BILLS DIGEST NO. 39, 2015–16              5 November 2015

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

Matthew Thomas
Social Policy Section 

Date introduced: 10 September 2015

House:  House of Representatives

Portfolio: Employment

Commencement: Sections 1–3 on Royal Assent; all other provisions on 1 July 2016.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

Purpose of the Bill

The purpose of the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 (the Bill) is to amend the Social Security (Administration) Act 1999 (the SSA Act)[1] to, from 1 July 2016:

•       remove the possibility of waiver of the eight week non-payment period imposed on job seekers who refuse a suitable job offer

•       provide for job seekers who fail, without a reasonable excuse, to enter into an Employment Pathway Plan, to have their payment suspended immediately, the suspension to continue until they enter into a plan, with no back-payment for the period in which they failed to comply

•       provide for job seekers who fail, without a reasonable excuse, to attend all required appointments—not just those with their employment services providers—to have their payment suspended immediately, the suspension to continue until they attend a re-scheduled appointment, with no back-payment for the period in which they fail to attend the appointment

•       provide for job seekers who act in an inappropriate manner, such that the purpose of required appointments is not met, to have their payment suspended immediately, the suspension to continue until they attend a re-scheduled appointment and behave in a manner deemed to be appropriate, with no back-payment for the period in which they fail to attend the appointment and behave appropriately and

•       provide for job seekers who fail, without a reasonable excuse, to undertake adequate job search efforts (to be specified in a legislative instrument) to have their payment suspended immediately, the suspension continuing until they meet their job search requirements. In this case, when the payment suspension is ended, job seekers will receive full back pay.

Background

The Bill gives effect to job seeker compliance measures that were announced as part of the 2015–16 Budget.[2]

Introduction of no show no pay penalties for missed appointments

It also seeks to extend some of the changes that were inserted into the SSA Act by the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014 (2014 Act).[3]

Under amendments in the 2014 Act, from 1 January 2015, job seekers who miss an appointment with their employment services provider, without a reasonable excuse, have their payment suspended immediately and reinstated only when they attend a rescheduled appointment.[4] Further, from 1 July 2015, job seekers who miss an appointment with their employment services provider do not receive back pay for the period in which they failed to attend the appointment.[5] This form of sanction is referred to as a no show no pay penalty under current job seeker compliance arrangements.

Under previous arrangements, a job seeker in this situation would have committed a connection failure, for which a penalty did not apply so long as the job seeker agreed to attend a rescheduled appointment. That is, the job seeker would have been back-paid from the date on which they agreed to attend the further appointment.

The introduction of no show no pay penalties for job seeker non-attendance at appointments with employment service providers would appear to have achieved the Government’s objectives. The Government claims that it has increased the number of job seekers attending appointments with employment service providers and reduced the average duration of income support suspensions for non-compliance.[6] If this is indeed the case then it will undoubtedly have helped to reduce the administrative burden on providers associated with job seeker non-attendance.

Broadening of no show no pay penalties

Accordingly, the Government is seeking to apply no show no pay penalties more broadly, to job seekers who: fail to enter into an Employment Pathway Plan; miss other required appointments; fail to undertake adequate job search efforts; and, fail to act in an appropriate manner at appointments such that the purpose of the appointment is not achieved. In effect, the Government seeks to do away with connection, reconnection and non-attendance failures altogether in favour of no show no pay failures.[7]

Waiver of non-payment penalties

The Bill also removes the possibility for job seekers who commit a serious failure by refusing or failing to accept an offer of suitable employment to have their eight week non-payment penalty waived. In doing so, it seeks to realise the main objective of the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 (the first Bill) which was introduced into the House of Representatives on 4 June 2014 in order to give effect to job seeker compliance measures that were announced as part of the 2014–15 Budget. The 2014 Bill failed to be passed by both houses of Parliament.[8]

Committee consideration

Senate Education and Employment Legislation Committee

The Bill has been referred to the Senate Education and Employment Legislation Committee (Education and Employment Committee) for inquiry and report by 24 November 2015.[9]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) has considered the Bill and raised some concerns.[10]

The Scrutiny of Bills Committee noted that under proposed subsections 42SA(5), (6) and (7) of the SSA Act (at item 34 of the Bill) the Secretary is able to determine by legislative instrument matters that must be considered by the Secretary when deciding whether a job seeker has acted in an inappropriate manner at an appointment. While proposed subsection 42SA(5) empowers the Secretary to make a legislative instrument to determine those matters that must be taken into account, it does not require such an instrument to be made.

The Scrutiny of Bills Committee’s concern is that without the matters to be considered having been included in the primary legislation, or a requirement for the Secretary to make a legislative instrument that spells these matters out, the Secretary ‘has a broadly framed power to determine what constitutes inappropriate behaviour at an appointment’.[11] That being the case, the Scrutiny of Bills Committee has sought the Minister’s advice on this issue.

Policy position of non-government parties/independents

The Australian Labor Party (Labor) has indicated that it supports some of the measures in the Bill, but not others.

Speaking in relation to the Bill, Shadow Minister for Employment Services, Julie Collins stated that Labor will not support three of its five measures.[12] Accordingly, Labor has moved amendments to remove these from the Bill.[13] The first of the measures Labor refuses to support is the measure that allows for the suspension of a job seeker’s income support where they fail to enter into an Employment Pathway Plan at their first appointment with their employment service provider. The second is the measure that allows for job seekers who act in an inappropriate manner at required appointments to have their payment suspended and potentially to be penalised. The third is the measure that removes the possibility for job seekers who refuse a suitable job offer to have their penalty waived by complying with a serious failure requirement or if it would cause serious financial hardship.

Labor’s position on the above measures is considered in further detail in the Key issues and provisions section, below.

The position of Labor and the Australian Greens (the Greens) in relation to the removal of waiver provisions for job seekers who commit a serious failure by refusing or failing to accept an offer of suitable employment is summarised in the Bills Digest for the first Bill.[14] Further details of Labor’s and the Greens’ position with regard to this measure are provided in their dissenting reports which are a part of the report by the Senate Education and Employment Legislation Committee on the first Bill.[15] Both Labor and the Greens were strongly opposed to the measure.

The independents do not appear to have publicly expressed a position with regard to the Bill.

Position of major interest groups

A number of submissions have been made to the Education and Employment Committee inquiry.[16] Generally speaking, there appears to be some broad support for simplification of the job seeker compliance framework. This is typically on the basis that:

The existing job seeker compliance framework is complex, with a range of different rules and consequences for, and even within, different categories of non-compliance. Simplification is desirable because a compliance framework that is more consistent and more readily understood is more likely to result in job seeker compliance. That means fewer payment suspensions and less financial harm, and greater engagement in services that support people into work. To that end, penalties for different compliance failures should be aligned as much as possible.[17]

However, the Australian Council of Social Service (ACOSS) has recommended that before any major changes are made to the system, such as those proposed in the Bill, an independent review of the compliance system should be undertaken. Such a review would consider trends in compliance and sanctions, reasons for non-compliance, whether the system strikes an appropriate balance between providing incentives for compliance and ensuring that a safety net is maintained, and, ways in which the system could be simplified while maintaining such a balance.[18]

The submissions have also expressed concerns with specific aspects of the Bill. Some of these are considered in the Key issues and provisions section, below.

The positions of major interest groups on the measure that removes the possibility for job seekers who refuse a suitable job offer to have their eight week non-payment period waived were canvassed in the Education and Employment Legislation Committee’s inquiry into the first Bill.[19] A summary of the submissions to the inquiry is provided in the Bills Digest for the first Bill.[20]

Financial implications

The Explanatory Memorandum estimates that the measures contained in the Bill will cost $24.5 million over the forward estimates period (2015–16 to 2018–19).[21] The 2015–16 Budget Papers put the figure at $24.9 million.[22]

Typically, stronger compliance measures such as those included in the Bill result in savings due to the reduced amount paid out in income support payments. However, the anticipated savings of $6.9 million over the three years from 2016–17 to 2018–19 are more than offset by the expected cost of $31.6 million over four years, with a net cost of around $24.9 million over four years.[23]

Australian Greens Senator, Rachel Siewert, has criticised the measure on the basis of its cost (among other things) arguing that ‘if the government is going to spend $3 to earn just $1 back, it should be better invested on measures that genuinely help people to engage with, find and maintain attachment to work’.[24] Speaking about the Bill, then Assistant Employment Minister, Luke Hartsuyker, defended the cost of the measure as follows:

I note there has been complaint from some quarters about the funding provided by the Government for the changes in the Bill. Let me put this into context. The Government is spending $6.8 billion over four years to help job seekers into work through jobactive. The $24.5 million provided for the measures in this Bill is a very small but important investment to maintain the overall integrity of the social security and employment services systems.

It is very important to remember that non-compliance by job seekers does come at a cost. It costs provider organisations in terms of red tape and downtime, and it costs the job seeker in terms of lost opportunity and benefits, and it costs the taxpayer in terms of the overall welfare bill.

The Australian Government is committed to ensuring the integrity of our income support system so that it is affordable and sustainable over the long term.

In order to do this, we need a stronger and more streamlined job seeker compliance framework that includes appropriate incentives and sanctions for job seekers who fail to meet their mutual obligation requirements.[25]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights (Human Rights Committee) has released its comments on the Bill and the Statement of Compatibility.[26]

The statement of compatibility acknowledges that the measure that allows for the suspension of people’s benefits where they act inappropriately during required appointments engages both the right to social security and the right to an adequate standard of living. However, it defends the limits placed on these rights by the measure on the grounds that the measure ‘has the legitimate objective of discouraging job seekers from deliberately resisting assistance provided to them to identify and find work’.[27] The statement goes on to argue that 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’.[28] That being the case, the Government considers that the Bill is compatible.[29]

The Human Rights Committee has taken issue with the Government’s assessment. In the first instance, it has questioned whether the measure that allows for the suspension of people’s benefits where they act inappropriately during required appointments could be said to be pursuing a legitimate objective, where no evidence has been provided to justify or support it:

A legitimate objective must address a substantial and pressing concern and be based on empirical research or reasoning. No evidence is provided as to the extent to which individuals on social security are frustrating job search activities by inappropriate behaviour during appointments.[30]

In the second instance, the Human Rights Committee has observed that the Bill does not provide any guidance as to what constitutes inappropriate behaviour, instead leaving such judgements to the providers of employment and related services. (The Secretary may determine matters that must be taken into account when deciding whether a job seeker has acted in an inappropriate manner at an appointment by legislative instrument—further details are provided below.) In the absence of statutory guidance, the Human Rights Committee has argued that the Bill ‘may result in individuals losing social security benefits in circumstances which are unfair or unreasonable’.[31]

The Human Rights Committee’s concern is that without the matters to be considered having been included in the primary legislation, or a requirement for the Secretary to make a legislative instrument that spells these matters out, the Secretary ‘has a broadly framed power to determine what constitutes inappropriate behaviour at an appointment’.[32] As noted above, the Scrutiny of Bills Committee has expressed similar concerns, and both Committees have sought the Minister’s advice on the matter. It is worth observing that the Human Rights Committee might have further added that the people who are most likely to be impacted upon by this measure are disadvantaged job seekers, such as those with a mental illness.

The Human Rights Committee has also expressed concerns about the measure that would remove the possibility for job seekers who refuse a suitable job offer to have their eight week non-payment period waived. It has argued that insufficient evidence has been provided to justify the statement of compatibility’s claim that the measure has a legitimate objective. For example, while the Explanatory Memorandum argues that the waiver provisions act as an incentive for noncompliance, the Human Rights Committee points out that no evidence has been provided to demonstrate that the waivers have not been granted for genuine reasons. If the waivers are being applied appropriately by the Department, then the Human Rights Committee has reflected that their removal could result in undue hardship for some job seekers. The Human Rights Committee made a similar assessment in its previous consideration of the measure.[33] For a summary of that earlier assessment and further analysis of issues raised by the measure, see the Bills Digest for the first Bill.[34]

In short, the Human Rights Committee concludes that the statement of compatibility has not sufficiently justified the limits to the right to social security and an adequate standard of living for the purposes of international human rights law and sought the advice of the Minister on the points raised.

Key issues and provisions

Timing of no show no pay failure deductions

Division 3A in Part 3 of the SSA Act contains the compliance framework which 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.[35]

Within Division 3A, subdivision B, subsection 42C(1) sets out the conduct which will lead to a person committing a no show no pay failure and subsection 42C(5) specifies the means by which the Secretary must determine the instalment period in which a no show no pay penalty is to be deducted, should the Secretary decide to make a determination.[36] Currently, the SSA Act provides that the earliest time at which a no show no pay penalty amount may be deducted is the income support instalment following the income support instalment in which the person is notified of the no show no pay failure.[37] The practical effect of this is that there is a delay of at least 15 days in the imposition of the penalty.

The original purpose behind delaying the imposition of penalties in this way was to try to reduce the hardships faced by income support recipients who are penalised. The rationale was that the delay would give penalised income support recipients time to organise their finances such that the negative impact of the penalty could be reduced. Given the low payment rates of Newstart Allowance and Youth Allowance, it might be argued that this is an important consideration. However, the competing view has it that delaying the penalty weakens the link between the failure and the sanction, and thereby reduces the impact of the sanction. The Government is seeking to restore this link and, to this end, the Bill removes from subsection 42C(5) the requirement that the penalty be delayed.[38] The effect of this change is to allow for no show no pay penalties to be imposed immediately.

Judging by Labor Members’ speeches during the debate on the Bill in the House of Representatives, Labor supports the imposition of more immediate penalties where job seekers either fail to participate in required activities or to undertake adequate job search activities, without reasonable excuse.[39] This is largely on the basis that the change should enable job seekers to become aware of their non-compliance sooner and act to remedy it, and enable any possible administrative mistakes to be corrected more quickly.

It is worth noting that there is an alternative approach to the imposition of more immediate sanctions for no show no pay failures, and one that could potentially satisfy both of the objectives mentioned above. The 2010 independent review of the job seeker compliance framework considered the issue of the timing of sanctions and concluded:

There is a case for trying to make financial sanctions take effect from the job seeker’s first, rather than second, pay day after a failure is imposed. This could induce earlier compliance in some cases and reduce the risk of incurring a large loss of payment. On the other hand, it could also cause considerable hardship and, in many cases, not significantly improve the job seeker’s understanding or speed of compliance. A more effective approach is to ensure that job seekers receive immediate and clear notification of the loss which they are beginning to incur and of ways to prevent further sanctions.[40]

Strengthened and aligned sanctions for failure to meet participation requirements

Entering into an Employment Pathway Plan, complying with the requirements of such a plan and attendance at compulsory employment-related activities are all requirements of job seekers. Where a job seeker fails, without reasonable excuse, to comply with such requirements then this may constitute a connection failure.[41] There is no immediate penalty for a connection failure, but the job seeker may be required to comply with a reconnection requirement.[42] Typically, this would entail attending a re-scheduled appointment or resuming the relevant activity.

If a job seeker fails to meet their reconnection requirement without a valid excuse then this amounts to a reconnection failure and sanctions apply.[43] For every day that a job seeker fails to meet their reconnection requirement, they incur a penalty equivalent to their daily rate of income support payment.[44]

As noted above, the Government is dissatisfied with the operation of the connection failure, primarily on the grounds that it is considered to provide insufficient incentive for job seekers to comply with their requirements under the Social Security Act 1991 and the SSA Act.[45] The Government’s preference is for the immediate non-payment of income support to job seekers who fail to meet their requirements and for penalties to be applied for the period in which they fail to comply, without having a reasonable excuse. To this end, the Bill repeals Subdivision C of Division 3A of Part 3 (that is, sections 42E–42L), thereby effectively removing connection and reconnection failures from the SSA Act.[46]

Further, the Bill incorporates a number of connection failures into Subdivision EA—Immediate non-payment of participation payments for certain failures and Subdivision EC—Non-attendance failures, thus ensuring that these failures result in the immediate non-payment of income support to job seekers who fail to meet their requirements under the SSA Act. The failures inserted into subsection 42SA include:

•       not complying with the requirement to enter into an Employment Pathway Plan[47]

•       failing to satisfy the Secretary that adequate job search efforts[48]—as specified in the Employment Pathway Plan—have been undertaken[49] and

•       failing to act in an appropriate manner such that the purpose of a required appointment is not achieved, as determined by the Secretary.[50]

The Bill inserts proposed subsections 42SA(1B), (1C) and (1D). The proposed subsections relate to making adequate job search efforts. Proposed subsection 42SA(1C) requires the Secretary to make a determination, by legislative instrument, which sets out what a person is required to do in order to satisfy the Secretary that they have made adequate job search efforts. If the Secretary makes a determination under subsection 42SA(1) that a participation payment is not payable to a person because he, or she, has failed to undertake adequate job search efforts, the Secretary must notify the person of the job search requirements they must comply with. This notification is necessary to enable the job seeker to comply with their requirement, and for the suspension of their income support payment to end.

In the case of the last of the failures listed above, the Secretary may determine, by legislative instrument, those matters that must be taken account when deciding whether a job seeker has acted in an inappropriate manner at an appointment under proposed subsections 42SA(5),(6) and (7).[51] Currently subparagraphs 42C(1)(a)(iii) and (iv) empower the Secretary to determine that a job seeker has committed a no show no pay failure where they commit misconduct while participating in an activity that they are required to undertake by an Employment Pathway Plan.

Comment

A number of issues have been raised in relation to the above proposed measures.

Labor Members have expressed concerns about the measure that would allow for the suspension of income support for a job seeker who fails to enter into an Employment Pathway Plan at their first appointment with their employment service provider.[52] Their argument is that the current arrangement, under which job seekers are only penalised after their second failure to enter into an Employment Pathway Plan (through a reconnection failure), is appropriate. At present, job seekers are given time to negotiate their plan with their employment services provider and to consider the plan in detail before being required to sign it—a ‘cooling off’ period, so to speak. This, Labor argues, allows job seekers to seek advice on the requirements being placed on them, and provides a potential safeguard against employment service providers imposing inappropriate obligations on job seekers.

A number of submissions to the Education and Employment Committee inquiry into the Bill have similarly argued that job seekers should continue to have 48 hours’ ‘think time’ before being required to sign an Employment Pathway Plan. Without such time, the Australian Unemployed Workers’ Union argues, ‘vulnerable job seekers will be at risk of signing Job Plans that do not accurately reflect their personal circumstances, potentially resulting in mental distress, injury and other serious consequences’.[53]

Labor Members also have serious reservations about the measure that would allow for the imposition of a penalty where the Secretary is satisfied that job seekers have acted in an inappropriate manner during a required appointment. Their main objections to the measure are similar to those of the Human Rights Committee and Scrutiny of Bills Committee which are discussed above. The first of these is that the term ‘inappropriate behaviour’ has not been defined and is to be left to the discretion of the Secretary. The second related objection is that, as a result of this lack of clarity, job seekers could be penalised for behaviour that is not inappropriate, or that is uncooperative, but justifiably so.[54]

The National Welfare Rights Network (NWRN) has argued in its submission to the Education and Employment Committee inquiry that allowing employment service providers the discretion to recommend suspension for inappropriate behaviour is likely to result in inconsistent, unfair or unreasonable decisions.[55] Its concerns relate in particular to instances in which the behaviour may be the result of: ‘an underlying mental health problem or behavioural problem; an intellectual disability or acquired brain injury; chronic pain from physical injuries; drug and alcohol dependence; cultural practices or misunderstandings; the person expressing a legitimate consumer complaint; stress and difficult coping with personal circumstances; or other complex underlying causes.’[56]

The Department of Employment has insisted in its submission that excuse provisions will still apply, ‘so that vulnerable job seekers are not penalised where the behaviour was not within their control’.[57] It is also the case that the final decision will still be made by the Secretary rather than employment services providers. However, the NWRN has serious reservations with regard to the proposed measure, arguing that ‘in practice, the assessment of the employment services provider is likely to be persuasive’.[58]

Labor Members do, however, support the harmonisation and simplification of failures and sanctions that the Bill provides for.[59] This is something that the independent review of the job seeker compliance framework saw considerable scope for and recommended.[60] However, the review did express concerns regarding practical difficulties associated with no show no pay failures that are of some consequence given that the Bill, should it be passed in its current form, would see these applied far more broadly. The independent review observed that

The no show, no pay failure concept is good in principle but it faces substantial practical difficulties. These relate partly to monitoring and reporting of non-attendance at activities which are conducted by external organisations instead of the providers themselves ... and to the need … to identify a specific date for the failure.[61]

Strengthened penalties for serious failures related to failing to accept or commence in a suitable job

Currently, the Secretary may determine that a job seeker has committed a serious failure in two circumstances—firstly for persistent non-compliance with participation obligations[62] and secondly, where the person has refused or failed to accept an offer of suitable employment.[63] The penalty for a serious failure is an eight week income support non-payment period.[64]

Section 42NC of the SSA Act currently provides that if the Secretary determines that a person has committed a serious failure, the Secretary must also determine that the non-payment period will apply. There is one exception, with two parts. The first is that the Secretary is satisfied that the job seeker does not have the capacity to undertake any serious failure requirement, for example, ‘because they now have significant caring responsibilities, or if undertaking the activity would aggravate an existing health condition’.[65] The second is that the Secretary is satisfied that serving the penalty would cause them to suffer severe financial hardship.[66] Item 10 of the Bill repeals this section so that the option of not having to serve the eight week income support non-payment period at all is removed.

The procedures for serious failures which were introduced by the Rudd-Gillard Government in 2009 enabled job seekers to have the eight week income support non-payment period waived or brought to an end early by complying with a serious failure requirement.[67] Job seekers are given the option of participating in an activity similar to work experience—a Compliance Activity—for at least 25 hours a week for the eight week period, rather than losing their payment.[68]

As noted above, the Government holds the firm view that tougher penalties need to be applied to job seekers who fail to accept or commence in a suitable job without good reason. It argues that too many job seekers who refuse a suitable job are having their penalties waived, and that, as a result, the serious failure penalty no longer provides an adequate deterrent to refusing work.[69]

The amendments to the Bill treat the two forms of serious failure differently.

For serious failure due to persistent non-compliance the Secretary will continue to be able to bring to an early end the serious failure period by requiring the person to comply with a serious failure requirement.[70]

That option is no longer available for serious failure for refusing or failing to accept an offer of suitable employment.

For detailed analysis of the Bill’s proposed changes in relation to serious failures, including stakeholder concerns and the potential impacts of the changes, see the Bills Digest for the first Bill.[71] The Education and Employment Legislation Committee’s report in relation to that Bill also contains relevant information.[72]

Labor Members have once again opposed this measure, with Julie Collins labelling it Labor’s ‘largest concern’ with the Bill.[73] Labor’s main problems with the measure are twofold. Firstly, it has argued that removing the ability of job seekers to have their penalty waived through participating in some form of compliance activity would result in the counterproductive outcome of these job seekers becoming disengaged. Secondly, it maintains that the penalty is severe and likely to result in financial hardship and related problems such as homelessness. Labor insists that the data indicate that relatively few penalties are being applied for job seekers refusing or failing to accept reasonable work offers, and that these figures do not support the need for the proposed changes.

A number of submissions to the Education and Employment Committee inquiry on the Bill make similar arguments, with most being highly critical of the proposal to remove the waiver provisions. The NWRN maintains that given that no evidence has been provided to suggest that the waivers have been applied inappropriately a more proportionate response would have been to tighten rather than get rid of job seekers’ ability to ‘work off’ the penalty.[74] This could have involved, for example, limiting the number of times a job seeker could have had a waiver applied for failing to accept or commence in a suitable job without good reason.

Other provisions

Item 22 repeals and replaces subsection 42SA(2) of the SSA Act so that the period for which a job seeker’s income support is not payable—the start and end days—for a range of different failures is set out in table form. Proposed subsection 42SA(2AAA) provides for the Secretary to end the non-payment period earlier than the time specified in the table, where this is considered appropriate.

The provisions in Subdivision EC of Division 3A of Part 3 of the SSA Act (that is, sections 42SC and 42SD) are currently about non-attendance failures. Items 35 and 36 of the Bill repeal the headings referring to non-attendance failures and substitute headings concerning no show no pay failures relating to appointments or to entry into Employment Pathway Plans. Among other things, most of the remaining items in the Bill repeal all subsequent references to non-attendance failures, substituting no show no pay failures. They also repeal all references to connection and reconnection requirements and failures, which are now redundant.

Item 38 of the Bill amends subsection 42SC(1) of the SSA Act to enable the Secretary to determine that a job seeker commits a no show no pay failure in relation to specific failures listed in subsection 42SA(1).[75] The effect of this change is to enable penalty amounts to be deducted in the case of these failures, in addition to the immediate non-payment of income support.

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[1].              Social Security (Administration) Act 1999, accessed 19 October 2015.

[2].              Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 83, accessed 19 October 2015.

[3].              Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act 2014, accessed 19 October 2015; M Thomas, Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, Bills digest, 17, 2014–15, Parliamentary Library, Canberra, 22 August 2014, accessed 19 October 2015.

[4].              Social Security (Administration) Act, subsection 42SA(2AA).

[5].              Social Security (Administration) Act, section 42SC and 42SD.

[6].              The Australian Association of Social Workers has questioned the data provided in the Explanatory Memorandum, arguing that the figures seem ‘exceptionally high in view of other data that is publicly available’. Australian Association of Social Workers, Submission to the Senate Education and Employment Legislation Committee, Inquiry into the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, October 2015, p. 2, accessed 4 November 2015.

[7].              Connection and reconnection failures formed a part of the new job seeker compliance system that was introduced along with the Job Services Australia employment services system in July 2009. See Parliament of Australia, Social Security Legislation Amendment (Employment Services Reform) Bill 2009 homepage, Australian Parliament website, accessed 21 October 2015.

[8].              Parliament of Australia, Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 homepage, Australian Parliament website, accessed 21 October 2015.

[9].              The terms of reference, submissions to the Senate Education and Employment Legislation Committee and the final report (when published) are available on the inquiry homepage, accessed 21 October 2015.

[10].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 10, 2015, The Senate, 16 September 2015, p. 6, accessed 12 October 2015.

[11].              Ibid.

[12].              J Collins, ‘Second reading speech: Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015’, House of Representatives, Debates, (proof), 13 October 2015, p. 83, accessed 21 October 2015.

[13].              Proposed amendments (House of Representatives), Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, accessed 4 November 2015.

[14].              Thomas, op. cit., pp. 6–7.

[15].              Senate Education and Employment Legislation Committee, Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 [Provisions], The Senate, Canberra, August 2014, accessed 15 October 2015.

[16].              Senate Education and Employment Legislation Committee, Inquiry into the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 [Provisions], accessed 21 October 2015.

[17].              Jobs Australia, Submission to: Senate Education and Employment Legislation Committee Inquiry into: Social Security Amendment (Strengthening Job Seeker Compliance) Bill 2015, p. 4, accessed 4 November 2015.

[18].              Australian Council of Social Service, Submission re: Inquiry into the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, 16 October 2015, p. 2, accessed 4 November 2015.

[19].              Senate Education and Employment Legislation Committee, Submissions, Inquiry into the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, accessed 15 October 2015.

[20].              Thomas, op. cit., p. 7.

[21].              Explanatory Memorandum, Social Security Legislation Amendment (Further Strengthening the Job Seeker Compliance) Bill 2015, p. 3, accessed 19 October 2015.

[22].              Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 83, accessed 19 October 2015.

[23].              Ibid.

[24].              See D Hurst, Federal Budget 2015: jobseeker penalty increases to cost more than savings, The Guardian, (online edition), 14 May 2015, accessed 19 October 2015.

[25].              L Hartsuyker, ‘Second reading speech: Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015’, House of Representatives, Debates, 10 September 2015, p. 9746, accessed 19 October 2015.

[26].              Parliamentary Joint Committee on Human Rights, Twenty-ninth report of the 44th Parliament, October 2015, pp. 25–30, accessed 19 October 2015.

[27].              Explanatory Memorandum, Social Security Legislation Amendment (Further Strengthening the Job Seeker Compliance) Bill 2015, p. 46, accessed 19 October 2015.

[28].              Ibid.

[29].              The Statement of Compatibility with Human Rights can be found at page 36 of the Explanatory Memorandum to the Bill.

[30].              Parliamentary Joint Committee on Human Rights, Twenty-ninth report of the 44th Parliament, op. cit., p. 27.

[31].              Ibid., p. 28.

[32].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 10, 2015, The Senate, 16 September 2015, p. 6, accessed 12 October 2015.

[33].              Parliamentary Joint Committee on Human Rights, Ninth report of the 44th Parliament, The Senate, July 2014, pp. 66–70, accessed 19 October 2015.

[34].              Thomas, op. cit., pp. 8–9.

[35].              Explanatory Memorandum, Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, p. 5. See the definition of ‘participation payment’ in the Dictionary at Schedule 1 to the SSA Act.

[36].              A job seeker may incur one or more no show no pay failures if they: fail to participate in a compulsory activity required by a Job Plan; fail to comply with a serious failure requirement (also known as a compliance activity); fail to attend a job interview; or during a job interview, deliberately behave in a way that results in them not receiving a job offer. Department of Social Security (DSS), 3.1.13.20, No show, no pay failures, Guide to social security law, version 1.216, released 20 October 2015, accessed 23 October 2015.

[37].              Subsection 42C(5) of the SSA Act. The penalty amount is calculated in accordance with the Social Security (Administration) (Penalty Amount) Determination 2015 (No. 1), accessed 21 October 2015.

[38].              Item 6 of the Bill.

[39].              For instance L Chesters, ‘Second reading speech: Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015’, House of Representatives, Debates, (proof), 14 October 2015, p. 18 and C O’Neil, ‘Second reading speech: Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015’, Debates, (proof), 14 October 2015, p. 23, accessed 21 October 2015.

[40].              J Disney (Chair), Independent review of the job seeker compliance framework: a report to the Parliament of Australia, [Department of Education, Employment and Workplace Relations, Canberra], 2010, p. 69, accessed 21 October 2015.

[41].              Social Security (Administration) Act, section 42E.

[42].              Social Security (Administration) Act, section 42G.

[43].              Social Security (Administration) Act, section 42H.

[44].              The penalty amount is calculated in accordance with the Social Security (Administration) (Penalty Amount) Determination 2015 (No. 1), accessed 21 October 2015.

[45].              When connection failures were introduced in 2009, it was intended that losses of payment would be incurred on the next day on which the job seeker’s regular payment was due. However, in the face of concerns about the hardships this might cause, the Social Security Legislation Amendment (Employment Services Reform) Bill 2009 was changed to delay the loss of payment for one payment period.

[46].              Item 8 of the Bill.

[47].              Item 16 of the Bill inserts proposed paragraph 42SA(1)(aa) into the Social Security (Administration) Act.

[48].              The job search requirements of activity tested income support recipients are specified at Section 3.2.9.30 of the Guide to Social Security Law. Job search efforts include activities such as: looking for job vacancies in newspapers, contacting employers about jobs, preparing and sending job applications, using job search sites and tools on the internet, registration with an employment services provider, and attending the office of an employment services provider to undertake job search-related activities. Job seekers must provide information about their job search efforts to Centrelink through an application for payment form, job seeker diary and/or employer contact certificates. One consequence of the incorporation of job search related failures into subdivision EA (under item 17) and the repeal of Subdivision C (connection and reconnection failures) (under item 8) is that neither Job Seeker Diaries nor employer contact certificates will be used.

[49].              Item 17 of the Bill inserts proposed paragraph 42SA(1)(baa) into the Social Security (Administration) Act.

[50].              Item 18 of the Bill repeals and replaces paragraph 42SA(1)(c) of the Social Security (Administration) Act which relates to reconnection requirements and is no longer relevant as a result of other changes made by the Bill. The same holds for item 19 of the Bill which repeals and replaces the note at the end of existing subsection 42SA(1).

[51].              Item 34 of the Bill.

[52].              See for example Collins, op. cit.

[53].              Australian Unemployed Workers’ Union, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Social Security Legislation Amendments (Further Strengthening Job Seeker Compliance) Bill 2015, 12 October 2015, p. 5, accessed 4 November 2015.

[54].              Ibid.

[55].              National Welfare Rights Network, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Social Security Legislation Amendments (Further Strengthening Job Seeker Compliance) Bill 2015, accessed 4 November 2015.

[56].              Ibid.

[57].              Department of Employment, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Social Security Legislation Amendments (Further Strengthening Job Seeker Compliance) Bill 2015, p. 3, accessed 4 November 2015.

[58].              National Welfare Rights Network, op. cit.

[59].              Ibid.

[60].              Disney, op. cit., p. 69.

[61].              Ibid., p. 68.

[62].              Social Security (Administration) Act, section 42M.

[63].              Social Security (Administration) Act, section 42N.

[64].              Social Security (Administration) Act, subsection 42P(2).

[65].              Department of Employment, Submission to Senate Standing Committee on Community Affairs, Inquiry into the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, [2014], accessed 4 November 2015.

[66].              Under Part 1.2, Subsection 14A(7) of the SSAct a person is considered to be in financial hardship if the value of their liquid assets does not exceed $2,500 for a person who is not a member of a couple and does not have a dependent child or $5,000 in any other case.

[67].              Social Security (Administration) Act, subsection 42P(3) and subsection 42Q(1).

[68].              Department of Human Services (DHS), Penalties for not meeting your mutual obligation requirements, DHS website, accessed 21 October 2015.

[69].              Explanatory Memorandum, Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015, p. 6.

[70].              Items 11 to 13 of the Bill.

[71].              Thomas, op. cit.

[72].              Senate Education and Employment Legislation Committee, Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 [Provisions], The Senate, Canberra, 2014, accessed 15 October 2015.

[73].              Collins, op. cit., p. 85.

[74].              National Welfare Rights Network, op. cit.

[75].              These are: failure to enter into an Employment Pathway Plan; failure to attend an appointment that is a requirement of the Employment Pathway Plan; failure to attend an appointment required under subsection 63(2); and, if the Secretary is satisfied that the person acted in an inappropriate manner such that the purpose of an appointment was not achieved.