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Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015

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2013-2014-2015

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

SENATE

 

 

 

 

 

SOCIAL SECURITY (ADMINISTRATION) AMENDMENT (CONSUMER LEASE EXCLUSION) BILL 2015

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

(Circulated by authority of the Hon. Senator Doug Cameron)



 

SOCIAL SECURITY (ADMINISTRATION) AMENDMENT (CONSUMER LEASE EXCLUSION) BILL 2015

 

OUTLINE

 

The purpose of the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015 is to amend the Social Security (Administration) Act 1999 to provide that consumer leases are excluded goods for the purposes of Part 3B of the Act.

 

The Bill is needed to remove the potential for Centrelink clients and participants in the income management regime under Part 3B of the Act to suffer financial harm as a result of entering into one or more consumer leases for household goods for which income management measures, including Centrepay deductions, are available.

 

The main provisions of the Bill will make consumer leases an excluded good for the purposes of Part 3B of the Act.

 

Centrepay was established in 1998 as a budgeting and financial capability tool to assist Centrelink clients by paying rent and utility bills through automatic deductions from their welfare payments. More than 600,000 people use Centrepay to pay bills, rent and ongoing expenses.

 

However, Centrepay has been open to access by businesses whose products, particularly consumer leases, which disadvantage consumers and have the potential to cause financial harm. Consumer leases can lead to people typically paying three times and up to seven times the normal retail price for common household goods obtained under a consumer lease.

 

Centrepay was established to enable people to budget and ensure that regular bills and essential living expenses are paid directly from their welfare payment or pension payment. The proliferation of consumer leasing businesses as approved Centrepay service providers is contrary to the policy rationale for Centrepay. It indicates that Centrepay is being used for the benefit of commercial interests, rather than the interests of Centrelink clients making the payments.

 

NOTES ON CLAUSES

 

1. Short Title

This clause is a formal provision and specifies the short title of Bill, once enacted, as the Social Security (Administration) Amendment (Consumer Leases Exclusion) Act 2015 .

 

2. Commencement

This clause provides for the commencement of the Act. Sections 1 to 3 commence on the day the Act receives the Royal Assent. Schedule 1 commences on the day after it receives the Royal Assent.

 

3. Schedules

This clause states that each Act specified in a Schedule to the Bill is amended or repealed according to the provisions of the Bill.

 

Schedule 1 - Amendments to the Social Security (Administration) Act 1999

 

Item 1

This item amends section 123TC of the Act to provide a definition of consumer lease .

 

A consumer lease means a contract for the hire of goods by a natural person or strata corporation under which that person or corporation does not have a right or obligation to purchase the goods.

 

Item 2

This item amends subsection 123TI(1) of the Act to provide that consumer leases are excluded goods for the purposes of Part 3B of the Act.

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015

 

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the Bill

The purpose of the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015 is to amend the Social Security (Administration) Act 1999 to provide that consumer leases are excluded goods for the purposes of Part 3B of the Act.

 

The Bill is needed to remove the potential for Centrelink clients and participants in the income management regime under Part 3B of the Act to suffer financial harm as a result of entering into one or more consumer leases for household goods for which income management measures including Centrepay deductions are available.

 

Human rights implications

 

This Bill does not engage any of the applicable rights or freedoms.

Conclusion

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Senator the Hon. Doug Cameron