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Wednesday, 29 February 2012
Page: 2401

Mr ANDREWS (Menzies) (10:18): I rise to speak on the Social Security and Other Legislation Amendment (Income Support and Other Measures) Bill 2012. This bill seeks to implement the income support measures that form part of the changes promulgated by the Building Australia's Future Workforce package. This bill seeks to make legislative amendments that include: (1) changing the criteria for youth allowance (other) and Newstart allowance; (2) changing incentives for single parents and parenting payment reforms; and (3) streamlining services for job seekers, including the alignment of daily penalty amount provisions

I will briefly deal with each of the key changes in turn. The changes to youth allowance (other) are given effect by virtue of an amendment to the Social Security Actso that, from 1 July 2012, 21-year-old persons who are unemployed may be eligible for youth allowance. Currently provisions mean that these young people may be eligible for Newstart allowance when they turn 21. The bill seeks to further encourage young people to take up work by amending the income-free area value from $62 a fortnight to $143 a fortnight for all youth allowance (other) recipients. Additionally, the bill increases the working credit limit from $1,000 to $3,500 for the same category of recipient. The 'earn or learn' measure would also be extended to 21-year-olds who have not achieved a year 12 or equivalent qualification.

Consequential amendments that are required to align with existing provisions will also be made, including: firstly, increasing the age at which a person will cease to be qualified for the youth disability supplement from 21 to 22 years; secondly, increasing the minimum qualification age for the sickness allowance from 21 to 22 years; and, thirdly, increasing the minimum qualification age for the long-term income support rate for students from 21 to 22 years. Transitional arrangements are also provided for.

This bill also seeks to make changes to the eligibility rules for grandfathered parenting payment recipients, namely those recipients who have been continuously receiving a parenting payment since before 1 July 2006. Under the existing arrangements, grandfathered recipients are eligible to receive a parenting payment until their youngest child turns 16 years, provided that child was in their care before 1 July 2011. Since 1 July 2011, any new child born to, or coming into the care of, a grandfathered parenting payment recipient no longer extends that recipient's grandfathered status.

Under the changes promulgated by this bill, from 1 January 2013, grandfathered recipients will cease to be eligible for the parenting payment when their youngest eligible child in their care before 1 July 2011 turns: firstly, 16 years if the child was born before 1 January 2000; secondly, 13 years if the child was born between 1 January 2000 and 31 December 2000; or, thirdly, 12 years if the child was born on or after 1 January 2001.

Additional changes apply for single carer parents receiving Newstart allowance. The current dual income test taper rate of 50c and 60c in the dollar will be replaced from 1 January 2013 with a taper rate of 40c in the dollar for income above the income-free area of $62 per fortnight. It is intended that this change will provide an incentive for people to re-engage in the workforce.

The bill also seeks to align, from 1 July 2012, the daily penalty rates for reconnection and no-show penalties. The government argues that aligning the rate at one-tenth will simplify the compliance framework and make the system fairer for job seekers by not penalising them for not connecting during weekends where providers are not available. The bill also makes amendments to education trusts and will make additional funding available for Indigenous education trust measures as part of the 12-month extension of the Cape York welfare reform trials.

Labor has presided over a culture of watering down social security arrangements, including reporting requirements and mutual obligation arrangements. Real reform is needed to strengthen our social security system. As usual, this government is absent of courage, absent of innovation and absent of any desire to tackle the big issues confronting this country. However, the coalition does not oppose this legislation.