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Social Services Legislation Amendment (Ending Carbon Tax Compensation) Bill 2017

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2016-2017

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

SOCIAL SERVICES LEGISLATION AMENDMENT

(ENDING CARBON TAX COMPENSATION) BILL 2017

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Social Services, the Hon Christian Porter MP)



SOCIAL SERVICES LEGISLATION AMENDMENT

(ENDING CARBON TAX COMPENSATION) BILL 2017

 

OUTLINE

This bill ceases, from 20 September 2017, payment of the energy supplement to recipients who were not receiving a welfare payment on 19 September 2016 and closes the energy supplement to new welfare recipients from 20 September 2017.

 

This bill amends the Social Security Act 1991, Farm Household Support Act 2014, Veterans’ Entitlements Act 1986 , Military Rehabilitation and Compensation Act 2004 and Budget Savings (Omnibus) Act 2016 .

The amendments made to these Acts prevent new recipients of welfare payments being paid the energy supplement from 20 September 2017. The amendments ensure that welfare recipients who are paid the energy supplement with their payment prior to 20 September 2016 who satisfy the requirements set out in the bill will continue to receive the energy supplement with their payment from 20 September 2017 onwards.

For payment recipients who first receive the energy supplement on or after 20 September 2016, the energy supplement can only be paid to them until 19 September 2017 and this is subject to the person satisfying the current legislative criteria for receiving the supplement. From 20 September 2017 onwards they can no longer receive the energy supplement.

The amendments made by the bill commence on 20 September 2017.

FINANCIAL IMPACT STATEMENT

This Bill is expected to produce savings of $933.4 million from 2016-17 to 2019-20.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

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



SOCIAL SERVICES LEGISLATION AMENDMENT

(ENDING CARBON TAX COMPENSATION) BILL 2017

 

NOTES ON CLAUSES

 

Abbreviations used in this explanatory memorandum

 

In this explanatory memorandum:

 

  • the Budget Savings (Omnibus) Act means the Budget Savings (Omnibus) Act 2016 ;

 

·          Farm Household Support Act means the Farm Household Support Act 2014

 

  • the Military Rehabilitation and Compensation Act means the Military Rehabilitation and Compensation Act 2004 .

 

·          Social Security Act means the Social Security Act 1991

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

  • Veterans’ Entitlements Act means the Veterans’ Entitlements Act 1986

 

Clause 1 sets out how the new Act is to be cited - that is, as the Social Services Legislation Amendment (Ending Carbon Tax Compensation) Act 2017.

 

Clause 2 provides a table setting 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 - Amendments

 

Summary

This schedule will close the energy supplement to new welfare recipients from 20 September 2017.

Background

The schedule amends the Social Security Act 1991, Farm Household Support Act 2014, Veterans’ Entitlements Act 1986 , Military Rehabilitation and Compensation Act 2004 and Budget Savings (Omnibus) Act 2016 .

The amendments made to these Acts prevent new recipients of welfare payments being paid the energy supplement from 20 September 2017. The amendments ensure that welfare recipients who are paid the energy supplement with their payment prior to 20 September 2016 who satisfy the requirements set out in the schedule will continue to receive the energy supplement with their payment from 20 September 2017 onwards.

For payment recipients who first receive the energy supplement on or after 20 September 2016, the energy supplement can only be paid to them until 19 September 2017 and this is subject to the person satisfying the current legislative criteria for receiving the supplement. From 20 September 2017 onwards they can no longer receive the energy supplement.

The amendments made by the schedule commence on 20 September 2017.

Explanation of the changes

Part 1 - Energy supplement under the social security law

 

Amendments to the Social Security Act

 

Item 1 repeals the formula in subsection 17(8) and substitutes a new formula that does not contain an energy supplement component. The formula in subsection 17(8) is used to determine the income cut-out amount for the purposes of working out the number of weeks in a person’s lump sum preclusion period under subsection 1170(4).

 

Item 2 repeals the definition of energy supplement component from subsection 17(8). This definition is no longer required as a result of the amendments made by item 1.

 

Item 3 is an application provision that provides that the amendments made to subsection 17(8) by this Part only apply in relation to lump sum preclusion periods beginning on or after the commencement of this item.

 

Item 4 inserts new section 22. Section 22 sets out when a person becomes a transitional energy supplement person . While a person remains a transitional energy supplement person they will continue to receive energy supplement after the commencement of this Schedule.

 

New subsection 22(1) provides that a person becomes a transitional energy supplement person on 19 September 2016 if on that day:

 

(a)   the person was receiving an income support payment where energy supplement was used to work out the rate of that payment; or

(b)   energy supplement was payable to the person under section 1061UA; or

(c)   subsection 62B(2) of the Veterans’ Entitlements Act applied in relation to the person; or

(d)   energy supplement was payable to the person under section 118PA of the Veterans’ Entitlements Act; or

(e)   under the scheme referred to in section 117 of the Veterans’ Entitlements Act, the Commonwealth was liable to pay the person energy supplement for the person’s clean energy underlying payment; or

(f)    subsection 238A(1) of the Military Rehabilitation and Compensation Act applied in relation to the person; or

(g)   under the scheme referred to in section 258 of the Military Rehabilitation and Compensation Act, the Commonwealth was liable to pay the person energy supplement for the person’s clean energy underlying payment; or

(h)   the person was receiving a payment under the ABSTUDY scheme (also known as the Aboriginal Study Assistance Scheme) that included an amount identified as living allowance and the person qualified for an energy supplement under that scheme.

 

New paragraph 22(1)(a) applies to a person receiving farm household allowance under the Farm Household Support Act where energy supplement is used to work out the rate of that allowance. Subsection 91(3) of the Farm Household Support Act treats a reference in the Social Security Act to an income support payment as including a reference to farm household allowance under the Farm Household Support Act.

 

Paragraph 22(1)(a) will also be applicable to certain persons in receipt of a Defence Force Income Support Allowance (DFISA).  DFISA is payable to those persons in receipt of a social security or benefit that is reduced, including to nil, because of the inclusion of disability pension paid to the person under the Veterans’ Entitlements Act as income in the assessment of that pension or benefit.

 

Those people in the circumstances where the social security or benefit is reduced to nil are commonly referred to as DFISA-only recipients.  Under paragraph 23(1D)(f) of the Social Security Act they will be taken to be receiving the particular pension or benefit for which they qualify and they remain subject to the obligations associated with that pension or benefit.

 

It should also be noted that income support payment, as defined in section 23 of the Social Security Act, includes a service pension under the Veterans’ Entitlements Act.

 

New subsection 22(2) provides that a person ceases to be a transitional energy supplement person on a day on or after 20 September 2016 (and can never again become a transitional energy supplement person) if none of paragraphs 22(1)(a) to (h) apply to the person on that day.

 

A note to subsection 22(2) alerts the reader that subsections 22(3) to (7) set out certain situations in which a person will be taken to be receiving a payment on a day and therefore subsection 22(2) will not apply to the person on that day.

 

New subsection 22(3) applies to treat a person as receiving an income support payment for new paragraph 22(1)(a) if, before 19 September 2016, the person receives a rate of a social security payment that is greater than nil (where energy supplement was used to work out that rate) and the person’s rate of payment goes to nil on a day on or after 19 September 2016 (where energy supplement was used to work out that rate).

 

The person must, on the day before the person’s rate goes to nil, have been receiving a social security payment at a rate greater than nil and energy supplement must have been used to work out that rate.  Further, the person must remain qualified for their social security payment while their rate of payment is nil and their payment is not cancelled.

 

For subsection 22(3) to apply a person must remain on a nil rate of the same payment.  Otherwise, subsection 22(3) will cease to apply and the person will no longer be receiving an income support payment for new paragraph 22(1)(a).

 

New subsection 22(4) applies to treat a person as receiving an income support payment despite the person’s payment being suspended on a day on or after 19 September 2016.

 

The person must, before 19 September 2016, be receiving a social security payment at a rate greater than nil and energy supplement must have been used to work out that rate.

 

The person must, on the day before the suspension took effect have been receiving a social security payment at a rate greater than nil and energy supplement must have been used to work out that rate. Further, the person must remain continuously qualified for their social security payment while suspended.

 

When a person’s suspension ends with the person being restored to a positive rate of payment, the person will again be able to have the energy supplement added to their rate of payment if all other requirements regarding the payment of the energy supplement have been met.

 

For subsection 22(4) to apply a person must return to the same payment they were receiving before the suspension began.

 

New subsection 22(5) applies to treat a person as receiving an income support payment under paragraph 22(1)(a) if, on 19 September 2016 a person is absent from Australia and is receiving an income support payment at a rate greater than nil on that day. If the person returns to Australia after an absence of greater than six weeks and their income support payment is payable to the person on the day before the person returns, paragraph 22(1)(a) will apply to each day that occurs in the period beginning on 19 September 2016 and ending at the end of the day before the person returns to Australia.

 

New subsection 22(6) applies to treat a person as receiving an income support payment under paragraph 22(1)(a) if, on 19 September 2016 the person was receiving an income support payment at a rate greater than nil, energy supplement was used to work out the rate of the payment and the person leaves Australia on a day on or after 20 September 2016

 

To satisfy subsection 22(6) the person must, before leaving Australia, have been receiving the income support payment at a rate greater than nil and energy supplement must have been used to work out the rate of the payment. Additionally, the person must return to Australia, where the period of the absence has exceeded 6 weeks and the person’s income support payment must be payable to the person on the day before the person returns to Australia.

 

If the above criteria have been met, subsection 22(6) will apply to treat a person as receiving an income support payment under paragraph 22(1)(a) for each day that occurs in the period beginning on the day after the end of the 6 week period of absence and ending at the end of the day before the person returns to Australia.

 

New subsection 22(7) applies to treat a person as receiving an income support payment under paragraph 22(1)(a) if the person makes a claim for a seniors health card under the Social Security Administration Act or the Veterans’ Entitlements Act and the claim is made:

 

(a)   within the 6 week period mentioned in subsection 1061U(4) or (8) of the Social Security Act, in circumstances where paragraphs 1061U(4)(a) to (d) or (8)(a) to (d) apply; or

(b)   within the 6 week period mentioned in subsection 118P(1C) or (1G) of the Veterans’ Entitlements Act, in circumstances where paragraphs 118P(1C)(a) to (d) or (1G)(a) to (d) of that Act apply.

 

Subsections 1061U(4) and (8) of the Social Security Act and subsections 118P(1C) and (1G) of the Veterans’ Entitlements Act give certain income support payment recipients a six week period from the date of the cancellation of their payment in which to claim a seniors health card. If the claim is made within the six week period the person can qualify for the energy supplement if a seniors health card is granted to the person.

 

A person’s claim for a seniors health card under the Social Security Act or Veterans’ Entitlements Act must be granted under one of these Acts for subsection 22(7) to apply.

 

If a person meets the requirements in new subsection 22(7) they will be treated as receiving an income support payment for the period:

 

(a)   beginning on the cessation day mentioned in subsection 1061U(4)(c) or (8)(c) of the Social Security Act or paragraph 118P(1C)(c) or (1G)(c) of the Veterans’ Entitlements Act; and

 

(b)   ending at the end of the day before the person becomes the holder of the seniors health card.

 

Item 5 Inserts a definition of transitional energy supplement person into subsection 23(1) that refers to new section 22.

 

Item 6 repeals section 915 and substitutes a new section 915. New subsection 915(1) provides that quarterly energy supplement is payable to a person for each day for which an election by the person under subsection 915A(1) is in force in relation to a social security payment the person is receiving.

 

A note to this subsection alerts the reader that section 918 (multiple qualification exclusions) may affect the person’s qualification for quarterly energy supplement.

 

Subsection 915(2) then ensures that a social security payment recipient who continues to have energy supplement used to work out the rate of their payment will continue to have their energy supplement paid quarterly if the person has made or makes an election under subsection 1061VA(1) to have their minimum pension supplement amount paid quarterly. 

 

A note to this subsection alerts the reader that section 918 (multiple qualification exclusions) may affect the person’s qualification for quarterly energy supplement.

 

Item 7 amends paragraph 915A(1)(a) to insert the words “(the main payment )” after “a social security payment”.

 

Item 8 amends the note in subsection 915A(1) to replace the word ‘would’ with ‘may’. This is a consequence of the repeal and substitution of section 915 made by item 6.

 

Item 9 repeals subsection 915A(3) and substitutes a new subsection 915A(3) which provides that an election to receive energy supplement quarterly under Division 2 of Part 2.18A of the Social Security Act ceases to be in force if, disregarding the election, energy supplement would cease to be used to work out the rate of a social security payment of the person.

 

Item 10 is an application and savings provision for the repeal and substitution of section 915 made by item 6 and the repeal and substitution of subsection 915A(3) made by item 9.

 

Sub-item (1) provides that the repeal and substitution of section 915 made by this Part applies in relation to working out whether quarterly energy supplement is payable to a person for a day on or after the commencement of this item.

 

Sub-item (2) provides that the repeal and substitution of section 915 made by this Part does not affect the validity of an election made under subsection 915A(1) or 1061VA(1) before the commencement of this item.

 

Sub-item (3) provides that subsection 915A(3), as substituted by this Part, applies on and after the commencement of this item in relation to elections made before, on or after that commencement.

 

Items 11 to 34, 36 to 39, 41 to 44, 46 to 52 and 54 to 55 amend the rate calculators for the following social security payments:

 

·          section 1064 (Rate of age, disability support, wife pensions and carer payment (people who are not blind));

·          section 1065 (Rate of age and disability support pension (blind people)); 

·          section 1066 (Rate of bereavement allowance and widow B pension); 

·          section 1066A (Rate of disability support pension (people under 21 who are not blind)); 

·          section 1066B (Rate of disability support pension (people under 21 who are blind)) 

·          section 1067G (Rate of youth allowance); 

·          section 1067L (Rate of austudy payment); 

·          section 1068 (Rate of widow allowance, Newstart allowance (18 or over) sickness allowance (18 or over) partner allowance, and mature age allowance under Part 2.12B); 

·          section 1068A (Rate of parenting paymentxxpension PP (single)); and 

·          section 1068B (Rate of parenting paymentxxPP (partnered)). 

 

The amendments made by these items apply so that the step in the method statement for the rate calculator that adds an amount of energy supplement to the rate of the person’s social security payment does not apply in relation to a person on a day on or after the commencement of these items unless the person is a transitional energy supplement person on that day.

 

If a person is a not a transitional energy supplement person in accordance with new section 22 (inserted by item 4 of this Part) on a day on or after the commencement of these items, the person’s rate of social security payment will not include an amount of energy supplement.

 

Various notes in the rate calculators mentioned above have also been added or amended as a result of the changes made to limit the payment of the energy supplement to certain individuals.

 

Items 35, 40, 45 and 53 amend the partner income free area provisions in the rate calculators for the following social security benefits:

 

·          section 1067G (Rate of youth allowance) 

·          section 1067L (Rate of austudy payment) 

·          section 1068 (Rate of widow allowance, Newstart allowance (18 or over) sickness allowance (18 or over) partner allowance, and mature age allowance under Part 2.12B); and 

·          section 1068B (Rate of parenting paymentxxPP (partnered)). 

 

The partner income free area is the amount of income a recipient's partner can receive before the recipient's rate of benefit is reduced. The partner income free area for a person varies depending on their partner's age and whether their partner also receives a social security benefit.

 

The effect of items 35, 40, 45 and 53 is to include an amount of energy supplement into the calculation of a person’s partner income free area where the person continues to have an amount of energy supplement added to their rate of social security benefit.

 

If the person does not have an amount of energy supplement added to their rate of payment then energy supplement won’t be taken into account in determining the partner income free area if the person’s partner is not a social security benefit recipient.

 

If the person does not have an amount of energy supplement added to their rate of payment and the person’s partner is a social security benefit recipient then the energy supplement will only be taken into account in determining the partner income free area where the person’s partner has an amount of energy supplement added to their rate of payment.

 

An example of how these items apply can be found in the amendments made to the youth allowance calculator by item 35. This item inserts new points 1067G-H26C and 1067G-H26D into the youth allowance rate calculator in section 1067G.

 

Point 1067G-H26C provides that where a person does not have an amount of energy supplement added to their rate of youth allowance and the person's partner is not receiving a social security benefit, an amount of energy supplement will not be included when calculating the person’s partner income free area.

 

Point 1067G-H26D provides that where a person has an amount of energy supplement added to their rate of youth allowance, an amount energy supplement will be included when calculating the person’s partner income free area. This applies regardless of whether the person’s partner receives a social security benefit and regardless of whether the person’s partner receives a social security benefit that includes an amount of energy supplement.

 

Item 56 repeals point 1071A-2A of the Social Security Act and substitutes a new point 1071A-2A. The intended effect of this item is to disregard step 1B of the method statement in point 1068-A1 of the Social Security Act when calculating a person’s allowable income for the purposes of the health care card income test in section 1071A of the Social Security Act. Step 1B would otherwise add an amount of energy supplement to the calculation when determining a person’s allowable income.

 

Item 57 is an application provision for the repeal and substitution of point 1071A-2A of the Social Security Act made by item 56 of this Part. The repeal and substitution of point 1071A-2A made by item 56 applies in relation to working out if a person is qualified for a health care card on a day on or after the commencement of this item (whether or not the person held such a card immediately before that commencement).

 

Part 2 - Energy Supplement under the Farm Household Support Act

 

Amendments to the Farm Household Support Act

 

Item 58 adds a note at the end of section 58 of the Farm Household Support Act that explains that energy supplement is not payable to certain persons due to point 1068-A2 of the Social Security Act, added by item 42 of this Schedule.

 

Item 59 amends the note at the end of section 58 of the Farm Household Support Act by renumbering this note as ‘Note 2’.

 

Item 60 adds a note at the end of section 62 of the Farm Household Support Act that explains that energy supplement is not payable to certain persons due to point 1067G-A2 of the Social Security Act, added by item 32 of this Schedule.

 

Item 61 amends the note at the end of section 62 of the Farm Household Support Act by renumbering this note as ‘Note 2’.

 

Part 3 - Energy supplement under the Veterans’ Entitlements Act

 

Amendments to the Veterans’ Entitlements Act

 

Item 62 repeals and replaces the formula in paragraph 59Q(7)(b) with a new formula that does not contain an energy supplement component.  The formula in paragraph 59Q(7)(b) is used to determine the lump sum preclusion period for the purposes of section 59Q.   Where a person has received lump sum compensation the person’s pension will not be payable during the lump sum preclusion period.

 

Item 63 repeals the definition of point SCH6-BB3 amount from paragraph 59Q(7)(b).  This definition is no longer required as a result of the amendments made by Item 62 .

 

Item 64 is an application provision that provides that the amendments made to paragraph 59Q(7)(b) by this Part only apply in relation to lump sum preclusion periods beginning on or after the commencement of this item.

 

Items 65 to 67 amend section 62A.  Section 62A provides for the payment of energy supplement to the recipients of a disability pension under Parts II or IV of the Veterans’ Entitlements Act.

 

Subsection 62A(1) provides the requirements to be met for a person to be eligible for energy supplement for a day:

(a)   the person receives disability pension for the day; and

(b)   the person’s rate of disability pension for the day is greater than nil; and

(c)   the person is residing in Australia; and

(d)   either the person is in Australia or is temporarily absent for a period not exceeding 6 weeks. 

 

Item 65 is a technical amendment to the Note to subsection 62A(1) to renumber it as “Note 1” as a consequence of the amendment made by Item 66 which inserts “Note 2”.

 

Item 66 inserts “Note 2” to subsection 62A(1).  The Note refers the reader to the effect that the insertion of subsection 62A(4) (by Item 67 ) has in limiting the circumstances when subsection 62A(1) (eligibility for energy supplement) will continue to be applicable.

 

Item 67 inserts new subsections 62A(4) to (6).

 

New subsection 62A(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement if the person is a transitional energy supplement person (as defined under new subsection 62A(5)) on that day.

 

The Note to new subsection 62A(4) states that a person must also satisfy the requirements set out in paragraphs 62A(1)(a) to (d) to be eligible for energy supplement.

 

New subsection 62A(5) defines for the purposes of section 62A that a person is a transitional energy supplement person on 19 September 2016 if:

(a)   paragraphs 62A(1)(a) to (d) are applicable to the person; or

(b)   energy supplement was payable under subsection 83A(1) of the Military Rehabilitation and Compensation Act because the person was eligible for compensation for permanent impairment under that Act; or

(c)   energy supplement was payable under subsection 209A(1) of the Military Rehabilitation and Compensation Act because the person was in receipt of or would have been eligible for the receipt of Special Rate Disability Pension under that Act.

 

The effect of new subsections 62A(4) and (5) is to prevent new recipients of disability pension, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing disability pensioners who are paid the energy supplement with their disability pension on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 62A of those persons who received energy supplement under section 83A or under section 209A of the Military Rehabilitation and Compensation Act because on 19 September 2016 they were either eligible for compensation for permanent impairment or were receiving or eligible to receive the Special Rate Disability Pension.

 

New subsection 62A(6) provides for the circumstances in which a person will cease to be a transitional energy supplement person.  On a day on or after

20 September 2016, if none of the paragraphs 62A(5)(a) to (c) apply to a person, the person will cease to be a transitional energy supplement person and can never again become a transitional energy supplement person.

 

The effect of subsection 62A(6) is to make it clear that a person will lose eligibility for the energy supplement on or after 20 September 2016 if any of the circumstances referred to in paragraphs 62A(5)(a) to (c) are no longer applicable to the person.  Subsection 62A(6) also makes it clear that there are no circumstances in which a person who ceases to be a transitional energy supplement person can regain the status of being a transitional energy supplement person.

 

Items 68 to 70 amend section 62B.  Section 62B provides for the payment of energy supplement for recipients of war widow/ war widower pension.

 

Subsection 62B(1) provides the requirements to be met for a person to be eligible for  energy supplement for a day:

(a)   the person receives war widow or war widower pension for the day; and

(b)   the person’s rate of that pension for the day is greater than nil; and

(c)   the person is residing in Australia; and

(d)   either the person is in Australia or is temporarily absent for a period not exceeding 6 weeks. 

 

Item 68 is a technical amendment to the Note to subsection 62B(1) to renumber it as “Note 1” as a consequence of the amendment made by Item 69 which inserts “Note 2”.

 

Item 69 inserts “Note 2” to subsection 62B(1).  The Note refers the reader to the effect that the insertion of subsection 62B(4) (by Item 70) has in limiting the circumstances when subsection 62B(1) (eligibility for energy supplement) will continue to be applicable.

 

Item 70 inserts new subsection 62B(4).

 

New subsection 62B(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement if the person is a transitional energy supplement person (within the meaning of section 22 of the Social Security Act) on that day.

 

New section 22 of the Social Security Act is inserted by Item 4 of this Schedule.

 

The Note to new subsection 62B(4) states that a person in receipt of a war widow/ widower pension must also satisfy the requirements set out in paragraphs 62B(1)(a) to (d) to be eligible for energy supplement.

 

The effect of new subsection 62B(4) is to prevent new recipients of war widow/ war widower pension, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing war widow/ war widower pensioners who are paid the energy supplement with their pension on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of

section 62B of all those persons (including war widow/ war widower pensioners) who on 19 September 2016 were eligible to receive energy supplement because they satisfied one of the conditions referred to in section 22 of the Social Security Act (as inserted by Item 4 of this Schedule).

 

Item 71 inserts a new Note 3 to subsection 62D(1).  Section 62D provides a person receiving disability or war widow or war widower’s pension with the option to receive their energy supplement on a quarterly basis.

 

New Note 3 refers the reader to the limitations set out in new subsections 62A(4) and 62B(4).

 

Item 72 amends subsection 62E(1) by inserting the words “but only if energy supplement is used to work out the rate of that service pension on that day”. 

 

Subsection 62E(1) provides that a quarterly energy supplement for service pension is payable to a person, as a separate payment, for as long as the person elects to receive quarterly pension supplement.

 

The additional words will make it clear that energy supplement will continue to be payable as a quarterly payment only to those persons still eligible to receive the payment as a transitional energy supplement person.

 

Items 73 and 74 amend subsection 62E(6).  Subsection 62E(6) provides for an exception to a reduction of quarterly pension supplement under subclause 4(5) of Schedule 6 of the Veterans’ Entitlements Act.

 

Clause 4 of Schedule 6 is applicable for income tax purposes and sets out the order in which deductions are made to a person’s rate of service pension or income support supplement for the purposes of the income and assets tests and compensation recovery.

 

Subclause 4(5) of Schedule 6 provides that where a person’s rate of service pension is to be reduced as described in subclause 4(1) and the person has elected to receive quarterly pension supplement, a person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subclause (1) were the election not in force.

 

Paragraph 62E(6)(a) is repealed and substituted by Item 73 .  Repealed paragraph 62E(6)(a) referred to an election by the person under subsection 60A(1) as being in force on a particular day.  New paragraph 62E(6)(a) refers to quarterly pension supplement for service pension being payable to a person for a day.

 

Item 74 is a minor amendment to paragraph 62E(6)(c) to identify a reference to “paragraph 4(5)(a)” as being located in “Schedule 6” of the Veterans’ Entitlements Act.

 

Item 75 is an application provision which provides that the amendments to section 62E made by Items 73 and 74 are to apply in working out whether quarterly energy supplement is payable to a person for a day on or after the commencement of the amendment.

 

Item 76 inserts new subsections 118P(2A), (2B) and (2C).  Section 118P sets out the eligibility criteria for the payment of the energy supplement under Part VIIAD of the Veterans’ Entitlements Act to holders of a seniors health card or a gold card.

 

Subsection 118P(2) specifies that a person is eligible for the energy supplement if:

(a)   the person is the holder of a gold card; and

(b)   the person has reached qualifying age; and

(c)   the person is in Australia, or is temporarily absent from Australia for a period not exceeding 6 weeks; and

(d)   the person is not receiving any of the following payments:

·        service pension;

·         income support supplement;

·        a social security pension or benefit; or

·        energy supplement under Part 2.25B of the Social Security Act.

 

New subsection 118P(2A) provides that subject to new subsection (2C), subsection 118P(2) will continue to apply to a person on or after the commencement of subsection 118P(2A) if on 19 September 2016 energy supplement was payable to the person under section 118PA.

 

The Note to new subsection 118P(2A) states that subsection 118P(2) will only continue to apply to a person who satisfies the requirements set out in

paragraphs 118P(2)(a) to (d).

 

The effect of new subsection 118P(2A) is (subject to new subsection 118P(2C) - discussed below) to prevent new gold card holders, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing gold card holders who are paid the energy supplement on 19 September 2016.

 

New subsection 118P(2B) provides subject to subsection (2C) that if:

(a)   energy supplement was payable to the person under section 118PA of the Veterans’ Entitlements Act on 19 September 2016; and

(b)   energy supplement ceases to be payable under that section on or after 20 September 2016;

then subsection 118P(2) will not apply, and never again apply to the person from:

(c)   if the cessation occurred before the commencement of subsection 118P(2B) - the day the subsection commences; or

(d)   if the cessation occurred on or after the commencement of subsection 118P(2B) - the day that the cessation occurred.

 

The effect of subsection 118P(2B) is to determine the date on which a person who has lost eligibility under section 118PA for the energy supplement on or after

20 September 2016 will cease to be eligible under subsection 118P(2) for the energy supplement.

 

New subsection 118P(2C) provides that if:

(a)   on 19 September 2016, a person was receiving an income support payment (within the meaning of the Social Security Act) where energy supplement was used to work out the amount of that payment; and

(b)   on a day (the cessation day ) on or after the commencement of subsection 118P(2C), the person ceases to be in receipt of any income support payment (as defined by the Social Security Act); and

(c)   on the day before the cessation day, the person was receiving an income support payment (as defined by the Social Security Act) where energy supplement was used to work out the amount of that payment; and

(d)   the person is the holder of a gold card on the cessation day;

the person can become eligible for energy supplement under subsection 118P(2) because they hold a gold card.

 

New subsection 118P(2C) allows a person who is paid the energy supplement with their income support payment on or after the commencement of the subsection to move to being eligible for energy supplement as the holder of a gold card on cessation of the income support payment.

 

Item 77 is a minor amendment to the Note to subclause 4(1) of Schedule 6 (Rate Calculator) of the Veterans’ Entitlements Act.

 

Clause 4 of Schedule 6 is applicable for income tax purposes and sets out the order in which deductions are made to a person’s rate of service pension or income support supplement for the purposes of the income and assets tests and compensation recovery.

 

The amendment replaces the reference to a person having made an election under subsection 60A(1) to receive quarterly pension supplement with a reference to quarterly pension supplement being “payable to the person”.

 

Items 78 to 80 amend subclause 4(5) of Schedule 6 (Rate Calculator) of the Veterans’ Entitlements Act.  Subclause 4(5) provides that where a person’s rate of service pension is to be reduced as described in subclause 4(1) and the person has elected to receive quarterly pension supplement, a person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subclause (1) were the election not in force.

 

Item 78 repeals and substitutes paragraph 4(5)(b). Paragraph 4(5)(b) had referred to the circumstances in which a person had elected under subsection 60A(1) to receive payments of quarterly energy supplement.  New paragraph 4(5)(b) states that quarterly energy supplement for service pension is payable to the person.

 

Items 79 and 80 are minor amendments to subclause 4(5) to replace the reference to an election to receive quarterly energy supplement not being in force with a reference to “were quarterly energy supplement for service pension not payable to the person” and to repeal and substitute the Note.

 

The replacement Note refers the reader to subsection 62E(6) as setting out the circumstances when the reduction in the instalment of the person’s quarterly energy supplement will not occur.

 

Items 81 to 84 make amendments to method statement 1 (service pension, not blind, not war widow/ war widower - pensioner) in subpoint SCH6-A1(2) and method statement 2 (service pension, blind, not war widow/ war widower - pensioner) in subpoint SCH6- A1(3) of Schedule 6 (Rate Calculator) of the Veterans’ Entitlements Act

 

Items 81 and 83 insert notes to Steps 1B and 2B respectively of method statements 1 and 2 to refer to the circumstances in which the steps will not be applicable as set out in new point SCH6-A10 (inserted by Item 85 ).  The notes also include the reference to the effect of section 65A which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.  That reference had been included in the notes to Step 4 of the method statements which are to be repealed by Items 82 and 84 of this Part.

 

Items 82 and 84 repeal the notes to Step 4 of method statements 1 and 2.

 

Item 85 inserts new point SCH6-A10 which is applicable to steps 1B and 2B respectively of method statements 1 and 2 of the rate calculator.  Those steps which add an amount of energy supplement to the rate of the person’s service pension will not be applicable in relation to a person on a day on or after commencement of the Item unless the person is a transitional energy supplement person on that day.

 

If a person is a not a transitional energy supplement person (within the meaning of new section 22 of the Social Security Act (inserted by Item 4 of this Schedule) on a day on or after commencement of these items, the rate of the person’s service pension will not include an amount of energy supplement.

 

Items 86 and 87 are a technical amendment to renumber the Note to point SCH6-BB1 of Schedule 6 (Rate Calculator) and to insert new Note 2.  Note 2 refers the reader to new point SCH6-A10 (inserted by Item 85 of this Part).

 

Part 4 - Energy supplement under the Military Rehabilitation and Compensation Act

 

Amendments to the Military Rehabilitation and Compensation Act

 

Items 88 and 89 amend section 83A.  Section 83A provides for the payment of energy supplement where the person is eligible for compensation for permanent impairment under the Military Rehabilitation and Compensation Act.

 

The Note to subsection 83A(1) is amended by Item 88 to include a reference to new subsection 83A(4) as setting out the applicable circumstances where a limitation will be imposed on subsection 83A(1).  The amended note retains the reference to the effect of section 424L which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.

 

New subsections 83A(4), (5) and (6) are inserted by Item 89 .

 

New subsection 83A(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement under subsection 83A(1) if the person is a transitional energy supplement person (as defined in new subsection 83A(5) on that day.

 

The Note to new subsection 83A(4) states that a person must also satisfy the requirements set out in paragraphs 83A(1)(a), (b) and (c) to be eligible for energy supplement.

 

New subsection 83A(5) defines for the purposes of section 83A that a person becomes a transitional energy supplement person on 19 September 2016 if:

(a)   paragraphs 83A(1)(a), (b) and (c) are applicable to the person; or

(b)   energy supplement was payable under subsection 209A(1) of the Military Rehabilitation and Compensation Act because the person was in receipt of or would have been eligible for the receipt of Special Rate Disability Pension under that Act; or

(c)   energy supplement was payable under subsection 62A(2) of the Veterans’ Entitlements Act because the person was in receipt of a disability pension under that Act

 

The effect of new subsections 83A(4) and (5) is to prevent new recipients of compensation for permanent impairment pension, granted from after 19 September 2016, from being paid the energy supplement after 20 September 2017.  The amendments also ensure the “grandfathering” of existing recipients of compensation who are paid the energy supplement with their compensation on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 83A of those persons who received energy supplement under section 209A of the Military Rehabilitation and Compensation Act because on 19 September 2016 they were either eligible to receive the Special Rate Disability Pension or under the Veterans’ Entitlements Act because they were receiving disability pension.

 

New subsection 83A(6) provides for the circumstances in which a person will cease to be a transitional energy supplement person.  On a day on or after

20 September 2016, if none of the paragraphs 83A(5)(a) to (c) apply to a person, the person will cease to be a transitional energy supplement person and can never again become a transitional energy supplement person .

 

The effect of subsection 83A(6) is to make it clear that a person will lose eligibility for the energy supplement on or after 20 September 2016 if any of the circumstances referred to in paragraphs 83A(5)(a) to (c) are no longer applicable to the person.  Subsection 83A(6) also makes it clear that there are no circumstances in which a person who ceases to be a transitional energy supplement person can regain the status of being a transitional energy supplement person.

 

Items 90 and 91 amend section 209A.  Section 209A provides for the payment of energy supplement where the person is eligible for a Special Rate Disability Pension under the Military Rehabilitation and Compensation Act.

 

The Note to subsection 209A(1) is amended by Item 90 to include a reference to new subsection 209A(3) as setting out the applicable circumstances where a limitation will be imposed on subsection 209A(1).  The amended note retains the reference to the effect of section 424L which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.

 

New subsections 209A(3), (4) and (5) are inserted by Item 91 .

 

New subsection 209A(3) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement under subsection 209A(1) if the person is a transitional energy supplement person (as defined in new subsection 209A(4)) on that day.

 

The Note to new subsection 209A(3) states that a will be a transitional energy supplement person if he or she satisfies the requirements set out in paragraphs 209A(1)(a), (b) and (c).

 

New subsection 209A(4) defines for the purposes of section 209A that a person becomes a transitional energy supplement person on 19 September 2016 if:

(a)   paragraphs 209A(1)(a), (b) and (c) are applicable to the person; or

(b)   energy supplement was payable under subsection 83A(1) of the Military Rehabilitation and Compensation Act because the person was eligible for compensation for permanent impairment under that Act; or

(c)   energy supplement was payable under subsection 62A(2) of the Veterans’ Entitlements Act because the person was in receipt of a disability pension under that Act

 

The effect of new subsections 209A(3) and (4) is to prevent new recipients of Special Rate Disability Pension, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing recipients of Special Rate Disability pension who are paid the energy supplement with their pension on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 209A of those persons who received energy supplement under section 83A because on 19 September 2016 they were eligible for compensation for permanent impairment or under the Veterans’ Entitlements Act because they were receiving disability pension.

 

New subsection 209A(5) provides for the circumstances in which a person will cease to be a transitional energy supplement person.  On a day on or after 20 September 2016, if none of the paragraphs 209A(4)(a) to (c) apply to a person, the person will cease to be a transitional energy supplement person and can never again become a transitional energy supplement person.

 

The effect of subsection 209A(5) is to make it clear that a person will lose eligibility for the energy supplement on or after 20 September 2016 if any of the circumstances referred to in paragraphs 209A(4)(a) to (c) are no longer applicable to the person.  Subsection 209A(5) also makes it clear that there are no circumstances in which a person who ceases to be a transitional energy supplement person can regain the status of being a transitional energy supplement person.

 

Items 92 and 93 amend section 238A.  Section 238A provides for the payment of energy supplement where the person is eligible for compensation as a wholly dependent partner of a deceased member under the Military Rehabilitation and Compensation Act.

 

The Note to subsection 238A(1) is amended by Item 92 to include a reference to new subsection 238A(4) as setting out the applicable circumstances where a limitation will be imposed on subsection 238A(1).  The amended note retains the reference to the effect of section 424L which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.

 

New subsection 238A(4) is inserted by Item 93 .

 

New subsection 238A(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement under subsection 238A(1) if the person is a transitional energy supplement person (within the meaning of section 22 of the Social Security Act) on that day.

 

The Note to new subsection 238A(4) states that a will be a transitional energy supplement person if he or she satisfies the requirements set out in paragraphs 238A(1)(a), (b) and (c).

 

The effect of new subsection 238AB(4) is to prevent new recipients of compensation for a wholly dependent partner, granted from after 19 September 2016, from being paid the energy supplement after 20 September 2017.  The amendments also ensure the “grandfathering” of existing compensation recipients who are paid the energy supplement with their compensation on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 238A all those persons who on 19 September 2016 were eligible to receive energy supplement because they satisfied one of the conditions referred to in section 22 of the Social Security Act (as inserted by Item 4 of this Schedule) or were receiving war widow/ war widower pensions under the Veterans’ Entitlements Act.

 

Part 5 - Other amendments

 

Amendments to the Budget Savings (Omnibus) Act

 

Item 94 amends item 38 of Schedule 21 to the Budget Savings (Omnibus) Act to add new paragraph 38(i). The effect of this item is to ensure that a person who satisfies paragraphs (a) to (f) of item 38 is then taken to be a transitional energy supplement person for the purposes of new paragraph 22(1)(a) of the Social Security Act for the period beginning on 19 September 2016 and ending at the end of the day before the person became the holder of the seniors health card referred to in item 38 of Schedule 21 to the Budget Savings (Omnibus) Act.

 

Item 95 amends item 107 of Schedule 21 to the Budget Savings (Omnibus) Act to add new paragraph 107(i). The effect of this item is to ensure that a person who satisfies paragraphs (a) to (f) of item 107 is then taken to be a transitional energy supplement person for the purposes of new paragraph 22(1)(a) of the Social Security Act for the period beginning on 19 September 2016 and ending at the end of the day before the person became the holder of the seniors health card referred to in item 107 of Schedule 21 to the Budget Savings (Omnibus) Act.

 

Amendments to the Veterans’ Entitlements Act

 

Item 96 amends paragraph 118P(4)(d) to ensure that those persons who are eligible for an energy supplement because they hold a gold card will be subject to the same portability rules as the holders of a seniors health card.



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the

Human Rights (Parliamentary Scrutiny) Act 2011

SOCIAL SERVICES LEGISLATION AMENDMENT

(ENDING CARBON TAX COMPENSATION) BILL 2017

 

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

This Bill closes payment of the Energy Supplement (ES) to new welfare recipients from 20 September 2017. People who receive the ES on 19 September 2016 retain access to it for so long as they have continuous entitlement to their ES-attracting payment on and after that date.  People who start, or who do not have continuous entitlement, to receive their Energy Supplement-attracting payment between 20 September 2016 and 19 September 2017 will have their payment increased by the amount of the ES but only for those days that both fall within that period and for which they are entitled to it.

 

The ES (which was originally called the Clean Energy Supplement) was introduced on 20 March 2013 to compensate people for the introduction of the carbon tax. As the carbon tax was repealed from 1 July 2014, there is no longer a need to provide this compensation.

 

Human rights implications

The Bill engages the following human rights:

  • The right of everyone to social security in Article 9, and the right of everyone to an adequate standard of living for an individual and their family, including adequate food, clothing and housing, and the continuous improvement of living conditions in Article 11 of the International Covenant on Economic, Social and Cultural Rights; and
  • The rights of the child in Article 26 of the Convention on the Rights of the Child.

 

The right of everyone to social security and an adequate standard of living

The legitimate objective of removing the ES from eligible payments to new recipients is to contribute to the ongoing sustainability of social security. The engagement of this Bill with the right of everyone to social security is reasonable because the Household Assistance Package, which includes the ES, was brought in to provide compensation for the carbon tax which no longer exists.

 

Closing the ES does not affect the range of payments that previously attracted it in any other way, maintaining the general integrity of social security.

 

Further, the grandfathering provisions in the Bill mean that no one on a payment that attracts the ES continuously from 19 September 2016 will be in a worse position financially as they will retain the ES as part of their payment.

 

 

The rights of the child

To the extent that ceasing the ES limits the rights of the child to social security, this is reasonable and proportionate. This Bill does not impact how the Australian Government supports low and middle income families with dependent children and young people through the payment of family tax benefit and student and youth payments. 

 

Student payments, such Youth Allowance (student) and ABSTUDY provide assistance to young people to undertake education and training, while Youth Allowance (other) provides assistance for unemployed young people.

 

Conclusion

 

This Bill is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate and people are otherwise provided for.

 

 [Circulated by the authority of the Minister for Social Services, the Hon Christian Porter MP]