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Social Security Legislation Amendment (Public Housing Tenants’ Support) Bill 2013

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2010-2011-2012-2013

 

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

SOCIAL SECURITY LEGISLATION AMENDMENT

(PUBLIC HOUSING TENANTS’ SUPPORT) BILL 2013

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Housing and Homelessness, the Hon Mark Butler MP)



 

 



SOCIAL SECURITY LEGISLATION AMENDMENT

(PUBLIC HOUSING TENANTS’ SUPPORT) BILL 2013

 

 

OUTLINE

 

This Bill will implement the Housing Payment Deduction Scheme to reduce the risk of homelessness for public housing tenants due to eviction and housing abandonment as a result of rental arrears.

 

This will be achieved by providing for deductions to be made from certain welfare payments for tenants who are in significant arrears, only after reasonable action (consistent with fair processes for managing public housing) has been taken by the public housing lessor.

 

The initiative flows from commitments made in the Australian Government’s 2008  White Paper on Homelessness, The Road Home :   a National Approach to Homelessness (the Homelessness White Paper) , and by the Australian Government and State and Territory Governments under the National Affordable Housing Agreement.

 

State Housing Authorities advise that there are around 600 evictions from p ublic housing a year due to non- payment of rent.  Each year, many more public housing tenants vacate their housing owing rent.   Terminations and abandonments of public housing are disruptive and costly for the individuals and families involved.  When families are involved, children’s schooling and relationships are often disrupted , and children may also be placed in care facilities.  Families and individuals being forced to vacate public housing can also result in greater demand for crisis accommodation, support services, mental health services and child protection services.

 

The Government understands the important decisions that need to be made before introducing measures that allow for compulsory deductions to be made from a person’s social security or family assistance entitlement.   Therefore , careful consideration has been given to the need for the Housing Payment Deduction Scheme as a necessary and appropriate way to address the problem of homelessness due to non-payment of rent.  It is part of the broader package of programs and reforms that the Government has implemented under the Homelessness White Paper to address homelessness. 

 

The Bill has been significantly strengthened following public consultations to focus more clearly on the prevention of homelessness, through a tightening of the conditions fo r including a tenant under the s cheme and the inclusion of provisi ons aimed at ensuring that the s cheme does not undermine due process or weaken t enancy management processes in S tates and T erritories.

 



 

Financial impact statement

 

The Department of H uman Services will deliver the s cheme , which will cost around $4.5 million for 2013-14 (including $3.7 million in information technology costs) , assuming commencement in early 2014, and ongoing delivery costs of around $1.4  million a year in addition to a transaction fee to be charged to States and Territories for using the s cheme at the same rate as is currently charged for the use of the (voluntary) Rent Deduction Scheme.

 

Total resourcing ($, 000)

2012-13

2013-14

2014-15

2015-16

2016-17

Nil

$4,482

$1,367

$1,379

$1,401

 

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

The statement of compatibility with human rights appears at the end of this explanatory memorandum.

 



SOCIAL SECURITY LEGISLATION AMENDMENT

(PUBLIC HOUSING TENANTS’ SUPPORT) BILL 2013

 

 

NOTES ON CLAUSES

 

Abbreviations used in this explanatory memorandum

 

  • Family Assistance Administration Act means the A New Tax System (Family Assistance) (Administration) Act 1999

 

  • Social Security Administration Act means the Social Security (Administration) Act 1999

 

  • The Scheme means the Housing Payment Deduction Scheme

 

  • White Paper on Homelessness means the Australian Government’s White Paper on Homelessness, The Road Home:  a National Response to Homelessness , released on 21 December 2008

 

 

Clause 1 sets out how the new Act is to be cited once it becomes law - that is, as the Social Security Legislation Amendment (Public Housing Tenants’ Support) Act 2013.

 

Clause 2 provides that the new Act will commence on the day after the Act receives the Royal Assent.  Note that, although the Act is effective from this date, it may not have effect in practice until particular ‘public housing lessors’ are specified.

 

Clause 3 makes clear that the amendments in Schedule 1 to the Bill are intended to make amendments to the principal legislation as stated.

 

 



Schedule 1 - Amendments

 

 

Summary

 

This Schedule introduces the Housing Payment Deduction Scheme into the social security law and family assistance law.  The Scheme will have effect in relation to specified social security payments and payments under the ABSTUDY scheme, as well as in relation to payments of family tax benefit.  The purpose of the Scheme is to reduce the risk of homelessness for public housing tenants due to non-payment of rent.

 

Background

 

The Australian Government’s White Paper on Homelessness commits the Commonwealth to ‘work with States and Territories to introduce compulsory rent payments from Centrelink payments for tenants in public housing at risk of eviction due to non-payment of rent’.

 

The Council of Australian Governments has also agreed to the implementation of compulsory rent deductions for public housing tenants as a priority area of reform under the National Affordable Housing Agreement. 

 

Public and targeted consultations on an exposure draft of the Bill were conducted during April 2013.  Submissions have been posted on the website of the Department of Families, Housing, Community Services and Indigenous Affairs, with the permission of the authors.  The consultation process included 15 individual meetings with peak bodies, welfare groups and tenant advocates to discuss the Bill in some detail.  A follow-up teleconference was also held to discuss the consultation feedback.

 

Some stakeholders were opposed in principle to the compulsory nature of the Scheme, and others considered that the Bill needed modification to make it more closely aligned to the Government’s commitment in the Homelessness White Paper to preventing homelessness, and to ensure that it did not undermine good tenancy management practices and the right of tenants to due process. 

 

A number of changes have been made to the Bill since the exposure draft to address the issues raised by stakeholders.  The changes are:

 

·          OBJECTIVES - The objective is now more clearly focused on the prevention of homelessness due to non-payment of rent only after other reasonable recovery action has been taken. 

·          CONDITIONS FOR APPROVING PUBLIC HOUSING LESSORS - The Commonwealth Minister will need to be satisfied that public housing authorities have appropriate tenancy management and review processes before specifying in a legislative instrument that a public housing lessor is able to participate in the Scheme.

·          IN-SCOPE HOUSING COSTS - Housing costs which can be deducted have been limited to rent, rent arrears and household utilities (where payment of these is a requirement under a lease).  Maintenance debt incurred as a result of property damage will not be included, in response to stakeholder concerns that these are often contentious and may unduly impact on domestic violence victims. 

·          REASONABLE ACTION DEFINED - The Bill now defines ‘reasonable action’ which a lessor must take to recover arrears before a request for deductions under the Scheme can be made, which go to due process and whether the person has been advised of available financial or other services that may be of assistance to them.

·          MINIMUM LEVEL OF ARREARS - The minimum level of arrears for a public housing lessor to be able to request deductions will be set out in a legislative instrument to be made by the Minister.  It is intended that the equivalent of four weeks’ rent will be initially specified in that instrument. 

·          AT RISK - The category of ‘at risk’ of arrears for making a request to make deductions under the Scheme has been removed in response to stakeholder concerns that this may unfairly include people whose circumstances had changed.

·          SAFETY NET - To address concerns that deductions for a person under the Scheme may stop and start repeatedly, the Bill allows a public housing authority to request that a person remain on the Scheme for a further 12 months for their rent, once their arrears are paid, to allow time for the person to address their financial or other support needs.

·          REVIEWS - Provisions are included to ensure that public housing lessors (which may include State and Territory housing authorities) have appropriate review processes in place before being specified as able to make requests for deductions under the Scheme.  These provisions have been inserted to ensure that requestors have their own review processes to address disputes arising under leases or under State or Territory tenancy legislation.  Decisions by a delegate of the Secretary to act on a request by a public housing lessor have not been exempted from the existing internal review provisions in the social security or family assistance law, or provisions relating to review in the Social Security Appeals Tribunal or the Administrative Appeals Tribunal.  However, it is not expected that internal review or merits review will be able to resolve disputes between tenants and landlords around the basis for making a request under the Scheme.

Note that, following consultations, it is also proposed that deductions from bereavement allowance will not be able to be made under the Scheme.  This outcome will be achieved not through this Bill, but by excluding reference to this payment from the legislative instrument expected to be made under clause 2 of new Schedule 6 to the Social Security Administration Act.  Stakeholders opposed the inclusion of bereavement allowance under the Scheme on hardship grounds.

 

Explanation of the changes

 

Part 1 - Amendments to the Social Security Administration Act

 

Items 1 and 2 ensure that new section 238A of the Social Security Administration Act (which gives new Schedule 6 its legal effect) and new Schedule 6 are exceptions to the rule against the alienability of social security payments.  Under section 60 of the Social Security Administration Act, social security payments, with certain exceptions, are absolutely inalienable, which means they are to be paid to a person to whom they are payable and not to another entity.  Because the new Housing Payment Deduction Scheme operates to ensure a deduction from a person’s payment can be paid directly to a public housing lessor, a new exception to this rule is required.

 

Items 3 and 7 ensure that the definition of household utilities is now consolidated in one place in the Social Security Administration Act.  Prior to these amendments, this term had been defined in subsection 123TH(1) of the Social Security Administration Act, which is a specific section containing definitions for income management.  Now that the same term is also to be used in the context of the new Housing Payment Deduction Scheme provisions (with the same meaning it had in subsection 123TH(1)), a consolidated definition in subclause 1(1) of Schedule 1 to the Social Security Administration Act provides clarity around the meaning of the term for both income management and for the Housing Payment Deduction Scheme.

 

Item 4 is a provision that ensures the consistent operation of the Housing Payment Deduction Scheme with the income management regime. 

 

The provision makes clear that, when the Secretary receives a Housing Payment Deduction Scheme request in relation to a person who is subject to income management, it is appropriate for the Secretary to take action under the income management regime in existing Part 3B of the Social Security Administration Act to enable deductions under existing income management provisions to meet the request.  Existing Part 3B contains measures enabling income managed funds to be directed towards ‘priority needs’, including housing payments. 

 

This provision reflects the fact that requests received in relation to people subject to income management cannot be acted upon under the new Housing Payment Deduction Scheme deduction rules (subclause 8(2) of new Schedule 6 to the Social Security Administration Act).

 

Item 5 inserts new section 238A into the Social Security Administration Act.  This ensures that the Scheme outlined in new Schedule 6, as it relates to certain social security payments and payments under the ABSTUDY scheme, has effect according to its terms to make clear that the new Schedule operates as part of the social security law.

 

Items 6 and 8 insert new definitions of divertible welfare payment and public housing lessor into the list of definitions in Schedule 1 to the Social Security Administration Act, referring to the meanings given for those terms in clause 3 of new Schedule 6.

 

Item 9 adds to the end of the Social Security Administration Act new Schedule 6, which contains the new Scheme as it affects certain social security payments and payments under the ABSTUDY scheme.

 

New Schedule 6 to the Social Security Administration Act - Deductions for payment for public housing

 

Part 1 - Introduction

 

Clause 1 of new Schedule 6 outlines the objects of the Schedule to clarify that the Scheme’s primary purpose is to reduce the risk of persons who receive certain welfare payments and lease public housing becoming homeless because they are evicted from or abandon housing for failure to make payments required by their leases.

 

The clause states that the primary object is sought to be achieved by providing for deductions to be made from the welfare payments and paid to lessors after they have taken reasonable action (consistent with fair processes for managing public housing) to recover arrears for rent or household utilities.

 

Clause 2 of new Schedule 6 clarifies what a divertible welfare payment is, and provides powers for the Minister to specify social security pensions, social security benefits, other social security periodic payments (within the definition of that term in the Social Security Administration Act) and payments under the scheme known as the ABSTUDY scheme as payments from which deductions can be made under the Scheme.

 

The capacity to make legislative instruments under this provision ensures that there will be flexibility in the payments that can be affected, and will, in particular, allow for the Minister to remove certain payments from the Scheme over time should a decision be made to narrow and refine the payment types able to be affected by deductions under the Scheme.

 

Clause 3 of new Schedule 6 provides power for the Minister to specify certain States, authorities and other persons as public housing lessors.  The power to specify as public housing lessors States or Territories, authorities of States or Territories or ‘persons’ is intended to address the various legal arrangements in place for managing public housing in each State and Territory.  Housing Authorities in some jurisdictions may be bodies corporate and therefore legal ‘persons’ for this purpose.  It is not intended to specify private landlords in reliance on this power. 

 

Once specified, a public housing lessor can make a request under the Scheme for a deduction to be made from a divertible welfare payment. 

 

Before specifying States, authorities or other persons as public housing lessors, the Minister must be satisfied of both of the following matters:

 

·          that there is an appropriate process for reviewing decisions (including through internal review processes or a State Tribunal) made by the person or authority (including through their officers) relating to amounts due and payable under leases with tenants; and

 

·          that there are appropriate processes that the person or authority follows in dealing with matters relating to leases with tenants.

 

Regarding what constitutes appropriate processes for reviewing decisions, the Minister is obliged to have regard to the following matters:

 

a)     the costs of the review process to applicants;

 

b)     the timeliness of the review process;

 

c)     whether applicants are able to be represented and heard;

 

d)     the independence of the process; and

 

e)     the availability of interpreters, where required.

 

Regarding what constitutes appropriate processes for reviewing decisions, the Minister is obliged to have regard to the following matters:

 

a)     the transparency of decision-making processes;

 

b)     the extent to which tenants’ individual circumstances (such as financial hardship) are taken into account;

 

c)     whether tenants are informed of their rights and responsibilities under their lease and of support services available; and

 

d)     whether reasonable action (a term outlined in clause 6) is taken.

 

The power to specify certain public housing lessors by legislative instrument has been provided to ensure that public housing authorities in certain States are only able to make requests under the Scheme once the Commonwealth enters into a Memorandum of Understanding with the relevant State or Territory to ensure there is policy agreement and a shared understanding of how the Scheme will operate.  Further, the power allows for, and requires, the Minister to assess public housing lessors as suitable for participation in the Scheme before prescribing them as able to make requests for deductions. 

 

A note at the end of the provision points out that the Minister is able to revoke a specification (under an existing rule in the Acts Interpretation Act 1901 ) in relation to a public housing lessor if the Minister is no longer satisfied of the required matters set out in the provision.  It is intended that the Minister would monitor public housing lessors’ participation in the Scheme to ensure that they remain in satisfaction of those matters.

 

Clause 4 of new Schedule 6 ensures, to avoid doubt, that the provisions in the Scheme bind the Crown, which includes agencies of the Commonwealth involved in administering the Scheme, as well as agencies of States and Territories within which public housing lessors have been specified.

 

Part 2 - Deductions from divertible welfare payments

 

Clause 5 of new Schedule 6 provides for the conditions under which a public housing lessor is able to make a request for a deduction from a divertible welfare payment.

 

The power to request is enlivened in two circumstances:

 

·          where a person already owes a minimum amount (as specified in a legislative instrument) under a lease with a public housing lessor and the lessor has taken reasonable action to recover the amount from the person; and

 

·          where a person has repaid all outstanding amounts, having already been subject to a request or requests in relation to a minimum amount.

 

This clause also clarifies that, in the case of doubt, it does not matter when the lease was entered into, whether the person is the only lessee or a joint lessee, or whether or not the relevant accommodation is also accommodation for others.

 

The content of a request is subject to a limitation referred to as a specified maximum amount (subclause 5(3)).  For each request, that amount must not be more than:

 

·          the amount specified in subclause 6(1), where the request is made because the person owes a prescribed minimum amount; or

 

·          the amount that is payable by the person under the lease by way of rent and household utilities for the period to which the divertible welfare payment relates (if the payment is an instalment, this will generally be the period of the days in relation to which that instalment is made as a result of section 43 of the Social Security Administration Act), if the request is made because the conditions in clause 7 are met (where the person no longer owes an amount under their lease).

 

The provision deals with the possibility of a tenant’s rent or household utilities liability under their lease changing after a request (or a number of requests) under the Scheme have been made.  It does this by allowing a public housing lessor to amend a request or requests to specify a different maximum amount.  Before making amendments, the public housing lessor must take reasonable action to inform the person and give then a reasonable opportunity to make representations about it.  This will ensure that, if a tenant’s rent increases or decreases, requests can be adjusted accordingly. 

 

Importantly, although the ‘maximum amount’ of a request can be amended, the maximum amount of actual deductions following a request will still be capped as outlined in clause 9.

 

Clause 5 also specifies that the content of the request must conform to a method approved by the Secretary (which could be a computerised method) and that it must set out the maximum amount requested from a divertible welfare payment, which must not be more than any amount due under the lease.  The clause also clarifies that requests relating to different divertible welfare payments can be made in a single communication.

 

Requests under this clause can be made in respect of any person in receipt of a divertible welfare payment, including if they are subject to income management.  If the person is subject to income management, the Secretary will be able to use the power in section 123YA of the Social Security Administration Act to direct funds towards meeting the request.  If the person is not subject to income management, new clause 8 allows for the Secretary to direct a deduction towards meeting the request under the Scheme.

 

Clause 6 of new Schedule 6 sets out conditions for the first kind of request referred to in subclause 5(1).  The first condition is that there is an amount due and payable by the tenant to the public housing lessor by way of rent and/or household utilities and that amount exceeds the minimum amount specified by legislative instrument.  In particular circumstances, that amount may be able to include an amount payable under a former lease if that amount is also owing under the relevant lease with the public housing lessor and if allowed under State or Territory Government legislation.

 

Subclause 6(2) provides power for the Minister to make a legislative instrument specifying the minimum amount for this purpose, and clarifies that the power can be exercised by specifying a method for working the amount out.  This could be done, for instance, by specifying that the amount is worked out for a person by reference to how much rent they will owe for a specific period under their particular lease.

 

The second condition is that the public housing lessor has taken ‘reasonable action’ to recover the amount.  Subclause 6(4) sets out the minimum standard for what constitutes reasonable action for this purpose, stating that the public housing lessor is taken not to have taken reasonable action unless:

 

·          the lessor has given the person written notice demanding payment of some or all of the amount within a specified period that is reasonable;

 

·          that period has passed without the demand being met;

 

·          the lessor has taken reasonable action to inform the person of:

 

o    financial counselling services, and other services relating to the lease, that are or may be available to the person; and

 

o    the person’s rights to review of decisions of the lessor or its officers or employees relating to amounts due and payable under the lease; and

 

·          the lessor:

 

o    has taken reasonable action to inform the person that the lessor proposes to make one or more requests under clause 5 because of the amount; and

 

o    has given the person a reasonable opportunity to make representations to the lessor about the proposal.

 

In particular circumstances, reasonable action could also include other matters.

 

Clause 7 of new Schedule 6 sets out conditions for the second kind of request referred to in subclause 5(1).

 

The first condition is that the public housing lessor has taken reasonable action to inform the person that the lessor proposes to make one or more requests under clause 5 because of this clause and has given the person a reasonable opportunity to make representations to the lessor about the proposal.

 

The second condition is that the request is made at the time the public housing lessor gives a notice under subclause 10(4) to the Secretary that no amount is due and payable by the person to the public housing lessor under the lease for rent or household utilities which caused an earlier request to cease to be in force.

 

Because of paragraph 10(1)(e), such requests can remain in force for 12 months, allowing for ongoing rent and household utilities to be met in that time.

 

Clause 8 of new Schedule 6 deals with when the Secretary can make a deduction as requested from a public housing lessor.  It clarifies that a deduction can be made in accordance with a request (subject to clause 9, which limits the amount of deductions) while a request remains in force (which is dealt with by clause 10).

 

The Secretary has discretion either to act on or not to act on a request.

 

The Secretary cannot make deductions in relation to a person who is subject to income management because the Secretary can take measures under Part 3B of the Social Security Administration Act to meet housing expenses for such people.  Deductions are also unable to made in relation to a person or class of persons covered by a legislative instrument made under subclause 8(3).  This power has been included in the Bill to ensure that certain classes of persons for whom it is inappropriate, or becomes inappropriate, for deductions to be made can effectively be exempted from the Scheme as necessary.

 

Clause 9 of new Schedule 6 outlines the maximum amount that can be deducted from a divertible welfare payment in response to a request by a public housing lessor.  That amount is effectively capped at the lowest of the amounts worked out under each of the paragraphs:

 

a)     the amount requested by the public housing lessor;

 

b)     the amount of the actual payment (taking into account all deductions and reductions) from which the deduction may be made;

 

c)     35 per cent of what the payment would have been apart from any law of the Commonwealth that would make deductions or reductions from the payment (including, for instance, section 238 of the Social Security Administration Act), excepting any deduction made by way of a penalty amount under Division 3 of Part 3A of the Social Security Administration Act or section 1231 of the Social Security Act 1991 ;

 

d)     for payments under the ABSTUDY scheme that include an amount identified as living allowance, 35 per cent of the basic component as identified in the ABSTUDY Policy Manual (available at http://deewr.gov.au/abstudy ).

 

Paragraph (c) means that, where this amount is lower than the amounts outlined at paragraphs (a) and (b), the public housing deduction is the third deduction in priority after deductions made under Part 3A of the Social Security Administration Act and section 1231 of the Social Security Act 1991 .  Although not expressly referred to, advance payment deductions would also be higher in priority (would be made first) as these are accounted for under rate calculators as part of the determination of a person’s payable rate.

 

The Minister is given a legislative instrument power under this clause to specify certain provisions to be disregarded for working out the amount for paragraph 9(1)(c).  This power will enable the Minister to ensure that certain components that add to the amount of a payment that is payable to a person, such as pension supplement, to be specified with the effect of reducing the total amount that can be deducted for a person.  It is intended that this power will only be exercised beneficially to a person to reduce the amount of the payment that 35 per cent is calculated against.  It allows for new components of payments, such as those that may be introduced to deal with emergency or other urgent circumstances, to be specified as, in effect, immune from deductions under the Scheme.

 

Clause 10 provides for a number of circumstances in which a request from a public housing lessor ceases to be in force.  These circumstances have been adapted to ensure that the lessor can revoke the request, that a request ceases when the relevant tenant ceases to lease property under the lease, when the lessor is no longer specified as a public housing lessor, when a person has paid any arrears of rent or household utilities outstanding under the lease (for requests meeting the clause 6 conditions), and after the expiry of 12 months from the date of a request made in conformity with the conditions in clause 7.

 

The clause also ensures that public housing lessors are under an obligation to inform the Secretary when a person ceases to lease the relevant accommodation, or when their arrears under the lease are paid, so the Secretary is aware of the lack of power to make deductions in relation to those requests.

 

Part 3 - Treatment of amounts deducted

 

Part 3 of new Schedule 6 contains a number of clauses to clarify the effect of action taken by the Secretary under Part 2 of new Schedule 6 to act on a request by a public housing lessor.

 

Clause 11 makes clear, in the case of doubt, that the new Part applies if an amount is deducted under new Part 2.

 

Clauses 12, 13 and 14 provide that, when a Secretary takes action to make a deduction, the amount is to be paid to the public housing lessor, that amount reduces the person’s liability under the lease, and the person is taken to have been paid the amount deducted.  These provisions ensure that deductions under the Scheme are only used to meet actual housing liabilities of a person under their lease with a public housing lessor.  Subclause 13(2) has been designed as a beneficial provision for a tenant to clarify that, if an amount is not yet overdue and deductions are made to meet it, the tenant’s liability is still reduced.

 

Subclause 14(2) clarifies for the purposes of other laws of the Commonwealth that the amount paid to the public housing lessor is to be treated as if the person were paid that amount.  Among other things, this ensures, for example, that a person’s income for income tax purposes includes any amount deducted under the Scheme as if it were paid to the person.  There is a power to exclude certain laws of the Commonwealth for this purpose through a legislative instrument made by the Minister.  This power is intended to be used for the benefit of a person in circumstances where it is apparent that the person should not be treated as if an amount deducted under the Scheme is paid to them.

 

Part 4 - Overpayments to public housing lessors

 

Part 4 of new Schedule 6 contains a code of debt rules that apply to the circumstances outlined in the Part.

 

Clause 15 is intended to apply to circumstances where an amount paid to a public housing lessor mistakenly exceeds the amount deducted from the relevant person’s payment.  This ensures the lessor is under an obligation to repay any such excess to the Commonwealth.

 

Clause 16 targets circumstances where a deduction is made and paid to a public housing lessor, but is more than should have been paid.  This could include where the request identified an amount that was more than it should have been, or where the Secretary deducted more than, for example, 35 per cent of the payment (as worked out in accordance with paragraph 9(1)(c)) by error.  Under this provision, where the Secretary is satisfied that the person has requested to be repaid the excess and the public housing lessor has refused to do so, the excess is a debt owing by the public housing lessor to the Commonwealth.  Whether or not this debt is paid, the Secretary must pay to the person the excess (as long as the total paid to the person does not exceed the person’s entitlement to the divertible welfare payment apart from the operation of the Scheme).

 

To ensure that payments are not double-counted (given the operation of clause 14), there is provision to ensure that any amount paid to a person under subclause 16(3) is not taken to have been paid to them.  This ensures, for instance, that the amount is not double-counted for income tax purposes. 

 

Clause 17 allows the Secretary to set off an amount payable to a public housing lessor under Part 3 against a debt due to the Commonwealth by the lessor to ensure the efficient operation of the Scheme.

 

Clause 18 provides, in the case of doubt, that clause 13 (which states that a person’s liability under a lease to a public housing lessor is reduced by an amount paid to the public housing lessor under the Scheme) does not apply to any amount that gives rise to a debt, to ensure that mistaken or overpaid amounts are dealt with purely by the debt provisions in Part 4 of new Schedule 6.

 

Part 5 - Miscellaneous

 

Part 5 of new Schedule 6 empowers the Secretary to charge public housing lessors fees for deducting amounts in accordance with requests or paying amounts.

 

Subclause 19(2) clarifies that fees do not amount to tax, to ensure that it is clear the imposition of fees is done on a fee-for-service basis and is consistent with section 55 of the Australian Constitution.

 

It is intended that the costs for such fees will not be passed on to tenants.

 

To ensure that the debts under new Schedule 6 cannot also be taken to arise under existing debt rules in Chapter 5 of the Social Security Act 1991 (in particular, section 1223), clause 20 clarifies that the debt rules in Part 4 of new Schedule 6 operate as code and to the exclusion of those rules to avoid confusion.

 

Part 2 - Amendments to the Family Assistance Administration Act

 

Item 10 inserts a new definition of household utilities into the Family Assistance Administration Act (to mirror the definition in the Social Security Administration Act), given that this term in used in the new Housing Payment Deduction Scheme provisions in new Schedule 1.

 

Item 11 inserts a new definition into the Family Assistance Administration Act to provide that the term public housing lessor has the meaning given by clause 2 of new Schedule 1 to the Family Assistance Administration Act.

 

Item 12 ensures that sections 23 and 24 of the Family Assistance Administration Act, which address who payments are to be made to, have effect subject to the new deduction rules imposed under the Scheme.  This reflects the fact that the Scheme operates by making compulsory deductions from instalments of family tax benefit that are otherwise payable.

 

Item 13 inserts an exception to the inalienability rules in section 66 to ensure that deductions under the Scheme may effectively be made to redirect amounts of certain payments of family tax benefit public housing lessors.

 

Item 14 ensures that new Schedule 1 to the Family Assistance Administration Act has effect according to its terms, and also ensures the effectiveness of the new Schedule as part of the family assistance law.

 

Item 14 inserts new Schedule 1, which provides for the new Scheme in relation to family tax benefit.

 

New Schedule 1 to the Family Assistance Administration Act - Deductions for payment for public housing

 

Part 1 - Introduction

 

Clause 1 of new Schedule 1 outlines the objects of the Schedule to clarify that the Scheme’s primary purpose is to reduce the risk of individuals who receive family tax benefit and lease public housing becoming homeless because they are evicted from or abandon housing for failure to make payments required by their leases.

 

The clause states that the primary object is sought to be achieved by providing for deductions to be made from family tax benefit payments and paid to lessors after they have taken reasonable action (consistent with fair processes for managing public housing) to recover arrears for rent or household utilities.

 

Clause 2 ensures that the definition and specification of the term public housing lessor under new Schedule 6 of the Social Security Administration Act has the same meaning in the family assistance law.  This ensures that the matters that the Minister must be satisfied of (under clause 3 in that Schedule) are also preconditions to public housing lessors’ ability to make requests under the family assistance law.

 

Clause 3 ensures, to avoid doubt, that the provisions in the Scheme bind the Crown, which includes agencies of the Commonwealth involved in administering the Scheme, as well as agencies of States and Territories within which public housing lessors have been specified.

 

Part 2 - Deductions from family tax benefit payments

 

Clause 4 of new Schedule 1 provides for the conditions under which a public housing lessor is able to make a request for a deduction from a payment of family tax benefit.

 

The power to request is enlivened in two circumstances:

 

·          where an individual already owes a minimum amount (as specified in a legislative instrument) under a lease with a public housing lessor and the lessor has taken reasonable action to recover the amount from the individual; and

 

·          where an individual has repaid all outstanding amounts, having already been subject to a request or requests in relation to a minimum amount.

 

This clause also clarifies that, in the case of doubt, it does not matter when the lease was entered into, whether the individual is the only lessee or a joint lessee, or whether or not the relevant accommodation is also accommodation for others.

 

The content of a request is subject to a limitation referred to as a specified maximum amount (subclause 4(3)).  For each request, that amount must not be more than:

 

·          the amount specified in subclause 5(1), where the request is made because the individual owes a prescribed minimum amount; or

 

·          the amount that is payable by the individual under the lease by way of rent and household utilities for the period to which the divertible welfare payment relates, if the request is made because the conditions in clause 6 are met (where the individual no longer owes an amount under their lease).

 

The provision deals with the possibility of a tenant’s rent or household utilities liability under their lease changing after one or more requests under the Scheme have been made.  It does this by allowing a public housing lessor to amend a request or requests to specify a different maximum amount.  Before making amendments, the public housing lessor must take reasonable action to inform the individual and give then a reasonable opportunity to make representations about it.  This will ensure that, if a tenant’s rent increases or decreases, requests can be adjusted accordingly. 

 

Importantly, although the ‘maximum amount’ of a request can be amended, the maximum amount of actual deductions following a request will still be capped as outlined in clause 8.

 

Clause 4 also specifies that the content of the request must conform to a method approved by the Secretary (which could be a computerised method), and that it must set out the maximum amount requested from a divertible welfare payment, which must not be more than any amount due under the lease.  The clause also clarifies that requests relating to different divertible welfare payments can be made in a single communication.

 

Requests under this clause can be made in respect of any individual in receipt of family tax benefit, including if they are subject to income management.  If the individual is subject to income management, the Secretary will be able to use the power in section 123YA of the Social Security Administration Act to direct funds towards meeting the request.  If the individual is not subject to income management, new clause 7 allows for the Secretary to direct a deduction towards meeting the request under the Scheme.

 

Clause 5 of new Schedule 1 sets out conditions for the first kind of request referred to in subclause 4(1).  The first condition is that there is an amount due and payable by the tenant to the public housing lessor an amount by way of rent and/or household utilities and that amount exceeds the minimum amount specified by legislative instrument under subclause 6(2) of the Social Security Administration Act.

 

The second condition is that the public housing lessor has taken ‘reasonable action’ to recover the amount.  Subclause 5(3) sets out the minimum standard for what constitutes reasonable action for this purpose stating that the public housing lessor is taken not to have taken reasonable action unless:

 

·          the lessor has given the individual written notice demanding payment of some or all of the amount within a specified period that is reasonable;

 

·          that period has passed without the demand being met;

 

·          the lessor has taken reasonable action to inform the individual of:

 

o    financial counselling services, and other services relating to the lease, that are or may be available to the individual; and

 

o    the individual’s rights to review of decisions of the lessor or its officers or employees relating to amounts due and payable under the lease; and

 

·          the lessor:

 

o    has taken reasonable action to inform the individual that the lessor proposes to make one or more requests under clause 5 because of the amount; and

 

o    has given the individual a reasonable opportunity to make representations to the lessor about the proposal.

 

In particular circumstances, reasonable action could also include other matters.

 

Clause 6 of new Schedule 1 sets out conditions for the second kind of request referred to in subclause 4(1).

 

The first condition is that the public housing lessor has taken reasonable action to inform the individual that the lessor proposes to make one or more requests under clause 5 because of this clause and has given the individual a reasonable opportunity to make representations to the lessor about the proposal.

 

The second condition is that the request is made at the time the public housing lessor gives a notice under subclause 9(4) to the Secretary that no amount is due and payable by the person to the public housing lessor under the lease for rent or household utilities which caused an earlier request to cease to be in force.

 

Because of paragraph 9(1)(e), such requests can remain in force for 12 months, allowing for ongoing rent and household utilities to be met in that time.

 

Clause 7 of new Schedule 1 provides a power for the Secretary to make a deduction as requested where the Secretary is satisfied that the request has been made in accordance with Part 2 of the new Schedule.  Once a request is received, it is at the discretion of the Secretary as to whether to act upon it in reliance on this power. 

 

The Secretary does not have the power to direct a payment under the Scheme in relation to an individual who is subject to the income management regime in recognition of the fact that, once a request is received in relation to an individual subject to income management, the Secretary is able to direct income managed funds towards priority needs, including a housing purpose or rent under Part 3B of the Social Security Administration Act.

 

The clause also ensures that the power in subclause 8(3) of Schedule 6 to the Social Security Administration Act to specify certain persons, including as a class, as persons in relation to whom deductions should not be made under the Scheme is operative in relation to individuals under the family assistance law. 

 

There is a power under this provision ( subclause 7(3) ) to enable the Minister to specify kinds of payments of family tax benefit from which deductions are unable to be made under the Scheme.  A kind of payment for this purpose could be a payment for a past period or other kinds of lump sums.

 

There is also an explicit power to notify public housing lessors if the Secretary exercises discretion not to make deductions following a request.

 

Clause 8 of new Schedule 1 outlines the maximum amount that can be deducted from a payment of family tax benefit in response to a request by a public housing lessor.  That amount is capped at the lowest of:

 

a)     the amount requested by the public housing lessor;

b)     the amount of the payment (remaining after other deductions have been applied) to ensure that no more can be deducted than the individual may be entitled to;

c)     35 per cent of payment, taking account any reduction made under sections 84 and 84A, which relate to deductions to repay debts or ‘set offs’ with respect to debts.

 

Subclause 8(2) enables the Minister to make a legislative instrument to specify provisions of the family assistance law to be disregarded to reduce the amount against which 35 per cent is calculated.  This would enable certain supplements (such as clean energy amounts) to be disregarded to make such supplements effectively immune from deductions under the Scheme.

 

Clause 9 provides for a number of circumstances in which a request from a public housing lessor ceases to be in force.  These circumstances have been adapted to ensure that the lessor can revoke the request, or that a request can cease when the relevant tenant ceases to lease property under the lease, when the lessor is no longer specified as a public housing lessor, when an individual has paid any arrears of rent or household utilities outstanding under the lease (where the request is made under the conditions in clause 5), and after the expiry of 12 months from the date of a request made in conformity with the conditions in clause 6.

 

The clause also ensures that public housing lessors are under an obligation to inform the Secretary when an individual ceases to lease the relevant accommodation or when their arrears under the lease is paid so that the Secretary is aware of the lack of power to make deductions in relation to those requests.

 

Part 3 - Treatment of amounts deducted

 

Part 3 of new Schedule 1 contains a number of clauses to clarify the effect of action taken by the Secretary under Part 2 of new Schedule 1 to act on a request by a public housing lessor. 

 

Notably, clauses 11, 12 and 13 provide that, when the Secretary takes action to make a deduction, the amount is to be paid to the public housing lessor, that amount reduces the individual’s liability or future liability under the lease and the individual is taken to have been paid the amount deducted.

 

These provisions ensure that deductions under the Scheme are only used to meet actual housing liabilities of an individual under their lease with a public housing lessor.  Subclause 12(2) is a beneficial provision to clarify that, if an amount is not yet overdue and deductions are made to meet it, the tenant’s liability is still reduced.

 

Subclause 13(2) clarifies for the purposes of other laws of the Commonwealth that the amount paid to the public housing lessor is to be treated as if the individual were paid that amount.  Among other things, this ensures, for example, that an individual’s income for income tax purposes includes any amount deducted under the Scheme as if it were paid to the individual.  There is a power to exclude certain laws of the Commonwealth for this purpose through a legislative instrument made by the Minister.  This power is intended to be used for the benefit of an individual in circumstances where it is apparent that the individual should not be treated as if an amount deducted under the Scheme is paid to them.

 

Part 4 - Overpayments to public housing lessors

 

Part 4 of new Schedule 1 contains a code of debt rules that apply to the circumstances outlined in the Part.

 

Clause 14 is intended to apply to circumstances where an amount paid to a public housing lessor mistakenly exceeds the amount deducted from the relevant individual’s payment of family tax benefit.  This ensures the lessor is under an obligation to repay any such excess to the Commonwealth.

 

Clause 15 targets circumstances where a deduction from a payment of family tax benefit is made and paid to a public housing lessor, but is more than should have been paid.  This could include where the request identified an amount that was more than it should have been, or where the Secretary deducted more than the correct amount in error.  Under this provision, where the Secretary is satisfied that the individual has requested to be repaid the excess and the public housing lessor has refused to do so, the excess is a debt owing by the public housing lessor to the Commonwealth.  Whether or not this debt is paid, the Secretary must pay to the individual the excess (as long as the total paid to the individual does not exceed the individual’s entitlement to the payment apart from the operation of the Scheme).

 

To ensure that payments are not double-counted (given the operation of clause 13), there is provision to ensure that any amount paid to an individual under subclause 15(3) is taken not to have been paid to them.  This ensures, for instance, that the amount will not be able to be double-counted for income tax purposes. 

 

Clause 16 allows the Secretary to set off an amount payable to a public housing lessor undner Part 3 against a debt due to the Commonwealth by the lessor to ensure the efficient operation of the Scheme.

 

Clause 17 provides, in the case of doubt, that clause 12 (which states that a individual’s liability under a lease to a public housing lessor is reduced by an amount paid to them under the Scheme) does not apply to any amount that gives rise to a debt, to ensure that mistaken or overpaid amounts are dealt with solely by the debt provisions in Part 4 of new Schedule 1.

 

Part 5 - Fees

 

Part 5 of new Schedule 1 empowers the Secretary to charge public housing lessors fees for deducting amounts in accordance with requests or paying amounts.

 

Subclause 18(2) clarifies that fees do not amount to tax, to make it clear that the imposition of fees is done on a fee-for-service basis and is consistent with section 55 of the Australian Constitution.

 

It is intended that the costs for such fees will not be passed on to tenants.



Statement of Compatibility with Human Rights

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

Social Security (Public Housing Tenants’ Support) Bill 2013

 

This 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 Bill

The Social Security Legislation Amendment (Public Housing Tenants’ Support) Bill 2013 is a Bill for and Act to establish the Housing Payment Deduction Scheme (the Scheme) which will allow rent and household utilities to be compulsorily deducted from a specified social security payments, ABSTUDY and family tax benefit (referred to below collectively as ‘social welfare payments’), if a person’s payments under their lease are in arrears above a specified minimum. 

The objective of the Scheme is to reduce the capacity of individuals and families at risk of non-payment of public housing rent to accumulate large amounts of arrears, risking eviction and possible homelessness. 

The Scheme recognises that social welfare payments should be used towards a person’s and their family’s basic needs, and is intended to enhance security of tenure in housing.  As such, the Bill recognises that a person’s home is an important precondition to their ability to exercise their human rights and their economic, social and cultural rights in particular.

The Secretary currently deducts public housing rent and other costs from persons’ social welfare payments, and pays amounts to public housing authorities with the customer’s consent, under the (voluntary) Rent Deduction Scheme.  The difference between the new Housing Payment Deduction Scheme and the current (voluntary) Rent Deduction Scheme is that deductions under the Housing Payment Deduction Scheme will be made compulsorily following a request from a public housing lessor.

Compulsory public housing payments under the Scheme will be applicable only to people who are lessees of public housing with a legal obligation to pay the amount deducted, and only if they have public housing arrears greater than a specified minimum amount.  Rules will be made by legislative instrument to determine the minimum amount.

There are provisions in the Bill to ensure that a request to make deductions will be made only after reasonable action (consistent with fair processes for managing public housing) has been taken by public housing lessors.  The Commonwealth Minister will have to be satisfied that there are appropriate review and tenancy management processes in place before a public housing lessor is approved to make requests under the Scheme.  Amongst other things, the Minister must have regard to the extent to which those processes provide for a tenant’s individual circumstances in making decisions, the processes for informing tenants of their rights and available support services, and for taking reasonable action to recover amounts due and payable under leases.

Human rights implications

The Bill engages the following Human Rights.

The right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises ‘the right of everyone to social security, including social insurance’ .  The ICESCR requires a country, within its maximum available resources, to provide a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.

People subject to the Housing Payment Deduction Scheme will benefit from amounts compulsorily deducted by way of a reduction of their liability to a public housing lessor.  As such, the Scheme will be compatible with the right to social security as expressed in the ICESCR.  Although a person’s ability to choose how to spend social welfare payments will be limited, the Scheme is designed to ensure people continue to enjoy an adequate standard of living by reducing the risk of their eviction and possible homelessness.  Further, there are assurances built into the Scheme that no more than 35 per cent of a person’s social welfare payment can be deducted for housing payments (determined after certain debt and compliance deductions are made, where applicable), leaving affected people with the majority of their payment to spend as they choose.  A person cannot be subject to deductions under both the Scheme and the income management regime.  The Scheme also ensures that a deduction can only be made in relation to actual amounts owing, and there are safeguards built into the Scheme to prevent overpayment.

Article 26 of the Convention on the Rights of the Child also recognises ‘for every child the right to benefit from social security’ and that ‘benefits should, where appropriate, be granted, taking into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child’

The Bill recognises that recipients of a range of social security payments, ABSTUDY and family tax benefit have children, and that the bests interests of children are served when parents responsibly ensure that their welfare benefits are directed towards housing as a primary and basic need. 

The right to an adequate standard of living including housing

Article 11.1 of the ICESCR states that everyone has the right to ‘an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions’ and that ‘appropriate steps’ be taken to ‘ensure the realization of this right’.   Under the Housing Payment Deduction Scheme, a maximum of 35 per cent of a person’s specified social security payments, ABSTUDY or instalments of family tax benefit will be able to be deducted and directed to their public housing lessor for people who have a legal obligation under their lease to pay the amounts being deducted, if they have arrears of rent or household utilities owing under their lease.  This will protect vulnerable people’s public housing tenancies and reduce the risk of eviction due to arrears or debt.  As such, the Scheme is designed to operate to reduce the likelihood of a person becoming homeless and is compatible with and enhancing the right to an adequate standard of living including housing. 

Article 27 of the Convention on the Rights of the Child also recognises ‘the right of every child to a standard of living adequate for the child's physical, mental, spiritual, moral and social development’ .  The Article also states that ‘ States Parties, in accordance with national conditions and within their means, shall take appropriate measures to assist parents and others responsible for the child to implement this right and shall in case of need provide material assistance and support programmes, particularly with regard to nutrition, clothing and housing ’.

In ensuring that up to 35 per cent of affected social welfare payments can be used to reduce the risk of homelessness and eviction, the Bill is compatible with children’s rights to an adequate standard of living by ensuring children of social welfare payment recipients affected by the scheme are at lower risk of being without a home. 

The right to self-determination

Article 1 of the ICESCR states that ‘all peoples have the right of self-determination.  By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development’ While the Housing Payment Deduction Scheme will limit one’s ability to dispose freely of all of their income, it will be compatible with a person’s right to pursue freely their economic, social or cultural development because the Scheme is intended to protect the tenancies of people affected in recognition of the important role housing plays in a person’s ability to economically, socially and culturally develop. 

The right to privacy

Article 17 of the ICCPR provides that no one shall be subjected to arbitrary or unlawful interference with their privacy.  Privacy guarantees a right to secrecy from the public of personal information.  For interference with privacy not to be arbitrary, it must be in accordance with the provisions, aims and objectives of the ICCPR and should be reasonable in the particular circumstances.  Reasonableness in this context incorporates notions of proportionality to the end sought and necessity in the circumstances.   To operate, the Scheme will only require limited information to be provided by a requesting public housing lessor about a person solely for the purpose of administering the Scheme.  The Secretary will be able to act on a request to make a deduction without requiring sensitive information about a person’s tenancy and circumstances being disclosed. 

Conclusion

The Social Security Legislation Amendment (Public Housing Tenants’ Support) Bill 2013 is compatible with human rights.  The Housing Payment Deduction Scheme will advance the protection of human rights by ensuring that a proportion of social welfare payments are spent on housing costs for people who are having difficulty meeting their obligations under their public housing leases and risking their tenancies.  To the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate to achieving the legitimate objective of preventing evictions due to arrears and debt, which may force a person, and their children, into homelessness.

 

 

 

The Hon Mark Butler MP, Minister for Housing and Homelessness