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Social Security Legislation Amendment (Community Development Program) Bill 2015

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2013-2014-2015

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

THE SENATE

 

 

 

 

 

 

 

 

 

SOCIAL SECURITY LEGISLATION AMENDMENT

(COMMUNITY DEVELOPMENT PROGRAM) BILL 2015

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Indigenous Affairs, Senator the Hon Nigel Scullion)



 



SOCIAL SECURITY LEGISLATION AMENDMENT

(COMMUNITY DEVELOPMENT PROGRAM) BILL 2015

 

 

GENERAL OUTLINE

 

The Social Security Legislation Amendment (Community Development Program) Bill 2015 (the Bill) will amend the Social Security Act 1991 and the Social Security (Administration) Act 1999 to strengthen incentives for job seekers in remote Australia to actively engage with their income support activity requirements and provide greater opportunities to participate and remain in paid work.

 

Welfare reliance is at its most concentrated in remote Australian communities. In very remote areas, almost one in five adults of workforce age are in receipt of income support payments. People in remote Australia are moving onto welfare at a young age and staying there for life. Very few people are transitioning into full time paid employment.

 

Long term welfare reliance on this scale is detrimental to individuals and to communities. The Community Development Programme (CDP), introduced on 1 July 2015, responds to this problem. It assists people to gain the skills, experience and commitment necessary to find paid work where it exists and enables them to contribute meaningfully to their community in the absence of paid work, through participation in continuous CDP activities. CDP includes employment incentives, incentives to establish businesses and access to vocational training and support to address pre-employment barriers such as drug and alcohol problems.

 

Notwithstanding these changes, outcomes suggest that current incentives within the income support system need to be stronger for those in remote communities to drive the behavioural changes needed to get people active, off welfare and into work.

 

Job seekers in remote Australia are subject to the national job seeker compliance framework, which applies financial penalties and suspensions for missing appointments and activities. The framework is complex - with a large number of different suspension and penalty types - and difficult for remote job seekers to understand. The consequences of not attending activities (No Show No Pay penalties) are not immediately felt, with long periods of up to five weeks or more before penalties are applied. For many remote job seekers the penalty feels arbitrary and not connected to their behaviour. As a result, behaviour is not changing.

 

The CDP caseload, while representing only five per cent of all job seekers , currently accounts for over 60 per cent of all reported No Show No Pay failures. Despite this, attendance in CDP activities remains low. In addition, current settings are not geared to readily support job seekers to seamlessly move in and out of intermittent work which is often the only type of work available in remote Australia.

 

To address these issues, the Bill introduces more direct and immediate payment and compliance arrangements that will allow job seekers to easily understand and comply with their requirements and avoid financial penalties - and provides additional incentives to work by increasing the amount an individual can earn before their income support payment starts to reduce under the income test. The amount of income support a jobseeker receives will depend on their participation in CDP activities rather than complex thresholds and taper rates.

 

The revised arrangements will allow the Secretary to enter into arrangements with Providers to enable them to make remote income support payments.

 

Participation and compliance arrangements that apply to these recipients will be determined by the Minister. This will enable the Minister to determine appropriate participation activities and compliance arrangements in consultation with communities, ensuring that they are tailored to the individual needs of remote job seekers.

 

The Bill will also allow the Minister to specify, by legislative instrument, remote income support regions in which these measures will operate. In making such a determination, the Minister must have regard to matters including the level of social and economic disadvantage within a region (including the levels of unemployment, social welfare and education of persons living within a region). The intention is that these arrangements will be phased in and will initially apply in no more than four regions (phase one). There will be extensive community consultation with communities to be included in phase one and participating providers will be assessed and supported to ensure they have sufficient capability and capacity to deliver the new arrangements.

 

The unique circumstances facing job seekers in remote Australia means that tailored arrangements are required in order to improve outcomes and ‘normalise’ the concept of work within these communities. In summary, building on the existing CDP Programme, the Bill makes provision for:

(a)   Payments made by the local CDP Provider on the ground who has a direct relationship with the job seeker;

(b)   Payments made weekly to assist individuals to better manage their finances;

(c)   A simplified compliance framework, with immediate No Show No Pay penalties to promote work-like behaviours;

(d)   Provision for reasonable excuses for being absent, factoring in appropriate reasons such as illness and cultural business;

(e)   Increasing income thresholds so individuals have a greater incentive to take-up casual or part time work, with the amount of income support dependant on participation in CDP activities; and

(f)    The scheme to be phased in, on a region by region basis, to ensure provider capability and community willingness.

 

FINANCIAL IMPACT STATEMENT

 

Approximate portfolio costs are $31.0 million over four years for upfront establishment costs and roll out of phase one (for up to 2,000 people).

 

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

(COMMUNITY DEVELOPMENT PROGRAM) BILL 2015

 

ABBREVIATIONS USED IN THIS EXPLANATORY MEMORANDUM

 

·          Acts Interpretation Act means the Acts Interpretation Act 1901

·          AAT means the Administrative Appeals Tribunal

·          Provider means a Community Development Program provider

·          Social Security Act means the Social Security Act 1991

  • Social Security Administration Act means the Social Security (Administration) Act 1999
  • Social security law includes the Social Security Act and the Social Security Administration Act

 

Clause 1 - Short title

 

This clause provides for the Act to be cited as the Social Security Legislation Amendment (Community Development Program) Act 2015.

 

Clause 2 - Commencement

 

Subclause 2(1) inserts a 3 column table setting out commencement information for various provisions in the Act. Each provision of the Act specified in column 1 of the table commences (or is taken to have commenced) in accordance with column 2 of the table and any other statement in column 2 has effect according to its terms.

The table has the effect of providing that:

·                 Sections 1 to 3 and anything in the Act not elsewhere covered by the table commence on Royal Assent.

·                 Schedule 1, Part 1 commences the day after Royal Assent.

·                 Schedule 2, Part 1 commences the day after Royal Assent.

·                 Schedule 1, Part 2 commences on a contingent basis associated with the commencement of item 1 of Schedule 1 to the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Act 2015 .

·                 Schedule 2, Part 2 commences on a contingent basis associated with the commencement of Schedule 1 to the Social Services Legislation Amendment (Youth Employment) Act 2015 .

Subclause 2(2) provides that column 3 of the table is for additional information which may be added to or edited in any published version of the Act but that information is not part of the Act.

 

Clause 3 - Schedules

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

 

 



Schedule 1 - Main a mendments

 

Summary

 

The Bill introduces simpler payment and compliance arrangements to assist job seekers to easily understand and comply with their requirements and to avoid financial penalties. The Bill provides additional incentives to take up available paid work by increasing the amount an individual can earn before their income support payment starts to reduce.

 

The Secretary will be able to enter into arrangements with local community based Providers to enable them to make income support payments, instead of the Department of Human Services. In addition, payments will be made to recipients weekly, as opposed to fortnightly under the current arrangements.

 

These changes will simplify the system and make it easier for job seekers in remote Australia to understand the link between attendance at CDP activities and income support payments. These changes will also enable, through legislative instruments, the application of a simpler compliance framework that is tailored to the unique social and labour market conditions in remote Australia and allows the application of compliance penalties on a weekly basis, removing the current delays. Ultimately, this will make it easier for these job seekers to understand their obligations and also help them to avoid compliance penalties.

 

Ensuring that payments are administered locally by organisations located permanently in communities and ensuring that CDP activities are tailored to the circumstances of the remote regions is a critical part of overcoming the disadvantage associated with pervasive welfare reliance. These arrangements will be determined by the Minister in a legislative instrument that will be disallowable by Parliament. Having these arrangements set in an instrument will allow the Minister to consult with communities and the Parliament to determine participation requirements and compliance arrangements and to make amendments to meet the changing needs of communities.

 

The Bill will also allow the Minister to specify, by legislative instrument, the remote income support regions in which these measures will operate. In making such a determination, the Minister must have regard to, among other things, the level of social and economic disadvantage within a region, including the levels of unemployment, social welfare and education of persons living within a region. The intention is that these arrangements will be carefully phased in based on community and Provider willingness and readiness.

 

Schedule 1 provides for the establishment of a new category of existing payments to be known as remote income support payments and related amendments to the Social Security Act and the Social Security Administration Act.

 

Part 1 of Schedule 1 establishes that remote income support payments are to be paid by Providers to persons where the person is qualified for the relevant payment, a remote income support requirement applies, and the person’s usual place of residence is in a remote income support region.

 

Part 1 also establishes a number of powers for the Minister to determine, by legislative instrument, remote income support regions, the scheme that will apply to remote income support recipients, modification of the social security law in relation to remote income support payments, and the power to enter into arrangements relating to the payment of remote income support payments.

 

A number of rate calculators and related consequential amendments are set out in order to introduce higher income free area limits for remote income support recipients and revised taper rates.

 

The Social Security Administration Act is amended to clarify the application of the existing compliance arrangements and confirm the right to seek merits review for remote income support recipients. Section 242 is amended to make it clear that the standing appropriation does not extend to payments made to Providers under an arrangement made under section 1061ZAAZB of the Social Security Act. Schedule 6 is inserted, which deals with the effect if the Secretary of the Department of Social Services delegates a power under the social security law to a Provider or the Secretary of the Prime Minister’s Department or an APS employee of the Prime Minister’s Department.

 

Part 2 of Schedule 1 provides for contingent amendments to take account of the possibility that the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Act 2015 may commence after the amendments proposed by this Bill commence.

 

 

 

 



 

Background

 

Welfare reliance is at its most concentrated in remote Australian communities . In very remote areas, almost one in five adults of workforce age are in receipt of income support payments. People in remote Australia are moving onto welfare at a young age and staying there for life. Very few people are transitioning into full time paid employment.

 

For example, in Indigenous communities the percentage of working age Indigenous adults on welfare has grown from 37 per cent in June 2008 to 46 per cent in June 2014. Long term welfare reliance on this scale is detrimental to individuals and to communities. It impacts on health, community safety and crime with unemployed Indigenous people more likely to have lower health outcomes, be victims of violence or be arrested.

 

Analysis of ABS data shows 19 of the 20 locations that suffer concentrated, persistent and entrenched disadvantaged are in remote Australia .

 

Job seeker compliance, which is designed to re-engage job seekers in their mutual obligations, is less effective in remote Australia. Providers currently rely on the national job seeker compliance framework to sanction job seekers who do not meet their mutual obligations, including activities. Current arrangements mean that when No Show No Pay penalties are applied a five week period can occur before the penalty is felt by the job seeker. In remote Australia, where contacting a job seeker is difficult for decision makers based outside the community, longer periods are the norm.

 

As a result, remote job seekers do not feel an immediate impact of non-compliance. There is not a clear link for them between attending activities and receiving income support. This undermines the effectiveness of the compliance system and is reported to be complex and confusing for individuals. When job seekers do not attend activities, they miss opportunities to build employable skills and contribute to their community. Delays in applying compliance also lead to ‘flood and famine’ where job seekers income can vary significantly from fortnight to fortnight with little understanding of the reasons behind the variations. This can make family and community budgeting harder, leading to disputes and violence. Indeed, in very remote Australia hospitalisation rates from assault are 15 times higher than in major cities of Australia.

 

New arrangements for remote Australia

This Bill gives effect to measures that are designed to address these problems. The measures create new income support payment and compliance arrangements for individuals living in remote Australia who are eligible for activity tested income support payments including newstart, youth allowance (other), parenting payment (single, once their youngest child turns six), disability support pension (under age 35 with compulsory participation requirements) and special benefit (with activity test requirements).

 

Payment and activity arrangements

Income support payments (including the basic rate and any associated supplements except for those paid quarterly or annually in lump sums) for remote job seekers will be made weekly by Providers, instead of the Department of Human Services making payments each fortnight under current arrangements. Providers will be based in remote regions and be accessible and able to make payments to individuals.

 

Responsibility for receiving, processing and determining claims for a job seeker’s payment (as well as assessing eligibility, payability and capacity to work) will remain with the Department of Human Services as is currently the case. Eligibility for income support, the level of income support and the level of activity requirements will remain unchanged. Department of Human Services will continue to fully administer other payments such as Family Tax Benefit and income management.

 

The Minister will be able to determine a broad range of CDP activities that people can participate in to meet their activity requirements. This means that activities that are useful to the community and job seekers, such as volunteering at the school canteen, participating in women’s support groups that address local issues (such as domestic violence) and supporting older and disabled people who are house bound, will be able to be considered eligible activities. Activities will be determined in consultation with communities and Providers to ensure that they are flexible and that each job seeker’s activities are tailored to their individual needs.

 

Job seeker compliance arrangements

Individuals on remote income support payments will no longer be subject to the national job seeker compliance framework. Instead, a simpler, more tailored compliance framework will apply. Providers will be able to apply a financial penalty to each job seeker for every day they do not attend activities unless there is a reasonable excuse. These arrangements will be implemented through a legislative instrument.

 

In practice, the instrument will enable the application of penalties on a weekly basis and the maximum daily penalty will be equivalent to a day’s remote income support payment. However, there will be greater flexibility within this maximum penalty. That is that penalties will not be limited to a full day but instead will allow Providers to reduce an hour’s payment for an hour’s non-attendance - lessening the financial burden on the job seeker while maintaining the behavioural impact. This will strengthen the link between attending activities and receiving income support. The instrument will also provide arrangements to ensure job seekers with a reasonable excuse for not attending an activity, such as illness, are not penalised, as is currently the case.

 

Weekly payments and a new, simplified and tailored compliance framework administered by locally based Providers, who know and understand the job seeker and the community will result in more immediate and easier to understand compliance arrangements.

 

New income thresholds to drive employment

While full time work is always the goal, the reality in remote Australia is that casual and intermittent work are more common and there are few opportunities for full time work. Currently short term work is often done by people flown in - at significant cost. To increase incentives for local people to take up available work, these new measures would allow job seekers in remote income support regions to earn more income before their income support reduces. Currently, an individual on newstart allowance has their income support tapering off after earning greater than around $102 per fortnight. This measure will increase this amount to $650 per week, broadly equivalent to the national minimum wage.

 

Increasing the income thresholds means that individuals will have a greater incentive to take up any casual or part time work that becomes available with the security that their income support will simply reflect their participation in CDP activities. If a job seeker undertakes paid work instead of attending their CDP activities, they would receive less income support (as penalties are applied) and receive more real income. With low complexity in the system, job seekers will be able to seamlessly move between CDP activities and intermittent and casual employment building their employment skills and experience. It is anticipated that this will help them to ultimately secure sufficient work to exit the income support system.

 

Finally, a new community investment fund will be established to enable funds that have been withheld as a result of penalties to be put back into communities to assist local economic and community development initiatives and programs. This will be delivered through the Commonwealth’s Indigenous Advancement Strategy.

 

These arrangements will be phased, in order to ensure the settings are correct and that the incentives work in the way that is intended. The revised arrangements will initially be introduced in up to four regions following community consultation and only where the community is willing. Providers will be consulted in the development of supporting systems and processes, and to ensure that the selected Providers are willing and ready to implement the revised arrangements. Further regions would be progressively added to the measure, based on community readiness and Provider capability, by a legislative instrument.

Explanation of the changes

Schedule 1 - Main amendments

Amendments to the Social Security Act

Items 1 to 3 amend subsection 23(1) to amend or insert a number of definitions set out below.

A Community Development Program provider is defined as a person with whom the Commonwealth has an arrangement under subsection 1061ZAAZB(1). This definition is relevant to Part 2.28 , which provides for Providers to administer arrangements associated with the payment of income support payments for certain social security recipients in remote income support regions. The term ‘person’ is defined in section 2C of the Acts Interpretation Act to include an individual or body politic or body corporate.

Provision is also made for the Secretary to be a Provider if required. This may be necessary for any times when an arrangement with a third party is not in place or, even if there is such an arrangement in place, the Commonwealth may consider it prudent to step in to make payments or provide services in respect of remote income support recipients. This could occur if a third party Provider is unable to provide services at some point in time - for example, if a Provider suffers a serious IT systems failure, or is under administration, and is not able for a period of time to make payments or provide necessary services in relation to remote income support recipients.

The definition of protected information is amended to ensure that it extends to information about a person that is obtained under the social security law by an employee or officer of a Provider. The term ‘protected information’ is relevant to Part 5 (Information Management) of the Social Security Administration Act.

 

A remote income support payment is defined as meaning either a disability support pension, a parenting payment, youth allowance, newstart allowance or special benefit. This definition provides a common term for the social security benefits and pensions that are to be paid by Providers to remote income support recipients. Associated supplements and allowances that a remote income support recipient is entitled to, and which are calculated as part of those benefits and pensions (such as rent assistance, remote area allowance and approved program of work supplements), will also be paid by the Providers.

 

A remote income support region is defined in section 1061ZAAZ.

 

Items 4 to 24 insert notes to explain that the relevant payments may be paid to a person by a Provider if the person’s usual place of residence is in a remote income support region and insert additional exemptions to, or relief from, participation requirements, activity tests and employment pathways plans.

These new exemptions are required in order to exempt remote income support recipients from existing requirements, as their obligations, including any obligations that apply instead of participation requirements, activity tests or employment pathway plans, will be set out in a determination made under section 1061ZAAZA (see item 25).

 

Item 4 inserts a note at the end of subsection 94(1) that explains that a disability support pension may be paid to a person by a Provider if the person’s usual place of residence is in a remote income support region (see item 25).

 

Items 5 and 6 insert section 94G to provide an additional exemption to the participation requirements for recipients of disability support pension where a person is a remote income support recipient. A note after section 94G explains that obligations may be imposed on the person by a determination made under section 1061ZAAZA (see item 25).

Item 7 inserts a note at the end of subsection 500(1) that explains that a parenting payment may be paid to a person by a Provider if the person’s usual place of residence is in a remote income support region (see item 25).

Items 8 and 9 insert section 502L to provide an additional exemption to the participation requirements for recipients of parenting payment where a person is a remote income support recipient. A note after section 502L explains that obligations may be imposed on the person by a determination made under section 1061ZAAZA (see item 25).

Item 10 inserts a note at the end of section 540 that explains that a youth allowance may be paid to a person by a Provider if the person’s usual place of residence is in a remote income support region (see item 25).

Items 11 and 12 insert section 542J to provide an exemption to the activity test requirements for recipients of youth allowance, so that a person is not required to satisfy the activity test where a person is a remote income support recipient. A note after section 542J explains that obligations may be imposed on the person by a determination made under section 1061ZAAZA (see item 25).

Item 13 amends section 544A to insert a reference to section 542J. The effect is to exempt remote income support recipients from being required to enter into a new youth allowance employment pathway plan. The intention is that any new employment pathway plan would be entered in accordance with a determination made under section 1061ZAAZA (see item 25).

Item 14 amends section 544E to insert a reference to section 542J. The effect is to suspend any existing youth allowance employment pathway plans for persons who are remote income support recipients. This is to ensure that any remote income support recipients who are subject to new employment pathway plans in accordance with section 1061ZAAZA will not simultaneously be required to satisfy requirements under any youth allowance employment pathway plans that may have been entered into prior to the person becoming a remote income support recipient (see item 25).

Item 15 inserts a note after subsection 593(1) that explains that a newstart allowance may be paid to a person by a Provider if the person’s usual place of residence is in a remote income support region (see item 25).

Item 16 amends the note at the end of subsection 601(1) to include a reference to section 603AC in the list of provisions that set out the situations in which a person is taken to satisfy, or is not taken to satisfy, the activity test for newstart allowance recipients.

Item 17 inserts section 603AC to provide relief from the activity test requirements for recipients of newstart allowance where a person is a remote income support recipient. A note after section 603AC explains that obligations may be imposed on the person by a determination made under section 1061ZAAZA (see item 25).

Item 18 amends subsection 605(2C) to insert a reference to section 603AC. The effect is to exempt remote income support recipients from being required to enter into a new newstart employment pathway plan. The intention is that any new employment pathway plan would be entered in accordance with a determination made under section 1061ZAAZA (see item 25).

Item 19 amends section 607C to insert a reference to section 603AC. The effect is to suspend any existing newstart allowance employment pathway plans for persons who are remote income support recipients. This is to ensure that remote income support recipients who are subject to new employment pathway plans in accordance with section 1061ZAAZA will not simultaneously be required to satisfy requirements under any newstart allowance employment pathway plans that may have been entered into prior to the person becoming a remote income support recipient (see item 25).

Items 20 to 21 insert a note at the end of subsection 729(1) that explains that a special benefit may be paid to a person by a Provider if the person’s usual place of residence is in a remote income support region (see item 25).

Item 22 inserts section 731KB to provide relief from the activity test requirements for recipients of special benefit where a person is a remote income support recipient. A note after section 731KB explains that obligations may be imposed on the person by a determination made under section 1061ZAAZA (see item 25).

Item 23 amends subsection 731L(3) to insert a reference to section 731KB. The effect is to exempt remote income support recipients from being required to enter into a new special benefit employment pathway plan. The intention is that any new employment pathway plan would be entered in accordance with a determination made under section 1061ZAAZA (see item 25).

Item 24 amends section 731R to insert a reference to section 731KB. The effect is to suspend any existing special benefit employment pathway plans for persons who are remote income support recipients. This is to ensure that remote income support recipients who are subject to new employment pathway plans in accordance with section 1061ZAAZA will not simultaneously be required to satisfy requirements under any special benefit employment pathway plans that may have been entered into prior to the person becoming a remote income support recipient (see item 25).

Item 25 Inserts Part 2.28 - Remote income support payments at the end of Chapter 2 of the Social Security Act.

 

Division 1 - Payment of remote income support payments by Providers

 

Division 1 of Part 2.28 provides for the payment of remote income support payments (that is disability support pension, parenting payment, youth allowance, newstart allowance or special benefit) to remote income support recipients by Providers, rather than by the Department of Human Services as is currently the case. The terms ‘Community Development Program provider’, ‘remote income support payment’ and ‘remote income support recipient’ are new terms included as definitions in subsection 23(1) of the Social Security Act.

The purpose of this division is to provide arrangements for Providers engaged by the Commonwealth to, among other things, make payments on behalf of the Commonwealth of remote income support payments to remote income support recipients. In addition to paying the usual instalments of the applicable social security benefits and pensions provided for this Part, provision is also made for the payment of an additional payment to a remote income support recipient by the Providers in certain circumstances. This additional payment is intended to address a potential time lag with the usual social security periodic payments which arises following the commencement of the new arrangements in a remote income support region and the movement to weekly payment arrangements for remote income support recipients.

 

Subsection 1061ZAAX(1) provides that, subject to subsections 1061ZAAX(4) and (5), a person is to be paid a remote income support payment by a Provider for the remote income support region, rather than the Secretary, where certain requirements are met.

 

Paragraphs 1061ZAAX(1)(a), (b) and (c) set out the following requirements respectively:

·          the person is qualified for the payment for the period;

·          the person meets the condition in subsection 1061ZAAX(2) throughout the period; and

·          the person’s usual place of residence is in the remote income support region.

 

The note at the end of subsection 1061ZAAX clarifies that a person will not be required to make a new claim for their social security benefit or pension when the person begins to reside in a remote income support region (or once the region becomes a remote income support region and the person becomes a remote income support recipient). This is because the remote income support payment is not a new type of social security benefit or payment as such. Rather, it remains the same type of social security benefit or pension the person was receiving immediately before their usual place of residence was in a remote income support region, albeit a benefit or pension that is to be paid by Provider in accordance with the social security law provisions applying to remote income support payments and remote income support recipients.

 

Subsection 1061ZAAX(2) sets out the condition that applies to a person for the purposes of paragraph 1061ZAAX(1)(b). There are different conditions set out under 1061ZAAX(2) depending upon which type of income support payment is relevant in the circumstances, and in each case the application of sections 94G, 502L, 542J, 603AC and 731KB is to be disregarded for the purposes of determining if a person meets the applicable condition.

 

Paragraph 1061ZAAX(2)(a) sets out the condition for a person who qualifies for disability support pension. The person meets the condition if the person would, throughout the period, either has been required to meet the participation requirements under section 94A or to meet the participation requirements under that section if the person were not covered by a participation exemption under section 94C, 94D, 94E or 94F.

 

Paragraph 1061ZAAX(2)(b) sets out the condition for a person who qualifies for parenting payment. The person meets the condition if the person would, throughout the period, either have been required to meet the participation requirements under section 500A or to meet the participation requirements under that section if the person were not covered by a participation exemption under Division 3A of Part 2.10.

 

Paragraph 1061ZAAX(2)(c) sets out the condition for a person who qualifies for youth allowance. The person meets the condition if the person would , throughout the period, either have been required to satisfy the activity test under Subdivision B of Division 1 of Part 2.11 or to satisfy the activity test under that Subdivision if they had not been covered by an exemption under Subdivision C of that Division . However, a person will not satisfy the condition if the person is covered by paragraph 541(1)(a) (where the person is undertaking full time study).

 

Paragraph 1061ZAAX(2)(d) sets out the condition for a person who qualifies for newstart allowance. The person meets the condition if the person would , throughout the period, either have been required to satisfy the activity test under Subdivision B of Division 1 of Part 2.12, or to satisfy the activity test under that Subdivision, or if they had not been covered by a provision in Subdivision B or Subdivision BA of that Division.

 

Paragraph 1061ZAAX(2)(e) sets out the condition for a person who qualifies for special benefit. The person meets the condition if the person would , throughout the period, either have been required to satisfy the activity test under section 731A or to satisfy the activity test under that section if they had not been covered by another provision in Subdivision AA of Division 1 of Part 2.15.

 

Paragraph 1061ZAAX(2)(f) provides for a person to meet the condition for the purposes of paragraph 1061ZAAX(1)(b) (regardless of whether or not one of the other paragraphs in 101061ZAAX(2) applies) if the person is, throughout the period, in a class of persons determined by the Secretary under a legislative instrument made under subsection 1061ZAAX(3).

 

Subsection 1061ZAAX(3) provides discretion for the Secretary to determine, by legislative instrument, a class of persons for the purposes of paragraph 1061ZAAX(2)(f).

 

Subsection 1061ZAAX(4) deals with the timing for a Provider to commence being responsible for making payments to a remote income support recipient. As a result of this subsection, if a person is already qualified for one or other of the applicable social security benefits or pensions and becomes qualified for the benefit or pension as a remote income support recipient part way through an instalment period, the person will not commence being paid by the Provider until the next complete instalment period. The entire social security payment for the earlier instalment period will be payable by the Secretary under the payment arrangements with the Department of Human Services. The purpose of this provision is to facilitate a smoother transition in payment arrangements for existing social security recipients when they first transition across to being a remote income support recipient.

 

Subsection 1061ZAAX(5) provides that a remote income support payment is not required to be paid to a person by a Provider if the payment is not payable.

Subsection 1061ZAAY(1) provides a discretion for an additional remote income support payment to be payable to a remote income support recipient following the Minister having made a determination under 1061ZAAZ (‘the regional determination’) that the region in which the person usually resides is to be a remote income support region. This provision allows the Secretary to exercise the discretion for a one-off payment to be made to a person who was qualified for disability support pension, parenting payment, youth allowance, newstart allowance or special benefit (see the definition of remote income support payment) on the day immediately preceding the day the regional determination was made, who then becomes a remote income support recipient on the next day as a result of a regional determination being made for the region in which the person usually resides.

 

Subsection 1061ZAAY(2) provides the Secretary the discretion to determine the amount of the additional payment to be paid to a person, but subsection 1061ZAAY(3) limits the amount to being no more than half of the fortnightly maximum payment rate applicable to the last instalment period before the person is first paid a remote income support payment as a remote income support recipient. For the purposes of subsection 1061ZAAY(3), the maximum payment rate is the rate as it is defined in subsection 19D(5).

 

Subsection 1061ZAAY(4) operates to ensure that the additional payment payable under section 1061ZAAY may be calculated and paid as provided for in section 1061ZAAY, by providing that subsection 1061ZAAY(3) applies despite subsection 43(3) of the Social Security Administration Act .

 

Subsection 1061ZAAY(5) then ensures that section 1061ZAAY does not affect the entitlement of the person to a remote income support payment for the instalment period which is taken into account in setting the limit for the additional payment. This is intended to ensure that, even though the additional payment of remote income support payment payable under section 1061ZAAY is calculated by reference to half of the maximum payment rate for the last instalment period before the person first gets paid as a remote income recipient, the payment of the additional payment does not affect the payment the person is entitled to receive for that last instalment period.

 

Subsection 1061ZAAY(6) provides that a payment under section 1061ZAAY is to be a payment of an instalment under the social security law.

 

Division 2 - Determinations and Arrangements

 

Division 2 of Part 2.28 will set out the powers of the Minister to make certain determinations and arrangements.

 

S ection 1061ZAAZ provides a power for the Minister to make a determination specifying a remote income support region. By specifying a remote income support region under section 1061ZAAZ, the Minister would give effect to the new arrangements whereby a person is to be paid a remote income support payment by a Provider if they meet section 1061ZAAX(1).

 

Subsection 1061ZAAZ(1) provides that the Minister may, by legislative instrument, determine a specified region to be a remote income support region.

 

Paragraph 1061ZAAZ(2)(a) provides a number of considerations the Minister must have regard to in determining a region under subsection 1061ZAAZ(1). The mandatory considerations include whether the region is remote, the level of social and economic disadvantage within the region and whether there is likely to be a Provider capable of providing remote income support payments to persons residing in the region. Paragraph 1061ZAAZ(2)(b) provides that the Minister may consider any other relevant matters in making a determination.

 

Subsection 1061ZAAZ(3) provides that the Minister may vary or revoke a determination under subsection 1061ZAAZ(1) at any time. The power provided in subsection 1061ZAAZ(3) is a separate power to vary or revoke to the power in subsection 33(3) of the Acts Interpretation Act. Thus, the associated requirement for applicable conditions to cease to be met in subsection 33(3AA) of the Acts Interpretation Act does not apply in relation to subsection 1061ZAAZ(3).

 

Section 1061ZAAZA creates a power for the Minister, by legislative instrument, to determine a scheme relating to the imposition of obligations on remote income support recipients and ensuring compliance with those obligations by remote income support recipients.

 

Without limiting subsection 1061ZAAZA(1), subsection 1061ZAAZA(2) sets out a non-exhaustive list of matters that may be dealt with in a determination, including obligations of remote income support recipients, the circumstances in which a person will be exempt from those obligations and the consequences for failing to comply with those obligations. Consequences will include the deduction of penalty amounts to remote income support payments where a remote income support recipient fails to comply with their obligations under the scheme and the method for calculating those penalties. The scheme will also set out the functions, duties and powers of employees and officers of Providers and review of their decisions under the scheme.

 

Other matters that may also be dealt with include the application of provisions of the Social Security Act or the Social Security Administration Act in relation to the scheme, the treatment of persons who were previously covered by Division 3A of Part 3 of the Social Security Administration Act, or the treatment of persons under Division 3A of Part 3 of the Social Security Administration Act who were previously a remote income support recipient.

 

Subsection 1061ZAAZA(3) will provide that the Minister has the power to vary or revoke a determination made under subsection 1061ZAAZA(1) at any time. The power provided in subsection 1061ZAAZA(3) is a separate power to vary or revoke to the power in subsection 33(3) of the Acts Interpretation Act.

 

Subsection 1061ZAAZA(4) provides that a person is not taken to be a worker or employee for the purposes of various Commonwealth Acts merely by undertaking an activity in accordance with an obligation imposed under this determination. This is consistent with existing provisions in the social security law applying to payment recipients who are not remote income support recipients.

 

Section 1061ZAAZB provides legislative authority for the payment of monies and entering into of arrangements (including contracts, agreements or deeds) related to the conduct of the Community Development Program and the provision of benefits (including remote income support payments and other benefits) for remote income support recipients. Subsection (1) deals with arrangements the Commonwealth may have with Providersrelating to the payment of remote income support payments to remote income support recipients. This will provide authority for the administrative arrangements between the Commonwealth and the Providers for the purpose of theProviders paying remote income support payments to remote income support recipients on behalf of the Commonwealth and for related purposes (including purposes related to the operation of the scheme determined under section 1061ZAAZA under which obligations may be imposed on remote income support recipients). The definition of ‘Community Development Program provider’ which is to be inserted into section 23(1) of the Social Security Act cross-references to this subsection.

 

Subsection (2) provides the legislative authority for the payment of monies and entering into of arrangements (including contracts, agreements or deeds) with a Provider or any other person (individual or body politic or body corporate) relating to provision of other benefits for remote income support recipients. These provisions provide legislative authorisation for the provision of other benefits for remote income support recipients. It would cover the engagement of other service providers or entities to provide such benefits as tailored services, training, work experience, skills development or employment opportunities for job seekers or medical-related services for disability support recipients or financial support for students, and to address other factors related to the social and economic disadvantage faced by remote income support recipients .

 

Section 1061ZAAZB will enable a broad range of matters which could be undertaken, and funded, under the arrangements provided for in subsections (1) and (2). That is, it extends to the provision a broad range of services, activities, assistance, infrastructure and projects for the purposes mentioned in those subsections.

 

Under subsections 1061ZAAZB(3) and (4) the Secretary has the authority to give effect to and administer, or to vary or revoke the arrangement entered into under subsections 1061ZAAZB(1) or (2).

 

Section 1061ZAAZC provides that the Minister may determine by legislative instrument that the social security law has effect in relation to remote income support payments with any modifications prescribed. The main purpose of this provision is to enable the Minister to address any unforeseen or unintended consequences of the highly complex interactions between a determination under section 1061ZAAZA and the social security law as amended that may arise at a later date.

 

Importantly, any determination made under section 1061ZAAZC is restricted to modifying the social security law in relation to remote income support payments to remote income support recipients. This limitation provides an appropriate balance between the flexibility required to address possible scenarios to ensure people receive their correct entitlements and the restrictions that should be placed on such delegation of legislative power to the executive.

 

Section 1061ZAAZC will ensure that any modifications required to support the effective operation of the social security law are provided for without the need for further legislative change s but will be subject to the usual rules for the possible disallowance of legislative instruments by either House of Parliament. This approach was also adopted in relation to the Farm Household Support Act 2014 (see in particular section 92). The Farm Household Support Act 2014 is a comparable instance of amendments to the social security law being made to address a specific policy challenge in a flexible and targeted manner.

 

Subsection 1061ZAAZC(1) provides that the Minister may determine that the social security law has effect in relation to remote income support payments with any modifications prescribed. Such matters may be included in a determination made under section 1061ZAAZA (see item 25).

 

Subsection 1061ZAAZC(2) provides that a determination under subsection 1061ZAAZC(1) may prescribe provision of the social security law that do not apply, or that apply with prescribed modifications, in relation to remote income support payments.

 

Disability Support Pension

 

Item 26 omits ‘family’ from Point 1064-E4, as this table no longer deals only with a person’s family situation for the purposes of determining the person’s ordinary income free area under the Pension Rate Calculator A, but also makes provision for circumstances where a person is a remote income support recipient. This will capture a disability support pensioner (DSP) who is a remote income support recipient and whose pension is calculated in accordance with Pension Rate Calculator A (which, in general, is where the DSP person is not permanently blind, and is 21 or over or is under 21 and has one or more dependent children, whose usual place of residence is in a remote income support region and the person is subject to participation requirements).

 

If a person’s ordinary income exceeds the ordinary income free area (that is, the amount of ordinary income that a person can have without any deductions being made from the person’s maximum rate of pension), the person’s pension is reduced by a specified amount for each dollar of income over the free area. This is known as the income test taper rate.

 

Item 27 replaces the table at Point 1064-E4 with a new table which sets out the ordinary income free area limits under Pension Rate Calculator A, and introduces the limits for remote income support recipients (to provide for the income free area limits for DSP persons who are remote income support recipients). The first four items in the table are the equivalent of the four items in the table which is being replaced, with the exception that clarification is provided in column 2 that each of those items deal with persons who are not remote income support recipients, and the figures in column 3 and 4 are updated to the current limits. This ensures the figures for non-remote income support recipients take into account indexation of the income test thresholds since those figures were previously published.

 

A new item 5 is included in the table to insert the new basic income free area amount applying to remote income support recipients. Item 5 applies whether or not the remote income support recipient is a member of a couple and whether or not the person’s partner is getting a pension or benefit.

 

Provision has been made for a remote income support recipient to earn a higher amount of ordinary income without any deduction in the person’s pension rate under Pension Rate Calculator A in order to create strong incentives for a remote income support recipient to undertake work when it is available.

 

Item 28 omits ‘family’ from Point 1066A-F3, as this table no longer deals only with a person’s family situation for the purposes of determining the person’s ordinary income free area under the Pension Rate Calculator D, but also makes provision for circumstances where a person is a remote income support recipient. This will capture a disability support pensioner (DSP) who is a remote income support recipient and whose pension is calculated in accordance with Pension Rate Calculator D (which, in general, is where the DSP person is not permanently blind, has not turned 21 and does not have any dependent children, whose usual place of residence is in a remote income support region and the person is subject to participation requirements).

 

Item 29 replaces the table at Point 1066A-F3 with a new table which sets out the ordinary income free area limits under Pension Rate Calculator D, and introduces the limits for persons who are remote income support recipients. The first four items in the table are the equivalent of the four items in the table which is being replaced, with the exception that clarification is provided in column 2 that each of those items deal with persons who are not remote income support recipients, and the figures in column 3 and 4 are updated to the current limits. This ensures the figures for non-remote income support recipients take into account indexation of the income test thresholds since those figures were previously published.

 

A new item 5 is included in the table to insert the new basic income free area amount applying to remote income support recipients. Item 5 applies whether or not the remote income support recipient is a member of a couple and whether or not the person’s partner is getting a pension or benefit. Provision has been made for a remote income support recipient to earn a higher amount of ordinary income without any deduction in the person’s pension rate under Pension Rate Calculator D in order to create strong incentives for a remote income support recipient to undertake work when it is available.

 

Youth Allowance (other)

 

Item 30 amends step 6 of the method statement at Point 1067G-H1 to include a reference to new Point 1067G-H34 which is to be used in working out a person’s ordinary income reduction for the purposes of Module H of the Youth Allowance Rate Calculator.

 

Item 31 replaces Point 1067G-H29, which sets out how to work out a person’s ordinary income free area for the purposes of the Youth Allowance Rate Calculator. Under the new Point 1067G-H29 the ordinary income free area amounts for persons who are not remote income support recipients are retained at the existing levels but the figures have been updated to the current amounts. This ensures the figures for non-remote income support recipients take into account indexation of the income test thresholds since those figures were previously published. A new paragraph is inserted to make provision for the ordinary income free area amount that is to apply to remote income support recipients for the purposes of the Youth Allowance Rate Calculator.

 

Provision has been made for a remote income support recipient to earn a higher amount of ordinary income without any deduction in the person’s benefit rate under the Youth Allowance Rate Calculator in order to create strong incentives for a remote income support recipient to undertake work when it is available.

 

Items 32 to 34 replace the heading to Point 1067G-H31, to clarify that the point deals with ordinary income reduction for persons who are not remote income support participants, and introduce a new point (Point 1067G-H34) dealing with the income test taper rate to apply to remote income support recipients, for the purposes of the Youth Allowance Rate Calculator. Item 32 amends the heading to Point 1067G-H31, and item 33 amends the chapeau to the point, to make clear that the point does not apply to persons who are remote income support recipients. Item 34 inserts new Point 1067G-H34 which provides the formula for working out the ordinary income reduction for remote income support recipients. It sets an income test taper rate for remote income support recipients of 50 cents for each dollar of income over the income free area for the purposes of the Youth Allowance Rate Calculator.

 

Provision has been made for a remote income support recipient to earn a higher amount of ordinary income without any deduction in the person’s benefit rate under the Youth Allowance Rate Calculator in order to create strong incentives for a remote income support recipient to undertake work when it is available. The different taper rate for remote income support recipients is intended to simplify administration of tapering for remote income support recipients.

 

Item 35 inserts a consequential amendment to Points 1067G-J4 and 1067G-J5 to ensure that the references in those points are updated to reflect the changes to Point 1067G-H29 (see Item 31).

 

Newstart Allowance

 

Item 36 amends step 10 of the method statement at Point 1068-G1 to include a reference to new Point 1068-G18 which is to be used in working out a person’s ordinary income reduction for the purposes of Module G of Benefit Rate Calculator B. New point 1068-G18 makes provision for circumstances where a person is a remote income support recipient (and is intended to cover persons receiving newstart Allowance who are remote income support recipients).

 

Item 37 makes changes to Point 1068-G12 which sets out how to work out a person’s ordinary income free area under Module G of Benefit Rate Calculator B. The ordinary income free area amounts for persons who are not remote income support recipients are retained at existing levels but the figures have been updated to the current amount. This ensures the figures for non-remote income support recipients take into account indexation of the income test thresholds since those figures were previously published. A new paragraph is inserted to make provision for the ordinary income free area amount that is to apply to remote income support recipients for the purposes of the Benefit Rate Calculator B.

 

Provision has been made for a remote income support recipient to earn a higher amount of ordinary income without any deduction in the person’s benefit rate under Benefit Rate Calculator B in order to create strong incentives for a remote income support recipient to undertake work when it is available.

 

Item 38 amends Point 1068-G14 to include a reference to new Point 1068-G18 which is to be used in working out a person’s ordinary income reduction for the purposes of Module G of Benefit Rate Calculator B.

 

Item 39 inserts new Point 1068-G18 which introduces the formula for working out the ordinary income reduction for remote income support recipients for the purposes of Module G of Benefit Rate Calculator B. This will capture persons receiving newstart allowance who are remote income support recipients (which, in general, is where the person’s usual place of residence is in a remote income support region and the person is subject to activity testing requirements). It sets an income test taper rate for remote income support recipients of 50 cents for each dollar of income over the income free area for remote income support recipients. The different taper rates for remote income support recipients is intended to simplify administration of tapering for remote income support recipients receiving newstart allowance.

 

Parenting Payment Single

 

Item 40 amends step 6 of the method statement at Point 1068A-E1 to include a reference to new Point 1068A-E20A which is to be used in working out a person’s ordinary income reduction for the purposes of Module E of the Parenting Payment (Single) Rate Calculator.

 

Item 41 replaces Point 1068A-E14, which sets out how to work out a person’s ordinary income free area for the purposes of Module E of the Parenting Payment (Single) Rate Calculator. Under the new Point 1068A-E14, the first item in the new table is the equivalent of the item in the table which is being replaced, with the exception that clarification is provided in column 1 that the item deals with persons who are not remote income support recipients and the basic free area figures in columns 2 and 3 have been updated to the current amounts.

 

This ensures the figures for non-remote income support recipients take into account indexation of the income test thresholds since those figures were previously published. A new item 2 is included in the table to insert the basic free area and additional free area amounts applying to remote income support recipients for the purposes of Module E of the Parenting Payment (Single) Rate Calculator.

 

Items 42 - 43 amend Point 1068A-E20, to clarify that the point deals with ordinary income reduction for persons who are not remote income support recipients, and introduce a new point (Point 1068A-E20A) which sets out the ordinary income reduction for persons who are remote income support recipients, for the purposes of Module E of the Parenting Payment (Single) Rate Calculator. Item 42 adds in words at the beginning of the provision, limiting the operation of the point to a person who is not a remote income support recipient. Item 43 inserts new Point 1068A-E20A which provides the formula for working out the ordinary income reduction for remote income support recipients. It sets an income test taper rate for remote income support recipients of 50 cents for each dollar of income over the income free area for the purposes of the Parenting Payment (Single) Rate Calculator.

 

Provision has been made for a remote income support recipient to earn a higher amount of ordinary income without any deduction in the person’s pension rate under the Parenting Payment (Single) Rate Calculator in order to create strong incentives for a remote income support recipient to undertake work when it is available.

 

Item 44 inserts a consequential amendment to Section 1190 (table item 20AA, column 4) to ensure that the references in that provision are updated to reflect the changes to 1067G-H29 (see Item 31).

 

Item 45 provides for the circumstance where an income threshold amount included in a point in a Rate Calculator for non-remote income support recipients is to be replaced under the Bill, but indexation is applied to the previous amount in accordance with sections 1191 to 1194 of the Social Security Act before the changes under the Bill take effect. The provision provides that the previous amount as indexed will apply instead of the amount set out in the Part 1 of Schedule 1 of the Bill.

Amendments to the Social Security Administration Act

 

Items 46 and 47 make changes to the heading and simplified outline for Subdivision A of Division 3A of Part 3, by substituting the heading of the Subdivision and the explanation in the second dot point that deals with when a person commits a no show, connection, reconnection or serious failure by failing to comply with their obligations in relation to a participation payment. The second dot point for the simplified outline is revised to make clear that Part 3, Division 3A of the Social Security Administration Act does not apply to remote income support recipients. Remote income support recipients would instead be subject to a scheme determined under section 1061ZAAZA of the Social Security Act.

 

Item 48 inserts section 42BA to provide that Part 3, Division 3A of the Social Security Administration Act does not apply to a person at a particular time if the person is a remote income support recipient at that particular time. This item implements arrangements to remove remote income support recipients from the operation of the compliance framework under Part 3, Division 3A while they are remote income support recipients. The note which is to be inserted under section 42BA clarifies that the compliance arrangements the remote income support recipients will be subject to will be implemented under a section 1061ZAAZA Social Security Act determination.

 

Item 49 replaces current section 125, which deals with whether decisions by officers under instruments made or issued under the Social Security Act or the Social Security Administration Act are taken to be decisions under the social security law for the purposes of the internal review of decisions under Part 4 of the Social Security Administration Act . The amended provision enables decisions of officers made under a determination under section 1061ZAAZA of the Social Security Act to be taken to be decisions under the social security law for the purposes of internal review of those decisions. A determination under section 1061ZAAZA would establish a scheme relating to the imposition of obligations on remote income support recipients and ensuring compliance with those obligations by the recipients. The revised section 125 makes provision for decisions by employees or officers of Providers, or other persons performing duties or exercising powers or functions under the scheme implemented under the legislative instrument to be subject to internal review by the Secretary under Part 4 of the Social Security Administration Act.

 

Item 50 replaces the current paragraph 144(daa) which excludes certain decisions relating to the Northern Territory CDEP Transition Payments from AAT review. This provision will no longer be required due to the repeal of the Northern Territory CDEP Transition Payment and the CDEP Scheme under Schedule 2 of the Bill. Paragraph 144(daa) provides that the AAT cannot review a decision of a Provider under a determination made under section 1061ZAAZA of the Social Security Act. The intention with this amendment, along with the amendment to section 125 of the Social Security Administration Act (see item 50), is to ensure that an initial review of a decision of a Provider (or any of a Provider’s officers or employees) would first be undertaken under Part 4 of the Social Security Administration Act by the Secretary of the Department of Prime Minister and Cabinet (or a delegate) or an authorised review officer. Once the internal review has been conducted in accordance with Part 4 (Internal review of decisions), the review decision would be able to be reviewed by the AAT, as provided for in Part 4A of the Social Security Administration Act (AAT first review).

 

Item 51 amends paragraph 192(daa), to allow the Secretary to be able to require a person to give information or produce a document to the Department if the Secretary considers that the information or document may be relevant to a scheme determined under section 1061ZAAZA of the Social Security Act. This will ensure the Secretary has the power to require the production of any information or document relevant to the operation of the scheme implemented under such a determination. There are likely to be a number of decisions or actions taken under the scheme that would not immediately relate to any of the matters currently in section 192. Accordingly, this amendment is intended to ensure decision makers can make those decisions with powers available to them to obtain relevant material.

 

Items 52 to 53 amend section 242, which deals with the appropriation of monies from the Consolidated Revenue Fund for the purposes of payments made under the social security law and the Student Financial Supplement Scheme. These items amend section 242 to provide that the appropriation under this section does not extend to payments made to Providers under an arrangement made under section 1061ZAAZB of the Social Security Act. It is intended that the appropriation for payments under such arrangements will be provided under annual appropriations under future appropriation Acts.

 

Item 54 inserts two new definitions into the Dictionary in Schedule 1 to the Social Security Administration Act. The new definitions are required as the intention is that primary responsibility for the administration of these measures will rest with the Minister for Indigenous Affairs (a portfolio Minister for the Department of the Prime Minister and Cabinet).

The Prime Minister’s Department means the Department of the Prime Minister and Cabinet.

The Prime Minister’s Secretary means the Secretary of the Department of the Prime Minister and Cabinet.

 

Item 55 inserts Schedule 6 (Provisions relating to remote income support payments) at the end of the Social Security Administration Act, which deals with the effect if the Secretary delegates a power under the social security law to an employee or officer of a Provider or the Secretary, or an APS employee, of the Prime Minister’s Department (‘the remote income support delegates’).

 

The Secretary has broad powers to delegate his or her powers under the social security law. Sc hedule 6 assists with the exercise of delegated powers in respect of the remote income support payment arrangements by clarifying how certain provisions of the social security law are to operate if powers are being exercised by the remote income support delegates . It contains a table at subclause 1(1) which sets out how the exercise of a power by a remote income support delegate is to operate in relation to certain circumstances which are itemised in the table. It effectively modifies the operation of the itemised powers and circumstances listed in column 1 of the table so they will have effect as provided for in column 2.

 

For example, item 1 in the table provides that where the power delegated to a remote income support delegate is the power to require or request a person to give the Secretary a document or information, then the delegate may, in exercising the power, require or request the person to give the document or information to an employee or officer of the Provider (if a Provider’s officer or employee is the delegate) or to the Prime Minister’s Secretary (if the delegate is the Secretary, or employee of, the Prime Minister’s Department).

 

The modifications effected by Schedule 6 are necessary to provide for the administrative arrangements being effected as a result of the remote income support payment arrangements being administered by the Prime Minister’s Department and Providers. This is because it is intended that primary responsibility for the administration of the measures under this Bill will rest with the Minister for Indigenous Affairs and the Prime Minister’s Secretary. The Prime Minister’s Secretary and Department will, therefore, be responsible for administration of the remote income support payment arrangements and the scheme for remote income support recipients, and the Providers may be required to exercise certain powers in order for the efficient and effective operation of those arrangements.

Items 2, 3 and 4 in the table provide for references to the Department in respect of the exercise of powers delegated to remote income support delegates to be read as references to the Provider or to the Prime Minister’s Department (as applicable) and for documents or information to be given, sent or lodged (or taken for all purposes as not having been given, sent or lodged) to them instead of the Department of Human Services .

Other items in the table modify other references associated with the exercise of other delegated powers by remote income support delegates as follows :

·          if the delegation makes a reference to the Secretary in another provision of the social security law, the reference is to be read as a reference to a Provider’s officer or employee or to the Prime Minister’s Secretary (as applicable) (see item 5 in the table); and

·          if the delegation makes a reference to the Department in another provision of the social security law, the reference is to be read as a reference to a Provider or to the Prime Minister’s Department (as applicable) (see item 6 in the table); and

·          if the delegation makes a reference to an officer of the Department in another provision of the social security law, the reference is to be read a Provider’s officer or employee or to an APS employee in the Prime Minister’s Department (as applicable) (see item 7), when the reference in the provision of the social security law would otherwise be inappropriate.

 

Subclause 1(2) of Schedule 6 creates a power for the Secretary, by legislative instrument, to direct that certain provisions to which items 5, 6 or 7 of the table applies are to have an operation different from that provided for by that item. This will allow the Secretary to deal with any unforeseen or unintended consequences that may arise at a later date in respect of having the delegated powers have effect as provided for in those items.

 

Subclause 1(3) of Schedule 6 provides that where the Secretary gives a direction under subclause 1(2) in relation to a provision, the provision has effect in accordance with the direction while the direction is in force.

 

Subclause 1(4) of Schedule 6 provides that a direction under subclause 1(2) commences either on the start of the day after the direction is registered under the Legislation Act 2003 , or on such later day as is specified, and remains in force until it is revoked.

 

 

 

 

Part 2 - Contingent amendments

 

Amendments to the Social Security Administration Act

 

If the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Act 2015 commences after the commencement of this Bill, it will repeal the effect of the amendments to s 42A of the Administration Act made by item 47, Part 1, Schedule 1.

 

Therefore, item 56 is a contingent amendment to section 42A of the Administration Act that will only commence immediately after the commencement of item 1 of Schedule 1 to the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Act 2015 (see clause 2) . However, if that item commences before the start of the day after this Bill receives the Royal Assent, the item does not commence at all .

 

 



Schedule 2 - Repeal of the Northern Territory CDEP Transition Payment and the CDEP Scheme

 

Summary

 

Schedule 2 provides for the repeal of the Northern Territory CDEP Transition Payment and the Community Development Employment Project ( CDEP) Scheme, both of which are now spent and no longer required to remain in the social security law.

 

Background

 

The Northern Territory CDEP Transition Payments were introduced in 2007 for a limited time to assist certain eligible persons who were transitioning from CDEP wages to income support or employment. It was paid in addition to a primary income support payment or wage in order to prevent recipients from being financially disadvantaged by the cessation of CDEP scheme payments.

 

The Northern Territory CDEP Transition Payments ceased to be payable from 1 July 2008. As a result, the provisions that deal with the Northern Territory CDEP Transition Payments are now spent and are no longer required to remain on the statute book.

 

The Community Development Employment Projects scheme (CDEP), which operated between 1977 and June 2015, was an Australian Government funded program aimed at assisting Indigenous job seekers to find and retain employment. CDEP originally operated as an alternative to the payment of unemployment benefits to Indigenous Australians in relevant communities where the scheme operated (generally communities where there was little prospect of unsubsidised employment or economic development). Under earlier CDEP arrangements, the Government provided a ‘CDEP wages’ component in grants paid to CDEP providers for the benefit of CDEP recipients. With effect 1 July 2009 a number of reforms were introduced to CDEP, which resulted in existing CDEP recipients continuing under the ‘CDEP wages’ arrangements but new recipients commencing in CDEP on or after 1 July 2009 were to receive income support payments under the Social Security Act (subject to qualifying for those payments), rather than CDEP wages from the CDEP providers.

 

Part 3.15A of the Social Security Act was introduced to reduce a CDEP Scheme wages recipient’s social security entitlement and provided, in certain circumstances, for entitlement to the ‘CDEP Scheme Recipient Supplement’. A number of other provisions in the Social Security Act were introduced to prevent ‘double-dipping’, since both the social security payment and the CDEP wages payments were funded by the Commonwealth.

 

In July 2013 CDEP was subsumed into the Remote Jobs and Communities Program, with grandfathering arrangements put in place to continue the payment of the wages component grants in respect of continuing CDEP wages recipients for a number of years. CDEP effectively ceased to operate on 30 June 2015 following reforms made to the Remote Jobs and Communities Program at that time. From 1 July 2015, CDEP wages ceased being paid and all CDEP Scheme recipients were to receive income support payments under the Social Security Act.

 

Various definitions and provisions in the Social Security Act, therefore, became redundant once CDEP ceased to operate and are therefore repealed.

 

 

 

 

 

 

 

 

 

 

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

 

Items 1 to 43 repeal various spent provisions within the Social Security Act that relate to the Northern Territory CDEP Transition Payment and the CDEP Scheme.

Amendments to the Social Security Administration Act

 

Items 44 to 47 repeal various spent provisions within the Social Security Administration Act that relate to the Northern Territory CDEP Transition Payment and the CDEP Scheme.

 

Part 2 - Contingent Amendments

 

Amendments to the Social Services Legislation Amendment (Youth Employment) Act 2015

 

Item 10 of Schedule 1 to the Social Security Legislation Amendment (Youth Employment) Act 2015 inserts a new provision after section 500W of the Social Security Act. However, if that Act commences after the commencement of this Bill, this amendment will fail due to the repeal of section 500W of the Social Security Act by item 10, Part 1, Schedule 2 to this Bill.

 

Therefore, item 48 is a contingent amendment to the Social Security Legislation Amendment (Youth Employment) Act 2015 to give effect to the proposed amendments in this event. This item will only commence immediately before the commencement of Schedule 1 to the Social Security Legislation Amendment (Youth Employment) Act 2015 (see clause 2) . However, if that Schedule commences before the start of the day after this Bill receives the Royal Assent, the item does not commence at all.

 



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

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

 

SOCIAL SECURITY LEGISLATION AMENDMENT

(COMMUNITY DEVELOPMENT PROGRAM) BILL 2015

 

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

 

Overview of the Bill

 

The Bill provides for measures that will establish a new category of existing social security payments, to be known as remote income support payments, for certain job seekers who live in remote income support regions. The purpose of the Bill is to strengthen the existing incentives for remote job seekers to actively engage with a range of obligations, including participation and activity requirements and opportunities to participate and remain in paid work.

 

This new category of payments will be available to persons who meet certain requirements, including:

1)     The person is qualified for disability support pension, parenting payment, youth allowance, newstart allowance or special benefit; and

2)     Satisfies the condition provided under subsection 1061ZAAX(2) (relating to participation requirements and activity tests); and

3)     The person’s usual place of residence is in a remote income support region.

 

Where a person meets those requirements, the person will be a remote income support recipient, and will receive their payment from a Provider.

 

When determining a remote income support region, the Minister must consider a number of factors including whether the region is remote, the level of social and economic disadvantage within the region, and whether there is likely to be a Provider that is capable of providing remote income support payments to persons living in the region. The Minister’s designation of remote income support regions by legislative instrument will be subject to the usual rules for the possible disallowance of legislative instruments by Parliament.

 

Under the new measures, it is intended that remote income support recipients will be able to earn close to the minimum wage before their payments are impacted. The rationale for this is to encourage remote job seekers to take on work opportunities as and when they arise, without fear of their income support being reduced in the short term. This increases the incentives to engage in and remain in work when it is available. This recognises that the remote job market is significantly different to the mainstream job market, especially in regard to the type of work available.

 

Remote income support recipients will be subject to new simplified compliance arrangements, which will be determined by the Minister under a legislative that will be subject to scrutiny by Parliament.

 

Human rights implications

 

This Bill engages the following human rights:

·          Right to social security: Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

·          Right to an adequate standard of living: Article 11 of the ICESCR.

·          Right to work: Article 6 of the ICESCR.

·          Right of equality and non-discrimination: Article 2 of the ICESCR, Article 5 of the Convention on the Elimination of All Forms of Racial Discrimination (the CERD), and Article 26 of the International Covenant on Civil and Political Rights (ICCPR).

·          Rights of children: Articles 26 and 27 of the Convention on the Rights of the Child (CRoC).

 

 

Right to social security and an adequate standard of living

 

The right to social security is recognised in Article 9 of the ICESCR, which recognises ‘the right of everyone to social security, including social insurance’.

 

The right to an adequate standard of living is recognised in Article 11 of the ICESCR, which recognises ‘ the right of everyone to an adequate standard of living… including adequate food, clothing and housing, and to the continuous improvement of living conditions’.

 

The changes to the social security law proposed in this Bill do not limit the ability for individuals to continue to qualify for any of the payments that they would otherwise qualify for. For remote income support recipients, the changes proposed by the Bill will have the effect of allowing individuals to continue to receive remote income support payments to a greater extent, even where a person has taken up some form of paid employment.

 

By allowing remote income support recipients to earn close to the minimum wage while still receiving their remote income support payments, the Bill also provides a more generous scheme for remote income support recipients. This consequently promotes the ability of those individuals to improve their standard of living, by allowing them to engage in a greater level of work and work-like activities before their social security payments are affected by tapering arrangements.

 

The Bill therefore promotes the rights to social security and an adequate standard of living.

 

Right to work

 

The right to work is recognised in Articles 6 of the ICESCR, and includes that for the full realisation of that right, steps should be taken by a State including ‘…technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and productive employment…’.

The measures included in this Bill are intended to strengthen the existing incentives for remote job seekers to actively engage with a range of mutual obligations requirements, tailored to their needs, and opportunities to participate and remain in paid work.

 

The intention is that the legislative instrument made by the Minister under section 1061ZAAZA will allow the Minister to set out obligation requirements to require remote income support recipients to engage in activities, including activities that will enable them to build essential skills for entering the workforce. The intention is that the legislative instrument will provide for consequences where obligations are not complied with, in order to provide incentives for remote income support recipients to engage in work or activities.

 

The application of the simplified compliance framework and the new payment arrangements will operate so that remote income support recipients will be paid on a weekly basis by Providers. It will therefore now be possible for penalties for failing to attend activities to be applied in the week in which the failure to attend occurred. It is intended that this will result in a closer connection between failing to attend a required activity and the application of a No Show, No Pay penalty. In turn, this will increase the incentives for remote income support recipients to comply with their participation or activity requirements, and thereby increase their readiness to engage in the workforce.

 

By allowing remote income support recipients to earn close to the minimum wage while still receiving their remote income support payments, the Bill provides incentives for remote income support recipients to engage in a greater level of paid work before their social security payments are affected by tapering arrangements. This is intended to address circumstances where job seekers in volatile job markets may resist taking on work opportunities that arise, for fear that a temporary work opportunity may negatively impact their amount of payment. The intention is that the ability to earn a larger amount of income before the payment amount begins to reduce will encourage remote job seekers to more readily take up part-time or casual job opportunities.

 

The Bill therefore promotes the right to work and provides incentives for job seekers to engage in their participation or activity requirements, as well as take up job opportunities and engage in work.

 

Rights of equality and non-discrimination

 

The right to equality and non-discrimination is explicitly recognised in Article 2 of the ICESCR and Article 26 of the ICCPR, which provide that all persons are entitled to exercise their rights, and to equality before the law, without discrimination as to ‘… race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status’.

 

Article 5 of the CERD reinforces this general prohibition and provides that States Parties ‘undertake to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law…’.

 

The measures introduced by the Bill aim to strengthen the existing incentives for remote job seekers to actively engage with a range of mutual obligations requirements and opportunities to participate and remain in paid work. The measures are aimed at remote job seekers, on the basis that there are particular obstacles faced by job seekers in remote Australia, including less robust job markets, higher levels of dependence on welfare, lower levels of literacy and numeracy, and persistent and entrenched disadvantage. The measures will apply equally to all job seekers who reside within remote income support regions across Australia.

 

These measures will be beneficial to remote income support recipients and have a positive impact by providing a simplified compliance framework and penalties that are easier to understand, as well as allowing job seekers who comply with their obligations to engage in higher levels of paid work before taper rates that reduce their amount of income support are applied.

 

This new category of payments will be available to persons who meet certain requirements, including:

1)     The person is qualified for disability support pension, parenting payment, youth allowance, newstart allowance or special benefit; and

2)     Satisfies the condition provided under subsection 1061ZAAX(2) (relating to participation requirements and activity tests); and

3)     The person’s usual place of residence is in a remote income support region.

 

As such, a determination will not be applied on the basis of racial, cultural, gender, religious, or political status of people residing in remote income support regions.

 

In addition, the proposed measure will not have the inadvertent effect of discriminating against welfare recipients in non-remote income support regions. As outlined, the measures proposed in the Bill allow for a simplified system of mutual obligations for persons in remote income support regions, when compared with their counterparts not living in remote income support regions. This simplification is complimented by modified compliance requirements and the ability to earn a higher income before payments are impacted.

 

Despite this differing standard, the application of these measures in remote income support regions is designed to overcome the inherent imbalance in employment opportunities and consequential disadvantage experienced in parts of remote Australia. The proposed amendment is therefore necessary to promote equality through elevating the situation of persons in remote income support regions to a standard comparable with their counterparts not living in remote income support regions.

 

The Bill is therefore consistent with the rights to equality and non-discrimination.

 

Right of children to benefit from social security and an adequate standard of living

 

Under Article 26 of the CRoC, all children have the right to ‘benefit from social security, including social insurance’.

 

Article 27 of the CRoC provides that every child has to a ‘standard of living adequate for the child’s physical, mental, spiritual, moral and social development’.

 

The proposed amendments in the Bill will have the direct effect of furthering the right to social security and an adequate standard of living for remote income support recipients under the ICESCR. In turn, the elevated standard of living and access to social security enjoyed by recipients will have an indirect benefit for the children of remote income support recipients.

 

The Bill is therefore consistent with the rights of the child to benefit from social security and to enjoy an adequate standard of living.

 

Conclusion

 

The amendments are compatible with human rights because they promote rights to social security, an adequate standard of living, to work and are consistent with the right to equality and non-discrimination. To the extent (if any) that they may limit human rights, those limitations are reasonable, necessary and proportionate to achieving the legitimate objective of supporting job seekers in remote Australia, by strengthening the existing incentives for remote job seekers to actively engage with a range of mutual obligations requirements and opportunities to participate and remain in paid work.

 

 

 

 

 

 

 

 

 

 

Minister for Indigenous Affairs, Senator the Hon Nigel Scullion