Sickness Benefit, 1945 to 1991, Sickness Allowance from 1991

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Milestones

Details

1945

July

Sickness Benefit introduced

Sickness Benefit (SB) paid to those temporarily incapacitated for work due to sickness or accident and consequently suffering income loss. Medical certificate, proof of loss of income and 12 months’ residence in Australia immediately prior to benefit application required.

Waiting period of seven days before SB payment commenced. Payment could be made conditional on beneficiary undertaking training, undergoing a medical examination, receiving treatment or undertaking work as required.

Income test, but not an assets test, applied. Income above certain limits reduced benefit by £1 for each £1 of income. Income of a beneficiary's spouse taken into consideration as was any unearned income of dependent children. Such income affected only the additional allowances for dependents in the case of SB.

Rate of SB could not exceed income lost by beneficiary as result of their sickness. Sick pay from friendly societies partially exempt. SB recoverable from future compensation or damages awards.

1947
July

Provision made for payment of a partial additional benefit for a partially dependent wife.

Additional benefit payable for a housekeeper where a beneficiary had dependent children under 16 years of age and received no benefit for a wife.

Where a beneficiary, living apart from his spouse, was paying spousal maintenance, additional benefit was not to exceed the amount of such maintenance.

Wives permanently living apart from their husbands eligible for benefit.

Where SB claimed within six weeks of incapacity commencing, no loss of benefit to occur due to the delay on claiming.

Residency requirements waived where the claimant satisfied the Director-General they intended to reside permanently in Australia.

Spouse’s pension income partially exempted and income of dependent children totally exempted from income test.

1950
November

Period during which a person could claim SB without loss of arrears extended from six weeks to 13 weeks after date on which incapacity occurred. War pensions exempted from income test.

1952
September

Amounts received from registered hospital benefit organisations, up to amount of hospital fees paid, exempted from income test.

1953
October

Amounts received from registered medical benefit organisations, up to amount of fees paid, exempted from income test.

1958
September

Benefits received from registered hospital and medical benefits organisations and friendly societies wholly exempted from income test.

1960
September

Restrictions on eligibility of Aboriginal people removed.

1966
September

SB payable in arrears to a person discharged from a mental hospital. SB could be paid for a maximum of 12 weeks of hospitalisation period if claim lodged within 13 weeks of discharge.

1969

September

Adult benefit rates payable to unmarried minors with no parents living in Australia.

1970
September

Supplementary Allowance payable

Higher benefit rate, equivalent to standard age and invalid pension rate, introduced for those receiving SB for more than six weeks. Long-term sickness beneficiaries became eligible for a supplementary allowance individually determined but maximum linked to Supplementary Assistance (later renamed Rent Assistance (RA)).

1973
March

SB rate linked to pension

SB payable at the same rate as pensions. Standard rate for single beneficiaries and a married rate for married beneficiaries and their spouses introduced. Lower benefit rate for single juniors and higher long-term SB rate abolished. Entitlement to supplementary allowance for long-term sickness beneficiaries retained. Spouse’s pension income fully exempted from income test.

1974
November

Payment of an additional benefit for a de facto wife of an unemployment or sickness beneficiary could be made where the relationship had existed for at least three years.

1975
May

SB paid weekly in advance instead of weekly in arrears as had been the practice from 1945.

1975
October

Junior SB rate for those aged under 18 years re‑introduced. Requirement that a de facto relationship exist for three years before married rate payable eliminated.

1976
June

SB taxable.

1976
November

SB increases, except for those who were unmarried and aged under 18 years, indexed every six months as were pensions. Benefits payable fortnightly.

1977
November

A married woman no longer disqualified from receiving SB if it was reasonably possible for her husband to maintain her. Combined income of beneficiary and spouse taken into account in assessing SB rate.

1978
November

SB indexation changed to an annual adjustment. (The only annual CPI adjustment occurred in November 1979.)

1980
May

Twice-yearly automatic indexation of SB re-introduced.

1980
September

Pay and allowances of Defence Force Reserve members exempted from income test.

1980
November

Commonwealth fringe benefits (concession cards) available to SB recipients subject to same income test as age pensioners and supporting parent beneficiaries.

SB extended to mental hospital patients.

Income test liberalised. Income above $6 per week to $50 per week reduced benefit by 50 cents in the dollar ($3 to $40 for those who were single and aged 16 or 17 years). Only income above $50 per week reduced benefit by $1 for each $1 of income.

1984
March

Income test free area increased to $20 per week and benefit reduced by $1 per week for each $1 of income above $70 a week.

1984
May

Single SB recipients with children eligible for MGA. SB recipients eligible for RAA.

1984
July

Income tax rebates introduced for beneficiaries

1984
November

Benefits increased despite a fall in the CPI.

1985
November

Waiting period removed for those transferring from other income support payments to SB.

1986
May

Income test free area increased to $30 per week.

1986
July

Receipt of a lump sum compensation payment precluded payment of SB for a period determined by formula.

1986
November

Indexation of benefits deferred for six weeks. Increases now paid December and June (previously November and May).

1987
June

SB not indexed.

1987
July

RA no longer separately income tested.

1987
October

Regular medical and entitlement reviews for SB recipients introduced.

1987
December

Assets test introduced

 

Assets test applied to benefits for those aged 25 years and over. Those with assets above pension assets test free area were no longer eligible for benefit.

New grants of SB paid at equivalent rates for UB and RA entitlement the same as for UB.

1988
February

SB benefit for recipients living apart from their spouse indefinitely due to illness payable at single rate.

1988
June

Separate maintenance income test introduced. Benefit reduced by 50 cents for each dollar of maintenance income above $15 per week for one child plus $5 per week for each subsequent child.

1988
December

Standard medical certificate was introduced for determining SB eligibility. Information about the nature of the illness and its effect on capacity to work required.

1989
January

Mobile benefits delivery teams established to provide services to remote areas.

1989
September

SB waiting period extended for up to four weeks if holiday pay received during waiting period.

1989
November

The first of three advances in the timing of indexation (second and third advances occurred in April and September 1990), changing the timing of indexation by moving indexation forward by three months from June and December to September and March.

Applicants for, and recipients of, benefit required to provide tax file number.

1990
January

Independent rate of SB, equivalent to AUSTUDY independent rate, introduced for SP recipients aged 16 and 17 years not supported by parents and therefore not subject parental income test.

1990
June

SB rate raised to single pension rate for those who were single, aged 60 years and over, with no dependants, and on benefits for six months.

1990
August

Disaster relief payment, equivalent to two weeks of maximum age pension rate, introduced for those beneficiaries experiencing disruption because of a major natural disaster. Backdated to December 1989 to cover Newcastle earthquake.

1990
September

Those beneficiaries aged under 21 years without dependants paid at single rate regardless of marital status. Spouses required to qualify in own right before any payment made for them.

Married beneficiaries and spouses permitted to earn additional $30 pf each from wages before benefit reduced under income test.

An 'at home' rate of $69.20 per week paid to those beneficiaries who were unmarried, aged 18 to 21 years, without dependants and living at a parent's home.

Married beneficiaries with a spouse receiving AUSTUDY paid half the combined married rate.

Deferment period for people ceasing education extended to SB recipients.

Beneficiaries who were custodial parents required to seek reasonable maintenance from non-custodial parent of their children. Failure to seek maintenance could result in non-payment of additional benefit for the children concerned.

Benefits assets test extended to those aged under 25 years.

1990
November

Lodgement of compensation claim for work-related injury or illness a pre-condition for SB eligibility.

1991

Beneficiaries required to provide spouse’s tax file number.

1991
February

Liquid assets test introduced

Liquid assets test applied to SB recipients. Claimants with liquid assets (cash and deposits with financial institutions) of $5000 if single or $10 000 if married or single with dependants, required to serve additional waiting period of four weeks.

1991
March

Cash in hand and money deposited with financial institutions deemed to be earning a minimum interest rate for purposes of benefit income test. First $2000 exempt from this provision.

1991
April

Computerised data matching to detect inconsistent payments made to people by two or more Commonwealth agencies. DSS, Department of Veterans' Affairs, Department of Health, Housing and Community Services, Department of Employment, Education and Training and Australian Taxation Office involved.

1991
July

Maintenance income test free areas indexed annually.

1991
November

SB replaced by Sickness Allowance

SB replaced by Sickness Allowance (SA). SA payable to those temporarily incapacitated for work because of sickness or accident. SA payable for a period of up to 13 weeks at which time new medical and other evidence was required for continuation of payment. Payment beyond one year and up to three years only possible for those who had a second or subsequent incapacity or when existing incapacity became markedly worse. Deferment periods could be imposed on recipients who refused a request to complete a questionnaire, contact a DSS officer, attend an interview or attend a medical examination.

1992
January

SA independent rate eligibility extended to:

  • those aged 16 or 17 years in substitute care and not receiving state government allowances
  • under 16 year olds aged above minimum school leaving age or over 15 years of age with an exemption from attending school, with an employment history and not living with, or supported, by a parent and
  • those aged 16 and 17 years olds registered with the CES as seeking full time work for at least 13 weeks in previous six months.

1992
March

New SA grants limited to half the married rate for a member of a couple whose partner not receiving DSS income support.

1992
November

Waiting period for school leavers changed. For those aged under 21 years who were not part of a couple and without dependent children, waiting period now 13 weeks or until 15 February, whichever was the earlier. Other education leavers to serve a six-week waiting period.

Waiting period waived for those who had undertaken a course of education for longer than six months, and then returned to income support within 12 months of the cancellation of their income support; and for those who would otherwise qualify for SpB.

Part-time and casual work undertaken since leaving school and prior to the start of the waiting period, taken into account when determining waiting period length.

1993
January

Migrants arriving in Australia after 1 January 1993 ineligible for SA until six months after arrival or receipt of permanent residence, whichever was later.

1993
March

SA independent rate available to those aged under 18 years who had lived away from home for 18 weeks (previously 26 weeks).

SA eligibility extended to those aged 15 years with an employment history or registered with the CES for at least 13 weeks.

1993
September

SA single recipients entitled to earn additional $30 pf from wages before payment reduced by income test. Similarly, a couple’s earnings entitlement increased from $30 to $50 pf each.

A person with a partner in prison treated as if they were single.

Ordinary waiting period waived for claimants receiving income support within the previous 13 weeks.

1994
March

Earnings credit introduced. Maximum rate SB recipients entitled to accumulate a credit of up to $500 at the rate of $90 pf for single recipients and $80 pf for each member of a couple without payments being reduced under the  income test. Credits could not be used if earned income greater than cut-off point for payments under the income test.

1994
September

Partner Allowance introduced

Additional amount of SA paid to recipients with a dependent spouse replaced by Partner Allowance (PA) paid directly to dependent spouse and at same rate as SA married rate.

1995
July

Working Nation

As part of Working Nation, income test changed. The 'earnings disregard' removed leaving a standard $60 pf income test free area for all recipients, single and partnered. The 100 per cent withdrawal rate changed to 70 per cent withdrawal rate (50 per cent withdrawal rate on first $40 earned after free area unchanged).

Each member of a couple individually subject to the standard income test. Once the income of one partner reduced their payment to nil, any additional income reduced partner’s payment.

1996
March

Those who were temporarily incapacitated for work because of illness not transferred to, or granted, SA. These recipients remained on, or were granted, the payment they were otherwise eligible for, but were exempt from activity test while ill.

1996
July

Extended Deeming introduced

Major reform of income test treatment of financial assets—'Extended Deeming'—introduced. When assessing income under the income test, total value of all financial assets added together. A rate of return of five per cent deemed to have been received on first $30 000 ($50 000 for a couple) worth of assets and a rate of seven per cent was deemed for asset holdings above these levels. First $2000 ($4000 for a couple) exempt from extended deeming. These rates set at levels considered to be easily achievable using safe investments. Minister for Social Security could vary deeming rates as market rates changed.

Financial assets included: bank, building society and credit union accounts; cash; term deposits; cheque accounts; friendly society bonds; managed investments; investments in superannuation funds, approved deposit funds and deferred annuities after age pension age; listed shares and securities; loans, debentures and bonds; shares in unlisted public companies; gifted assets above the allowable limits; and gold and other bullion.

Financial assets excluded: homes, home contents and other real estate; cars, boats and caravans; antiques and stamp and coin collections; investments in superannuation funds, approved deposit funds and deferred annuities before age pension age; standard life insurance policies; and income streams such as superannuation pensions, allocated pensions, immediate annuities and allocated annuities.

1997
January

SA minimum payment rate abolished for those aged under 18 years. Full payment rate for these recipients subject to parental means test.

Advance payments restricted to amounts of up to $500 and limited to one advance payment each 12 months.

1997
March

Calculation of preclusion periods due to the receipt of personal injury compensation after 20 March 1997 altered. Compensation amount divided by the amount above which no pension was payable to a single person under the income test. Previously compensation amount divided by 'all persons average weekly earnings'. For compensation received after 20 March 1997, compensation preclusion period applied only to the recipient and not to spouses as previously.

Exemption under 'extended deeming' provisions for first $2000 of a pensioner’s financial assets ($4000 for a pensioner couple) removed.

Newly Arrived Residents Waiting Period of 104 weeks for a range of payments introduced for migrants arriving after 4 March 1997. Refugees and their immediate family, and certain spouse visa holders, exempt.

1997
July

Health Benefit Card replaced by Health Care Cards for SA recipients and incapacitated-for-work NSA recipients.

1997
September

Superannuation assets assessed under income and assets tests for those recipients aged 55 years and over and receiving income support for 39 weeks.

1998
July

Youth Allowance introduced

YA became the main income support payment for young people. YA replaced SA for those who were aged 15 to 20 years and unemployed.

2000
July

GST compensation

Allowances rates for all recipients increased by four per cent as part of a package of measures to compensate for the impact of the introduction of the GST. Indexation provisions adjusted so that half of this increase was an advance on whatever rate increase occurred in March 2001, leaving an effective long-term increase of two per cent in the allowance rate.

Income and asset test free areas applying to allowances increased by 2.5 per cent as part of compensation package.

2001
April

Overpayments caused by administrative error became recoverable debts.

2001
July

Superannuation assets of those aged between 55 years and age pension age exempt from income and assets tests.

2001
September

Partners of compensation recipients no longer subject to dollar-for-dollar reduction of their payment. Instead once the compensation recipient's payment was reduced to nil by dollar-for-dollar deductions, the excess was treated as income under the income test for their partner.

2003
September

Australians Working Together

Australians Working Together, a 2001–02 budget measure, provided a Working Credit for those of workforce age on income support. Credits of up to $48 pf accumulated up to a total of $1000. Any income earned would reduce amount of credit accumulated each week on a dollar-for-dollar basis. In fortnights where earnings exceeded income test free area, accumulated credit would be reduced before any reduction was made to income support under income test.

2006
September

Seasonal worker preclusion period extended to cover those applying for SA.

2007
August

Income management

Allowances could be subject to income management in the Northern Territory and Cape York. Income management involved diversion of 50 per cent of a recipient’s income support into an account that could only be drawn on to pay for priority needs, such as food, clothes and rent.

2007
September

Non-resident parents with care of a child between 14 per cent and 34 per cent of nights per year paid at the ‘with child’ rate.

2008
December

SEAM

SEAM provisions commenced. Centrelink empowered to suspend for up to 13 weeks and then cancel income support payments where a recipient’s child does not comply with school enrolment or attendance requirements.

2009
April

From April 2009 to March 2011, in recognition of the impact of the GFC, liquid assets maximum reserve doubled so that those with liquid assets of over $5000 if single, or $10 000 if partnered, were subject to waiting periods of from one to 13 weeks, depending on the amount they had.

2009
July

Definition of ‘member of a couple’ changed to include same-sex couples.

2010
April

Disadvantaged income support recipients able to receive payments weekly rather than fortnightly.

2011
March

Temporary doubling of liquid asset maximum reserve ceased.

2012
June

Clean Energy Advance paid to compensate those receiving allowances for the expected impact of the Carbon Tax.

SEAM extended compelling recipients to attend conferences regarding their child’s attendance, and to comply with school attendance plan.

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