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Community Affairs Legislation Committee—Senate Standing—Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 [Provisions]—Report, dated November 2020


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November 2020

The Senate

Community Affairs Legislation Committee

Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 [Provisions]

© Commonwealth of Australia 2020

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iii

Committee Members

Chair Senator Wendy Askew LP, TAS

Deputy Chair Senator Rachel Siewert AG, WA

Members Senator Malarndirri McCarthy ALP, NT

Senator Andrew McLachlan CSC LP, SA

Senator Helen Polley ALP, TAS

Senator Dean Smith LP, WA

Secretariat Apolline Kohen, Acting Committee Secretary Sarah McFadden, Principal Research Officer Sarah Batts, Senior Research Officer Lorraine Watson, Research Officer Carol Stewart, Administrative Officer

PO Box 6100 Parliament House Canberra ACT 2600 Phone: 02 6277 3515 Fax: 02 6277 5829 E-mail: community.affairs.sen@aph.gov.au Internet: www.aph.gov.au/senate_ca

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Table of Contents

Committee Members ........................................................................................................................ iii

List of Recommendations ............................................................................................................... vii

Chapter 1—Overview ......................................................................................................................... 1

Purpose of the bill ................................................................................................................................ 1

Background ........................................................................................................................................... 1

Key provisions of the bill .................................................................................................................... 2

Financial implications .......................................................................................................................... 4

Legislative scrutiny .............................................................................................................................. 4

Conduct of the inquiry ........................................................................................................................ 4

Submissions .......................................................................................................................................... 5

Witnesses ............................................................................................................................................... 5

Acknowledgement ............................................................................................................................... 5

Note on references ............................................................................................................................... 5

Chapter 2—Key issues........................................................................................................................ 7

Extension of the coronavirus supplement ....................................................................................... 7

Proposed reduction of the coronavirus supplement ........................................................... 8

End date for the coronavirus supplement ............................................................................. 9

Liquid assets test waiting period .................................................................................................... 10

Other matters raised .......................................................................................................................... 11

Committee view ................................................................................................................................. 12

Labor Senators' Additional Comments ......................................................................................... 15

Australian Greens' Dissenting Report .......................................................................................... 19

Appendix 1—Submissions and additional information ........................................................... 23

Appendix 2—Public hearings ......................................................................................................... 25

vii

List of Recommendations

Recommendation 1

2.38 The committee recommends that the bill be passed.

1

Chapter 1 Overview

Purpose of the bill 1.1 The Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 (bill) seeks to amend the Social Security Act 1991 (Social Security Act), the Farm Household Support Act 2014, and the

Veterans’ Entitlements Act, in order to extend temporary financial support, including the coronavirus supplement and other temporary eligibility and access measures, until 31 March 2021.1

Background 1.2 Following the declaration of a human biosecurity emergency related to the spread of COVID-19 in Australia,2 the Coronavirus Economic Response Package Omnibus Act 2020 (Act) was introduced. A significant element of the Australian

Government’s COVID-19 response package, this Act provided for a number of changes to the Social Security Act, including the creation of a coronavirus supplement, the listing of new qualification categories for Youth Allowance and JobSeeker Payment, and waiving of the liquid assets test waiting periods and assets tests.3

1.3 As noted above, the Act amended the Social Security Act to make recipients of certain social security payments eligible for a temporary coronavirus supplement; which initially applied from 27 April 2020 to 24 September 2020. The rate of the coronavirus supplement was set at $550 per fortnight.4

1.4 The Act also provided the Minister the power to make disallowable legislative instruments extending eligibility for the coronavirus supplement up to 3 months at a time, at a rate specified in a legislative instrument.5 The Social Security (Coronavirus Economic Response — 2020 Measures No. 14)

1 Schedule 1, Social Services and Other Legislation Amendment (Extension of Coronavirus Support)

Bill 2020 (bill).

2 Biosecurity (Human Biosecurity Emergency) (Human Coronavirus with Pandemic Potential)

Declaration 2020 [F2020L00266] (accessed 16 November 2020).

3 Coronavirus Economic Response Package Omnibus Act 2020 [C2020C00139] (accessed

16 November 2020).

4 Section 12, Schedule 11, Coronavirus Economic Response Package Omnibus Act 2020 [C2020C00139]

(accessed 16 November 2020).

5 Item 40A, Coronavirus Economic Response Package Omnibus Act 2020 [C2020C00139] (accessed

16 November 2020).

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Determination 2020, registered on 30 August 2020, extended the coronavirus supplement to 18 December 2020 at the rate of $250 per fortnight.6

1.5 The Explanatory Memorandum (EM) to the bill notes that a new legislative instrument will be made under existing legislation to ensure the payment of the coronavirus supplement at a rate of $250 per fortnight for social security instalment periods that begin during the period 19 December 2020 to 31 December 2020.7

1.6 In a joint media release with the Prime Minister, Senator Anne Ruston, Minister for Families and Social Services, announced on 10 November 2020 that the coronavirus supplement would continue from 31 December 2020 to 31 March 2021, at the reduced rate of $150 per fortnight.8

1.7 Further to the extension of the temporary coronavirus supplement provided for in the bill, the Australian Government has announced numerous other measures as part of its COVID-19 response package. These measures include:

 two further $250 economic support payments for recipients of the Age Pension, Disability Support Pension, Carer Payment and other payment recipients;

 additional funding for domestic and family violence support;  $25 million over four years from 2020-21 to temporarily revise the independence test for those applying for youth allowance;  $231 million over four years from 2020-21 for the Second Women’s

Economic Security Package, as part of the JobMaker Plan; and  $108 million over two years from 2020-21 to provide 10 additional psychological therapy sessions and increase access to mental health care.9

Key provisions of the bill 1.8 The bill contains one schedule set out in six parts.

1.9 Part 1 allows for the extension of the coronavirus supplement from 1 January 2021 to 31 March 2021. It also ensures the payment can be made available to all persons in receipt of Youth Allowance, whether because they are a student or otherwise. Part 1 also provides that the coronavirus supplement and the temporary exemptions from the ordinary waiting period,

6 Social Security (Coronavirus Economic Response—2020 Measures No. 14) Determination 2020

[F2020L01093] (accessed 16 November 2020).

7 Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020,

Explanatory memorandum, (Explanatory memorandum), p. 4.

8 Department of Social Services, Minister for the Department of Social Services, Senator the Hon

Anne Ruston, Media Releases, JobSeeker Supplement extended to March, 10 November 2020 (accessed 16 November 2020).

9 Budget 2020-21, Budget Paper No. 2, pp. 25-169.

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newly arrived resident’s waiting period and seasonal work preclusion period, cannot be extended beyond 31 March 2021.

1.10 Part 2 extends the temporary COVID-19 qualification rules for JobSeeker Payment and Youth Allowance from 1 January 2021 to 31 March 2021.

1.11 Part 3 permanently ends the temporary COVID-19 exemptions from the liquid assets test waiting period and assets tests from 1 January 2021.

1.12 Part 4 allows certain specified provisions of the social security law to be temporarily modified by the Minister by disallowable legislative instrument. This power is time limited to 31 March 2021.

1.13 Part 5 introduces a discretionary power under the social security and veterans’ entitlements assets tests to extend the principal home temporary absence provisions where a person, for reasons beyond their control, cannot return to Australia within the allowable absence period.

1.14 Part 6 permits JobKeeper information provided to Services Australia on or before 28 March 2021 to continue to be used after that date.10

1.15 As outlined in the second reading speech by the Hon Alan Tudge MP, Minister for Population, Cities and Urban Infrastructure, the government has already announced that through the extension of the instrument-making powers in Part 1 of the Bill, the new instrument-making provisions set out in Part 4 of the bill, and along with other existing powers, a number of new measures will be introduced, including:

 extension of payment of the coronavirus supplement for an additional three months at a rate of $150 per fortnight;  extending changes to the personal income test for recipients of JobSeeker payment (excluding single principal carer recipients) and youth allowance

(other) to provide a $300 income-free area and a 60c taper;  extending changes to the partner income test for JobSeeker payment recipients to taper at 27c in the dollar for income earned above the partner

income-free area;  extending expanded eligibility criteria for JobSeeker payment and youth allowance (other) to allow sole traders, the self-employed and permanent

employees who have been stood down by their employers, people self-isolating because they or someone they are caring for is required to continue to be eligible for payment;  extending the waiver of the ordinary waiting period, seasonal work preclusion period and newly arrived resident's waiting period;  extending until 16 April 2021 the period in which income support recipients can maintain eligibility for payment and retain their concession card while receiving a nil rate of payment due to employment income; and

10 Explanatory memorandum, p. 1.

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 extending other minor policy changes, such as pension portability arrangements, currently implemented by legislative instruments under item 40A of schedule 11 to the Coronavirus Economic Response Package Omnibus Act 2020.11

Financial implications 1.16 The EM notes that, through the instrument making powers set out in Parts 1 and 4 of the bill, the new measures will be delivered at a cost of $3.2 billion to 2024-25.12

Legislative scrutiny 1.17 The Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights had not reported on their consideration of the bill at the time this report was prepared.

1.18 The bill's statement of compatibility (SoC) with human rights noted that the bill engages the following rights:

 the right of everyone to social security in Article 9, and the right of everyone to an adequate standard of living for an individual and their family, and the continuous improvement in living conditions in Article 11 of the International Covenant on Economic, Social and Cultural Rights;

 the rights of the child in Article 26 of the Convention on the Rights of the Child; and  the right to privacy in Article 17 of the International Covenant on Civil and Political Rights (ICCPR).13

1.19 The SoC notes that the right to privacy is limited by the bill, through the continued use of JobKeeper information obtained by Services Australia from the Australian Taxation Office (ATO), as allowed for in Part 6 of the bill. The SoC noted that this limitation of the right to privacy is 'reasonable, necessary and proportionate as a public benefit will flow from the use of this information'.14

Conduct of the inquiry 1.20 The bill was introduced into the House of Representatives on 12 November 2020. Pursuant to the adoption of the Senate Standing Committee for the Selection of Bills report on 12 November 2020, the bill was

11 The Hon Alan Tudge MP, Minister for Population, Cities and Urban Infrastructure, House of

Representatives Hansard, 12 November 2020, pp. 5-6.

12 Explanatory memorandum, p. 1.

13 Explanatory memorandum, p. 15.

14 Explanatory memorandum, p. 16.

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referred to the Community Affairs Legislation Committee (committee) for inquiry and report by 27 November 2020.15

Submissions 1.21 The committee wrote to relevant organisations inviting them to make a submission to the inquiry by 19 November 2020. Submissions continued to be accepted after this date.

1.22 The committee received 35 public submissions which are published on the committee's website. A list of submissions received is included at Appendix 1.

Witnesses 1.23 A public hearing for the inquiry was held in Canberra on 25 November 2020.

1.24 The committee heard evidence from a range of organisations, peak bodies and academics. A list of witnesses is included at Appendix 2.

Acknowledgement 1.25 The committee would like to thank those individuals and organisations that made submissions and gave evidence at the public hearing.

Note on references 1.26 References to the Committee Hansard are to the proof Hansard. Page numbers may vary between the proof and official Hansard transcripts.

15 Journals of the Senate, No. 73, 12 November 2020, pp. 2563-2565.

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Chapter 2 Key issues

2.1 The Australian welfare system operates as a safety net within the context of government social and economic policy, which is designed to encourage growth and create jobs. The highly targeted income support system is to support individuals who are unable to support themselves through work, savings or other means.1

2.2 Since the beginning of the COVID-19 pandemic in March 2020 the Australian government has introduced a series of temporary measures aimed at supporting individuals, families, businesses and the economy. Among these measures are significant extra financial supports for those individuals in receipt of income support payments.

2.3 The Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 (bill) seeks to extend this temporary financial support through the coronavirus supplement and other temporary eligibility and access measures for an additional three months to 31 March 2021.

2.4 The committee received evidence from a range of organisations. The views expressed centred on the extension of the coronavirus supplement and the liquid assets test waiting period.

Extension of the coronavirus supplement 2.5 As noted in chapter 1, the bill allows for the extension of the coronavirus supplement from 1 January 2021 to 31 March 2021. This will be ensured by continuing the power for the Minister to extend the coronavirus supplement

by disallowable legislative instrument until 31 March 2021.2

2.6 The majority of submitters to the inquiry welcomed the introduction of the coronavirus supplement in April 2020; and noted the positive effects it had on individuals, families and communities.3

2.7 The Australian Council of Social Service (ACOSS) observed that the increase in income support in April 2020 hugely benefited everyone receiving these

1 Submission to inquiry into the adequacy of Newstart and related payments, Multi-agency

submission, Submission 80, p. 4.

2 Explanatory memorandum, p. 4.

3 See, for example, Anglicare Australia, Submission 1, p. 1; TasCOSS, Submission 2, p. 3; Financial

Counselling Victoria, Submission 3, p. 2; National Foundation for Australian Women, Submission 6, p. 2; QCOSS, Submission 10, pp. 1-2; Anti-Poverty Week, Submission 11, p. 1; Economic Justice Australia, Submission 18, p. 1; ACTCOSS, Submission 19, pp. 1-2; SACOSS, Submission 25, p. 2.

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payments, and particularly highlighted the extra support it provided to single parents and their children.4

2.8 The Salvation Army and Mission Australia both commented that their organisations witnessed a significant decrease in regular users of emergency relief services as the coronavirus supplement had enabled those individuals to afford to buy essential items including fresh food, as well as housing, health care, electricity bills, and other basic needs.5

2.9 More broadly, submitters noted the positive effect that the introduction of the coronavirus supplement had on communities and the economy.6

2.10 In particular, in their joint submission, Australia Together and Every Child commented that ‘as businesses closed and economies faltered, the income support system supported those without work and ensured that money continued to flow into communities and into the economy’.7

2.11 In light of the positive effects following the introduction of the coronavirus supplement for individuals, communities and the economy more broadly, submitters expressed that they were pleased the coronavirus supplement was due to continue.8

2.12 In particular, the AHRC noted its support of the measures outlined in the bill, as they ‘will go some way to alleviating financial hardship caused or exacerbated by the COVID-19 pandemic’.9

2.13 Whilst submitters noted that the extension of the coronavirus supplement to 31 March 2021 was a positive measure, submitters also expressed concerns that this measure was due to end and that the rate of the coronavirus supplement was due to be extended at a new rate of $150 per fortnight. These points are addressed in the sections below.

Proposed reduction of the coronavirus supplement 2.14 Submitters raised concerns about the proposed reduction of the rate of the coronavirus supplement from $250 to $150 per fortnight from 1 January 2021.10

4 Australian Council of Social Service, Submission 16, p. 5.

5 The Salvation Army, Submission 5, p. 4; Mission Australia, Submission 22, p. 1.

6 See, for example, Australian Human Rights Commission, Submission 8, p. 2; Australia Together

and Every Child, Submission 28, p. 1; Jesuit Social Services, Submission 32, p. 2.

7 Australia Together and Every Child, Submission 28, p. 1.

8 See, for example, Financial Counselling Victoria, Submission 3, p. 1; Australian Council of Social

Service, Submission 16, p. 1; Jesuit Social Services, Submission 32, p. 3; NTCOSS, Submission 35, p. 4.

9 Australian Human Rights Commission, Submission 8, p. 1.

10 See for example, QCOSS, Submission 10, pp. 1-2; Ms Carmel Stafford, Submission 15, p. 1; SACOSS,

Submission 25, p. 3; Per Capita, Submission 34, p. 4.

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2.15 Just as submitters had noted the positive effects of the introduction of the coronavirus supplement, submitters commented on the possible effects of the reduction of the coronavirus supplement, notably that it would cause some recipients to fall below some measures of income poverty.11

2.16 Tomorrow Movement, a project of YOUNG Campaigns, Per Capita and Mission Australia each cited the effects that the proposed reduction would have on individuals.12 Tomorrow Movement highlighted:

This bill will push almost 2 million people back to trying to live on $51 a day at Christmas time and then back to the unlivable rate of $40 or $33 (for Youth Allowance) a day in April 2021. There is a wealth of evidence to show that basic expenses such as food, housing, transportation and healthcare are unaffordable on this rate.13

2.17 In their submissions to the inquiry, ARACY, Australia Together and Every Child, and the National Council for Single Mothers and their Children highlighted the detrimental effects of the proposed changes to the level of supplement on children and single parents.14

End date for the coronavirus supplement 2.18 Submitters also expressed concerns that the coronavirus supplement is due to end on 31 March 2021.15 Broadly, submitters considered that the effects of the COVID-19 pandemic were still being felt by individuals, communities and

businesses, and that more extended support would be beneficial.

2.19 In particular, Per Capita contended that ‘it is too early to withdraw the powers to make the provisions that have provided additional income support to people in receipt of unemployment benefits and related payments’.16 Per Capita further explained:

The COVID-19 economic shock has clearly demonstrated the primacy of economic, rather than social, conditions as the cause of unemployment. Australia’s economy has undergone a sharp and extraordinary contraction;

11 See, for example, Australian Council of Social Service, Submission 16, p. 3; ACTCOSS, Submission

19, p. 2; GetUp!, Submission 20, p. 2; Dr Bruce Bradbury and Mr Peter Whiteford, Submission 21, pp. 2-3; National Council for Single Mothers and their Children, Submission 27, p. 2; Australia Together and Every Child, Submission 28, p. 3.

12 Tomorrow Movement, Submission 33, pp. 1-2; Per Capita, Submission 34, pp. 5-6; Mission

Australia, Submission 22, p. 2.

13 Tomorrow Movement, Submission 33, pp. 1-2.

14 ARACY, Submission 7; National Council for Single Mothers and their Children, Submission 27, p. 2.

Australia Together and Every Child, Submission 28.

15 See, for example, Canberra Community Law, Submission 4, p. 2; The Salvation Army, Submission 5,

p. 4; ARACY, Submission 7, p. 4; Australian Council of Social Service, Submission 16, p. 1.

16 Per Capita, Submission 34, p. 5.

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Australia’s economic recovery will require a similarly extraordinary intervention.17

2.20 Anglicare Australia highlighted that there are currently 1.6 million people looking for work and thirteen jobseekers for each vacancy, and that Anglicare Australia’s Jobs Availability Snapshot shows that there are 106 jobseekers for each entry-level vacancy. Anglicare Australia further noted that ‘unemployment is expected to reach a record high once wage subsidies come to an end’.18

2.21 Per Capita noted the government’s suggestion that the reduction of income support payments is necessary to provide an incentive for unemployed people to look for work.19 However, Per Capita, along with other participants in the inquiry argued that the current state of the economy and the lack of available jobs was a greater impediment to people moving off income support payments than the rate of those payments.20

2.22 In their joint submission to the inquiry, Dr Bruce Bradbury and Mr Peter Whiteford further noted their view that more people may become dependent on income support payments into 2021, likely leading to large adverse macro-economic effects.21

2.23 The Department of Social Services (DSS) noted that the extension of the temporary coronavirus supplement would allow the government to continue to provide targeted additional support to Australians impacted by the COVID-19 pandemic.22 DSS further clarified that ‘the measures enabled by the bill will support people as they re-engage with the workforce as labour market conditions improve and confidence increases’.23

Liquid assets test waiting period 2.24 As noted in chapter 1, Part 3 of the bill permanently ends the temporary COVID-19 exemptions from the liquid assets test waiting period from 1 January 2021. The liquid asset waiting period was reintroduced on

25 September 2020 and has been in place since then. Several submitters were

17 Per Capita, Submission 34, p. 5.

18 Anglicare Australia, Submission 1, p. 2.

19 Per Capita, Submission 34, p. 5.

20 Per Capita, Submission 34, p. 5; Anglicare Australia, Submission 1, p. 2; GetUp!, Submission 20, p. 3;

Dr Bruce Bradbury and Mr Peter Whiteford, Submission 21, p. 2; Australian Unemployed Workers’ Union, Submission 31, p. 3.

21 Dr Bruce Bradbury and Mr Peter Whiteford, Submission 21, pp. 3-4.

22 Department of Social Services, Submission 26, p. 3.

23 Department of Social Services, Submission 26, p. 1.

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not supportive of this proposal, and to the reverse, considered that the liquid asset test waiting period should be permanently waived.24

2.25 ACOSS noted its strong support of the suspension of the liquid assets test waiting period at the beginning of the COVID-19 pandemic; however expressed in its submission to the inquiry, that the re-instatement of the waiting periods would be detrimental to those individuals seeking income support:

ACOSS strongly opposes the return of these waiting periods, which only serve to deny people income support when they need it, and forces people to whittle away limited savings just to access support. Income support is means-tested and there is no reason to deny people with limited savings access to income support when they become unemployed.25

2.26 COTA Australia (COTA) noted the possible negative effects of the proposed re-introduction of waiting periods particularly for older Australians. COTA explained that the practical effect of the change proposed in the bill would be that older Australians who do have assets outside of their superannuation would be required to draw on those assets prior to being eligible to access income support, thereby reducing their retirement incomes.26

2.27 COTA pointed out that those unemployed mature age workers will be among the most vulnerable individuals in a recession.27

2.28 In its submission to the inquiry, DSS noted that the exemption to the liquid assets test waiting period was introduced in March 2020 as part of the broader initial economic response package when the extent of the impact of the pandemic was unknown. DSS also noted that the liquid assets test waiting period was reintroduced on 25 September 2020.

2.29 DSS further commented that this reintroduction ensures that income support is appropriately targeted as the economy recovers; reflecting the ‘long-standing principle in the social security system that people should rely on their own resources before calling on the community for assistance’.28

Other matters raised 2.30 Some submitters also raised broader issues related to the income support system, which are outside the scope of the bill and this inquiry, including:

24 See, for example, The Salvation Army, Submission 5, p. 6; COTA Australia, Submission 9, p. 1.

Australian Council of Social Service, Submission 16, p. 9; Per Capita, Submission 34, p. 21.

25 Australian Council of Social Service, Submission 16, p. 9.

26 COTA Australia, Submission 9, p. 1.

27 COTA Australia, Submission 9, p. 1.

28 Department of Social Services, Submission 26, p. 2.

12

 a call to extend the eligibility for income support to temporary visa holders as they have been adversely affected by the COVID-19 pandemic;29 and  the need for a permanent increase to the rate of the JobSeeker and related payments.30

Committee view 2.31 Australia’s highly targeted income support system is designed to support individuals who are unable to support themselves through work, savings or other means.

2.32 Throughout the COVID-19 pandemic, the government has assisted individuals, families, communities and businesses through the introduction of a wide range of temporary support measures. The extension of support provided for in this bill builds on the overall response package of $507 billion invested since the crisis began.

2.33 The targeted income assistance programs put in place by the government since the beginning of the pandemic will continue to ensure that support remains appropriate to the economic and health conditions. As such, this bill responds to the continuing uncertainty around economic conditions in Australia by allowing the government to extend temporary financial support, through the coronavirus supplement and other temporary eligibility and access measures.

2.34 The committee is of the view that the measures enabled by the bill will adequately support people as they re-engage with the workforce as labour market conditions improve and confidence increases.

2.35 The committee notes that the new power provided in Part 4 of the bill will provide the government with the flexibility to respond quickly to changes in economic conditions and health measures as the economy reopens and people return to work.

2.36 In relation to the liquid assets test waiting period and assets test for various social security payments, the committee notes that these exemptions were put in place rapidly as part of the initial package of Coronavirus Economic Response measures in March 2020, when the extent of the impact of the pandemic was unknown. The committee considers that their reintroduction, which has already occurred, reflects the long-standing principle in the social

29 See for example, ACTCOSS, Submission 19, pp. 4-5; SACOSS, Submission 25, p. 3; Tomorrow

Movement, Submission 33, p. 5.

30 See, for example, Anglicare Australia, Submission 1, pp. 3-4; Financial Counselling Victoria,

Submission 3, p. 4; Canberra Community Law, Submission 4, p. 3; National Foundation for Australian Women, Submission 6, p. 2; Ms Carmel Stafford, Submission 15, p. 1; Australian Council of Social Service, Submission 16, p. 1; GetUp!, Submission 20, p. 3; Save the Children, Submission 24, p. 2; Community and Public Sector Union, Submission 29, p. 2; Jesuit Social Services, Submission 32, p. 5.

13

security system that people should rely on their own resources before calling on the community for assistance.

2.37 Finally, the committee considers that the provisions of the bill will further support Australians during the COVID-19 pandemic, with the flexibility to adapt to new circumstances as the country transitions to a post-COVID economy. Importantly, this bill is part of a broader suite of measures aimed at ensuring Australians are supported to engage with the workforce.

Recommendation 1

2.38 The committee recommends that the bill be passed.

Senator Wendy Askew Chair

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Labor Senators' Additional Comments

1.1 This Bill will cut unemployment payments back down to the old Newstart rate from 31 March 2021.

1.2 It is a missed opportunity for the government to deliver a permanent increase to the rate of JobSeeker Payment.

1.3 Labor Senators concur with the extensive evidence supporting a permanent increase in the rate of unemployment support. It would be the right thing for the government to do. It would help lift the most vulnerable people out of poverty, provide economic stimulus and support jobs.

1.4 The need for a permanent increase to the base rate of unemployment support has been thoroughly examined by this committee, including through the inquiry into the Adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia, which reported earlier this year.

1.5 At the hearing into this bill, Professor Whiteford summarised the current situation:

…it is well recognised, including by previous Senate inquiries, that the rate of Newstart—as it was; now JobSeeker—is inadequate and has been realised as inadequate for a long period of time. I think the appropriate thing is not to maintain the supplement but to go for a permanent increase to make it more adequate.1

1.6 Labor Senators have heard extensive evidence - in the context of this committee and directly from the community - about the positive impact of increased unemployment payments, since the Coronavirus Supplement was introduced.

1.7 Ms Stary, from Financial Counselling Victoria summarised the difference increased payment have made to the lives of those Australians under the greatest financial pressure:

I just want to highlight this: since the terrible impacts of coronavirus, we have seen the federal government's response with the coronavirus supplement, which has made a very positive impact to people that we work with. We have seen people able to pay for housing, electricity and gas; turn on heating during winter; pay for their water, telephone and internet bills; pay for medications; eat enough healthy food; pay for children's school activities; buy clothing and shoes for themselves and their kids; participate in activities; and even address outstanding debt. We have seen women able to re-establish their lives after leaving family violence

1 Professor Peter Whiteford, Committee Hansard, 25 November 2020, p. 18.

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with reduced anxiety as well as recover and regain confidence in establishing themselves into pathways of employment.2

1.8 Mr Coonan from the Australian Unemployed Workers’ Union highlighted the impact on people’s mental health and questioned the government’s proposal, in this bill, to revert back to the old Newstart rate of payment in March 2021:

In response to the Productivity Commission's report on mental health, the Prime Minister acknowledged that financial hardship contributes to anxiety and depression, which people on unemployment payments experience at three times the rate of the wider community. Prime Minister, why is there such a gap between your words and actions?3

1.9 On 31 March 2021, this bill proposes to end the additional social security support put in place in the context of the Coronavirus pandemic. This includes:

 ending the Minister’s ability to continue paying the Coronavirus Supplement;  reinstating the Newly Arrived Residents Waiting Period;  reverting to the old Income Free Area, so people will start losing their

payment sooner if they get part time or casual work; and  suddenly ending the changes to the Partner Income Test, which have helped families where one person has lost their job.

1.10 Labor Senators note that without the passage of this bill, the Minister would retain the ability to indefinitely extend the Coronavirus Supplement (except for recipients of Youth Allowance - Student). However, the Minister’s power to make beneficial changes, including to the Income Free Area and Partner Income Test, would lapse after 31 December 2020.

1.11 Labor Senators are of the view that the government should not be ending the Minister’s ability to provide additional Coronavirus support, without at least legislating for a permanent increase to the base rate of unemployment payments. Particularly as evidence provided to this committee at Senate Estimates indicated that 1.8 million people would be relying on unemployment payments at Christmas, more than double the number before the pandemic. At Senate Estimates, the Department of Social Services also indicated that the number of people relying on unemployment payments is expected to remain above pre-Coronavirus levels across the entire forward estimates.

2 Ms Elizabeth Stary, Centrelink Working Group Convenor, Financial Counselling Victoria Inc.,

Committee Hansard, 25 November 2020, p. 10.

3 Mr Jaiden Coonan, Policy Officer, Australian Unemployed Workers’ Union, Committee Hansard,

25 November 2020, p. 8.

17

1.12 Labor Senators share the concerns of Ms Chambers from Anglicare Australia that the timing of the changes in this bill will be particularly difficult for many Australians:

In Senate estimates a few weeks ago, we heard officials from the Department of Social Services talk about the kinds of numbers that they were expecting to see unemployed in April. They were predicting an increase from what we're seeing today. So, as to pulling these benefits back, we are arguing—I do need to be clear about this—for a permanent increase. In the meantime, it is clearly not the time to be pulling this back.

And not only that, but, as to the timing and the actual date that we're looking at this decrease coming in, we know, from decades of data, that, in emergency relief and in financial counselling services, January is always the peak for those services. It is an expensive time of year for families. There's preparation for the school year. There are increased costs in cooling their dwellings, especially in the last couple of summers we've had. There are Christmas peaks. There are all those kinds of things. So, even down to the month and the day, it is not the right time.4

1.13 COTA Australia indicated to the Committee that they supported a permanent increase to unemployment payments and were very concerned about the government’s decision to re-introduce the Liquid Assets Waiting Period - as well as the government’s proposal to increase the Liquid Asset Waiting Period to 26 weeks. Mr Irlam, from COTA, told the committee:

We are terribly concerned that, when JobKeeper ceases in March, we will see, as we have through every other economic downturn period, greater numbers of older workers being retrenched. These people will be forced onto JobSeeker.5

1.14 Professor Borland also told the Committee that the government’s response to Coronavirus has been a test-case for the interaction of payment rates and the labour market:

Even before COVID, I would have thought, as many others have expressed, that there were strong arguments for making a permanent increase in the Newstart, now JobSeeker, payment. As I explained in answer to your first question, what COVID has done is give us a stronger evidentiary base for thinking that you could make that permanent increase without having significant adverse effects on the incentives to find work. 6

1.15 Professor Borland summarised his analysis of the impact of the Coronavirus Supplement on the labour market as follows:

4 Ms Kasy Chambers, Executive Director, Anglicare Australia, Committee Hansard, 25 November

2020, p. 4.

5 Mr Corey Irlam, Deputy Chief Executive, COTA Australia, Committee Hansard, 25 November 2020,

p. 4.

6 Professor Jeff Borland, Committee Hansard, 25 November 2020, p. 18.

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That research has a couple of main findings. One is that you could have a substantial increase in JobSeeker without adversely affecting incentives to take up paid work. Secondly, with the COVID-19 supplement to JobSeeker, we have had, in 2020, an experiment, if you like, on what the effect on incentives to find work would be of a higher rate of JobSeeker, and my evaluation of the evidence is that there is no evidence that the higher level of JobSeeker during 2020, with the COVID-19 supplement, has had any appreciable effect on incentives to take up paid work for the people who are receiving JobSeeker.7

1.16 The broader economic impacts of this bill were also emphasised by Mr Zahra of the Australian Retailers Association:

Social security recipients spend an estimated 58 per cent of their payments on retail goods or services at supermarkets, convenience stores, pharmacies, essential merchandise stores and other local small businesses…

It is projected that the scheduled end of the JobSeeker payment will take the equivalent of $8½ billion per year from the retail sector. The equivalent of 130,000 Australian retail jobs are also on the line if we return the rate of the JobSeeker payment to its old base rate.8

Conclusion 1.17 Labor Senators are deeply concerned that this bill - which cuts the rate of unemployment payments back to pre-pandemic levels - is a missed opportunity to lift people out of poverty, support the economy and protect

local jobs.

1.18 Noting that increased expenditure can effectively only be proposed by the government in the House of Representatives, Labor Senators call on the government to amend the bill to:

1.19 deliver a permanent increase to the base rate of unemployment support; and

1.20 ensure continued beneficial support for people impacted by the Coronavirus pandemic and the recession.

Senator Malarndirri McCarthy

Senator Helen Polley

7 Professor Jeff Borland, Committee Hansard, 25 November 2020, p. 16.

8 Mr Paul Zahra, Chief Executive Officer, Australian Retailers Association, Committee Hansard,

25 November 2020, pp. 21-22.

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Australian Greens' Dissenting Report

This payment has been like lighting a dark room full of promise and wonder, only to turn the light out because the committee has the power to do so. Please ask the committee to leave the light on for us all.1

1.1 This Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 (bill) further cuts the coronavirus supplement from $250 a fortnight to $150 a fortnight from 1 January 2021.

1.2 The Australian Greens reject the majority committee view that this bill will adequately support people as they re-engage with the workforce. The overwhelming evidence received by the committee clearly demonstrates this bill will cause harm by further cutting the rate of the coronavirus supplement and dropping people on income support payments further below the poverty line.

1.3 As explained by the Australian Council of Social Service:

This bill cuts income support payments by $50 a week at Christmas time. Around 2.5 million people will be affected by this cut, including parents of 1.1 million children. A total of 3.6 million people will need to make do with less this Christmas.2

1.4 The committee heard evidence about the positive impact the original rate of the coronavirus supplement of $550 a fortnight had on people’s lives. The rate of $550 a fortnight allowed people on Jobseeker Payment, Youth Allowance and Parenting Payment to be able to afford nutritious food, three meals a day, children’s school activities, essential medications, housing costs, new clothing and shoes, and heating and cooling. Importantly, the coronavirus supplement also allowed people to avoid predatory payday lenders and even pay off some outstanding debts.

1.5 While the rate of $550 a fortnight lifted millions of people out of poverty, the first cut to the coronavirus supplement of $300 a fortnight dropped people back below the poverty line. This has had devastating impacts on Australians receiving income support payments.

1.6 Dr Sandy Ross, Executive Officer, Financial Counselling Victoria, noted that financial counsellors have seen an uptick in demand following the cut to the coronavirus supplement in September.3

1 Ms Kasy Chambers, Executive Director, Anglicare Australia, Committee Hansard,

25 November 2020, p. 2.

2 Australian Council of Social Service, Submission 16, p. 3.

3 Dr Sandy Ross, Executive Officer, Financial Counselling Victoria, Committee Hansard,

25 November 2020, p. 11.

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1.7 Ms Terese Edwards, Chief Executive Officer, National Council for Single Mothers and their Children, explained how the cut of $300 a fortnight meant homelessness, skipping meals, and no cooling in summer.4

1.8 Ms Kristin O’Connell from the Australian Unemployed Workers’ Union discussed how the union has been ‘flooded with people who are in extreme distress as a result of the payment being slashed’.5

1.9 The Australian Greens have strong concerns that this bill will only exacerbate the financial hardship and deprivation currently being experienced by Australians on income support payments.

1.10 Many submitters questioned the timing of this cut to the coronavirus supplement.

1.11 Ms Kasy Chambers, Executive Director, Anglicare Australia noted that January is the peak for emergency relief and financial counselling services and it is an expensive time of year for families preparing for the school year.6 Ms Chambers noted: ‘So, even down to the month and the day, it is not the right time’.7

1.12 The Australian Greens have serious concerns that the timing of this cut to the coronavirus supplement will further contribute to financial stress and hardship being experienced by millions of unemployed and underemployed Australians.

1.13 COTA Australia raised concerns about the reintroduction of the liquid asset waiting period test and the impact this will have on older workers:

These people will be forced to draw through their assets, due to the liquid asset waiting period, and then they'll be driven further into poverty before reaching retirement.8

1.14 The Australian Greens strongly reject the majority committee view that the reintroduction of the liquid assets waiting period and assets test is justified because these measures are reflective of the long-standing principle that people should rely on their own resources first. This blanket argument ignores the fact that Australia is in the middle of a recession and we need to make

4 Ms Terese Edwards, Chief Executive Officer, National Council for Single Mothers and their

Children, Committee Hansard, 25 November 2020, p. 21.

5 Ms Kristin O’Connell, Acting Communications Coordinator, Australian Unemployed Workers’

Union, Committee Hansard, 25 November 2020, p. 21.

6 Ms Kasy Chambers, Executive Director, Anglicare Australia, Committee Hansard,

25 November 2020, p. 4.

7 Ms Kasy Chambers, Executive Director, Anglicare Australia, Committee Hansard,

25 November 2020, p. 4.

8 Mr Corey Irlam, Deputy Chief Executive, COTA Australia, Committee Hansard, 25 November 2020,

p. 4.

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changes to ensure Australians don’t fall behind due to circumstances out of their control like age discrimination. Now is not the time to be forcing older Australians into further financial hardship and deprivation by making them wear down their savings.

1.15 The committee heard important evidence from Professor Jeff Borland that there is no evidence to support the argument that higher levels of Jobseeker Payment act as a disincentive for people to look for work:

I don't see any evidence that the COVID-19 supplement has been a substantial or really any type of major disincentive for people to move into work from unemployment. I'm not aware of systematic, Australia-wide evidence that the COVID-19 supplement has constituted a barrier to people moving back into work.9

1.16 The Australian Greens call on the government to stop using anecdotal claims about higher income support payments acting as a disincentive for people to look for work as a justification for cutting the coronavirus supplement. The government must stop trying to demonise those looking for work and trying to survive on the Jobseeker payment.

1.17 The overwhelming evidence heard by the committee demonstrates the need for continued levels of support for unemployed and underemployed Australians that ensures people can live above the poverty line. No one should need to live in fear and anxiety about how they will afford to buy healthy food or keep a roof over their heads.

1.18 The Australian Greens urge the government to listen to the evidence heard throughout the inquiry and use this opportunity to increase the coronavirus supplement to $550 a fortnight.

Recommendations

Recommendation 1

1.19 That the Government immediately announce a permanent and ongoing increase to the Jobseeker Payment.

Recommendation 2

1.20 That the Government immediately re-instate the original rate of the coronavirus supplement of $550 a fortnight, as outlined in our Private Senators Bill Social Security Amendment (COVID-19 Supplement) Bill 2020 which is currently before the Senate.

9 Professor Jeff Borland, Committee Hansard, 25 November 2020, p. 17.

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Recommendation 3

1.21 That the Government re-instate the pause on the Liquid Assets Waiting Period test and assets test to ensure unemployed Australians aren’t forced to draw down on their savings before they can access support.

Senator Rachel Siewert

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Appendix 1

Submissions and additional information

Submissions 1 Anglicare Australia 2 Tasmanian Council of Social Service 3 Financial Counselling Victoria

 Attachment

4 Canberra Community Law 5 The Salvation Army 6 National Foundation for Australian Women 7 ARACY

8 Australian Human Rights Commission 9 COTA Australia 10 Queensland Council of Social Service 11 Anti-Poverty Week 12 Name Withheld 13 Name Withheld 14 Name Withheld 15 Ms Carmel Stafford 16 Australian Council of Social Service

 Attachment

17 Name Withheld 18 Economic Justice Australia 19 ACT Council of Social Service 20 Getup!

21 Dr Bruce Bradbury and Mr Peter Whiteford 22 Mission Australia 23 Australian Housing and Urban Research Institute 24 Save the Children Australia 25 South Australian Council of Social Service

 Attachment

26 Department of Social Services 27 National Council of Single Mothers and their Children  2 Attachments

28 Australia Together and Every Child 29 Community and Public Sector Union 30 Name Withheld 31 Australian Unemployed Workers' Union 32 Jesuit Social Services

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33 Tomorrow Movement 34 Per Capita 35 Northern Territory Council of Social Service

Additional Information 1 Information in relation to the 'A Wave of Disadvantage' report, received from Homelessness NSW, 20 November 2020 2 Child poverty statistics, received from National Council of Single Mothers and

their Children, 26 November 2020 3 Fast Facts, Child Poverty in Australia, anti-poverty week, received from National Council of Single Mothers and their Children, 26 November 2020 4 Supplementary information, received from Financial Counselling Victoria,

26 November 2020

Answer to Question on Notice 1 Answers to Questions taken on Notice during 25 November public hearing, received from Australian Council of Social Service, 26 November 2020

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Appendix 2 Public hearings

Wednesday, 25 November 2020 Main Committee Room Parliament House Canberra

Australian Council of Social Service  Dr Cassandra Goldie, Chief Executive Officer  Ms Charmaine Crowe, Senior Advisor, Social Security

Anglicare Australia  Kasy Chambers, Executive Director

COTA Australia  Mr Corey Irlam, Deputy Chief Executive  Mrs Sophia Petrov, National Manager Policy and Engagement

Australian Unemployed Workers' Union  Kristin O'Connell, Acting Communications Coordinator  Jaiden Coonan, Policy Officer

Financial Counselling Victoria  Dr Sandy Ross, Executive Officer  Ms Elizabeth Stary, FCVic Centrelink Working Group Convenor

Professor Jeff Borland, Private capacity

Mr Peter Whiteford, Private capacity

National Council of Single Mothers and their Children  Ms Terese Edwards, Chief Executive Officer  Ms Toni Wren, Expert Policy Adviser  Ms Angela Finch, Client

Australian Retailers Association  Mr Paul Zahra, Chief Executive Officer