child Support Assessment Act applies in relation to the financial year ending 30 June 2013 as if the amendments of section 58AA made by Division 3 of this Part of Schedule 4 to this new Act had already commenced.

 

Item 19 amends subclause 2(3) of Schedule 1 to the Child Support Assessment Act by omitting ‘September’ and substituting ‘June’.  The effect of the amendment is that the amount referred to in subclause 2(3) will be worked out by reference to the annualised MTAWE figure for the relevant June quarter.

 

Item 20 is an application provision.  The amendments made by items 6 to 16 of Division 2 of this Part apply in relation to child support periods starting on or after 1 January 2013.

 

Item 21 is a transitional provision.  From 1 July 2013, in relation to child support periods starting on or after that date, the AWE amount will be defined by reference to a December quarter of a year of income.  The ATI indexation factor, which is relevant to determining a ‘default’ adjusted taxable income for an assessment, if applicable, is worked out using AWE amounts for a year of income.  The Registrar may make or amend an administrative assessment for a child support period before that period starts.  This allows a person to be notified of their new assessment before their child support period starts.  This provision allows the AWE amounts that will apply in relation to working out an ATI indexation factor (where applicable) for child support periods starting on or after 1 July 2013, to be used in making or amending an administrative assessment, before 1 July 2013, for a child support period that starts on or after 1 July 2013.

 

Division 3 - Amendments commencing on 1 July 2013

 

Under the current subsection 58AA(1), the ATI indexation factor is worked out with reference to AWE amounts for the September quarters of the last relevant year of income and of the relevant earlier tax return year.  Item 22 repeals subsection 58AA(1) and substitutes a new definition of the ATI indexation factor .  Under new subsection 58AA(1), the ATI indexation factor is the AWE amount for the December quarter of the last relevant year of income, divided by the AWE amount for the December quarter of the relevant earlier tax return year.  Terms used in this definition are defined in subsection 58AA(1). 

 

AWE amount for a December quarter of a year of income means the amount published for the reference period in the quarter by the Australian Statistician in a document titled Average Weekly Earnings, Australia (or, if that title changes, in a replacement document) under the headings ‘Average Weekly Earnings-Trends-Persons—All employees total earnings’ (or, if any of those headings change, under any replacement headings).  December quarter of a year of income means the quarter ending on 31 December of that year, and reference period in a December quarter of a year of income means the period described by the Australian Statistician as the last pay period ending on or before the third Friday of the middle month of the quarter.  The meaning of tax return year which is also defined in new subsection 58AA(1) depends on whether subsection 58(3) or (4) applies in the  determination of the parent’s adjusted taxable income for the last relevant year of income.  If subsection 58(3) applies, tax return year means the year of income before the last relevant year of income in relation to a child support period.  If subsection 58(4) applies, tax return year means the earlier year of income that applies under paragraph 58(4)(c).

 

Item 23 omits ‘September’ and substitutes ‘December’ in paragraph 58AA(3)(a). 

 

Item 24 is an application provision.  The amendments made by Division 3 of this Part apply in relation to child support periods that start on or after 1 July 2013.  For child support periods that start before this date, if subsection 58(3) or (4) applies for the determination of a parent’s adjusted taxable income for the last relevant year of income, the ATI indexation factor under current subsection 58AA(1) (which is worked out with reference to AWE amounts for the September quarter of the last relevant year of income, and the September quarter of the tax return year) will be used.

 

Part 2 - Other amendments

 

Amendment to the Social Security Act

 

Item 25 makes a minor technical amendment by repealing sub-subparagraphs 1139(2)(b)(iv)(A) and (B) of the Social Security Act, relating to recovery after death of a debt under the pensions loan scheme.  This amendment removes an incorrect and redundant reference to the pension age for women and men.  Subsection 23(1) and subsections 23(5A), (5B), (5C) and (5D) define the pension age for men and women.

 

Amendment to the Veterans’ Entitlement Act

 

Item 26 substitutes a new paragraph 58A(6)(c) of the Veterans’ Entitlements Act to clarify that the new daily rate for a minimum amount of service pension is 1/364 th of the total of:

 

·          if more than the pension supplement basic amount is added, the minimum pension supplement amount; and

 

  • if added, the clean energy supplement.

 

This means that, if a person’s rate of service pension is more than nil but less than the minimum daily rate due to the application of the income or assets test, the person’s rate of service pension is increased to the minimum daily rate.  The amount of clean energy supplement is to be incorporated into the minimum daily rate.  This ensures that a person whose rate is reduced, but not to nil, by the income and assets test, may receive an instalment equivalent to the minimum pension supplement amount plus the clean energy supplement amount.

 

 

 



STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Social Security and Other Legislation Amendment (Disability Support Pension Participation Requirements) Bill 2012

 

Schedule 1 - Work rule for disability support pension

This Schedule to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Schedule

The Schedule will amend the Social Security Act 1991 to allow disability support pension recipients who have been granted payment under the 15-hour work rule to work for up to 30 hours a week and, subject to the income test, remain qualified for disability support pension.

Human rights implications

·          The Schedule engages the following human rights:

-           Right to Social Security

-           Rights of people with disability

  • The Schedule promotes these rights as it will allow people who are granted disability support pension on after 11 May 2005 to increase their hours of work without affecting their qualification for disability support pension .  This will treat this group the same as those qualified prior to 11 May 2005 in regard to their allowable hours of work.

Conclusion

The Schedule is compatible with human rights because it advances the protection of human rights.

 



Schedule 2 - Participation requirements for disability support pension

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Schedule

The Schedule will amend the Social Security Act 1991 to introduce participation requirements for certain disability support pension recipients in the form of attendance at participation interviews and the development of a participation plan.

Human rights implications

·          The Schedule engages the following human rights:

-           Right to Social Security

-           Rights of people with disability

  • The Schedule promotes the rights of people with disability as it will provide a means for people receiving disability support pension who are under age 35 who have some work capacity to receive regular information about supports and services available to them and, where appropriate, referrals.  This will assist to build their capacity and may increase their chance of gaining employment.
  • Certain disability support pension recipients will be required to develop participation plans which will be individually tailored to the recipient and will include voluntary activities that may help to connect them with services and supports to overcome barriers to participation.  Disability support pension recipients who are manifestly eligible or have a work capacity of zero to seven hours a week, or who are working in an Australian Disability Enterprise, or in the Supported Wage System will be exempt from the participation requirements.
  • The aim of the measure is to ensure people on disability support pension in the target group are provided with information about supports and services they may use to overcome barriers to participation, and to maintain regular contact with these people.  It is expected that some people may benefit from this regular contact by building their capacity for work, or by gaining some paid employment or accessing supports or services that they may not otherwise have known about. 
  • The measure is specifically targeted at people who are under age 35 as they are considered to be more likely to have had a more recent connection with work or study.  This group is also considered to be more at risk of remaining on income support for a long time.  People who are outside the age bracket or who are not in the target group for any other reason will have the opportunity to voluntarily participate in regular interviews with Centrelink.

Conclusion

The Schedule is compatible with human rights because it advances the protection of human rights.



Schedule 3 - Portability of disability support pension

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Schedule

The Schedule inserts new provisions that will allow disability support pension recipients who have a severe and permanent impairment and no future work capacity to have their disability support pension paid overseas for greater than 13 weeks.  These changes acknowledge that some disability support pensioners who have a severe and permanent impairment and no future work capacity should not be impacted by the portability rules applicable to the majority of disability support pension recipients.

Human rights implications

This Schedule promotes the right to social security as it changes the portability rules for disability support pension recipients with a severe and permanent impairment and no future work capacity to allow them to receive their payment overseas for greater than 13 weeks. 

For the majority of disability support pension recipients the maximum time they can receive their payment outside Australia will remain 13 weeks.

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Conclusion

The Schedule is compatible with human rights because it advances the protection of human rights.



Schedule 4 - Average weekly earnings and other amendments

 

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Schedule

The Australian Bureau of Statistics is changing the frequency of publication of its Average Weekly Earnings (AWE) series from quarterly to biannually.  AWE data for the July-September quarter for 2012 and subsequent years will no longer be published.  As the Child Support (Assessment) Act 1989 refers to the September quarter for AWE data, this bill amends that Act to change the reference period.

The amendment to the Veterans’ Entitlements Act 1986 aligns the rules for working out the minimum instalment for a service pensioner who is receiving either or both pension supplement and clean energy supplement with corresponding rules for pensioners under the Social Security Act 1991 .

Human rights implications

The AWE measure does not engage any of the applicable rights or freedoms.

The amendment to the Veterans’ Entitlements Act 1986 engages the right to social security.

The right to social security is contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

The amendment will ensure that the rules for determining the minimum payments of service pension instalments will correspond with those that apply to age pensioners under the Social Security Act 1991 .

 

The alignment of the rules that apply under both Acts will ensure the effective administration of the Australian system of social security and ensure that payments under the system are reasonable, proportionate and transparent.

 

Those aims are consistent with those expressed by the UN Committee on Economic Social and Cultural Rights in General Comment No 19 .

Conclusion

The AWE measure is compatible with human rights as it does not raise any human rights issues.

The amendment to the Veterans’ Entitlements Act 1986 is compatible with human rights because it advances the protection of human rights.

 

 

Minister for Families, Community Services and Indigenous Affairs,

Minister for Disability Reform, the Hon Jenny Macklin MP