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Monday, 7 September 2015
Page: 6133


Senator McGRATH (Queensland) (19:35): It gives me great pleasure to rise this evening to talk on the Social Services Legislation Amendment (No. 2) Bill 2015. This bill will introduce three measures into the Social Services portfolio. In the first measure the bill will amend the social security law to streamline the current income management program under a two-year continuation. Income management and the BasicsCard will continue for two additional years to maintain support for existing income management participants. The income management element of the Cape York Welfare Reform will also continue for two additional years to June 2017 in line with the rest of the income management streamlining measures.

The streamlining amendments made by this bill will enable more effective operation of the income management program; for example, certain incentive payments relating to income management will be abolished, the operation of the vulnerable measure of income management will be refined, and minor amendments will be made to remove ambiguities and improve the program's effectiveness. These amendments were previously intended to commence in July of this year; however, they will now generally commence on the day after royal assent. Savings provisions will allow qualifying periods for the incentive payments to continue to accrue until late 2015.

The bill also makes amendments to reflect two measures relating to aged care which were included in the 2014-15 Mid-Year Economic and Fiscal Outlook announcement. The bill will formalise ceasing payment of residential care subsidy to residential aged care providers for holding a place for up to seven days before a care recipient enters care. The savings associated with this measure, as stated in the explanatory memorandum, have largely been realised through amendments to the Aged Care (Subsidy, Fees and Payments) Determination 2014 and the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014. However, the bill will ensure that the subsidy appropriately continues to be targeted to people actually receiving care.

Lastly, the bill will reflect the government's decision to abolish the Aged Care Planning Advisory Committees as part of the Smaller Government initiative. The Aged Care Planning Advisory Committees' role was to provide advice in relation to the distribution of aged care places. However, the last of these committees expired in September 2014. These amendments repeal the now-redundant relevant provisions of the Aged Care Act 1997.

I would like to focus on the three schedules within this particular bill. The first relates to the income management regime. Income management and the BasicsCard will continue for two additional years to maintain support for existing income management participants. The amendments in schedule 1 will make a number of changes to streamline the income management program to enable more effective operation of the program. This schedule: provides for the abolition of certain incentive payments relating to income management; amends the operation of the vulnerable measure of income management; and makes minor amendments streamlining the operation of income management, removing ambiguities and providing for more effective operation of the program. The financial impact statement of the explanatory memorandum for this bill shows the financial impact over the forward estimates to be just over $144 million for this measure. The amendments made by the schedule generally commence after royal assent.

To ensure that vulnerable people benefitting from income management continue to receive support, the government has committed this $146 million to extend a streamlined version of income management to all existing locations until June 2017. This will align end dates across all 12 locations across Australia. The alignment extends to the income management element of Cape York Welfare Reform, which will also continue until the end of June 2017. This will enable income management to continue to provide additional support in disadvantaged locations for vulnerable people, children and families. The government is uniquely positioned, through the provision of welfare and family payments, to use income management to support vulnerable families by assisting them to stabilise and take control of their financial circumstances. This funding also included a limited expansion to new locations which may need additional support and would benefit from the income management program.

In response to a request from the South Australian Premier in the wake of the Chloe Valentine tragedy, in August 2015, Minister Morrison announced that the child protection and voluntary measures of income management will be introduced to the Greater Adelaide region from October of this year. This bill will streamline the program while ensuring continued support to people who benefit from income management. Streamlining includes the removal of social worker assessed referrals through the vulnerable welfare recipient measure, as this was an underutilised tool by social workers and highly resource intensive. The removal of this will also allow social workers to better service their vulnerable clients.

While participants remain able to adjust how they use their funds to meet priority needs at any time, they will no longer be required to discuss these arrangements with Centrelink every eight weeks. The phased removal of the matched savings payment, which offers people on compulsory measures up to $500 in matched savings if they complete an approved money management course and have demonstrated an appropriate savings pattern over a 13-week period, will cease from December 2015 as they were largely undersubscribed and costly to administer. The phased removal of the voluntary incentive payments, which offer individuals a payment of $250 for every continuous period of 26 weeks will cease on 28 December 2015, as evaluations have shown that incentive payments are not the main driver for people commencing income management and that they can create a dependency on the program. The BasicsCard Merchants approval framework will also undergo administrative and policy changes that will simplify the model, improve the customer experience and remove unnecessary customer contact. The streamlining arrangements will achieve a saving of approximately $36 million over two years.

In relation to the second schedule, which is 'ceasing residential care subsidy for pre-entry leave', this measure ceases the payment of residential care subsidy for care recipients during a period of leave taken before entering a residential care service. It also makes consequential amendments to fee and leave provisions. Under the Aged Care Act 1997, providers are paid the residential care subsidy for the care they provide to care recipients. The residential care subsidy is also paid when care recipients are on leave—usually, at a reduced rate.

To facilitate the entry of care recipients into residential care, a care recipient may take leave for up to seven days before entry, as outlined in section 42-3(3) of the Aged Care Act. This is referred to as 'pre-entry leave'. During this period, the residential care service reserves the care recipient's place, but the care recipient does not receive care. Currently, subsidy for the pre-entry period is paid to providers at the rate of 30 per cent of the full residential care subsidy that will be payable once the care recipient enters care. The government will no longer pay the residential care subsidy or supplements during this period. The amendments made by this schedule commence on the day after royal assent.

These amendments effectively formalise the ceasing of payment of residential care subsidy to residential aged-care providers for holding a place open for a care recipient. These changes better target aged-care expenditure by only paying care subsidies on behalf of people who have actually entered permanent residential care. The savings associated with this measure, as stated in the explanatory memorandum, have largely been realised through amendments to the Aged Care (Subsidy, Fees and Payments) Determination 2014 and the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014. The amendments in the bill formalise these changes in the principal act. Previously, subsidy for the pre-entry period was paid to providers for up to seven days at the rate of 30 per cent of the full residential care subsidy that will be payable once the care recipient enters care.

Care recipients will still be able to take pre-entry leave prior to entering an aged-care service. The provider will not be able to recoup any lost residential care subsidy from the care recipient. However, the aged-care provider will still be able to charge the care recipient the standard resident contribution for the pre-entry period. Previously, any days taken as pre-entry leave were counted as part of the care recipient's entitlement to 52 days of social leave from the aged-care service. Under these amendments, the 52-day cap on social leave will not include any leave that was taken as pre-entry leave. This ensures any pre-entry leave taken by a care recipient does not negatively impact on their ability to take other forms of leave from the residential care service. The impact of lost pre-entry leave payment revenue should be considered in the context of other recent aged-care changes, such as the redirection of the former government's workforce supplement into the general pool of aged-care funding and the introduction of a higher level of accommodation supplement. The government is expected to provide $11 billion for residential care subsidies in 2015-16.

Schedule 3 of this bill removes the provisions that allow for the establishment of aged-care planning advisory committees. Aged-care planning advisory committees were established in all states and territories. Their role, when called upon, was to advise the department on the most appropriate distribution of new aged-care places across aged-care planning regions. The last appointments to the various committees expired in September 2014. The amendments made by this schedule commence this year. In December 2014, as part of the 2014-15 Mid-Year Economic and Fiscal Outlook, the government announced that aged-care planning advisory committees would be abolished, with ongoing functions to be performed by the Department of Social Services. This forms part of the third phase of the Smaller Government reforms, which reduce the size and complexity of government, streamline services and reduce the cost of government administration. These amendments repeal the now redundant relevant provisions in the Aged Care Act 1997. The government remains committed to engaging with stakeholders and obtaining local intelligence as part of the needs-based planning framework. Consequently, the department has consulted with a broad range of aged-care stakeholders to help inform the distribution of aged-care places in relation to the 2015 aged-care approvals round, which was announced in August 2015.

I would now like to look at the committee's views in relation to this bill. The Senate Community Affairs Legislation Committee tabled its report on the bill on 15 June 2015. The committee, chaired by Senator Zed Seselja, did not recommend any changes to the bill. There was only one recommendation—that the bill be passed.

I think it is important to place on record the views of committee as outlined in the following paragraphs of its report:

2.26 The committee acknowledges concerns raised by submitters about extending compulsory income management for a further two years. However, the committee notes income management programs have been in place since 2007 and have assisted around 25,000 Australians. The committee is satisfied the proposed changes, together with the government's additional investment in financial wellbeing, will deliver more streamlined and cost-effective income management programs.

2.27 The committee also acknowledges the concerns raised about removing incentive payments for people entering voluntary income management. The committee supports measures to assist people seeking to better manage their incomes, but accepts the existing measures are administratively inefficient and that these funds are better directed at initiatives to improve financial management skills.

2.28 The committee further acknowledges the concerns raised about changes to the process for determining classes of vulnerable persons, particularly the possibility that objective criteria may cause people to enter income management programs when their particular circumstances may not warrant this. The committee accepts that the existing case-by-case process is under-utilised and administratively burdensome. Moreover, the committee is satisfied that by requiring the Minister to determine classes by legislative instrument, the Parliament will have opportunity to ensure the criteria are appropriate and retain adequate flexibility.

In summing up, this bill does introduce three quite sensible measures into the social services portfolio. In the first measure, the bill will amend the social security law to streamline the current income management program under a two-year continuation. Income management and the BasicsCard will continue for two additional years to maintain support for existing income management participants. The income management element of the Cape York welfare reform will also continue for two additional years to 30 June 2017 in line with the rest of the income management streamlining measures.

The streamlining amendments made by this bill will enable more effective operation of the income management program. For example, certain incentive payments relating to income management will be abolished, the operation of the vulnerable measure of income management will be refined, and minor amendments will be made to remove ambiguities and improve the program's effectiveness.

These amendments were previously intended to commence generally on 1 July 2015. However, they will now generally commence on the day after royal assent. Savings provisions will allow qualifying periods for the incentive payments to continue to accrue until late 2015.

The bill also makes amendments to reflect two measures relating to aged care which were included in the 2014-15 Mid-Year Economic and Fiscal Outlook announcement. The bill will formalise ceasing payment of residential care subsidy to residential aged-care providers for holding a place for up to seven days before a care recipient enters care. The savings associated with this measure, as stated in the explanatory memorandum, have largely been realised through amendments to the Aged Care (Subsidy, Fees and Payments) Determination 2014 and the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014. However, the bill will ensure that the subsidy appropriately continues to be targeted to people actually receiving care.

Lastly, the bill will reflect the government's decision to abolish the Aged Care Planning Advisory Committees as part of the Smaller Government initiative. The Aged Care Planning Advisory Committees' role was to provide advice in relation to the distribution of aged-care places. However, the last of these committees expired in September 2014. These amendments repeal the now redundant— (Time expired)