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Tuesday, 3 March 1998
Page: 221

Ms MACKLIN (8:38 PM) —I want to say at the outset that the Social Security and Veterans' Affairs Legislation Amendment (Budget and Other Measurers) Bill contains a number of different measures, some of which are positive, which we welcome, and some of which appear to be simply budget saving measures.

On the positive side, there are the measures which will help carers. The time during which a carer may cease their caring activities whilst still qualifying for the carer payment has been increased from 52 days to 63 days a year. This brings the carer payment provisions into line with existing provisions relating to the child disability allowance, the domiciliary nursing care benefit and the Commonwealth's respite programs. This is a very welcome change. It will enable people caring for sick or disabled relatives or friends to get a bit of an extra break or maybe take up some extra work. It is a very positive measure.

The treatment of income streams in schedule 3 is designed to simplify the current very complex system and to stop people who have sizeable assets parked in what have been short-term, asset-test-exempt income streams from also claiming the age pension. The majority of people who invest in income streams will not be affected by these proposals, but some 2,100 people will lose their pensions because they have sizeable amounts of money invested in certain fixed-term superannuation and other schemes.

In the interests of a more streamlined income stream system and a consistent retirement incomes policy, the opposition is broadly supportive of the government's proposal. However, while the bill will provide favourable asset test treatment for certain income stream products which are underpinned by fixed interest assets, it does not practically allow for products which are underpinned by a balanced portfolio. Fixed interest based products may result in lower returns than balanced portfolio based products and hence lower retirement incomes.

There are some other serious problems with other parts of the bill, particularly the way in which it proposes to extend the carer payment to carers of certain under-16-year-olds and the way in which the government proposes to introduce a period of non-payment for certain seasonal and contract workers. I will deal with these issues in some detail.

First, I will deal with the payment to carers of people under the age of 16. Although the extension of the carer payment for those caring for children with a disability who are under the age of 16 sounds like a positive move in principle, it is difficult to see from the material that has been made available who will actually benefit from this proposal. Most of those who might qualify for the payment under the proposal are already in receipt of the parenting allowance or special benefit. This may help to account for the fact that anticipated outlays in respect of the measure are just a little over $1 million a year up to the year 2001. It means that no more than about 100 people—maybe slightly more—around Australia will be eligible for this payment. I would be grateful if the government could provide some guidance to the opposition about who and what type of family will be better off under this proposal.

The number of people who would benefit under the proposal is further restricted by the fact that the criteria in respect of under-16-year-olds are much more restrictive than the existing criteria for older people. At the moment, over-16-year-olds must be severely handicapped for their carers to qualify for the carer payment. To be severely handicapped, the person's disability must be such that they require frequent care in connection with their bodily functions or require constant supervision to prevent injury to himself or herself or to another person. That is the current definition for over-16s.

Under the bill, a child who is under 16 must be profoundly disabled for his or her carer to qualify. The definition of that term is far more onerous than the current definition of `severely handicapped'. I must say it is difficult to see the logic behind the distinction in definitions between disabled people under 16 and those over 16. Does it mean that the burden of caring for a disabled child changes on their sixteenth birthday? I doubt it.

Under the proposed definition of `profoundly disabled child', what must be satisfied, if the carer is to qualify for the payment, is that the child's disability must give rise to at least three of the following seven specific circumstances: that the child must be tube fed; that the child has a tracheotomy; that the child requires a ventilator for at least eight hours a day; that the child has urinary and faecal incontinence; that the child cannot stand without support; that the child's condition is terminal and palliative care has replaced active treatment; and that the child requires personal care on at least two occasions between 10 p.m. and 6 a.m. each day.

There are a number of other conditions which most certainly render a child profoundly disabled but which would not satisfy the required three circumstances. For example, some children suffer from severe epilepsy which cannot be adequately controlled by medication. This condition leaves them prone to frequent severe fits, and their safety may depend on the constant and vigilant supervision of the carer. Similarly, some children with severe psychiatric conditions need constant intensive care and supervision to prevent them from injuring themselves, other people or property. Some children who suffer from profound intellectual disabilities need help in relation to most daily activities, including feeding, dressing and toileting. Some of these children must be spoon fed highly processed food, and yet they may well not satisfy three of the seven conditions.

A more comprehensive list of circumstances than the seven provided for in the bill is needed to ensure that it covers the kinds of cases I have outlined. There may, of course, be other conditions which render a child profoundly disabled which would not fit neatly into the proposed criteria. I would suggest that there is a need for a general discretion to regard as relevant other circumstances which have not been anticipated.

The second area I want to talk about tonight is the preclusion period for seasonal and contract workers. I particularly want to draw attention to the proposal in schedule 4 of the bill to impose a non-payment period upon certain seasonal and contract workers. This means that seasonal workers who earn above average weekly earnings during the six months before claiming social security will have to wait an extra period before they can be paid a benefit. For example, a seasonal or contract worker who earned $37,000 in 26 weeks, and whose earnings were uniform over that period, would have to wait six months before he or she could claim benefits.

I have some concerns about the fact that this bill seems to penalise seasonal work. A worker who earned over the relevant average earnings figure that is defined in the bill in any six-month period and then lost their job would not face an extra waiting period—that is, a normal worker who earns the relevant average weekly earnings figure in any six-month period. If they lose their job, they are not going to face an extra waiting period, but a seasonal worker earning the same amount over that period would. What I would like from the minister is some rationale for this change. We should be encouraging people to participate in the work force, not penalising them.

The bill contains a formula for determining the length of the non-payment period. This focuses on the question of whether the person earned above average weekly earnings—and this is the important point—during the weeks in which they actually worked over the six months prior to claiming a social security payment, rather than whether they earned above average wages over the whole period. The period starts on the day after the person stops work. Seasonal work which commences prior to the six-month period but continues into that period will also be taken into account. This is likely to lead to unfair results in cases where the claimant has engaged in seasonal work during a number of discrete periods during the relevant six months and lived on their savings without claiming a social security payment during the intervening periods of unemployment.

The proposal fails to take account of the periods during which the person lived on their savings. For example, a person might have seasonal work for the first two of the six months prior to claiming a newstart allowance and might then live on their savings from that work for the next three months before finding seasonal work for a further month. If they applied for the newstart allowance after completing that month's seasonal work, their preclusion period would begin on the day after they completed that work and its length would be determined on the basis of all the work they did in the six-month period and the income they received while working, without regard to the fact that they were without income for three of the six months. We are also concerned that the proposed start date is 1 July this year, which means that people currently engaged in seasonal work will be affected—only they do not know it yet.

The opposition will be moving amendments in the Senate to address these issues. We will be moving amendments to both the definition of a `profoundly disabled child' and the seasonal worker sections of the bill. We will not be moving amendments to the income streams sections but, as far as we are concerned, there are some issues which require further debate and discussion, particularly as they relate to the asset test treatment of certain income streams. We are proposing to send a reference to the Senate Select Committee on Superannuation to examine this particular issue.

As I said at the outset, the opposition welcomes the positive changes in this bill, particularly for carers. We also welcome the improvement in the treatment of income streams. Carers do an outstanding job in our community, looking after the elderly and the disabled, and this will enable people to have a greater amount of respite and still qualify for the carer payment. That is a very positive move. As I said, however, there are a number of areas of concern, particularly in the extension of the carer payment to under 16-year- olds because it is not clear to us that very many people at all will in fact benefit from this payment. It seems so tightly constrained that very few people will benefit. In fact, the government's projections of how much it intends to spend in this area—only about $1 million per year—would lead us to believe that only about 100 carers throughout all of Australia—and I am sure that there are many more than 100 people caring for profoundly disabled children—will be entitled to this new payment. If the government is serious about extending a carer payment to those caring for profoundly disabled children, it needs to get serious about making sure that those who are carrying out that very important function will in fact be eligible for that payment.

As far as seasonal workers are concerned, we do recognise that it is important that people who have the capacity to support themselves as a result of seasonal work do so. Nevertheless, as far as the opposition is concerned, we do not think the current formula proposed by the government in this bill will be fair and that it will penalise some seasonal workers—and we will propose some amendments in the Senate when the time comes.