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Community Affairs Legislation Committee
17/04/2018

CROWE, Ms Charmaine, Senior Policy and Advocacy Officer, Australian Council of Social Service

GEAR, Ms Joni, Legal Project Officer, National Social Security Rights Network

HO, Ms Leanne, Executive Officer, National Social Security Rights Network

Evidence from Ms Gear was taken via teleconference—

[11:39]

ACTING CHAIR: Welcome. Could you all please confirm that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you?

Ms Crowe : Yes.

Ms Ho : Yes.

Ms Gear : Yes.

ACTING CHAIR: Thanks very much. The committee has your submissions. I now invite you to make a short opening statement, if you so desire, and, at the conclusion of your remarks, I'll invite members of the committee to put questions to you. Ms Crowe, would you like to make an opening statement on behalf of the Australian Council of Social Services?

Ms Crowe : Yes, I would, but could I suggest that Leanne goes first?

ACTING CHAIR: That's quite okay. Ms Ho from the National Social Security Rights Network, would you like to make an opening statement?

Ms Ho : Yes, thank you. The National Social Security Rights Network is happy to have the opportunity today to appear before the Senate committee to explain the reasons why it opposes the bill. The network is a peak community organisation in the area of income support, policy and administration. Our members are community legal centres across the country that provide free and independent legal assistance to people experiencing issues with social security and family assistance payments. The network draws on this frontline experience in developing its submissions and policy positions.

We opposed the bill because we believe it is based on flawed assumptions—firstly, the reason that newly arrived migrants need income support is that they choose not to work and that removing income support will encourage self-sufficiency. The evidence we've seen suggests that migrants actually have a very strong desire to work and only look to income support when they're unable to work and are in financial hardship. This evidence suggests that it can often be difficult for migrants to secure employment in Australia, even where there is a match between the skills and experiences of the migrants and an advertised skills shortage. The reason why migrants find it difficult to secure good jobs are more likely to be on the employer side: perceptions about their lack of Australian experience, being overqualified for positions, lack of English language skills, and discrimination.

Research which has found better employment outcomes for migrants who've arrived since the introduction of the two-year waiting period compared with those who arrived before its introduction has found that the difference between those two groups was in large part the employability of the second group and the buoyant job market at that time rather than any additional motivation to work. This suggests that it's actually coordination between the immigration system and employment policies that is most likely to increase employment outcomes and reduce the need for income support. Of course, we recognise that desperate circumstance may motivate desperate measures. If income support is not available for a longer period, we are very concerned that migrants and their families and their children will either fall into poverty or fall prey to exploitation. Exploitation of migrant workers is well documented where they will accept any substandard work conditions in order to survive. Extending the waiting period will only exacerbate this vulnerability. Any costs saved from extending the waiting period may well end up being costs spent in dealing with the fallout from the destitution.

Migrants are already overrepresented in statistics on poverty and homelessness. In particular, we oppose the introduction of the waiting period for special benefit as it is the payment of last resort for people in financial hardship. The exception to the waiting period, where there is a substantial change in circumstances beyond a person's control, will not capture the experience of many migrants, particularly skilled migrants, who came with a legitimate expectation of work but became unemployed. We don't have exact figures, but our member centres have widely reported that it's become much more difficult to access special benefit and prove the substantial change in circumstances.

I'll finish with a story of one of our member centres' newly arrived clients who came to Australia and ended up in a relationship with a man who turned out to be controlling and violent. She was working in his business, and after a while he decided not to pay her. When the violence reached the point where she needed to escape, she tried to claim special benefit. With the help of our member centre, she provided evidence of her financial hardship, her homelessness while escaping violence and her inability to work as a result of ill health, which was largely exacerbated by the abuse. However, she was unsuccessful because she'd made a $12,000 contribution to an overseas insurance scheme. Our member centre presented evidence that she was unable to access these funds without travelling to the country in question, which would be really difficult for her, given her financial circumstances and her ill health. She ended up unable to get special benefit and was living in refuges until she could find a way to leave Australia.

I think this client is a really good example of the problems with the assumptions behind this bill. She'd proven her motivation to work; in fact, she was working for no payment at all. Waiting longer for income support would not have any impact on her motivation or provide any additional encouragement to self-sufficiency. And it was really arguable, in her case, that there had been a change in her circumstances beyond her control, but the bar was already set so high for special benefit that she couldn't access it. We believe that a much better outcome would've been if she'd been able to access financial support to leave the violent relationship and find alternative employment.

In summary, we oppose the bill because it's based on these flawed assumptions that migrants choose not to work and that removing the support will encourage self-sufficiency. We're very concerned that it will lead to poverty for migrants and their families and increase their vulnerability to exploitation. At the very least, we would hope that special benefit could be made available to everyone as a payment of last resort. Thank you.

Ms Crowe : The Australian Council of Social Service also thanks the committee for being given the opportunity to present today. ACOSS opposes this bill. We do not see any justification for imposing a three-year wait to access the social safety net. In our view, this legislation will make life harder for people trying to set up their lives in Australia. Women and children will be the biggest losers if this bill goes through. They are the primary beneficiaries of family tax benefit and paid parental leave, which is where the biggest cuts in this bill will be made. Migrants to Australia must already serve a two-year waiting period before accessing key payments in our social security system. This waiting period sends a strong signal to people coming to Australia that they must be self-sufficient. We do not believe it is reasonable to expect people to be able to plan for up to three years in advance. Anyone of us would struggle to sufficiently prepare for events that could arise over a three-year period, not least when moving to a new country.

This legislation breaches the principle that should underscore our social security system—that assistance should be made available where there is financial need. Waiting periods, such as those proposed in this bill, fail this test. We urge the committee to reject this bill. Our social security system is already very difficult to access for migrants, despite the enormous contribution they make to our community. They work, raise families, build businesses, participate in the community and create fulfilling lives in Australia.

Just this morning we saw reports that migrants deliver billions more in tax revenue than what they cost in services. We must not lose sight of the contribution migrants make when looking at how to best structure our social security system. In our view, these supports that migrants may access maximise the benefits that migrants deliver for Australia. We are a wealthy enough country to ensure that people in financial need receive income support.

ACTING CHAIR: Thank you. We will go to questions.

Senator SIEWERT: I want to go back to the issue of whether there was an exemption for low-income families. I am still struggling with it, because you can only access these payments when you are below the limit.

Senator GRIFF: If you are referring to 5.4, it is virtually almost $100,000 before anything is reduced and you can still seek payments up to $200,000 of income.

Senator SIEWERT: For Newstart? No, it is not.

Senator GRIFF: No, in relation to family tax payment. That is what I was referring to.

Senator SIEWERT: I am referring to Newstart, youth allowance and all those payments. I know that those new payments are going in, but, when you are particularly looking at those who are not able to access income support, you couldn't access it anyway if you are on a high income—you would be excluded in any case.

Senator GRIFF: But family tax benefit is the largest budget saving.

ACTING CHAIR: We can have conversations amongst ourselves, but this is the witnesses' time.

Senator SIEWERT: Would it make it a little more palatable, or should it still be rejected, if there was effectively a stricter means-test put in for those new payments that are coming in?

Ms Crowe : Are you asking whether we would support it if there was a stricter means-test for family tax benefit?

Senator SIEWERT: Should we say that low-income families are excluded?

Ms Crowe : From our point of view, we oppose the bill in its entirety. I think it is important to make the distinction between the family tax benefit payments, which do represent the largest saving in this bill, and the other payments. Family tax benefit is designed to supplement other income. That is because it is designed to cover the cost of children. A lot of families who are in full-time work but that work is low paid get access to family tax benefit, which is presumably why family tax benefit was excluded from the waiting period when it was first introduced in the 1990s. It is fair to recognise the cost of children. We would oppose an amendment that would allow those families to be exempt from this bill but other measures went through. As you rightly pointed out, Senator Siewert, the other payments that come into this bill are already means-tested—and very tightly means-tested—and you really have to be destitute to be able to access them. So, from our point of view, we reject the bill in its entirety.

Senator SIEWERT: You were here for part of the discussion when we were talking about exceptional circumstances and family violence. What's your understanding of the changes and the level of access when people can access special benefit and whether this bill is the same as people being able to access it outside of this bill?

Ms Crowe : Joni is probably in a better position to answer that.

Ms Gear : I guess at the moment there could be instances where people can access special benefit but, as we outlined in our submission, the test that has to be satisfied for a person who's subject to the waiting period to get onto special benefit is that first they have to demonstrate that they are in financial hardship and then they have to demonstrate that there has been a substantial change in their circumstances beyond their control. As far as I'm aware, family violence is something that can be captured by that, or can be characterised as a 'substantial change' in someone's circumstances. I do know that there are some instances where people have entered the country with an assurance of support—that is, where an Australian resident is providing or has given an undertaking to provide them with financial support during the time that they are in Australia—but if that relationship has broken down due to family violence then that person is able to then apply for special benefit and satisfy the definition of substantial change in circumstance.

However, I think the issue with the special benefit exemption is that, firstly, it may not capture everybody's experience. It has been, in my view, narrowly interpreted by the Administrative Appeals Tribunal. I think the issue with special benefit is that it really is this payment of last resort. It pays at a rate equivalent to Newstart; however, it takes into account in-kind support. So if somebody is receiving, say, food or board or any other in-kind support from somebody else or from a charity, that will be taken into account in the assessment of how much income they actually have. That is what causes so many people who are on special benefit to not actually receive the full amount. I think the statistic that we've captured in our submission is that 80 per cent of those recipients receive part payment. So we see that, even though there is this exemption where if you are experiencing change or subject to violence then there is a payment available, the issue that that still causes is that, really, you're providing a payment that is still very low or meagre, and that doesn't necessarily address all of the issues that that person is experiencing at that time. The payment is given for financial hardship and yet is still not really sufficient to provide someone with the ability to deal with everything that is happening to them at that time.

Ms Crowe : Just to quickly build on Joni's point: special benefit is a payment of last resort, and, if you extend the period of time that people are unable to access other payments such as Newstart, we're concerned that it's going to act as a barrier for people escaping domestic violence because the only option they'll have is to go onto special benefit, if they can actually get it. The other thing that special benefit does is this. There is a dollar-for-dollar income test. So, as soon as you earn a dollar, you'll lose a dollar of your special benefit, which is most likely to be paid at a part rate because it factors in-kind support into the income test.

Senator SIEWERT: We've been talking to people this morning about the money coming off the bond or the guarantee by sponsors of migrants, and we heard that the Centrelink payment, if they do receive special benefit, comes off that guarantee, and then the sponsor can go into debt once they've exceeded the guarantee. We were trying to find out about figures. The Brotherhood of St Laurence said to us this morning that they have not been able to get figures on this, and so far we haven't been able to find out figures. Have either of your organisations come across this issue? And do you have any idea of the numbers? We'll obviously be asking the department, but I'm particularly keen to know how widespread an issue this is and whether the sector has come across this issue in a broad sense.

Ms Gear : Just to clarify: is this the issue about how many people who provide the assurance of support end up with a debt to the government?

Senator SIEWERT: Yes, because that's an issue for the sponsors but it also obviously has a direct impact on the capacity of the family or the people that they're sponsoring.

Ms Gear : I don't know the exact figures of how many people are even providing assurance of support or how many people end up having a debt pursued because the person they've been supporting has ultimately accessed social security payments. But the reason why we put in our submission that the bill really will impact on those people who do provide an assurance of support, and the key thing we wanted to say about this, is that if you are increasing the waiting period, and the government have indicated that they are also going to increase the assurance of support period in line with that, then the issue is that, with longer periods, it can be quite difficult for people to really be prepared and actually even be confident in their guarantee that they can financially support somebody to migrate here. And usually the assurance of support is typically provided for people who are in those family reunion categories of visas, so what that means—I think how this will essentially operate is that families who are less wealthy, so poorer families, will just find it much harder to be able to support their other family members to migrate here. It really puts them at risk that if something happens and they can't actually follow through with their guarantee that they can provide that support for three years, if something unexpected happens that causes their family member to then access income support payments, then they're still subject to this debt owing to the government. I think that exacerbates it, but I don't exactly have those figures.

Senator WATT: Thank you for coming along today. Just to begin with, were either of your organisations consulted before or after the bill was introduced?

Ms Crowe : Not that I'm aware of.

Ms Ho : Not that I'm aware of, no.

Senator WATT: Thank you. Ms Ho, you've mentioned that the experience of your member centres is that it has become more difficult to apply for and obtain special benefit, and you gave us a good case study that outlined that. Is there anything more that you can say based on the experience of your member centres to explain how it has become more difficult? Is it that more applications are being knocked back? Is it that they're taking longer? In what way is it becoming more difficult?

Ms Ho : I actually went away and just asked for some case studies, so they are what I have to present today. Another case that was sent through to me was of someone whose health had suddenly deteriorated. They were trying to demonstrate that sudden deterioration by obtaining medical records from overseas. There were difficulties obtaining those records and with the interpretation of those records by medical professionals in Australia. In the end the client, because they were already in a really vulnerable position financially and with their ill-health, just couldn't cope with the appeals process. And after being unable to present sufficient evidence at the first tier of the AAT, they just didn't want to continue. This is another example, like the previous one, of the kinds of barriers that migrants, in particular, face in trying to present enough evidence to meet one of these exemptions or to demonstrate a change in circumstances. Joni, did you have any others?

Ms Gear : No, I didn't.

Senator WATT: I'm still a little bit confused about the special benefit issue. I understand that obtaining special benefit is something that someone can apply for while they are in the waiting period. They've been here long enough to become a permanent resident. They then begin their waiting period to obtain a range of payments which, if this bill goes through, will be a wider range of payments, and I have understood that, if there's been a substantial change in circumstances since they arrived in Australia, that's what enables them to apply for a special benefit. Am I right so far?

Ms Ho : Yes.

Senator WATT: In your submission, Ms Ho, paragraph 31 says that the special benefit payment itself is typically subject to a waiting period; is that right?

Ms Gear : Just to clarify, how is that meant to read? Is it that the special benefit is a payment that is available to everybody, but, yes, because there is that waiting period, at the moment—sorry, if that sentence is confusing, but, basically, it means that special benefit is subject to the waiting period, and it operates where there is this exception to the waiting period that people can access it if they meet those tests for substantial change in circumstance and financial hardship.

Senator WATT: Am I right that, at the moment, there's no waiting period that needs to be served before you can apply for special benefit?

Ms Gear : My understanding is that there is a two-year waiting period that applies to special benefit at the moment, but, I think, to be able to access special benefit, if you are a person who is not here as a newly arrived migrant, you can apply for special benefit just on the basis that you can't access any other payment and you're experiencing financial hardship. I may have to clarify that, but that's my understanding of how it operates—that there is this additional test here.

Senator WATT: We might try and clarify that with the department this afternoon. I notice that your submission also answers one of the questions I've had in my mind, in terms of trying to get a handle on how many people obtain special benefit. I see in paragraph 33, you've said, based on departmental figures:

Special Benefit provides an important safety net for approximately 5000-7000 recipients.

So I take it that there are about 5,000 to 7,000 recipients per year of special benefit. Is special benefit something that is obtained only by newly arrived migrants or could there be other categories of people obtaining that as well?

Ms Gear : Yes, and I think this is an important thing to note. As our submission says, most of the recipients of special benefit aren't of working age, and this is partly because the age pension requires a much longer residence period of 10 years, although obviously the recent legislation has shifted this a bit. Because it's a longer period, it means that people have to be residing in Australia for longer. Most people who receive that are over pension age because it's the only income support payment they're entitled to.

Senator WATT: One of our earlier witnesses made the point that, at a bare minimum, if this bill were to be passed, the eligibility criteria for special benefit, which currently set the guidelines, should be enshrined in the legislation. Is that something you would support? I'm not taking away from the fact that you actually oppose the bill. I get that. But would that be a further improvement that could be made?

Ms Ho : Definitely, we would always prefer to see safeguards for vulnerable people enshrined in legislation, so that it's clear and can't easily be changed.

Ms Crowe : Yes, I would concur with that sentiment. And it would also provide the department clarity when they're making decisions around who should qualify for the payments.

Senator WATT: My last question is one I've posed to a number of witnesses. My understanding is that the bill seeks to tighten eligibility for special benefit so that, effectively, you can only apply for special benefit if the change in circumstances has occurred since your waiting period has started, and that can only start once you obtained permanent residency, whereas the current position is that, as long as the substantial change in circumstances has occurred since you came to Australia, whether it was before or after your waiting period commenced, that enables you to apply. What would be your concern if that change and the eligibility for special benefit was tightened?

Ms Crowe : It's really hard to get a full picture of what the impact of that change would be, because we have such limited information about who is receiving special benefit and for whom that current provision has applied. Going back to first principles, this would effectively see people falling through the cracks. You could have people who are in desperate financial need who have had a change of circumstance that has prevented them from being able to participate in paid work and get any kind of income support. That would be our fundamental concern, and we don't see that as being of any benefit to anyone or the Australian community to have people in that situation. As Leanne indicated earlier, it would likely lead to an increase in access to emergency relief and other supports which essentially governments have to pay for. That would be our concern.

Ms Ho : I would also add that that distinction would be very difficult for many people to know about and understand. Our clients' lives are very messy, and the point at which a substantial change in circumstances happens to them is not something that they can foresee or plan for. It would be rather unfair to have what would seem like an arbitrary distinction.

Senator SIEWERT: There is the issue around single parents where it says—I'll just find the wording so I'm not misquoting:

… people who have become a lone parent may be exempt from the NARWP for parenting payment, newstart allowance and youth allowance.

Do you know any more about that or have you been engaged in any subsequent discussions with the department about what that might mean?

Ms Crowe : No, I haven't on that front. I just took it at face value that, if you became a single parent after arriving in Australia, you would receive an exemption to access a single parenting payment or Newstart paid at the single parent rate.

Senator SIEWERT: It doesn't seem as clear as that. But you don't know anything beyond that?

Ms Ho : No. Just wearing my other hat as deputy chair of the Refugee Advice and Casework Service—and I know they're appearing this afternoon—I want to give you a heads-up about an issue that we were just discussing on the way here about whether safe haven enterprise visa and temporary protection visa holders are included in the definition of refugee or former refugee for the purposes of the exemptions. We couldn't really work that out. They may well cover this in more detail this afternoon, but I just wanted to flag that as an issue.

Senator SIEWERT: Ms Gear, did you have anything to add to that?

Ms Gear : No, but that's something that I'm also looking to clarify but can't at this stage.

Senator SIEWERT: Thank you.

Ms Crowe : I'd like to make another comment regarding the three-year waiting period for paid parental leave. Briefly, our core concern is that that is obviously going to impact predominantly low-paid women. Our concern is that we have an environment where we're needing to increase the workforce, particularly in the care space—we have inadequate numbers working in aged care, in disability care, and we can only see that problem growing as time goes on. We are presumably going to be needing workers from outside of Australia to fill that gap. Our concern is that this bill sends a message to those workers, who are most likely going to be women, that, yes, we want you to come and do these roles but we're unwilling to pay you paid parental leave. There is large likelihood that those people will be unable to access a decent paid parental leave scheme with their employers, particularly if they are in low-paid work, and likewise with family tax benefit. I just wanted to make that point.

Senator SIEWERT: The point was made this morning about the link between FTB and child care. I think you might have been in the room when we were discussing it again.

Ms Crowe : It happened before we were here.

Senator SIEWERT: We definitely had a conversation about it before you got here this morning about that link, and concerns were raised about that. You can get childcare benefits.

Ms Crowe : Yes.

Senator SIEWERT: You can have access to child care, but you don't get FTB, which of course makes it extremely difficult then to be able to pay for your child care.

Ms Crowe : Absolutely.

ACTING CHAIR: Just a query from me: at a time when we, the government, are tightening the eligibility requirements around income support for Australians that have been here for a long period of time, do you think people in receipt of those income support benefits would consider it fair that the government consider at the same time tightening eligibility requirements for others?

Ms Crowe : It was indicated earlier that most people are probably unaware that there is a two-year waiting period for key social security payments already. I don't think extending it out to three years would have any bearing on their views of whether it is fair or otherwise. We all very well know that our social security system is the most targeted in the OECD. We have as a general principle opposed the further tightening of social security payments, whether it be for people who were born here or people who have migrated here. That would be my view.

Ms Ho : I think too there are many factors that influence public perception about social security and where it should be targeted. It is incumbent on all of us to ensure that those perceptions are shaped by evidence. We are all presenting evidence here today about not only the impact on vulnerable people but the contribution that migrants make. We both sat on the plane today and looked over someone's shoulder to see the headline about the billions of dollars coming in the next five years as a result of the taxes—

ACTING CHAIR: We've heard that mentioned a couple of times today. I actually don't think that is in dispute. What is critical about that report is that it points the finger at whether or not infrastructure has been able to keep up with population growth. I think that is the pointy edge of the debate, not whether or not migrants make an economic and cultural contribution to our country. I don't think that's in dispute. I hope it's not in dispute. And I don't think anyone here would dispute that. To be fair, I think the really interesting point about that report that was reported in The Australian and the Fairfax press and other things is the pressure it puts on infrastructure and what more governments can be doing to make sure that those infrastructure needs are keeping pace with the economic benefit that comes from migration. Sorry to interrupt you, Ms Ho. I've heard a lot today—

Ms Ho : That's all right. The point that we took was that they pay much more in taxes than they cost in services.

Ms Crowe : It counters the narrative that this bill is putting across that people are coming here and immediately accessing income support and don't have a desire to work, which is absolutely not the case.

ACTING CHAIR: Thank you very much.

Proceedings suspended from 12 : 19 to 13 : 21