Bills Digest No. 44   1997-98 Social Security Amendment (Entry Payments) Bill 1997


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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

Social Security Amendment (Entry Payments) Bill 1997

Date Introduced: 26 June 1997
House: Senate
Portfolio: Social Security
Commencement: 1 January 1998

Purpose

To abolish the employment entry payment and restrict the availability of the education entry payment.

Background

Employment Entry Payment & Education Entry Payment

The employment entry payment and education entry payment provide for the payment of a lump sum amount to people who are on social security benefits and satisfy certain criteria.

In respect to the employment entry payment, for New Start Allowance recipients, the payment is available where: they have been registered with the CES for at least 12 months; they will cease to be eligible for the allowance because of finding employment; and that employment is likely to continue for more than 4 weeks. The payment is only available once each 12 month period.

For recipients of other benefits, other tests apply. The main other type of test being that the payment may be made when the person's income exceeds a threshold level and is likely to do so for more than 4 weeks.

The payment was introduced to help off-set initial costs associated with commencing employment (clothes, tools, fares etc). The payment is generally $100 for those 18 and over, and $50 for those under 18.

The abolition of the employment entry scheme is estimated to result in savings of $7.605 million in 1997-98, $16.192 million in 1998-99, and $16.192 million in 1999-2000.(1)

The eduction entry payment is similar to the employment entry payment but applies to situations where people on benefits enter a full-time education course that is approved under AUSTUDY or ABSTUDY. The benefit may also be available were the applicant satisfies the Secretary that they intend to enrol in such a course. As with the employment entry payment, different criteria may apply depending on the benefit received before entering education.

The Social Security Legislation Amendment (Budget and Other Measures) Bill

1996

On 12 September 1996, the Government introduced the Social Security Legislation Amendment (Budget and Other Measures) Bill 1996 in the House of Representatives. The main amendment contained in the Bill included:

  • tightening of the activity test and penalty periods for those on Newstart and Youth Training Allowance;
  • abolition of the earnings credit scheme;
  • increased waiting periods in regard to unused annual leave and liquid assets waiting periods; and
  • abolition of the employment entry payment and restriction on the availability of the education entry payment.

The proposed amendments abolishing the employment entry payment and restricting the availability of the education entry payment gave effect to a 1996-97 Budget announcement. In the Second Reading Speech to this Bill, the Government provides an underlying reason for the amendments, that is, that it considers that the payments were not major factors in influencing social security customers decisions to return to work or study.

On 10 October 1996, the Senate referred the provisions of the Bill to the Senate Community Affairs Legislation Committee. The Committee, which tabled its report on 6 November 1996, recommended that the Bill proceed and made no reference to the amendments abolishing the employment entry payment and restricting the availability of the education entry payment.

While the majority report of the Committee recommended that the Bill proceed, Senators Neal, Denman, Faulkner, Lees and Woodley presented a minority report which, among other recommendations, recommended that the amendments abolishing the employment entry payment and restricting the availability of the education entry payment be omitted. The rationale given for recommendation was:

We heard no evidence that these payments were not meeting their original purpose. In our view administrative convenience is not sufficient reason to reduce or abolish individual's entitlements.(2)

The entry payment amendments were not agreed to by the Senate. The omission of those amendments was passed on the voices. (Senator Harradine, the Greens, Australian Democrats and the Australian Labor Party supported the omission of the amendments from the Bill.)

Main Provisions

Item 1 of Schedule 1 of the Bill repeals provisions relating to the employment entry payment, so abolishing the scheme.

The effect of items 2-4 of Schedule 1 of the Bill is to remove the education entry payment to those who are transferring from special benefits, job search, youth allowance, Newstart allowance, mature age allowance, widow allowance, mature age partner allowance, and partner allowance.

Endnotes

  1. Explanatory Memorandum, Social Security Amendment (Entry Payments) Bill 1997.
  2. Senate Community Affairs Legislation Committee, Social Security Legislation Amendment (Budget and Other Measures) Bill 1996, November 1996: 22.

Contact Officer and Copyright Details

Ian Ireland
19 September 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

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, 1997.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 22 September 1997

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