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Social Services Legislation Amendment (Youth Employment and Other Measures) Bill 2015

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2013-2014-2015

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

SOCIAL SERVICES LEGISLATION AMENDMENT

(YOUTH EMPLOYMENT AND OTHER MEASURES) BILL 2015

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Social Services, the Hon Scott Morrison MP)



 



SOCIAL SERVICES LEGISLATION AMENDMENT

(YOUTH EMPLOYMENT AND OTHER MEASURES) BILL 2015

 

 

OUTLINE

 

This Bill introduces a number of measures in the Social Services portfolio, including 2015 Budget measures and several measures previously introduced in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014 (the No. 4 Bill).

The measures are provided by Schedules to the Bill numbered as set out below:

  1. Ordinary waiting periods - exclude widow allowance claimants from the one-week ordinary waiting period for working age payments, to be implemented from 1 July 2015 - that is, reintroduce Schedule 3 to the No. 4 Bill but excluding widow allowance claimants.

2.     Age requirements for various Commonwealth payments - delay to 1 July 2016 the start date for the measure increasing the age of eligibility for newstart allowance and sickness allowance - that is, reintroduce Schedule 6 to the No. 4 Bill with new start date.

  1. Income support waiting periods - introduce a revised four-week waiting period for youth income support from 1 July 2016 - that is, introduce a replacement for the measure provided by Schedule 7 to the No. 4 Bill, which required young people with full capacity to serve a six-month waiting period for income support, with access to payment for six months and rolling six-month non-payment periods thereafter.
  2. Low income supplement - cease the low income supplement from 1 July 2017.

5.     Indexation - reintroduce the following changes to Australian Government payments provided by Schedule 1 to the No. 4 Bill:

·          maintain at level for three years the income free areas for all working age allowances (other than student payments) and for parenting payment single - from the existing start date of 1 July 2015; and

·          maintain at level for three years the income free areas and other means test thresholds for student payments, including the student income bank limits - with a new start date of 1 January 2016.



Financial impact statement

MEASURE

FINANCIAL IMPACT OVER THE FORWARD ESTIMATES (SAVINGS)

1.       Ordinary waiting periods

$274.8 million

2.       Age requirements for various Commonwealth payments

$517.0 million

3.       Income support waiting periods

$173.3 million

4.       Low income supplement

$42.9 million

5.       Indexation:

·          maintain at level for three years the income free areas for all working age allowances (other than student payments) and for parenting payment single

·          maintain at level for three years the income free areas and other means test thresholds for student payments, including the student income bank limits

 

$134.8 million (combined)

 

 

 

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

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

 



SOCIAL SERVICES LEGISLATION AMENDMENT

(YOUTH EMPLOYMENT AND OTHER MEASURES) BILL 2015

 

 

NOTES ON CLAUSES

Abbreviations used in this explanatory memorandum

  • Farm Household Support Act means the Farm Household Support Act 2014
  • Social Security Act means the Social Security Act 1991
  • Social Security Administration Act means the Social Security (Administration) Act 1999

 

Clause 1 sets out how the new Act is to be cited - that is, as the Social Services and Other Legislation Amendment (Youth Employment and Other Measures) Act 2015.

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 - Ordinary w aiting periods

 

 

Summary

This Schedule makes amendments to extend and simplify the ordinary waiting period for all working age payments from 1 July 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 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 exemption on the basis of severe financial hardship will only apply if the person is also experiencing a personal financial crisis.  A person will be taken to be experiencing a personal financial crisis if they have been subjected to domestic violence, incurred unavoidable or reasonable expenditure or in the circumstances prescribed by the Secretary in a legislative instrument.

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 July 2015.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Items 1 and 2 amend the definition of unavoidable and reasonable expenditure so the definition can apply for the purpose of whether a person is experiencing a personal financial crisis.  Item 5 inserts a new section 19DA to provide for when a person is experiencing a personal financial crisis.  This is relevant for whether a person has an exemption from the ordinary waiting period.  Under new subsection 19DA(3), a person is experiencing a personal financial crisis if the person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure.

Current subsection 19C(4) provides for the meaning of unavoidable or reasonable expenditure in relation to a person who is serving a liquid assets test waiting period, is subject to a seasonal work preclusion period, or a person to whom an income maintenance period applies. 



Items 1 and 2 amend subsection 19C(4) to provide that, in relation to working out whether a person is subject to an ordinary waiting period, unavoidable or reasonable expenditure includes, but is not limited to, the reasonable costs of living, under subsection 19C(6) and (7) that the person has incurred in the four-week period before the person’s claim for the relevant payment, if the person is qualified for the payment on the day of claim.

Current subsection 19C(5) provides that the reasonable costs of living of a person include, but are not limited to, the following costs:

·          food costs;

·          rent or mortgage payments;

·          regular medical expenses;

·          rates, water and sewerage payments;

·          gas, electricity and telephone bills;

·          costs of petrol for the person’s vehicle;

·          public transport costs; and

·          any other cost that the Secretary determines is a reasonable cost of living in relation to a person.

Items 3 and 4 amend subsections 19C(6) and (7) to provide for the maximum amount of the reasonable costs of living that are taken to have been incurred for the purpose of subsection 19C(4).  The amount of reasonable costs of living cannot exceed the amount of newstart allowance, youth allowance (other), sickness allowance or parenting payment (as the case may be) that would have been payable in the four-week period before the person’s claim for that payment if the payment was payable, or in the case of a person who is a member of a couple, twice the amount of the payment that would have been payable in that period.

Item 5 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 exemption will now apply only if, in addition to being in severe financial hardship, subsection 19DA(2), (3) or (4) applies to the person.  Those subsections will apply if the person:

·       has been subjected to domestic violence in the four-week period before the person makes a claim for a relevant payment, if the person is qualified for the payment on the day of claim (subsection (2));

·       is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure in the  four-week period before the person makes a claim for a relevant payment, if the person is qualified for the payment on the day of claim.  Items 1 and 2 amend the definition of unavoidable and reasonable expenditure in section 19C so that it can apply for the purpose of determining whether a person has an exemption from an ordinary waiting period (subsection (3)); or

·       satisfies circumstances prescribed in a legislative instrument made by the Secretary (subsection (4)).  Subsection 19DA(5) provides the Secretary with the power to prescribe circumstances for this purpose. 

Subsection 19DA(6) clarifies that a person will not be taken to satisfy the circumstances in subsections 19DA(2), (3) or (4) unless he or she can produce evidence that demonstrates a reasonable possibility that he or she satisfies the circumstances.  It is expected that a person will meet this evidence requirement by complying with the current evidentiary requirements of the Department of Human Services.  It will not always be necessary for a person to provide written evidence. For example, a person may provide confirmation from a social worker that they have experienced domestic violence and this will likely satisfy the ‘evidence requirement’ in subsection 19DA(6).

Item 6 is consequential to the amendments made by item 5.

Items 7 and 8 amend the definitions of ordinary waiting period and waiting period in subsection 23(1) to refer to the new ordinary waiting periods for parenting payment and youth allowance (other).  The definition of waiting period is also amended to refer to a newly arrived resident’s waiting period.  This is a waiting period that may currently apply under the Social Security Act but which has been inadvertently omitted from the definition of waiting period .

Item 9 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 10 and 12 provide for a new ordinary waiting period for parenting payment and youth allowance (other), and provide for the duration of those waiting periods.

New subsection 549CA(1) makes it clear that the new ordinary waiting period provisions for youth allowance apply only in relation to a person who is qualified for youth allowance (other) and not in relation to a person who is qualified for youth allowance on the basis of being a student or new apprentice.

Under new subsections 500WA(1) and 549CA(2), a person will be subject to the ordinary waiting period for parenting payment and youth allowance (other) unless:

·          the person was receiving an income support payment at some time in the 13 weeks immediately before the person made a claim for  parenting payment or youth allowance (other); or

·          the Secretary is satisfied that the person is experiencing a personal financial crisis (as defined in new section 19DA, inserted by item 5); or

·          in relation to youth allowance (other), immediately before the person was qualified for that payment, the person was qualified for youth allowance on the basis of being a student or new apprentice.  This means that a person transitioning from youth allowance on the basis of being a student or new apprentice to youth allowance (other) will not serve an ordinary waiting period.

Further, subsections 500WA(2) and 549CA(3) 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 2013 (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 500WA(3) and 549CA(4) allow the Secretary to specify these activities in a legislative instrument.

Subsections 500WB(1) and 549CB(1) provide that, subject to subsections (2) and (4) of those provisions, the ordinary waiting period is a period of seven days that starts on the day that parenting payment or youth allowance (other), as applicable, would have been payable but for the ordinary waiting period.

Subsection 500WB(2) provides for the start of an ordinary waiting period for parenting payment where the person is subject to a seasonal work preclusion period, a lump sum preclusion period or an income maintenance period, where the rate of parenting payment payable would be nil on the start day.  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 500WB(3) and 549CB(3) provide for circumstances in which a person is subject to an income maintenance period where the person’s rate of parenting payment or youth allowance (other) is nil on the person’s start day, but where the rate of payment subsequently would become payable at a rate greater than nil during the income maintenance period.  In these circumstances, the effect of subsections 500WC(3) and 549CB(3) is that the income maintenance period is taken to have ended for the purpose of the ordinary waiting period provisions when the payment would have become payable at a rate greater than nil.  This means that the person will serve the ordinary waiting period when their rate of parenting payment or youth allowance (other) would have become payable at a rate greater than nil.

Subsections 500WB(4) and 549CB(4) provide for the start of an ordinary waiting period for 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 11 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 13, 14 and 15 make consequential amendments to section 549F.  Section 549F makes it clear that a youth allowance is not payable until both the waiting periods mentioned in Subdivision C of Division 2 of Part 2.11 of the Social Security Act have ended.  As this Schedule inserts a new ordinary waiting period for youth allowance (other), section 549F will now make it clear that a youth allowance is not payable until all of the waiting periods in Subdivision C, including an ordinary waiting period, have ended.

Items 16 and 21 amend paragraphs 620(1)(a) and 693(a).  Current sections 620 and 693 provide for the ordinary waiting period for newstart allowance and sickness allowance.  Paragraphs 620(1)(a) and 693(a) provide that a person is not subject to an ordinary waiting period for newstart allowance and sickness allowance if the person has received an income support payment in a 13-week period.  The effect of these items is to make it clear that this 13-week period is the period before the person’s start day, disregarding clause 5 of Schedule 2 to the Social Security Administration Act.  This will generally be the 13 weeks before the person made a claim for newstart allowance or sickness allowance.

Items 17 and 22 are consequential to the amendments made by items 19 and 24.

Items 18 and 23 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 5 of this Schedule).

Items 19 and 24 insert new notes that are consequential to the amendments made by this Schedule.

Items 20 and 25 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 (5) 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 where the rate of newstart allowance or sickness allowance payable would be nil on the start day.  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 circumstances in which a person is subject to an income maintenance period where the person’s rate of newstart allowance or sickness allowance is nil on the person’s start day, but where the rate of payment subsequently would become payable at a rate greater than nil during the income maintenance period.  In these circumstances, the effect of subsections 621(4) and 694(4) is that the income maintenance period is taken to have ended for the purpose of the ordinary waiting period provisions when the payment would have become payable at a rate greater than nil.  This means that the person will serve the ordinary waiting period when their rate of newstart allowance or sickness allowance would have become payable at a rate greater than nil.

Subsections 621(5) and 694(5) 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 26 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 2 - Age requirements for various Commonwealth payments

 

 

Summary

From 1 July 2016, 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 people who can satisfy the activity test, will be available to people 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 a grandfathering arrangement to allow existing newstart allowance recipients who are 22, 23 or 24 leading up to commencement (or people undergoing certain waiting periods or suspension periods) to 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 provide incentives to 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.

 

Presently, unemployed youth aged 22 to 24 are able to qualify for newstart allowance or sickness allowance rather than youth allowance.  People 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 replaces the reference to age 22 in paragraphs 38K(2)(a) and (b) with a reference to age 25.  Section 38K sets out an income test for a person’s social security pension if green army allowance is payable to the person’s partner.    Subsection 38K(1) provides that if the amount of the partner’s green army allowance exceeds the threshold applicable under subsection 38K(2), the part of the green army allowance that exceeds that threshold is ordinary income of the person’s partner.  Current subsection 38K(2) provides a different threshold where a person’s partner is aged under 22 compared to where the person’s partner is aged 22 or over.  There is a higher threshold for a person aged over 22 years compared with a person aged under 22 years.  This item will changes the age references in subsection 38K(2) to 25 years.

Item 3 is the key amendment that will lift the qualification age for youth allowance, allowing people 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 people not undertaking full-time study, people undertaking full-time study and people who are ‘new apprentices’.  This amendment proposes to set the maximum age of youth allowance at 25 for all people previously dealt with by subsection 543B(1).  Note that subsection 543B(2) will still provide that people 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 15.

Items 4 and 5 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 16.

Item 6 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 17.

Item 7 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 item3.

Items  8, 9, 10 and 11 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 12 is an amendment consequential upon the changes to youth disability supplement proposed by item 7.  Item 12 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 13 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 the commencement date.

Item 14 is an application provision to clarify that the amendment made by item 2 to the income test for a person’s social security pension where green army allowance is payable to the person’s applies in relation to instalment periods ending on or after the commencement date.

Item 15 is an application provision that sets out how various amendments proposed by this Schedule will affect different people. 

Subitem 15(1) sets out the default rule (‘default’ in the sense that it operates subject to subitems 15(2) and (3)) that the amendments made by item 3 to the ‘maximum age for youth allowance’ apply for the purposes of working out whether a person qualifies for youth allowance for days from commencement date and onwards.

Subitem 15(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 16(2), that existing people 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 5(3) is an application provision that will apply to a person where a claim for newstart allowance was granted before the commencement of item 3 in circumstances where the start day is worked out as being on a day after the commencement date.  If this provision applies to a person, the amendments made by item 3 (to adjust the ‘maximum age of youth allowance’) will not apply to that person until their newstart allowance is cancelled.

Subitem 15(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 7 will apply to a person.  The subitem states that the amendment made by item 7 will apply from the commencement date onwards.

Item 16 deals with various circumstances around how the amendments made by items 4 and 5 (to raise the lower age qualification limits for newstart allowance) apply, depending upon a person’s particular case as follows.

Subitem 16(1) sets out the default rule (to operate subject to the more specific rules in the remainder of item 16) that the amendments made by items 4 and 5 apply for working out whether a person is qualified for newstart allowance from days extending from the commencement date onwards.

Subitem 16(2) provides that if, immediately before the amendments made by this Schedule commence (that is, on 30 June 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 4 and 5 (to raise the lower qualification age for newstart allowance from 22 to 25) do not affect the person from the commencement date 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 16(3) operates to ensure that claims for newstart allowance made by people aged 22, 23 or 24 that have been made but not determined by the Secretary at the time immediately before the commencement date 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 4 and 5.  This means that 22, 23 and 24 year old people who have a claim pending (that is, made but not determined) on the commencement date can still be granted newstart allowance on the basis of the claim as if the lower age limit for qualification remains 22, from the commencement date until the person’s payment (if granted as a result of the claim) is cancelled.

Subitem 16(4) deals with the application of the amendments proposed by items 4 and 5 to people 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 the commencement date.  For such people, the amendments made by items 4 and 5 do not apply from the commencement date 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 16(5) ensures that people 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 the commencement date until their payment is cancelled.  This provision will operate as a beneficial rule for people 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 16(6) is an application provision that will apply to a person where a claim for newstart allowance was granted before the commencement of items 4 and 5 in circumstances where the start day is worked out as being on a day after the commencement date.  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 people aged 22, 23 or 24 at the time of commencement, as people 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 17(1) and (2) provide that item 6, 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 the commencement date onwards, unless the person is 22, 23 or 24 on the commencement date and is in receipt of sickness allowance or is undergoing a period of suspension in relation to their sickness allowance:  such people can remain in receipt (or have their sickness allowance payment resumed after a period of suspension) following the commencement date until their payment is cancelled.

Subitems 17(3) to 17(6) are modelled on the application provisions for newstart allowance at subitems 16(3) to 16(6), and operate as described in more detail above in relation to newstart allowance in circumstances where, for people 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 is after the commencement date.

Item 18 provides that the amendments made by items 8, 9, 10 and 11 (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 the commencement date onwards.

Amendments to the Farm Household Support Act

Items 19, 20, 21 and 22 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 3, 4 and 5 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 people of the same age.

Similarly, items 23, 24 and 25 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 people of the same age.

Item 26 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 people 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 people who have and have not turned 25 respectively.

The amendments made by item 27 are various application rules which determine how certain people are affected by the amendments made by items 21, 22, 24 and 24 from the commencement date.

Subitem 27(1) sets out a default rule (that is, one that is subject to subitems 27(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 21, 22, 24 and 25, 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 the commencement date and days following.

Subitem 27(2) ensures that people in receipt of farm household allowance on the commencement date (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 21 and 22.  This is a beneficial rule which will ensure that such people 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 24 and 25 as these items change references to people who ‘have not turned 22’ to references to people who ‘have not turned 25’, the rationale being that people who have not turned 22 on commencement will also have not turned 25.  People will only remain able to benefit from this application provision until their payment is cancelled.

Subitem 27(3) is a similar rule that deals with people who are aged 22, 23 or 24 on commencement whose claim has been granted prior to the commencement date for a start date on or after the commencement date.  Such people are also not affected by the amendments made by items 21 and 22 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.  People will only remain able to benefit from this application provision until their payment is cancelled.

Subitem 27(4) ensure that the amendments proposed for changing the reference from 22 to 25 in items 1 and 16 of the table in subsection 93(1) of the Farm Household Support Act do not apply during the period that the application provisions described above (and particularly subitems 27(2) and (3)) do not apply.  Aligned in this way to the period for which the application provisions dealing with items 21 and 22 operate for a person, this subitem also ensures that people 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 the commencement date, 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 3 - Income support waiting periods

 

 

Summary

This measure introduces a four-week waiting period for job ready young people who are looking for work to receive income support payments.  During this four-week period, job seekers under 25 years of age who have been classified as job ready (Stream A) by the Job Seeker Classification Instrument will also be required to complete assigned activities, through a new program, RapidConnect Plus, that will help them prepare for and find work.

Background

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 job seekers.  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 July 2016 to a person aged under 25 years who is a new claimant for youth allowance (other) and, in certain circumstances, special benefit.  Such a person will be subject to a four-week waiting period, as well as any other waiting periods that may apply, before the social security benefit becomes payable.

A person will not be subject to the new waiting period if they are subject to an exemption.  This Schedule sets out a number of exemptions for a person who is not yet job ready and allows the Minister to specify further exemptions in a legislative instrument. 

The amendments made by this Schedule commence on 1 July 2016.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Item 1 inserts a new definition of income support waiting period into subsection 23(1).  This Schedule provides for a new youth allowance income support waiting period under new section 549CAA and a new special benefit income support waiting period under new section 739AA.

Items 2 and 3 amend the definition of waiting period in subsection 23(1) to refer to the new income support waiting period for youth allowance and special benefit.

Item 4 is a technical amendment to remove a redundant reference to section 732 in paragraph (ka) of the definition of waiting period .  Section 732 no longer provides for a waiting period.



Item 5 amends subsection 549(2) to provide for an income support waiting period under section 549CAA (as inserted by item 6).  Section 549 provides that youth allowance is not payable if a person is subject to certain waiting periods.

Item 6 inserts new sections 549CAA and 549CAB to provide for a new income support waiting period for youth allowance and exemptions from that waiting period.

Persons subject to the income support waiting period

Subsection 549CAA(1) provides that a person is subject to an income support waiting period if the person who is qualified for youth allowance is neither undertaking full-time study nor a new apprentice.

As a result of amendments made by Schedule 2 to this Bill, the maximum age at which a person is qualified for youth allowance will be increased to 24 years.  As such, the youth allowance income support waiting period will apply to a person who is under the age of 25 years.

Subsection 549CAA(2) provides that a person is not subject to an income support waiting period if:

·          the person was qualified for another income support payment (other than youth allowance or special benefit) on the day before the person qualified for youth allowance (other).  This means that a person who ‘transfers’ from most other social security payments to youth allowance (other) will not be subject to the income support waiting period;

·          an exemption in section 549CAB (inserted by this item) applies to the person on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act).  The general rule is that the start day is the day of the person’s claim for a social security payment, if the person is qualified for the payment on that day;

  • the person has served a four-week income support waiting period for youth allowance or special benefit in the previous six months. 

Length of the income support waiting period

Subsection 549CAA(3) provides that an income support waiting period starts on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act) for youth allowance.  This means that, in most circumstances, a youth allowance income support waiting period will start on the day the person makes a claim for youth allowance, if the person is qualified for youth allowance on that day. 

The income support waiting period will start even if the person is subject to other waiting periods and exclusion periods.  That is, the income support waiting period will be served concurrently with any other waiting periods and exclusion periods, with the exception of the ordinary waiting period which will start after the income support waiting period has ended (see item 7 of this Schedule).

Subsection 549CAA(4) provides that the income support waiting period ends on the earliest of the following:

·          four weeks after it started;

·          when the person turns 25 years of age;

·          when section 549CAB applies to the person.  Section 549CAB (inserted by this item) provides for exemptions to the income support waiting period;

·          if the person was serving an income support waiting period for special benefit when the person claims and qualifies for youth allowance (other), when the income support waiting period for special benefit would have ended.

Special rules for transitioning between youth allowances

Subsection 549CAA(5) modifies rules in section 549CAA where a person becomes qualified for youth allowance (other) immediately after they were qualified for youth allowance on the basis of being a student or new apprentice.  In particular, one of the effects of subsection 549CAA(5) is that a person may be required to serve an income support waiting period if the person became qualified for youth allowance (other) on the day after the person was qualified for youth allowance on the basis of being  a student or new apprentice.

Subsection 549CAA(6) provides for the end of an income support waiting period where a person was previously subject to that waiting period because they were qualified for youth allowance (other) and they then become qualified for youth allowance on the basis of being a student or new apprentice.  In these circumstances, the waiting period will end when the person becomes qualified for youth allowance on the basis of being a student or new apprentice.

Exemptions

New section 549CAB provides for exemptions from the income support waiting period.  A person is exempt from an income support waiting period if the person:

·       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 an income support waiting period;

·         is the principal carer of a child;

·       is in State care or ceased to be in State care during the previous 12 months.  Subsection 549CAB(3) provides that a person is in State care if:

o   the person is in the guardianship, care or custody of a court, a Minister, or a Department, of the Commonwealth, a State, or a Territory; or

o   there is a current direction from such a court, Minister or Department placing the person in the guardianship, care or custody of someone who is not the person’s parent;

·       is not required to satisfy the activity test for 15 days or more on the basis that the person has:

o    a temporary incapacity exemption;

o    a pre-natal exemption or post-natal exemption;

o    a domestic violence or other special family circumstances exemption;

o    a disabled child or other family circumstances exemption;

o    a training camp exemption; or

o    a special circumstances exemption.

·       requires employment services or disability employment services of a class determined by the Minister in a legislative instrument.  Paragraph 549CAB(2)(a) provides that the Minister may determine classes of employment services or disability employment services for this purpose.  It is intended that the legislative instrument would determine classes of employment services or disability employment services which mean that the person is not ‘job ready’.  This means that only a person who is ‘job ready’ will be subject to the income support waiting period;

·       is covered by an exemption determined by the Minister by legislative instrument.  Paragraph 549CAB(2)(b) provides that the Minister may determine exemptions for this purpose.  

Item 7 amends new subsection 549CB(2) (as inserted by Schedule 1 to this Bill) to provide that an ordinary waiting period for youth allowance starts after the income support waiting period ends.  This will ensure that the new income support waiting period is treated in the same way as other waiting periods and exclusion periods.  An ordinary waiting period will start after all waiting periods and exclusion periods have ended.

Item 8 inserts a new paragraph 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 youth allowance is not payable to the person because of certain non-payment periods or preclusion periods.

The effect of this item is that a person will not be qualified for special benefit if youth allowance is not payable to the person because of an income support waiting period.  It would undermine the integrity of income support waiting periods if a person was able to qualify for, and be paid, special benefit while they are subject to an income support waiting period for youth allowance.

Item 9 inserts new sections 739AA and 739AB to provide for a new income support waiting period for special benefit and exemptions from that waiting period.

Persons subject to the income support waiting period

Subsection 739AA(1) provides that a person is subject to an income support waiting period if:

·          the person is qualified for a special benefit; and

·          the person is an Australian resident or the holder of a visa determined by the Minister in a legislative instrument.  Subsection 739AA(5) provides that the Minister may determine classes of visas; and

·          on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act) for the special benefit, the person has attained the minimum age for youth allowance but less than 25 years of age.  The general rule is that the start day is the day of the person’s claim for a social security payment, if the person is qualified for the payment on that day.  Subsection 543A(1) provides that, subject to some exceptions, a person has attained the minimum age for youth allowance if the person is at least 16 years old, or is 15 years old and is independent.

Subsection 739AA(2) provides that a person is not subject to an income support waiting period if:

·       the person was qualified for another income support payment on the day before the person qualified for special benefit.  This means that a person who ‘transfers’ from another social security payment to special benefit will not be subject to the income support waiting period;

·       an exemption in section 739AB (inserted by this item) applies to the person; and

·       the person has served a four-week income support waiting period for youth allowance or special benefit in the previous six months.

Length of the income support waiting period

Subsection 739AA(3) provides that an income support waiting period starts on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act) for special benefit.  This means that, in most circumstances, a special benefit income support waiting period will start on the day the person makes a claim for special benefit. 

The special benefit income support waiting period will start even if the person is subject to other waiting periods and exclusion periods.  That is, the income support waiting period will be served concurrently with any other waiting periods and exclusion periods.

Subsection 739AA(4) provides that the income support waiting period ends on the earliest of the following:

·          four weeks after it started;

·          when the person turns 25 years of age;

·          when the person becomes subject to an exemption under section 739AB.

Exemptions

New section 739AB provides that a person is exempt from an income support waiting period if the person:

·       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 an income support waiting period;

·       is a principal carer of a child;

·       is in State care or ceased to be in State care during the previous 12 months.  Subsection 739AB(3) provides that a person is in State care if:

o   the person is in the guardianship, care or custody of a court, a Minister, or a Department, of the Commonwealth, a State, or a Territory; or

o   there is a current direction from such a court, Minister or Department placing the person in the guardianship, care or custody of someone who is not the person’s parent;

·          is not required to satisfy the activity test for 15 days or more on the basis that:

o   the person has been subjected to domestic violence;

o   has responsibility for the care of a child;

o   special circumstances beyond the person’s control exist;

o   a pre-natal exemption or post-natal exemption applies to the person;

o   the person was granted a visa during the previous 13 weeks that is included in a class of visas granted for temporary protection, humanitarian or safe haven purposes; or

o   the person is temporarily incapacitated for work;

·       is taken to satisfy the activity test for 15 days or more on the basis that the person would be qualified for carer payment in certain circumstances;

·       a special circumstances exemption;

·       requires employment services or disability employment services of a class determined by the Minister in a legislative instrument.  Paragraph 739AB(2)(a) provides that the Minister may determine classes of employment services or disability employment services for this purpose.  It is intended that the legislative instrument would determine classes of employment services or disability employment services which mean that the person is not ‘job ready’.  This means that only a person who is ‘job ready’ will be subject to the income support waiting period;

·       is covered by an exemption determined by the Minister by legislative instrument.  Paragraph 739AB(2)(b) provides that the Minister may determine exemptions for this purpose.

Item 10 provides the application provision for this Schedule.

Subitem 10(1) provides that the amendments made by this Schedule apply in relation to a claim for a social security payment made on or after the commencement of the Schedule.

Subitem 10(2) provides a specific application provision for a person transitioning between youth allowances.  Where a person made a claim for youth allowance before commencement and became qualified for that payment on the basis of being a student or new apprentice, but becomes qualified for youth allowance (other) after commencement, then the new income support waiting period starts on the day the person became qualified for youth allowance (other).

 



Schedule 4 - Low income supplement

 

 

Summary

This Schedule provides for the cessation of the low income supplement from 1 July 2017.

Background

This Schedule ceases the low income supplement from 1 July 2017.  The low income supplement is an annual lump sum to be paid to independent adults in low-income households who met residence, income and tax requirements, and who could show that they were not adequately assisted through the tax reform package and the household assistance measures set out with the introduction of the carbon price.

 

The low income supplement is paid, as an annual tax-exempt lump sum, to adults in low-income households, based on the household’s circumstances from the previous income year.  The low income supplement was payable to qualifying individuals from 1 July 2012.  The amount of the payment was $300 for each qualifying individual, and was limited to one payment per year.

 

A person must make a new claim for the low income supplement each financial year, and only during the relevant financial year.  That is, a claim for the 2014-15 financial year must be lodged between 1 July 2014 and 30 June 2015, and a claim for the 2015-16 financial year must be lodged between 1 July 2015 and 30 June 2016.  A person’s claim for the low income supplement is assessed with reference to the claimant’s income for the previous financial year.  Claims for the low income supplement in respect of more than one financial year cannot be rolled into one claim.  Members of a couple cannot make a combined claim, and have to make a claim for the low income supplement separately.  The person, at the time the claim is lodged, must be an Australian resident or a special category visa holder residing in Australia and not subject to a newly arrived resident’s waiting period.  In addition, a person must be in Australia at the time of making a claim.

 

The payment was originally known as the clean energy low income supplement, and then changed to the low income supplement following the repeal of the carbon price.  It is also known by its administrative name of the low income family supplement (as it applies to family tax benefit recipients). 

 

Very few claims for low income supplement have been received, and it is administratively highly complex.  Recipients of most Government payments will continue to receive carbon tax compensation through the energy supplement, which provides up to $14.10 per fortnight depending on individual circumstances.

 

The amendments made by this Schedule commence on 1 July 2017.

 

 



Explanation of the changes

Part 1 - Main amendments

 

Amendments to the Social Security Act

 

Item 3 repeals Division 3 of Part 2.18A, which provides qualification criteria for low income supplement.

 

Items 1 , 2, and 4 to 7 are consequential to item 3, and remove references to low income supplement.

 

Amendments to the Social Security Administration Act

 

Items 8 to 10 and 16 repeal provisions relating only to low income supplement, which become redundant as a result of the repeal of low income supplement.

 

Items 11 to 15 omit references to ‘low income supplement’ consequential to the main amendments repealing low income supplement. 

 

Part 2 - Taxation amendments

 

Amendments to the Income Tax Assessment Act 1936

 

Item 17 repeals paragraph 202(haa) from section 202 of the Income Tax Assessment Act 1936 as it facilitated the administration of Division 3 of Part 2.18A of the Social Security Act, which is repealed by item 3.

 

Amendments to the Taxation Administration Act 1953

 

Items 18 and 19 make minor technical amendments to paragraphs 8WAA(1AA)(b), 8WB(1A)(a) and 8WB(1A)(b) of the Taxation Administration Act 1953 as a consequence of the amendment made by item 18.

 

Part 3 - Contingent amendments

 

Amendments to the Social Security Administration Act

 

Item 20 and 21 are contingent on the commencement of item 57 of Schedule 2 to the Social Services and Other Legislation Amendment (Student Measures) Act 2015 .

 

Item 20 will commence on 1 July 2017, unless item 57 of Schedule 2 to the Social Services and Other Legislation Amendment (Student Measures) Act 2015 commences on or before 1 July 2017, in which case item 20 does not commence at all.  Item 20 removes the redundant reference to low income supplement in subsection 238(1A).

 

However, item 21 deals with item 57 of Schedule 2 to the Social Services and Other Legislation Amendment (Student Measures) Act 2015 commencing after the low income supplement is ceased.  Item 21 will commence immediately after the commencement of the remainder of Schedule 4 ceasing low income supplement and immediately after the commencement of item 57 to Schedule 2 to the Social Services and Other Legislation Amendment (Student Measures) Act 2015 unless item 57 of the Social Services and Other Legislation Amendment (Student Measures) Act 2015 does not commence at all, in which case item 21 does not commence.

 

Item 21 repeals paragraph 238(1A)(a), which is inserted by item 57 to Schedule 2 to the Social Services and Other Legislation Amendment (Student Measures) Act 2015 .  That paragraph refers to low income supplement, and would be redundant.

 

Part 4 - Saving provisions

 

Item 22 sets out a number of saving provisions.

 

Subitem (1) states that, despite the amendment made by item 3, Division 3 of Part 2.18A 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 working out qualification for a low income supplement for the 2016-17 income year or an earlier income year.  This will ensure that late claims for low income supplement for the 2016-17 income year or an earlier income year may continue to be considered on the basis the person may qualify under this Part.

 

Subitem (2) states that, despite the amendments made by items 4, 5, 6, 7, 20 and 21, sections 1224A and 1231 of the Social Security Act and section 238 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 payments of low income supplement made before, on or after that commencement.  This will ensure that any debts due to the Commonwealth for payments of low income supplement made prior to 1 July 2017 may continue to be recovered.

 

Subitem (3) states that, despite the amendments made by items 8, 9 and 10, Part 3 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 making of claims for low income supplement for the 2016-17 income year or an earlier income year.  This will ensure that the manner and time limit provisions in place for claims made by a person for the low income supplement may continue to be considered on the basis outlined in this Subsection and Subdivision.

 

Subitem (4) states that, despite the amendments made by items 11, 12, 13 and 14, Part 3 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 making payments of low income supplement for the 2016-17 income year or an earlier income year, and determinations made under that Part before, on or after that commencement in relation to low income supplement.  This will ensure that payments of a single lump sum may be made if an individual is qualified for low income supplement for the 2016-17 income year or an earlier income year before, on or after commencement.

 

Subitem (5 ) states that, despite the amendment made by item 15, Part 4 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 a decision under the social security law in relation to low income supplement made before, on or after that commencement.  This will ensure that, if an officer makes a decision under the social security law in relation to low income supplement and notice is given to the person concerned, the person is not entitled to make an application under subsection 129(1) for review of the decision more than 13 weeks after the giving of the notice.

 

Subitem (6) states that, despite the amendment made by item 16, section 204B 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 claims for low income supplement made for the 2016-17 income year or an earlier income year.  This will ensure that the Secretary may continue to require the Commissioner of Taxation to provide the Secretary with information about a person in relation to claims for low income supplement made for the 2016-17 income year or an earlier income year.  

 

Subitem (7) states that, despite the amendments made by Schedule 4 to this Bill, subsection 52-10(1L) 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 payments of low income supplement made before, on or after that commencement.  Subsection 52-10L exempts ‘clean energy payments’ from income tax.  This will preserve the tax-exempt status of such payments.

 

Subitem (8) states that, despite the amendments made by items 17, 18 and 19, sections 8WA and 8WB of the Taxation Administration Act 1953 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to a person exercising powers or performing functions under, or in relation to, a law of the Commonwealth of a kind referred to in paragraph 202(haa) of the Income Tax Assessment Act 1936 (as in force immediately before that commencement).  This will ensure that tax file numbers may continue to be requested or recorded after the repeal of the low income supplement provisions, where the request or recording of the tax file number is by a person exercising powers or performing functions relating to the administration of the low income supplement provisions in force before the repeal.

 



Schedule 5 - Indexation

 

 

Summary

This Schedule implements the following changes to Australian Government payments:

  • maintain at level for three years from 1 July 2015 the income free areas for all working age allowances (other than student payments) and for parenting payment single; and
  • maintain at level for three years from 1 January 2016 the income free areas and other means test thresholds for student payments, including the student income bank limits.

Background

Under the current rules, income free areas and means test thresholds are indexed annually in line with movements in the Consumer Price Index.  Indexation occurs either on 1 July or 1 January, depending on the payment involved.

This Schedule pauses for three years the indexation that occurs on 1 July each year of various income thresholds that apply to certain social security benefits and allowances (other than student payments) and the income test free area for parenting payment single.  Under this measure, these amounts will not be indexed on 1 July 2015, 1 July 2016 and 1 July 2017. 

Similarly, the usual 1 January indexation of the income free areas and other means test thresholds for student payments will be paused for three years.  These amounts will not be indexed on 1 January 2016, 1 January 2017 and 1 January 2018. 

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.

Explanation of the changes

Amendments to the Social Security Act

Item 1 relates to the benefits and allowances ‘payment free area’ (defined in item 20AAA of the table in section 1190 of the Social Security Act).  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 2 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 2016, 1 January 2017 and 1 January 2018.



STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the

Human Rights (Parliamentary Scrutiny) Act 2011

SOCIAL SERVICES LEGISLATION AMENDMENT

(YOUTH EMPLOYMENT AND OTHER MEASURES) BILL 2015

 

Schedule 1 - Ordinary w aiting 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 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) and parenting payment

This Schedule will extend the application of the Ordinary Waiting Period to new claimants of youth allowance (other) and parenting payment. From 1 July 2015, claimants of these payments will be required to serve the one week ordinary waiting period before those payments are payable, 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’.  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.

A person may be taken to be experiencing a personal financial crisis if they have been subjected to domestic violence or incurred unavoidable or reasonable expenditure.  Further, 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 this Schedule 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, in addition to the circumstances set out in this Schedule.

 

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 made by the Secretary would be subject to Parliamentary scrutiny and disallowance.

 

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 test 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 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 test 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

This Schedule 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 who 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 this Schedule 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

This Schedule 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 this Schedule, 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, this Schedule is compatible with the right to 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 people 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, this Schedule 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).

This Schedule 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.

 

As more than 90 per cent of parenting payment 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) and parenting payment, in addition to newstart allowance and sickness allowance, will ensure that the waiting period is applied consistently to working age payments which have 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, this Schedule 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 2 - 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 July 2016, 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 2014 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 30 June 2016 (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 3 - Income support 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

This Schedule implements, from 1 July 2016, an income support measure that forms part of the broader Growing Jobs and Small Businesses package announced in the 2015-16 Budget. This measure aims to encourage greater participation in work through establishing firm expectations for young job seekers. It provides an incentive for affected persons to become self-reliant before relying on the taxpayer for support.

Waiting periods

The amendments made by this Schedule will apply from 1 July 2016 to a job seeker if they are:

·          placed in stream A of the Employment Services 2015 model following assessment using the Job Seeker Classification Instrument (JSCI); and

·          aged under 25 years; and

·          a new claimant for youth allowance (other) and, in certain circumstances, special benefit. Special benefit recipients will not be required to serve another waiting period if they transfer to youth allowance (other).

Such persons will be subject to an income support waiting period before the social security benefit becomes payable.

This measure does not apply to full-time students or new apprentices.

Interaction with other waiting periods

The income support waiting period will be served prior to the one week ordinary waiting period. Other waiting periods, such as the income maintenance period, liquid assets test waiting period, or seasonal work preclusion period, will be served concurrently with the income support waiting period, if they apply.

Exemptions

Exemptions from the income support waiting period will be made for:

·          job seekers in Streams B or C with a jobactive provider

·          Disability Employment Services participants

·          parents with 35 per cent or more care of a child, and

·          young people in State care, or who have left State care within the past 12 months

·          people with an activity test exemption of 15 days or more - this will include pregnant women in the six weeks before birth, and people testing their eligibility for disability support pension, as well as victims of domestic violence and people in special circumstances.

The Minister will also be able to determine other categories of exemption via a legislative instrument.

Activity test and participation requirements

Job seekers will be required to comply with pre-benefit activities as part of ‘Rapid Connect Plus’ (a separate Budget measure led by the Employment portfolio) during the income support waiting period. These activities will include meeting with a jobactive provider, agreeing to a Job Plan, developing an up-to-date resume, creating a job seeker profile on the JobSearch website, and providing evidence of satisfactory job search with a total of 20 job applications (with flexibility for job seekers in poor labour markets).

Failure to complete these activities within 28 days from the date of application for income support will result in the lapse of a job seeker’s application for income support.  The job seeker will be required to re-apply, and subsequently comply with the Rapid Connect Plus activity requirements over the course of a further four weeks before any payment is made.

Job seekers will be eligible to participate in Work for the Dole as required by their jobactive provider, with Stream A job seekers commencing Work for the Dole six months after application for income support. Stream B and C job seekers will commence Work for the Dole after 12 months. Job seekers will participate in Work for the Dole for six months out of every 12 months thereafter.

Emergency relief

Around $8.1 million in additional funding will be available to Emergency Relief providers to provide assistance for those impacted by the measure.

Special benefit

Inclusion of certain special benefit applicants is designed to prevent applicants who would otherwise apply for youth allowance (other), applying and qualifying for special benefit in order to avoid serving an income support waiting period. Failure to include special benefit in the measure would provide a loophole which would effectively defeat the purpose of the measure.

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 job seekers 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.

The measure acknowledges the particular needs of vulnerable job seekers. To this end, the following vulnerable young job seekers will be exempt from the measure: those who have 35 per cent or more care of a child; those who have more significant barriers to employment and are placed in Streams B or C with a jobactive provider; those who are in or have recently left state care; who have a temporary activity test exemption; or whose disability qualifies them for Disability Employment Services. The minister will also have the discretion, via a disallowable instrument, to provide further exemptions from the measure for other classes of people identified as vulnerable.

The specific targeting of this measure to young people who are job ready without significant barriers to prevent them finding work will mitigate the risk of limiting a person’s right to social security.

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. 

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

This measure will help to maintain the integrity of the social security system and ensure finite resources are equitably allocated among genuine job seekers. 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.

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. To assist claimants experiencing hardship, the measure includes $8.1 million in additional funding for Emergency Relief providers.

In encouraging young persons to work or undertake further study, the measure also acknowledges that the best way for a person to enjoy an adequate standard of living is through entering the workforce. There is a connection between the limitation and the objective.  The limitation of immediate access to unemployment benefits supports that objective.

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 additional income support waiting period will be served concurrently with any other applicable waiting periods (except the ordinary waiting period).

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 certain income support recipients in such a situation by exempting job seekers with disability who qualify for Disability Employment Services.

Non-discrimination on the basis of age

Article 2(2) of the ICESCR requires States Parties to implement the rights contained within the ICESCR without discrimination of any kind. Although this measure differentiates between those aged under 25 and those aged 25 and over, this differential treatment is designed so that those subjected to a waiting period are young enough to reasonably draw on family support to assist them during the waiting period. Additional funding for Emergency Relief providers acts as a further contingency plan for those young people who need it.

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 4 - Low income 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

The low income supplement inclusive of the low income family supplement is a $300 annual lump sum supplement claimed by independent adults in low-income households who were not adequately assisted through the tax systems or other Household Assistance Package measures for the cost of living impact of the carbon tax.

 

This supplement will cease from 1 July 2017.

 

Human rights implications

Individuals eligible for the supplement are now better off following the abolition of the carbon tax.  The abolition of the carbon tax has delivered cost of living benefits to low income households that are greater than the value of the supplement they receive.

 

Individuals eligible for the low income family supplement will continue to receive the energy supplement with their Family Tax Benefit payment.

 

Individuals receiving an income support or Family Tax Benefit payment automatically receive an energy supplement payment.  There is also a range of assistance that individuals and families can access through the social security system to ensure they can maintain a minimum standard of living.

 

Conclusion

There are no human rights impacts as all low income households are better off because there are no longer price pressures from the carbon tax.

 



Schedule 5 - 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:

  • maintain at level for three years from 1 July 2015 the income free areas for all working age allowances (other than student payments) and for parenting payment single; and
  • maintain at level for three years from 1 January 2016 the income free areas and other means test thresholds 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.

 

Conclusion

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

 

 

 

 

[Circulated by the authority of the Minister for Social Services, the Hon Scott Morrison MP]

 




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