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Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015

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2013-2014-2015

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

THE HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

SOCIAL SECURITY LEGISLATION AMENDMENT (FURTHER STRENGTHENING JOB SEEKER COMPLIANCE) BILL 2015

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Assistant Minister for Employment, the Honourable Luke Hartsuyker MP)



 

SOCIAL SECURITY LEGISLATION AMENDMENT (FURTHER STRENGTHENING JOB SEEKER COMPLIANCE) BILL 2015

 

 

GENERAL OUTLINE

 

This Bill would amend the Social Security (Administration) Act 1999 to support measures announced in the 2015-16 Budget to further strengthen the job seeker compliance framework by providing stronger and more immediate consequences for job seekers who do not meet their mutual obligation requirements. The Bill would also simplify compliance provisions in the Social Security (Administration) Act 1999 to assist job seekers to better understand their mutual obligation requirements.

 

The Bill would make amendments to provide, from 1 July 2016, for the following:

 

·          When a job seeker fails to enter into an Employment Pathway Plan, a job seeker’s participation payment may not be payable until the job seeker complies with a further requirement to enter into an Employment Pathway Plan. In addition, if the job seeker does not have a reasonable excuse for failing to enter into an Employment Pathway Plan, a penalty amount would be able to be deducted from the job seeker’s participation payment. Currently, there is no financial penalty imposed for an initial refusal to enter into an Employment Pathway Plan despite it being a basic qualification requirement for job seekers to receive participation payments.

 

·          If a job seeker acts in an inappropriate manner during an appointment such that the purpose of the appointment is not achieved, a job seeker’s participation payment may not be payable until the job seeker attends a new appointment. In addition, if the job seeker does not have a reasonable excuse for acting in an inappropriate manner during the appointment, a penalty amount would be able to be deducted from the job seeker’s participation payment. This would see the treatment of inappropriate behaviour at an appointment be brought into closer alignment with the treatment of inappropriate behaviour at an activity.

 

·          When a job seeker fails to participate in an activity (such as training or Work for the Dole), the penalty amount would be able to be deducted from the instalment period in which this type of no show no pay failure is determined. This would ensure the impact of the penalty is more immediate and would provide a more direct deterrent than under the current legislation, which requires that the penalty amount be deducted from a later fortnightly instalment period.

 

·          When a job seeker fails to undertake adequate job search efforts, a job seeker’s payment may not be payable until the job seeker demonstrates adequate job search efforts. Once adequate job search efforts have been demonstrated, the job seeker would receive full back pay. Currently, it can take at least fourteen weeks of ongoing inadequate job search before a job seeker’s participation payment is impacted in any way.

 

·          When a job seeker refuses or fails to accept an offer of suitable employment, and has no reasonable excuse for the failure, a job seeker would no longer be able to seek to have the existing 8 week penalty period ended by agreeing to undertake additional activities (or because the job seeker does not have the capacity to undertake additional activities and serving the penalty would cause financial hardship). This change would only affect those job seekers who have shown they can obtain suitable employment but are simply choosing not to work.

 

In addition, the Bill would simplify the compliance framework, and assist job seekers to better understand their mutual obligation requirements by renaming all failures resulting in short-term financial penalties as “no show no pay” failures. This change would help to reinforce to job seekers that regardless of what the person has been asked to do — whether it is to participate in an activity, or to attend an interview or an appointment with a provider or any other organisation — if they don’t show up and participate, they should not expect to receive their income support payment. Also, because connection and reconnection failures would now be dealt with under the new payment suspension provisions and the renamed no show no pay failure provisions, connection and reconnection failure provisions would become redundant. This would also result in the compliance framework becoming further streamlined.

 

 

FINANCIAL IMPACT STATEMENT

 

The Bill would have the following budgetary implications:



Year

Expense ($ million)

2015-16

-5.6

2016-17

-7.2

2017-18

-6.2

2018-19

-5.5

TOTAL:

-24.5

 

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

The statement of compatibility with human rights appears at the end of this explanatory memorandum.



Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015





Clause 1 - Short Title

 

This clause sets out how the new Act is to be cited, that is, the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Act 2015 .

 

 

Clause 2 - Commencement

 

This clause provides that the Act commences as specified in the commencement information table. Specifically, sections 1 to 3 commence the day the Act receives Royal Assent and Schedule 1 on 1 July 2016.

 

 

Clause 3 - Schedules

 

This clause provides that legislation that is specified in a Schedule is amended or repealed as set out in that Schedule, and any other item in a Schedule to the Act has effect according to its terms. 

 

 

 

Abbreviations used in this explanatory memorandum

 

 

Administration Act means the Social Security (Administration) Act 1999.    All references to legislative provisions in this explanatory memorandum are to provisions contained in the Administration Act unless otherwise indicated.  



1991 Act means the Social Security Act 1991.



 

Schedule  1 - Amendments



 

Summary

 

This Bill would make amendments to strengthen and simplify the job seeker compliance framework in Division 3A of Part 3 of the Administration Act.

 

The compliance framework applies to recipients of participation payments. These are newstart allowance, youth allowance for persons who are not apprentices or full-time students, parenting payment for persons who have participation requirements and special benefit for certain visa holders.

 

The Bill would build on changes introduced by the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014 . These changes are successfully improving attendance rates at appointments with employment service providers through more immediate consequences and stronger penalties. For example, attendance at reconnection appointments increased from 65 per cent in 2013-14 to over 90 per cent in June 2015. This Bill would extend this successful approach to job seekers’ other mutual obligation requirements, ensuring they are engaging with employment services and receiving the support they need to move off income support and into a job as quickly as they can. These changes will also simplify the compliance framework, making it easier for job seekers to understand their obligations and also helping them to avoid penalties.

 

The package of changes in the Bill will help ensure more effective and consistent compliance arrangements are in place for each stage of a job seeker’s pathway into work.

 

When a job seeker first receives income support, they are required to enter into an Employment Pathway Plan. An Employment Pathway Plan is a document that sets out the activities, including job search requirements, a job seeker must undertake to improve their employment prospects in return for their income support from the community. Entering into an Employment Pathway Plan is critical to give effect to other mutual obligation requirements. The Bill will provide more immediate consequences and stronger penalties for job seekers who refuse to enter an Employment Pathway Plan.

 

Once a job seeker has entered into an Employment Pathway Plan, the next step along the pathway to employment is to attend appointments and activities and undertake job searches, to improve their chances of employment. The changes supported by this Bill will ensure that all appointment types that a job seeker may need to attend are treated the same as appointments with employment service providers. More immediate consequences will also apply to job seekers who fail to attend activities like training or Work for the Dole, or who fail to undertake adequate job search efforts.

 

Receiving an offer of suitable work should be the end of the job seeker’s time on income support, but some job seekers are turning these offers down. For this reason, the Bill will also provide for stronger penalties for job seekers who refuse work that they have been found capable of doing. These changes reinforce the principle that taxpayer-funded income support payments for the unemployed should only be available to those who are genuine in their efforts to move into paid work.

 

The Bill retains all existing protections for vulnerable job seekers. This includes the requirement for the Department of Human Services to talk to the job seeker and consider if a reasonable excuse exists before applying any financial penalty. Exemptions from mutual obligation requirements and rights of appeal also remain. Employment service providers will retain existing discretion to decide whether it is appropriate to initiate compliance processes or use other methods to re-engage job seekers who have not met their requirements.

 

Job seekers with identified vulnerabilities will continue to be flagged on the IT systems used by the Department of Human Services and employment service providers. This alerts Human Services and the provider to the vulnerability and enables them to take it into account when setting mutual obligation requirements for the job seeker or when considering whether or not to initiate compliance action.

 

Strengthening and aligning penalties for failing to enter an Employment Pathway Plan

 

Currently, there is no financial penalty for an initial refusal to enter an Employment Pathway Plan, even though it is a basic qualification requirement for job seekers to receive participation payments.

 

The Bill will allow payment suspensions for job seekers who refuse to enter into an Employment Pathway Plan. The suspension would only be lifted when they enter into a plan. In addition, the job seeker may incur a penalty equivalent to a working day’s payment for each day they continued to refuse without good reason after being notified of the failure. If the Department of Human Services finds a plan to be unreasonable, given the job seeker’s individual circumstances, no financial penalty will be applied.

 

A similar approach implemented on 1 January 2015 has been very effective in reducing the average duration of payment suspensions for job seekers who miss provider appointments, ensuring that they are re-engaging as quickly as possible. Between the September 2014 and March 2015 quarters, the average suspension duration fell from 5.2 business days to 3.1 business days.

 

It is expected these changes will ensure job seekers enter an Employment Pathway Plan as soon as possible after an initial refusal.

 

A consecutive refusal to enter an Employment Pathway Plan without a reasonable excuse currently results in cancellation of payment, and this will remain unchanged. As occurs under the current provisions, if this happens, the job seeker will need to reclaim and will generally be required to enter an Employment Pathway Plan before payment is granted.

 

Aligning penalties for failing to attend appointments

 

Job seekers may be required to attend appointments with organisations other than employment service providers. For example this could be an appointment with a specialist service provider (such as a career adviser or training provider) or a Work for the Dole host organisation to arrange their activity. These appointments are crucial in ensuring that job seekers are getting the support and specialist services they need to find employment.

 

At a practical level, different consequences apply for non-attendance at these appointments than for non-attendance at appointments with employment service providers. This inconsistency makes compliance arrangements confusing for job seekers and adds to red tape for providers.

 

From 1 July 2016, the practice will be that the consequence for non-attendance at all appointment types will be the same. This means a job seeker’s income support payment will be able to be suspended whenever they fail to attend an appointment, regardless of who the appointment was with.

 

The payment suspension will last until the job seeker re-engages by attending a further appointment. If the job seeker did not give prior notice of a reasonable excuse for the non-attendance they may also lose payment for each day until they re-engage, starting from the day they were notified of the failure to attend.

 

The approach is consistent with the changes introduced by the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014 . These changes are successfully improving attendance rates at appointments with employment service providers. For example, attendance at reconnection appointments increased from 65 per cent in 2013-14 to over 90 per cent in June 2015.

 

This change in practice will also simplify the system and make it easier for job seekers to understand the consequences of non-attendance at any appointment.

 

The Bill will apply the same consequences if a job seeker deliberately behaves inappropriately at an appointment, such that the purpose of the appointment is unable to be achieved.



 

More immediate application of penalties for failing to attend activities or job interviews

 

Most job seekers are required to undertake activities such as training or Work for the Dole that will give them the skills, experience and commitment necessary to find paid work. Currently, financial penalties that are applied for failing to participate in activities cannot be deducted from the job seeker’s next fortnightly income support payment. They may only be deducted from the one following that. This can result in a delay of over 5 weeks before the penalty is deducted from the time of the non-attendance. It can be even longer if the job seeker is difficult to contact. This delay significantly reduces the efficacy of the penalty on modifying job seeker behaviour.

 

The Bill will not change the amount of these penalties but would allow the penalty amount to be deducted from the job seeker’s next fortnightly payment. This change will help to create a stronger link between the non-compliance and the consequence, increasing the job seeker’s motivation to comply with their participation requirements in the future.

 

The recent changes regarding attendance at provider appointments have shown that more immediate payment consequences do result in more job seekers subsequently meeting their requirements and thereby avoiding financial penalties entirely. It is expected that the changes made by the Bill will have a similar positive impact and help more job seekers to meet their participation requirements.

 

Suspension of payments for inadequate job search

 

Looking for work is the most important part of a job seeker’s mutual obligation requirements. A person rarely manages to find a job without actively looking for one.

 

Despite this, the current process for dealing with job seekers who fail to look for work is cumbersome, protracted and ineffective. It can take more than 14 weeks of ongoing inadequate job search before a job seeker’s payment can be impacted in any way.

 

The Bill will introduce more immediate consequences for poor job search and provide a stronger incentive for job seekers to meet this mutual obligation requirement. The amendments will allow a job seeker’s payment to be suspended if they fail to undertake adequate job search efforts, unless there is a good reason for their failure to do so. The Bill will require the Secretary to make a legislative instrument giving decision-makers guidance on what constitutes inadequate job search. This suspension will be lifted once adequate job search has been undertaken, or if the job seeker subsequently discloses that they did have a good reason for not being able to look for work. Once the payment suspension is lifted, the job seeker will receive full back-payment.

 

Repeated failures to look for work will, as is currently the case, result in the job seeker undergoing a Comprehensive Compliance Assessment to determine if there are barriers impeding their ability to meet their requirements. If barriers are identified this can result in a vulnerability indicator being placed on the job seeker’s record, ensuring their barriers are taken into account in future compliance decisions.

 

The Bill will also remove redundant provisions relating to Job Seeker Diaries and Employer Contact Certificates. These will no longer be used as they are administratively inefficient, contribute to the length of the current process and are ineffective at modifying job seeker behaviour.

 

Employer Contact Certificates are considered especially burdensome by employers who are approached by job seekers to have them completed. They are also seen as counter-productive, in that they may unhelpfully stigmatise job seekers as income support recipients who are not genuine in their search for work.

 

Removal of waivers for serious penalties incurred for refusing or failing to accept a suitable job

 

Current provisions that allow penalties for serious failures to be waived essentially allow job seekers to refuse suitable work with impunity.

 

The data indicates that job seekers are increasingly taking advantage of the waiver provisions to remain on income support rather than accept a suitable job.

 

In 2009-10, when the waiver provisions were introduced, 45 per cent of penalties for refusing a suitable job were waived and 55 per cent were served by the job seeker.

 

In 2013-14, 78 per cent of penalties were waived and only 22 per were actually served by the job seeker.

 

The availability of the waiver provisions is also acting as an incentive for non-compliance.

 

In 2008-09, the year before waivers were introduced, there were 644 serious failures for refusing or failing to accept suitable work. In 2013-14, there were 1,626 such penalties applied. This difference cannot be attributed to any comparable change in the size of the activity tested job seeker population or increase in the number of jobs being offered.

 

The Bill will mean that an eight week non-payment period applied for refusing or failing to commence work will no longer be able to be waived. This change will ensure that job seekers face real consequences for turning down suitable offers of work that they are capable of doing and that would reduce or end their reliance on income support. The change will not affect eight week non-payment periods applied for persistent non-compliance, which will still be able to be waived.

 

These changes will uphold the fundamental principle that taxpayer funded income support payments are provided as a safety net to support people who genuinely cannot find a job, and not as an option for people who have been offered a job but simply refuse to work.

 

Existing protections such as the reasonable excuse provisions and safeguards for vulnerable job seekers will still apply, and the Bill will not change the process used to make decisions as to what constitutes suitable work. A job seeker cannot be penalised for failing to accept a job that they are not capable of doing (or for which the employer will not provide training), that does not meet the applicable statutory conditions, that involves unreasonable commuting or that would aggravate any pre-existing medical conditions.

 

Repealing redundant provisions and simplifying the framework by renaming all short-term penalties as no show no pay penalties

 

Currently for job seekers there are four types of failures to comply with mutual obligation requirements that result in a payment suspension or short-term financial penalty. These are known as connection failures, reconnection failures, non-attendance failures and no show no pay failures.

 

The Bill will amend the Administration Act to remove the current provisions related to connection failures, as they will now all be dealt with under the payment suspension provisions. The Bill will also remove reconnection failures and associated penalties, as these provisions are no longer relevant.

 

As the penalties for non-attendance at all appointments will now be the same, the Bill will allow for a single penalty type which will be referred to as a no show no pay penalty. This terminology will help simplify the compliance framework, making it easier for job seekers to understand their mutual obligation requirements, avoid penalties, and have the best possible chance of finding work.



 

Detailed explanation

 

Social Security (Administration) Act 1999

 

Item 1 - Section 42A

 

Section 42A provides, in a table, a simplified outline of Division 3A of Part 3 of the Administration Act. Division 3A is about job seekers’ compliance with obligations in relation to their participation payments.

 

This item would repeal the table and substitute it with a new simplified outline of Division 3A as amended by the Bill.

 

Items 2 and 3- Subdivision B of Division 3A of Part 3 (heading) and Section 42C (heading)

 

Item 2 would repeal the current heading to Subdivision B, “Subdivision B - No show no pay failures” and substitute a new heading, “Subdivision B - No Show no pay failures relating to participation in activities or to job interviews etc”.

 

Item 3 would repeal the current heading to section 42C, “42C No show no pay failures” and substitute a new heading, “42C No show no pay failures relating to participation in activities or to job interviews etc.”.

 

These amendments would be consequential to the amendments the Bill would make to Subdivision EC- see items 35, 36, 37, 38 and 39. Effectively, as a result of the amendments that would be made to Subdivision EC, the failures under section 42SC would become a type of no show no pay failures and would be renamed “No show no pay failures relating to appointments or to entry into employment pathway plans”.

 

These amendments would ensure that the failures under section 42C (which are also a type of no show no pay failures) and the failures under section 42SC are easily distinguished.

 

Item 4 - Subsection 42C(4)

 

This item inserts the words “under that subsection” after “determine” in subsection 42C(4).

 

This amendment would arise as a result of section 42C being amended to be about no show no pay failures relating to participation in activities or to job interviews etc. (rather than all no show no pay failures) and, as such, is of a technical and consequential nature. It is consequential to the amendments the Bill would make to Subdivision EC- see items 38 and 39.



 

Item 5 - Paragraph 42C(4)(c)

 

This item would repeal the current paragraph 42C(4)(c) and substitute a new paragraph 42C(4)(c).

 

This amendment would be consequential to the amendments the Bill would make to repeal Subdivision C and to amend Subdivision EC- see items 8, 38 and 39. Repealing the current paragraph 42C(4)(c) would remove the redundant reference to “reconnection failure period” in that paragraph. The new paragraph 42C(4)(c) would provide that the Secretary must not determine under subsection 42C(1) that a person commits a no show no pay failure on a day if, in respect of that day, there is a penalty amount for the person, because of a determination under subsection 42SC(1).

 

This would mean that if a job seeker commits a no show no pay failure under subsection 42C(1) on a particular day, but the job seeker would be financially penalised under subsection 42SC(1) in respect of that day, then a determination under section 42C(1) cannot be made. The rationale is that if the job seeker has already been financially penalised for a particular day, it is not appropriate to financially penalise them again for that same day.

 

Item 6 - Subsection 42C(5)

 

Section 42C relates to failures that a job seeker commits on a particular day. If the Secretary determines that a job seeker commits one of the failures listed in subsection 42C(1), it results in the imposition of a penalty amount.

 

Currently, subsection 42C(5) provides that the Secretary must include in a determination under this section the instalment period in which a penalty amount for the no show no pay failure is to be deducted from the person’s instalment period of a participation payment, provided that the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the no show no pay failure.

 

This means that, currently, a penalty amount for a failure listed in subsection 42C(1) will typically not be deducted until at least 15 days after the failure is committed, and frequently much longer. This means that the deduction is so far removed from the failure that it has lost its impact as a sanction and penalised job seekers are generally confused as to why their payment is lower than it would normally be.

 

This item would omit the words “provided that the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the no show no pay failure” from subsection 42C(5).

 

This amendment would allow for any penalty amount resulting from failures listed under subsection 42C(1) to be deducted from any instalment period, ensuring that the impact of the loss of payment is more immediate and providing a stronger and more direct deterrent for these failures.

 

Item 7 - Section 42D

 

This item inserts the words “under section 42C” after “determines” in section 42D. Section 42D is about deducting the penalty amount.

 

This amendment is consequential to the amendments the Bill would make to Subdivision EC - see items 38 and 39. It would make clear that section 42D applies to section 42C no show no pay failure determinations (relating to participation in activities or to job interviews etc), and not to section 42SC no show no pay failure determinations (relating to appointments or to entry into employment pathway plans).

 

Item 8 - Subdivision C of Division 3A of Part 3

 

This item would repeal Subdivision C of Division 3A of Part 3, which deals with connection and reconnection failures.

 

A connection failure is a failure to comply with section 63 requirements (for example, attending appointments), a failure to enter into an employment pathway plan, a failure to attend an appointment the job seeker is required to attend under an employment pathway plan, and job search related failures (subsection 42E(2)).

 

Currently, under Subdivision C, there is no immediate penalty applicable for a connection failure. Rather, the commission of a connection failure results in a job seeker being given a reconnection requirement. Failure to comply with the reconnection requirement (or a further reconnection requirement) without a reasonable excuse may result in a reconnection failure determination being made. If a reconnection failure determination is made, the job seeker enters a reconnection failure period until they comply with any further reconnection requirements imposed on them or they have a reasonable excuse for failing to comply with the further reconnection requirement. During a reconnection failure period, a job seeker may accrue a penalty amount (that is, they are not fully back paid upon meeting the further reconnection requirement) and/or their participation payment may not be payable to them for a period.

 

This amendment is consequential to the amendments the Bill would make to Subdivisions EA and EC - see items 16, 17, 18, 38 and 39. Those amendments, which would incorporate connection failures into Subdivision EA (which is about immediate non-payment of participation payments for certain failures) and which would incorporate connection failures (other than those relating to job search) into Subdivision EC (which is currently about non-attendance failures but which, under the amendments made by the Bill, would be about no show no pay failures relating to appointments or to entry into employment pathway plans).

 

Incorporating connection failures into Subdivision EA would, in effect, mean that a job seeker’s participation payment would not be payable until the job seeker rectifies the failure and, if rectified, would result in their payment being fully back paid. In addition, for those connection failures incorporated into Subdivision EC, if the job seeker does not have a reasonable excuse for committing the failure, a penalty amount would be able to be deducted from the job seeker’s participation payment for the period between when the job seeker committed the failure until the job seeker rectifies the failure.

 

The consequence of incorporating connection failures into Subdivisions EA and EC would mean separate reconnection or further reconnection requirements are no longer necessary, making the need for reconnection failure determinations redundant.

 

Further, the particular consequence of incorporating and consolidating the job search related failures into Subdivision EA under one provision (see item 17 for more information about that amendment), would also make the need for provisions relating to Job Seeker Diaries (paragraph 42E(2)(g)) and Employer Contact Certificates (section 42F) redundant. These would no longer be used because they are administratively inefficient, contribute to the length of the current process and are ineffective at modifying job seeker behaviour. Employer Contact Certificates are considered especially burdensome by employers who are approached by job seekers to have them completed. They are also seen as counter-productive, in that they may unhelpfully stigmatise job seekers as income support recipients who are not genuine in their search for work.

 

Repealing Subdivision C, therefore, would result in a more streamlined and simplified compliance framework.

 

Item 9 - Paragraph 42M(1)(a)

 

Section 42M is about serious failure for persistent non-compliance.

 

This item omits “(including by committing a no show no pay failures, connection failures or reconnection failures)” from paragraph 42M(1)(a).

 

This change is largely of a technical and consequential nature. It is consequential to the amendments the Bill would make to Subdivision C (see items 8), as there would no longer be connection failures or reconnection failures. While a person could be persistently non-compliant by committing no show no pay failures, it is not necessary to specifically refer to such failures in this section.

 

Item 10 - section 42NC

 

This item repeals section 42NC.

 

A job seeker can commit a serious failure for persistent non-compliance (section 42M) or for refusing or failing to accept an offer of suitable employment (section 42N).

 

Currently, section 42NC provides that if the Secretary determines that a person commits a serious failure, the Secretary must also determine that section 42NC applies unless the Secretary is satisfied that: (a) the person does not have the capacity to undertake any serious failure requirement; and (b) serving the serious failure period would cause the person to be in severe financial hardship.

 

The consequence is that, if the Secretary determines that section 42NC applies, a job seeker’s payment is not payable to the job seeker during the serious failure period (which is a period of 8 weeks unless the Secretary ends the period earlier under section 42Q) (subsection 42P(1)). On the other hand, if the Secretary cannot determine that section 42NC applies, the job seeker’s payment is still payable despite the job seeker having committed a serious failure.

 

This amendment is consequential to the amendments relating to serious failures for refusing or failing to accept an offer of suitable employment that the Bill would make to subsection 42P(3) and 42Q(1) - see items 12 and 13. It would ensure the protection afforded by section 42NC no longer applies to serious failures for refusing or failing to accept an offer of suitable employment.

 

The protection afforded by section 42NC will still be required for job seekers who commit serious failures for persistent non-compliance. However, section 42NC entirely duplicates protections already available in another provision (section 42Q), which will still apply to serious failures for persistent non-compliance.

 

For this reason this item repeals section 42NC entirely.

 

Item 11 - Subsection 42P(1)

 

Section 42P is about the consequences of a serious failure.

 

This item would repeal the current subsection 42P(1) and substitute a new subsection 42P(1) (including repealing and replacing the notes to that subsection).

 

This amendment is consequential to the amendments relating to serious failures for refusing or failing to accept an offer of suitable employment that the Bill would make to section 42NC (to be repealed) and subsections 42P(3) and 42Q(1) - see items 10, 12 and 13.



 

Items 12 and 13 - Subsections 42P(3) and 42Q(1)

 

Currently, if a job seeker commits a section 42N serious failure (that is, a job seeker refuses or fails to accept an offer of suitable employment) and section 42NC applies, the job seeker’s payment is not payable to the job seeker for a period of 8 weeks unless the Secretary ends the period earlier under section 42Q. Generally, the 8 week non-payability period is ended earlier if the job seeker undertakes additional activities (that is, complies with a serious failure requirement) or the job seeker does not have the capacity to undertake the additional activities and serving the penalty would cause them to suffer severe financial hardship. This results in the penalty not being imposed or the penalty being shortened for this serious failure.

 

Item 12 would amend subsection 42P(3) so that a job seeker who commits a section 42N serious failure (that is, fails to accept an offer of suitable employment) would no longer be able to be required to comply with a serious failure requirement. However, the amendment makes it clear that subsection 42P(3) would continue to apply to job seekers who commit a section 42M serious failure for persistent non-compliance.

 

Item 13 would amend subsection 42Q(1) so that the Secretary is no longer able to end the 8 week non-payability period earlier under section 42Q in circumstances where a job seeker commits a section 42N serious failure for refusing or failing to accept an offer of suitable employment. However, this amendment makes clear that the ability to end an 8 week non-payability period under subsection 42Q(1) would continue to apply to job seekers who commit a section 42M serious failure for persistent non-compliance.

 

In summary, these items would make amendments to subsection 42P(3) and subsection 42Q(1) so that when a job seeker commits a section 42N serious failure for refusing or failing to accept an offer of suitable employment and has no reasonable excuse for the failure, a job seeker’s payment would not be payable for a period of 8 weeks. I t will no longer be possible in such circumstances for the Secretary to end the 8 week non-payment period earlier under section 42Q.

 

These amendments would provide a stronger deterrent to those job seekers who have successfully shown they can obtain suitable employment but are simply choosing not to work.

 

Item 14 - Subsection 42Q(3)

 

This item would repeal subsection 42Q(3) which provides “section 42NC does not affect the operation of this section”.

 

This amendment is consequential to the repealing of section 42NC - see item 10.



 

Item 15 - Subsection 42R(1)

 

Section 42R is about determining that participation payments are payable despite a job seeker being in a serious failure period.

 

This item would omit the words, “The Secretary may determine that, despite the person’s” and substitute the words, “If the Secretary determines under subsection 42M(1) that a person commits a serious failure, the Secretary may determine that, despite the person’s” in subsection 42R(1).

 

This amendment would be consequential to the amendments relating to serious failures for refusing or failing to accept an offer of suitable employment that the Bill would make to subsections 42P(3) and 42Q(1) - see items 12 and 13.

 

Items 16, 17, 18

 

These items amend section 42SA, which is about immediate non-payment of participation payments for certain failures.

 

Under current subsection 42SA(1), the Secretary may make a determination to suspend a job seeker’s payment if the job seeker fails to comply with a requirement under their Employment Pathway Plan to attend an activity or appointment (42SA(1)(a) and (b)); or fails to attend an appointment that the job seeker was required to attend by notice under subsection 63(2) (42SA(1)(ba)); or fails to comply with a reconnection requirement or a further reconnection requirement (42SA(1)(c)).

 

These items would insert additional failures into the list of failures in subsection 42SA(1) as new paragraphs 42SA(1)(aa), (baa), and (c). Item 18 would also repeal the current paragraph 42SA(1)(c).

 

Item 16 would insert the failure to comply with a requirement, under section 501, 544A, 605 or 731L of the 1991 Act, to enter into an Employment Pathway Plan, as new paragraph 42SA(1)(aa). This failure is currently a connection failure, which means there are no immediate consequences for failing to enter into an Employment Pathway Plan. The Bill would amend the Administration Act so that there will no longer be connection failures. In addition, the amendment made by this item would mean an immediate consequence for committing such a failure.

 

Item 17 would insert the failure to satisfy the Secretary that a job seeker has undertaken adequate job search efforts in relation to a period worked out in accordance with an Employment Pathway Plan that is in force in relation to the job seeker, as new paragraph 42SA(1)(baa). Currently, there are three relevant sources of a requirement to undertake job searches: a standard provision in an Employment Pathway Plan to undertake a certain number of job searches per fortnight; a provision in an Employment Pathway Plan relating to the maintenance of a job seeker diary; and requirements under section 42F relating to applying for job vacancies. The failure to meet any of these requirements is a connection failure, which means there are no immediate consequences for these job search related failures.

 

The Bill would amend the Administration Act so that there will no longer be connection failures. In addition, t his item would consolidate these job search related failures by inserting them into subsection 42SA(1) as one failure. This would mean a single provision dealing with the failure to undertake adequate job search efforts and an immediate consequence for committing such a failure.

 

Item 18 would repeal the current failure covered by paragraph 42SA(1)(c) (failure to comply with a reconnection requirement, which will no longer be required) and substitute a new failure - if the Secretary is satisfied that, during an appointment mentioned in paragraphs 42SA(1)(b) or (ba) that the job seeker attended, the job seeker acted in an inappropriate manner such that the purpose of the appointment was not achieved. This would mean an immediate consequence for committing such a failure.

 

The amendments made by these items would support the repeal of Subdivision C (relating to connection and reconnection failures) - see item 8.  In relation to items 16 and 17, the amendments would have the effect of incorporating failures that were previously connection failures into Subdivision EA. This would ensure more immediate consequences for job seekers who commit one of these failures. In relation to item 18, the amendment would repeal the redundant failure to comply with reconnection and further reconnection requirements and would ensure more immediate consequences for job seekers who, although they attend their appointments as required, act in an inappropriate manner during their appointment.

 

Item 19 - Subsection 42SA(1) (note)

 

This item would repeal the note in subsection 42SA(1) and substitute two new notes in subsection 42SA(1).

 

This amendment would be consequential to the amendments the Bill would make to Subdivision C and subsection 42SA(1) - see items 8, 17 and 18.

 

Item 20 - Before subsection 42SA(1A)

 

This item would insert the sub-heading, “Exception - section 42SB applies to person”

 

This is a minor technical amendment which clarifies the effect of subsection 42SA(1A) - that subsection 42SA(1) cannot apply if section 42SB applies.

 

Item 21 - After subsection 42SA(1A)

 

This item amends section 42SA, which is about immediate non-payment of participation payments for certain failures.

 

This item would insert three new subsections into section 42SA. It is consequential to the amendments the Bill would make to current subsection 42SA(1) regarding the failure to undertake adequate job search efforts - see items 8 and 17.

 

Currently, job search related failures are connection failures (paragraphs 42E(2)(d) - (g) in Subdivision C) which means there are no immediate consequences applicable for these failures.

 

Consolidating these job search related failures and inserting them into Subdivision EA as one failure (the failure to undertake adequate job search efforts in a particular period) would mean a single provision dealing with job search related failures and a more immediate consequence for committing such a failure - that is, immediate payment suspension until the job seeker completes adequate job search efforts. When the failure is rectified, the job seeker’s payment would be fully back paid.

 

New subsections 42SA(1B) and (1C) would provide the method to work out whether a job seeker has undertaken adequate job search efforts in relation to a particular period. Relevantly, the question of whether a job seeker had undertaken adequate job search efforts in relation to a particular period would be worked out in accordance with a determination made by the Secretary in a legislative instrument.

 

New subsection 42SA(1D) would make it mandatory to notify the job seeker of the requirements the job seeker must comply with in order to rectify the failure if a determination is made under subsection 42SA(1) that a job seeker’s payment is suspended because of a failure to undertake adequate job search efforts. Notification is important because, if a job seeker is not notified of the requirements they must comply with, the period under subsection 42SA(2) would not end. In particular, the table in subsection 42SA(2) would provide, in item 4 of the table, that a job seeker must “comply with the requirements notified to the person under subsection 42SA(1D) in order for the payment suspension period to end.

 

Item 22 - Subsection 42SA(2)

 

This item amends section 42SA, which is about immediate non-payment of participation payments for certain failures.

 

This item would repeal the current subsection 42SA(2) and substitute a new subsection 42SA(2) and (2AAA). This amendment would be consequential to the amendments the Bill would make to subsection 42SA(1) - see items 16, 17, 18 and 21.

 

The new subsection 42SA(2) would set out, in table form, when the payment suspension period for each of the failures listed in subsection 42SA(1) would begin and end. Using a table would make it easier to ascertain when the payment suspension period begins and ends for each of the failures listed in subsection 42SA(1).

 

The new subsection 42SA(2AAA) would retain the operation of the current paragraph 42SA(2)(b) which allows for the payment suspension period to end at an earlier day if the Secretary determines that an earlier day is more appropriate than the date that would otherwise apply.

 

Item 23 - paragraph 42SA(2AA)(a)

 

This item would omit the words “employment provider” and substitute “employment service provider”.

 

This is a minor technical amendment which would align the term in the Administration Act with the term used in the 1991 Act.

 

Item 24 - Paragraph 42SA(2AA)(b)

 

This item would insert the words “by a notice under subsection 63(2)” after “Secretary” in paragraph 42SA(2AA)(b).

 

This amendment is largely of a technical and consequential nature. It would ensure, as is currently the case in practice, that when the Secretary requires a job seeker to attend a rescheduled appointment with their employment service provider, the Secretary does so by a notice under subsection 63(2).

 

Item 25 - paragraph 42SA(2AA)(b)

 

This item would omit the words “employment provider” and substitute “employment service provider”.

 

This is a minor technical amendment which would align the term in the Administration Act with the term used in the 1991 Act.

 

Items 26 and 27

 

Item 26 would repeal note 1 in subsection 42SA(2AA). Note 1 currently provides that the requirement to attend the rescheduled appointment will be a reconnection requirement or further reconnection requirement.

 

Item 27 would omit “note 2” and substitute “note” in subsection 42SA(2AA).

 

These amendments, are consequential to the amendments the Bill would make to current Subdivision C - see item 8.

 

Item 28 and 29

 

Item 28 would insert the sub-heading “Withholding payment” before subsection 42SA(2A).

 

Item 29 would insert the sub-heading “When participation payment becomes payable again” before subsection 42SA(3).

 

These are minor technical amendments which would clarify the operation of subsections 42SA(2A) and (3).

 

Item 30, 31 and 32

 

Item 30 would omit “Note” and substitute “Note 1” into the note at subsection 42SA(3) and relates to the amendment made by item 32.

 

Item 31 would omit “paragraph (1)(b) or (ba)” and substitute “paragraph (1)(aa), (b), (ba) or (c)” into the note at subsection 42SA(3). This amendment would be consequential to the amendments the Bill would make to subsection 42SA(1) and Subdivision EC - see items 16, 18 and 38. It would clarify that for a failure referred to in paragraphs 42SA(1)(aa), (b), (ba), (c), a penalty amount may be deducted from the person’s participation payment because of the operation of Subdivision EC.

 

Item 32 would add a second note at the end of subsection 42SA(3). It would provide that if a suspension period ends under subsection 42SA(2) in relation to a job seeker and a participation payment becomes payable to the job seeker for that period, section 42C may apply in relation to a day in that period. That is, this second note would clarify that a penalty amount may be deducted from the person’s participation payment (after it becomes payable) if, on a day that falls in the suspension period, the person commits a failure under section 42C. However, it would not be possible to deduct a penalty amount under section 42C in relation to that day if a penalty amount has already been deducted from the person’s participation payment for that day because of a failure committed under section 42SC - see the amendment the Bill would make to paragraph 42C(4)(c) at item 5 for more information about that amendment.

 

Item 33 - Before subsection 42SA(4)

 

This item would insert the sub-heading “Notification of determination” before subsection 42SA(4).

 

This amendment is a minor technical amendment which would clarify the operation of subsection 42SA(4).

 

Item 34 - At the end of section 42SA

 

This item would insert three new subsections into section 42SA. This amendment is largely consequential to the amendments the Bill would make to subsection 42SA(1) regarding a person acting in an inappropriate manner at an appointment - see item 18.

 

Currently, there are a no consequences if a job seeker acts in an inappropriate manner at an appointment such that the purpose of the appointment is not achieved. New paragraph 42SA(1)(c) would mean there is a consequence for committing such a failure - that is, immediate payment suspension until the person attends a new appointment. If the job seeker attends the new appointment so that the purpose of the appointment can be achieved, it would result in the job seeker’s payment being fully back paid.

 

New subsections 42SA(5), (6) and (7), would allow the Secretary, by legislative instrument, to determine matters that the Secretary must take into account in deciding whether a job seeker has acted in an inappropriate manner at an appointment under paragraph 42SA(1)(c). The subsections make clear that if such an instrument is made, those matters must be taken into account when deciding whether the job seeker has acted in an inappropriate manner at an appointment. The Secretary is not limited to only taking those matters into account.

 

Item 35 - Subdivision EC of Division 3A of Part 3 (heading)

 

This item would repeal the current heading to Subdivision EC, “Subdivision EC - Non-attendance failures” and substitute a new heading, “Subdivision EC - No show no pay failures relating to appointments or to entry into employment pathway plans”.

 

This amendment would be consequential to the amendments the Bill would make to subsection 42SA(1) and 42SC(1) - see items 16, 18, 37, 38 and 39. With the inclusion of additional failures in subsection 42SC(1), this new subheading would more accurately reflect the failures to which Subdivision EC would apply.

 

In addition, with the repeal of Subdivision C (relating to connection and reconnection failures) and Subdivision EC applying to all appointments, there would no longer be a need to distinguish between appointments giving rise to a non-attendance failure under subsection 42SC(1) and appointments giving rise to a reconnection failure.

 

As failures under Subdivision EC and Subdivision B give rise to short-term penalties there would be two types of no show no pay failures. This amendment would ensure that the failures under Subdivision B (section 42C) and Subdivision EC (section 42SC) are easily distinguished.

 

Item 36 - Section 42SC (heading)

 

This item would repeal the current heading to section 42SC, “42SC Non-attendance failures” and substitute a new heading, “42SC No show no pay failures relating to appointments or to entry into employment pathway plan”.

 

This amendment would be consequential to the amendments the Bill would make to subsection 42SA(1) and 42SC(1) - see items 16, 18, 37, 38 and 39. With the inclusion of additional failures in subsection 42SC(1), this new subheading would more accurately reflect the failures to which Subdivision EC would apply.

 

In addition, with the repeal of Subdivision C (relating to connection and reconnection failures) and Subdivision EC applying to all appointments, there would no longer be a need to distinguish between appointments giving rise to a non-attendance failure under subsection 42SC(1) and appointments giving rise to a reconnection failure.

 

As failures under Subdivision EC and Subdivision B give rise to short-term penalties there would be two types of no show no pay failures. This amendment would ensure that the failures under Subdivision B (section 42C) and Subdivision EC (section 42SC) are easily distinguished.

 

Item 37 - Subsection 42SC(1)

 

This item would omit the words “non-attendance failure” and substitute the words “no show no pay failure” into subsection 42SC(1).

 

This amendment would be consequential to the amendments the Bill would make to subsections 42SA(1) and 42SC(1)  - see items 16, 18, 38 and 39. Renaming failures under subsection 42SC(1) as no show no pay failures reflect the inclusion of additional failures in subsection 42SC(1), as well as, the fact that the failures under subsection 42SC(1) give rise to a short-term financial penalty and therefore would be a type of no show no pay failure (the other type of no show no pay failures being the failures under subsection 42C).

 

Also, with the repeal of Subdivision C (relating to connection and reconnection failures) and Subdivision EC applying to all appointments, there would no longer be a need to distinguish between appointments giving rise to a non-attendance failure under subsection 42SC(1) and appointments giving rise to a reconnection failure.

 

Items 38 and 39 - subsection 42SC(1) and subsection 42SC(2)

 

Section 42SC is about non-attendance failures. It would be amended to be about no show no pay failures relating to appointments or to entry into employment pathway plans.

 

Item 38 would omit the words “the person’s failure referred to in paragraph 42SA(1)(b) or (ba)” and substitute the words “paragraph 42SA(1)(aa), (b), (ba) or (c) applying” into subsection 42SC(1) in order to make these additional failure types (see discussion below) subject to financial penalties under Subdivision EC.

 

Currently, under Subdivision EC, a penalty amount may be deducted from a job seeker’s payment if the job seeker fails to attend an appointment they were required to attend under either their employment pathway plan (42SA(1)(b)) or a notice under subsection 63(2) (42SA(1)(ba)) without a reasonable excuse.

 

Item 38 would insert additional failures for which a penalty amount may be deducted from a job seeker’s payment. Relevantly, these would be the failure to enter into an Employment Pathway Plan (new subsection 42SA(1)(aa) - see item 16) and acting in an inappropriate manner at an appointment (new subsection 42SA(1)(c) - see item 18).

 

The rationale for item 38 is that while immediate non-payment for these additional failures under subsection 42SA(1) provides some incentive to rectify the failures (either by complying with the further requirement to enter into an Employment Pathway Plan or attending a new appointment), it does not provide sufficient incentive because a person will be back paid once the failure is rectified. The possibility of also having an amount of pay deducted (from their back pay) for the days a job seeker fails to comply with a further requirement to enter into an Employment Pathway Plan or attend a new appointment provides a far greater incentive.

 

Item 39 would ensure that job seekers who have a reasonable excuse for the failures specified under subsection 42SC(1) will, as is currently the case, not be financially penalised. The note at the end of subsection 42SC(2) would guide readers to section 42U (which provides the Secretary with the power to make a legislative instrument setting out the matters that must be taken into account in deciding whether a job seeker has a reasonable excuse) and section 42UA (which is about prior notification of excuses).

 

Item 40 - subsection 42SC(3)

 

This item would omit the words “non-attendance failure” and substitute the words “no show no pay failure” into subsection 42SC(3).

 

This amendment would be consequential to the amendments the Bill would make to subsections 42SA(1) and 42SC(1)  - see items 16, 18, 38 and 39. Renaming failures under subsection 42SC(1) as no show no pay failures reflects the inclusion of additional failures in subsection 42SC(1), as well as the fact that the failures under subsection 42SC(1) give rise to a short-term financial penalty and therefore would be a type of no show no pay failure (the other type of no show no pay failure being the failures under subsection 42C).

 

Also, with the repeal of Subdivision C (relating to connection and reconnection failures) and Subdivision EC applying to all appointments, there would no longer be a need to distinguish between appointments giving rise to a non-attendance failure under subsection 42SC(1) and appointments giving rise to a reconnection failure.

 

Item 41 - section 42SD

 

This item would insert the words “under section 42SC” after “determines” in section 42SD. Section 42SD is about the deduction of penalty amounts.

 

This amendment is consequential to the amendments the Bill would make to subsection 42SC(1) - see items 38 and 39. It would make clear that section 42SD applies to section 42SC determinations for no show no pay failures relating to appointments or to entry into employment pathway plans (as opposed to section 42C determinations for no show no pay failures relating to participation in activities or to job interviews etc.).

 

Item 42 - Section 42SD

 

Section 42SD is about deduction of penalty amounts.

 

This item would omit the words “non-attendance failure” (wherever occurring) and substitute the words “no show no pay failure” into section 42SD.

 

This amendment would be consequential to the amendments the Bill would make to subsections 42SA(1) and 42SC(1)  - see items 16, 18, 38 and 39. Renaming failures under subsection 42SC(1) as no show no pay failures reflects the inclusion of additional failures in subsection 42SC(1), as well as the fact that the failures under subsection 42SC(1) give rise to a short-term financial penalty and therefore would be a type of no show no pay failure (the other type of no show no pay failure being the failures under subsection 42C(1)).

 

Item 43 - Subsection 42T(1)

 

Section 42T is about legislative instruments determining the method for working out a penalty amount.

 

This item would omit the words “a reconnection failure or a non-attendance failure” from subsection 42T(1).

 

This amendment would be consequential to the amendments the Bill would make to Subdivisions C and EC - see items 8, 38 and 39.

 

Item 44 - Before subsection 42T(2)

 

This item would insert the sub-heading “No show no pay failures under subsection 42C(1)” before subsection 42T(2).

 

This is a minor technical and consequential amendment which would make clear that the formula in subsection 42T(2) applies only to no show no pay failures (relating to participation in activities or to job interviews etc.) under subsection 42C(1).

 

Item 45 - Subsection 42T(2)

 

This item would insert the words “under subsection 42C(1)” after the words “no show no pay failure” in subsection 42T(2).

 

This is a minor technical amendment which would make clear that the formula in subsection 42T(2) applies to no show no pay failures (relating to participation in activities or to job interviews etc.) under subsection 42C(1). It is also consequential to the amendments the Bill would make to Subdivision B and EC - see items 2, 3, 38 and 39. This is because it clarifies that subsection 42T(2) would apply to the no show no pay failures under 42C(1) only (and not to the no show no pay failures (relating to appointments or to entry into employment pathway plans) under  42SC(1)).

 

Item 46 - Subsection 42T(3)

 

This item would repeal subsection 42T(3), which would remove the formula applicable to reconnection failures.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. Subsection 42T(3) would be redundant as there would no longer be reconnection failures under the Administration Act.

 

Item 47 - Before subsection 42T(3A)

 

This item would insert the sub-heading “No show no pay failures under subsection 42SC(1)” before subsection 42T(3A).

 

This is a minor technical and consequential amendment which would make clear that the formula in subsection 42T(3A) applies only to no show no pay failures (relating to appointments or to entry into employment pathway) under subsection 42SC(1).

 

Item 48 - Subsection 42T(3A)

 

This item would omit the words “a non-attendance failure” and substitute the words “a no show no pay failure under subsection 42SC(1)” in subsection 42T(3A).

 

This amendment would also be consequential to the amendments the Bill would make to Subdivision EC - see items 38 and 39. The reference to “non-attendance failure” in subsection 42T(3A) would be redundant because there would no longer be non-attendance failures under the Administration Act. It would also clarify that subsection 42T(3A) would apply to the no show no pay failures (relating to appointments or to entry into employment pathway plans) under 42SC(1) and not to the no show no pay failures (relating to participation in activities or to job interviews etc.) under 42C(1).

 

Item 49 - Subsection 42T(3A)

 

This item would omit the words “non-attendance failure penalty period” and substitute the words “applicable penalty period” in subsection 42T(3A).

 

This amendment would be consequential to the amendment the Bill would make to Subdivision EC - see item 38 and 39. The reference to “non-attendance failure penalty period” in subsection 42T(3A) would be redundant because there would no longer be non-attendance failures under the Administration Act.

 

Item 50 - Subsection 42T(3B)

 

This item would repeal subsection 42T(3B) and substitute a new subsection 42T(3B) and (3C). Currently, subsection 42T(3B) provides for the definition of “non-attendance failure penalty period” for the purposes of subsection 42T(3A).

 

This amendment would be consequential to the amendment the Bill would make to Subdivision EC and to section 42T(3A) - see items 38, 39 and 49. The reference to “non-attendance failure penalty period” in subsection 42T(3A) and, therefore, subsection 42T(3B), would be redundant because there would no longer be non-attendance failures under the Administration Act. It would also ensure there is a definition of “applicable penalty period” for the purposes of subsection 42T(3A).

 

In addition, this amendment would expand on the definition by providing that the applicable penalty period ends not only on the day the period under subsection 42SA(2) ends (new paragraph 42T(3B)(b)(i)), but also that it ends on an earlier day if the Secretary determines under new subsection 42T(3C) that ending the applicable penalty period on that earlier day is more appropriate (paragraph 42T(3B)(b)(i)).

 

New subsection 42T(3C) would provide that for the purposes of new paragraph 42T(3B)(b)(ii), the Secretary may determine an earlier day if the person satisfies the Secretary that the person had a reasonable excuse for committing the failures referred to in paragraphs 42T(3C)(a), (b), (c) or (d) (these failures being, for example, further requirements or new appointments  mentioned in column 3 of the table in subsection 42SA(2) that, if complied with, would have ended a person’s suspension period).

 

The rationale for this amendment is to ensure that if the person had a reasonable excuse for committing the failures referred to in paragraphs 42T(3C)(a), (b), (c) or (d), even though the suspension period may not have ended under subsection 42SA(2) (ie. because a job seeker committed the failures referred to in paragraphs 42T(3C)(a), (b), (c) or (d)), it would be possible to end the applicable penalty period earlier. It would ensure a person is not financially penalised for being non-compliant where they had a reasonable excuse for that non-compliance.

 

The note at the end of subsection 42T(3B) would guide readers to section 42U (which provides the Secretary with the power to make a legislative instrument setting out the matters that must be taken into account in deciding whether a job seeker has a reasonable excuse) and section 42UA (which is about prior notification of excuses).



 

Item 51 - Subsection 42T(4)

 

This item would repeal subsection 42T(4).

 

Currently, paragraph 42T(4)(a) provides that the penalty amount for a no show no pay failure must relate to the amount of the participation payment paid to the job seeker on the day of the failure.

 

It is clear from other provisions in the Administration Act (section 42C and the formula set out in subsection 42T(2)) that the penalty amount relates to the amount of the participation payment paid to the job seeker on the day of the failure. As such, this provision is redundant and repealing it would simplify the legislation.

 

In relation to paragraph 42T(4)(b), this amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. Paragraph 42T(4)(b) would be redundant because there would no longer be connection failures or reconnection failures under the Administration Act.

 

Item 52 - Before subsection 42T(5)

 

This item would insert the sub-heading “General rules” before subsection 42T(5).

 

This is a minor technical and consequential amendment which would make clear that there are general rules that would apply to the method determined by the Minister for working out a person’s penalty amount under section 42T.

 

Item 53 - Paragraph 42U(1)(a)

 

Section 42U is about legislative instruments relating to reasonable excuse.

 

This item would insert the words “and subsection 42SC(2)” after the words “paragraph 42C(4)(a)” in paragraph 42U(1)(a), to reflect the amendments to section 42SC.

 

This amendment is consequential to the amendment the Bill would make to subsection 42SC(1) and 42SC(2) - see items 38 and 39. In particular, it reflects that there would be a new type of no show no pay failure, relating to appointments or to entry into employment pathway plans.

 

Item 54 - Paragraphs 42U(1)(b) and (c)

 

This item would repeal paragraphs 42U(1)(b) and (c), as these provisions relate to connection and reconnection failures.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. Paragraphs 42U(1)(b) and (c) would be redundant because there would no longer be connection failures or reconnection failures under the Administration Act.

 

Item 55 - Paragraph 42U(1)(e)

 

This item would repeal paragraph 42U(1)(e) and substitute a new paragraph 42U(1)(e), “(e) a failure referred to in paragraph 42T(3C)(a), (b), (c) or (d)”.

 

The effect of this item would be that the Secretary must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether a person has a reasonable excuse for committing a failure referred to in paragraph 42T(3C)(a), (b), (c) or (d), but would no longer need to do so in relation to a non-attendance failure.

 

This amendment would be consequential to the amendment the Bill would make to subsection 42SC(1) - see items 38, 39. Current paragraph 42UA(1)(e) would be redundant because there would no longer be non-attendance failures under the Administration Act. It would also be consequential to the amendment made by item 53, which would include the new type of no show no pay failure (that is, the renamed non-attendance failures) under paragraph 42U(1)(a).

 

In addition, this amendment would be consequential to the amendment the Bill would make to subsection 42T(3B) - see item 50, which would insert new subsection 42T(3C) into the Administration Act. Subsection 42T(3C) would effectively provide that the Secretary can determine that an applicable penalty period ends on an earlier day if satisfied a person had a reasonable excuse for committing the failures referred to in paragraph 42T(3C)(a), (b), (c), or (d).

 

Item 56 - Paragraph 42UA(1)(d)

 

Section 42UA is about prior notification of excuse.

 

This item would omit “person;” and substitutes “person.” in paragraph 42UA(1)(d).

 

This item effectively removes the semicolon from paragraph 42UA(1)(d) and would be consequential to the amendment the Bill would make to paragraph 42UA(1)(e) - see item 57.

 

Item 57 - Paragraph 42UA(1)(e)

 

This item would repeal paragraph 42UA(1)(e), as this provision relates to reconnection and further reconnection requirements.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. Paragraph 42UA(1)(e) would be redundant because there would no longer be reconnection and further reconnection requirements under the Administration Act.



 

Item 58 - Subsection 42UA(2)

 

This item would omit “, paragraph 42E(4)(a) or 42H(3)(a) or subsection 42SC(2)” from subsection 42UA(2) and substitute the words “or subsection 42SC(2) or 42T(3C)”.

 

The effect of this item would be that for the purposes of subparagraph 42C(4)(a)(ii), subsection 42SC(2) or subsection 42T(3C) (but no longer for the purposes of paragraph 42E(4)(a) or 42H(3)(a)), in deciding whether the person has a reasonable excuse for the failure mentioned in subsection 42UA(1), the table set out in subsection 42UA(2) would have effect.

 

Paragraphs 42E(4)(a) and 42H(3)(a) relate to connection and reconnection failures and, as such, their omission is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. Paragraph 42E(4)(a) and 42H(3)(a) would be redundant because there would no longer be connection and reconnection failures under the Administration Act.

 

It would also be consequential to the amendment the Bill would make to subsection 42T(3B) - see item 50, which would insert new subsection 42T(3C) into the Administration Act. Subsection 42T(3C) would effectively provide that the Secretary can determine that an applicable penalty period ends on an earlier day if satisfied a person had a reasonable excuse for committing the failures referred to in paragraph 42T(3C)(a), (b), (c), or (d).

 

Item 59 - Subsection 42UA(2) (table item 2, column heading “For this failure:”)

 

This item would omit “or (e)” from table item 2, column heading “For this failure” in subsection 42UA(2).

 

This amendment is consequential to the amendment the Bill would make to repeal subsection 42UA(1)(e) which relates to reconnection or further reconnection requirements - see item 57.

 

Items 60 and 61 - Section 42V

 

Section 42V is about deduction from any participation payment.

 

Item 60 would omit “a reconnection failure or a non-attendance failure” from section 42V.

 

Item 61 would omit “,42L” (which relates to reconnection failures) from section 42V.

 

These amendments are consequential to the amendments the Bill would make to repeal Subdivision C and amend Subdivision EC - see items 8, 38 and 39. The references to reconnection failure and non-attendance failure in section 42V would be redundant because there would no longer be reconnection failures or non-attendance failures under the Administration Act.

 

Item 62 - Section 42X

 

Section 42X is about payability.

 

This item would insert “(1)” before “A” in section 42X.

 

This amendment is consequential to the amendment the Bill would make at the end of section 42X - see item 65.

 

Item 63 - Section 42X

 

This item would omit “, a reconnection failure or a non-attendance failure” from section 42X.

 

These amendments are consequential to the amendments the Bill would make to repeal Subdivision C and amend Subdivision EC - see items 8, 38 and 39. The references to reconnection failure and non-attendance failure in section 42X would be redundant because there would no longer be reconnection failures or non-attendance failures under the Administration Act.

 

Item 64 - At the end of section 42X

 

This item would add a new subsection 42X(2) to section 42X.

 

It would provide that if, under Division 3A of Part 3 of the Administration Act, a participation payment is not payable to a person for a period, then, for the purposes of paragraphs 63(1)(a) and (3)(a), the person is taken to be receiving that participation payment for that period.

 

This amendment would clarify that even though a job seeker’s participation payment may be not be payable for a period under Division 3A, the job seeker is taken to be receiving that participation payment under paragraphs 63(1)(a) and (3)(a). This would ensure that subsections 63(2) and (4) are effective, by allowing a job seeker to be notified under subsection 63(2) and (4) during a period that a participation payment is not payable. This is to ensure that a job seeker continues to meet any relevant requirements that might apply under subsections 63(2) or (4) during a period of non-payability.

 

Item 65 - Subsection 63(2)

 

Subsection 63(2) provides general authority to require income support claimants or recipients to attend appointments. This provision is often relied upon to compel job seekers to attend appointments with providers at specific times.

 

Currently, subsection 63(2) allows the Secretary to require a person to do an act or thing (including attend an appointment) within a specified time. This was presumably because subsection 63(2) was originally drafted with the requirement to provide documentation in mind, but it would be unworkable to allow a person to attend an appointment within, rather than at , a specified time.

 

This item, therefore, would omit “within” and substitute “at or within” in subsection 63(2).

 

This is a minor technical amendment that would put beyond doubt that subsection 63(2) can also be used to require a job seeker to attend an appointment at a specified time.

 

Item 66 - Subclause 1(1) of Schedule 1 (definition of connection failure )

 

This item would repeal the definition of connection failure from subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. The definition of connection failure would be redundant because there would no longer be reconnection failures under the Administration Act.

 

Item 67 - Subclause 1(1) of Schedule 1 (definition of further reconnection requirement )

 

This item would repeal the definition of further reconnection requirement from subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. The definition of further reconnection requirement would be redundant because there would no longer be further reconnection requirements under the Administration Act.

 

Item 68 - Subclause 1(1) of Schedule 1 (definition of non-attendance failure )

 

This item would repeal the definition of non-attendance failure in subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision EC - see items 38 and 39. The definition of non-attendance failure would be redundant because there would no longer be non-attendance failures under the Administration Act.



 

Item 69 - Subclause 1(1) of Schedule 1 (definition of no show no pay failure )

 

This item would omit “subsection 42C(1)” and substitute “subsections 42C(1) and 42SC(1)” in the definition of no show no pay failure in subclause 1 of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to Subdivision B and Subdivision EC - see items 2, 3, 38 and 39. This is because there would now be two types of no show no pay failures under the Administration Act - no show no pay failures relating to participation in activities and or to job interviews etc. (section 42C) and no show no pay failures relating to appointments or to entry into employment pathway plans (section 42SC).

 

Item 70 - Subclause 1(1) of Schedule 1 (definition of penalty amount )

 

This item would omit “, a reconnection failure or a non-attendance failure” from the definition of penalty amount in Subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to Subdivision C and EC - see items 8, 38 and 39. The references to reconnection failure and non-attendance failure in the definition of penalty amount would be redundant because there would no longer be reconnection failures or non-attendance failures under the Administration Act.

 

Item 71 - Subclause 1(1) of Schedule 1 (definition of reconnection failure )

 

This item would repeal the definition of reconnection failure from subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. The definition of reconnection failure would be redundant because there would no longer be reconnection failures under the Administration Act.

 

Item 72 - Subclause 1(1) of Schedule 1 (definition of reconnection failure period )

 

This item would repeal the definition of reconnection failure period from subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. The definition of reconnection failure period would be redundant because there would no longer be reconnection failure periods under the Administration Act.



 

Item 73 - Subclause 1(1) of Schedule 1 (definition of reconnection requirement )

 

This item would repeal the definition of reconnection requirement from subclause 1(1) of Schedule 1.

 

This amendment is consequential to the amendment the Bill would make to repeal Subdivision C - see item 8. The definition of reconnection requirement would be redundant because there would no longer be further reconnection requirements under the Administration Act.

 

Item 74 - Application and saving provisions

 

This item contains application and transitional provisions that would operate as follows:

 

Subitem 74(1)

 

This subitem would provide that the amendments made by items 4, 5, 6 and 7 apply in relation to determinations made under subsection 42C(1) of the Administration Act on or after the commencement of this item (that is, on or after 1 July 2016). This will be the case whether the failures mentioned in paragraph 42C(1)(a) are committed before, on or after 1 July 2016.

 

Subitem 74(2)

 

This subitem would provide that despite the amendments made by Schedule 1, Subdivisions C, EA and F of Division 3A of Part 3 of the Administration Act, as in force immediate before the commencement of this item (that is, immediately before 1 July 2016), continue to apply on or after 1 July 2016 in relation to the following:

(a)   a requirement mentioned in paragraph 42E(2)(a), (b), (c), (f) or (g) that arose before 1 July 2016;

(b)   a notice issued under subsection 42F(1) before 1 July 2016.

 

Subitem 74(3)

 

This subitem would provide that the amendments made by items 10, 11, 12, 13, and 15 apply in relation to determinations, made under subsection 42M(1) of the Administration Act, on or after the commencement of this item (that is, on or after 1 July 2016). This will be the case whether the failures mentioned in paragraph 42M(1)(a) occur before, on or after 1 July 2016.

 

In addition, this subitem would provide that the amendments made by items 10, 11, 12, 13, and 15 apply in relation to determinations, made under subsection 42N(1) of the Administration Act, on or after the commencement of this item (that is, on or after 1 July 2016). This will be the case where the refusal or failures mentioned in paragraph 42N(1)(b) occur on or after 1 July 2016 (not before).

 

Subitem 74(4)

 

This subitem would provide that the amendment made by item 16 applies in relation to failures that occur on or after the commencement of this item (that is, on or after 1 July 2016), where the requirements arose on or after 1 July 2016.

 

Subitem 74(5)

 

This subitem would provide that the amendment made by item 17 applies in relation to failures that occur on or after the commencement of this item (that is, on or after 1 July 2016), where the periods begin on or after 1 July 2016.

 

Subitem 74(6)

 

This subitem would provide that the amendment made by item 18 applies in relation to appointments occurring on or after the commencement of this item (that is, on or after 1 July 2016).

 

Subitem 74(7)

 

This subitem would provide that the amendments made by items 22 and 24 apply in relation to determinations made under subsection 42SA(1) of the Administration Act on or after the commencement of this item (that is, on or after 1 July 2016), other than determinations made as a result of the continued application of Subdivision EA of Division 3A of Part 3 of the Administration Act as mentioned in subitem 74(2). That is, this subitem will not apply to a determination made under subsection 42SA(1) if that determination was made because of the operation of subitem 74(2).

 

Subitem 74(8)

 

This subitem would provide that the amendments made by items 37, 38, 39, 40, 41, 42, 50 apply in relation to determinations made under subsections 42SC(1) of the Administration Act on or after the commencement of this item (that is, on or after 1 July 2016), whether the determinations under subsection 42SA(1) were made before, on or after 1 July 2016.



 

Statement of Compatibility with Human Rights

 

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

 

Social Security Legislation Amendment (Further Strengthening the Job Seeker Compliance) Bill 2015

 

The Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Bill

 

The Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 (the Bill) would amend Division 3A of Part 3 of the  Social Security (Administration) Act 1999 (the Act).

 

The job seeker compliance framework in Division 3A of Part 3 of the Act (the compliance framework) relates to job seekers’ mutual obligation requirements for receiving participation payments. The objectives of the compliance framework are to encourage increased workforce participation for those with the capacity to work and to secure compliance with mutual obligation requirements. This recognises that work is a right that is essential for realising other human rights and forms an inherent part of human dignity. The compliance framework also seeks to reduce the adverse consequences of passive welfare dependence and to ensure the integrity and sustainability of the social security system.

 

Participation payments are newstart allowance, youth allowance for persons who are not new apprentices or full-time students, parenting payment for persons who have participation requirements and special benefit for certain visa holders. These payments are made to job seekers if they meet mutual obligation requirements, such as entering into an Employment Pathway Plan, undertaking active job searches, attending appointments with employment services (and other specialist providers as may be relevant) and participating in activities designed to assist the person to improve their employment prospects.

 

The Bill would amend the compliance framework to provide stronger incentives for job seekers to comply with their mutual obligations by making amendments for the purpose of:

 

·          strengthening and aligning penalties for failing to enter into an Employment Pathway Plan;

·          suspending payments and applying penalties for failing to behave in an appropriate manner at an appointment;

·          enabling more immediate application of penalties for failing to participate in activities or job interviews;

·          suspending payments for inadequate job search;

·          removing waivers for serious penalties incurred for refusing or failing to accept a suitable job; and

·          repealing redundant provisions and simplifying the compliance framework by renaming all failures resulting in short-term penalties as ‘no show no pay’ failures, and by repealing connection and reconnection failure provisions.

 

The compliance framework amendments are outlined in further detail below.

 

Summary

 

This Bill would make amendments to strengthen and simplify the job seeker compliance framework in Division 3A of Part 3 of the Social Security (Administration) Act 1999 (the Act).

 

The Bill would build on changes introduced by the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014 . These changes are successfully improving attendance rates at appointments with employment service providers through more immediate consequences and stronger penalties. For example, attendance at reconnection appointments increased from 65 per cent in 2013-14 to over 90 per cent in June 2015. This Bill would extend this successful approach to job seekers’ other mutual obligation requirements, ensuring they are engaging with employment services and receiving the support they need to move off income support and into a job as quickly as they can. These changes will also simplify the compliance framework, making it easier for job seekers to understand their obligations and also helping them to avoid penalties.

 

The package of changes in the Bill will help ensure more effective compliance arrangements are in place for each stage of a job seeker’s pathway into work.

 

When a job seeker first receives income support, they are required to enter into an Employment Pathway Plan. An Employment Pathway Plan is a document that sets out the activities a job seeker must undertake to improve their employment prospects in return for income support from the community. Entering into such a plan is critical to give effect to other mutual obligation requirements. The Bill will provide more immediate consequences and stronger penalties for job seekers who refuse to enter an Employment Pathway Plan.

 

Once a job seeker has entered into an Employment Pathway Plan, the next step along the pathway to employment is to attend appointments and activities to improve their chances of employment. The changes supported by this Bill will ensure that all appointment types that a job seeker may need to attend are treated the same as appointments with providers. More immediate consequences will also apply to job seekers who fail to attend activities like Work for the Dole, or who fail to undertake adequate job search efforts.

 

Receiving an offer of suitable work should be the end of the job seeker’s time on income support, but some job seekers are turning these offers down. For this reason, the Bill will also provide for stronger penalties for job seekers who refuse work that they have been found capable of doing. These changes reinforce the principle that taxpayer-funded income support payments for the unemployed should only be available to those who are genuine in their efforts to move into paid work.

 

The Bill retains all existing protections for vulnerable job seekers. This includes the requirement for the Department of Human Services to talk to the job seeker and consider if a reasonable excuse exists before applying any financial penalty. Exemptions from mutual obligation requirements and rights of appeal also remain. Employment service providers will retain existing discretion to decide whether it is appropriate to initiate compliance processes or use other methods to re-engage job seekers who have not met their requirements.

 

Job seekers with identified vulnerabilities will continue to be flagged on the IT systems used by the Department of Human Services and employment service providers. This alerts Human Services and the provider to the vulnerability and enables them to take it into account when setting mutual obligation requirements for the job seeker or when considering whether or not to initiate compliance action.

 

As is the case now, job seekers who give prior notice of a reasonable excuse will not have payment suspensions or penalties applied. This means that penalties will not impact on those whose failure to meet a requirement is beyond their control, for instance, where they were taken ill or had an unexpected caring commitment and, where reasonable, gave prior notice of this.

 

Strengthening and aligning penalties for failing to enter an Employment Pathway Plan

 

Currently, there is no financial penalty for an initial refusal to enter an Employment Pathway Plan, even though it is a basic qualification requirement for job seekers to receive participation payments.

 

The Bill will allow payment suspensions for job seekers who refuse to enter into an Employment Pathway Plan. The suspension would only be lifted when they enter into a plan. In addition, the job seeker may incur a penalty equivalent to a working day’s payment for each day they continued to refuse without good reason after being notified of the failure. If the Department of Human Services finds a plan to be unreasonable, given the job seeker’s individual circumstances, no financial penalty will be applied.

 

A similar approach implemented on 1 January 2015 has been very effective in reducing the average duration of payment suspensions for job seekers who miss provider appointments, ensuring that they are re-engaging as quickly as possible. Between the September 2014 and March 2015 quarters, the average suspension duration fell from 5.2 business days to 3.1 business days. It is expected these changes will ensure job seekers enter an Employment Pathway Plan as soon as possible after an initial refusal.

 

A consecutive refusal to enter an Employment Pathway Plan without a reasonable excuse currently results in cancellation of payment, and this will remain unchanged. As occurs under the current provisions, if this happens, the job seeker will need to reclaim and will generally be required to enter an Employment Pathway Plan before payment is granted.

 

Suspending payments and applying penalties for failing to behave in an appropriate manner at an appointment

 

The Bill will allow payment suspensions for job seekers who act in an inappropriate manner during an appointment such that the purpose of the appointment is not achieved. In addition, if the job seeker does not have a reasonable excuse for acting in an inappropriate manner during the appointment, a penalty amount would be able to be deducted from the job seeker’s participation payment. This would be comparable to the existing penalty provisions for misconduct at activities or job interviews with prospective employers.

 

More immediate application of penalties for failing to attend activities or job interviews

 

Most job seekers are required to undertake activities such as training or Work for the Dole that will give them the skills, experience and commitment necessary to find paid work. Currently, financial penalties that are applied for failing to participate in activities cannot be deducted from the job seeker’s next fortnightly income support payment. They may only be deducted from the one following that. This can result in a delay of over 5 weeks before the penalty is deducted from the time of the non-attendance. It can be even longer if the job seeker is difficult to contact. This delay significantly reduces the efficacy of the penalty on modifying job seeker behaviour.

 

The Bill will not change the amount of these penalties but would allow the penalty amount to be deducted from the job seeker’s very next fortnightly payment. This change will help to create a stronger link between the non-compliance and the consequence, increasing the job seeker’s motivation to comply with their participation requirements in the future.

 

The recent changes to provider appointments have shown that more immediate payment consequences do result in more job seekers subsequently meeting their requirements and thereby avoiding financial penalties entirely. It is expected that the changes made by the Bill will have a similar positive impact and help more job seekers to meet their participation requirements.



 

Suspension of payments for inadequate job search

 

Looking for work is the most important part of a job seeker’s mutual obligation requirements. A person rarely manages to find a job without actively looking for one.

 

Despite this, the current process for dealing with job seekers who fail to look for work is cumbersome, protracted and ineffective. It can take more than 14 weeks of ongoing inadequate job search before a job seeker’s payment can be impacted in any way.

 

The Bill will introduce more immediate consequences for poor job search and provide a stronger incentive for job seekers to meet this mutual obligation requirement. The amendments will allow a job seeker’s payment to be suspended if they fail to undertake adequate job search efforts, unless there is a good reason for their failure to do so. The Bill will require the Secretary to make a Legislative Instrument giving decision-makers guidance on what constitutes inadequate job search. This suspension will be lifted once adequate job search has been undertaken, or if the job seeker subsequently discloses that they did have a good reason for not being able to look for work. Once the payment suspension is lifted, the job seeker will receive full back-payment.

 

Repeated failures to look for work will, as is currently the case, result in the job seeker undergoing a Comprehensive Compliance Assessment to determine if there are barriers impeding their ability to meet their requirements. If barriers are identified this can result in a vulnerability indicator being placed on the job seeker’s record, ensuring their barriers are taken into account in future compliance decisions.

 

The Bill will also remove redundant provisions relating to Job Seeker Diaries and Employer Contact Certificates. These will no longer be used as they are administratively inefficient, contribute to the length of the current process and are ineffective at modifying job seeker behaviour.

 

Employer Contact Certificates are considered especially burdensome by employers who are approached by job seekers to have them completed. They are also seen as counter-productive, in that they may unhelpfully stigmatise job seekers as income support recipients who are not genuine in their search for work

 

The Bill will also remove redundant provisions relating to Job Seeker Diaries and Employer Contact Certificates. These will no longer be used as they are administratively inefficient, contribute to the length of the current process and are ineffective at modifying job seeker behaviour.

 

Employer Contact Certificates are considered especially burdensome by employers who are approached by job seekers to have them completed. They are also seen as counter-productive, in that they may unhelpfully stigmatise job seekers as income support recipients who are not genuine in their search for work.

 

Removal of waivers for serious penalties incurred for refusing or failing to accept a suitable job

 

Current provisions that allow penalties for serious failures to be waived essentially allow job seekers to refuse suitable work with impunity.

 

The data indicates that job seekers are increasingly taking advantage of the waiver provisions to remain on income support rather than accept a suitable job.

 

In 2009-10, when the waiver provisions were introduced, 45 per cent of penalties for refusing a suitable job were waived and 55 per cent were served by the job seeker.

 

In 2013-14, 78 per cent of penalties were waived and only 22 per were actually served by the job seeker.

 

The availability of the waiver provisions is also acting as an incentive for non-compliance.

 

In 2008-09, the year before waivers were introduced, there were 644 serious failures for refusing or failing to accept suitable work. In 2013-14, there were 1,626 such penalties applied. This difference cannot be attributed to any comparable change in the size of the activity tested job seeker population or increase in the number of jobs being offered.

 

The Bill will mean that an eight week non-payment period applied for refusing or failing to commence work will no longer be able to be waived. This change will ensure that job seekers face real consequences for turning down suitable offers of work that they are capable of doing and that would reduce or end their reliance on income support. The change will not affect eight week non-payment periods applied for persistent non-compliance, which will still be able to be waived.

 

These changes will uphold the fundamental principle that taxpayer funded income support payments are provided as a safety net to support people who genuinely cannot find a job, and not as an option for people who have been offered a job but simply refuse to work.

 

Existing protections such as the reasonable excuse provisions and safeguards for vulnerable job seekers will still apply, and the Bill will not change the process used to make decisions as to what constitutes suitable work. A job seeker cannot be penalised for failing to accept a job that they are not capable of doing (or for which the employer will not provide training), that does not meet the applicable statutory conditions, that involves unreasonable commuting or that would aggravate any pre-existing medical conditions.

Repealing redundant provisions and simplifying the framework by renaming all short-term penalties as no show no pay penalties

 

Currently for job seekers there are four types of failures to comply with mutual obligation requirements that result in a payment suspension or short-term financial penalty. These are known as connection failures, reconnection failures, non-attendance failures and no show no pay failures.

 

The Bill will amend the Act to remove the current provisions related to connection failures, as they will now all be dealt with under the payment suspension provisions. The Bill will also remove reconnection failures and associated penalties, as these provisions are no longer relevant.

 

As the penalties for non-attendance at all appointments will now be the same, the Bill will allow for a single penalty type which will be referred to as a no show no pay penalty. This terminology will help simplify the compliance framework, making it easier for job seekers to understand their mutual obligation requirements, avoid penalties, and have the best possible chance of finding work.

 

Human rights engaged by the Bill

 

The Bill engages the following rights:

·            the right to social security in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR);

·            the right to an adequate standard of living in article 11 of the ICESCR ; and

·            the right to work in article 6 of the ICESCR.

 

Human rights implications of the Bill

 

Article 9 of the ICESCR recognises the right of everyone to social security. The right to social security requires States to establish a social security system and, to the maximum of its available resources (as required by Article 2 of the ICESCR), ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.

 

Article 11 of the ICESCR recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions.

 

Article 6 of the ICESCR recognises the right to work. This includes the right to the opportunity to gain a living by work which the job seeker freely chooses or accepts, and is considered an inherent part of human dignity [1] .

To enable people to realise their right to work, States are required, among other things, to assist and support individuals in order to enable them to identify and find available employment.

Article 4 of the ICESCR provides that countries may only subject economic, social and cultural rights to such limitations ‘as are determined by law only in so far as this may be compatible with the nature of these rights and solely for the purpose of promoting the general welfare in a democratic society’. The Committee on Economic, Social and Cultural Rights has stated that such limitations must be proportional and the least restrictive alternative where several types of limitations are available, and even where such limitations are permitted, they should be of limited duration and subject to review.

 

The current compliance framework relates to job seekers’ mutual obligation requirements for receiving social security payments (participation payments). The objectives of the compliance framework are to encourage increased workforce participation for those with the capacity to work and to secure compliance with mutual obligation requirements. This recognises that work is a right that is essential for realising other human rights and forms an inherent part of human dignity.  The objectives of the compliance framework also recognise the need to reduce the adverse consequences of passive welfare dependence and the need to ensure the integrity and sustainability of the social security system.

 

General overview

 

The amendments that would be made to the job seeker compliance framework by the Bill engage with right to social security, the right to an adequate standard of living and the right to work.

 

The amendments are directed towards achieving the legitimate objective of encouraging persons receiving participation payments to actively seek work and to accept suitable work when it is available. Activities directed towards finding work include attending appointments and undertaking activities designed to improve employment prospects. It is appropriate that a person who is able to work and is receiving social security payments while they are unemployed should demonstrate that they are actively looking for work and attending appointments to improve their employment prospects and, where appropriate, that they are accepting suitable job offers.

 

The extent to which the Bill may limit the right to social security or the right to an adequate standard of living is reasonable, because those persons who comply, or who genuinely cannot comply, with their participation requirements would not be adversely affected by the Bill. The Bill promotes the right to work. Failures by job seekers to meet participation requirements, such as participation in activities in an Employment Pathway Plan or attending job interviews (listed in section 42C), or accepting suitable employment (section 42N), or attending appointments and entering into an Employment Pathway Plan (listed in section 42SA), will not result in a suspension of participation payments or a financial penalty if a job seeker gives prior notice of a reasonable excuse for such a failure to comply with these participation requirements. The applicable reasonable excuse provisions are at subparagraph 42C(4)(a)(ii), paragraph 42N(2)(a) and subsection 42SC(2) (as will be amended) respectively. 

 

A reasonable excuse may include (but is not limited to) whether the person or a close family member has suffered a serious illness or where the person lacked the capacity to advise their provider that they could not attend an appointment. When making a decision that a person has a reasonable excuse, the decision maker must take into account a range of factors, including (but not limited to) whether the person has access to safe housing, their literacy and language skills, unforseen caring responsibilities, or whether the person was affected by an illness, impairment or condition that impeded their ability to meet their requirements. The matters a decision maker must take into account when making a determination that a person had a reasonable excuse are outlined in identical legislative instruments made by the relevant Secretary under section 42U  - the Social Security (Reasonable Excuse - Participation Payment Obligations) (DEEWR) Determination 2009 (No. 1) and the Social Security (Reasonable Excuse - Participation Payment Obligations) (FaHCSIA) Determination 2009 (No. 1).

 

Further, subsection 42T(5) makes clear that the method for working out a job seeker’s penalty amount must not affect other allowances payable to the job seeker such as rent assistance, pharmaceutical allowance or youth disability allowance.

 

All failures by a job seeker to meet participation requirements that contribute to a determination to suspend payments or impose financial penalties are subject to review, both within the Department of Human Services and by appeal to the Administrative Appeals Tribunal.  This is an important safeguard in the operation of these provisions.

 

It is necessary for the job seeker compliance framework to be further strengthened by the measures in the Bill to enhance job seeker compliance and reduce instances of non-compliance. The Bill aims to make improvements to what is already an effective and fair compliance framework, by linking non-compliance more clearly and quickly to proportionate consequences. These changes will provide a clearer incentive for job seekers to meet their mutual obligation requirements, which are designed to facilitate and encourage participation in the workforce.

 

The amendments made by the Bill are proportionate as a financial penalty will only be applied after the Department of Human Services engages in person with the job seeker and considers whether the job seeker has a reasonable excuse or an exemption from mutual obligation requirements. 

 

The Bill also retains the discretionary power of the Secretary (or decision-makers) to make determinations to ensure that there is no obligation to apply payment suspensions or financial penalties to job seekers, unless the Secretary (or decision-maker) decides it is appropriate to do so.

Further detail of the specific measures is provided below.

 

Strengthening and aligning penalties for failing to enter into an Employment Pathway Plan

 

The extent to which rights to social security and to an adequate standard of living may be limited, the amendments that would be made by the Bill are necessary and proportionate. Imposing a payment suspension and, potentially, a financial penalty for failing to enter into an Employment Pathway Plan serves as an incentive to job seekers to be committed to doing what is reasonably expected of them in terms of placing themselves in the best position to obtain employment while they receive their participation payment. Entering into an Employment Pathway Plan is important because it allows job seekers to receive the support and services they need to transition to employment.

This measure does not affect job seekers who comply by entering into an Employment Pathway Plan. In addition, for those job seekers who do not initially enter into an Employment Pathway Plan, participation payments will be back paid once they enter into an Employment Pathway Plan. Also, if the job seeker has a reasonable excuse for initially failing to enter into an Employment Pathway Plan, a financial penalty would not be applied (although a penalty can be applied if the job seeker has no reasonable excuse).

This measure is consistent with the compliance framework that already exists for failing to attend employment service provider appointments, which have been successful in improving job seeker attendance (and, thus, ensuring job seekers continue to receive their full participation payment). Between the September 2014 and March 2015 quarters, the average suspension duration fell from 5.2 business days to 3.1 business days. It is expected these changes will ensure job seekers enter an Employment Pathway Plan as soon as possible after an initial refusal.

 

Employment Pathway Plans are a key component of the compliance framework because they set out the mutual obligation requirements to be completed by the job seeker that are appropriate to the job seeker’s needs, and provide targeted support to job seekers to help them find work. In this way, job seekers are assisted and supported to enable them to identify and find available employment. This measure is therefore also aimed at expanding job seekers’ opportunities to attain their right to work.

 

For the above reasons, the measure promotes the right to work, and to the extent that this measure may limit the right to social security and the right to an adequate standard of living, the impact is necessary and proportionate to the legitimate objective of having job seekers remain committed to increasing their employment prospects as soon as they can.



 

Suspending payments and applying penalties for job seekers who fail to behave in an appropriate manner at appointments

 

This measure has the legitimate objective of discouraging job seekers from deliberately resisting assistance provided to them to identify and find work. It is reasonable to expect job seekers to remain engaged with their employment providers and their mutual obligations.

 

Compliance by a job seeker with their mutual obligations places them in an optimum position to seek and obtain gainful employment, and to fulfil their right to work. As such, these measures are necessary to ensure that more job seekers experience the benefits of employment sooner, including gaining a living and greater social and economic inclusion.

The measure is proportionate as protections would be added to the compliance framework to ensure that a job seeker’s behaviour can be assessed in a fair and reasonable manner.

 

For the above reasons, the measure promotes the right to work, and to the extent that this measure may limit the right to social security and the right to an adequate standard of living , the impact is necessary and proportionate to the policy objective of encouraging job seekers to remain engaged with their employment providers and their mutual obligations.

 

More immediate application of penalties for failing to participate in activities or job interviews

 

The rights to social security and to an adequate standard of living are not limited by applying the financial penalty that already applies for failing to participate in activities such as Work for the Dole or training, at an earlier stage . It does not involve any increase in the financial penalty that currently applies to non-compliant job seekers. Further, this measure allows existing penalties to have a greater impact on job seeker behaviour by creating a clearer link between the non-compliance and the penalty.

 

This measure does not affect a job seeker who complies by participating in activities such as Work for the Dole or training. As is currently already the case, if the job seeker has a reasonable excuse for failing to participate in activities such as Work for the Dole or training, a financial penalty would not be applied.

 

This measure, by encouraging job seekers to utilise the assistance provided to them in activities and job interviews that are aimed at assisting them to find suitable work, is consistent with, and aims to assist job seekers to attain, the right to work.

 

For the above reasons, this measure promotes the right to work and also has no impact on the right to social security or the right to an adequate standard of living.



 

Suspending payments for inadequate job search

 

Imposing a payment suspension until adequate job search efforts are undertaken serves as an incentive to job seekers to remain committed to doing what is reasonably expected of them in terms of placing themselves in the best position to obtain employment while they receive their participation payment. This will also increase their chances of finding suitable employment.

 

This measure does not affect job seekers who comply by undertaking adequate job search efforts. In addition, for job seekers who initially fail to undertake adequate job searches, participation payments will be back paid in full once they undertake adequate searches, or if the job seeker has a good reason for not being able to look for work. A financial penalty will not be incurred for failing to undertake adequate job search efforts.

This measure will not only provide job seekers with more incentive to search for work, but will also be done in conjunction with other activities, included in an Employment Pathway Plan, that will assist the job seeker to identify possible jobs and to develop skills to enhance their opportunities to find work. By providing this additional assistance along with the requirement to search for work, the measure will assist job seekers to realise their right to work.

 

For the reasons above, the measure promotes the right to work, and to the extent that this measure may limit the right to social security and the right to an adequate standard of living , the impact is necessary and proportionate to the legitimate objective of increasing a job seeker’s chances of entering the workforce.

 

Removing waivers for serious penalties incurred for refusing or failing to accept a suitable job

 

The Bill will make amendments so that an eight week non-payment period applied for refusing or failing to commence work will no longer be able to be waived. This change will ensure that job seekers face real consequences for turning down suitable offers of work that they are capable of doing and that would reduce or end their reliance on income support. The change will not affect eight week non-payment periods applied for persistent non-compliance, which will still be able to be waived.

 

Job seekers who incur penalties for refusing suitable work are demonstrably employable and should be expected to find and take work rather than remain in receipt of income support at tax-payer expense. There is a need to ensure that such job seekers are properly deterred from refusing suitable work in the future through the imposition of a meaningful penalty in the form of an eight week non-payment period, which cannot be ended at the Secretary’s discretion.

 

The rights to social security and to an adequate standard of living may be limited by this amendment because it will no longer be possible for the Secretary to end the 8 week non-payment period earlier if a job seeker refuses or fails to accept a suitable job. However, this measure has the legitimate objective of reducing the reliance on participation payments by job seekers who have successfully shown they are capable of obtaining suitable work.

 

This measure does not affect a job seeker who complies by accepting a suitable job offer. If a job seeker accepts a suitable job offer, they will be receiving income from paid work and, as such, will reduce or remove the need to continue to rely on participation payments. In fact, paid work is essential for realising an adequate standard of living.

 

Stronger incentives for job seekers who are capable of working to engage in suitable employment will assist those job seekers to experience the benefits that result from paid employment. By enabling and encouraging participation in the work force for job seekers who are able to work, the right to work is made more achievable for those job seekers.

 

The measure is reasonable and proportionate because existing protections such as reasonable excuse will still apply, and the current definition of suitable work will ensure that job seekers are not penalised where they have a good reason not to accept a job. A job seeker cannot be penalised for failing to accept a job that they are not capable of doing (or for which the employer will not provide training), that does not meet the applicable statutory conditions, that involves unreasonable commuting or that would aggravate any pre-existing medical conditions.

 

For the reasons above, the right to work is promoted, and to the extent that this measure may limit the right to social security and the right to an adequate standard of living, the impact is necessary and proportionate to the legitimate objective of having demonstrably employable job seekers remain committed to obtaining work as soon as they can rather than continuing to remain in receipt of income support at tax-payers expense.

 

Conclusion

 

The Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 is compatible with human rights because it promotes the right to work, and to the extent that it may limit human rights, the impact is for a legitimate objective, and is reasonable, necessary and proportionate.

 




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