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Thursday, 26 May 2011
Page: 4774

Mr GARRETT (Kingsford SmithMinister for School Education, Early Childhood and Youth) (09:29): I move:

That this bill be now read a second time.

The government's Social Security Amendment (Parenting Payment Transitional Arrangement) Bill 2011 represents the first stage of the income support payment reforms contained in the Building Australia's Future Workforce package. This package will provide greater incentives for parents to engage in the workforce, reduce their dependency on welfare and will provide families with a greater measure of financial security.

Joblessness among families represents one of the most immediate challenges facing Australia as an inclusive society. In a time of increasing national wealth, many Australian families risk being left behind and many Australian children are in danger of missing out on the opportunities that a dynamic and growing society has to offer.

Evidence indicates that joblessness is closely linked with higher rates of poverty, lower achievement in education and training, and poorer health outcomes for both parents and their children. Families in which neither parent works, or in which single parents rely on welfare payments as their sole source of income, can produce entrenched problems leading to intergenerational disadvantage. This is especially a concern for single parent families, who constitute 70 per cent of the total number of jobless families in Australia.

In order to break the cycle of joblessness and welfare dependence, the government is enacting a range of measures to help parents address the barriers which prevent them and their children from taking advantage of the opportunities which Australian society has to offer.

To this end, the government is introducing changes to parenting payment and Newstart allowance for single principal carer parents that will provide greater incentive for single parents to engage in paid work, to reduce their reliance on welfare and to promote self-sufficiency. This will in turn serve to provide positive role models for the children of income support recipients and help reduce the chance of welfare dependence passing onto their children.

Under the Building Australia's Future Workforce reforms, single principal carer parents on Newstart allowance will be able to retain more of their income support as their employment income rises. This will mean that single-parent families will be able to earn almost $400 extra per fortnight before they lose eligibility for Newstart allowance. This provides a strong incentive for single parents to undertake or increase their hours of work, and allows their family to see the immediate benefit of their labour.

These changes further build upon the government's more flexible participation requirements for parents reforms that were introduced in July 2010 which allowed parents greater flexibility in engaging in meaningful participation whilst balancing their parenting responsibilities.

As part of the broader changes to parenting payment, in this bill the government is taking a positive step towards reducing the inequity that exists between different parenting payment recipients based upon when they first applied for payment. This inequity is a legacy of the 2006 Welfare to Work reforms of a previous government.

In July 2006, the parenting payment provisions in the Social Security Act were amended such that a person who claims parenting payment from 1 July 2006 can only qualify for parenting payment until their youngest child turned eight (if they are single) or six (if they are a member of a couple). Prior to July 2006, a person could qualify for parenting payment until their youngest dependent child turned 16.

However, people who were in receipt of parenting payment immediately before 1 July 2006 were allowed to remain under the previous rules. These 'grandfathered' recipients can continue to qualify for parenting payment until their youngest child turns 16. A full eight years longer than new recipients if they are single or 10 years longer if they are partnered.

In order to achieve more equitable and consistent eligibility rules for parenting payment, this bill will amend the Social Security Act so that only children who were born to or came into the principal care of their parent before 1 July 2011 will count towards the grandfathered status of the parenting payment recipient.

This change will limit the ability of parenting payment recipients to extend their grandfathered status and will ensure that all parenting payment recipients will be treated equally in a shorter time frame than would otherwise have been the case.

This bill is just the first step towards creating more equitable treatment for parenting payment recipients. Further changes will take effect from 1 January 2013 and will be included in a separate bill which will be introduced later this year.

Overall, these changes will form an important element of the income support reforms that the government is undertaking as part of the Building Australia's Future Workforce package. These reforms will encourage more parents to participate in and share in the benefits of paid work, will provide better support and assistance to parents, and are an important step to making the system fairer. I commend the bill to the House.

Debate adjourned.