Bills Digest No. 13   1997-98 Social Security and Veterans' Affairs Legislation Amendment (Family and Other Measures) Bill 1997

Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

• Passage History
• Purpose
• Background
• Main Provisions
• Endnotes
• Contact Officer and Copyright Details

Passage History

Social Security and Veterans' Affairs Legislation Amendment (Family and Other Measures) Bill 1997

Date Introduced: 25 June 1997
House: House of Representatives
Portfolio: Social Security
Commencement: The commencement date of the various measures will be addressed in the Main Provisions section of this Digest.

Purpose

The main amendments contained in the Bill deal with:

• the introduction of an allowance designed to encourage people to have their children fully immunised;
• amendments to the Family Payment to remove anomalies, allow payment at more than the basic rate when a child travels overseas for a limited period, decrease the period for which Family Payment is payable when the parent with care of the child leaves Australia and to tighten certain hardship provisions relating to Family Payment;
• the introduction of new Impairment tables used to calculate eligibility for Disability Support Pension and to amalgamate the Disability Wage Supplement with the Disability Support Pension; and
• the abolition of Rent Assistance for people sub-renting Government housing.

Background

As there is no central theme to the Bill, the background of the various measures will be discussed below.

Main Provisions

Immunisation

Immunisation against specific diseases has been in use in Australia since the 1920s. The process of immunisation involves administering a vaccine to a person to allow their own immune system to develop anti-bodies to a disease (the process was pioneered by Edward Jenner approximately 200 years ago). Current Australian immunisation programs relate to rubella, measles, pertussis (whooping cough), a variety of meningitis (Hib), diphtheria and tetanus.

The potential of immunisation campaigns to lessen the frequency of a disease is best illustrated by the World Health Organisations successful campaign to eradicate smallpox. The campaign was launched in 1958 and, by 1977, had eradicated smallpox except in research institutions. In more developed countries, including Australia,poliomyelitis has also been eradicated. In 1988 the WHO introduced a program aimed at the global eradication of this disease.

While immunisation campaigns have been in use for a long time, there are few reliable statistics available on the frequency of diseases that could be prevented by immunisation or the proportion of people who are immunised. In a 1993 paper, titled National Immunisation Study, the National Health and Medical Research Council (NHMRC) states:

Having noted potential problems with the statistics available, the Department of Human Services and Health compiled the following figures for the occurrence of vaccine preventable diseases, with the 1994 data relating to cases reported to mid-April 1994 and not being full year figures.(2)

The Australian Medical Association and the Australian College of Paediatricians have claimed that whooping cough and measles killed 457 Australian children between 1980 and 1990.(3)

A survey by the Australian Bureau of Statistics published in 1992 deals with the coverage of immunisation for children aged between 0 and 6 in 1989-90. Findings of the survey include:

• only 52.9% of such children were fully immunised, with 29.5% partly covered;
• 3.6% had no vaccination and 14% were unsure;
• the rate of vaccination varied between diseases, with rates high for diphtheria and tetanus and lower rates for whooping cough and polio;
• ACT had the highest rate of immunisation while the Northern Territory had the lowest rate; and
• in addition to variations across States/Territories, there were differing rates of immunisation between regions, with urban areas tending to have higher rates.(4)

A number of reasons have been suggested for the above figures, including:

• children from economically disadvantaged families and areas have lower immunisation rates;
• lower rates of immunisation are also found in Aboriginal children, children of recent immigrants and children of Arabic and Asian, other than Chinese, background;
• if a child has two or more siblings, or an older sibling who is not fully immunised, they are more likely to not be fully immunised;
• many children are not fully immunised because of parents fear of side effects of the vaccine, particularly for whooping cough;
• refusal to have children immunised is rare and is concentrated in relatively highly educated groups that prefer 'natural' methods (although there is no scientific evidence on the effectiveness of such methods);
• many parents do not have children vaccinated against diseases perceived to have been eradicated (the main case is for poliomyelitis which, while it no longer exists in Australia, can be found in many areas of the world);
• booster shots can be forgotten so that a child is not fully immunised; and
• immunisation services are fragmented with little co-ordination so that follow-up reminders often do not occur.(5)

ailure to implement universal immunisation can cause diseases that were thought to have been eradicated from a region to reoccur. An article in the Medical Journal of Australia reports two such cases. The first related to the reintroduction of paralytic poliomyelitis. It is reported that twice within 15 years a religious group in Holland that refused immunisation were responsible for outbreaks of the disease in that country and that the disease was also spread to the United States and Canada on both occasions by visiting members of the group. At the time of the visits poliomyelitis was considered to have been eradicated in the latter countries. The article also reports that following adverse publicity regarding the effects of whooping cough vaccine in the 1970s, which were later proved to be incorrect, the rate of vaccination in the U.K. fell from approximately 80% to 40% and that there were two subsequent outbreaks of the disease (1977-79 and 1981-82) in which more than 100 000 cases of the disease were reported and 27 people died.(6)

It was announced in the 1995-96 Budget that funds would be allocated to establish ACIR which would monitor immunisation coverage and provide a central register to enable parents to determine the immunisation status of their child regardless of where the immunisation service was provided. ACIR commenced operation on 1 January 1996. According to the second reading speech for the Bill, approximately 450 000 immunisations had been registered by 1 April 1996.

ACIR was originally funded for two years, after which the scheme would be evaluated to determine whether it should be continued. This included funding for preparatory work on the scheme during the period 1 July 1995 until its commencement on 1 January 1996 so that funding for the ACIR would end after 18 months of its operation on 30 June 1997. In the second reading speech to the Bill the Minister states that:

The explanatory memorandum to the Bill provides a financial impact statement which states that ACIR will cost $3.18 million in 1995-96 and $3.30 million for 1996-97. There is no estimate of costs beyond 1 July 1997.

ACIR is currently established under regulations made under the Principal Act. However, those regulations do not provide for information sharing, which prevents ACIR being used to share information with those who provide immunisation services and State/Territory immunisation bodies. This also prevents 'reminder notices' being sent to those on ACIR when their next immunisation is due.

Concern regarding the relatively low rate of full immunisation in Australia resulted in the announcement of Immunise Australia: A Seven Point Plan, which was announced by the Minister in a Press Release dated 25 February 1997. The Plan aims to promote immunisation through a number of means, including financial inducement and education campaigns. Main points of the Plan are:

• to provide additional payments under the Maternity Allowance where certain immunisation standards are met;
• to provide a link between Childcare assistance benefits and immunisation, so that benefits are only payable in respect of immunised children (there will be provision for conscientious objectors and cases where immunisation is not reasonable for medical reasons);
• the offering of financial incentives to general practitioners to achieve high immunisation rates;
• closer monitoring of immunisation data and rates;
• education programs in areas of low immunisation; and
• a general education campaign to encourage immunisation.

The measures contained in this Bill will implement the first of these points. The costing of the measure contained in Budget paper No. 21997-98 is linked with changes to social security changes under the heading Comprehensive National Immunisation Strategy. The net effect on Budget outlays from the combined measures is a saving of $8.6 million in 1997-98; savings of $23.3 million in 1998-99; a cost of $12.6 million in 1999-2000; and a cost of $8 million in 2000-2001. The Budget paper does not make it clear where the savings, which occur in the social security component of the Strategy, result from, but they may result from lower childcare expenditure due to children becoming ineligible due to a lack of immunisation.

Schedule 1 of the Bill will amend the Social Security Act 1991 (the Principal Act) to introduce the maternity immunisation allowance (MIA). MIA will be payable in respect of a child delivered on or after 1 January 1998 if:

• the child is stillborn and maternity allowance was payable in respect of the child;
• the child dies within 18 months of birth, was a dependant of the person claiming the payment and either maternity allowance or family payment was payable in respect of the child; or
• the child has survived for 18 months after birth and was a dependant of the person claiming the payment, either maternity allowance or family payment was payable in respect of the child, and
  • - the Secretary is satisfied that the child has been immunised (as defined in Item 6 of the Schedule this will mean that the child has received vaccines as determined by the National Health and Medical Research Council); or
  • - the benefits and risks of vaccination have been discussed with the person eligible to make the claim or other relevant person and the immunisation provider has, after considering the Immunisation Handbook, certified that immunisation would not be in the best interests of the child; or
  • - the person has an objection against immunisation which is based on a 'fundamental conviction' (this term is not defined) and is so compelling that the person has to refuse to allow immunisation (it is not clear how such a conviction or its compulsion will be determined. For example, the provision does not require that the Secretary be satisfied of such matters so that a mere statement to this effect may be sufficient).

Proposed sections 900EC and 900ED contain standard provisions that require a person to supply their tax file number (TFN) and, where relevant and possible, their partner's TFN, to be eligible to receive MIA.

Rate:MIA will generally be payable at the rate of $200 (a higher amount may be payable in rare cases where the amount of maternity allowance payable is greater than the basic amount due to exceptional circumstances) (proposed section 900GA). MIA will be payable when the eligibility conditions discussed above apply, so that, for example, if a child survives to 18 months age, MIA will only be payable if the child has received all required vaccinations to that date. MIA will be payable to the person receiving family payment in respect of the child and, if there are two or more people receiving family payment in respect of a child, the Secretary is to make a declaration as the proportion of MIA payable to each such person (proposed section 900GB).

Other amendments related to MIA are of a procedural nature and relate to matters such as the making of claims for payment; making MIA inalienable so that debts, other than social security debts, cannot be recovered from such payments; the requirement of recipients to disclose certain information; and amendments to the Income Tax Assessment Act 1936 to provide that MIA is exempt from tax (proposed section 24ABXAAA). Commencement: 1 January 1998.

Family Payment

Family payment (FP) is payable to the person who has the major direct responsibility for an eligible child's care and upbringing, which is usually the mother. To be eligible, the child needs to be under 16 or between 16 and 25 and in receipt of full time education. FP is not payable where the income and/or assets tests are not satisfied by the applicant for FP.

The FP replaced the family allowance and previously contained two components of payment, a basic family payment and additional family payment. The latter provided increased benefits to low income families. In 1996 the two components of family allowance were again included in the one payment, FP, although there was no direct change in the level of payment due to the combination of the two payments. This has led to the situation where the rate of FP can vary between the minimum amount payable where the income and assets tests are satisfied but no rate higher than the minimum payment is due to situations where a significantly higher amount is payable to those families on lower income and asset levels.

Currently, FP payments range from a minimum amount of $23.40 per child per fortnight, to a maximum rate of $96 per fortnight for each child under 13; $124.90 per fortnight for each child aged 13-15; and $60 per fortnight for each child aged 16-18 (and for eligible students over this age). The income test currently provides for maximum FP to be payable when income is $23 350 or less for one child (increasing to $25 222 for four children) and FP will cut out at an income level of $65 743 for a family with one child ($75 607 for four children).

The actual amount payable to those eligible to receive FP will also depend on whether other, related benefits are available. For example, people in receipt of FP may also be eligible for parenting allowance, maternity allowance, rent assistance and the family tax payment.

With the combination of basic and additional FP in 1996, a number of anomalies were discovered where references in the Principal Act were not changed to reflect the abolition of the basic and additional FP. A number of such matters will be addressed in this Bill.In addition, the Bill will implement measures relating to FP announced in the 1997-98 Budget. Such measures include:

• providing above minimum FP where a child in respect of whom above minimum rate FP is payable and the child travels overseas with or without a parent. The above minimum FP will be available for 8 weeks and is estimated to affect approximately 25 000 families per year at a cost of $4.2 million (m) in 1997-98, $6.8m in 1998-99, $7 m in 1999-2000 and $7.1m in 2000-2001;(7)
• the tightening of certain hardship provisions. Section 1132A of the Principal Act provides that although FP is not payable due to the operation of the income and/or assets tests, the Secretary may determine that the minimum amount of FP is payable if the hardship provisions contained in the section are satisfied. One of the hardship rules [subsection 1132(1B)] provides that the Secretary may authorise payment of minimum FP where the value of the family's assets is between $406 000 and $602 500, their liquid assets and/or current income exceed the threshold above which FP is not payable and their income is less than $65 743 (for a family with one child). Amendments announced in the 1997-98 Budget will reduce the later figure to $27 125 for a family with one child and an additional $4 399 per child.

Module J of Point 1069-J1 of the Principal Act provides for the calculation of the value of maintenance income in determining the amount of FP payable. The first step in that calculation is to disregard maintenance income received in respect of a child who is not in receipt of FP. This step will be amended so that maintenance income in respect of a child who is not eligible to receive FP as they are out of Australia, or reasonable action has not been taken to obtain maintenance, from the calculation of maintenance income. Commencement: 1 January 1996.

An approved care organisation is currently eligible to receive FP in respect of a child if the child is a FP child of the organisation and no other person is in receipt of FP in respect of the child. Schedule 5 will amend the test to also require that the child is not a FP child of another person. As a result, if another person is eligible to receive FP in respect of the child but FP is not received, FP will not be payable to the organisation. Commencement: Royal Assent.

Where a FP child is outside of Australia, FP is payable only at the minimum amount in respect of the child (if absent from Australia for more than 3 years, FP is not payable in respect of the child). If the FP recipient leaves Australia for more than 13 weeks, FP ceases to be payable in respect of the child, although during the 13 week period FP may be payable at more than the minimum rate. Schedule 6 will amend the Principal Act to provide that the 13 week period referred to above will be reduced to 8 weeks. Similarly, amendments to the various Modules used to calculate the amount of FP payable in respect of a child will be amended so that the above minimum rate of FP will continue to be payable in respect of a child for a period of 8 weeks after the child leaves Australia. The explanatory memorandum to the Bill estimates that the measure will save $4.169 million in 1997-98, $6.815 m in 1998-99; and $6.969m in 1999-2000. Commencement: 1 January 1998.

The hardship provisions will be amended by Schedule 7 of the Bill, that will amend section 1132A of the Principal Act which deals with when the hardship provisions apply. Subsection 1132A(1B) will be repealed and a substituted section inserted that will reduce the income limit below which the Secretary may determine that FP is payable to a person on hardship grounds from the current rate of $65 734 (for a family with one child) per annum to $27 125 for a family with one child plus an additional $4 399 per additional child. The amendments are estimated in the Explanatory memorandum to cost $0.083million in 1997-98; and save $3.47m in 1998-99 and $3.608m in 1999-2000. Commencement: 1 January 1998.

In calculating the income of a person or family for the purposes of the FP income test, income is defined to include 'assessable fringe benefits' as defined in section 10A of the Principal Act. The term is currently defined to include car, school fee, health insurance, loan and housing benefits, with the value of the benefits being calculated according to the relevant provision/s of the Principal Act. The inclusion of such benefits is designed to include in income amounts that would otherwise not qualify due to arrangements commonly known as 'salary sacrifice'. Schedule 8 of the Bill will insert two new items in the definition of assessable fringe benefits - expense benefits and financial investment benefits. Expense benefits are defined in proposed section 1157J to be a benefit connected with employment and provided by their employer, an associate of the employer, or another person who has arranged such a payment. The benefit must be connected to private expenses that were incurred by the employee or a person connected with the employee. A benefit will be exempt if it comprises a reimbursement of expenses incurred in employment or is required to pay for employment expenses (proposed section 1157JB). A financial investment benefit is defined in proposed section 1157JC to be a benefit paid for by the employer, associate of the employer, or another person who arranges the benefit on behalf of the employer, to reimburse the cost ofthe acquisition of a financial investment (the term financial investment is not defined). Contributions to a superannuation fund or an Australian taxation Office small superannuation account will be specifically excluded from the definition. (This definition is similar to the general definition of superannuation benefit contained in section 9 of the Principal Act. It appears that a contribution to a Retirement Savings Account, which is not a superannuation fund, will be included in the definition of a financial investment, even when a contribution is made to a RSA, rather than a superannuation fund, in accordance with superannuation guarantee requirements.) The value of the various benefits will be the value of the investment or expense (proposed sections 1157UA and 1157UB). Commencement: 1 January 1998.

Disability Support Pension

The DSP is payable where:

• a person has a disability, or disabilities, that result in an impairment of 20% or more calculated using the Impairment Tables contained in the Principal Act (this Bill will insert new Tables into the Principal Act);
• the person has a continuing disability to work (generally this will be where the disability will continue for at least 2 years); and
• the person has turned 16 and satisfies residence requirements.

As noted above, the Impairment Tables play a critical role in determining eligibility for DSP. The Tables are used in a cumulative way to determine if the person reaches the required 20% impairment level. The Social Security Legislation Amendment (Budget and Other Measures) Bill 1996 proposed to substitute new Impairment Tables into the Principal Act but the measure was postponed after debate in the Senate. Senator's expressed concern about the lowering of the degree of impairment for certain conditions and the inability to use non-medical factors that may effect a person's ability to find employment in determining if the 20% level is met. Consideration of new Impairment Tables was deferred pending further consultation with affected organisations and people.(8) The Minister states in the second reading speech to this Bill:

According to the explanatory memorandum to the Bill, the new Tables will result in savings of $0.251m in 1997-98; $2.799m in 1998-99; and $5.053m in 1999-2000. In order to achieve the estimated savings, the value of various impairments will be reduced when compared to the current Impairment Tables. This will result in fewer people being eligible for DSP. Those made ineligible for DSP are likely to be transferred to other benefits, such as Newstart, with a greater emphasis on their reentering the workforce.

New Impairment tables will be substituted into the Principal Act by Schedule 16 of the Bill. In comparing the Tables and their introductory notes, the major differences relate to a reduction of the degree of impairment in the proposed Tables and the removal of references to calculation of 'whole of body' impairment. Presently, where a person has one or more impairments, the 'value' of the combined impairments on the 'whole of body' is calculated according to how the impairments relate. Under the proposed system, a person will be given a certain number of points for each impairment and, where there is more than one impairment, the points for the various impairments are added to determine if the person has reached the threshold for eligibility for the DSP. Under the proposed system, a person will be required to have an impairment score of at least 20 points to be eligible to receive the DSP. As the proposed system is based on a combined points system, rather than the current system where impairment is related to a 'whole of body' result determined by the current Tables, a direct comparison between the effect of the old and new schemes on a person's eligibility for DSP is very difficult and will depend on the actual impairments and the relative value given to the impairments in the existing and proposed Tables. Commencement: On a date fixed by Proclamation, or if such a date is not fixed within 6 months of the Bill receiving the Royal Assent, on the first day after the end of the 6 month period.

Disability Wage Supplement: This payment was introduced in 1994 to encourage disabled people to enter the workforce. If a disabled person is unable to perform to the appropriate level to justify the payment of full award wages, the DWS is an additional payment made to the disabled employee who receives only the percentage of award wages that corresponds to the percentage, as determined by a medical practitioner, of the normal work that the disabled person can perform. The DWS therefore results in the employer paying less than full award wages for the employment of a disabled person who is performing less than would be expected for an employee on full award wages, while the disabled employee receives both the relevant percentage of the award rate and the DWS. According to the explanatory memorandum to the Bill, since its introduction in June 1994 and two years after this time, less than 300 people had used the DWS scheme. Qualification for DWS is essentially the same as that for DSP, in particular a person is required to have the same degree of disability (ie. 20% or 20 points) to be eligible for either payment.

Schedule 15 of the Bill will abolish the DWS and future payments under that scheme will be made under the DSP scheme. This will be achieved by omitting references to the DWS and an amendment to section 94 of the Principal Act, which deals with qualification for DSP. The amendments will add to the eligibility criteria for DSP that the person was previously in receipt of DWS and has made a claim for DSP within 28 days of their final DWS payment, or where the Health Secretary has notified the Secretary of the Social Security Department that the person is a participant in a DWS scheme and the period for which the person would have been subject to DWS. The effect of the amendments will be to include those currently in the DWS into the DSP. The explanatory memorandum to the Bill estimates that the measure will have a negligible financial impact. Commencement: 1 January 1998.

Rent Assistance

Rent assistance is payable in conjunction with most social security benefits where the recipient of the benefit pays private rent above the prescribed level, which varies on the person's circumstances. For example, a couple with one child will be eligible for maximum rent assistance of $87.40 per fortnight where their fortnightly rent exceeds $255.73. No rent assistance will be payable where fortnightly rent for such a couple does not exceed $139.20 and graduated payments are made between these figures.

As noted, rent assistance is only payable in respect of private rent so that rent assistance is not paid where rent is paid to a government body as defined in the Principal Act, which are the various State and Territory public housing authorities. The reasoning behind this exclusion is that people paying rent in respect of government housing are receiving subsidised housing as rent is usually based on a percentage of income, rather than the market rate. It is argued that if such people were also in receipt of rent assistance they would in effect be receiving a double subsidy in respect of their rent.

A tightening of the rent assistance scheme was announced in the 1997-98 Budget. The proposal deals with the situation where a public tenant has sub-let their public housing. While State and Territory housing authorities generally do not allow sub-letting of public housing, as it defeats he general purpose of providing housing for those in need, it is allowable in a restricted range of circumstances and increased rent is charged. Under the Budget announcement, rent assistance will cease to be payable to those who are renting a place in government housing from the lesee of the property. It is estimated in the Budget that this measure will result in savings of $21.2m in 1997-98; $58.3m in 1998-99; and $60m in 1999-2000.

Section 13 of the Principal Act contains a number of definitions related to rent assistance. Schedule 19 of the Bill will insert a new subsection 13(3A) into the Principal Act that provides that if a person is paying rent to live in premises in regard to which someone else pays government rent, other than rent at or above the market rate, the rent paid by the first person will be taken to be government rent and so not eligible for rent assistance. A similar amendment will also be made to section 5N of the Veterans' Entitlements Act 1986. Commencement: 1 January 1998.

Endnotes

1. NHMRC, National Immunisation Strategy, April 1993, p. vii.
2. Department of Human Services and Health, Childhood Immunisation, August 1994, p. 4 (this work provides a review of the literature on immunisation in Australia).
3. Ibid.
4. Ibid., p. 5.
5. Ibid.
6. The Medical Journal of Australia, Vol 160 , 18 April 1994, pp. 459 & 460.
7. Budget Paper No. 2 1997–98, p.129.
8. Hansard, Senate, 12 December 1996, p.7365 and p. 7542.

Contact Officer and Copyright Details

Chris Field
21 August 1997
Bills Digest Service
Information and Research Services

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.

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

ISSN 1328-8091
Commonwealth of Australia 1997

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Published by the Department of the Parliamentary Library, 1997.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 26 August 1997

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