Bills Digest 102 1995-96 Social Security Legislation Amendment (Newly Arrived Resident's Waiting Periods and Other Measures) Bill 1996


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WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.

This Digest was available from 25 June 1996

CONTENTS

Passage History



Social Security Legislation Amendment (Newly Arrived Resident's Waiting Periods and Other Measures) Bill 1996

Date Introduced: 23 May 1996
House: House of Representatives
Portfolio: Social Security
Commencement: The changes to benefit eligibility take place either from Royal Assent; or from 1 April 1996. The commencement dates of the various measures are detailed in the Main Provisions section of this Digest.

Purpose

This Bill is designed to impose on immigrants a two-year waiting period for a range of social security payments. Refugees, humanitarian category migrants, and their partners and dependent children are exempt.

Background

There is support from both the Coalition and the Labor parties for imposing a waiting period on newly arrived migrants before they are allowed to access at least some social security payments.

In 1993, the previous Labor government imposed a six-month waiting period for job search allowance, newstart allowance, and sickness allowance, and, from their inception in 1995, youth training allowance and parenting allowance.

The Arguments

The Second Reading Speech to the Bill offers few clues as to why the Government is taking these measures other than to say:

The Government expects that new entrants to Australia should provide for their own support during their first two years (104 weeks) in Australia, and as a result, announced as part of its 1996 election policy commitments, that the newly arrived resident's waiting period would be so extended.

The main arguments advanced elsewhere in favour of the Bill seem to be that with unemployment running at 8.5 per cent in May 1996, and a net foreign debt of $184.8 billion in the March quarter of 1996, Australia cannot afford to have new migrants coming here, and immediately drawing social welfare payments, like unemployment benefits. For example, research by Monash sociologist Ernest Healy has shown that in May 1994, 27 per cent of all migrants in the labour force who arrived in Australia during 1992-93 were on unemployment benefits.(1)

Put simply, the Bill seeks to discourage those who cannot pay their way, and may cause them to think twice before immigrating.

In an interview in April, the Federal Minister for Immigration and Multicultural Affairs, the Hon. Phillip Ruddock hinted at this.

It was a clear, unambiguous policy commitment ... designed to ensure that people who desire to enter Australia who are not refugees, are not humanitarian (migrants), who have not been subject to significant change in their circumstances, will be excluded from obtaining (benefits) for two years.

An effect that there might be is that some people who apply to come here, they might reconsider their situation.(2)

However, opponents of the Bill believe the government has another agenda - to change the pattern of migration.

Victor Rebikoff, the chairman of the peak ethnic lobby group, the Federation of Ethnic Communities Councils of Australia, has accused the Coalition of planning to use the waiting period as a means of cutting back on family reunion migration. He has also said that the proposal raises questions about the Coalition's commitment to a non-discriminatory immigration policy. Mr Rebikoff has also claimed that one-quarter of the annual intake of migrants would be affected, particularly poorer ones from new communities.(3)

Research by Professor Bob Birrell seems to support the argument that certain categories of migrants - for example spouse/fiance(e)s - from particular countries may, in practice, be disadvantaged by the changes.

According to Professor Birrell, spouse/fiance(e) immigration has risen sharply, doubling between the early 1980s and 1990s.

(T)he spouse-fiance(e) category contributed around 26,000 people or 29% of the total migration program of 89,760 for 1994-95.(4)

Professor Birrell says the vast majority of spouses and fiances(es) come from the poorer countries in Asia and the Middle East, with the most rapid growth from Vietnam and China.

Whilst this group will be affected by the proposed laws tightening spouse eligibility, it is impossible to predict whether these changes will stop people migrating, or simply lead to more calls on voluntary welfare services once they are here.

There may be an argument as to whether the Bill breaches section 10(1) of the Racial Discrimination Act 1975 which prohibits discrimination on the basis of nationality. Under section 18, an act is discriminatory even if only one of the reasons for it are illegal.

Supporters of the Bill may argue that even if it does change the composition of the immigration program, the government has the right to do this in the interests of the whole community.

Genesis in Fightback

The Bill has its genesis in Coalition Fightback policy released in 1991 which stated:

The Coalition will not permit future migrants access to benefits for two years after they first arrive, unless they are given refugee or humanitarian entry status. Access to Family Allowances will however, be maintained.(5)

In the lead-up to the last election, this policy was reaffirmed by then Shadow Treasurer and Deputy Leader of the Opposition, Peter Costello. To quote one of his pre-election statements:

In January 1993, the Labor Government introduced a six month wait after arrival in Australia for migrants, other than refugees and humanitarian migrants, before they became eligible to receive most welfare benefits.

Access to welfare benefits for migrants other than refugee and humanitarian migrants will be available after two years under a Coalition Government. This will have little impact on those migrants, particularly those in the Preferential Family Reunion category, who are accepted for entry into Australia on the basis of formal assurances of support.

Full access to Family Allowance and Medicare will be maintained for all migrants immediately upon arrival.

As well, the Coalition will provide a 'safety-net' in the form of a special allowance for those migrants whose circumstances change significantly after arrival in Australia for reasons beyond their personal control.

The Coalition projects that this will achieve savings of $602 million over three years.

However, this policy will apply to prospective migrants only. It will not be applied retrospectively or to migrants who arrive in Australia before 1 April 1996.(6)

Retrospectivity

In general, the provisions affecting social security benefits which are already subject to a six-month waiting have effect from 1 April 1996. Provisions covering additional benefits, come into operation from the date of Royal Assent. The waiting period will generally begin to run from either the migrant's arrival in Australia or the granting of their permanent residence visa - whichever is the later date.

Promises Honoured

The Bill reflects most of the commitments made by Mr Costello.

  • As discussed above, many of the provisions are effective from 1 April 1996.

The Department of Social Security has already alerted staff to this, sending a directive out in May that in part states:

It will not be possible for Parliament to pass the legislation before the implementation date of 1 April 1996. However, it is the Government's intention to enact this legislation retrospectively. This means that staff will have to inform new migrant customers about the two year waiting period from 1 April even though the Act will not have changed.

  • The Bill does not include Medicare, so it will continue to be available to newly arrived migrants.
  • The Bill also provides a special safety-net benefit for migrants whose circumstances change through no fault of their own. The payment is at the discretion of the Secretary of the Department of Social Security. In making the decision, the Secretary must act in accordance with guidelines which are disallowable by parliament.(7)

Promises Ignored

Contrary to Mr Costello's pre-election remarks(8), the Bill does not provide full access to the family payment (family allowance). It only provides access at the minimum rate of $22.70 per child, as opposed to a maximum of $121.10.(9)

Surprise Additions

In his February statement, Mr Costello gave no indication that the Coalition's scheme would apply to more social security benefits than Labor's.

Additional benefits subject to the waiting period include:

  • carer pension;
  • maternity allowance;
  • child disability allowance;
  • double orphan allowance(10);
  • Commonwealth Senior's health card and health care card under the disadvantaged person scheme; and
  • special benefits (migrants will only be entitled to special benefits if, in the opinion of the Secretary of the Department, they are suffering hardship because their circumstances have changed through no fault of their own. This test is significantly tougher than the present one.)

In addition, the Bill substantially tightens eligibility for spouses/fiance(e)s. They will have to serve their own two-year waiting period, even if their partner is fully entitled to social security. However, spouses/fiance(e)s in Australia on a subclass 820 visa (a two-year temporary visa which converts to permanent residency providing the marriage/partnership has lasted) will not have to serve an additional two years once they become permanent residents.

Under the Bill, migrants must wait two years before they qualify for the mature age allowance. This is an improvement on the present position. At present, migrants have to wait ten years (the same period as for age pensions).

Savings

In his February statement, Mr Costello(11) said the new measures would save more than $600 million over three years. The then Deputy Prime Minister and Minister for Finance, the Hon. Kim Beazley, contested this, claiming the savings would be about $183.6 million.(12)

The amended Explanatory Memorandum to the Bill puts the savings at $360.5 million ($31.4 million in 1996-97, $143.5 million in 1997-98, and $185.6 million in 1998-99).

Refugees and Special Humanitarian Migrants and their Families.

Family members of refugees, or former refugees, will continue to have access to the full range of social security benefits.

International Agreements

Australia has reciprocal agreements covering a range of social security payments to citizens/and or residents of other countries including, for example, Malta and Greece. Under section 1208(1) of the Social Security Act 1991, these agreements take precedence over any contrary provision in the Act.

According to an internal instruction issued by the Department of Social Security in May 1996, most people from countries with whom Australia has one of these international agreement will have to serve out the two-year waiting period.

The exceptions listed in the internal instruction are:

  • People covered by the New Zealand agreement who arrive in Australia on a New Zealand passport will continue to have access to allowances after 26 weeks - except for the parenting allowance, which is payable immediately.
  • Temporary residents covered by the UK agreement will continue to have access to sickness allowance.

Main Provisions

Schedule 1

Part 1 amends the Social Security Act 1991

The changes to the allowances/benefits will apply from 1 April 1996 unless otherwise stated.

Item 2: makes it clear the waiting period does not apply to a close family members of a refugee or a former refugee, or to a spouse/partner who has a acquired a permanent visa after coming into the country on an 820 subclass visa (this last category only get a permanent visa after serving a two-year wait).

Item 7: amends various definitions to take account of the extended waiting period and the new categories of benefits added.

Items 13 and 14: introduce a two-year waiting period for a carer pension, (applies from the date of Royal Assent).

Items 15 to 17: extend the waiting period for widow allowance from six months to two years.

Items 18 to 21: introduce a waiting period for disability wage supplement - unless the person is 20 per cent or more impaired or permanently blind or the impairment/blindness occurred in Australia (applies from the date of Royal Assent).

Items 22 to 25: extend the waiting period for job search.

Items 26 to 29: extend the waiting period for the newstart allowance.

Items 30 and 31: introduce a waiting period for mature age allowance. (As noted above, this is added because of changes to the residency rules. At the moment, a 10-year residency rule applies. From 1 July, that will be relaxed, with Australian residency the only requirement.)

Items 32 to 35: extend the waiting period for sickness allowance.

Items 36 to 38: introduces a waiting period for special benefit allowance - unless the secretary is satisfied of a substantial change in circumstances beyond the migrants control (applies from date of Royal Assent).

Items 39 and 40: introduce a waiting period for partner allowance (applies from date of Royal Assent).

Item 41: introduces a waiting period for maternity allowance (applies from date of Royal Assent).

Items 42 to 45: extend the waiting period for parenting allowance.

Items 46 and 47: introduce a waiting period for child disability allowance (applies from date of Royal Assent).

Items 48 and 49: introduce a waiting period for double orphan allowance (applies from date of Royal Assent).

Items 50 and 51: introduce a waiting period for mobility allowance (applies from date of Royal Assent).

Items 52 to 54: introduce a waiting period for the seniors health card (applies from date of Royal Assent).

Items 55 to 61: introduce a waiting period for more than the minimum family payment (applies from date of Royal Assent);

Part 2 amends the Student and Youth Assistance Act 1973

Items 62 to 65: extend the waiting period for youth training allowance.

Endnotes

(1) Katharine Betts, 'From Airport to Dole Queue', The Independent Monthly, April 1995: 50.

(2) Colleen Egan, and AAP, 'Migration Pattern to change: Ruddock', The Australian, 2 April 1996.

(3) Kimina Lyall, The Weekend Australian, 17 February 1996: 6.

(4) Bob Birrell, People and Place, Vol. 3(4) 1993: 37.

(5) Fightback, Liberal and National Party Coalition, 1991: 289.

(6) Peter Costello MP, News Release, 'Meeting Our Commitments', February 19, 1996.

(7) It is worth noting that the Second Reading Speech to the Bill also makes it clear the Government is re-examining sponsorship arrangements with a view to ensuring that where a person formally sponsors an immigrant, they, rather than the taxpayer, will pick up the bill if the migrant falls on hard times.

(8) Costello, op cit.

(9) Details of family payments contained in a Department of Social Security leaflet, Social Security Payment Rates - 20 March - 30 June 1996: 6.

(10) A double orphan is defined as a child whose parents are both dead, or where one or both parents are uncontactable, or living outside Australia, or a long-term prisoner, or a long-term mental or nursing home patient.

(11) Costello, op cit.

(12) Kim Beazley, Media Release, 'Coalition Costings - the Real Story'.

Contact Officer and Copyright Details

Bronwyn Young Ph. 06 277 2699
12 June 1996
Bills Digest Service
Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

PRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1323-9032
Commonwealth of Australia 1996

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1996.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 24 June 1996



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