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Tuesday, 3 March 1998
Page: 232


Mr RUDDOCK (Immigration and Multicultural Affairs) (9:37 PM) —I thank the members who have contributed in this debate—the member for Jagajaga (Ms Macklin), who spoke for the opposition, the member for Lilley (Mrs Grace), the member for Herbert (Mr Lindsay), the member for Dawson (Mrs De-Anne Kelly) and the member for Reid (Mr Laurie Ferguson). I welcome the general support that has been given to this legislation by the opposition and the indication that they have concerns limited to a number of areas, which I will focus on in my own comments. But I do want to thank the members who have very correctly focused on the positive and beneficial nature of this legislation.

I take honourable members to the amendments that extend the qualification for parent payment to the carers of profoundly disabled children. It is a positive measure. It is a very significant advance. It flowed out of the commitment to assist carers that was given by the coalition in opposition. While there are some specific matters that have been raised in the debate which I will address, obviously the beneficial nature of these matters is positive, as are the need to provide consistent treatment for lump sums which are part of this legislation; the amendments relating to income streams, about which I will have something to say; the amendments relating to seasonal workers; the amendments to hardship rules for income maintenance periods; as well as some technical matters relating to the Commonwealth Services Delivery Agency, the change of name of the family payment to a family allowance and those amendments to the Farm Household Support Act. As I said, the latter three matters are largely technical.

I want to focus on the need for changes in relation to the income streams area, which the member for Reid focused on and which the member for Jagajaga raised in her comments. The fact is that many customers whose payments will be changed will be amongst the affluent individuals using anomalies in the current means test to receive an assets test exemption on short-term investments. The measures are designed to put in place what is, in fact, a fairer and more appropriate system. Many people should be able to satisfactorily restructure their financial arrangements to invest in income stream products that meet the government's objectives of minimising loopholes whilst allowing for an orderly drawing down of capital that provides a steady stream of income for retirement.

In order to ensure that people are not disadvantaged in a way which is unintended, the Minister for Social Security (Senator Newman) will have the power to provide an exemption from the new treatment for people who are significantly financially disadvantaged by the new arrangements and who cannot rearrange their affairs without facing a significant penalty. These exemptions will be decided on a case by case basis. But I think they ought to satisfy members generally as to the nature of the changes that we are intending here. They are to ensure that the impact of the assets and income test is to be as it was intended and that those people who have the funds to be able to arrange their affairs in such a way as to use anomalies ought not to be able to continue to do so. That is a matter on which I welcome the indication of opposition support. I note that they have said that in the other place they may invite some committee deliberations in relation to these matters. But, obviously, we believe the legislation in that sense is a positive measure, given the nature of the scheme which we operate in Australia.

In relation to the matters that were raised by the member for Jagajaga which relate to the care and support of a child under the age of 16 years, the fact is that the government recognises that the care of children under the age of 16 years is seen as a parental responsibility. While in appropriate cases support should be given, there needs to be a continuing recognition of the commitment that parents normally make to the upbringing of their children. Payments such as a child disability allowance provide assistance to carers in recognition of the special situation where additional care and supervision are required from a parent or guardian.

One difficulty in extending the carer payment to a person providing care for a profoundly disabled child under the age of 16 years is encountered in distinguishing what would be considered to be a child's normal level of dependence on their parents and the required level of additional care provided by a parent in direct response to the child's disability. The care requirements outlined in this measure clearly distinguish and support the intensive and constant assistance provided for children with profound disabilities, over and above what would be considered a normal parenting role. This is consistent with the aim of this measure to target assistance to those people providing a high level of attendant care to maintain comfort and sustain life or attend to a bodily function that the profoundly disabled child cannot manage by himself or herself.

It was asked why the number of carers of profoundly disabled children would be limited to about 100. The advice I have is that it would be something in the order of 400 to 500 carers who would be able to benefit from this measure. Carers are generally already receiving a special benefit or parenting allowance. For some people with profoundly disabled children, it is desirable to give them more assistance by way of the carer payment. The carer payment will be subject to the pension incomes and assets test, which is more beneficial than the special benefit or parenting allowance test. In addition, there are better pharmaceutical concessions and less reviews for carer pensions.

However, this is a highly targeted payment for those most in need. People with disabilities or disabled children who do not qualify for the new payment can still qualify for other social security payments, such as the special benefit parenting allowance and child disability allowance. So I think it needs to be seen in that context. In relation to children under the age of 16 years being considered to be a parental responsibility, I think I pointed out the basis upon which the age of 16 years was chosen for this measure.

The other matter that was raised was in relation to the measures that relate to the income of seasonal and contract workers. It is suggested that these measures treat them more harshly than other high income full-time employees who lose their job. The fact is that it needs to be recognised—and I think the honourable member for Jagajaga did in her comments; she used the figure of $37,000—that what we are dealing with here are levels of income earned by seasonal workers that can be quite unusually high for the nature of the work that is being addressed. Where you are dealing with people with much lower incomes, this measure will not operate.

The measure has to be seen, rather than discriminating against seasonal workers, as being aimed at removing the current advantage that seasonal workers have over other high income permanent employees who become unemployed. It better aligns the treatment of higher income seasonal workers with existing provisions that apply to other high income employees who become unemployed. The permanent employee, unlike the seasonal worker, will most likely have to serve an income maintenance period, so this measure is about evening up that balance.

Other workers who become unemployed generally receive a payment for any accrued or unused annual or long service leave. This amount is maintained as income for a period following cessation of work and in most cases will result in the social security payment being deferred for the period covered by the leave. Higher income seasonal workers do not receive normal leave entitlements, which are generally cashed out in salary. Currently, therefore, the only preclusion period that can be applied to a seasonal or contract worker is the liquid assets test, and generally this has not been effective.

Seasonal workers will generally have a regular pattern of employment which is governed by seasons or other regular patterns of work. Therefore, it is reasonable to expect that the workers would be able to budget for breaks between employment more readily than a worker in permanent employment who has lost their job. Where workers with high annual incomes are seen to be receiving an employment payment between seasons or contracts, the integrity of the social security system is compromised.

I think members can see from the comments I have made that the measures are not unreasonable. Obviously the government intends to press on with the bill in its present form. It is seen as being largely beneficial and, where it is not, it is dealing with anomalies that do undermine the integrity of the system and which demand of a responsible government measures to address those concerns. We do have a targeted system of benefits, which I know you, Madam Deputy Speaker Crosio, are very familiar with and have on other occasions supported very forcefully. These measures are designed to ensure that that system remains targeted and appropriate. I commend the bill to the House. Obviously, we will see how these matters progress when the bill reaches the other chamber.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.