FlagPost

Flagpost is a blog on current issues of interest to members of the Australian Parliament

Parliamentary Library Logo showing Information Analysis & Advice

Filter by

Date

Syndication

Tag cloud

Social services budget bills propose major changes to welfare


The 2014-15 federal budget included proposals for major changes in the social services portfolio, including payments to the unemployed, aged, people with disability and families with children. With most of these measures being introduced through two large and complex pieces of social services legislation, there is likely to be some confusion about the changes being made and which changes are being introduced where. This FlagPost provides a brief outline of what is in each of the social services bills.

Most of the significant (and contentious) changes are introduced in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014.

This Bill includes proposals to:

  • change the indexation of pensions to Consumer Price Index (CPI) only, along with a number of other changes to income support indexation arrangements
  • gradually increase the qualifying age for Age Pension from 67 to 70 from 1 July 2025
  • introduce six-month waiting periods for new applicants for Newstart Allowance and Youth Allowance (Other) who are aged under 30, and only allow these payments to be paid for periods of six months for recipients in this age group
  • introduce new, more stringent participation requirements focused around Work for the Dole for those aged under 30 in receipt of Newstart Allowance and Youth Allowance (Other)
  • change eligibility rules for Newstart Allowance and Youth Allowance (Other) so that those aged under 25 years can only receive the latter (which has lower payment rates and tighter eligibility rules)
  • remove eligibility for relocation scholarships from students who need to relocate within or between major cities to take up their studies
  • limit Family Tax Benefit Part B (FTB-B) eligibility to families where the primary income earner makes $100,000 or less (down from $150,000), and where the youngest child is aged under six years
  • pause indexation, reduce supplementary payments and tighten eligibility for other family payments
  • include tax-free superannuation in the income test for the Commonwealth Seniors Health Card (CSHC)
  • lower the income thresholds used in the income test for all social security payments to assess deemed income from financial assets
  • limit the period for which Disability Support Pension (DSP) recipients can travel overseas and remain eligible to 28 days in a 12 month period (with some exceptions for special circumstances)
  • remove the three month backdating from the date of claim for Veterans’ Disability Pension and
  • abolish the Pensioner Education Supplement and Education Entry Payment .

Explanation and analysis of each of the measures introduced in this Bill can be found in the relevant Parliamentary Library Bills Digest.

Changes proposed by the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 include:

  • applying participation requirements to certain DSP recipients aged under 35 years who have had their eligibility reviewed against the current Impairment Tables
  • ceasing payment of the Seniors Supplement for holders of the CSHC or the Veterans’ Affairs Gold Card
  • renaming the Clean Energy Supplement as the Energy Supplement and permanently ceasing its indexation
  • indexing Parenting Payment (Single) to the CPI only by removing benchmarking to Male Total Average Weekly Earnings)
  • applying the Ordinary Waiting Period of seven days, currently applying to Newstart Allowance and Sickness Allowance, to recipients of Widow Allowance, Parenting Payment and Youth Allowance (Other)
  • limiting the six-week overseas portability period for student payments and
  • maintaining Family Tax Benefit (FTB) standard payment rates for two years from 1 July 2014.

For further details and analysis, see the Parliamentary Library Bills Digest.

Many of these measures are opposed by the Opposition, minor parties and independents. Of these, the Opposition has declared that it opposes:

  • changing the indexation method for pensions
  • lowering the deemed income thresholds
  • abolishing the Pensioner Education Supplement and Education Entry Payment
  • changing the age eligibility age requirements for Newstart Allowance and Youth Allowance (Other)
  • introducing six-month waiting periods for new applicants for Newstart Allowance and Youth Allowance (Other) aged under 30
  • reducing FTB end-of-year supplements
  • restricting eligibility for FTB-B to those whose youngest child is aged under six
  • raising the Age Pension eligibility age to 70  
  • removing the three-month backdating provisions for the veterans’ Disability Pension
  • abolishing Seniors Supplement for holders of the CSHC or Gold Card and
  • freezing FTB payment rates.

The Opposition has said that it will support a number of measures, including reducing the FTB-B primary earner income limit from $150,000 to $100,000; limiting DSP portability; removing eligibility for the relocation scholarship for students relocating within and between major cities; and ceasing indexation of the Clean Energy Supplement.

Both Bills have passed the House but are yet to be debated in the Senate. They have been jointly referred to the Community Affairs Legislation Committee for inquiry and report by 4 September 2014.