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Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014

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2013-2014

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT

(2014 BUDGET MEASURES No. 4) BILL 2014

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Social Services, the Hon Kevin Andrews MP)



 



SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT

(2014 BUDGET MEASURES No. 4) BILL 2014

 

OUTLINE

 

This Bill will reintroduce several measures previously introduced in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014.  The reintroduced measures appear in Schedules to the Bill numbered as set out below:

  1. Implement the following changes to Australian Government payments:

·            from 1 July 2015 - maintain at their current levels for three years the income free areas for all working age allowances (other than student payments), and the income test free area for parenting payment single;

·            from Royal Assent - index parenting payment single to the Consumer Price Index (CPI) only, by removing benchmarking to Male Total Average Weekly Earnings;

·            from 1 July 2015 - maintain at their current levels several family tax benefit free areas for three years; and

·            from 1 January 2015 - maintain at their current levels for three years the income free areas and other means-test thresholds for student payments, including the student income bank limits.

2.     Implement the following family payment reforms from 1 July 2015:

·            maintain the standard FTB child rates for two years in the maximum and base rate of family tax benefit Part A and the maximum rate of family tax benefit Part B;

·            revise the family tax benefit end-of-year supplements to their original values and cease indexation;

·            limit family tax benefit Part B to families with children under six years of age, with transitional arrangements applying to current recipients with children above the new age limit for two years; and

·            introduce a new allowance for single parents on the maximum rate of family tax benefit Part A for each child aged six to 12 years inclusive, and not receiving family tax benefit Part B. 

  1. Extend and simplify the ordinary waiting period for all working age payments from 1 January 2015.
  2. Cease pensioner education supplement from 1 January 2015.
  3. Cease the education entry payment from 1 January 2015.
  4. From 1 January 2015, extend youth allowance (other) to 22 to 24 year olds in lieu of newstart allowance and sickness allowance.
  5. Require young people with full capacity to learn, earn or Work for the Dole from 1 January 2015.
  6. From 1 January 2015, remove the three months’ backdating of disability pension under the Veterans’ Entitlements Act 1986 .

Financial impact statement

MEASURE

FINANCIAL IMPACT OVER THE FORWARD ESTIMATES

1.       Changes to Australian Government payments:

Maintain at their current levels for three years the income free areas for all working age allowances (other than student payments) and the income test free area for parenting payment single

CPI-only indexation of parenting payment single from January 2015

Maintain several family tax benefit free areas at their current levels for three years

Maintain at their current levels for three years the income free areas and other means-test thresholds for student payments, including the student income bank limits

 

Saving of $83.0 million *

 

 

Saving of $134.2 million

 

Saving of $636.4 million **

 

Saving of $76.0 million *

2.       Family payment reforms:

Maintain family tax benefit payment rates for two years

End-of-year supplements

Part B for children under six

New allowance for single parents

 

Saving of $1,852.2 million **

 

Saving of $1,209.4 million **

Saving of $1,888.6 million **

Cost of $155.0 million **

3.       Extend the ordinary waiting period for working age payments

Saving of $232.1 million

4.       Pensioner education supplement

Saving of $281.2 million over five years

5.       Education entry payment

Saving of $65.4 million over five years

6.       Extension of youth allowance (other) to 22 to 24 year olds in lieu of newstart allowance and sickness allowance

Saving of $508.4 million

7.       Require young people with full capacity to learn, earn or Work for the Dole

Saving of $1,247.3 million

8.       Date of effect for veterans’ disability pension

Saving of $40.0 million

 

Note:

* indicative only - indicative financial impact refers to administered funding for affected social security payments only and is not net of implementation funding

** indicative only - indicative financial impact refers to whole-of-government financial impact, including administered and implementation funding

 

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

The statements of compatibility with human rights appear at the end of this explanatory memorandum.



SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT

(2014 BUDGET MEASURES No. 4) BILL 2014

 

 

NOTES ON CLAUSES

Abbreviations used in this explanatory memorandum

  • Family Assistance Act means the A New Tax System (Family Assistance) Act 1999
  • Family Assistance Administration Act means the A New Tax System (Family Assistance) (Administration) Act 1999
  • Farm Household Support Act means the Farm Household Support Act 2014
  • Military Rehabilitation and Compensation Act means the Military Rehabilitation and Compensation Act 2004
  • Social Security Act means the Social Security Act 1991
  • Social Security Administration Act means the Social Security (Administration) Act 1999
  • Veterans’ Entitlements Act means the Veterans’ Entitlements Act 1986

 

Clause 1 sets out how the new Act is to be cited - that is, as the Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Act 2014.

Clause 2 provides a table setting out the commencement dates of the various sections in, and Schedules to, the new Act.

Clause 3 provides that legislation that is specified in a Schedule is amended or repealed as set out in that Schedule.

 



Schedule 1 - Indexation

 

 

Summary

This Schedule implements the following changes to Australian Government payments:

9.     from 1 July 2015 - pause indexation for three years of the income free areas for all working age allowances (other than student payments), and the income test free area for parenting payment single;

10. from Royal Assent - index parenting payment single to the Consumer Price Index (CPI) only, by removing benchmarking to Male Total Average Weekly Earnings;

11. from 1 July 2015 - pause indexation for three years of several family tax benefit free areas.

  1. from 1 January 2015 - pause indexation for three years of the income free areas and other means-test thresholds for student payments, including the student income bank limits.

Background

Pause indexation of various income and other means-test thresholds

This Schedule pauses for three years the indexation that occurs on 1 July each year of various income thresholds that apply across the family assistance law and payments of some social security benefits and allowances (other than student payments) and indexation for three years of the indexation on 1 January each year of the income free areas and other means-test thresholds for student payments. When indexation recommences, it will apply to the (paused) thresholds and there will be no catch-up in respect of indexation that would otherwise have occurred during the three-year pause.

Schedule 4 to the Family Assistance Act provides for indexation and adjustment of amounts in line with the CPI. This affects various amounts set out in clause 2, and applies acronyms for the purposes of the table in clause 3, Part 2 of Schedule 4, which describes the rules and timing for the relevant indexation.

Part 3.16 of the Social Security Act provides for the indexation and adjustment of amounts. Division 2 deals with CPI indexation, which affects various amounts set out in section 1190, and applies acronyms for the purposes of the table in section 1191, which describes the rules and timing for the relevant indexation.



Index parenting payment single by the CPI

Parenting payment single is described as pension PP (single) within the Act, and is treated in part as a pension (although parenting payment partnered is treated as a benefit). Pension PP (single) is indexed to the CPI , under item 1 of the CPI table in subsection 1191(1) and Division 2 of Part 3.16, and then benchmarked against 25 per cent of the annualised MTAWE and the rate is increased to meet the benchmark if CPI indexation resulted in a lower rate (see section 1195).  This benchmarking will cease from Royal Assent, such that the next indexation of pension PP (single) will only be by reference to the CPI.

This Schedule takes effect from 1 January 2015.

Explanation of the changes

Pausing indexation

Amendments to the Family Assistance Act

Item 1 inserts new subclause 3(7A) into Schedule 4, providing that the FTB free area (A1 and A3), the FTB free area (B), the FTB basic MIFA (A1) the FTB double basic MIFA (A1) and the FTB additional MIFA (A1) are not to be indexed on 1 July 2015, 1 July 2016 and 1 July 2017.  These terms are abbreviations, with their meaning described in Schedule 4, Part 1 of the Family Assistance Act.

Amendments to the Social Security Act

Item 4 relates to the benefits and allowances ‘payment free area’ (defined in item 20AAA of the table in section 1190).  Current subsection 1192(4AB) provides that the first indexation of amounts to which item 14AAA of the CPI Indexation Table in subsection 1191(1) relates is to take place on 1 July 2015.  This item substitutes 1 July 2018 for the recommencement of indexation.

Item 5 adds further subsections to section 1192.  New subsection (5AAA) affects indexation provided for by item 14 in the CPI Indexation Table in subsection 1191(1).  Item 14 deals with the pension free area (which is an abbreviation for the ordinary income free area for social security pension - see item 20 of the table in subsection 1190(1)).  To the extent the pension free area relates to the Pension PP (Single) Rate calculator in point 1068A-E14, new subsection (5AAA) provides it is not to be indexed on 1 July 2015, 1 July 2016 and 1 July 2017.

New subsection (5AAB) affects indexation provided for by items 14AA (the youth allowance and austudy ordinary income free area), 14AB (the youth allowance and austudy range reduction boundary), 15 (the student income bank balance limit) and 24 (the youth allowance (non-independent) assets value limit) of the CPI Indexation Table in subsection 1191(1).  The amounts under these items are not to be indexed on 1 January 2015, 1 January 2016 and 1 January 2017.

Indexing parenting payment single to the CPI

Amendments to the Social Security Act

Items 2 and 3 are consequential to the removal of reference to MTAWE adjustment for pension PP (single) in section 1195 (see items 6 and 7).

Items 6 and 7 remove reference to category A amounts from section 1195.  Pension PP (single) is identified as a ‘category A’ amount as the result of the current reference to section 1068A , which is the pension PP (single) rate calculator.  This will result in section 1195 applying a MTAWE comparison only to ‘category B’ amounts.  Category B amounts are pensions not including Pension PP (single), such as age pension, various disability support pensions and carer payment.

 

 



Schedule 2 - Family tax benefit

 

 

Summary

From 1 July 2015, Part 1 of this Schedule maintains the standard FTB child rates for two years in the maximum and base rate of family tax benefit Part A and the maximum rate of family tax benefit Part B. 

 

Part 2 of this Schedule implements the following family payment reforms from 1 July 2015:

 

·          revise family tax benefit end-of-year supplements to their original values, and cease indexation;

·          limit family tax benefit Part B to families with children under six years of age, with transitional arrangements applying to current recipients with children above the new age limit for two years; and

  • introduce a new allowance for single parents on the maximum rate of family tax benefit Part A for each child aged six to 12 years inclusive, and not receiving family tax benefit Part B.

 

Background

 

Maintain standard FTB child rates for two years

 

The FTB child rates for family tax benefit Part A (methods 1 and 2), the standard rates for family tax benefit Part B, and an approved care organisation’s standard rate are currently indexed in accordance with movements in the Consumer Price Index on 1 July each year.  From 1 July 2015, indexation of these amounts will be paused for two years.  Indexation will resume on 1 July 2017.  

 

Revise end-of-year supplements

 

From 1 July 2015, the end-of-year FTB Part A and FTB Part B supplements will be revised to their original values.  The FTB Part A supplement will be reduced from the current $726.35 per child per annum to $602.25 (the next whole multiple of $3.65 above $600).  The FTB Part B supplement will be reduced from the current $354.05 per family per annum to $302.95 (the next whole multiple of $3.65 above $300).  These amounts, as revised, will not be subject to indexation.

 

Limit family tax benefit Part B

 

Family tax benefit Part B is currently available to families who have a child aged under 16 or a full-time secondary student up to the end of the calendar year they turn 18.  From 1 July 2015, family tax benefit Part B will be limited to families with a youngest child aged under six years.  Transitional arrangements will apply, allowing families who were entitled to family tax benefit Part B for a youngest child aged six years or more on 30 June 2015 to remain eligible for family tax benefit Part B for up to two years, until 30 June 2017.



 

Single parent supplement

 

A new family tax benefit payment, called the single parent supplement, will be introduced from 1 July 2015 for single parents on the maximum rate of family tax benefit Part A whose youngest child is aged six to 12.  The single parent supplement aims to offset partially the loss of assistance experienced by certain single parent families, as a result of the reduction, to under age six, of the age limit for family tax benefit Part B from 1 July 2015, with transitional arrangements for two years.  Only FTB children aged six to 12 (inclusive) would attract the additional payment, and families, while covered by the family tax benefit Part B age limit transitional provision, would not be eligible for the payment. 

 

The annual amount of the payment is $751.90 (the next whole multiple of $3.65 above $750). 

 

Explanation of the changes

 

Amendments to the Family Assistance Act

 

Part 1 - Amendments commencing on Royal Assent

 

Schedule 4 to the Family Assistance Act provides for the indexation or adjustment (as relevant) of specified amounts.

 

Item 1 repeals existing subclause 3(3), which is a spent provision, and inserts a new subclause (3).  The new provision ensures that specified amounts are not indexed on 1 July 2015 or 1 July 2016.  These amounts are the standard FTB child rates for family tax benefit Part A (methods 1 and 2); the standard rates for family tax benefit Part B; and an approved care organisation’s standard rate.

 

Items 2 and 4 repeal clauses 3A, 10 and 11 of Schedule 4, which are redundant.

 

Item 3 makes a consequential amendment to remove references to clauses 10 and 11 from subclause 5(1).

 

Part 2 - Amendments commencing on 1 July 2015

 

Revise family tax benefit end-of-year supplements

 

From 1 July 2015, the end-of-year FTB Part A and FTB Part B supplements are being revised to their original values and these amounts, as revised, will not be subject to indexation.

 

Clause 31A of Schedule 1 to the Family Assistance Act provides for the calculation of the FTB Part B supplement by reference to the FTB (B) gross supplement amount Item 11 repeals subclauses 31A(2) and (3), and substitutes a new subclause 31A(2), which resets the FTB (B) gross supplement amount to $302.95. 

 

Clause 38A of Schedule 1 provides for the calculation of the FTB Part A supplement by reference to the FTB gross supplement amount (a per-child amount).  Item 13 repeals subclauses 38A(3) and (4), and substitutes a new subclause 38A(3), which resets the FTB gross supplement amount to $602.25. 

 

The FTB gross supplement amount and the FTB (B) gross supplement amount are currently indexed in accordance with movements in the CPI on 1 July each year (although indexation of these amounts is currently paused until 30 June 2017 under clause 3(8) of Schedule 4).  The amendments made by items 15 and 17 ensure that these amounts are no longer subject to indexation. 

 

Limit family tax benefit Part B

 

Family tax benefit Part B is currently payable to families who have a child aged under 16 or a full-time secondary student up to the end of the calendar year they turn 18.  The following amendments are made to limit family tax benefit Part B to families with a youngest child aged under six. 

 

Subclause 29(3) of Schedule 1 to the Family Assistance Act currently disregards an FTB child who has turned 16 from the calculation of an individual’s Part B rate unless the child is a senior secondary school child.  Item 9 reworks subclause 29(3) to ensure that an FTB child who has turned six is disregarded in applying Part 4 of Schedule 1 (Part B rate). 

 

Section 22B of the Family Assistance Act defines a senior secondary school child Item 5 makes a consequential amendment to subparagraph 22B(1)(a)(i) to remove a reference to subclause 29(3) from that provision. 

 

Clause 30 of Schedule 1 sets out the standard rates for family tax benefit Part B, depending on the individual’s family situation (that is, whether the individual’s youngest child is under 5 years of age or is 5 and over).  Item 10 amends the table in clause 30 so that the family situation described in item 2 is that the individual’s youngest child is 5 years of age.

 

Clause 31B of Schedule 1 currently provides a method for working out the amount of an individual’s clean energy supplement Part B, depending on the individual’s family situation (that is, whether the individual’s youngest child is under five years of age or is five and over).  The clean energy supplement Part B is being renamed the energy supplement Part B from 1 July 2014 by amendments in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014.  Item 12 then amends the table in clause 31B(1) so that the family situation described in item 2 is that the individual’s youngest child is five years of age.  

 

Transitional arrangements will also apply.  These are set out in the application and saving provisions, in subitems 20(2) to (4) .

 

Subitem 20(2) sets out the circumstances in which the amendments to limit family tax benefit Part B to families with children under six do not apply in working out the rate of family tax benefit for an individual for days on and after 1 July 2015.  An individual who is entitled to family tax benefit for 30 June 2015, including a Part B rate greater than nil for a youngest child who is aged six or more on that day, is not subject to the new Part B rules.  This individual is referred to as the saved individual .  The new Part B rules will also not apply to an individual who is the partner of the saved individual but only for as long as the new Part B rules do not apply to the saved individual.

 

Subitem 20(3) lists the circumstances in which subitem 20(2) ceases to apply to a saved individual (and their partner because of the connection in paragraph 20(2)(b)). 

 

Subitem 20(2) ceases to apply effectively from the earliest of the following:

 

·          1 July 2017;

·          the first day on which neither the saved individual nor their partner (if any) is entitled to family tax benefit;

·          the first day on which the Part B rate for the saved individual or their partner (if any) is nil;

·          the first day on which none of the saved individual’s FTB children on 30 June 2015 is an FTB child of the saved individual or their partner (if any);

  • the first day that the saved individual’s single parent supplement would be equal to or more than their Part B rate.

 

Some examples of how these saving provisions will work are set out below.

 

Example 1

On 30 June 2015, Mary is entitled to family tax benefit, including Part B, for one FTB child aged 10.  Mary is a saved individual under paragraph 23(2)(a).

On 1 August 2015, Mary gains the care of a younger child, aged three.  She now has two FTB children aged 10 and three.  Mary is entitled to family tax benefit, including Part B worked out by reference to her three-year old.  Mary continues to come within the transitional rule in subitem 23(2).

On 1 October 2015, Mary has one FTB child aged 10, having lost the care of the child aged three.  Mary continues to come within the transitional rule in subitem 23(2).

If, however, Mary lost the care of the child aged 10 on 1 October 2015 and has one FTB child aged three, then she would cease to come within the transitional rule in subitem 23(2) due to paragraph 23(3)(d), because she no longer has care of the child aged 10 who was her only FTB child on 30 June 2015.  However, Mary would continue to receive Part B for her child aged three until the child turns six.

 

Example 2

On 30 June 2015, Idris, a single parent, is entitled to family tax benefit, including Part B, for his two FTB children aged eight and 11.  Idris is a saved individual under paragraph 23(2)(a).

On 1 August 2015, Idris becomes partnered with Aretha, and they have care of his two children.  Idris’ Part B rate continues to be greater than nil.  Therefore, Idris continues to come within the transitional rule in subitem 23(2).  Also, Aretha becomes an individual who satisfies paragraph 23(2)(b), because she is the partner of a saved individual to whom the transitional rule in subitem 23(2) continues to apply.

On 1 October 2015, Idris and Aretha agree that Aretha will begin to receive family tax benefit for Idris’ two children.  There is no period when neither Idris nor Aretha is entitled to be paid family tax benefit, and no period when the Part B rate is nil.  Therefore, Aretha’s rate of family tax benefit is affected by the transitional rule in subitem 23(2), so she will receive Part B when she begins to receive family tax benefit.

 

Subitem 20(4) allows the Minister to prescribe, by legislative instrument, other scenarios where the amendments to limit family tax benefit Part B to families with children under six years of age do not apply.  This will allow the transitional rules to apply to the calculation of a lump sum payment of family tax benefit for a deceased child.

 

As transitional arrangements end from 1 July 2017, no families with a youngest child aged six or over will receive family tax benefit Part B from that time.

 

Single parent supplement

 

From 1 July 2015, a new payment, the single parent supplement will be introduced. 

 

The single parent supplement will be a new component of family tax benefit, a new amount that, together with family tax benefit Part A and family tax benefit Part B, will make up family tax benefit.  Item 8 amends subclause 1(1) of Schedule 1 to the Family Assistance Act to achieve this.

 

The single parent supplement will be provided for in new clauses 52 to 54 (a new Part 6) in Schedule 1 to the Family Assistance Act.  These provisions are inserted by item 14 .

 

New clause 52 sets out the circumstances in which an amount of single parent supplement is to be added in working out an individual’s annual rate of family tax benefit.  An amount of single parent supplement is added if:

 

·          the individual is not a member of a couple;

·          the individual’s youngest FTB child is six years of age and has not turned 13 years (that is, aged six to 12 inclusive);

·          the individual’s Part A rate worked out under Part 2 (that is, Method 1) of Schedule 1 but disregarding reductions (if any) under clause 5 of Schedule 1 and disregarding section 58A and subclause 38AA(3) of Schedule 1, is greater than nil;

·          the individual’s income excess for the purposes of Division 2C of Part 5 of Schedule 1 is nil; and

·          the individual’s maintenance income excess is nil under Subdivision A of Division 5 of Part 2 of Schedule 1.

 

The last three dot points require the individual to be eligible for the maximum rate of family tax benefit Part A. 

 

New clause 53 sets the annual amount of single parent supplement at $751.90 for each FTB child aged six to 12 (inclusive).  The amount is the next whole multiple of $3.65 above $750.

 

New clause 54 applies where an individual has a shared care percentage (is sharing the care of an FTB child).  In this situation, the individual’s amount of single parent supplement for the child is the shared care percentage of the full amount of the single parent supplement. 

 

The same absence from Australia rules that apply to family tax benefit Part B under sections 62, 63 and 63A of the Family Assistance Act will also apply to the new single parent supplement.  If the individual is an absent overseas recipient, the individual’s single parent supplement for each FTB child aged six to 12 would be nil.  If an FTB child aged six to 12 is an absent overseas FTB child, the child would be disregarded in working out the individual’s rate of single parent supplement.  The relevant amendments are made by items 6 and 7 .

 

Because the new single parent supplement partly offsets the loss of assistance due to the new age limit for family tax benefit Part B, an amount of single parent supplement will not be added if the transitional rules apply to the individual.  Otherwise, the amendments discussed above will apply in working out the rate of family tax benefit for days on or after 1 July 2015.  These rules are provided for in subitems 20(5) and (6) .  

 

Items 16, 18 and 19 provide for the indexation of the new single parent supplement.  As with other FTB child amounts, the single parent supplement will be indexed on 1 July in accordance with movement in the CPI.  The amount will first be indexed on 1 July 2016.  This is consistent with the indexation arrangements for the FTB child rates for family tax benefit Part A (methods 1 and 2), which will be paused on 1 July 2015, and resume on 1 July 2016. 

 

Application and saving provisions

 

Item 20 provides some application and saving provisions that apply in relation to the amendments made by Part 2 of this Schedule. 

 

Subitem 20(1) covers the amendments that limit family tax benefit Part B to families with children under six years of age.  Subject to the transitional rules in subitems 25(2) to (4), these amendments apply in relation to working out the rate of family tax benefit for days on or after 1 July 2015. 

 

Subitems 20(2) to (4) are addressed above in the context of amendments that limit family tax benefit Part B to families with children under six years of age.

 

Subitems 20(5) and (6) are addressed above in the context of amendments that introduce the new single parent supplement.

 

Subitem 20(7) provides that the amendments made to specified provisions which affect the calculation of rate apply in relation to working out the rate of family tax benefit for days on or after 1 July 2015.

 

 



Schedule 3 - Waiting periods

 

 

Summary

This Schedule makes amendments to extend and simplify the ordinary waiting period for all working age payments from 1 January 2015.

Background

Currently, a person who is qualified for newstart allowance or sickness allowance under the Social Security Act must, subject to some exceptions, serve an ordinary waiting period of seven days before either of those allowances is payable.  The exceptions include where the Secretary is satisfied that the person is in severe financial hardship.  Depending on the circumstances, an ordinary waiting period may be served concurrently with other waiting periods and preclusion periods.

This Schedule creates a new ordinary waiting period for widow allowance, parenting payment and youth allowance for a person who is not undertaking full-time study and is not a new apprentice (in this Schedule, referred to as youth allowance (other)).

This Schedule also provides that the current exception on the basis of severe financial hardship will only apply if the person is also experiencing a personal financial crisis.  The Secretary will be able to prescribe by legislative instrument circumstances for when a person is experiencing a personal financial crisis.

The Schedule further clarifies that an ordinary waiting period is to be served after certain other relevant waiting periods or preclusion periods have ended.

The amendments made by this Schedule commence on 1 January 2015.

Explanation of the changes

Amendments to the Social Security Act

Item 1 inserts a new definition of experiencing a personal financial crisis

There is currently an exemption to the ordinary waiting period for newstart allowance and sickness allowance for a person who is in severe financial hardship.  Section 19C generally provides that a person is in severe financial hardship if the value of the person’s liquid assets is less than the fortnightly amount at the maximum payment rate of the relevant social security payment.  Other items in this Schedule replace this exemption with a new concept of experiencing a personal financial crisis.

A person will still need to be in severe financial hardship in order to be experiencing a personal financial crisis.  However, the person will also need to satisfy any circumstances, prescribed in a legislative instrument, before the exemption applies.  As examples, the Secretary could prescribe in a legislative instrument circumstances such as the person having incurred unavoidable or reasonable expenditure or having experienced domestic violence.



Subsection 19DA(2) clarifies that a person will not be taken to satisfy the circumstances in the legislative instrument unless he or she can produce evidence that there is a reasonable possibility that he or she satisfies the circumstances. 

Item 2 is consequential to the amendments made by item 1.

Items 3 and 4 amend the definitions of ordinary waiting period and waiting period in subsection 23(1) to refer to the new ordinary waiting periods for widow allowance, parenting payment and youth allowance (other).

Item 5 amends subsection 23(10) to clarify when a person is taken to have served an ordinary waiting period. 

Current subsection 23(10) refers to the ordinary waiting periods for newstart allowance and sickness allowance.  The amendments made by this item replace the references to ‘newstart allowance’ and ‘sickness allowance’ with references to ‘social security benefit’ and ‘social security pension’ to cover all of the payments to which an ordinary waiting period may apply.  

Items 6, 7 and 9 provide for a new ordinary waiting period for widow allowance, parenting payment and youth allowance (other), and provide for the duration of those waiting periods.

Under new subsections 408CGA(1), 500WA(1) and 549CA(1), a person will be subject to the ordinary waiting period for widow allowance, parenting payment and youth allowance (other) unless:

·          the person was receiving an income support payment at some time in the 13 weeks immediately before widow allowance, parenting payment or youth allowance (other), as applicable, would have become payable; or

·          the Secretary is satisfied that the person is experiencing a personal financial crisis (as defined in new section 19DA, inserted by item 1).

Further, subsections 408CGA(2), 500WA(2) and 549CA(2) provide that an ordinary waiting period will not apply if the person is undertaking an activity specified in a legislative instrument.  These provisions replicate a current exemption to the ordinary waiting period for newstart allowance and sickness allowance.  The legislative instrument made for the purpose of those current provisions (the Social Security (Exemptions from Non-payment and Waiting Periods - Activities) (DEEWR) Specification 2003 (No. 1) ) specifies the following activities:

·          an activity undertaken by a person as part of Stream 4 employment services provided to the person;

·          a rehabilitation programme; and

·          an activity undertaken by a person as part of the Remote Jobs and Communities Programme in certain circumstances.

Subsections 408CGA(3), 500WA(3) and 549CA(3) allow the Secretary to specify these activities in a legislative instrument.

Subsections 408CGB(1), 500WB(1) and 549CB(1) provide that, subject to subsections (2) and (3) of those provisions, the ordinary waiting period is a period of seven days that starts on the day that widow allowance, parenting payment or youth allowance (other), as applicable, would have been payable but for the ordinary waiting period.

Subsections 408CGB(2) and 500WB(2) provide for the start of an ordinary waiting period for widow allowance or parenting payment where the person is subject to a seasonal work preclusion period, a lump sum preclusion period or an income maintenance period.  Subsection 549CB(2) provides for the start of an ordinary waiting period for youth allowance (other) where a person is subject to one or more these preclusion periods, but also where the person is subject to a liquid assets test waiting period or a newly arrived resident’s waiting period.

If a person is subject to one or more of the other waiting periods or preclusion periods, then the ordinary waiting period starts on the day after all the other waiting periods and preclusion periods have ended.  The effect of this is that the ordinary waiting period cannot be served concurrently with other relevant waiting periods and preclusion periods.

Subsections 408CGB(3), 500WB(3) and 549CB(3) provide for the start of an ordinary waiting period for widow allowance, parenting payment or youth allowance (other) where:

·          a person is subject to an ordinary waiting period (the first ordinary waiting period) for any payment; and

·          during the first ordinary waiting period, the person ceases to be qualified for the payment to which the first ordinary waiting period relates; and

  • during the first ordinary waiting period, the person claims another payment which has an ordinary waiting period (the second ordinary waiting period).

In these circumstances, the second ordinary waiting period starts on the day that the first ordinary waiting period starts.

Item 8 inserts a reference to an ordinary waiting period in section 549.

Section 549 provides that a youth allowance is not payable to a person who is subject to a waiting period.  Certain waiting periods are specified for the purpose of that provision, and it is appropriate to include a reference to an ordinary waiting period, given one of the effects of this Schedule is to create an ordinary waiting period for youth allowance (other).

Items 10 and 14 are consequential to the amendments made by items 12 and 16.

Items 11 and 15 amend paragraphs 620(1)(g) and 693(f), the effect of which is that an ordinary waiting period for newstart allowance and sickness allowance will not apply if the person is experiencing a personal financial crisis, as defined in new section 19DA (inserted by item 1 of this Schedule).

Items 12 and 16 insert new notes that are consequential to the amendments made by this Schedule.

Items 13 and 17 substitute sections 621 and 694 with new provisions that provide for the duration of the ordinary waiting period for newstart allowance and sickness allowance.

The effect of subsections 621(1) and 694(1) is that, subject to subsections (3) and (4) of those provisions, the ordinary waiting period is a period of seven days starting on the day that newstart allowance or sickness allowance, as applicable, would have been payable but for the ordinary waiting period.

Subsections 621(2) and 694(2) provide for the start of an ordinary waiting period for newstart allowance and sickness allowance where the person is disqualified for those payments because of the liquid assets test.  In these circumstances, the ordinary waiting period is the period of seven days that starts after the end of the liquid assets test waiting period.

Subsections 621(3) and 694(3) provide for the start of an ordinary waiting period for newstart allowance and sickness allowance where the person is subject to a newly arrived resident’s waiting period, a seasonal work preclusion period, a lump sum preclusion period or an income maintenance period.  If a person is subject to one or more of the other waiting periods or preclusion periods, then the ordinary waiting period starts on the day after all the other waiting periods and preclusion periods have ended.  The effect of this is that the ordinary waiting period cannot be served concurrently with other relevant waiting periods and preclusion periods.

Subsections 621(4) and 694(4) provide for the start of an ordinary waiting period for newstart allowance and sickness allowance where:

·          a person is subject to an ordinary waiting period (the first ordinary waiting period) for any payment; and

·          during the first ordinary waiting period, the person ceases to be qualified for the payment to which the first ordinary waiting period relates; and

·          during the first ordinary waiting period, the person claims another payment which has an ordinary waiting period (the second ordinary waiting period).

In these circumstances, the second ordinary waiting period starts on the day that the first ordinary waiting period starts.

Item 18 provides that the amendments made by this Schedule apply in relation to a claim for a social security payment that is made on or after the commencement of this Schedule.

 



Schedule 4 - Pensioner education supplement

 

 

Summary

This Schedule ceases pensioner education supplement from 1 January 2015.

Background

In broad terms, the pensioner education supplement assists students with the ongoing costs of full-time or part-time study.  This Schedule repeals provisions that provide for pensioner education supplement, and makes related consequential changes.

The Government remains committed to providing incentives for income support recipients to improve their employment prospects through study or training.  More appropriate channels of Government-funded study and training assistance for income support recipients are available through employment service providers and the FEE HELP and VET FEE HELP tuition loan programmes.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Part 2.24A of the Social Security Act provides for the payment of pensioner education supplement.  Item 17 repeals Part 2.24A.

Consequential amendments are made as follows.

Item 1 omits ‘a pensioner education supplement,’ from subsection 7(6).

Item 2 repeals subparagraph (l)(v) of the definition of compensation affected payment in subsection 17(1).

Item 3 omits ‘ or supplement, ’ from paragraph (l) of the definition of compensation affected payment in subsection 17(1).

Item 4 repeals and substitutes paragraph (m) of the definition of compensation affected payment in subsection 17(1) to reflect the repeal of subparagraph 1061ZAAA(1)(b)(iv) by item 19.

Item 5 repeals the note at the end of the definition of approved course of education or study in subsection 19AB(2).

Item 6 repeals and substitutes the definition of independent in subsection 23(1).

Item 7 repeals paragraph (cb) of the definition of newly arrived resident’s waiting period in subsection 23(1).



Item 8 omits ‘ , a double orphan pension or a pensioner education supplement’, and substitutes ‘or a double orphan pension’ in paragraph (a) of the definition of payday in subsection 23(1).

Item 9 omits the word ‘, supplement’ from paragraph (a) of the definition of payday in subsection 23(1).

Item 10 repeals paragraph 23(4AA)(c).

Item 11 omits ‘paragraph 1061PB(1)(b)’, and substitutes ‘subsection 541B(5)’, in paragraphs 23(10F)(c) and (d).

Item 12 repeals section 119.

Item 13 repeals subsection 503AA(1).

Item 14 omits ‘(2)’ from subsection 503AA(2).  This is consequential to item 13.

Item 15 omits ‘, 569A(b) or 1061PB(1)(b)’, and substitutes ‘or 569A(b)’ in subparagraph 569H(7)(g)(iii).

Item 16 repeals subsection 1049(1).

Item 18 adds ‘and’ to the end of subparagraph 1061ZAAA(1)(b)(iii).  This is consequential to item 19.

Item 19 repeals subparagraph 1061ZAAA(1)(b)(iv).

Item 20 omits ‘ , a mobility allowance or a pensioner education supplement’, and substitutes ‘or a mobility allowance’, in section 1158.

Amendments to the Social Security Administration Act

Item 21 omits ‘allowance; or’, and substitutes ‘allowance.’, in paragraph (i) of the definition of supplementary payment in subsection 15(5).  This is consequential to item 22.

Item 22 repeals paragraph (j) of the definition of supplementary payment in subsection 15(5).

Item 23 repeals subsection 50(3).

Item 24 repeals paragraph 52(1)(h).

Item 25 omits ‘, austudy payment or pensioner education supplement’, and substitutes ‘or austudy payment’, wherever occurring in paragraphs 55(4A)(a) and (b).

Items 26 and 27 repeal paragraphs (i) and (o) of the definition of category I welfare payment and paragraphs (d) and (i) of the definition of category Q welfare payment respectively in section 123TC.

Item 28 repeals paragraph (i) of the definition of social security periodic payment in subclause 1(1) of Schedule 1.

Item 29 repeals clauses 30 to 32 of Schedule 2.

Part 2 - Other amendments

Consequential amendments are also made to the following Acts.

Amendments to the Family Assistance Act

Item 30 omits the reference to paragraph 17(1)(c) in subparagraph 14(1A)(b)(i).  This is consequential to item 31.

Item 31 repeals paragraph 17(1)(c).

Amendment to the Farm Household Support Act

Item 32 repeals paragraph 94(i). 

Amendments to the Income Tax Assessment Act 1997

Item 33 repeals item 22A.1 in the table contained in section 52-10.

Item 34 repeals item 22A in the table contained in section 52-40.

Part 3 - Application and saving provisions

Subitem 35(1) provides that, despite the amendments to the definition of compensation affected payment in subsection 17(1) of the Social Security Act made by Part 1 of this Schedule, Parts 3.6A and 3.14 of the Social Security Act continue to apply as if those amendments had not been made.

Subitem 35(2) provides that, despite the amendments made by items 12, 13, 14 and 16 of this Schedule, sections 119, 503AA and 1049 of the Social Security Act, as in force immediately before the commencement of this item, will continue to apply on and after the commencement of the items in relation to working out whether an approved program of work supplement or language, literacy and numeracy supplement are payable in respect of a fortnight beginning before that commencement.

Subitem 35(3) provides that, despite the amendment made by item 17 of this Schedule, Part 2.24A of the Social Security Act, as in force immediately before the commencement of this item, will continue to apply on and after the commencement in relation to days occurring before the commencement.

Subitem 35(4) provides that, despite the amendments made by items 18 and 19 of this Schedule, paragraph 1061ZAAA(1)(b) of the Social Security Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a relevant period that began before that commencement.

Subitem 35( 5 ) provides that, despite the amendment made by item 20 of this Schedule, section 1158 of the Social Security Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to days occurring before that commencement.

Subitem 35(6) provides that, despite the amendments made by items 23 and 25 of this Schedule, subsections 50(3) and 55(4A) of the Social Security Administration Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to the payment of fares allowance on or after that commencement, to the extent that payment of fares allowance is being made because of the receipt of pensioner education supplement.

Subitem 35(7) provides that, despite the amendment made by item 24 of this Schedule, paragraph 52(1)(h) of the Social Security Administration Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to the payment of pensioner education supplement on or after that commencement.

Subitem 35(8) provides that, despite the amendments made by items 26 and 27 of this Schedule to paragraphs (i) and (o) of the definition of category I welfare payment and paragraphs (d) and (i) of the definition of category Q welfare payment in the Social Security Administration Act, Part 3B of that Act continues to apply as if those amendments had not been made.

Subitem 35(9) provides that, despite the amendments made by items 30 and 31 of this Schedule, subparagraph 14(1A)(b)(i) and paragraph 17(1)(c) of the Family Assistance Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to working out whether an individual satisfies the work/training/study test or has recognised study commitments before, on or after that commencement.

Subitem 35(10) provides that, despite the amendment made by item 33 of this Schedule, item 22A.1 of the table in section 52-10 of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a payment of pensioner education supplement before, on or after that commencement.

 

 



Schedule 5 - Education entry payment

 

 

Summary

This Schedule c eases the education entry payment from 1 January 2015.

Background

In broad terms, the education entry payment assists with education expenses, and is paid once a year to eligible recipients.  This Schedule repeals provisions that provide for education entry payment, and makes related consequential changes.

The Government remains committed to providing incentives for income support recipients to improve their employment prospects through study or training.  More appropriate channels of Government-funded study and training assistance for income support recipients are available through employment service providers and the FEE HELP and VET FEE HELP tuition loan programs.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Part 2.13A of the Social Security Act provides for the payment of education entry payment.  Item 3 repeals Part 2.13A.

Consequential amendments are made as set out below.

Item 1 repeals subparagraph (l)(iv) of the definition of compensation affected payment in subsection 17(1).

Item 2 omits ‘allowance, payment’, and substitutes ‘allowance,’ in paragraph (l) of the definition of compensation affected payment in subsection 17(1).

Item 4 repeals table item 7 in subsection 1222(2).

Item 5 omits ‘or an education entry payment supplement’ in paragraph 1223ABAAB(1)(a).

Item 6 omits ‘benefit; and’, and substitutes ‘benefit.’ in paragraph 1223ABAAB(2)(e).  This is consequential to item 7.

Item 7 repeals paragraph 1223ABAAB(2)(h).

Item 8 repeals section 1224B.

Amendments to the Social Security Administration Act

The following paragraphs refer to the education entry payment.  Amendments are made to remove these references.



Item 9 repeals paragraph (c) of the definition of supplementary payment in subsection 15(5).

Item 10 repeals paragraph (d) of the definition of lump sum benefit in subsection 47(1).

Item 11 repeals paragraph (c) of the definition of household stimulus payment in section 123TC.

Amendment to the Veterans’ Entitlement Act

Part VIIAA of the Veterans’ Entitlement Act provides for the payment of education entry payment.  Item 19 repeals Part VIIAA.

 

Consequential amendments are made as follows:

Item 12 omits the words ‘age; or’ and substitutes ‘age.’ in paragraph (c) of the definition of compensation affected pension in subsection 5NB(1).

 

Item 13 repeals paragraph (f) of the definition of compensation affected pension in subsection 5NB(1).

 

Item 14 omits the words ‘pensions, supplements and payments’, and substitutes ‘pensions and supplements’ in subsection 59M(1).

 

Item 15 omits the word ‘supplement;’ and substitutes ‘supplement.’ in paragraph 59M(1)(f).  This is consequential to Item 16.

 

Item 16 repeals paragraph 59M(1)(i).

 

Item 17 omits the words ‘pensions, supplements, allowances and payments’, and substitutes ‘pensions and supplements’ in note 2 to subsection 59M(1).

 

Item 18 omits the words ‘supplement or payment’ and substitutes ‘or supplement’ in subsections 59M(2), (3) and (4).

 

Part 2 - Other amendments

Consequential amendments are made as follows to various Acts, as set out below.

Amendment to the Farm Household Support Act

Item 20 repeals paragraph 94(e).

Amendments to the Income Tax Assessment Act 1936

Item 21 omits ‘or education entry payment’ in subparagraph 160AAAA(2)(c)(i).

Item 22 omits ‘or education entry payment’ in subparagraph 160AAAB(2)(c)(i).

Amendments to the Income Tax Assessment Act 1997

Item 23 omits the entry ‘education entry payment supplement under the Social Security Act 1991’ in the table item headed ‘social security or like payments’ in section 11-15.

Item 24 omits ‘purposes;’, and substitutes ‘purposes.’ in paragraph 51-35(e).  This is consequential to item 25.

Item 25 repeals paragraph 51-35(f).

Item 26 repeals and substitutes section 51-40.

Item 27 repeals paragraph 52-10(1)(za).

Item 28 repeals subsection 52-10(1J).

Item 29 repeals section 55-10.

Amendment to the Taxation Administration Act 1953

Item 30 omits ‘, 55-5 or 55-10’, and substitutes ‘or 55-5’ in paragraph 12-110(1)(c) of Schedule 1.

Part 3 - Application and saving provisions

Subitem 31(1) provides that, despite amendments to the definition of compensation affected payment in subsection 17(1) of the Social Security Act made by Part 1 of this Schedule, Parts 3.6A and 3.14 of the Act continue to apply as if the amendments had not been made. 

Subitem 31(2) provides that, despite the amendment made by item 3 of this Schedule, Part 2.13A the Social Security Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to the 2014 calendar year and earlier calendar years.

Subitem 31(3) provides that, despite amendments made by items 5 to 8 of this Schedule, sections 1223ABAAB and 1224B of the Social Security Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment supplement or education entry payment made before, on or after that commencement.

Subitem 31(4) provides that despite the amendments of the definition of compensation affected pension in subsection 5NB(1) of the Veterans’ Entitlements Act made by Part 1, Part IIIC of the Veterans’ Entitlements Act continues to apply as if those amendments had not been made.

 

Subitem 31(5) provides that despite the amendment made by item 19, Part VIIAA of the Veterans’ Entitlements Act 1986, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to the calendar year 2014 and earlier calendar years.

 

Subitem 31(6) provides that, despite the amendments made by items 14 and 15 of this Schedule, paragraphs 160AAAA(2)(c)(i) and 160AAAB(2)(c)(i) of the Income Tax Assessment Act 1936 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment made before, on or after that commencement.

Subitem 31(7) provides that, despite the amendments made by items 25, 26 and 29 of this Schedule, paragraph 51-35(f) and sections 51-40 and 55-10 of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment made before, on or after that commencement.

Subitem 31(8) provides that, despite the amendment made by item 28 of this Schedule, subsection 52-10(1J) of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment supplement made before that commencement.

 



Schedule 6 - Age requirements for various Commonwealth payments

 

 

Summary

From 1 January 2015, this Schedule provides that young unemployed people aged 22 to 24 would no longer be eligible for newstart allowance or sickness allowance until they turn 25 years of age and would, instead, be able to claim and qualify for youth allowance.  To enable this, youth allowance for all types of persons who can satisfy the activity test, will be available to persons who have not yet reached 25.  Youth disability supplement will also be available to all youth allowance recipients who have not yet reached 25.  The amendments include safeguards to ensure that existing newstart allowance recipients who are 22, 23 or 24 leading up to commencement (or persons undergoing certain waiting periods or suspension periods) can remain in receipt of newstart allowance.  Similar savings rules are provided for sickness allowance.

This Schedule also makes consequential amendments to the Farm Household Support Act to align rates at which farm household allowance is paid to farmers and their partners, with newstart allowance and youth allowance rates.

Background

The key aim of this measure is to incentivise young unemployed people to obtain the relevant education and training to increase employability.  Changes to labour markets presage the need for a highly educated and skilled workforce and this measure is designed to encourage young people to adequately skill themselves and move off unemployment benefits.  The proposal is driven by the current high youth unemployment rate of approximately 12 per cent, which is significantly higher than the comparable national average of 5.4 per cent.

 

Presently, unemployed youth aged 22 to 24 are able to qualify for newstart allowance or sickness allowance rather than youth allowance.  Persons in this age bracket may perceive an advantage by remaining in receipt of newstart allowance and a disincentive to pursue full-time study or employment, given the higher rate of newstart allowance and sickness allowance as compared to youth allowance.  This measure removes this disincentive by placing all under 25 year olds on the same payment levels whether unemployed or studying full-time.  The broad financial incentives provided for further education in lieu of working, applying to those on youth allowance (student) payments are not diminished, since youth allowance (student) attracts more generous income testing compared to youth allowance (other).  In addition, a facility is provided to youth allowance (student) recipients to accumulate a student income bank of $10,000 without affecting payments.

 

While youth allowance is paid at lower rates to newstart allowance, the payment has a larger income free area compared to newstart allowance, providing greater flexibility to earn while on payment.



Explanation of the changes

Amendments to the Social Security Act

Item 1 replaces the reference to age 22 in paragraphs 19C(8)(b) and (c) of the Social Security Act with a reference to age 25.  This amendment is consequential on the age adjustments proposed to be made by the Bill to youth allowance and newstart qualification rules.  Section 19C deals with definitions for a number of terms related to when a person is in severe financial hardship .  The concept of severe financial hardship is relevant to a number of provisions in the Social Security Act, including those dealing with advance payments, ordinary waiting periods, special employment advances, certain rules dealing with seasonal workers and others.  The specific amendments to paragraphs 19C(8)(b) and (c) will ensure that the reference to ‘maximum payment rate’ in subsections 19C(2) and (3) will mean that the age thresholds relevant to determining a person’s maximum payment rate will be interpreted in line with the new qualification age thresholds for youth allowance and newstart allowance as proposed by this Schedule to the Bill.

Item 2 is the key amendment that will lift the qualification age for youth allowance, allowing persons who have not yet reached 25 to qualify.  Under section 543 of the Social Security Act, a person is of youth allowance age if the person has attained the ‘minimum age for youth allowance’ and has not yet attained the ‘maximum age for youth allowance’ as set out under section 543B.  Prior to these amendments, the maximum age for youth allowance under section 543B was set at different ages (either 22 or 25) for persons not undertaking full-time study, persons undertaking full-time study and persons who are ‘new apprentices’.  This amendment proposes to set the maximum age of youth allowance at 25 for all persons previously dealt with by subsection 543B(1).  Note that subsection 543B(2) will still provide that persons in receipt of youth allowance at the time they turn 25 to remain below the maximum age for youth allowance if they continue full-time study or remain as a new apprentice after they turn 25.  The amendments made by this item will operate subject to the application rules set out in item 13.

Items 3 and 4 propose to make changes to the basic qualification rules for newstart allowance, amending references to age 22 to age 25.  These amendments will ensure that a person is only qualified for youth allowance during a period where they have reached the age of 25.  These amendments will operate subject to the application rules set out in item 14.

Item 5 proposes to amend the age at which a person can qualify for sickness allowance, by changing the reference to 22 years to 25 years in paragraph 666(1)(e) of the Social Security Act.  This will mean that, from commencement, a person will no longer be able to qualify for sickness allowance if they have not yet turned 25 years old.  This amendment will operate subject to the application rules set out in item 15.

Item 6 proposes to amend the age at which a person is able to have an amount by way of youth disability supplement to be added to their rate of youth allowance under the youth allowance rate calculator.  Prior to these amendments, a person can only receive an amount by way of youth disability supplement if they have not turned 22.  These amendments will allow a person to receive youth disability supplement up to the age of 25 to align with the adjustment to the maximum age for youth allowance made by item 2.

Items 7, 8, 9 and 10 propose to make changes to the rules around how to determine the ‘partner income free area for a person’ for the purposes of the youth allowance, austudy payment, benefit rate calculator B (including for newstart allowance) and parenting payment (partnered) rate calculators.  Prior to these amendments, the partner income free area was determined by reference to the amount of income of a partner beyond which youth allowance or newstart allowance would not be payable to the partner if the partner were qualified for youth allowance or newstart allowance.  Whether the calculation is conducted by reference to youth allowance or newstart allowance depends on the age of the partner:  whether they have reached 22 years of age or not.  The amendments propose to change references to 22 to 25 for relevant ‘partner income free area’ provisions such that the ‘partner income free area for a person’ will be calculated by reference to the income test for youth allowance for partners who are not yet 25 and by reference to the income test for newstart allowance for partners who have already turned 25.

Item 11 is an amendment consequential upon the changes to youth disability supplement proposed by item 6.  Item 11 addresses the description of youth disability supplement in the indexation table at section 1190 of the Social Security Act to refer to youth disability supplement as payable to a recipient of youth allowance who is under 25 (rather than under 22).  This item in the indexation table operates to make clear which amount is subject to the indexation rules in Part 3.16 of the Social Security Act.

Item 12 is an application provision to clarify that the amendments made to the ‘severe financial hardship’ definitions in item 1 will apply for days on or after 1 January 2015.

Item 13 is an application provision that sets out how various amendments proposed by this Schedule will affect different persons. 

Subitem 13(1) sets out the default rule (‘default’ in the sense that it operates subject to subitems 13(2) and (3)) that the amendments made by item 2 to the ‘maximum age for youth allowance’ apply for the purposes of working out whether a person qualifies for youth allowance for days from 1 January 2015 and onwards.

Subitem 13(2) provides that, if a person was aged 22, 23 or 24 on the day before the amendments to adjust the ‘maximum age of youth allowance’ commence and is, at that time, receiving newstart allowance (or is undergoing a period of suspension), the amendment to the maximum age of youth allowance does not apply to the person until their newstart allowance is cancelled.  This provision will operate to ensure, along with subitem 14(2), that existing persons in receipt of newstart (or subject to a period of suspension) will remain in receipt of newstart in spite of the amendments proposed to the ages at which a person can qualify for youth allowance and newstart allowance as proposed by this Schedule to the Bill.

Subitem 13(3) is an application provision that will apply to a person where a claim for newstart allowance was granted before the commencement of item 2 in circumstances where the start day is worked out as being on a day after 1 January 2015.  If this provision applies to a person, the amendments made by item 2 (to adjust the ‘maximum age of youth allowance’) will not apply to that person until their newstart allowance is cancelled.

Subitem 13(4) is an application provision that deals with when the changes to youth disability supplement (as paid as an amount by way of youth allowance) proposed by item 6 will apply to a person.  The subitem states that the amendment made by item 6 will apply from 1 January 2015 onwards.

Item 14 deals with various circumstances around how the amendments made by items 3 and 4 (to raise the lower age qualification limits for newstart allowance) apply, depending upon a person’s particular case as follows.

Subitem 14(1) sets out the default rule (to operate subject to the more specific rules in the remainder of item 14) that the amendments made by items 3 and 4 apply for working out whether a person is qualified for newstart allowance from days extending from 1 January 2015 onwards.

Subitem 14(2) provides that if, immediately before the amendments made by this Schedule commence (that is, on 31 December 2015), the person was aged 22, 23 or 24 and was receiving newstart allowance (or subject to a period of suspension), the amendments made by items 3 and 4 (to raise the lower qualification age for newstart allowance from 22 to 25) do not affect the person from commencement on 1 January 2015 until their newstart is cancelled.  This provision will mean that existing recipients of newstart allowance, at the time this Schedule commences, will be able to remain in receipt of newstart allowance.

Subitem 14(3) operates to ensure that claims for newstart allowance made by persons aged 22, 23 or 24 that have been made but not determined by the Secretary at the time immediately before 1 January 2015 can still be granted on the basis that the lower age limit for qualification for newstart allowance is not affected by the amendments proposed by items 3 and 4.  This means that 22, 23 and 24 year old persons who have a claim pending (that is, made but not determined) on 1 January 2015 can still be granted newstart allowance on the basis of the claim as if the lower age limit for qualification remains 22, from 1 January 2015 until the person’s payment (if granted as a result of the claim) is cancelled.

Subitem 14(4) deals with the application of the amendments proposed by items 3 and 4 to persons aged 22, 23 or 24 who have claimed newstart allowance prior to the time this Schedule commences and who are undergoing a liquid assets test waiting period, in relation to that claim, on 1 January 2015.  For such persons, the amendments made by items 3 and 4 do not apply from 1 January 2015 in relation to their claim and subsequent qualification for and payment of newstart allowance as a result of that claim.  Once any payment as a result of that claim is cancelled, the person will no longer be subject to this application provision and will not be able to qualify for newstart allowance again until they turn 25.

Subitem 14(5) ensures that persons serving an income maintenance period on 1 January 2015 in relation to newstart allowance are not affected by the amendments proposed by items 3 and 4 from 1 January 2015 until their payment is cancelled.  This provision will operate as a beneficial rule for persons who are 22, 23 and 24 in these circumstances, as they will able to resume payment on newstart allowance following their income maintenance period, notwithstanding the proposal to raise the age of qualification for newstart allowance to 25.

Subitem 14(6) is an application provision that will apply to a person where a claim for newstart allowance was granted before the commencement of items 3 and 4 in circumstances where the start day is worked out as being on a day after 1 January 2015.  If this provision applies to a person, the amendments made by items 3 and 4 (to raise the lower age for qualification for newstart allowance) will not apply to that person until their newstart allowance is cancelled.  This will operate beneficially for such persons aged 22, 23 or 24 at the time of commencement, as persons of these ages will still be able to receive newstart allowance, notwithstanding the amendments to the qualification age for newstart allowance proposed by this Schedule.

Subitems 15(1) and (2) provide that item 5, which amends the lower qualification age for sickness allowance from 22 to 25, applies for working out a person’s qualification for sickness allowance from 1 January 2015 onwards, unless the person is 22, 23 or 24 on 1 January 2015 and is in receipt of sickness allowance or is undergoing a period of suspension in relation to their sickness allowance:  such persons can remain in receipt (or have their sickness allowance payment resumed after a period of suspension) following 1 January 2015 until their payment is cancelled.

Subitems 15(3) to 15(6) are modelled on the application provisions for newstart allowance at subitems 14(3) to 14(6), and operate as described in more detail above in relation to newstart allowance in circumstances where, for persons aged 22, 23 and 24:  a claim is made but not determined; the person is serving a liquid assets test waiting period; the person is serving an income maintenance period; or a claim is granted but the person’s start day post-dates 1 January 2015.

Item 16 provides that the amendments made by items, 7, 8, 9 and 10 (which make changes to the rules around how to determine the ‘partner income free area’ for a person) apply in relation to working out that rates of social security payments for a person for days following commencement on 1 January 2015 onwards.

Amendments to the Farm Household Support Act

Items 17, 18, 19 and 20 replace a number of references in the Farm Household Support Act to a person who has ‘turned 22’ to references to a person who has ‘turned 25’.  The changes are consequential upon the changes to the qualification ages for youth allowance and newstart allowance proposed by items 2, 3 and 4 of this Schedule to the Bill.  Prior to these amendments, farm household allowance was paid either at youth allowance rates or newstart allowance rates, depending upon whether a person had turned 22.  These amendments will ensure payment rates of farm household allowance remain aligned with payment rates of youth allowance and newstart allowance for persons of the same age.

Similarly, items 21, 22 and 23 replace a number of references in the Farm Household Support Act to a person who has ‘not turned 22’ to references to a person who has ‘not turned 25’.  These amendments will also ensure payment rates of farm household allowance remain aligned with payment rates of youth allowance and newstart allowance for persons of the same age.

Item 24 makes amendments to the table in section 93 of the Farm Household Support Act that deals with reading certain references in the Social Security Act for the purposes of the Farm Household Support Act.  The amendments to items 1 and 2 in the table will ensure that, from commencement, references to newstart allowance and youth allowance in the Social Security Act are to be read as including references to persons who have and have not turned 25 respectively (subject to the other rules in Division 2 of Part 5 of the Household Support Act).  The amendments to items 15 and 16 in the table will ensure that, from commencement, references to the newly arrived resident’s waiting period for newstart allowance and youth allowance are to be read as references to a newly arrived resident’s waiting period (within the meaning of the Farm Household Support Act) for persons who have and have not turned 25 respectively.

The amendments made by item 25 are various application rules which determine how certain persons are affected by the amendments made by items 19, 20 and 24 from commencement on 1 January 2015.

Subitem 25(1) sets out a default rule (that is, one that is subject to subitems 25(2) and (3)) for how various substantive provisions made by this Schedule apply (excluding amendments made to headings and the outline at section 7 of the Farm Household Support Act).   Subitem (1) states that amendments made by items 19, 20, 22 and 23, to change references to age 22 to age 25 throughout the Farm Household Support Act apply for working out the rate of a person’s farm household allowance from 1 January 2015 and days following.

Subitem 25(2) ensures that persons in receipt of farm household allowance on 1 January 2015 (or for whom payment is suspended) and who are aged 22, 23 or 24 are not affected by amendments to change references to age 22 to age 25 made by items 19 and 20.  This is a beneficial rule which will ensure that such persons will be able to be paid farm household allowance at the newstart allowance rate (under benefit rate calculator B of the Social Security Act) notwithstanding amendments made to Subdivision A of Division 8 of the Farm Household Support Act.  Note that equivalent amendments are not required in relation to the amendments made by items 22 and 23 as these items change references to persons who ‘have not turned 22’ to references to persons who ‘have not turned 25’, the rationale being that persons who have not turned 22 on commencement will also have not turned 25.  Persons will only remain able to benefit from this application provision until their payment is cancelled.

Subitem 25(3) is a similar rule that deals with persons who are aged 22, 23 or 24 on commencement whose claim has been granted prior to 1 January 2015 for a start date on or after 1 January 2015.  Such persons are also not affected by the amendments made by items 19 and 20 and can therefore receive farm household allowance at the newstart allowance rate (under benefit rate calculator B of the Social Security Act) notwithstanding amendments made to Subdivision A of Division 8 of the Farm Household Support Act.  Persons will only remain able to benefit from this application provision until their payment is cancelled.

Subitem 25(4) ensure that the amendments proposed for changing the reference from 22 to 25 in items 1 and 16 do not apply during the period that the application provisions described above (and particularly subitems 25(2) and (3)) do not apply.  Aligned in this way to the period for which the application provisions dealing with items 19 and 20 operate for a person, this subitem also ensures that persons aged 22, 23 and 24 on commencement who are in receipt of farm household allowance, subject to a period of suspension, or for whom a claim has been determined but whose start date follows 1 January 2015, can benefit from their payment being calculated at the at the newstart allowance rate (under benefit rate calculator B of the Social Security Act) until their farm household allowance is cancelled.

 



Schedule 7 - Exclusion periods

 

 

Summary

This Schedule makes amendments to require young people with full capacity to earn, learn, or Work for the Dole from 1 January 2015.

Background

This Schedule implements an income support measure that forms part of the broader reforms announced in the 2014-15 Budget.  This measure aims to encourage greater participation in work and other activities and make the welfare system fairer and more sustainable, to ensure a productive Australian workforce for the future.  The measure establishes firm expectations for young jobseekers.  It provides an incentive for affected persons to be self-sufficient, or to undertake further relevant education or training to increase employability before relying on the taxpayer for support. 

Subject to some exceptions, the amendments made by this Schedule will apply from 1 January 2015 to a person aged under 30 years who is a new claimant for, or transferring from another payment to, newstart allowance, youth allowance (other) and, in certain circumstances, special benefit.  Such a person will be subject to a 26-week waiting period before the social security benefit becomes payable.  This 26-week period may be reduced if a person has had past periods of gainful work. 

After an initial 26-week waiting period, jobseekers may become eligible to receive income support for 26 weeks, after which a person will be required to participate in 25 hours a week of Work for the Dole during this 26-week payment period.

After the 26-week payment period, a person may become subject to a 26-week non-payment period, unless an exemption applies.  During this period, a wage subsidy will be available for employers, as well as relocation assistance to encourage people to move to where jobs are available.

A person who is receiving, on 1 January 2015, a social security benefit to which these amendments apply will become subject to a 26-week non-payment period once they have completed a Work for the Dole programme after 1 July 2015, provided they are aged under 30 years and an exemption does not apply.  This cycle will continue, with income support generally payable for 26 weeks in every 52-week period, until a person finds a job, undertakes full-time study, or turns 30 years of age.



A person will be required to register as a jobseeker in order to commence the new waiting period.  They will then have to comply with their activity test and participation requirements while they are subject to the new waiting period and non-payment period.  These requirements are to look for work, attend appointments with employment services providers and accept any offers of suitable work.   Requirements will be monitored through Employment Pathway Plans and young jobseekers will be required to enter into and comply with the terms of an Employment Pathway Plan at all times during the new exclusion period.  Jobseekers who fail to comply with an Employment Pathway Plan may have an exclusion period extended or a penalty imposed. 

A person will not be subject to the new waiting period or the new non-payment period if they are subject to an exemption.  This Schedule sets out a number of exemptions for a person who does not have a full capacity to work and allows the Minister to specify further exemptions in a legislative instrument.  The Minister will also be able to specify temporary exemptions in a legislative instrument which exempt a person from a waiting period or a non-payment period for particular period of time.

The amendments made by this Schedule commence on 1 January 2015 with the exception of Part 2, which commences immediately after the remainder of Part 1 commences, unless the Social Security Legislation Amendment (Increased Employment Participation) Act 2014 does not receive the Royal Assent, in which case Part 2 would not commence at all.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Item 1 inserts a new Part 3.12B to provide for new exclusion periods.

Relevant social security benefits

New subsection 1157AA(1) provides that Part 3.12B applies to the following social security benefits:

(a)   youth allowance, if the person qualified for that payment is neither undertaking full-time study nor a new apprentice;

(b)   newstart allowance;

(c)   special benefit, if the person qualified for that benefit is an Australian resident or a person who is the holder of a visa in a class determined by the Minister by legislative instrument.

Subsection 1157AA(2) provides that the Minister may determine classes of visas for the purpose of paragraph (1)(c).

Subsections 1157AA(3) and (4) provide for special rules for Part 3.12B exclusion periods in relation to youth allowance.  These rules are necessary because a person may be qualified for youth allowance on two separate bases.  First, a person may be qualified on the basis that they are undertaking full-time study or are a new apprentice (hereafter referred to as youth allowance (student)).  Second, a person may be qualified for youth allowance other than on the basis that they are undertaking full-time study or are a new apprentice, usually where the person is a jobseeker (hereafter referred to as youth allowance (other)).  Part 3.12B exclusion periods will apply only to youth allowance (other) and not youth allowance (student).

Subsection 1157AA(3) modifies rules in new Part 3.12B where a person becomes qualified for youth allowance (other) immediately after they were receiving youth allowance (student).  In particular, one of the effects of subsection 1157AA(3) is that a person may be required to serve a Part 3.12B waiting period, under sections 1157AB and 1157AC, if the person became qualified for youth allowance (other) after receiving youth allowance (student). 

Subsection 1157AA(4) provides for the end of a Part 3.12B exclusion period where a person was previously subject to that exclusion period because they were qualified for youth allowance (other) and they then become qualified for youth allowance (student). In these circumstances, the exclusion period will end when the person becomes qualified for youth allowance (student).

Part 3.12B waiting period

Section 1157AB provides for when a person is subject to a Part 3.12B waiting period. 

Subsection 1157AB(1) provides that a person qualified for a social security benefit to which Part 3.12B applies will generally be subject to a Part 3.12B waiting period if, on the person’s start day for the social security benefit:

·          they are aged under 30 years; and

  • they are not covered by an exemption in new section 1157AF (inserted by this item).

Subsection 1157AB(2) provides for when a person will not be subject to a Part 3.12B waiting period despite the general rule in subsection (1). 

A person will not be subject to a Part 3.12B exclusion period if they are transferring from a social security pension or a social security benefit of a kind determined by the Minister in a legislative instrument to any of the payments to which new Part 3.12B applies where the conditions determined by the Minister in a legislative instrument are met. 

A person will not be subject to a Part 3.12B waiting period if they are transferring to newstart allowance from youth allowance, other than youth allowance paid to a person undertaking full-time study or as a new apprentice, provided the person was not subject to a Part 3.12B exclusion period at the time of their transfer to newstart allowance.  This is also the case for a person transferring from special benefit to youth allowance or newstart allowance.

Duration of the waiting period

Section 1157AC sets out the duration of a Part 3.12B waiting period.

Subsection 1157AC(1) provides for when a Part 3.12B waiting period commences.  A person’s social security payment becomes payable from a person’s start day.  The Social Security Administration Act provides for rules in relation to a person’s start day, with the general rule being that the start day is the day of a person’s claim for a social security payment, if the person is qualified for the payment on that day.

If a person’s start day falls within one or more of a period of non-payment because the person has moved to an area of lower employment prospects without sufficient reason, a seasonal work preclusion period, liquid assets test waiting period, newly arrived resident’s waiting period, a lump sum preclusion period or an income maintenance period, then the Part 3.12B waiting period commences when all of those waiting periods and preclusion periods have ended.  The effect of this is that a person cannot serve a Part 3.12B waiting period concurrently with the other specified waiting periods and preclusion periods.

Subsection 1157AC(2) provides for when the Part 3.12B waiting period ends.  The general rule in subparagraph (a)(i) is that a person’s Part 3.12B waiting period is 26 weeks. 

However, subparagraph (a)(ii) provides that the waiting period may be reduced if the person has participated in previous periods of gainful work.  Gainful work is defined to mean any work for financial gain or reward (see subsection (4)).  Under subsection (3), the Minister will be able to determine, in a legislative instrument, the method for working out the reduced period on the basis of previous periods of gainful work.  However, the minimum reduced period worked out under the determination must be at least four weeks.  This determination will also be able to provide that particular kinds of gainful work do not cause a reduced waiting period to apply.  As examples, the Minister could provide that particular kinds of gainful work do not cause a reduced waiting period if the work:

·          does not involve a substantial degree of consistent personal exertion;

·          consists of domestic or gardening tasks in relation to the place of residence of the person or a member of their family;

·          consists of the management of financial investments in which the person or a member of their family has an interest;

·          involves nudity or is in the sex industry;

·          contravenes Commonwealth, state or territory legislation; or

·          is for the purpose of achieving election of the person to public office.

The general rule that the Part 3.12B waiting period will be a period of 26 weeks will also not apply if the person makes a claim for the social security benefit while serving a Part 3.12B exclusion period for another benefit (subparagraph (2)(a)(iii)).  In these circumstances, the person will be required to serve only the balance of the Part 3.12B exclusion period that remained at the time of their transfer to the new payment.  For example, if a person made a claim for newstart allowance when they were subject to, and had served 13 weeks of, a Part 3.12B waiting period for youth allowance, then the person would have a Part 3.12B waiting period of 13 weeks for newstart allowance (assuming no other reductions applied).

The effect of paragraph 1157AC(2)(b) is that a Part 3.12B waiting period will end when a person becomes subject to an exemption under section 1157AF.  A Part 3.12B waiting period will also end when a person turns 30 years of age (paragraph 1157AC(2)(c)).

Part 3.12B non-payment period

Section 1157AD provides for when a person will be subject to a Part 3.12B non-payment period.

Subsection 1157AD(1) provides that a person will be subject to a Part 3.12B non-payment period if on the relevant day specified in subsection (2):

·          the person’s age is under 30 years;

·          the person would be receiving a social security benefit to which Part 3.12B applies, apart from the operation of section 1157AD; and

·          the person is not covered by an exemption under section 1157AF.

Subsection 1157AD(2) provides for when a person will become subject to a Part 3.12B non-payment period, if they are a person who is covered by subsection 1157AD(1).  A person will become subject to a Part 3.12B non-payment period if 26 weeks have elapsed since the person’s last Part 3.12B exclusion period, which may be either a Part 3.12B waiting period or another Part 3.12B non-payment period.  A person will also become subject to a Part 3.12B non-payment period immediately after an exemption to a Part 3.12B exclusion period ends (paragraph 1157AD(2)(c)). 

However, these rules for when a person becomes subject to a Part 3.12B non-payment period will not apply if:

·          the last Part 3.12B exclusion period that the person served was a waiting period and this waiting period was a reduced period on the basis of previous periods of gainful work (under subparagraph 1157AC(2)(a)(ii)).  In these circumstances the Part 3.12B non-payment period will apply after a period of time equivalent to the period by which the Part 3.12B waiting period was reduced, in addition to 26 weeks.  For example, if a person had previous periods of gainful work that resulted in an eight-week reduction of the Part 3.12B waiting period, then the relevant day on which the person would become subject to the Part 3.12B non-payment period would be 34 weeks after the Part 3.12B waiting period ended;

·          the 26-week period falls within a Part 3.12B penalty period.  In these circumstances, the Part 3.12B non-payment period will start after the Part 3.12B penalty period ends.  New subsection 1157AE(5) allows the Secretary to impose a Part 3.12B penalty period in certain circumstances.

Subsection 1157AD(3) provides for when a person will become subject to a Part 3.12B non-payment period when they are also subject to a non-payment period as a result of moving to an area of lower employment prospects without sufficient reason.  In these circumstances, the Part 3.12B non-payment period will start after the end of the non-payment period that applies as a result of the person moving to an area of lower employment prospects without sufficient reason.

Subsections 1157AD(4) and (5) provide for the duration of a Part 3.12B non-payment period.  Generally, the non-payment period is a period of 26 weeks that starts on the day worked out under subsection (2), unless the person turns 30 before the end of that period, or the person is exempt from the non-payment period by reason of section 1157AF.  Note 1 at the end of subsection 1157AD(5) alerts the reader to the fact that not all of the non-payment period may apply if the person becomes subject to a temporary exemption.  Note 2 refers to section 1157AE so that the reader is aware that a Part 3.12B non-payment period may be extended in certain circumstances.

Extending Part 3.12B exclusion periods

Section 1157AE sets out when the Secretary may extend a person’s Part 3.12B exclusion period.

Subsection 1157AE(1) provides that the Secretary may extend a person’s Part 3.12B exclusion period if, during that period, the person fails to enter into an employment pathway plan as required by the Secretary or fails to comply with a requirement in an employment pathway plan.

Subsection 1157AE(2) provides, however, that subsection 1157AE(1) does not apply if the person satisfies the Secretary that the failure was the result of exceptional circumstances beyond the person’s control.  If, however, the failure is one relating to attendance at an appointment (including an appointment relating to entering into an employment pathway plan) or attendance at an interview or activity then there is an additional requirement contained in paragraph1157AE(2)(b).  This provision provides that in such circumstances it is necessary for the person to also give the Secretary advance notice of the failure or satisfy the Secretary that exceptional circumstances beyond the person’s control prevented the person from giving such notice. 

Subsection 1157AE(3) states that an extension under subsection 1157AE(1) is for the period worked out under a determination made under subsection 1157AE(4).  Subsection 1157AE(4) provides that the Employment Minister may, by legislative instrument, determine extension periods that apply for failures to enter into employment pathway plans, including new plans, and failures to comply with particular requirement in such plans.  Such extensions must not exceed four weeks for each failure.  New subsection 1157AE(5) provides for the consequences of a person providing false or misleading information for the purpose of subsection 1157AC(3), which provides for a reduction of the Part 3.12B waiting period on the basis of previous periods of gainful work. 

Subsection 1157AE(5) provides that the Secretary may extend the person’s Part 3.12B waiting period if the false or misleading information is identified while the person is serving that period.  A Part 3.12B penalty period may be imposed if the false or misleading information is identified while the person is receiving a social security payment.

Subsection 1157AE(6) provides that the Minister may, by legislative instrument, determine a method for working out the number of weeks by which a person’s Part 3.12B waiting period may be extended and the number of weeks and commencement day of a Part 3.12B penalty period.  As an example, the Minister could determine that the extension of the Part 3.12B waiting period/ penalty period is the period of weeks equal to the period of time by which the Part 3.12B waiting period was reduced under subsection 1157AC(3).  The Minister could also determine an additional period by which the person should be sanctioned for providing false or misleading information. 

Exemptions from Part 3.12B exclusion periods

Section 1157AF provides that a person will be exempt from a Part 3.12B waiting period and non-payment period if the person:

·          is a principal carer of a child;

·          is a parent of an FTB child.  The effect of this is that a parent who has 35 per cent care of a child will be exempt from a Part 3.12B waiting period and non-payment period;

·          has a partial capacity to work. Section 16B of the Social Security Act provides that a person has a partial capacity to work if:

o    the person has a physical, intellectual or a psychiatric impairment; and

o    the Secretary is satisfied that the impairment prevents the person from doing  30 hours or more a week of work independently of a programme of support where no training activity is likely to enable the person from doing such work;

·          has a current Commonwealth registration number in relation to a part-time apprenticeship, traineeship or trainee apprenticeship.  Subsection 1157AE(3) provides that this exemption does not apply to a person whose registration number has been suspended;

·          requires employment services or disability employment services of a class determined by the Minister in a legislative instrument.  Paragraph 1157AF(2)(a) provides that the Minister may determine classes of employment services or disability employment services for this purpose;

·          is covered by an exemption determined by the Minister by legislative instrument.  Paragraph 1157AF(2)(b) provides that the Minister may determine exemptions for this purpose. 

Temporary exemptions from Part 3.12B exclusion periods

Subsection 1157AG(1) provides that a person is not, or ceases to be, subject to a Part 3.12B exclusion period while an exemption determined by the Minister in a legislative instrument applies to him or her. 

Paragraph 1157AG(2)(a) provides that the Minister may, by legislative instrument, determine  the circumstances in which a person is exempt from a kind of a Part 3.12B exclusion period.  It is intended that the Minister would determine in such an instrument circumstances that may hinder a person from effectively looking for work.  An example of a circumstance that the Minister could determine in a legislative instrument may be where a person has an injury that prevents the person from actively looking for work for a temporary period.

Paragraph 1157AG(2)(b) provides that the Minister may also determine in the same legislative instrument a method for working out the number of weeks and the commencement day for the exemption.  The period of time that a person would be exempt from a Part 3.12B exclusion period would depend on the nature of the particular circumstances. 

Generally, where a person is subject to a temporary exemption, this will not change when the Part 3.12B exclusion period ends.  For example, if, 15 weeks into a 26-week Part 3.12B exclusion period, a person becomes subject to a six-week exemption period, the person would then have five weeks of their exclusion period to serve when the exemption ends.  However, subsection 1157AG(3) provides that the Minister may determine, in a legislative instrument, that the exemption does extend the Part 3.12B exclusion period in some circumstances.

Treating a person as still receiving a benefit for certain purposes

Subsection 1157AH(1), together with subsection (3), provides that, for the purpose of provisions about health care cards, a person is taken to have been receiving, or to be receiving, a social security benefit during a Part 3.12B exclusion period.

There are provisions in the Social Security Act which provide for the automatic issue of a health care card.  The automatic issue of these cards turns on the person receiving a social security payment. 

Subsections 1157AH(1) and (3) ensure that a person can be automatically issued with a health care card during a Part 3.12B exclusion period, even though the person is not technically receiving a social security payment during this period. 

Subsection 1157AH(4) provides that a person is taken to be still receiving a social security benefit for the purpose of subsections 1157AA(3) and 1157AD(1) if the person would be receiving the benefit apart from the operation of a provision of, or a decision made under, the social security law.  Subsections 1157AA(3) and 1157AD(1) provide rules for when a person is taken to be receiving a social security benefit.  The purpose of subsection 1157AH(4) is to provide that the person will be taken to be receiving a social security benefit for the purpose of those rules if they would have been receiving such a benefit but they were subject to, for example, a waiting period, a preclusion period or a compliance penalty period.

Part 2 - Contingent amendments

Part 2 provides for contingent amendments in relation to the job commitment bonus.  If passed by the Parliament, the Social Security Legislation Amendment (Increased Employment Participation) Bill 2014 would insert into the social security law provisions for the job commitment bonus.  One of the qualification requirements for the job commitment bonus is that a person has received certain payments for a continuous period of at least 12 months. 

Item 2 is consequential to the amendments made by item 3.

Item 3 inserts a note at the end of subsection 861(1).

If the Social Security Legislation Amendment (Increased Employment Participation) Bill 2014 is passed by the Parliament, subsection 861(1) would provide for qualification for the first job commitment bonus.  The new note would refer the reader to the fact that a person may be taken to be receiving newstart allowance or youth allowance while the person is subject to a Part 3.12B exclusion period.

Item 4 amends new subsection 1157AH(3) to refer to provisions relating to the job commitment bonus.  The effect of this will be that a person will be taken to be receiving a social security payment during a Part 3.12B exclusion period for the purpose of provisions dealing with the job commitment bonus.  This means that the period of receiving a social security benefit for 12 months for the purpose of the qualification rule for the job commitment bonus will not be broken by a period serving a Part 3.12B exclusion period.

Part 3 - Other amendments

Amendments to the Farm Household Support Act

Item 5 inserts a new paragraph (ea) into section 94 of the Farm Household Support Act. 

Farm household allowance under the Farm Household Support Act is generally treated in the same way as newstart allowance and youth allowance.  This means that, where there is a reference to newstart allowance and youth allowance in the Social Security Act, it is as though there were also a reference to farm household allowance.  However, section 94 of the Farm Household Support Act specifies that a number of provisions in the Social Security Act do not apply for the purpose of the operation of the Farm Household Support Act. 

The effect of this item is that new Part 3.12B in the Social Security Act about Part 3.12B exclusion periods (inserted by this Schedule) will not apply for the purpose of the Farm Household Support Act.  This means that there will be no Part 3.12B exclusion periods for the purpose of farm household allowance.  The Farm Household Support Act has its own participation regime, which sets out the activity requirements the farmer and/or their partner will need to undertake to receive the farm household allowance.

Amendments to the Social Security Act

Item 6 inserts a number of new definitions into subsection 23(1) that are relevant to the insertion of Part 3.12B of this Schedule. 

Part 3.12B exclusion period is defined to include a Part 3.12B waiting period, a Part 3.12B non-payment period and a Part 3.12B penalty period.  Employment Minister is defined because that term is used in new section 1157AE and it is not currently defined in the Social Security Act.  All of the other defined terms take their meaning from new provisions in Part 3.12B or existing definitions in the Social Security Administration Act.

Items 7 and 8 amend the definition of waiting period in subsection 23(1) to refer to the new Part 3.12B waiting period for newstart allowance and special benefit.

Item 9 amends subsection 549(2) to provide for the Part 3.12B waiting period.  Section 549 provides that youth allowance is not payable if a person is subject to certain waiting periods.

Items 10, 14 and 22 insert new subsections 553B(4A), 634(5) and 745N(6).

Sections 553B, 634 and 745N provide that a person may be subject to a non-payment period of 26 weeks for youth allowance, newstart allowance or special benefit if the person has reduced his or her employment prospects by moving to a new place of residence without sufficient reason.  The effect of these items is that, if the person is subject to a Part 3.12B exclusion period when the non-payment period under section 553B, 634 and 745N would have otherwise begun, then the non-payment period under section 553B, 634 and 745N begins on the day after the end of the Part 3.12B exclusion period. 

Items 11, 15 and 21 insert new provisions in parts of the Social Security Act that provide for the payability of newstart allowance, youth allowance and special benefit.  The new provisions make it clear that these payments are not payable while the person is subject to a Part 3.12B exclusion period, which is provided in a separate part of the Social Security Act.

Item 12 amends a note in subsection 593(1), which provides for qualification for newstart allowance, to alert the reader to the fact that a person’s newstart allowance may not be payable by reason of a Part 3.12B exclusion period, even if the person is qualified for the allowance.

Item 13 inserts a note after a provision providing for ordinary waiting periods for newstart allowance to make it clear that a person may also be subject to a Part 3.12B waiting period.

Item 16 is a technical amendment that is consequential to the amendments made by item 17.

Item 17 inserts a note after a provision that provides for qualification for special benefit to alert the reader to the fact that a person may also be subject to a Part 3.12B exclusion period.

Item 18 is a technical amendment that is consequential to the amendment made by item 19.

Items 19 and 20 insert new paragraphs into a special benefit qualification provision.

A person is generally qualified for special benefit only if other social security benefits or social security pensions are not payable to the person.  However, under current provisions, a person is not qualified for special benefit if newstart allowance or youth allowance is not payable to the person because of certain non-payment periods or preclusion periods.

The effect of items 19 and 20 is that a person will not be qualified for special benefit if newstart allowance or youth allowance is not payable to the person because of a Part 3.12B exclusion period.  It would undermine the integrity of Part 3.12B exclusion periods if a person was able to qualify for, and be paid, special benefit while they are subject to a Part 3.12B exclusion period for newstart allowance or youth allowance.

Item 23 inserts a note after subsection 1061ZK(5).

Section 1061ZK provides for qualification for health care cards.  The new note alerts the reader to section 1157AH, inserted by this Schedule, which provides for when a person is taken to have been receiving, or to be receiving, a social security benefit for the purpose of provisions that deal with health care cards.

Amendments to the Social Security Administration Act

Item 24 renames the existing note at the end of section 42D ‘Note 1’ to avoid confusion with the second note inserted under item 25.

Item 25 inserts a second note at the end of section 42D to make clear that the deduction under section 42D may not be made until payments resume at the end of the Part 3.12B exclusion period (which is usually 26 weeks).  This and item 27 make it clear that penalties that cannot be deducted before the jobseeker enters the exclusion period (for example, because they are not reported or determined in time) to be held on the person’s record and deducted when and if they return to payment.

Item 26 renames the existing note at the end of section 42L ‘Note 1’ to avoid confusion with the second note to section 42L inserted by item 27.

Item 27 inserts a second note at the end of section 42L to make clear that the deduction under section 42L may not be made until payments resume at the end of the Part 3.12B exclusion period (which is usually 26 weeks).

Part 4 - Application and transitional provisions

Item 28 provides that the amendments made by this Schedule apply to a person who makes a claim for a social security benefit on or after 1 January 2015.

Item 29 provides for how the amendments about Part 3.12B exclusion periods apply to certain persons. 

Generally, if a person’s circumstances are dealt with in subitem 29(1) , the person will become subject to a Part 3.12B waiting period set out in section 1157AD on the day worked out in subitem 29(2).

The effect of subitem 29(2) is that such a person may become subject to a Part 3.12B non-payment period pursuant to new section 1157AD following their completion of an approved program of work for income support payment after 1 July 2015.  The Employment Secretary has declared particular programs of work as approved programs of work for income support payment under section 28 of the Social Security Act.  Work for the Dole is an approved program of work for income support payment.  1 July 2015 is the date that the new employment service framework is expected to come into place.  It is anticipated that all jobseekers who are receiving income support payments will be moved into an approved program work for income support payment at some point after 1 July 2015.

The first circumstance in which subitem 29(2) applies, set out under paragraph 29(1)(a), is where the person is receiving a social security benefit on 1 January 2015.  While this paragraph is expressed to apply broadly to social security benefits, a person will only become subject to a Part 3.12B non-payment period under new section 1157AD if they are receiving a social security benefit to which Part 3.12B applies, as provided under new section 1157AA.

The second circumstance in which subitem 29(2) applies, set out under paragraph 29(1)(b), is where a person has made a claim for a social security benefit on 1 January 2015, but where that claim has not been determined on that date.  For example, a person may make a claim for a social security benefit on 30 December 2014 but that claim may not be determined until 3 January 2015.  Such a person would not be ‘receiving’ a social security benefit on 1 January 2015 and so paragraph 29(1)(a) would not apply.  Paragraph 29(1)(b) does not apply if the claim is later rejected.

The third circumstance in which subitem 29(2) applies, set out under paragraph 29(1)(c), is where the person has been granted a social security benefit and would be receiving that benefit apart from the operation of a decision under, or a provision of, the social security law.  This paragraph is intended to cover a person who is subject to a waiting period on 1 January 2015 and, as such, results in the person’s social security payment not being payable, which means they are not technically ‘receiving’ the social security benefit.  It also covers a person who has an income maintenance period which reduces the person’s payment rate to nil and a person whose social security benefit is suspended on 1 January 2015, other than in the circumstances set out in subitem (3).  

Subitem 29(3)  provides exceptions to the general transitional rules in subitem (2) where a person:

·          is serving a serious failure period or an unemployment non-payment period on 1 January 2015; and

  • would otherwise be receiving a social security benefit to which Part 3.12B applies. 

Such a person will become subject to a Part 3.12B non-payment period pursuant to new section 1157AD on 1 January 2015. 

A serious failure period may be imposed if a person is receiving a participation payment and has persistently failed to comply with his or her obligations in relation to that payment, or if the person refuses or fails to accept an offer of suitable employment.  A participation payment is not payable during an unemployment non-payment period if the Secretary has determined that a person is unemployed as a result of a voluntary act of the person, or as a result of the person’s misconduct as an employee. 

 

 

 



Schedule 8 - Date of effect for veterans’ disability pension

 

 

Summary

From 1 January 2015, this Schedule removes the three months’ backdating of disability pension under the Veterans’ Entitlements Act.

Background

Disability pension is paid under Parts II and IV of the Veterans’ Entitlements Act to veterans and eligible members of the Forces, or of a Peacekeeping Force, for incapacity from war or defence-caused injuries or diseases.

Currently, under the Veterans’ Entitlements Act, disability pension may be granted from a date not earlier than three months before the date on which the claim for disability pension was received at the Department of Veterans’ Affairs (the Department).  In practice, disability pensions are automatically backdated three months from the date the claim is received at the Department. 

This measure will change the earliest date of effect for a grant of disability pension, from a date that is not earlier than three months before the date on which the claim for disability pension was received at the Department, to the date on which the claim for disability pension was received at the Department. 

The amendments align the date of effect for the grant of disability pension with other Veterans’ Affairs payments such as income support under the Veterans’ Entitlements Act and permanent impairment compensation under the Military Rehabilitation and Compensation Act. 

The measure will not change the effective date for treatment eligibility under subsections 85(1), (3) and (7) of the Veterans’ Entitlements Act.  Treatment eligibility for specific conditions will continue to be backdated three months from the date as from which disability pension is, or would have been granted.  Treatment eligibility for all conditions may continue to be backdated three months from the date as from which disability pension is payable. 

The existing earliest dates of effect for disability pension increase, war widow or widower and orphan pension remain unchanged.

These amendments commence on 1 January 2015.

Explanation of the changes

Amendments to the Veterans’ Entitlements Act

 

Item 1 repeals subsections 20(1) and (2), and substitutes new subsections 20(1) and (2). 



New paragraph 20(1)(a) provides that, where a claim for disability pension made in accordance with an approved claim form is granted, the earliest date that the Repatriation Commission may specify as a date from which the disability pension may be granted is a date that is not earlier than the date on which the claim for pension was received at the Department.  

 

New paragraph 20(1)(b) retains the existing date of effect for a claim for war widow or widower pension (other than a claim to which subsection 20(2A) applies) or orphan pension, made in accordance with an approved claim form, as a date not earlier than three months before the date on which the claim is received at the Department. 

 

Collectively, new paragraphs 20(2)(a),(b), (c) and (d) provide that:

 

·          where a person initially makes a claim for disability pension in writing, but not in accordance with an approved form; and

·          the person later makes a claim for the pension in accordance with an approved claim form within the required timeframe; and

  • the pension is granted;

 

the earliest date that the Repatriation Commission may specify as a date from which the pension may be granted is a date that is not earlier than the date on which the claim for pension was received at the Department. 

 

Collectively, new paragraphs 20(2)(a), (b), (c) and (e) retain the existing date of effect for a claim for war widow or widower pension (other than a claim to which subsection 20(2B) applies) or orphan pension that is initially made not in accordance with an approved claim form but is subsequently made in accordance with an approved claim form, as a date not earlier than three months before the date on which the claim is received at the Department. 

 

Item 2 repeals paragraph 85(1)(a) and (b), and substitutes new paragraphs 85(1)(a) and (b). 

 

In accordance with new subparagraph 85(1)(a)(i), the date from which treatment may be provided for an accepted condition for a veteran or member granted disability pension is the date that is three months before the date from which the pension is granted.  This amendment ensures that eligibility for treatment in these circumstances is not affected by the removal of the three-month backdating of disability pension, and treatment eligibility is maintained at three months before the date from which the disability pension is granted. 

 

In accordance with new subparagraph 85(1)(a)(ii), the date of effect for treatment eligibility for an accepted condition for a veteran or member granted an increased rate of disability pension is the date from which the pension increase is granted.  This amendment retains the effect of the existing provision. 

 

In accordance with new subparagraph 85(1)(b)(i), the date of effect for treatment eligibility for an accepted condition, for a veteran or member not granted disability pension because the extent of the incapacity does not justify the grant of a disability pension, is the date that is three months before the date as from which the disability pension would have been granted.  This amendment ensures that eligibility for treatment in these circumstances is not affected by the removal of the three month backdating of disability pension, and treatment eligibility is maintained at three months before the date a disability pension would have been granted.

 

In accordance with new subparagraph 85(1)(b)(ii), the date of effect for treatment eligibility for an accepted condition, for a veteran or member not granted an increased disability pension because the extent of the incapacity does not justify the increase of the rate a disability pension, is the date from which the pension increase would have been granted.  This amendment retains the effect of the existing provision. 

 

Item 3 repeals subsection 85(3), and substitutes a new subsection 85(3).  In accordance with new paragraph 85(3)(c), where a veteran or member is in receipt of a disability pension at the general or higher rate or in respect of an accepted condition of a kind described in column 1 of the table in subsection 27(1) of the Veterans’ Entitlements Act, the veteran or member is eligible to be provided with treatment for any condition from the date that is three months before the date from which the disability pension became payable.  This amendment ensures that eligibility for treatment in these circumstances is not affected by the removal of the three-month backdating of disability pension, and treatment eligibility is maintained at three months before the date a disability pension became payable. 

 

New paragraph 85(3)(d) provides that, where a veteran or member who is in receipt of an increased disability pension at the general or higher rate or in respect of an accepted condition of a kind described in column 1 of the table in subsection 27(1) of the Veterans’ Entitlements Act, the veteran or member is eligible to be provided with treatment for any condition as from the date as from which the increased disability pension became payable.  This amendment retains the effect of the existing provision.

 

Item 4 repeals paragraph 85(7)(a), and substitutes a new paragraph 85(7)(a).  New paragraph 85(7)(a) clarifies that subsection 85(7) applies to a grant of pension, or an increased pension, that is a rate not less than 50 per cent of the general rate. 

 

Item 5 repeals subsection 85(7)(c), and substitutes a new subsection 85(7)(c).

 

In accordance with new subparagraph 85(7)(c)(i), where a veteran or member is in receipt of a disability pension at a rate that is not less than 50 per cent of the general rate, the veteran or member is eligible to be provided with treatment for any condition from the later of:  the date that is three months before the date from which the disability pension became payable; or the date service pension became payable.  This amendment ensures that eligibility for treatment in these circumstances is not affected by the removal of the three-month backdating of disability pension, and treatment eligibility is maintained at the later of:  three months before the date from which disability pension became payable; or the date service pension became payable. 

 

New paragraph 85(7)(c)(ii) provides that, where a veteran or member who is in receipt of an increased disability pension at a rate that is not less than 50 per cent of the general rate, the veteran or member is eligible to be provided with treatment for any condition from the later of:  the date from which the increased disability pension became payable; or the date service pension became payable.  This amendment retains the effect of the existing provision in that treatment eligibility is maintained at the later of, the date as from which the increased disability pension became payable, or the date service pension became payable. 

 

Item 6 is an application provision.

 

In accordance with subitem 6(1) , subsection 20(1) of the Veterans’ Entitlements Act, as amended by this Schedule, is to apply to claims made on or after 1 January 2015.  This means that a claim, lodged in accordance with a form approved for the purpose by the Repatriation Commission on or before 31 December 2014, may take effect from a date not earlier than three months before the date on which the claim is received at the Department. 

 

In accordance with subitem 6(2) , paragraph 20(2)(a) of the Veterans’ Entitlements Act, as amended by this Schedule, is to apply to claims made in writing on or after 1 January 2015.  This means that claims initially made on or before 31 December 2014, not in accordance with a form approved for the purpose by the Repatriation Commission, but subsequently made in accordance with a form approved for the purpose, including where the subsequent claim is made, within the required timeframe, after 1 January 2015, may take effect from a date not earlier than three months before the date on which the initial claim referred to in paragraph 20(2)(a) is received at the Department. 

 

Subitem 6(3) provides that the amendment made by item 2 applies in relation to a determination referred to in subsection 85(1) of the Veterans’ Entitlements Act that is made on or after 1 January 2015 where the claim for the pension referred to in paragraph 85(1)(a) or (b) associated with the determination referred to in subsection 85(1) was made on or after 1 January 2015.

 

Subitem 6(4) provides that the amendments made by items 3, 4 and 5 apply in relation to a pension, or increased pension, that begins to be received on or after 1 January 2015, where the claim for the pension, or increased pension, is made on or after 1 January 2015. 

 



STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the

Human Rights (Parliamentary Scrutiny) Act 2011

SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT

(2014 BUDGET MEASURES No. 1) BILL 2014

 

Schedule 1 - Indexation

 

This Schedule 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 Schedule

This Schedule implements the following changes to Australian Government payments:

·          from 1 July 2015 - pause indexation for three years of the income free areas for all working age allowances (other than student payments), and the income test free area for parenting payment single;

·          from Royal Assent - index parenting payment single to the Consumer Price Index (CPI) only, by removing benchmarking to Male Total Average Weekly Earnings;

·          from 1 July 2015 - pause indexation for three years of several family tax benefit free areas.

  • from 1 January 2015 - pause indexation for three years of the income free areas for student payments, including the student income bank limits.

Human rights implications

The Schedule engages the following human rights:

Right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to social security.

The Schedule has no effect on the right to social security.

The changes to the value of income test free areas and thresholds for certain Australian Government payments assist in targeting payments according to need.  Payments will not be reduced unless customers’ circumstances change, such as their income increasing in value. 



 

Parenting Payment Single will continue to be indexed to movement in the Consumer Price Index twice a year, and its purchasing power will be maintained. 

 

Conclusion

The amendments in the Schedule are compatible with human rights because they do not limit access to social security.

 



Schedule 2 - Family tax benefit

 

This Schedule 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 Schedule

This Schedule makes amendments to the A New Tax System (Family Assistance) Act 1999 .  From 1 July 2015, this Schedule maintains the standard FTB child rates for two years in the maximum and base rate of family tax benefit Part A and the maximum rate of family tax benefit Part B.

This reform will improve the sustainability of the family payments system over the long term, while continuing to provide assistance to families in need.

This Schedule also makes amendments to enable the following family payment reforms from 1 July 2015:

 

·          revise family tax benefit end-of-year supplements to their original values, and cease indexation;

·          limit family tax benefit Part B to families with children under six years of age, with transitional arrangements applying to current recipients with children above the new age limit for two years; and

·          introduce a new allowance for single parents on the maximum rate of family tax benefit Part A for each child aged six to 12 years inclusive, and not receiving family tax benefit Part B.

Human rights implications

These amendments engage the following human right:

Right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), recognises the right of everyone to benefit from social security.

Article 26 of the Convention on the Rights of the Child (CRC) requires countries to recognise the right of the child to benefit from social security.  Benefits should take into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child.

The United Nations Committee on Economic, Cultural and Social Rights has stated that a social security scheme should be sustainable and that the conditions for benefits must be reasonable, proportionate and transparent.

To the extent that maintaining the family tax benefit standard payment rates limits the right to social security, this is reasonable and proportionate.  The standard rates are not being reduced, and families will continue to receive assistance at current rates for another two years.  Certain elements of family tax benefit, namely rent assistance, newborn supplement, large family supplement and multiple birth allowance, will continue to be indexed.

This reform will help ensure the sustainability of the family payments system.

To the extent that revising the family tax benefit end-of-year supplements to their original values limits the right to social security, this is reasonable and proportionate.  It does not reduce the fortnightly assistance that families receive throughout the year.  The family tax benefit end-of-year supplements were introduced to help minimise the impact of families being overpaid as a result of underestimating their incomes for an entitlement year.  The change still retains a substantial amount to assist families to cover end-of-year debt.

Limiting the age of eligibility for family tax benefit Part B to families with a youngest child aged under six acknowledges that care requirements for children are higher when children are very young.  To the extent that this limits the right to social security, it is reasonable and proportionate.  This change encourages parents to participate in the workforce.  Families with a youngest child aged six and over will continue to be eligible for the payment for two years under grandfathering arrangements, giving them time to adjust to the change.

The introduction of a new allowance for single parents with a child aged six to 12 inclusive recognises that these families may have fewer resources to meet living costs and need to balance work with care responsibilities.  The single parent supplement is targeted specifically to low-income families, ensuring that children in these families will continue to benefit from additional financial support despite losing access to family tax benefit Part B.

Conclusion

These amendments are compatible with human rights because they advance the protection of human rights and, to the extent that these changes limit access to family payments, these limitations are reasonable and proportionate.



 

Schedule 3 - Waiting periods

 

This Schedule 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 Schedule

Schedule 3 to the Bill amends the Social Security Act 1991 to extend and simplify the application of the Ordinary Waiting Period.  The Ordinary Waiting Period is a one week waiting period that currently applies to new claimants of Newstart Allowance and Sickness Allowance. These new claimants must serve the waiting period before they start payment, unless they are exempt or the waiting period is waived.  The Ordinary Waiting Period reflects the general principle that people should support themselves before seeking Government assistance a nd has existed since the first iteration of these payments commenced in 1945. 

The amendments in this schedule seek to better promote self-support and discourage a culture of automatic entitlement to income support by ensuring that the waiting period is applied consistently and effectively across similar working age payments.

Extend the Ordinary Waiting Period to Youth Allowance (Other), Parenting Payment Single, Parenting Payment Partnered and Widow Allowance

This schedule will extend the application of the Ordinary Waiting Period to new claimants of Youth Allowance (other), Parenting Payment Single, Parenting Payment Partnered and Widow Allowance. From 1 January 2015, claimants of these payments will be required to serve the one week Ordinary Waiting Period before they commence payment, unless exempt or the waiting period is waived.  The Ordinary Waiting Period will also continue to apply to new claimants of Newstart Allowance and Sickness Allowance.  This means that the rules governing when payment commences will be more consistent across similar working age payment types. This limitation is reasonable as it ensures more consistent access to similar working age payments while maintaining the longstanding principle of self-support.  Claimants without the means to support themselves will have access to exemptions and waivers.

Introducing additional evidentiary requirements to ‘severe financial hardship’ waiver

Under existing legislation, claimants can have their Ordinary Waiting Period waived if the Secretary is satisfied that they are in ‘severe financial hardship’.  As per section 19C of the Social Security Act 1991 , a person is in ‘severe financial hardship’ if the value of their liquid assets is less than their fortnightly rate of payment if they are single, or less than double their fortnightly payment if they are partnered. 

This schedule will tighten these waiver provisions by introducing an additional requirement, in addition to severe financial hardship, that the person be experiencing a ‘personal financial crisis’ and provide supporting evidence in order to have the Ordinary Waiting Period waived.  The tightening of the severe financial hardship waiver also acts as a discouragement for people to spend their resources on non-essential items in order to obtain income support payments.  These limitations are reasonable as they ensure claimants use their own resources first, while still enabling those who are in hardship due to extenuating circumstances to access payments immediately.

As the individual circumstances of people are many and sometimes complex, it is not possible to envisage or legislate specifically in the primary legislation to cover all circumstances. The use of legislative instruments provides the Secretary or the Minister with the flexibility to refine policy settings to ensure that the rules operate efficiently and fairly without unintended consequences.

 

The measure in Schedule 3 allows the Secretary (under the current Administrative Arrangements Order, this means the Secretary of the Department of Social Services) to prescribe, by legislative instrument, the circumstances which constitute a ‘personal financial crisis’ for the purposes of waiving the Ordinary Waiting Period. Such circumstances may include where a person has experienced domestic violence or has incurred reasonable or unavoidable expenditure.

 

This provision provides the Secretary with the flexibility to consider other unforeseeable or extreme circumstances which may be identified in the future where it would be appropriate for a person to have immediate access to income support. Using an instrument will enable this to occur in a timely manner without having to amend the primary legislation. This power can only be used beneficially and any instrument issued by the Secretary would be subject to Parliamentary scrutiny and disallowance.

 

The definition of ‘personal financial crisis’ will be provided for by legislative instrument to enable the flexibility to consider a range of circumstances. Circumstances constituting such a crisis may include domestic violence, reasonable or unavoidable expenditure, or prison release.  These requirements will apply to waivers of the Ordinary Waiting Period for Newstart Allowance, Sickness Allowance, Youth Allowance (other), Parenting Payment (single and partnered) and Widow Allowance.

Other existing exemptions from the Ordinary Waiting Period will also continue to be available to claimants of the above payments who are:

·          reclaiming within 13 weeks of last receiving an income support payment; or

·          participating in certain employment services designed for vulnerable job seekers with multiple barriers to work.



Removing the concurrent application of the waiting period

Currently, depending on individual circumstances, claimants may be able to serve the Ordinary Waiting Period concurrently with certain other waiting periods or periods of reduced or non-payment.  This may result in some claimants being treated more beneficially than others. 

The Government acknowledges the increasing costs of the welfare system and seeks to ensure that working age people first use their own resources before relying on Government assistance.  Exclusion periods, such as the Income Maintenance Period and Liquid Assets Waiting Period, apply to certain working age income support payments to enforce self-support for a period which is based on the person’s level of resources. 

The amendments in this schedule Bill will remove the ability for claimants to serve the Ordinary Waiting Period concurrently with other waiting periods.  This means the Ordinary Waiting Period will be served following the end of any other waiting periods, including the Liquid Assets Waiting Period, Income Maintenance Period, Seasonal Work Preclusion Period and Newly Arrived Resident’s Waiting Period.  

The changes to the concurrency rules in this measure ensure that income support payments are directed towards those in need.

 

Human rights implications

Right to social security

Schedule 3 to the Bill engages the rights to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system.  The social security scheme must provide a minimum essential level of benefits to all individuals and families that will enable them to cover essential living costs.

The United Nations Committee on Economic, Cultural and Social Rights (the Committee) has stated that a social security scheme should be sustainable and that the conditions for benefits must be reasonable, proportionate and transparent (see General Comment No.19) .

Article 4 of ICESCR provides that countries may limit the rights such as to social security in a way determined by law only in so far as this may be compatible with the nature of the rights contained within the ICESCR and solely for the purpose of promoting the general welfare in a democratic society.  Such a limitation must be proportionate to the objective to be achieved.

A central principle underpinning Australia’s social security system is that support should be targeted to those in the community most in need in order to keep the system sustainable and fair.  The amendments in this schedule do not affect eligibility for social security pensions or benefits, rather they affect the rules governing when those eligible for certain payments can start receiving their entitlements.  The amendments focus on promoting self-support by requiring people to meet their own living costs for a short period where they are able.  New claimants that need immediate financial assistance will still be able to access exemptions and waivers provided they meet the relevant eligibility criteria.  In this way, the amendments help to ensure that immediate access to working age payments is targeted to those most in need.

To the extent that the changes in Schedule 3 may limit the right to social security , those limitations are reasonable and proportionate to the policy objective of ensuring a sustainable and well-targeted payment system.

Right to an adequate standard of living, including food, water and housing

Schedule 3 to the Bill engages the right to an adequate standard of living, including food, water and housing, contained in article 11 of the ICESCR.  The right to an adequate standard of living, including food, water and housing provides that everyone is entitled to adequate food, clothing and housing and to the continuous improvement of living conditions.

To the extent that there is an impact on a person’s right to an adequate standard of living, including food, water and housing, by virtue of Schedule 3, the impact is limited.  The Ordinary Waiting Period is a period of one week only during which those claimants with the means to support themselves are expected to do so.  Those who are unable to accommodate their own living costs for that one week period because they are in severe financial hardship and have experienced a personal financial crisis will be able to have the waiting period waived.

Therefore, Schedule 3 to the Bill will be compatible with the right an adequate standard of living as the potential limitations on this right are proportionate to the policy objective of encouraging self-support while providing a safety net as eligible persons can be exempted from serving the Ordinary Waiting Period or can have the Ordinary Waiting Period waived. 

Right to equality and non-discrimination

To avoid doubt, Schedule 3 is compatible with the right to equality and non-discrimination contained in articles 2 and 26 of the International Covenant on Civil and Political Rights (ICCPR).

Article 2(1) of the ICCPR obligates each State party to respect and ensure to all persons within its territory and subject to its jurisdiction the rights recognised in the Covenant without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status (see CCPR General Comment No. 18).

Article 26 not only entitles all persons to equality before the law as well as equal protection of the law, but also prohibits any discrimination under the law and guarantees to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status (see CCPR General Comment No. 18) .

It is important to note, however, that not all differential treatment will be considered discriminatory.  The Committee has provided the following commentary on when differential treatment will be considered discriminatory:

Differential treatment based on prohibited grounds will be viewed as discriminatory unless the justification for differentiation is reasonable and objective.  This will include an assessment as to whether the aim and effects of the measures or omissions are legitimate, compatible with the nature of the Covenant rights and solely for the purpose of promoting the general welfare in a democratic society.  In addition, there must be a clear and reasonable relationship of proportionality between the aim sought to be realised and the measures or omissions and their effects.  A failure to remove differential treatment on the basis of a lack of available resources is not an objective and reasonable justification unless every effort has been made to use all resources that are at the State party’s disposition in an effort to address and eliminate the discrimination, as a matter of priority (CESCR, General Comment No. 20).

Schedule 3 to the Bill will extend and simplify the application of the Ordinary Waiting Period.  There will be no differential treatment on the basis of race, colour, sex, language, religion, political or other opinion, national or social origin, property or birth as the Ordinary Waiting Period will apply equally to claimants of affected working age income support payments.

 

The proposed changes to the one-week Ordinary Waiting Period (OWP), which includes extending the OWP to additional working-age payments, affect all recipients of these payments, regardless of their gender.  As more than 90 per cent of Parenting Payment recipients and all Widow Allowance recipients are women, the changes may more significantly impact on women in that regard.  However, the changes are reasonable and proportionate to achieving the legitimate objective of providing consistency across similar working age payments by ensuring that all new claimants meet their own living costs for a short period before receiving Government assistance, where they are able.

 

The application of the Ordinary Waiting Period to Youth Allowance (other), Parenting Payment and Widow Allowance, in addition to Newstart Allowance and Sickness Allowance, will ensure that the waiting period is applied consistently to working age payments which a similar purpose.  While the Ordinary Waiting Period is not being extended to all social security payments, this will not be a limitation on the right to equality and non-discrimination as the differential treatment is for a reasonable and objective purpose.

The above working age payments are generally intended to be shorter-term payments which provide support while also offering incentives to return to work.  Claimants of these payments are also more likely to be able to support themselves for a time before needing income support as they may have transitioned from employment or had other means of support.  In contrast, pension payments, such as Age Pension and Disability Support Pension, provide longer-term support and are designed to acknowledge ongoing barriers that make it difficult for claimants to support themselves through paid employment.  Additionally, claimants of student payments generally have up-front expenses associated with their study which may substantially reduce any means of self-support.

It is therefore reasonable and objective to apply an Ordinary Waiting Period with respect to the above mentioned types of working age payments to ensure that claimants of these payments support themselves where they are able before calling on the Government for income support.  Claimants will be able to access exemptions and waivers to receive assistance sooner, if they are eligible.

For these reasons, Schedule 3 to the Bill is compatible with the right of equality and non-discrimination .

Conclusion

This Schedule is compatible with human rights.  To the extent that it may have limited adverse impact on a person’s right to social security, an adequate standard of living and equality and non-discrimination, the limitation is reasonable, proportionate to the policy objective and for legitimate reasons.



Schedule 4 - Pensioner education supplement

 

This Schedule 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 Schedule

In broad terms, the pensioner education supplement (PES) assists students with the ongoing costs of full-time or part-time study.  This Schedule repeals provisions that provide for PES, and makes related consequential changes.

The Government remains committed to providing incentives for income support recipients to improve their employment prospects through study or training.  More appropriate channels of Government-funded study and training assistance for income support recipients are available through employment service providers and the FEE HELP and VET FEE HELP tuition loan programmes.

Human rights implications

The Schedule engages the following human rights:

Right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to social security.

The amendments in this Schedule remove the PES.  PES is an additional fortnightly supplement of $62.40 for students who are undertaking at least 50 per cent of a full-time study load, or $31.20 for students with a study load below 50 per cent.

PES is available to certain recipients of social security payments and payments under the Veterans’ Entitlement Act 1986 who are undertaking qualifying study to assist with the ongoing costs associated with study.  Qualifying study includes secondary courses, tertiary courses, open learning, Certificate courses, Bachelor degrees, Advanced Certificate courses, Graduate Certificate courses, Graduate Diplomas and Degrees, Master qualifying courses or Approved Masters by coursework programs.

The removal of PES is compatible with the right to social security as it is not a social security payment to meet the regular cost of living but rather a supplement designed to assist with some of the costs associated with study, paid on top of a recipient’s social security payment.  An individual’s entitlement to other social security payments or benefits will be unaffected by the cessation of PES.

Right to education

Article 13 of the ICESCR recognises the right of everyone to education.

The removal of PES, to a small extent, impacts on an individual’s ability to participate in education, particularly if they have a low income.  However, its impact on individuals is minor ($31.20 or $62.40 per fortnight depending on study load), and it does not affect a person’s entitlement to other ongoing payments designed to support individuals to engage in education, such as austudy payment and youth allowance (student).

The Australian Government currently provides other programmes to assist tertiary students with the cost of their fees:

·          Students who are enrolling in a Commonwealth Supported Place for a university level qualification (that is, undergraduate level) can access a HECS-HELP loan to pay their student contribution amount.  Students accessing this loan are required to pay their debt through the tax system when they earn above the minimum threshold for compulsory repayment.

·          Eligible students who are enrolling in a higher-level vocational education and training (VET) qualification are able to access VET FEE-HELP, a loan scheme which assists eligible students, enrolled in diploma-level and above courses at an approved VET provider, to pay their tuition fees.

·          FEE-HELP is a loan scheme that assists eligible fee paying students in non-Commonwealth Support Places (for example, post-graduate level courses at university) pay all or part of their tuition fees.

  • Eligible students who access any of the above loans can borrow up to the FEE-HELP limit to pay their fees and do not have to repay the loan until their income meets the minimum repayment threshold.

The 2014-15 Budget is introducing additional measures to assist students with the costs of study.  Subject to the passage of legislation, the following measures will be introduced.

·          Equal access to loans for all Australian undergraduate students - the existing 25 per cent FEE-HELP loan fee and the 20 per cent VET FEE-HELP loan fee will be removed from 1 January 2016.

·          The FEE-HELP limit will be removed, and there will be no limit on the amount of FEE-HELP and VET FEE-HELP assistance that a student can access.  This change will apply for all students from 1 January 2016.

·          A new minimum repayment threshold for HELP will be introduced from the 2016-17 income year.  In that year, graduates will commence repaying their HELP debt once their income reaches an estimated $50,638.

  • Commonwealth Scholarship Scheme.  Higher education institutions will be required to commit $1 in every $5 of additional revenue to a new Commonwealth Scholarship scheme to provide tailored, individualised support to students, including needs-based scholarships to help meet costs of living, fee exemptions, tutorial support, and assistance at other critical points in their university career.  These Commonwealth scholarships are in addition to the existing student income support payments.  Commonwealth scholarships will be available from 1 January 2016.

In addition, if an individual is a jobseeker who is registered with a Job Services Australia provider, the provider can use the Employment Pathway Fund to help provide skills and qualifications for the jobseeker including:

 

·          employment-related training, and associated books and equipment;

·          literacy, language or numeracy assistance where places in other government funded programmes are unavailable; or

  • pre-vocational or preparatory support such as pre-apprenticeship training or pre-tertiary courses where it is not covered by other Government-funded programme.

Consequently, the removal of PES is reasonable in that access to other payments and support mechanisms to allow individuals to undertake study remains.

Conclusion

The Schedule is compatible with human rights because any impact on the right to education is balanced with other financial support for students.

 



Schedule 5 - Education entry payment

 

This Schedule 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 Schedule

In broad terms, the education entry payment (EdEP) assists with education expenses, and is paid once a year to eligible recipients.  This Schedule repeals provisions that provide for EdEP, and makes related consequential changes.

The Government remains committed to providing incentives for income support recipients to improve their employment prospects through study or training.  More appropriate channels of Government-funded study and training assistance for income support recipients are available through employment service providers and the FEE HELP and VET FEE HELP tuition loan programs.

Human rights implications

The Bill engages the following human rights:

Right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to social security.

The amendments in this Schedule remove the EdEP.  EdEP is an additional annual supplement of $208 paid to recipients of newstart allowance, partner allowance, widow allowance, widow B pension, wife pension, parenting payment (single and partnered), disability support pension, carer payment, special benefit partner service pension, invalidity service pension and income support supplement.  EdEP is specifically targeted to assist with the up-front costs of education and training for those who are enrolling or commencing in an approved course of study.

The removal of EdEP is compatible with the right to social security as it is not an ongoing social security payment to meet the regular cost of living but rather a supplement designed to assist individuals meet the up-front costs of education/training on an annual basis.  An individual’s entitlement to other social security or Veterans’ Affairs payments or benefits will be unaffected by the cessation of EdEP.

Right to education

Article 13 of the ICESCR recognises the right of everyone to education.

The removal of EdEP, to a small extent, impacts on an individual’s ability to participate in education, particularly if they have a low income.  However, its impact on individuals is minor ($208 per annum), and it does not affect a person’s entitlement to other ongoing payments designed to support individuals to engage in education, such as austudy payment and youth allowance (student).

The Australian Government currently provides other programmes to assist tertiary students with the cost of their fees:

·          Students who are enrolling in a Commonwealth Supported Place for a university level qualification (that is, undergraduate level) can access a HECS-HELP loan to pay their student contribution amount.  Students accessing this loan are required to pay their debt through the tax system when they earn above the minimum threshold for compulsory repayment.

·          Eligible students who are enrolling in a higher-level vocational education and training (VET) qualification are able to access VET FEE-HELP, a loan scheme which assists eligible students, enrolled in diploma-level and above courses at an approved VET provider, to pay their tuition fees.

·          FEE-HELP is a loan scheme that assists eligible fee paying students in non-Commonwealth Support Places (for example, post-graduate level courses at university) pay all or part of their tuition fees.

  • Eligible students who access any of the above loans can borrow up to the FEE-HELP limit to pay their fees and do not have to repay the loan until their income meets the minimum repayment threshold.

The 2014-15 Budget is introducing additional measures to assist students with the costs of study.  Subject to the passage of legislation, the following measures will be introduced:

·          Equal access to loans for all Australian undergraduate students - the existing 25 per cent FEE-HELP loan fee, and the 20 per cent VET FEE-HELP loan fee will be removed from 1 January 2016.

·          The FEE-HELP limit will be removed, and there will be no limit on the amount of FEE-HELP and VET FEE-HELP assistance that a student can access.  This change will apply for all students from 1 January 2016.

·          A new minimum repayment threshold for HELP will be introduced from the 2016-17 income year.  In that year, graduates will commence repaying their HELP debt once their income reaches an estimated $50,638.

·          Commonwealth Scholarship Scheme.  Higher education institutions will be required to commit $1 in every $5 of additional revenue to a new Commonwealth Scholarship scheme to provide tailored, individualised support to students, including needs-based scholarships to help meet costs of living, fee exemptions, tutorial support, and assistance at other critical points in their university career.  These Commonwealth scholarships are in addition to the existing student income support payments.  Commonwealth scholarships will be available from 1 January 2016.

In addition, if an individual is a jobseeker who is registered with a Job Services Australia provider, the provider can use the Employment Pathway Fund to help provide skills and qualifications for the jobseeker including:

·          employment related training, and associated books and equipment;

·          literacy, language or numeracy assistance where places in other government-funded programmes are unavailable; or

·          pre-vocational or preparatory support such as pre-apprenticeship training or pre-tertiary courses where it is not covered by other government-funded programme.

Consequently, the removal of EdEP is reasonable in that access to other payments and support mechanisms to allow individuals to undertake study remains.

Conclusion

The Schedule is compatible with human rights because any impact on the right to education is balanced with other financial support for students.

 



Schedule 6 - Age requirements for various Commonwealth payments

 

This Schedule 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 Schedule

This measure proposes that, from 1 January 2015, young unemployed people aged 22 to 24 would no longer be eligible for newstart allowance or sickness allowance until they turn 25 years of age and would, instead, be able to claim and qualify for youth allowance. To enable this, youth allowance for all types of persons who can satisfy the activity test, will be available to persons who have not yet reached 25. Youth disability supplement will also be available to all youth allowance recipients who have not yet reached 25. The amendments include safeguards to ensure that existing newstart allowance recipients on commencement of the measure who are 22, 23 or 24 (or persons undergoing certain waiting periods or suspension periods) can remain in receipt of newstart allowance. Similar savings rules are provided for sickness allowance.

The measure also proposes to make consequential amendments to the Farm Household Support Act to align rates at which farm household allowance is paid, to farmers and their partners, with newstart and youth allowance rates.

Human rights implications

The measure engages the following human rights:

Right to social security

The measure engages article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), which recognises the right of everyone to social security.

The proposed measure broadly aligns the income support arrangements for all young people aged under  25 years, with the objective of ensuring the social security system supports and encourages young people in their transition from study to work. The measure aims to provide rational incentives for young unemployed Australians to acquire the required skills to obtain gainful employment by encouraging study, particularly for young people who have been unsuccessful in gaining work. Incentives are provided to persons aged 22, 23 or 24 who, as a result of this measure, will no longer be able to qualify for newstart allowance. This is achieved through the availability of a larger income free threshold compared to newstart allowance, for those being paid for any work while in study or training.

This measure also removes the incentive for young unemployed Australians to forgo study in favour of moving to newstart allowance, which is paid at a higher rate than youth allowance. This limitation is a reasonable and proportionate measure for the achievement of that objective. The use of savings provisions for recipients already in receipt of newstart allowance or sickness allowance on 31 December 2014 (or others undergoing certain waiting periods or suspension periods), ensures 22, 23 and 24 year olds already qualified for newstart allowance and sickness allowance will not be affected by the amendments following commencement until their payment is cancelled. The measure will also not modify the age at which a person is regarded as ‘independent’ (currently 22 years) for youth allowance. This will mean that persons above that age will continue to not be subject to parental means testing.

Right to education

This measure engages Article 13 of the ICESCR, which recognises the right of everyone to education.

The proposed measure enhances and incentivises the acquiring of education and skills for young people. It is designed to activate young unemployed youth (age 22 to 24) who are currently not in education or working. Enabling this cohort to qualify for youth allowance rather than newstart allowance provides an incentive to obtain the required training to place them in a position of improved employability. Youth allowance has a higher income free threshold compared to newstart allowance, enabling a greater scope to earn while learning or training.

Rights of persons with disabilities

This measure engages Article 28 of the Convention of the Rights of Persons with Disabilities , which recognises the right to an adequate standard of living and social protection for those with disability.  The proposal recognises the special requirements of income support recipients with disability by raising the age of qualification for the youth disability supplement (as paid as a component of youth allowance) to 24 years.

Conclusion

This measure is compatible with human rights because it generally advances human rights including the opportunity for education and gainful employment.  To the extent that it may have any adverse impact on human rights, that impact is reasonable and proportionate, and is for legitimate reasons.



Schedule 7 - Exclusion periods

This Schedule 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 Schedule

This Schedule implements an income support measure that forms part of the broader reforms announced in the 2014-15 Budget. This measure aims to encourage greater participation in work and other activities and make the system fairer and more sustainable, to ensure a productive Australian workforce for the future. The measure establishes firm expectations for young jobseekers. It provides an incentive for affected persons to be self-sufficient, or to undertake further relevant education or training to increase employability before relying on the taxpayer for support.

Waiting periods

Subject to some exemptions, the amendments made by this Schedule will apply from 1 January 2015 to a person aged under 30 years and who is a new claimant for, or transferring from another payment to, newstart allowance, youth allowance (other) and, in certain circumstances, special benefit. Such persons will be subject to a 26-week waiting period before the social security benefit becomes payable. This 26-week period may be reduced if a person has had past periods of gainful work.

After an initial 26-week waiting period, jobseekers may become able to receive income support for 26 weeks. It is anticipated that a person will be required to participate in 25 hours per week of Work for the Dole or other approved activities during this 26-week payment period.

Non-payment period

After a 26-week payment period, a person may become subject to a further 26-week non-payment period, unless an exemption applies. A wage subsidy will be made available to employers, as well as relocation assistance to encourage people to move to where jobs are available.

Recipients of social security benefits on 1 January 2015

A person who, on 1 January 2015, is receiving a social security benefit or is taken to be receiving a social security benefit in certain circumstances, may become subject to a 26-week non-payment period once they have completed a Work for the Dole programme after 1 July 2015, provided they are aged less than 30 years and an exemption does not apply. This cycle will continue, with income support generally payable for 26 weeks in every 52-week period, until a person finds a job, undertakes full-time study, or turns 30 years of age.

Exemptions

A person will have an exemption from the new waiting period or the new non-payment period if the person:

·          is a principal carer of a child;

·          is a parent of an FTB child. The effect of this is that a parent who has 35 per cent or more care of a child will be exempt from a Part 3.12B waiting period or non-payment period;

·          has a partial capacity to work;

·          has a current Commonwealth registration number in relation to a part-time apprenticeship, traineeship or trainee apprenticeship;

·          required employment services or disability employment services of a class determined by the Minister in a legislative instrument;

The Minister will also be able to determine temporary exemptions in a legislative instrument which exempt a person from a waiting period or a non-payment period for a particular period of time.

Activity test and participation requirements

A person will be required to comply with their activity test and participation requirements while they are subject to the new waiting period and non-payment period. These requirements are to look for work, attend appointments with employment services providers and accept any offers of suitable work. Requirements will be monitored through Employment Pathway Plans, and young jobseekers will be required to enter into and comply with the terms of an Employment Pathway Plan at all times during the new exclusion period. Jobseekers who fail to comply with an Employment Pathway Plan may have an exclusion period extended or a penalty imposed.

Human rights implications

This measure engages the following human rights:

Right to work

Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right to work. This includes the right to the opportunity to gain a living by work which the person freely chooses or accepts, and is considered an inherent part of human dignity [1] .

This measure provides incentives for young unemployed Australians to either acquire employment or the required skills to obtain gainful employment. As such, this Schedule encourages affected persons to enter the workforce, or undertake further study to enhance their employment prospects, rather than relying on the social security system. This measure therefore seeks to ensure that more jobseekers experience the benefits of employment - for example, greater social and economic inclusion.

Right to social security

Article 9 of the ICESCR recognises the right of everyone to social security.

The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide a minimum essential level of benefits to all individuals and families that will enable them to cover essential living costs.

This measure will implement a framework to ensure that vulnerable young people, including those with children or disability, will continue to have access to income support under the current arrangements and not be subject to this measure. This measure contains exemptions to ensure that vulnerable persons can be exempted from the measure, including those who: are the principal carer of a child or a parent of an FTB child; have only a partial capacity to work; are a part-time apprentice; or are undertaking more intensive employment services or disability employment services. These exemptions ensure that vulnerable persons are still able to receive payments. The minister will also have the discretion, via disallowable instrument, to provide further exemptions from the measure for other classes of people identified as vulnerable.

This measure also continues to provide access to social security for those young people who elect to undertake full-time study or training to further their employment prospects, with no waiting period applied for access to student income support payments. Therefore the right to social security is not removed and the limitation on immediate access to unemployment benefits is reasonable and proportionate to the objective of having young people either earning or learning to increase their employment prospects. 

In alignment with the intent of the measure, those young people that have work experience may be able to reduce their initial 26-week period to a minimum period of 4 weeks.

If a young person enters a second or subsequent non-payment period, they will have access to wage subsidy support through employment services providers and additional assistance to relocate for employment. This aspect of the measure recognises that social security can be made available ‘in case or in kind’, as acknowledged by the Committee on Economic, Social and Cultural Rights [2] . A young person may elect to undertake further study or training and transfer to a student income support payment.

The savings made by this measure will ensure that the broader social security system is focussed on those that need it most, helping to promote general welfare in a democratic society (consistent with Article 4 of the ICESCR).

This measure aims to provide greater encouragement to jobseekers to make a genuine effort to enter suitable employment, including if necessary by moving to a different area, rather than remaining on income support.

This measure will help to maintain the integrity of the social security system and ensure finite resources are equitably allocated to genuine jobseekers. To the extent that this measure may limit the right to social security, the impact is reasonable and proportionate.

Right to an adequate standard of living

Article 11 of the ICESCR recognises the right of everyone to an adequate standard of living and to the continuous improvement of living conditions.

Young people will continue to have access to an adequate standard of living by undertaking full-time study or training if their job search activities are unsuccessful. The limitations imposed on the social security system by this measure, in focusing on young persons, acknowledges that young persons often have access to family support to enjoy an adequate standard of living. In encouraging young persons to work or undertake further study, it also acknowledges that the best way for a person to enjoy an adequate standard of living is through entering the workforce. There is a rational connection between the limitation and the objective and the limitation of immediate access to unemployment benefits is reasonably and proportionate to the achievement of that measure.

Currently, claimants of social security payments may be subject to a range of waiting and exclusion periods which operate on the basis that claimants should draw on their own resources before drawing from taxpayer funded financial support. This measure will impose an additional initial 26-week exclusion period to prevent young job ready people becoming fully reliant on income support and encourage workforce participation.

Right to education

Article 13 of the ICESCR recognises the right of everyone to education.

This measure enhances and provides incentives for young people to obtain an education and skills. It is designed to motivate young unemployed Australians who are currently not in education or working. Subjecting a job ready young person to a waiting period unless they are studying provides a financial incentive to learn which will place such persons in a position of improved employability over their life course. The Australian Government has a framework in place to ensure uncapped places and uncapped availability of student income support for young unemployed Australians who enter into full-time education or training.

Rights of persons with disabilities

Article 28 of the Convention on the Rights of Persons with Disabilities deals with the adequate standard of living and social protection issues of those having a disability. This measure recognises the special requirements of income support recipients in such a situation and exempts people with an assessed partial capacity to work due to a disability from the measure.

Conclusion

This Schedule is compatible with human rights. To the extent that it limits rights, the limitation is reasonable, proportionate to the policy objective and for legitimate reasons.



Schedule 8 - Date of effect for veterans’ disability pension

 

This Schedule 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 Schedule

The Schedule amends the Veterans’ Entitlements Act to change the earliest date of effect for a grant of disability pension to the date the claim is received at the Department of Veterans’ Affairs, instead of a date that is not earlier than three months before the date the claim is received at the Department of Veterans’ Affairs.

Human rights implications

This measure engages the right to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system.  The social security scheme must provide a minimum level of benefits to all individuals and families that will enable them to cover essential living costs.

 

The United Nations Committee on Economic, Cultural and Social Rights (the committee) has stated that a social security scheme should be sustainable and that the conditions for benefits must be reasonable, proportionate and transparent (see General Comment No. 19).

 

A backdated commencement for disability pension was originally introduced in 1943 under the Act preceding the Veterans’ Entitlements Act, to provide a safety net for Second World War veterans who were discharged before a claim for a disability pension was lodged.  The intention was to ensure that veterans could receive payment from the date of discharge where there had been a delay in lodging the claim.

 

The current backdating provisions relate only to claims under the Veterans’ Entitlements Act for injuries and illnesses related to defence service rendered prior to 30 June 2004.  Claims for permanent impairment compensation under the Military Rehabilitation and Compensation Act for defence service rendered on or after 1 July 2004 are paid from the date of claim or later.

 

The amendments will align the date of effect for the grant of disability pension with other Veterans’ affairs portfolio programs such as income support under the Veterans’ Entitlement Act and permanent impairment under the Military Rehabilitation and Compensation Act.  The proposed amendments also restore equity between income support and disability pension compensation under the Veterans’ Entitlement Act .

 

Conclusion

 

The amendments made by this Schedule are compatible with human rights because:

 

  • to the extent that the changes reduce the period for which disability pension is payable, the reduction is reasonable, necessary and proportionate to achieving a legitimate aim; and
  • they do not limit or preclude eligible persons from gaining or maintaining access to disability pension compensation under the Veterans’ Entitlement Act .

 

Minister for Social Services, the Hon Kevin Andrews MP

 




[1] Committee on Economic, Social and Cultural Rights, General Comment 18, paragraphs 1 and 2.

[2] Committee on Economic, Social and Cultural Rights, General Comment 19.