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Social Services Legislation Amendment (Welfare Reform) Bill 2017

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2016-2017-2018

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

SENATE

 

 

 

 

 

 

 

 

 

SOCIAL SERVICES LEGISLATION AMENDMENT

(WELFARE REFORM) BILL 2017

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

 

Amendments to be moved on behalf of the Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Social Services, the Hon Dan Tehan MP)



 

SOCIAL SERVICES LEGISLATION AMENDMENT

(WELFARE REFORM) BILL 2017

                               

Amendments to be moved on behalf of the Government

 

 

OUTLINE

 

The amendment to Schedule 6, Part 1 (Cessation of Widow Allowance) to the Bill amends the commencement date to be the first 1   July or 1   January to occur after the day the Act receives Royal Assent, rather than the later of 1 January 2018 and the day after the Act receives Royal Assent.

 

As Royal Assent was not received in time for a 1 January 2018 commencement date, this amendment will enable a sufficient period of time for the Department of Human Services to communicate the closure of Widow Allowance to recipients and make the necessary infrastructure and technology changes.

 

The amendment to the commencement provisions for Schedule 10 of the Bill will amend the commencement date for Schedule 10 so that it will be the first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of 2 months beginning on the day this Act receives Royal Assent, rather than the day after Royal Assent is received.

 

As Royal Assent was not received in time for a 1 January 2018 commencement date, this amendment to the Schedule 10 commencement date will enable a sufficient period of time for the Department of Human Services to test the necessary infrastructure and technology changes to ensure there are no adverse interactions with other measures.

 

The amendments to Schedule 15 prevent ParentsNext participants from receiving four week penalties for refusing suitable work or leaving employment voluntarily. While these penalties are appropriate when looking for work is a condition of receiving income support, ParentsNext participants are not required to look for work as a condition of receiving payment. This is because ParentsNext is a pre-employment program, rather than an employment program. It connects parents of young children to services in their local community and helps them plan and prepare for employment by the time their children start school.

 

The amendments to Schedule 15 also clarify administrative arrangements and address an unintended consequence of the current Bill, identified through the implementation design process.

 

 

FINANCIAL IMPACT STATEMENT

 

The amendment to Schedule 6 has an indicative administered cost of $1.763 million over the forward estimates.

 

The amendments to Schedule 10 will not alter the financial impact of the Bill. A later commencement date for Schedule 10 would reduce the savings in 2017-18.

 

The amendments to Schedule 15 will not alter the financial impact of the Bill.

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

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



SOCIAL SERVICES LEGISLATION AMENDMENT

(WELFARE REFORM) BILL 2017

 

Amendments to be moved on behalf of the Government

 

Schedule 6 - Cessation of Widow Allowance

 

Summary

 

This amendment to Schedule 6, Part 1 (Cessation of Widow Allowance) to the Bill amends the commencement date. The Bill currently provides that Schedule 6, Part 1, will commence on the later of 1 January 2018 and the day after this Act receives Royal Assent.

 

As Royal Assent has not occurred, this amendment changes the commencement date to the first 1 July or 1 January to occur after the day this Act receives Royal Assent.

 

 

Background

 

Widow Allowance provides income support for older working age women who lose the support of a partner and face barriers to employment. Widow Allowance is payable to women born on or before 1 July 1955, who are no longer partnered and have become widowed, divorced or separated since turning 40 years of age, and have no recent workforce experience. This Schedule would have closed Widow Allowance to new entrants from 1 January 2018, and ceased the payment entirely from 1 January 2022.

 

Following the closure of Widow Allowance to new entrants, women who claim Newstart Allowance who would have otherwise qualified for Widow Allowance will be exempt from the activity test requirements. Women who would have qualified for Widow Allowance and who are over pension age and not residentially qualified for Age Pension could claim special benefit.

 

 

Explanation of the changes

 

Part 1 - amendments closing claims for Widow Allowance

 

This Part currently closes Widow Allowance to new entrants from 1 January 2018, or the day after Royal Assent, if this is after 1 January 2018.

 

This amendment will change the commencement date by closing Widow Allowance to new entrants from the first 1 July or 1 January to occur after the day the Act receives Royal Assent.

 

This amendment will enable a sufficient lead in period for the Department of Human Services to communicate the closure of Widow Allowance to recipients and make the necessary infrastructure and technology changes.

 

 



SOCIAL SERVICES LEGISLATION AMENDMENT

(WELFARE REFORM) BILL 2017

 

Amendments to be moved on behalf of the Government

 

Schedule 10 - Start day for some participation payments

 

Summary

 

This amendment to the Bill amends the commencement date for Schedule 10 to the Bill.

 

The Bill currently provides that Schedule 10 will commence on the later of 1 January 2018 and the day after the Act receives Royal Assent.  As Royal Assent was not received by 1 January 2018, this amendment changes the commencement date of Schedule 10 to the first 1 January, 1 April, 1 July, or 1 October to occur after the end of the period of 2 months beginning on the day the Act receives Royal Assent.

 

 

Background

 

Schedule 10 of the Bill amends the Social Security (Administration) Act 1999 (Social Security Administration Act) so that, if a person who is claiming or transferring to Newstart Allowance or Youth Allowance (other than a new apprentice or a full-time student) is subject to RapidConnect, their income support payments will be payable from the day they attend their first appointment with their employment services provider, unless their employment services provider is unable to offer an appointment within two business days, or the person is not qualified for the allowance on the day.

 

The change to the commencement date of Schedule 10 is necessary to enable the Department of Human Services (DHS) to re-test the necessary infrastructure and information technology changes to implement the measure, to ensure that there are no adverse interactions with other measures and thereby to avoid any risk of payment inaccuracies. 

 

Explanation of the changes

 

Amendment (2) amends Item 14, Column 2 of the table in clause 2 of the Bill, to provide for Schedule 10 to commence on the first 1 January, 1 April, 1 July, or 1 October to occur after the end of the period of 2 months beginning on the day the Act receives Royal Assent.

 

This amendment will ensure that DHS has a minimum of 2 months from Royal Assent to complete the necessary infrastructure and technology testing before the measure commences.



SOCIAL SERVICES LEGISLATION AMENDMENT

(WELFARE REFORM) BILL 2017

 

Amendments to be moved on behalf of the Government

 

Schedule 15 - Targeted compliance framework

 

Summary

 

This amendment to the Bill amends Schedule 15 by preventing ParentsNext Participants from being subject to failures for voluntarily leaving or refusing work (unemployment failures or work refusal failures) under the new compliance framework.

 

It also amends Schedule 15 to give the Secretary a discretion to suspend or penalise a job seeker under the new compliance framework where the job seeker fails to comply with a requirement notified under subsections 63(2) or (4) of the Social Security Administration Act , or fails to attend or be punctual for an appointment notified under subsection 63(4).

 

 

Background

 

Schedule 15 of the Bill will introduce a new targeted compliance framework which recognises that the majority of job seekers generally try to meet their requirements and introduces strong penalties for those who persistently and deliberately do not meet their requirements while receiving a participation payment.

 

Amendments to failures for ParentsNext participants

 

This Schedule as currently drafted would have applied a four week payment cancellation to ParentsNext participants who refused suitable work or left employment voluntarily.

 

These amendments will prevent ParentsNext participants from receiving four week penalties for refusing suitable work or leaving employment voluntarily. While these penalties are appropriate when looking for work is a condition of receiving income support, ParentsNext participants are not required to look for work as a condition of receiving payment. This is because ParentsNext is a pre-employment program, rather than an employment program.

 

ParentsNext participants would remain subject to the rest of the targeted compliance framework.

 

Amendments regarding non-compliance with notices issued under section 63

 

The amendments address an unintended consequence of the Bill, identified through the implementation design process.

 

The new targeted compliance framework will always apply for non-compliance with mutual obligation requirements, including a failure to attend an appointment with an employment provider (notified under section 63 of the Social Security Administration Act). However, this section is also used by the Department of Human Services (Centrelink) to notify income support claimants and recipients of broader administrative requirements, such as the need to provide documents to Centrelink.

 

As currently drafted, the targeted compliance framework generally applies to non-compliance with a notice issued under section 63, so would require any failure to meet these administrative requirements to be subject to suspension and potential penalties under the framework. However, there are more appropriate legislative mechanisms to deal with these failures.

 

To ensure that job seekers are not penalised under the compliance framework for failing to meet an administrative requirement, if a job seeker fails to comply with a notice under section 63, the amendments will mean that they may rather than must face payment suspension or penalty under the compliance framework. This would enable the use of either the compliance framework or alternative legislative mechanisms, depending on the nature of the requirement.

 

 

Explanation of the changes

 

Amendments (3) - (5) amend Item 1 of Schedule 15 to the Bill to update the simplified outline in the new Division 3AA. These amendments are consequential to the amendments contained in Amendments (9) - (11).

 

The amendments ensure that the simplified outline reflects the new discretion given to the Secretary to decide not to make a determination suspending, reducing or cancelling a person’s payment under subsection 42AF(1) and (2) if the relevant failure is a failure to comply with a requirement notified under subsections 63(2) or (4) of the Social Security Administration Act.

 

Amendment (6) amends Item 1 of Schedule 15 to the Bill to insert a new paragraph - paragraph 42AD(aa) - into section 42AD.

 

Section 42AD in Item 1 of Schedule 15 sets out when a person commits a work refusal failure. Currently, the section may apply to all participation payment recipients subject to the new compliance framework. This includes parenting payment recipients to whom paragraph 500(1)(ca) of the Social Security Act applies. Presently, the only people to whom paragraph 500(1)(ca) applies are those in the ParentsNext program.

 

New paragraph 42AD(aa) will provide for an additional criterion to determine when a person commits a work refusal failure. That is, in the case where the participation payment is parenting payment, the person is not someone to whom paragraph 500(1)(ca) of the Social Security Act applies. The effect of this criterion is to exclude ParentsNext participants from being subject to work refusal failures.

 

Amendments (7) and (8) amend Item 1 of Schedule 15 to the Bill to insert two new paragraphs into subsection 42AE(1) - paragraph 42AE(1)(aa) and 42AE(2)(aa), respectively.

 

Subsections 42AE(1) and (2) in Item 1 of Schedule 15 set out when a person commits an unemployment failure. Currently, the provisions may apply to all participation payment recipients (in the case of subsection 42AE(1)), or participation payment claimants (in the case of subsection 42AE(2)), subject to the new compliance framework. This includes parenting payment recipients and claimants to whom paragraph 500(1)(ca) of the Social Security Act applies. Presently, the only people to whom paragraph 500(1)(ca) applies are those in the ParentsNext program.

 

New paragraphs 42AE(1)(aa) and 42AE(2)(aa) will provide for an additional criterion to determine when a person commits an unemployment failure.  That is, in the case where the participation payment is parenting payment, the person is not someone to whom paragraph 500(1)(ca) of the Social Security Act applies. The effect of this criterion is to exclude ParentsNext participants from being subject to unemployment failures.

 

Amendment (9) amends Item 1 of Schedule 15 to the Bill to insert a new subsection - subsection 42AF(3A).

 

Section 42AF sets out the compliance action if a person commits a mutual obligation failure under section 42AC. Subsection 42AF(1) sets out the default position - that is, if a person commits a mutual obligation failure, the Secretary must determine that the person’s participation payment is not payable for a period, and take action under subsection 42AF(2) if it applies.

 

Subsection 42AF(2) applies if a person has persistently committed mutual obligation failures and does not have a reasonable excuse for the relevant mutual obligation failure. In such circumstances, the Secretary must also determine that an instalment of the person’s participation payment should be reduced or cancelled. Under both subsections 42AF(1) and 42AF(2), the Secretary has no discretion to determine whether a person’s payment may be suspended, reduced or cancelled - the Secretary ‘must’ make these determinations.

 

Amendment (9) will insert a discretion into section 42AF in certain circumstances. New subsection 42AF(3A) will provide that, despite subsections 42AF(1) and 42AF(2),  the Secretary may decide not to make a determination under either or both of those subsections, if the relevant mutual obligation failure was committed under paragraph 42AC(1)(a) or subparagraph 42AC(1)(c)(i) of the Social Security Administration Act. Paragraph 42AC(1)(a) and subparagraph 42AC(1)(c)(i) broadly provide that a person commits a mutual obligation failure if they fail to comply with a requirement notified under subsections 63(2) or (4) of the Social Security Administration Act, or fail to attend or be punctual for an appointment that the person is required to attend by notice under subsection 63(2), respectively.

 

The effect of this amendment is to enable the Secretary to decide whether to suspend, reduce or cancel a person’s participation payment if the relevant mutual obligation failure was a failure to comply with a requirement notified under subsections 63(2) or (4) of the Social Security Administration Act , or a failure to attend or be punctual for an appointment notified under subsection 63(4).

 

Note 1 to new subsection 42AF(3A) reminds the reader of the content of the mutual obligation failures set out in in paragraph 42AC(1)(a) and subparagraph 42AC(1)(c)(i) in Item 1 of Schedule 15 to the Bill.

 

Note 2 to new subsection 42AF(3A) reminds the reader that, if the Secretary decides not to make a determination under subsections 42AF(1) or (2), the Secretary may suspend or cancel the payment under section 80 of the Social Security Administration Act instead.

 

New subsection 42AF(3B) will provide that, when making a decision under new subsection 42AF(3A), the Secretary must have regard to any matters determined under subsection 42AR(1A), and may have regard to any other relevant matters. (New subsection 42AR(1A) will give the Minister a power to make a legislative instrument determining matters to which the Secretary must have regard when making a decision under subsection 42AF(3A)).

 

The effect of the insertion of new subsection 42AF(3B) is to ensure that the Secretary will not have a completely open-ended discretion when exercising the power in new subsection 42AF(3A), but instead must have regard to any matters set out in the relevant legislative instrument.

 

Amendment (10) amends Item 1 of Schedule 15 to the Bill to insert a new subsection - subsection 42AR(1A).

 

Section 42AR sets out the powers the Minister has to make determinations for the purposes of new Division 3AA in Item 1 of Schedule 15 to the Bill.

 

New subsection 42AR(1A) will provide that the Minister may, by legislative instrument, determine matters to which the Secretary must have regard for the purposes of subsection 42AF(3B), in making a decision under subsection 42AF(3A).

 

Amendment (11) amends subsection 42AR(2) in Item 1 of Schedule 15 to the Bill.

 

This amendment makes a minor change to the language used in subsection 42AR(2), consequential to the insertion of new subsection 42AR(1A). The phrase “The Minister may also” in subsection 42AR(2) will be omitted and substituted with “In addition, the Minister may”. The amendment makes no substantive change to the operation of subsection 42AR(2).



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

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

 

SOCIAL SERVICES LEGISLATION AMENDMENT (WELFARE REFORM) BILL 2017

 

Schedule 6 - Cessation of widow allowance

 

These amendments are 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 amendments

 

Schedule 6, Part 1 of the Bill closes claims for Widow Allowance. Women under pension age who could have claimed and qualified for Widow Allowance will be required to claim Newstart Allowance instead after commencement. 

 

This amendment to Schedule 6, Part 1 of the Bill amends the commencement date. The Bill currently provides that Schedule 6, Part 1, will commence on the later of     1 January 2018 and the day after this Act receives Royal Assent.

 

As Royal Assent has not occurred yet, this amendment changes the commencement date to the first 1 July or 1 January to occur after the day this Act receives Royal Assent.

 

Human rights implications

The amendment does not alter the compatibility of this Schedule 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 , as set out in the original Explanatory Memorandum to the Bill.

 

 

Schedule 10 - Start day for some participation payments

 

These amendments are 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 amendments

 

Schedule 10 of the Bill amends the day from which Newstart Allowance or Youth Allowance (other) for RapidConnect participants becomes payable (that is, their start day).  Under Schedule 10 of the Bill, the start day for RapidConnect participants becomes the day on which they attend their appointment, rather than the day of their claim.

 

This amendment to Schedule 10 of the Bill amends the commencement date.  The Bill currently provides that Schedule 10 will commence on the later of 1 January 2018 and the day after this Act receives Royal Assent.

 

As Royal Assent has not occurred yet, this amendment changes the commencement date to the first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of 2 months beginning on the day this Act receives Royal Assent.

 

Human rights implications

This amendment does not alter the compatibility of this Schedule 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 , as set out in the original Explanatory Memorandum to the Bill.

 

 

Schedule 15 - Targeted compliance framework

 

These amendments are 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 amendments

 

As currently drafted, the targeted compliance framework generally applies to non-compliance with a notice issued under section 63 of the Social Security (Administration) Act 1999 , which includes a failure to attend an appointment with an employment provider. This section is also used by the Department of Human Services (Centrelink) to notify income support claimants and recipients of broader administrative requirements, such as the need to provide documents to Centrelink. However, there are more appropriate legislative mechanisms to deal with failures relating to administrative requirements.

 

To ensure that job seekers are not penalised under the compliance framework for failing to meet an administrative requirement, if a job seeker fails to comply with a notice under section 63, the amendments will mean that they may rather than must face payment suspension or penalty under the compliance framework. This would enable the use of either the compliance framework or alternative legislative mechanisms, depending on the nature of the requirement.

 

As currently drafted, Schedule 15 of the Bill provides ParentsNext participants to be subject to payment penalty due to voluntary unemployment or work refusal. The amendment will mean that ParentsNext participants will not be subject to penalties for voluntarily leaving or refusing work. This is because ParentsNext is a pre-employment program and participants are not required to look for or accept work as a condition of receiving a participation payment.

 

 

 

 

Human rights implications

These amendments engage the following human 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 of the ICESCR; and

·          the right to work in article 6 of the ICESCR.

These amendments mean that ParentsNext participants’ participants, who are not required to look for or accept work as part of their requirements, would not be subject to penalties for voluntarily leaving or refusing work. This amendment will ensure consistency with the policy intent of ParentsNext.

Exempting ParentsNext participants from unemployment failures and work refusal failures promotes their right to social security and an adequate standard of living.  This is because they will no longer be subject to the four week penalties for refusing suitable work or leaving employment voluntarily. The amendments will also promote ParentsNext participants’ right to work, because exempting them from unemployment and work refusal failures will remove this potential disincentive to voluntarily agree to look for, and accept, work.

Additionally, the amendments to administrative arrangements address an unintended consequence of the current Bill identified through the implementation design process, and will ensure that the most appropriate legislative mechanism is used to determine an administrative requirement failure, depending on the nature of the requirement.

By providing the Secretary with discretion regarding whether to suspend, reduce or cancel a person’s participation payment in certain circumstances, a relevant person’s right to social security and an adequate standard of living is promoted.

 

 

 

 

 

 

 

 

Minister for Social Services, the Hon Dan Tehan MP