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Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016

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2016

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES  

 

 

 

 

 

 

 

SOCIAL SECURITY LEGISLATION AMENDMENT (YOUTH JOBS PATH: PREPARE, TRIAL, HIRE) BILL 2016

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment, the Senator the Honourable Michaelia Cash)



 

SOCIAL SECURITY LEGISLATION AMENDMENT (YOUTH JOBS PATH: PREPARE, TRIAL, HIRE) BILL 2016

 

 

GENERAL OUTLINE

 

This Bill would help to give effect to the Youth Jobs PaTH measure announced in the 2016-17 Budget as part of the Youth Employment Package.

 

Youth Jobs PaTH (Prepare-Trial-Hire) is aimed at maximising the chance of young job seekers obtaining a job and moving off income support. It will do this by providing a three-stage pathway to work for young job seekers. The elements of Youth Jobs PaTH are employability skills training (Prepare), internship placements (Trial), and ‘Youth Bonus’ wage subsidies (Hire). This Bill would assist to give effect to the internship and wage subsidy elements of Youth Jobs PaTH.

 

Internship payments

 

Under the internship element of Youth Jobs PaTH, eligible young job seekers will be given the opportunity to undertake unpaid work experience by participating in internships. This will give young job seekers a chance to show what they can do in a real workplace. Both businesses and eligible young job seekers will be able to choose whether to participate in an internship. To encourage eligible young job seekers to undertake an internship, participants will receive a fortnightly incentive payment from the Department of Human Services (which will initially be $200). The fortnightly incentive payment will be paid in addition to eligible young job seekers’ social security payments and will not be remuneration for work.

 

This Bill would ensure that fortnightly incentive payments to eligible young job seekers placed in internships under Youth Jobs PaTH are not ‘income’ for social security and veterans’ entitlements purposes. Doing this would make sure that the incentive payments would not affect participants’ social security payments or veterans’ entitlements.

 

Youth Bonus wage subsidy

 

The Youth Bonus wage subsidy element of Youth Jobs PaTH will encourage businesses to employ young people. Businesses will be eligible to receive a Youth Bonus wage subsidy if they employ a young job seeker under the age of 25 who has been in employment services for at least 6 months.

 

The Bill would amend the social security law to protect young job seekers whose employers are eligible to receive a Youth Bonus wage subsidy in relation to them. It would allow these young people to have their income support payments suspended for a period rather than cancelled. These young people will be able to have their social security payments restored (without having to make a new claim) if they lose their job (through no fault of their own) with an eligible employer within 26 weeks of ceasing to receive income support because of that employment.

 

FINANCIAL IMPACT STATEMENT

 

The internship payment amendments contained in Schedule 1 to the Bill would have no financial impact.

 

The Youth Bonus wage subsidy amendments contained in Schedule 2 to the Bill would have the following budgetary implications:

 

Year

Expense ($ million)

2015-16

4.3

2016-17

0.4

2017-18

0.4

2018-19

0.4

2019-20

0.4

TOTAL:

5.7

 

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 (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016





Clause 1 - Short Title

 

This clause provides for the short title of the Act to be the Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Act 2016 .

 

Clause 2 - Commencement

 

This clause sets out when the various provisions of the Act commence. Specifically:

 

·          sections 1 to 3 commence the day the Act receives Royal Assent,

 

·          Schedule 1 (the internship payment amendments) commences the later of 1 April 2017 or the day the Act receives Royal Assent, and

 

·          Schedule 2 (the Youth Bonus wage subsidy amendments) commences the later of 1 January 2017 or the day the Act receives Royal Assent.

 

Clause 3 - Schedules

 

This clause provides that legislation that is specified in a Schedule to the Act is amended or repealed as set out in that Schedule, and any other item in a Schedule to the Act has effect according to its terms. 

 

 

 

Abbreviations used in this Explanatory Memorandum

 

 

Social Security Act means the Social Security Act 1991

 

Administration Act means the Social Security (Administration) Act 1999

 

Schedule  1 - Internship Payments



 

Summary

 

Under the ‘Trial’ element of Youth Jobs PaTH, eligible young job seekers will be able to choose to participate in an internship of 4 to 12 weeks to give them a chance to show what they can do in a real workplace.

 

To be eligible to participate, a person must:

 

·          be 17 to 24 years old,

 

·          have been in jobactive, Transition to Work or Disability Employment Services for 6 months or more, and

 

·          be on income support payments.

 

Both businesses and eligible young job seekers will be able to choose to participate in an internship. Further, businesses and eligible young job seekers will be able to co-design internship placements. Participants will attend host businesses for 15 to 25 hours a week. They will undertake unpaid work experience and will not be employees of their host businesses.

 

So as to encourage eligible young job seekers to take up the opportunity to be placed in an internship under the Youth Jobs PaTH, participants will be paid a fortnightly incentive payment by the Department of Human Services (which will initially be $200). The payment will not constitute remuneration for work. Participants will receive the fortnightly incentive payment in addition to their social security payments.

 

Schedule 1 would insert a provision into the Social Security Act and the Veterans’ Entitlements Act 1986 so that the fortnightly incentive payment is not counted as ‘income’ for social security or veterans’ entitlements purposes.

 

 

Detailed explanation

 

Social Security Act 1991

 

Item 1 - after paragraph 8(8)(tc)

 

This item inserts new paragraph 8(8)(td) after paragraph 8(8)(tc).

 

Section 8 of the Social Security Act provides a broad definition of ‘income’ for social security purposes. Subsection 8(8) excludes specified amounts from the definition of ‘income’.

 

New paragraph 8(8)(td) excludes a payment made by the Commonwealth to an internship participant under Youth Jobs PaTH from the definition of ‘income’. This means that the fortnightly incentive payment to internship participants will not affect their social security payments. It will be paid in addition to their social security payments.

 

Veterans’ Entitlements Act 1986

 

Item 2 - after paragraph 5H(8)(xac)

 

This item inserts new paragraph 5H(8)(xad) after 5H(8)(xac).

 

Section 5H of the Veterans’ Entitlement Act 1986 provides a broad definition of ‘income’ for veterans’ entitlements purposes. Subsection 5H(8) excludes specified amounts from the definition of income.

 

This item makes an equivalent amendment to item 1 by inserting a new paragraph 5H(8)(xad) into the Veterans’ Entitlement Act 1986 . The new paragraph excludes a payment made by the Commonwealth to an internship participant under Youth Jobs PaTH from the definition of ‘income’. This means that the fortnightly incentive payments will not affect internship participants’ entitlements under the Veterans’ Entitlement Act 1986 .



 

 

Schedule  2 - Youth Bonus Wage Subsidy



 

Summary

 

The Youth Bonus wage subsidy element of Youth Jobs PaTH will encourage businesses to employ young people. Businesses will be eligible to receive a Youth Bonus wage subsidy if they employ a young job seeker under the age of 25 who has been in employment services for at least 6 months. Wage subsidies will be paid according to administrative eligibility criteria.

 

This Schedule amends the Administration Act to ensure that young people who are employed by a business that is eligible to receive a Youth Bonus wage subsidy will have their payment suspended for a period, rather than automatically cancelled, if they cease to be qualified for  income support or their income support ceases to be payable because of that employment. These young people will be able to have their social security payments restored (without a waiting period) if they lose their job with the eligible employer through no fault of their own within 26 weeks of ceasing to be qualified for income support or their income support ceasing to be payable, provided they remain otherwise qualified for the payment.

 

Under the current provisions, an eligible young job seeker commencing in paid employment may no longer qualify for their payment if they are employed full-time, because they will not meet the qualification requirement of being unemployed. Similarly, a young job seeker’s payment may no longer be payable under the income test due to their employment income. Such young job seekers will benefit from this measure by having 26 weeks during which they may resume their social security payment if necessary, such as where they lose their job with the eligible employer through no fault of their own. This means they will not have to re-claim income support or serve any waiting periods that might otherwise apply to a claim.

 

 

Detailed explanation

 

Social Security (Administration) Act 1999

 

 

Items 1 and 2 - subparagraph 85(1)(a)(i) and subparagraph 85(1)(a)(ii)

 

Item 1 amends subparagraph 85(1)(a)(i) to insert a reference to a cancellation under new subsection 95C(2). Item 2 inserts new subparagraph 85(1)(a)(iia) which refers to a suspension under subsection 95C(1).

 

Section 85 allows for the resumption of social security payments in particular circumstances following a cancellation or suspension. These amendments to section 85 will enable the Secretary to reconsider section 95C suspensions or cancellations and, in appropriate circumstances, to determine that a social security payment was, or is, again payable to a person who was employed by an employer that is eligible to receive a Youth Bonus wage subsidy.

 

These amendments are consequential to the main amendment at item 3 , which inserts new section 95C into the Act.

 

Item 3 - after section 95B

 

This item inserts a new section 95C after section 95B.

 

New section 95C overrides sections 93 and 94 of the Administration Act.  These sections automatically cancel a person’s social security payment if an event or change of circumstances occurs which results in that person ceasing to be qualified for the payment, or if the payment ceases to be payable to the person. (These sections only operate where the person has received a notice under s 68 of the Administration Act requiring them to give certain information to the Secretary). Instead, new section 95C provides that if the person ceases to be qualified for a social security payment or the social security payment ceases to be payable to them, and the Secretary is satisfied that the cessation is because they are employed by a ‘Youth Bonus wage subsidy employer’ (as defined), then the Secretary may make a determination under subsection 95C(1). More specifically, the Secretary may determine that the person’s social security payment is suspended, and that section 93 or 94 is taken not to apply (or not to have applied) to their social security payment. The determination results in any cancellation under either section 93 or 94 being taken as not having occurred. The suspension takes effect from the day that the person ceased to be qualified for a social security payment, or the day that their social security payment ceased to be payable to them (as relevant).

 

A note to the subsection alerts the reader that Youth Bonus wage subsidy employer is defined at subsection 95C(4), in relation to a person, to mean an employer that is eligible to receive a Youth Bonus wage subsidy in respect of the person under the program established by the Commonwealth and known as “Youth Jobs PaTH”. The 26 week suspension period is available to any eligible young person (that is, a person under the age of 25 who has been in employment services for at least 6 months) who is employed by an employer eligible to receive a Youth Bonus wage subsidy in relation to that young person (regardless of whether or not the employer claims the Youth Bonus wage subsidy).

 

New subsection 95C(2) applies, subject to new subsection 95C(3), to cancel a person’s social security payment at the end of a 26 week suspension period. More specifically, a person’s social security payment will be cancelled if a suspension under subsection 95C(1) remains in effect at the end of the 26 week period following a suspension, and the person is not qualified for the social security payment or the social security payment is not payable to them at that time. The payment is cancelled, by force of the subsection, on the day after the end of that 26 week period of continuous suspension. If the person’s payment has been restored within that 26 week period under section 85, or has been cancelled for reasons not related to their employment, or cancelled either during or after the 26 week period under subsection 95C(3), then the automatic cancellation under subsection 95C(2) will not occur.

 

An earlier cancellation can occur under new subsection 95C(3) if the person ceases to be employed by a Youth Bonus wage subsidy employer. This will occur in circumstances where the Secretary determines that the person has ceased to be employed as a direct or indirect result of a voluntary act of the person that was not reasonable, or as a result of the person’s misconduct as an employee. These factors replicate the factors in section 42S of the Administration Act, which would represent a serious failure and a participation failure, and result in the person’s participation payment not being payable to the person for a period. If the Secretary makes this determination, then the person’s social security payment is taken to have been cancelled, by force of the subsection, on the day of the cessation.

 

A note alerts the reader that if the Secretary does not make the determination that the cessation is as a direct or indirect result of a voluntary act of the person that was not reasonable, or as a result of the person’s misconduct as an employee, then the social security payment may again become payable to the person (without the need for a further claim) if the Secretary makes a determination under section 85. Section 85 allows for the resumption of social security payments following a cancellation or suspension in particular circumstances.

 

Item 4 - paragraph 123(1)(c)

 

This item amends paragraph 123(1)(c) to insert reference to a suspension under subsection 95C(1). This makes clear that such a suspension ends the continuing effect of a determination that a person’s claim for social security payment is granted, or that a social security payment is payable to a person.

 

This amendment is consequential to the main amendment at item 3 , which inserts new section 95C into the Act.



 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

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

 

Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Bill 2016

 

This Bill is compatible with 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 Bill would amend the Social Security Act 1991 , Social Security (Administration) Act 1999 and the Veterans’ Entitlements Act 1986 to help give effect to the Youth Jobs PaTH measure announced in the 2016-17 Budget as part of the Youth Employment Package. More specifically, the Bill would ensure that:

 

·          fortnightly incentive payments to young job seekers who undertake internships under the Commonwealth program known as Youth Jobs PaTH are not ‘income’ for social security and veterans’ entitlements purposes, and

·          eligible young people will be able to have their social security payments restored (without having to make a new claim or serve waiting periods) in particular circumstances. More specifically, if they lose their job (through no fault of their own) with an eligible Youth Bonus wage subsidy employer, they will have their payments restored within 26 weeks of ceasing to be qualified for income support, or of their income support ceasing to be payable, because of that employment.

 

Human rights engaged by the Bill

 

The Bill engages the following rights:

 

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

 

·            the right to an adequate standard of living in article 11(1) of the ICESCR

 

·            the right to work in article 6 of the ICESCR, and

 

·            the right to equality and non-discrimination in article 2(2) of the ICESCR and article 26 of the International Covenant on Civil and Political Rights (ICCPR).



 

Human rights implications of the Bill

 

Article 9 of the ICESCR recognises the right of everyone to social security. The right to social security requires States to establish a social security system and, to the maximum of its available resources, [1] ensure access to a social security scheme that provides 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. [2]

 

Article 11(1) of the ICESCR recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions.

 

Article 6(1) of the ICESCR recognises the right to work, which includes the right to the opportunity to gain a living by work which the job seeker freely chooses or accepts. Article 6(2) specifically refers to States’ obligations to realise this right by implementing ‘technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment’.

Article 2(2) of the ICESCR and article 26 of the ICCPR recognise the right to equality and non-discrimination on a range of grounds including of race, sex, colour, language, national origin or ‘other status’. Age is considered to fall within ‘other status’ for the purpose of these articles.

Incentive payments for internship participants

Exempting fortnightly incentive payments to young job seekers who complete internships under Youth Jobs PaTH from being ‘income’ for social security and veterans’ entitlements purposes will promote the right to social security, the right to an adequate standing of living and the right to work. It also engages the right to equality and non-discrimination.

 

Right to social security and right to adequate standard of living

 

This measure will promote the right to social security and the right to an adequate standard of living by ensuring that young job seekers do not have their social security payments or veterans’ entitlements reduced because they are completing internships and receiving an additional fortnightly incentive payment (which will initially be $200).

 

Right to work

 

This measure will promote the right to work because it will encourage young job seekers to undertake internships to enable them to gain work experience and skills that will ultimately assist them to identify and find available employment. The Department’s administrative data shows that, of job seekers who undertook unpaid work experience, 48.6 per cent were in employment three months later compared to 26.0 per cent across all activities. [3]

 

Right to equality and non-discrimination

 

This measure engages the right to equality and non-discrimination because it involves differential treatment for people aged between 17 and 24 years of age (these are the only people who are eligible to receive incentive payments under Youth Jobs PaTH). This constitutes discrimination on the basis of age. However, the right to equality and non-discrimination is subject to the international human rights law principle of ‘legitimate differential treatment’. This principle allows particular groups of people to be treated differently where the treatment is aimed at achieving a legitimate objective, is based on reasonable and objective criteria and is proportionate to the objective to be achieved. Differential treatment for young people in the manner proposed is legitimate because the unemployment rate for young people is more than twice as high as that for the general population, and unemployment can have a particularly detrimental impact on young people who lack experience and life skills. This measure will achieve the legitimate objective of encouraging young people to gain work experience and skills that will ultimately assist them to avoid long-term unemployment. Further, the measure is reasonable, necessary and proportionate to achieve this objective because it is specifically targeted at a group within society that is particularly disadvantaged in the labour market and vulnerable to long-term unemployment and welfare dependency.  

 

Youth Bonus wage subsidy

 

Enabling eligible young people to easily return to income support within a particular time period if they lose their job through no fault of their own will promote the right to social security and the right to an adequate standard of living. It also engages the right to equality and non-discrimination. This aspect of the Bill will not engage the right to work (although the Youth Bonus wage subsidy itself will engage the right to work, by encouraging employers to hire young job seekers).

 

Right to social security and right to an adequate standard of living

 

This measure will ensure that eligible young people will be able to have their social security payments restored without having to make a new claim in particular circumstances. Eligible young people who lose their job (through no fault of their own) with an eligible Youth Bonus wage subsidy employer will have their payments restored if this occurs within 26 weeks of ceasing to be qualified for income support, or of their income support ceasing to be payable, because of that employment. This will promote the right to social security and the right to an adequate standard of living by facilitating faster access to financial support if they lose paid employment.

 

Right to equality and non-discrimination



This measure engages the right to equality and non-discrimination because it involves differential treatment for people under 25 years of age (these are the only people in respect of whom the Youth Bonus wage subsidy can be paid). However, as discussed above, differential treatment on the basis of age is permissible in certain circumstances, where the differential treatment is reasonable, necessary and proportionate to achieve a legitimate objective. Differential treatment for the purposes of the Youth Bonus wage subsidy is legitimate because it would ensure that young people are not disadvantaged if they take up employment with an employer who is eligible to receive the Youth Bonus wage subsidy, by enabling them to quickly access income support if they lose their job through no fault of their own. The proposed legislative amendments are reasonable, necessary and proportionate to achieve this legitimate objective because they are specifically targeted at a group within society that is particularly disadvantaged in the labour market and vulnerable to long-term unemployment and welfare dependency.  

 

Conclusion

 

The Bill is compatible with human rights because it promotes the protection of the right to social security, the right to an adequate standard of living and the right to work. To the extent that the Bill provides for differential treatment for young people, the measures taken are reasonable, necessary and proportionate to achieve a legitimate objective.

 




[1] Article 2 of the ICESCR.

[2] Committee on Economic, Social and Cultural Rights, General Comment 19, para 59.

[3] Department of Employment, December 2014 Labour Market Assistance Outcomes Report: https://docs.employment.gov.au/node/34835