Bills Digest no. 70 2005–06
Employment and Workplace Relations Legislation Amendment
(Welfare to Work and Other Measures) Bill 2005
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
Purpose
Background
Schedule Disability Support Pension
(DSP)
Introduction
Background
Influences driving the changes to the DSP qualification rules
Expenditure and savings attached to these DSP reform
proposals
Current DSP continuing inability to work test
Current local labour market rule for DSP claimants aged 55 or
more
Proposed changes to DSP continuing inability to work test
30 hour a week test to a 15 hour a week test
Changes to definition of continuing inability to work
New definition of doing work independently of a program of
support
New and broader definition of training activity
Schedule 1 Part 1 - New definition of
partial capacity for work
Comment
Second assessment of continuing inability to work after two
years - qualification to DSP
Introduction
Background
Comment
DSP recipients and claimants overview of who will be affected
when and how?
Current DSP recipients
Persons who claim DSP from 11 May 2005 to 30 June 2006
Persons who claim DSP on or after 1 July 2006
How many might be affected by this tightening of the DSP
incapacity for work test?
Schedule 2 – Part 2, Schedule 3,
Schedule 4 - Part 3, Schedule 6 Part 2, Schedule 9 and Schedule 22
Part 6 Seasonal work preclusion period
Introduction
Origins of the SWPP
Background
Current SWPP rules
What is seasonal work?
What is the SWPP length?
Proposed change to the SWPP
Anticipated savings to government
Comment
Schedule 4 – Parenting
Payment
History
McClure Report
Australians Working Together Package
2005-06 Budget PP reforms in Welfare to Work
Post 2005-06 Budget Developments
Senate Committee referral
Reduced expenditure on Parenting Payment
Major Changes
Participation Requirements
Exemptions
Unsuitable work
Suitable activities
At least 15 hours but up to 25 hours
Reduced level of income support
Impact on those affected
How will savings be realised with more persons paid NSA and less
persons paid DSP and PP - Single?
DSP is paid at a higher rate than NSA
Tighter income testing on NSA than on DSP
Pensioner Education Supplement (PES) payment and qualification
Schedule 2 Part 3 Approved program of
support supplement
Schedule 5 Part 1, Schedule 7 Part 1 and
Schedule 22 Part 1 RapidConnect
Introduction
Brief overview of current jobseeker NSA/YA registration and
referral to Job Network processes
Change in jobseeker NSA/YA claim and referral to Job Network
processes with RapidConnect
RapidConnect - new requirements for jobseekers claiming
NSA/YA
Comment
Schedule 5 Part 2, Schedule 7 Part 2,
Schedule 10 Part 1 - Participation
Introduction
Background
Legislative rigour behind the activity test
New participation requirements in the SSA for jobseekers with a
restricted work capacity due to a medical condition or with
principal carer status
Requirement to undertake suitable paid work
Unsuitable paid work
Repeal of reasonable commuting distance to travel to and from
work provisions
Repeal of SSA provisions that stipulate the situations in which
participation in an approved program of work for income support
payment cannot be required no replacement legislation
Attempts by the jobseeker to comply with a directive removal of the
take reasonable steps provisions
New categories for exemptions from the requirement to participate
in a program of work domestic violence, caring for disabled child,
foster carer, home educator, distance educator
Exemptions from participation requirements
Activity test requirements detail to be taken out of the SSA and
replaced with a Legislative Instrument specified by the
Secretary
Comment
Unemployed while working to capacity
Unsuitable work and award work
Guidelines are discretionary and flexible
Schedule 16, Schedule 17 Part 6, Schedule 18
Part 2, Schedule 19 Part 4, Schedule 20 Part 2 - Income maintenance
period (IMP)
Introduction
Current IMP application
Origins and purpose of the IMP
Savings
Comment
Schedule 8 Employment Entry Payment
(EEP)
Background
Current EEP payments
Current rate of EEP
Current qualification for EEP
Proposed new EEP payments
Schedule 9 Sickness allowance
Schedule 10 Special benefit
Schedule 11 Mobility Allowance (MA)
Current MA qualification requirements and payment rate
Proposed higher rate of MA
Expenditure
Schedule 12 Advance payment of PP
Partnered
Schedule 13 PES
Schedule 19 Part 3 Pharmaceutical Allowance,
Schedule 15 - Pensioner Concession Card and Schedule 14 - Telephone
Allowance
Schedules 17, 18, 19, and 20 The Youth
Allowance, Austudy Payment, Benefit and Parenting Payment Partnered
Income Test thresholds and taper rates
Schedules 17 and 19 A new maximum rate of Youth
Allowance and Newstart Allowance for certain groups
Schedule 21 10% recovery fee on earnings related
debts
Background
Current penalties
New 10 per cent of debt penalty
Schedule 4 Part 2, Schedule 5 Part 3,
Schedule 6 Part 1, Schedule 7 - Part 3, Schedule 10 Part 2 and
Schedule 22 Part 4 - Compliance
Introduction
Current compliance regime
Activity test breaches
Activity test breach penalties
Administrative breaches
Administrative breach penalties
Proposed activity test breach regime non-payment periods
How long will the non-payment periods be?
Comment
Payment rate reduction periods versus non-payment periods
Projected savings
Activation of a penalty which is easier a non-payment period or a
payment rate reduction period
Parenting payment compliance requirements
Background
PP recipients with participation requirements
Austudy payment compliance requirements
Background
Austudy payment compliance regime
Schedule 22 – Administration
Part 2 Disability support pension
Schedule 23 Other amendments
Current approval of rehabilitation
Main Provisions
Schedule 1 Definitions and other
interpretive provisions
Schedule 2 Disability support pension
Part 1 Participation
Part 2 Seasonal work preclusion period (SWPP)
Part 3 Approved program of work supplement
Schedule 3 Carer payment
Schedule 4 – Parenting payment
Part 1 Participation
Part 2 - Compliance
Part 3 Seasonal work preclusion period
Schedule 5 Youth allowance
Part 1 RapidConnect
Part 2 Participation
Part 3 Compliance
Schedule 6 Austudy payment
Part 1 Compliance
Part 2 Seasonal workers preclusion period
Schedule 7 Newstart allowance
Part 1 RapidConnect
Part 2 Participation
Part 3 Compliance
Schedule 8 Employment entry
payment
Schedule 9 Sickness allowance
Schedule 10 Special benefit
Part 1 Participation
Part 2 Compliance
Schedule 11 Mobility allowance
Schedule 12 Advance payment of PP
Partnered
Schedule 13 Pensioner education
supplement
Schedule 14 Telephone allowance
Schedule 15 Concession cards
Schedule 16 Pension rate
calculators
Schedule 17 Youth allowance rate
calculator
Part 1 Income test
Part 2 Maximum benefit rate calculator
Part 3 Pharmaceutical allowance (PhA)
Part 4 Youth disability supplement
Part 5 Exemption from parental means test
Part 6 Income maintenance period (IMP)
Schedule 18 Austudy payment rate
calculator
Part 1 income test
Part 2 Income maintenance period (IMP)
Schedule 19 Benefit rate
calculator
Part 1 income test
Part 2 Maximum benefit rate for certain newstart allowance
recipients
Part 3 Pharmaceutical allowance (PhA)
Part 4 Income maintenance period (IMP)
Schedule 20 Parenting payment rate
calculators
Part 1 income test
Part 2 Income maintenance period (IMP)
Schedule 21 Overpayments and debt
recovery
Schedule 22 Administration
Part 1 RapidConnect
Part 2 Disability support pension
Part 4 Compliance
Part 5 Information exchange
Schedule 23 Other amendments
Concluding Comment
Endnotes
Contact Officer & Copyright Details
Passage History
Employment and Workplace Relations
Legislation Amendment (Welfare to Work and Other Measures) Bill
2005
Date Introduced: 9 November 2005
House: House of Representatives
Portfolio: Employment and Workplace
Relations
Commencement: The main consequential provisions
concerning the welfare to work initiatives for the Disability
Support Pension (DSP) and the parenting payments (Parenting Payment
Partnered and Parenting Payment Single) (PP) are to commence from 1
July 2006. Other commencement dates are set out in the Table in
Clause 2 of the Bill.
To provide the legislation to support the government s welfare
to work reforms that were announced in the 2005-06 Budget.
The provisions in this Bill change requirements to qualify for
the DSP. The Bill puts in place stricter criteria for assessing a
person s continuing inability to work which will tighten the DSP
incapacity for work qualification requirements. The proposed
reforms to the DSP program were announced in the 2005-06
Budget.(1) In tightening the qualification criteria for
access to DSP by reducing the work incapacity test from 30 hours a
week down to 15 hours a week, fewer persons with a disability will
be able to access DSP. The vast majority of those not able to
access DSP will be provided with enhanced New Start Allowance
(NSA.
The government has attempted three times to change the DSP
qualification requirements but the changes were not passed by the
Parliament. The relevant Bills were:
- Family and Community Services Legislation Amendment
(Disability Reform) Bill 2002. The Bills
Digest for that Bill is No. 157 2001-02.(2)
- Family and Community Services Legislation Amendment
(Disability Reform) Bill (No. 2) 2002. The Bills
Digest for that Bill is No. 3 2002-03.(3)
- Family and Community Services Legislation Amendment
(Disability Reform) Bill (No. 2) 2002 [No. 2]. The Bills
Digest for that Bill is No. 125 2002-03.(4)
The ever increasing numbers of DSP recipients over the past 15
years is one of the main influences driving the Government in
pressing for changes to the DSP qualification criteria. In June
1990 there were 316,713 DSP recipients(5) and as at June
2005 there were 706,800 recipients.(6)
A background to increasing DSP recipient population is provided
in the Bills
Digest to the first of the above Bills (Family and
Community Services Legislation Amendment (Disability Reform) Bill
2002).(7)
Another impetus for the proposed changes to the DSP program in
this Bill arises from the recommendations from the
McClure Report into welfare reform of July 2000. The McClure
Report recommended the development of expected levels of
participation for people with a disability and also a review of the
capacity for work criterion (the 30-hour threshold) for people with
disabilities, ensuring that any such criterion is in line with
contemporary patterns of labour market
participation.(8)
The total estimated cost of the DSP reforms presented in the
2005-06 Budget were then $562.3 million over four years. $38.8
million in 2005-06, $153.7 million in 2006-07, $160.2 million in
2007-08 and $209.6 million in 2008-09.(9)
The extra expenditure involved in this proposal is largely made
up of the money allocated for training, rehabilitation and job
enhancement programs and also on Job Network employment placement
assistance for jobseekers as announced in the Budget. There are
some program savings in having jobseekers on payments that cost
less to administer and deliver, like enhanced Newstart Allowance
(NSA), rather than being on more expensive programs like DSP and PP
Single. See How will savings be realised with more persons paid
NSA and less persons paid DSP and PP - Single? in this
Digest.
The
Government s estimate of reduced outlays for DSP and increased
outlays for NSA, YA and other allowance payments were provided in
an answer to a question on notice (No. W156-06) asked by Senator
Penny Wong at Senate Employment, Workplace Relations and Education
Legislation Committee estimates hearings for the 2005-2006
Budget:
The estimated changes to income support payments
administered by the Department of Employment and Workplace
Relations as a result of the Welfare to Work, increasing
participation of people with a disability measure are:
Estimated Payment Cost ($m) - People with a
Disability
|
Payment Type:
|
2006/07
|
2007/08
|
2008/09
|
3 Yr Total
|
|
Disability Support Pension
|
-443.978-
|
-766.265
|
-1094.508-
|
-2304.751
|
|
Mobility Allowance
|
27.963
|
34.23
|
40.602
|
102.795
|
|
Newstart
|
283.94
|
470.492
|
663.635
|
1418.067
|
|
Pensioner Education Supplement
|
-1.162
|
-1.985
|
-2.8
|
-5.947
|
|
Parenting Payment - Partnered
|
6.779
|
11.238
|
15.853
|
33.87
|
|
Parenting Payment - Single
|
14.066
|
23.603
|
33.703
|
71.372
|
|
Youth Allowance (Unemployed)
|
27.624
|
31.393
|
35.054
|
94.071(10)
|
Program savings in the DSP and Employment Entry payment (EEP)
programs are more than offset by the proposed extra spending on
employment placement assistance.
The current DSP incapacity for work test as spelt out in section
94 of the Social Security Act 1991 (SSA) is basically made
up of two main components:
- the person has an impairment (as measured by the DSP impairment
tables) of at least 20 points or more; and
- because of this impairment, the person has a continuing
inability to work.(11)
The current DSP definition of continuing inability to work as
defined by sub-section 94(2) of the SSA is:
the impairment is of itself sufficient to prevent the person
from doing any work within the next 2 years.
Work is defined in sub-section 94(5) of the SSA as:
(a) that is for at least 30 hours per week at
award wages or above; and
(b) that exists in
Australia, even if not within the person's locally accessible
labour market.
Just because a person has a an impairment of 20 points or more
does not automatically mean they are qualified for DSP. They must
also meet the continuing inability to work test. There will be many
claimants with high impairment levels, for example 30 points or
even 60 points, but they may also be able to do substantial levels
of work (that is for 30 hours a week or more) and will therefore
not qualify for DSP. For example, an accountant who has lost the
use of both legs will have a high impairment rating but may also be
able to work full-time, so is not qualified for DSP.
The continuing inability to work test is a subjective test. It
is applied by the delegate and it is the delegate under the SSA who
makes this decision, not the claimant s treating doctor or the
Australian Government Health Service medical officer.
Currently, section 94(4) of the Social Security Act
1991 (SSA) allows for a special work test for claimants aged
55 or more, with the work test only against work in their locally
accessible labour market.(12) For persons aged up to 54,
work means any work the person could be reasonably able to do,
regardless whether the work is locally available or
not.(13) This means the test is not against any work the
person could reasonable do, regardless if it is locally available
or not, rather only against work available in the local labour
market. This has allowed many older aged DSP claimants in
remote/regional areas, where the labour market is a lot more
limited, access to DSP. This special labour market test for those
aged 55 or more partially explains why rural and regional Australia
has a higher proportion of DSP recipients than metropolitan
Australia.(14)
This Bill proposes to remove sub-section 94(4) from the SSA and
consequently will see fewer numbers of older aged DSP claimants
qualifying for DSP.
The Bill does not propose to make any changes to the DSP
impairment tables or to the 20 points impairment rating
requirement.
The Bill does propose to alter the work definition in the
continuing inability to work test by reducing the 30 hours a week
test to a 15 hours a week test. This is the same change presented
in the three previous DSP amendment Bills see above. However, only
the first of the previous Bills had a retrospective element to
apply the 15 hour rule to all DSP recipients and claimants. This
Bill, like the latter two earlier Bills, makes it prospective in
this case from 1 July 2006.
The change from a 30 hours a week test to a 15 hour a week test
means that applicants will have a lower work capacity in order to
qualify. The amendments in the Bill will therefore see reduced
access to DSP for new claimants.
For the vast majority of current DSP recipients no record is
kept as to their work capacity either at the grant or review stage.
An assessment of actual hours of work capacity is not made, the
only assessment being against whether they fall above or below the
30 hour a week requirement.
The proposed 15 hour a week test is only to apply to DSP
claimants who claim on or after 1 July 2006 and also to those
granted DSP between 11 May 2005 and 30 June 2006 at the time of
their 2 or 5 year review. Every DSP recipient has a qualification
and payment rate review every 2 or 5 years, depending on the
severity of their inability to work, with the less severe being
reviewed every 2 years.
The Bill also proposes to change the definition of continuing
inability to work in sub-section 94(2) of the SSA. The proposed
replacement 94(2) is:
94(2) A person has a continuing
inability to work because of an impairment if the
Secretary is satisfied that:
(a) the impairment is of itself sufficient to
prevent the person from doing any work independently of a program
of support within the next 2 years; and
(b) either:
(i) the impairment is of itself sufficient to
prevent the person from undertaking a training activity during the
next 2 years; or
(ii) if the impairment does not prevent the person
from undertaking a training activity such activity is unlikely
(because of the impairment) to enable the person to do any work
independently of a program of support within the next 2 years.
Note: For work see subsection (5).
The proposed new sub-section 94(2)(a) adds the qualification
that work means work independently of a program of support . This
change of work definition makes it clearer that where a person
needs significant support to achieve employment of more than 15
hours a week (for example attendant care, with toileting or
eating), they will qualify for DSP. For some this expands
opportunities for access to DSP.
The proposed amendments also mean that where the person is
assessed as being unable to work for at least 15 hours a week at
the time of assessment, but it is also assessed they could work for
more than 15 hours a week with targeted assistance within the next
two years they do not qualify for DSP. For some this reduces
opportunities to access DSP.
Item 5 in Part 1 of Schedule 2 provides a new definition of
doing work independently of a program of support :
A person is treated as doing work
independently of a program of support if
the Secretary is satisfied that to do the work the person:
(a) is unlikely to need a program of support
that:
(i) is designed to assist the person to prepare
for, find or maintain work; and
(ii) is funded (wholly or partly) by the
Commonwealth or is of a type that the Secretary considers is
similar to a program of support that is funded (wholly or partly)
by the Commonwealth; or
(b) is likely to need such a program of support
provided occasionally; or
(c) is likely to need such a program of support
that is not ongoing.
Interpretations of the meaning of occasionally and not ongoing
may be a matter that is decided by the tribunals or the courts.
There are some helpful case examples in the Explanatory
Memorandum(15) providing some clarity as to the
intention of occasionally and not ongoing , but interpretation may
be subject to some dispute or contention as cases come close to the
definition.
The proposed sub-section 94(2)(b)(i) deletes the previous
educational or
vocational training or on-the-job training and replaces it with
training activity . Training activity is proposed to be defined as
including:
- education,
- pre-vocational training,
- vocational training,
- vocational rehabilitation, and
- work-related training (including on-the-job training).
This is a much broader definition of training than the current
educational or
vocational training or on-the-job training definitions
being:
"educational or vocational training" does not
include a program designed specifically for people with physical,
intellectual or psychiatric impairments;
'on-the-job training' does not include a program
designed specifically for people with physical, intellectual or
psychiatric impairments;(16)
The current educational or
vocational training or on-the-job training definition in
94(2)(b)(i) deliberately and specifically excluded any reference to
programs designed specifically for people with physical,
intellectual or psychiatric impairment. This provision goes back to
the introduction of DSP in November 1991 and was done so that where
it was considered a claimant could be rehabilitated and/or trained
to work for more than 30 hours a week within 2 years, they could
initially gain access to DSP but would then be taken off DSP (over
the next two years), as they were exposed to that appropriate
rehabilitation and/or training. In most cases this exposure to
rehabilitation and/or training has not happened and these claimants
have remained on DSP.
The proposed changes to the DSP qualification requirements means
that where a person is assessed as not being able to work for at
least 15 hours a week now, but is considered to be able to work for
more than 15 hours a week in the next two years without ongoing
assistance. Access to DSP will be more difficult.
The Bill proposes to insert a new definition of partial capacity
to work using a new section 16B. This will be used for those
assessed as being able to work for more than 15 hours a week (and
therefore do not qualify for DSP), but are able to work for less
than 30 hours a week independently of a program of support and
where no training or assistance program will increase their work
capacity to over the 30 hours a week in the next two years. These
persons are to be provided with enhanced NSA/YA or PP.
There has not been nor has there been a need for a definition of
partial capacity for work in the SSA before. Where a person did not
meet the requirement of being unable to work for 30 hours a week or
more, it was just assumed that they had a sufficient work capacity
to work part-time work or even for some full-time.
Even under the new lower
qualification requirement of 15 hours a week work, a DSP qualified
recipient may work 14 hours a week and continue to receive DSP
(subject to the income test being met), so long as the recipient is
unable to work for 15 hours a week or more. This new partial
capacity for work definition in the SSA is likely to be used for
those recipients on enhanced NSA and PP, who can be required to
undertake work enhancement activities like training, job search
activities and even a program of work. These persons might have
work enhancement activities modified or reduced recognising their
reduced work capacity.
The proposed new section 94A would allow qualification for DSP
where a two year income support recipient (not on DSP) has a second
assessment and is assessed as being unable to work for at least 15
hours a week.
The proposed amendment to the DSP continuing inability to work
test discussed above relates to being unable to work for at least
15 hours a week at assessment and also for the next two years
without ongoing assistance. This could apply in cases where a
person paid NSA and receives some work enhancement assistance over
that two year period, and is again assessed as being unable to work
for at least 15 hours a week. In this sort of case, the person
could qualify for DSP. This access to DSP on the second assessment
is not to be retrospective, only prospective, that is from the date
of the second assessment.
To qualify for DSP under the proposed section 94A there are
other requirements that will also need to be met:
- the Secretary is satisfied that the person has a current
continuing inability to work (that is, is unable to work for at
least 15 hours a week or more),
- is currently in receipt of an income support payment (other
than DSP),
- has been continuously in receipt of that payment for two or
more years,
- it is two years or more since a previous assessment as to
continuing inability to work requirements for DSP has been made,
and
- the person has complied with any training activities required
of the person during the two year period.
This proposed new section 94A is beneficial legislation in that
it will prevent rolling non-qualification for DSP for claimants who
are repeatedly assessed as being unable to work for 15 hours a week
but able to work for more than 15 hours a week in the next two
years, and yet after intervention in that two years, are again
similarly assessed.
Generally speaking the tightening of the DSP qualification
requirements will see fewer people with a disability qualifying for
DSP and being alternatively provided with enhanced NSA. The
Australian Council of Social Service (ACOSS) has predicted that the
changes to the DSP qualification requirements will have a greater
affect on people with a disability in regional/rural
areas.(17) In response, the Government has suggested
that many of these persons will be better off as they are
encouraged and supported to maximise their own self-support from
employment.
Those who claimed DSP on or before 11 May 2005 will not be
affected by the continuing inability to work changes. They will
continue to be assessed and reviewed against the current inability
to work test, being the 30 hours a week test.
Persons who claimed DSP between 11 May 2005 to 30 June 2006 will
also be assessed against the current continuing inability to work
for 30 hours a week test. However, when they are subsequently
reviewed (every two or five years) it will be against the proposed
15 hour test. Where it is later assessed that they do not meet the
15 hour test, they will be transferred to enhanced NSA and required
to seek part-time work.
Persons who claim DSP on or after 1 July 2006 will need to meet
the proposed 15 hours a week test. Where a claimant is not
qualified for DSP, as they do not meet the 15 hour a week test, and
it is assessed that they can work for between 15 to 29 hours a
week, they may qualify for enhanced NSA and will be required to
seek part-time work.
Some estimates of the impact of this policy change have been
provided in a response to a Question on Notice at Senate Estimates
for the 2005-06 Budget from Senator Penny Wong by the Department of
Workplace Relations (DEWR):(18)
Senator Wong asked:
Question: Out of the 70,000
grants a year for Disability Support Pension, how many fall between
the 15-29 work capacity cohort?
Answer: Approximately 14,200 of
the 73,500 people granted DSP between 20/9/03 and 20/9/04 have an
assessed work capacity of 15 to 29 hours per week.
Therefore approximately 20 per cent of DSP claimants who claimed
from 11 May 2005 to 30 June 2005 may be affected. It may therefore
also be estimated that for those who claim from 1 July 2006, about
20 per cent might be affected.
Some further figures about anticipated numbers of DSP recipients
and new claimants affected were supplied in answers to further
Questions on Notice from Senator Wong at 2005-06 Budget estimates
see below:
Senator Wong asked:
How many people who would previously have been on the DSP will
be on enhanced Newstart under the Welfare Reform package?
Answer:
The estimated costs of the Welfare to Work package included,
amongst other things, the impact of the following number of people
who would have been on DSP, but will instead be on Newstart
Allowance, as a result of the Welfare to Work package:
- 34,400 in 2006-07;
- 57,900 in 2007-08; and
- 75,700 in 2008-09.
These costing estimates include people who will be granted DSP
between 11 May 2005 and 30 June 2006 and will be reviewed with some
(those with 15-29 hours per week capacity) transferring to Newstart
Allowance as a result of the review process. These estimates
represent annual average impacts for the relevant year, and have
been rounded to the nearest 100.(19)
The government announced in the 2005-06 Budget the extension of
the seasonal work preclusion period (SWPP) to all the income
support payments for the working aged and a broadening of the SWPP
provisions to also refer to highly paid contract and intermittent
workers.(20) Various Schedules and Parts of Schedules in
this Bill propose to amend the SSA so that the SWPP will also apply
to DSP, Carer Payment, PP - Single, Austudy payment and Sickness
Allowance from 20 September 2006.
The SWPP was originally introduced with the passage of the
Social Security and Veterans' Affairs Legislation Amendment
(Budget and Other Measures) Act 1997. See Bills
Digest No. 138 1997-98.(21) The original SWPP
(described below) was designed to prevent high income seasonal
workers, intermittent and contract workers from accessing income
support payments between seasons or between
contracts.(22) It was designed to address the issue of
seasonal abattoir workers in northern Australia working in remote
locations for six months of the year then claiming unemployment
payments for the other six months. These workers had very little
prospect of finding alternative employment in the six month lay-off
due to their remoteness. Often these workers were paid penalty
rates when working, recognising that their work was seasonal. The
same issues applied to other seasonal workers like seasonal fishing
industry workers.
Currently the SWPP applies to the following payments:
- newstart allowance
- partner allowance
- mature age allowance
- youth allowance unemployed jobseekers
- widow allowance
- parenting payment - partnered
The Secretary determines what work is seasonal work under
sub-section 16A(2) of the SSA and the determination is a
disallowable instrument placed before the
Parliament.(23) Commonly, seasonal work refers to work
that is performed for only part of the year and is often linked to
primary production.
The SWPP period a claimant might have to serve is calculated on
an individual basis. The calculation takes into account the number
of weeks worked, the period of weeks since they last worked prior
to claiming assistance (that is the self-support weeks) and how
much earnings the person earned when working, calculated against
average ordinary time weekly earnings. Often seasonal workers are
provided with a lump-sum payment or a retainer at the end of the
season and this can also be regarded when calculating the SWPP.
The SWPP only refers to seasonal work performed in the six month
period prior to the date of claim for payment. The SWPP may not
apply where the claimant is in severe financial hardship that is
unforseen.
Part 2 of Schedule 1 proposes to expand the
definition of seasonal work for the purposes of the SWPP to include
work that is:
- intermittent,
- is less than for 12 months,
- was for a specific task, and
- for which the person did not include any leave
entitlements.
This is an expansion of the definition of seasonal work and will
see the SWPP applied to a greater range of casual work.
The 2005-06 Budget papers anticipate the extension of the
broadened SWPP (and the expansion of the Income Maintenance Period
(IMP)) provisions to all of the current income support payments for
persons of working age will save $43.0 million in 2006-07, $62.1
million in 2007-08 and $63.8 million in 2008-09.(24)
These savings of $176.1 million over four years are for all the
payments proposed to gain the SWPP and the IMP. No discrete savings
figure for the expanded SWPP alone was provided in the Budget
papers.
Currently the SWPP is mainly applied to NSA/YA and the expansion
of the SWPP to DSP, Carer Payment, PP Single, Austudy payment and
Sickness Allowance will mean the SWPP will apply to all income
support payments for the working aged.(25)
It is not likely that there will be many DSP claimants who will
be subject to the SWPP, as it is probably not likely that many DSP
claimants, who qualify under the 15 hour a week rule, will also
have been seasonal or highly paid contract or intermittent workers.
The other payments will probably have a higher incidence of the
SWPP being applied.
Parenting Payment was introduced in March 1998 by the merger of
Parenting Allowance (PgA) and Sole Parent Pension (SPP).
PgA had been an income support payment for partnered parents who
were the primary carer for their children. It was paid at the same
rates and under similar income and asset tests to allowances such
as Newstart Allowance or Sickness Allowance.
SPP had been an income support payment for single parents caring
for dependant children. It was paid at the higher pension rate and
under the more generous pension income and assets tests.
The new Parenting Payment brought income support for all
low-income parents who were primary carers together. However the
rates and eligibility conditions for the two superseded payments
were largely unchanged resulting in separate rate and eligibility
structures for Parenting Payment - Single (PP - Single) and for
Parenting Payment Partnered (PP Partnered).
McClure Report
In July 2000 the final report of the Reference Group on Welfare
Reform was delivered to Senator Newman the then Minister for Family
and Community Affairs.(26) The Group, chaired by Patrick
McClure of Mission Australia, had been commissioned in October 1999
to advise the Government on possible approaches to welfare
reform.
The
McClure Report recommended the extension of a form of mutual
obligation to parents receiving income support that took account of
their caring responsibilities, while preparing them for workforce
re-entry. Recommendation D12 read as follows:(27)
Implement, with phased transitional arrangements,
a participation model of income support for parents with the
following features:
- The substantial caring responsibilities of those with children
under school age (six years of age) and those caring for a child
with a disability be regarded as meeting participation
requirements.
- Parents with primary school aged children (six to thirteen
years of age) be required to attend an annual compulsory interview
to discuss their current and future capacity for increasing
participation.
- Parents could choose to enter into a voluntary participation
plan, which linked them to available assistance for education,
training, employment and other forms of participation. Parents of
high school aged children (thirteen and over) be required to enter
into a Participation Plan, including job readiness and needs
assessment, part-time job search, part-time employment or part-time
preparation for paid employment (including education, training, or
other relevant forms of participation).
Parents receiving income support had been able to continue for
many years without actively preparing for self-support at a time
when they no longer had dependent children. Participation in
measures to assist them to prepare for that eventuality have been
entirely voluntary. Many parents, when their children reached 16
years of age, had difficult transitions back into the workforce,
because of the erosion of their skills and loss of networks.
The McClure Report refers to a pilot study by the Department of
Family and Community Services (FACS) that suggested that few of
this group participate voluntarily in programs like the Jobs
Education and Training Program (JET). The results suggested that
there is a low uptake in voluntary interviews, making them
'relatively ineffective'. On the other hand, compulsory interviews
were found to be valuable and were supported by a majority of
participants. The McClure Report concluded that:
'For most groups, it appears as if a structured
approach within a requirement framework provides the best measure
of assistance for Parenting Payment recipients.'(28)
The Government's response to the McClure Report was the
Australians Working Together Package (AWT) in the 2001-02 Budget.
The Government addressed the McClure Report recommendations in the
following form:
- From September 2002, people who receive PP and whose youngest
child was aged 12 to 15 years were required to attend an annual
interview with a Centrelink Personal Adviser. From July 2003 they
were expected to undertake part-time activity of around six hours
each week. A system of participation agreements and participation
agreement breach penalties was introduced. Access to approved work
programs (Work for the Dole) and the supplement of $20.80 per
fortnight was also provided.
- From July 2003, all people who received PP and whose youngest
child was aged 6 to 15 years were required to attend annual
interviews at Centrelink.
- A New Transition to Work program to help people return to paid
work after long absences was introduced. It built on the Jobs,
Education and Training (JET) and Return to Work programs
processes.
- Additional assistance with child care was provided.
Those parts of the AWT package requiring legislative amendments
were delayed by opposition to the package in the Senate. The
amending legislation entitled the Family and Community Services
Legislation Amendment (Australians Working Together and other 2001
Budget Measures) Bill 2003 introduced into the Parliament in
May 2002 but was not passed until March 2003. See Bills
Digest No. 159 2001-02.(29) The AWT Bill required
that an evaluation of the AWT package be conducted. The report of
this evaluation was released in October 2005.(30)
2005-06 Budget PP reforms in
Welfare to Work
The AWT package was the first round response by the Government
to the McClure Report. The 2005-06 Budget provided a second round
of reforms to Parenting Payment. Minister Andrews said this of the
reforms in his
press release:
The 2005-06 Budget invests $389.7 million over
four years to help parents into work. A significant increase in
employment services will be combined with changes to income support
payments and participation requirements for single and partnered
parents with school-aged children. These changes are designed to
assist, support and encourage parents to return to work when their
children are old enough to go to school. The changes are designed
to increase the workforce participation of parents and reduce their
dependency on welfare. The best way to help parents and their
children is to help the parents find a job. This change is in step
with current community attitudes, said Mr Andrews. Children growing
up in a jobless household often face greater disadvantage in their
community and an increased chance of becoming welfare-dependent as
they leave school. (31)
The Budget announcement proposed the following changes to
Parenting Payment:(32)
- People receiving Parenting Payment on 1 July 2006 would be
required to seek part-time work of at least 15 hours per week once
their youngest child reached the age of six years. They would be
able to continue to receive Parenting Payment until their youngest
child reached the age of sixteen years.
- People applying for Parenting Payment after 1 July 2006 would
only qualify until their youngest child reached the age of six
years. At that time they would transfer to enhanced NSA and be
required to seek part-time work of at least 15 hours per week.
- Parents with a youngest child aged between six and fifteen
years applying for income support from 1 July 2006 would go
straight on to enhanced NSA with the requirement to seek part-time
work of at least 15 hours per week.
- The requirement to seek work could be satisfied by job search,
participating in Job Network or other services or other mutual
obligation activities.
- The work requirement would be modified in special family
circumstances such as having a child with a disability.
- Sole parents receiving enhanced NSA would have access to
Pharmaceutical Allowance, a Pensioner Concession Card and
Employment Entry Payment.
- The NSA income test would be eased by reducing the 70 per cent
taper rate to 60 per cent(33) and increasing the
threshold at which it comes into effect from $142 per fortnight to
$250 per fortnight.
These
reforms are the subject of the present Bill.
Since the initial announcement the package has been modified in
a number of ways. In September 2005 changes to the Carer Payment
were announced which broadened the eligibility for carers of
children with severe disabilities. The change was in part prompted
by the need to provide for PP recipients who would otherwise be
required to seek part-time work under the welfare to work measures
announced in the Budget(34). As this measure is not
included in the present Bill, it may be expected to be dealt with
in the form of amendments to this Bill or in a subsequent Bill.
The following changes were announced just before the Bill was
introduced to Parliament and are included in this Bill:
- Sole parents will be able to remain on Parenting Payment until
their youngest child reaches the age of eight years. They will
however still be required to seek part-time work once their
youngest child reaches six years of age.(35)
- Parents on NSA or Youth Allowance (YA) or other allowance
payments and who are the principal carer or are a registered and
active foster carer , or a home educator or a distance educator ,
as defined in Schedule 1 of this Bill, will
automatically be exempt from the part-time work requirements. Sole
parents in this category will receive a higher rate of NSA/YA,
which will bring their income support payment up to the equivalent
of the PP Single rate.(36)
- The legislative definition of unsuitable work will be adjusted
for parents so that:
Parents will not have to accept a job if there is
no appropriate schooling or outside school hours care available at
the times they are expected to undertake the work, or if the costs
of outside school hours care make the job financially unviable.
Nor will parents have to accept a job if the
travel to and from the place of employment is unreasonably
difficult, that is, if it is too long or expensive. The guidelines
to the Act will state that a general travel time rule of more than
60 minutes is to be considered unsuitable for commuting between
home and work and vice versa. The job seeker will be not be
required to accept job offers exceeding the 60 minute travel
rule.
Job seekers will also not be expected to take a
job if their travel costs are likely to exceed 10% of their gross
wage. (37)
On 9 November 2005 the Senate referred the Bill to the Senate
Community Affairs Committee for inquiry and report by 28 November
2005.(38) The Committee received over fifty
submissions.(39) The Committee s
report was published on 29 November 2005.(40)
The package of measures designed to address welfare to work for
parents involves expenditure of $389.7 million over 4
years.(41) The changes to PP eligibility will result in
reductions to the forward estimates for that payment and increases
to the forward estimates for those payments such as NSA. Estimates
provided in the Budget Estimates:(42)
The
estimated changes to income support payments administered by the
Department of Employment and Workplace Relations as a result of the
Welfare to Work, increasing participation of parents measure
are:
Estimated Payment Cost ($m)
|
Parents Income Support Payment:
|
2006/07
|
2007/08
|
2008/09
|
3 Year Total
|
|
Disability Support Pension
|
0.364
|
29.117
|
46.526
|
86.007
|
|
Newstart
|
186.704
|
518.216
|
818.088
|
1,523.008
|
|
Pensioner Education Supplement
|
-6.370
|
-6.565
|
-6.716
|
-19.651
|
|
Parenting Payment Partnered
|
75.039
|
78.251
|
75.077
|
228.367
|
|
Parenting Payment Single
|
-302.556
|
-748.566
|
-1,191.062
|
-2,242.194
|
Note:
1 Slight discrepancies may occur between the sum of the three years
and the total figure due to rounding. 2 There are no administered
costs for income support payments in 2005-06.
This data indicates that the increased expenditure identified in
the Budget will in large part be offset by the reduced expenditure
in the PP.
The adjustments to the original package in relation to the
obligations required of principal carer parents may arguably
significantly influence the effectiveness of the reform program.
See also discussion below in relation to Schedule 5 Part 2
(YA), Schedule 7 Part 2 (NSA), Schedule 10 Part 1 (Special Benefit)
Participation.
The Bill provides for exemptions from the participation
requirements for NSA and PP where:
- Recent domestic violence has occurred,
- Care of children with disabilities are involved,
- The parent is a foster carer,
- The parent is a Home educator or distance educator, or
- The parent fits into a class of people determined by
legislative instrument.
The last group could include people in a diverse set of
circumstances according to the DEWR submission to the Senate
inquiry.(43) The Explanatory Memorandum specifically
mentions that principal carers with large families are likely to be
included.(44)
The definition of unsuitable work is also modified in the Bill
to take account of principal carers particular circumstances,
particularly in relation to access to appropriate child care and
limits to travel times and costs. The DEWR submission gives some
detail on how this is likely to operate.(45)
At present section 501B(2) of the SSA sets out the approved
activities that can be used to satisfy the requirements of a
Parenting Payment participation agreement.
The Bill replaces this approach with a statement that a person
can be required to undertake activities that the Secretary regards
as suitable for the person in new section 501A.(1) see discussion
about Schedule 5 Part 2, Schedule 7 Part 2, Schedule 10 Part 1
Participation in this Digest. The Secretary may however determine
by legislative instrument requirements that cannot be made under an
activity agreement. According to the Explanatory Memorandum this
new approach is less restrictive and more flexible but ensures that
jobseekers are not permitted or compelled to undertake activities
that are not consistent with the Government s policy intention
.(46)
The original Budget announcement made it clear that principal
carers will be required to seek part-time employment of at least 15
hours per week.(47) However, the Bill makes it clear
that they may be required to undertake work of up to 25 hours per
week provided it was not unsuitable work and that was within their
capacity (taking into account such things as child care and
travel). This has come as something of a surprise to some
interested sections.(48)
ACOSS and others have expressed reservations about the shift
from pensions to benefits for many people with disabilities and for
sole parents. In their response to the Government proposals in July
they had this to say:(49)
We acknowledge and support the main elements of
the investment needed to get jobless people into employment.
However, as it is presently structured, the Welfare to Work package
has critical weaknesses that will reduce the employment gains and
push many people into poverty.
It is of deep concern to us that the Welfare to
Work package diverts many future applicants for income support from
pensions down to lower allowance payments sharply reducing their
income support
The Government has acknowledged that the present
division between pensions and allowances for people of workforce
age is unfair and discourages participation in the workforce. By
making pensions harder to get in future, the Welfare to Work
package entrenches these problems. There is no need to reduce
people s future payments to help them into employment.
The National Council of Single Mothers and their Children in
their submission to the Senate inquiry had this to say on the same
subject:(50)
The legislation will increase financial hardship
and reduce social security protections for vulnerable families.
Children in single parent households will have reduced access to
parental care and income support can be more easily stopped with
fewer protections from unfair and ill-informed decisions. The
legislation seriously erodes the social safety net for single
parents and their children and the consequences of this will have
the highest adverse impact on the children whose families are
further impoverished.
The Government view of the impact of these Welfare to Work
changes is clearly expressed in the second reading speech:
Moving from welfare to work helps people achieve
higher incomes and a better standard of living, participate in
mainstream social and economic life and achieve a better future for
their families. It also reduces the obligation on taxpayers,
creating a positive cycle of work, higher incomes and more
sustainable and better targeted welfare
expenditure.(51)
The Government has also provided estimates on the impact of the
changes on the number of people who are expected to be unable to
qualify for PP and the payments they are likely to receive
instead.(52)
- In 2006-07, it is estimated that around 23,900 sole parents
will receive an alternative payment (to Parenting Payment Single)
as a result of the eligibility changes associated with the Welfare
to Work reforms. This estimate increases to around 63,100 in
2007-08 and around 95,100 in 2008-09.
- The estimated number of partnered parents who are expected to
receive an alternative payment (to Parenting Payment Partnered) is
around 7,770 in 2006-07, increasing to around 19,400 in 2007-08 and
26,100 in 2008-09. For costing purposes only, this group were
treated as if they were remaining on Parenting Payment Partnered
after their youngest child turns six rather than moving to another
payment. As a consequence, there is no breakdown of customers who
were estimated to receive an alternative payment to Parenting
Payment Partnered (see part (d)). The vast majority of this group
will receive Newstart Allowance, which has the same rate of payment
as Parenting Payment Partnered, and therefore, this will have a
negligible cost impact.
- In 2006-07, it is estimated that around 100 people will receive
no payment as a result of the proposed changes to Parenting Payment
eligibility rules. This estimate increases to 1,600 in 2007-08 and
4,800 in 2008-09.
Please note that these figures are annual averages and have been
rounded to the nearest 100.
(d) In the main, people who do not meet the new eligibility
requirements for Parenting Payment may be eligible for:
- Newstart Allowance,
- Austudy,
- Disability Support Pension, or
- Carer Payment.
- Customers estimated to receive alternative payments other than
PPS
|
Payment
|
2006/7
|
2007/8
|
2008/9
|
|
Newstart Allowance
|
21,800
|
57,300
|
86,200
|
|
Austudy
|
900
|
2,500
|
3,800
|
|
DSP
|
1,000
|
2,700
|
4,100
|
|
Carer Payment
|
200
|
600
|
1,000
|
Notes: 1 These figures have been rounded to the
nearest hundred, and therefore components may not add to the total
provided in the first dot point of part (c).
1 These figures are annual averages.
1 These estimates do not include estimates of
alternative payments to PPP (see the answer to the second dot point
of part (c)).
It should be noted that this data was provided before the
post-Budget modifications to the measures were announced.
Analysis of the impact of the changes was also undertaken by Ann
Harding and colleagues at the National Centre for Social and
Economic Modelling (NATSEM). Their research was summarised as
follows:(53)
This report analyses the impact of the proposed
changes upon the disposable incomes and effective marginal tax
rates of these two groups of people. It shows that the disposable
incomes of sole parents can be up to about $100 a week lower under
the proposed new system than under the current system and that the
losses for people with disabilities could be as high as $120. It
also finds that effective marginal tax rates will be sharply
increased under the proposed new system over a reasonably wide
range of earned income for these two groups of people.
A further paper from NATSEM examined options to reduce the
adverse effects identified. For sole parents the paper suggested
that those receiving allowances rather than parenting payment have
access to the pensioner tax offset rather than the allowance tax
offset. This would both reduce the drop in disposable income and
the increase in effective marginal tax rates resulting from a shift
from parenting payment to an allowance.(54)
ACOSS has also provided some analysis of regional distribution
of the impact of the changes.(55) The report concluded
that:
This research indicates that people living in
regional Australia, in the north and west of the country, and in
Coalition electorates will be disproportionately affected by the
cuts to future social security payments proposed in the Government
s Welfare to Work policy
ACOSS supports the Government s objective to
assist more single parents and people with disability into
employment. However, it is not necessary to cut people s future
income support payments to achieve this goal. The proposed cuts are
actually counterproductive. They would further constrain people s
ability to live in areas where their job prospects are better and
would drive more recipients into areas where fewer jobs are
available.
The Budget papers indicate that most of those persons unable to
access DSP because they can work for more than 15 hours a week,
will be provided with enhanced NSA as an alternative income support
payment. Similarly with those no longer provided with PP Single.
However, despite more being paid NSA with the reduction in numbers
being paid DSP and PP, savings will be realised for several
reasons:
DSP and PP Single is paid at a higher rate than
NSA, even the enhanced NSA
- The DSP and PP Single income test is less stringent than the
NSA income test with a higher free area(56) and lower
taper rate,(57)
- Pensioner Education Supplement (PES) is paid attached to DSP
but not attached to NSA (note: some NSA recipients with a partial
capacity for work or are a principal carer will continue to qualify
for PES see below),
- DSP attracts the Pensioner Concession Card (PCC) which provides
access to a wider range of concessions than the Health Care Card
(HCC) which is provided with NSA (note: some NSA recipients with a
partial capacity for work or are a principal carer will continue to
qualify for a PCC),
- Reduced outlays on
Pharmaceutical Allowance (PhA) as most allowance payment (for
example, NSA, YA, Sickness Allowance, Widow Allowance) recipients
do not qualify for PhA (note: some NSA/YA recipients with a partial
capacity for work or are a principal carer will continue to qualify
for a PhA), and
- Reduced outlays on Employment Entry Payment (EEP) as the rate
of EEP paid to DSP recipients is higher than for other
payments.
The current fortnightly maximum single rate of DSP is $488.90,
whereas the fortnightly maximum single rate of NSA is $404.50 - a
difference of $84.40 per fortnight.
Currently the DSP the income test for a single person has a free
area of $124 per fortnight and income above this reduces the
maximum pension rate by 40 cents in the dollar to a cut-out limit
of $1 360.75 a fortnight.
For NSA the income test free area is $62, then income from $63
to $142 reduces the rate by 50 cents in the dollar and income above
$142 reduces the rate by 70 cents in the dollar to a fortnightly
cut-out limit of $655.29.
The 2005 06 Budget proposed the 50 cents in the dollar
withdrawal rate apply to income from $63 to $250 and for income
above this to reduce the rate by 60 cents in the dollar. The
amendments to the SSA to effect this are largely presented in
Schedule 19 of this Bill.
The PES of $62.40 per fortnight is
payable to DSP recipients undertaking the requisite amount of study
but it is not payable to NSA recipients doing the same
study.
This Bill proposes that former DSP and PP Single recipients who
had been receiving PES prior to moving on to NSA or YA will be able
to retain their PES, until they complete their present course of
study. Also this Bill proposes that former DSP recipients, who
claimed between 11 May 2005 and 1 July 2006, will continue to
receive PES as will former PP Single recipients who move to NSA/YA,
because their youngest child reaches the age of eight years.
Other allowance recipients, who would formerly have qualified
for DSP or PPS will not have access to the PES if they undertake
the requisite study.
This part of the Bill provides for the payment of a
participation supplement to DSP recipients participating in an
approved program of work. The participation supplement has its
origins as an extra payment for those undertaking a
Work for the Dole (WftD) program. The WftD supplement was
introduced when the WftD legislation was passed, see Bills
Digest No. 136 1996-97.(58) The WftD participation
supplement is currently $20.80 per fortnight. This Bill provides
for the payment of the same amount to DSP recipients.
The original purpose of the WftD participation supplement was to
assist persons undertaking a WftD program meet the extra costs of
participation, for example transport, clothing, food.
The participation supplement to DSP recipients undertaking an
approved program of work was not provided for in the 2005-06
Budget.
Given the new 15 hours a week test (for new claims from 1 July
2006), most of the DSP recipients who will probably participate in
an approved program of work will be those recipients granted DSP
before 11 May 2005 who originally qualified under the 30 hours a
week incapacity for work rule. The participation supplement will
provide an added financial incentive for DSP recipients to
participate in a program of work.
RapidConnect was announced in the 2005-06 Budget.(59)
This Bill proposes to apply the new RapidConnect requirements to
unemployed jobseekers claiming either NSA (Schedule 7 Part 1) or YA
(Schedule 5 Part 1). RapidConnect was explained by the Minister for
Workforce Participation, the Hon. Mr Peter Dutton, MP on 10 May
2005 in the context of the 2005-06 Budget.(60) Under the
current NSA/YA claim and payment commencement processes, it can
take as much as 3 4 weeks before a jobseeker claiming NSA/YA
registers with a Job Network provider.
Essentially the revised NSA/YA RapidConnect claim processes
presented in this Bill are designed to require an unemployed
jobseeker claiming NSA/YA to register with a Job Network provider
as a jobseeker and to sign up to a job search activity agreement at
the earliest time in the NSA/YA claim process, even before actually
lodging a claim for NSA/YA with Centrelink. The proposed changes in
this Bill will make it a qualification requirement that the
jobseeker register with a Job Network provider. In some cases, even
the date of commencement of NSA/YA payment may be delayed where the
registration with the Job Network provider is delayed.
The Government s argument for these revised claim processes is
essentially presented in the Explanatory Memorandum; that is the
jobseekers chances of being assisted and provided with employment
are enhanced the earlier the jobseeker is registered with a Job
Network provider.(61)
The usual steps taken by an unemployed jobseeker claiming NSA/YA
at present are set out below:
- Unemployed jobseeker contacts Centrelink to register an
interest in claiming NSA or YA (or actually lodges a NSA/YA claim
form with Centrelink).
- Jobseeker attends an interview at Centrelink where NSA/YA
claim, payment processes and the mutual obligation (MO)
requirements are explained. MO requirements feature the
requirements to hand fortnightly forms in, to attend interviews and
to look for work. Another MO requirement, which is to register with
a Job Network provider is explained. Jobseeker is issued with
NSA/YA claim form (if not already lodged a claim) and other papers
necessary for the determination of qualification and payment rate,
for example income and assets, proof of identity, living
arrangements, partner s details.
- Jobseeker completes all the NSA/YA claim papers and processes,
like proof of identity, proof of income and assets, living
arrangements etc and provides them to Centrelink.
- Jobseeker is provided with a Jobseeker Provider Number by
Centrelink to take to register with a Job Network employment
placement assistance provider.
- A determination of NSA payment qualification and payment rate
made by Centrelink.
- Jobseeker hands in first fortnightly NSA continuation form
declaring any income earned in the fortnight and efforts to find
work.
- First fortnightly NSA payment made on the basis of information
provided on the fortnightly form.
- Jobseeker registers with Job Network provider.
RapidConnect is designed to move Step 8 above up to Step 2.
Therefore until the jobseeker registers with the Job Network
provider as a jobseeker, the rest of the NSA/YA claim processes are
not advanced by Centrelink.
If the registration with a Job Network provider by the jobseeker
is undertaken within 14 days of registering an interest with
Centrelink to claim NSA/YA, then payment will be made from the
earliest date of commencement (subject to any waiting and deferment
periods). However, if the jobseeker registers with the Job Network
provider more than 14 days after registering an interest to claim
NSA/YA with Centrelink, then payment will commence from the day of
Job Network registration (subject to any other waiting or deferment
periods).
The amendments for RapidConnect place new qualification
requirements on jobseekers. One of these is the requirement to
attend an interview at a specified time and place with a Job
Network provider. If this is not met then the NSA/YA claim can be
rejected. The Secretary has the discretion to waive, or change the
requirements or deem that they have been met.
RapidConnect is anticipated to save $7.7 million over 4
years.(62)
RapidConnect involves a jobseeker registering a NSA/YA claim or
expressing an interest in claiming with Centrelink and then being
told to attend an interview with a Job Network provider, in another
place with another organisation. There is significant potential for
confusion unless this process is explained, communicated and
managed very well.
The Australian National Audit Office
(ANAO) in its August 2005 report made some critical; observations
about computer networks between DEWR and Job Network
providers.(63) The criticisms centred on computer
systems problems between DEWR and Job Network
providers(64) and about low jobseeker attendance at
jobseeker interviews with Job Network providers.(65)
Addressing these problems was a feature of the implementation of
the Employment Services Contract No. 3 (ESC3) from 1 July
2004.(66)
The estimated $7.7 million is savings over four years is
relatively small in the context of the total cost of NSA/YA claim
processes.
This focus on Job Network registration is possibly related to
the change in administration of the NSA/YA programs from the Family
and Community Services portfolio to DEWR.
The Parts in this Bill titled Participation , provide special
work and activity test rules for jobseekers claiming, or being paid
NSA/YA, who have a long-term medical condition and a partial
capacity for work and also for principal carers , who do not
qualify for PP. Theses are jobseekers who do not qualify for DSP,
under the new proposed 15 hours a week continuing inability to work
test, so therefore can work for 16 hours a week or more but are
unable to work full-time. They are also the principal carers who do
not qualify for PP because of the age of their youngest child. Also
see the comments on PP and participation in Schedule 4 above.
The NSA/YA work test has never been a full-time work test.
Essentially work that an unemployed jobseeker on NSA/YA can be
required to look for and do is suitable paid employment
(sub-section 601(1) of the SSA). Suitable work is not restricted to
a person's traditional occupation or to work that they would prefer
to do. Jobseekers are encouraged and required to look for all types
of suitable work, that is all work that a jobseeker is capable of
performing. Where a jobseeker is capable of work, that is up to
full-time work, then that is the work they are required to look for
and accept. This flows through to the work search activity test
requirements, so that jobseekers are required to search for work in
a wide range of suitable areas and without a reasonable excuse, may
be subject to an activity test breach.
Jobseekers, who due to principal carer status or due to their
incapacity, are not able to work full-time or are restricted to a
limited range of positions, are expected to look for work to their
capacity. Amendments presented in this Bill will mean that a
jobseeker in this situation who is undertaking work up to their
capacity, will satisfy the activity test.
The legislative rigour behind activity test requirements has
stemmed from the words in section 601(1) of the SSA:
a person satisfies the
activity test in respect of a period if the person satisfies
the Secretary that, throughout the period, the person is:
(a) actively seeking;
and
(b) willing to undertake;
paid work in
Australia, other than paid work that is unsuitable to be
undertaken by the person.
If a jobseeker did not attend an interview, didn t attend a
training course or did not take on a reasonable job offer, then a
breach or even cancellation of payment could be made on the grounds
that the Secretary was no longer satisfied the jobseeker was
actively seeking and willing to undertake suitable paid work
.(67) In the early 1990s, some specific activity test
requirements were itemised in the SSA, like attend a training
program, attend an interview. The AWT initiative continued this
trend.(68)
The amendments to the activity test requirements proposed in the
Participation sections of this Bill spell out in more specific
detail what the activity requirements and work participation
requirements are for jobseekers with a disability and with a
reduced work capacity and also for jobseekers who are principal
carers of a child.
The amendments to the SSA in the participation parts of the Bill
also change what is to be accepted as unsuitable paid work .
The participation provisions for jobseekers with a restricted
work capacity due to a medical condition and those with principal
carer status include:
- The requirement to attend an interview and/or enter into an
activity agreement to qualify for NSA/YA.
- The power for the Secretary to still consider a person as
unemployed even though they are working, or involved in an approved
activity, to the maximum of their restricted capabilities. This
means they can still qualify for NSA/YA.
- The power for the Secretary to regard the principal carer of a
child or a person with a partial work capacity to be considered as
unemployed and also satisfying the activity test if work for at
least 15 hours a week.
A person satisfies the activity test requirements if directed to
undertake suitable paid work and they comply with that
directive.
Essentially work that an
unemployed jobseeker on NSA/YA can be required to do is suitable
paid employment. This arises from sub-section 601(1) of the
SSA.(69) And also for activity test compliance purposes
from sub-paragraph 541(1)(b) of the SSA.(70)
Correspondingly there is
also a description in the SSA of what is unsuitable paid work in
sub-paragraph 541(D)(1)(e).(71)
Unsuitable paid work - What
is unsuitable paid work
541D.(1) Subject to
subsections (1A) and
(1B), for the purposes of section
541, particular paid work is unsuitable for a person if, and
only if, in the Secretary's opinion: (e) the work would be covered
by an industrial award but the employer would only employ the
person if the person agreed to become a party to an agreement
reducing or abolishing rights that the award confers on employees;
or
This Bill proposes to
replace sub-paragraph (e) in 541(D)(1)(e), which refers to work
below award conditions with a reference to the work covered by the
an Fair Pay and Conditions Standard (AFPACS). The AFPACS are
provided for in the Workplace Relations Act 1996 (WRA),
which is currently subject of amendment by the Workplace
Relations Amendment (Work Choices) Bill
2005.(72) See Bills
Digest No. 66 2005-06.(73) This may see suitable
work that a jobseeker may be required to do being work that is
remunerated at less than current awards conditions.
The SSA sets out in section
541(D)(2) a 90 minute limit (each way) as a reasonable commuting
distance to ask a jobseeker to attend a job. The 90 minute limit is
not a restriction on the Secretary in forming another opinion as
541(D)(3) allows.(74) Even though the Secretary has this
discretion the Explanatory Memorandum states that the intention
behind repeal of 541(D)(2) and 541(D)(3) is to allow flexibility in
dealing with the concept of unreasonably difficult commuting
.(75)
This Bill includes many new provisions that describe when a
jobseeker is required is to undertake certain actions, like attend
an interview, or undertake a program of work. It also proposes to
repeal some existing provisions that currently describe when the
Secretary cannot ask a jobseeker to undertake a program of work
such as when:(76)
- the person has an illness, disability or injury that would be
aggravated by the conditions in which the work would be
performed
- performing the work would constitute a risk to health or safety
or would contravene a law of the Commonwealth, a State or a
Territory relating to occupational health and safety
- or the program of work requires the person to move from a home
in one place to a home in another place.
The Bill proposes to remove the words take reasonable steps to
from several sections in the current SSA. Items 11, 33,
35, in Part 2 refer.
As the provisions currently stand in the SSA, where a jobseeker
made every reasonable effort to comply, there is discretion to not
remove their temporary incapacity for work exemption. For example
section 542(B)(1) prescribe when a jobseeker would have their
temporary incapacity for work exemption revoked on account of not
complying with activity test requirements.(77) The
removal of these words from the SSA will remove the jobseeker s
rights to argue they were not able to comply for reasonable reasons
beyond their control, for example a sick child. The Secretary will
still have discretion as to whether to withdraw the jobseeker s
temporary incapacity for work exemption, but this is a diminution
of jobseeker s rights as they currently exist in the SSA.
The Bill proposes to insert into the SSA new categories of
exemption for jobseekers to undertake a program of work. In doing
this the Bill removes the voluntary work exemption, which is not
replaced, presumably because voluntary work is no longer to be
classified as an activity for the activity test or for the activity
agreement exemption.
These new sections also empower the Secretary to change the
categories of activity test exemptions (add or delete) by way of a
Legislative Instrument. Legislative Instruments are subject to some
scrutiny of Parliament.(78) Essentially a Disallowable
Instrument sits on the notice paper before parliament for 15
sitting days. If it is not amended or rejected by a vote of either
House of the Parliament in that 15 day period, it then becomes a
matter of law.
The proposed amendments set out some
circumstances where the Secretary may exempt a person from the
participation requirements; for example attend a training program
or undertake a program of work.
Home educator is defined in the proposed section 5C in Schedule
1 of the Bill. However, there is no explanation or justification
provided as to why a jobseeker who choses to educate their child at
home, as opposed to sending their child to a school, should be
provided with a blanket exemption. Likewise the same issue arises
for distance educators , as is defined in section 5D in Schedule 1
of the Bill.(79)
Currently, the detailed activity test requirements that a
jobseeker can be asked to comply with are spelt in section
544(B)(1) of the SSA.(80)
Youth
Allowance Activity Agreements-terms - Approved
activities
544B.(1) A Youth Allowance Activity Agreement with
a person is to require the person to undertake one or more of the
following activities approved by the
Secretary:
(a) a job
search;
(b) a
vocational training course;
(c) training
that would help in searching for work;
(d) paid work
experience;
(e) measures
designed to eliminate or reduce any disadvantage the person has in
the labour market;
(f) subject
to
subsection (7)-an
approved program of work for income support payment;
(g) subject
to section
544D-development of self-employment;
(h) subject
to section
544E-development of and/or participation in group enterprises
or co-operative enterprises;
(i)
participation in a labour market program conducted by the
Department;
(ia)
participation in the
PSP;
(j)
participation in a
rehabilitation program;
(k) a course
of education;
(l) an
activity proposed by the person (such as unpaid voluntary work
proposed by the person).
The Bill proposes to repeal these specific activity test
requirements from the SSA and have them replaced with the power for
the Secretary to specify in a Legislative Instrument what the
requirements are.
The amendments detailing that a person is still unemployed while
working or being active to the maximum of their capacity is a long
needed amendment. This is made necessary by the fact there will be
far more jobseekers on NSA/YA for the long-term, with restricted
work capacities, arising from the tightening of the DSP
qualification requirements.
The alteration to the definition of unsuitable work in
sub-paragraph 541(d)(1)(e) in the SSA will refer to all jobseekers
claiming/receiving NSA/YA or any other work search activity tested
payment like Widow Allowance, Mature Age Allowance, Partner
Allowance, Parenting Payment Partnered and Single. The concern is
that suitable work now includes work remunerated at less than award
conditions and that unemployed jobseekers may be required to
undertake such work and failure to do so could constitute a breach
of the activity test requirements.
While the detailed setting out of the participation requirements
in the SSA for jobseekers with a disability, and child carers
appears to be setting a new rigor to activity testing, in many ways
many of the requirements and exceptions in this Bill are still at
the discretion of the Secretary and will therefore be described and
prescribed by guidelines.
The most that the amendments is set out in more detail the
specific circumstances in which the Secretary should act and can
make determinations and form opinions. Where provisions are
repealed and not replaced they are likely to be defined by the
Secretary s guidelines and to this extent there is likely to be
less Parliamentary scrutiny and greater reliance on guidelines that
hang off discretionary powers of the Secretary.
It is interesting to note that in some cases that the
application of the SSA will be by guidelines set down by the
Secretary and in other cases by guidelines set out by the Secretary
in a Legislative Instrument, which is subject to some Parliamentary
scrutiny. Disallowable Instruments are tabled in Parliament for 15
sittings days but there is no requirement for debate unless a
member moves a motion to debate the instrument.
Program deliverers and administrators wanting flexibility are
likely to benefit from of Legislative Instruments as they are more
quickly changed than Acts of Parliament At the same time they still
provide some degree of Parliamentary scrutiny.
The expansion of the IMP to DSP recipients and the expansion of
the IMP provisions to extend to redundancy payments were announced
in the 2005-06 Budget.(81)
Currently the IMP has been applied mostly to the allowance
income support payments, that is:
- NSA,
- PP Partnered and Single,
- Partner Allowance,
- Widow Allowance,
- Youth Allowance,
- Austudy Payment,
- Mature Age Allowance, and
- Sickness Allowance
The IMP was introduced with the passage of the Social
Security Legislation (Budget and Other Measures) Act 1996. The
current IMP refers to leave payments paid out on termination of
employment, for example annual leave, long-service leave and sick
leave. Where a person has a leave payment paid out to them on
termination their income support payments may be deferred for the
equivalent number of weeks. For example, where a person had 4 weeks
annual leave, 3 weeks sickness leave and 16 weeks long-service
leave paid out on termination of employment, this 23 week leave
period is counted as an IMP and needs to be served before payment
of income support can commence. The IMP period is counted from the
date last worked and the leave is treated as income at the rate of
normal wages paid when working.
The 2005-06 Budget papers anticipate the extension of the
broadened IMP (and the expansion of the SWPP) provisions to most of
the current income support payments for persons of working age,
will save $43.0 million in 2006-07, $62.1 million in 2007-08 and
$63.8 million in 2008-09.(82) These savings of $176.1
million over four years are for all the payments for which the IMP
and the SWPP will apply.
The amendments proposed in this Bill will extend the application
of the IMP to DSP and expand the coverage of the IMP to also count
redundancy payments as leave for the calculation of the IMP.
This proposed expansion of access to the EEP was announced by
the Minister for Employment Services, the Hon. Mr Peter Dutton, MP
in a media release
Welfare To Work $554.6 Million To Help People With Disabilities
Into Work issued on 10 May 2005.(83)
Recipients of income support payments for those of working age
paid under the SSA may qualify for an EEP if they are commencing
employment or if their income from employment rises above a
threshold amount. The qualification rules depend on the type of
payment being received. EEP is designed to assist with the on-off
extra costs of starting a job, like transport, a uniform etc. An
EEP payment is only payable once in every 12 months and EEP is paid
as a lump-sum. Currently recipients of the following payments may
qualify for an EEP:
- NSA
- partner allowance
- mature age allowance
- widow allowance
- PP
-Single
- DSP
- carer payment, and
- Special
benefit - if the recipient is a sole parent and not
residentially qualified for PP.
The DSP EEP rate is $312.00 whereas for all other payment
recipients the EEP rate is $104.00, both paid only once in a 12
month period.
For the allowance payments (NSA, partner allowance, mature age
allowance, widow allowance) the job needs to be for 4 weeks or more
and precludes any payment under the income test for 4 successive
weeks. For the pension payments (DSP, carer payment and PP Single),
the job needs to be for 4 weeks or more and precludes any payment
at the equivalent of the adult single rate of NSA.
The amendments in Schedule 8 would expand access to the EEP in
the following ways:
- Pay EEP to PP Partnered recipients,
- Pay to EEP to NSA and YA recipients who have a partial capacity
for work or who are principal carers EEP to be paid where earnings
exceed a threshold amount for four successive weeks,
- Pay EEP to income support recipients (NSA, YA, PP Single, PP
Partnered) with a partial capacity for work or who are a principal
carer even though their income does not rise above the EEP
threshold amount and the work is at least 15 hours a week for 4
weeks or more,
- Pay EEP to PP Single and PP Partnered recipients who do not
have a work requirements but commence work, or increase work to, 15
hours a week,
- The EEP payment rate for NSA/YA jobseekers with a partial
capacity for work will be $312.00, and
- The EEP payment rate for NSA, YA, PP Single, PP Partnered
recipients who are a principal carer will be $104.00.
The Bill proposes to apply the revised SWPP to Sickness
Allowance from 20 September 2006. See the separate discussion of
the revised SWPP above.
There are some Special Benefit categories that require a person
of working age to look for work and actively seek suitable
employment. The same activity test requirements as apply to NSA/YA
jobseekers are applied here (see the separate discussion of the
revised participation requirements above). These are mainly persons
who would otherwise qualify for NSA/YA, but do not meet the
residence qualification requirements. The Bill proposes to apply
the same amended participation and compliance requirements to these
categories of Special Benefit recipients, as is proposed for NSA/YA
jobseekers.
The government announced an increase in the rate of MA in the
2005-06 Budget.(84)
The current qualification
requirements for MA are the person:
- is 16 or over, and
- has a disability that prevents the person from using public
transport without substantial help for the next 12 months or longer
(there does not need to be public transport in the area to
qualify), and
- are undertaking vocational training, voluntary work, paid work,
independent living/life skills training, or a combination of these
for at least 32 hours every four weeks on a continuing basis,
or
- have an agreement to look for work through the Job Network,
or
- are undertaking jobsearch activites under the Competitive
Employment, Training and Placement (CETP) program administered by
Family and Community Services (CETP Services are also known as Open
Employment Services), or
- are getting Newstart Allowance, Youth Allowance or Austudy and
are required to satisfy the Activity Test, and
- need to travel to and from home as part of work, training or
job seeking, and
- are an Australian resident, in Australia and not subject to the
two year newly arrived residents waiting period.
The current rate of MA is $67.90 per fortnight.
This Bill would, from 1 July 2006, provide for a new higher rate
of MA of $100 a fortnight for DSP, NSA or YA recipients undertaking
certain activities. The activities are:
- Looking for work of at least 15 hours a week at award wages or
more under an agreement with a Job Network provider, or
- Working at least 15 hours a week at award wages or above.
The person will need to have a disability that prevents the
person from using public transport without substantial help for the
next 12 months or longer.
The current provisions for
the lower rate of MA remain.
In some cases, where the person ceases to receive DSP due to
employment income, the higher rate of MA may still continue to be
paid while they are employed.
The increased rate of MA is
anticipated to cost an extra $11.6 million in 2006-07, $14.2
million in 2007-08 and $16.8 million in 2008-09, total of $42.5
million over three years.(85)
This measure aligns PP-Partnered with other like income support
payment that provide access to advance payments. Advances of
lump-sum amounts of income support entitlements were first
introduced with the passage of the Social Security (Budget and
White Paper) Amendment Act 1994. See
Bills Digest No. 146 1994.(86)
Advances on payments are available under most other income
support payments, so these amendments to the SSA is bringing
PP-Partnered into alignment with other like payments.
Certain groups of people who had been receiving PES prior to
moving onto NSA or YA will be able to retain the PES until they
complete their present course of study. Former DSP recipients who
claimed their pension between 11 May 2005 and 1 July 2006 will be
eligible, as will former PP -Single recipients who move to an
allowance because their youngest child reaches the age of eight
years.
Other people who would formerly have qualified for DSP or PP -
Single will not have access to the PES if they enter full-time
study. This change will significantly lower the amount of
assistance provided to many sole parents and people with
disabilities who undertake study as a way out of welfare
dependence. The Australian Council of Social Service (ACOSS)
claimed in its July response that:
people with disabilities and sole parents who
study full time to improve their future job prospects are the worst
affected group. Many of those who go onto Austudy Payment instead
of a pension in future would be over $100 per week worse
off.(87)
Estimates of reductions in outlays on PES were provided in an
answer to a question on notice (No. W156-06) asked by Senator Penny
Wong at Senate Employment, Workplace Relations and Education
Legislation Committee estimates hearings for the 2005-2006
Budget.(88)
Eligibility for a Pharmaceutical Allowance, Pensioner Concession
Card and for Telephone Allowance will be extended to Newstart and
Youth Allowees (NSA and YA) who have a partial capacity to work or
are single principal carers . They will also be able to retain the
Pensioner Concession Card for a period after they cease to qualify
for NSA or YA. These changes preserve some entitlements that would
have been available to these people if they had still been able to
access DSP and PP.
The present income test structure was introduced as part of the
1994 Working Nation Statement.(89) It replaced a test
which withdrew assistance above a certain income on a dollar for
dollar basis. This 100 per cent taper rate(90) was
reduced to 70 per cent to encourage the take up of casual and
part-time work by people receiving unemployment payments.
Taper rates(91) and income thresholds for NSA, YA,
Austudy Payment, Sickness Allowance, Partner Allowance, Widow
Allowance, Mature Age Allowance and PP - Partnered will now be
reduced from 70 per cent to 60 per cent. The income threshold from
which this taper rate applies will be increased from $142 per
fortnight to $250 per fortnight except for payments to full-time
students who already enjoy more generous thresholds. These changes
are designed to improve the returns from work for all these
payments and reduce effective marginal tax rates.
However, the income tests are still considerably less generous
than the pension income test which has a single taper rate of only
40 per cent and single income test free threshold of $124 per
fortnight (for a single person).
The difference between the pension income test and the new
allowance income test is explored in the NATSEM research discussed
earlier.(92) The implications, in terms of effective
marginal tax rates (EMTR) and changes in disposable income for
people, who will have access to an allowance rather than a pension
after the measures in this Bill are implemented, are examined in
the NATSEM paper. The paper found that persons on allowance
payments face higher EMTR than those on pension rate payments.
Sole parents who receive NSA or YA and are foster carers,
distance educators or home educators will be paid a new rate of
payment equivalent to the PP Single rate. Sole parents in these
categories will be exempt from the requirement to satisfy the
activity test. However there are other sole parents who are also
exempt from that requirement but do not qualify for the higher rate
of payment. Those who have recently experienced domestic violence
and those caring for a child with a disability will not qualify for
this higher rate of payment. The reason for this difference in
treatment is unclear.
Currently, where a person incorrectly declares their income or
fails to declare their income two sanctions apply. Firstly, any
overpayment of income support is recovered. Secondly, where the
person is a jobseeker on an allowance payment, (NSA, YA and Austudy
payment) they may also incur an administrative breach penalty; that
is the jobseeker s rate of payment is reduced by 16 per cent of
their maximum benefit rate for a period of 13 weeks. Where the
person is on a pension payment like PP partnered or PP Single, all
that occurs is the debt is recovered. The matter may be referred to
the Department of Public Prosecutions for consideration of charges
being laid under the SSA or the Crimes Act but that is rare and
only for large amounts of debt.
This measure provides for a 10 per cent recovery fee to be
applied (additional to the debt amount), where a working age person
receiving a benefit (such as NSA or YA, or PP - Partnered) or
certain pensions (DSP, Wife, Widow B Pensions or PP - Single)
incurs a debt due to knowingly incorrectly
declaring or refusing to declare their earnings.
The Bill would change the current breaching regime and remove
existing penalties for false reporting of earnings. The new
recovery fee is milder than the measures it will replace but will
apply penalties for the first time to groups of income support
recipients who are not presently covered - DSP, Wife, Widow B
Pensions, PP Single and PP - Partnered.
The Government announced proposed changes to the compliance
regime for income support payment for the working
aged(93) in the 2005-06 Budget.(94) The main
change is the suspension of payments (that is a non-payment period)
rather than the current 6 month payment rate reduction periods. The
proposed compliance regime is anticipated to save $21.1 million in
2005-06, $65.0 million in 2006-07, $78.9 million in 2007-08 and
$76.2 million in 2008-09.(95)
Currently there are two types of breaches activity test breaches
and administrative breaches . This Bill does not propose to alter
the penalties for administrative breaches.
An activity test breach is mainly a breach involved in not
taking the right or sufficient steps in looking for or preparing
for work. Common examples of activity test breaches are when a
jobseeker:
- refuses or fails to attend a job interview without sufficient
reason,
- fails to complete a labour market program (LMP) without
sufficient reason,
- is dismissed from a LMP for misconduct,
- refuses to declare, or fails to correctly declare earnings from
employment,
- becomes unemployed voluntarily without sufficient reason,
- becomes unemployed due to misconduct,
- fails to accept suitable job offers without sufficient reason,
or
- has not applied for a particular number of job vacancies.
The current regime of activity test breaches is set out in the
table below.
|
If it
is
|
Then
|
|
the first activity test
breach within a 2 year period
|
the jobseeker s basic rate
of payment is reduced by 18% for a period of 26 weeks
|
|
a second activity test
breach within a 2 year period
|
the jobseeker s basic rate
of payment is reduced by 24% for a period of 26 weeks
|
|
a third or subsequent
activity test breach within a 2 year period
|
a non-payment period
applies for 8 weeks
|
Administrative breaches refer to actions where the jobseeker has
failed to comply with a requirement in the SSA. For example a
jobseeker fails, without sufficient reason to:
- attend an office of Centrelink when asked to do so,
- notify Centrelink of changes to their circumstances,
- reply to letters from Centrelink, or
- provide a required tax file number.
The current regime for administrative breaches is:
- the jobseeker s rate of payment is reduced by 16 per cent of
their maximum benefit rate for a period of 13 weeks, or
- the jobseeker s can instead choose a non-payment period of 2
weeks.
Unlike activity test breaches, subsequent administrative breach
penalties do not incur an increased penalty. Instead another 13
week 16 per cent payment rate reduction period is imposed, for any
subsequent administrative breaches.
This Bill does not propose to alter the current regime for
administrative breaches.
The Bill provides for changes to the activity test compliance
rules for several working age payments. The payments are PP (Single
and Partnered), NSA, YA, Austudy and Special Benefit. Special
Benefit is included as some of the Special Benefit payment
categories have the same activity test requirements as NSA and YA,
that is, a jobseeker is required to look for work and accept
suitable work.
Set out below are the main points about the new proposed
activity testing compliance regime:
- Three successive non-payment periods in 12 months will see an
8-week non-payment period.
- The amendments proposed to the SSA specifically state there is
not to be a non-payment period imposed where the Secretary is
satisfied the jobseeker has a reasonable excuse for the failure .
What might constitute a reasonable excuse is not set out in the
amendments in the Bill, so presumably this will be a matter to be
set out in the Secretary s guidelines.
- The activity test compliance requirements and potential for
non-payment penalties is not to apply during the RapidConnect new
claim processes see Schedule 5 Part 1, Schedule 7 Part 1 and
Schedule 22 Part 1 RapidConnect above.
- Apart from the 3rd activity test non-compliance
breach in 12 months that will result in an 8-week non-payment
period, there are several other specified events that will
automatically and immediately, that is with a single breach, result
in a 8-week non-payment of assistance. These are:
- The jobseeker is voluntarily unemployed,
- The jobseeker is unemployed due to their own misconduct as a
worker,
- The jobseeker refuse a suitable job offer, or
- The jobseeker fails to commence, participate or complete a
program of work or comply with the conditions of a program.
Again the Secretary has the power not to impose the 8-week
non-payment period where the Secretary is satisfied the jobseeker
has a reasonable excuse for the failure . What might constitute a
reasonable excuse is not defined in the Bill, so again presumably
this will be a matter for the Secretary s guidelines.
- Non-payment periods are to run concurrent with any preceding
and on-going non-payment period or payment reduction period.
- The counting of events that might immediately result in an
8-week non-payment period (see above) is not retrospective; the
counting only starts from when this Part of the Bill takes effect,
being 1 July 2006.
- The provisions are to only apply to jobseekers aged 60 or
under.
The Bill does not specify any prescribed number of days or weeks
for non-payment periods, that is apart from the 3rd
breach in 12 months and the other prescribed breach actions that
are to result in the mandatory 8 week non-payment period (see
above). Rather the non-payment periods for the 1st and
2nd breaches in a 12 month period is equal to the period during
which the jobseeker fails to comply with an activity requirement.
Some examples might be:
- Where a jobseeker initially fails to attend an interview with a
potential employer and then attends the interview with the same
employer two days later, then the non-payment period would be two
days. (That is conditional on the jobseeker not having an excuse
that is acceptable as reasonable by the Secretary).
- Where a jobseeker fails to sign up to a NSA Activity Agreement
then signs the agreement three days later, the non-payment period
would be for three days. (That is conditional on the jobseeker not
having an excuse that is acceptable as reasonable by the
Secretary).
- Where a jobseeker fails to attend a program of work and returns
to work four days later, then the non-payment period would be for
four days. (That is conditional on the jobseeker not having an
excuse that is acceptable as reasonable by the Secretary).
The current single rate of NSA is $404.50 per fortnight, this is
$40.50 per day (10 day fortnight). The current activity test
sanction of 18 per cent rate reduction for 26 weeks is the
equivalent of $946.53 (if paid at the current single rate of NSA at
$404.50 per fortnight). So the sanction of $946.53 over 6 months is
the equivalent of losing 123 days of payment. However there are
likely to be very few jobseekers with non-payment periods of this
magnitude under the proposed compliance regime presented in this
Bill. Most non-payment periods will probably be for one to five
days.
The 18 per cent rate reduction for 26 weeks has been criticised
as being a very harsh penalty for the first or any activity test
breach and the 24 per cent rate reduction (or a total of $1 262.04)
for the 2nd breach in 2 years is even harsher.(96)
However, for many, the non-payment of income support for 1, 2 or 3
days under the new compliance regime will be far less that the
current 16 per cent payment rate reduction period for 6 months.
In the out years, this new compliance regime is anticipated to
save close to $75 million a year. There are several reasons why
this figure is probably quite conservative. Firstly, the proposed
non-payment period would apply to a greater number of jobseekers,
that is jobseekers who fail to qualify to DSP due to the stricter
15 hour a week test and also the jobseekers on PP with a youngest
child aged 8 years or more. In addition, jobseekers on NSA, YA,
Austudy payment and Special Benefit have not been exposed to an
immediate non-payment period sanction before. Furthermore while in
many cases the current 18 per cent payment rate reduction for 26
weeks realises a bigger financial penalty than short non-payment
periods of 3 or 4 days, this new regime of short non-payment
periods will be easier to impose and will probably result in a
greater number of breaches imposed.
Many jobseekers just have difficulty at first in complying with
all the rules and red-tape involved in claiming and receiving a
payment from Centrelink, in attending all the interviews and
maintaining contact with a Job Network provider, in completing
jobseeker diaries, in signing up to an activity test agreement, in
completing and lodging fortnightly continuation forms etc. There
are many opportunities for a jobseeker to just slip up mainly due
to ignorance of the rules and requirements and then incur a
non-payment period.(97) This especially applies to young
jobseekers.(98) It is not clear (as the guidelines are
not available yet), whether ignorance and naivet will be an excuse
acceptable as reasonable by the Secretary .
Up until 1997 the first and only breach that could be imposed on
a jobseeker was a two week non-payment period.(99)
However, it was not often imposed as a two week non-payment was
considered a very harsh penalty especially for what in many cases
were minor breaches. In 1997 a new penalty regime was introduced
with the passage of the Social Security Legislation Amendment
(Activity Test Penalty Periods) Act 1997.(100) This
legislation introduced the 6 month payment rate reduction
periods.
Partly because payment reduction rate periods are easier to
impose than a 2 week non-payment period, and also because the range
of actions that are now subject to a penalty is far larger than in
1997, there has been an increase in the number of penalties
imposed.(101) Payment rate reduction periods are easier
to impose than a non-payment period (especially a minimum 2 week
non-payment period), as the recipient is still left with some,
albeit reduced, level of support.
While the impact of a6 month rate reduction period is spread out
and not immediate, the impact of a non-payment period is immediate
and so the pressure on the jobseeker to comply is also far more
immediate. A non-payment period of two days ($81.00) is also far
easier to impose as it is less harsh than a two week non-payment
period ($404.50) or a 16 per cent rate reduction for 6 months
($946.53).
It is likely that this proposed compliance regime of non-payment
for short periods (one, two or three days) will therefore see more
breaches imposed.
As outlined in Schedule 4 Participation above,
this Bill would cease qualification to PP where the youngest child
turns age 8 (single recipients) or age 6 (partnered recipients).
Once PP is no longer payable to these parents, they are to be
provided with enhanced NSA and subject to the new NSA/YA jobseeker
participation requirements and compliance regimes, including
non-payment for non-compliance, as provided for in this Bill.
Some PP recipients will be subject to some participation
requirements and the associated compliance regime will also apply.
These will be:
- PP Single recipients granted payment of PP from on or after 1
July 2006 and where the youngest child is aged 6 to 7, and
- PP Single and Partnered recipients granted payment of PP from
before 1 July 2006 will have participation requirements (and the
attached compliance regime) from 1 July 2007, or when youngest
child turns age 7, whichever is the latter. These are the PP
recipients who can continue to qualify for PP until the youngest
child turns age 16.
The participation requirements for these two categories of PP
recipients will be the same as for principal carers on NSA/YA see
New categories for exemptions from the requirement to
participate in a program of work domestic violence, caring for
disabled child, foster carer, home educator, distance educator
above. Essentially, principal carers will be required to
seek and/or undertake part-time work of at least 15 hours per week.
PP recipients with participation requirements will also not be
required to provide jobseeker diaries or employer contact
certificates as part of their participation requirements.
Austudy payment is provided to full-time students undertaking
undergraduate tertiary study aged 25 or more. Their activity test
requirement is essentially that they are continuing to undertake
the requisite study. They are not subject to the same activity test
requirements as NSA/YA jobseekers, like the look for suitable work,
accept suitable paid work requirements, as they are studying
full-time. If at any time they discontinue studying full-time, then
they are no longer qualified for Austudy payment.
The Austudy compliance regime as presented in this Bill is the
same as that for NSA/YA jobseekers, that is non-payment periods for
non-compliance. For example, a non-payment period could be imposed
on an Austudy payment recipient where they fail to attend an
interview with Centrelink when requested.
Schedule 22 of the Bill proposes consequential amendments to the
Social Security (Administration) Act 1999 (SSAA) arising from the
proposed main amendments to the SSA in the Bill.
Items 12 and 14 insert suspension provisions
into the SSAA to allow the suspension of DSP (not cancellation) for
up to 2 years where a DSP recipient obtains paid employment and the
income precludes payment. This is a pre-existing DSP entitlement;
that is to temporary suspend DSP for up to 2 years where the
recipient attempts to work. The two year suspension means the
recipient can come back on to DSP without re-claiming and without
having to reprove qualification. It is designed to provide an
incentive for DSP recipients to attempt employment
opportunities.
This Schedule proposes to amend other Acts to bring them into
line with the provisions in this Bill.
The main amendment proposed is to section 20(1) of the
Disability Services Act 1986 (DSA):
Provision of rehabilitation programs
20(1) Subject to section 21, if the
Secretary is satisfied that the provision of a
rehabilitation program for a
person in the target group would:
(a) result in the
person having a substantially increased capacity to:
(b) (i) obtain or retain paid employment
(whether or not the employment would be
unsupported); or
(c) (ii) live independently; and
(d) (b) comply with guidelines (if any)
formulated under section 5 that relate to this section;
the
Secretary may, on the Commonwealth's behalf, approve the
provision of the
rehabilitation program for the
person, together with any follow-up program that the
Secretary considers necessary or desirable.
This proposed new wording for section 20(1) of the DSA is a far
more open and liberal application of appropriate rehabilitation
than the current section 20(1) of the DSA, that requires
rehabilitation to produce a vocational result.(102)
Rehabilitation will be able to be provided against guidelines
prescribed by the Secretary (of the Department of Health).
The Commonwealth Rehabilitation Services (CRS) has for a long
time used the current prescriptive direction in section 20(1) of
the DSA to determine the allocation of rehabilitation assistance.
This assistance has been targeted at individuals who will realise a
vocational outcome by way of rehabilitation, that is the results
comply with sub-paragraph 20(1)(a)(i) of the DSA.(103)
However, this interpretation by the CRS has been quite literal,
often providing rehabilitation only where it is assessed that the
person would realise a job outcome from rehabilitation alone. This
may be very appropriate in cases where the person has a job to
return to, or has very current labour market skills and needs
rehabilitation assistance alone to return to work. However,
many/most of the income support recipients on DSP (and other income
support payments), with the potential to benefit from
rehabilitation, do not have a job to return to or current
marketable labour market skills.
So while the CRS was not providing these persons with
rehabilitation, the vocational skills enhancement processes under
various government jobseeker assistance programs, like Working
Nation and today the Job Network, was not being provided either.
This was because these persons required rehabilitation before
vocational assistance could benefit them. So many persons with a
medical condition affecting their work capacity on income support
payments (DSP and other payments) who could benefit from
rehabilitation and vocational training fell through the cracks and
were left behind.
The proposed amendments to section 20(1) of the DSA are long
overdue, that is allowing a broader application of the provision of
rehabilitation. However, the amendments refer to empowering the
Secretary to prescribe guidelines for the targeting of
rehabilitation assistance but as these guidelines are not available
in this Bill it is difficult to be definitive about what the new
rehabilitation assistance priorities will be, apart from the
background provided in the Explanatory Memorandum.
Item 2 sets out the commencement dates for the
various Schedules and Parts in the Bill.
Part 1 sets out new definitions for the SSA
that commence from 1 July 2006. Item 3 sets out
the new definition of principal carer . Item 4
inserts a new definition of registered and active foster carer ,
home educator and distance carers . Item 6
provides a definition of partial capacity to work and what 30 hours
work a week means. Item 16 inserts new definitions
of participation failure instalment period . Item
21 inserts a new definition of subject to participation
requirements .
Part 2 sets out amended definitions in the SSA
to take effect from 1 July 2006 and they are in Schedule
2. Item 2 amends subsection 94(2) of the
SSA to provide a new definition of continuing inability to work for
DSP qualification. Item 37 Schedule
1 inserts a definition of Australian Fair Pay and
Conditions Standard to be that as provided for in the Workplace
Relations Act 1996 (WRA)
Item 2 provides for a new definition of
continuing inability to work for DSP qualification. Item
5 provides a new definition of independently of a program
of support . Item 8 provides a new definition of
training activity , replacing the previous definition of on the job
training. Item 9 and Item 12
replaces the number 30 with 15 in sub-section 94(5) and
1061ZD(2)(b) changing the number of hours a week a claimant must be
unable to work for to qualify for DSP from 30 hours a week down to
15 hours.
Item 10 provides for new automatic
qualification criteria for some income support recipients assessed
as being unable to work for 15 hours a week and have been on an
income support payment for two years or more.
Item 14 inserts the SWPP provisions into the
DSP qualification sections in the SSA.
Item 16 inserts new provisions setting out the
qualification for and the rate of approved program of work
supplement for DSP recipients
Item 1 inserts the SWPP provisions into the
carer payment qualification sections in the SSA.
Item 2 inserts new provisions setting out the
participation requirements in the new section 500A (see
Item 4) are to apply to PP recipients where the
youngest child is aged 6 or more.
Item 4 inserts the new section 500A setting out
the new PP participation requirements. Item 6 sets
out the PP participation requirements transitional arrangements.
Item 7 sets out the PP activity agreement
requirements.
Item 9 sets out the participation failure
events that may result in a non-payment period and the duration of
non-payment periods.
Part 3 removes PP Single as an exempt payment
for the application of the SWPP.
Item 2 inserts new provisions for the
requirements for a YA jobseeker claimant to attend an interview
with a Job Network provider as part of the YA claim process.
Item 3 sets out the activity test requirements
for a YA claimant with a medical condition restricting their work
capacity. Item 7 inserts provisions detailing
principal carers are exempt for the participation requirements.
Item 8 inserts provisions detailing the paid work
requirements. Item 15 repeals references to work
remunerated at minimum award conditions and replaces it with
referrals to work under the Australian Fair Pay and Conditions
Standard. Item 25 inserts new provisions for the
exemption from the activity test requirements in domestic violence
and caring for disabled child/ren situations. Item
35 details that a YA activity agreement meets the
participation requirements. Item 40 empowers the
Secretary to revoke the requirement to undertake an approved
program of work. Item 41 sets out the approved
program of work is up to 15 hours a week for principal carers and
for persons with a partial capacity for work.
Item 46 inserts provisions detailing
participation failures and consequential non-payment periods.
Item 2 sets out the Austudy payment
participation requirement, failures and the non-payment periods for
non-compliance.
Item 10 inserts the SWPP provisions into the
Austudy payment provisions.
Item 2 sets out the requirements for a NSA
jobseeker claimant to attend an interview with a Job Network
provider as part of the NSA claim process.
Item 8 inserts new provisions for the activity
test requirements. Item 15 inserts provisions
empowering the Secretary to consider a person as unemployed even
though they are working to the maximum of their capacity.
Item 23 empowers the Secretary to require a person
to undertake an approved program of work and the number of hours
required may differ from the numbers of hours a week required to
undertake jobsearch activities. Item 28 repeals
references to work remunerated at minimum award conditions and
replaces it with referrals to work under the AFPACS. Item
41 inserts new provisions for the exemption from the
activity test requirements in domestic violence and caring for
disabled child/ren situations. Item 56 sets out
the relief from the activity test requirements for principal carers
and person with a partial capacity for work. Item
57 details that the exemption for these categories of
person can be lapsed under prescribed conditions. Item
68 inserts sections about activity agreements for
principal carers , persons with a partial capacity for work,
requirements to participate in an approved program of work.
Item 73 inserts provisions about NSA
participation failures and consequential non-payment periods.
Item 2 contains provisions for the payment of
the higher rate of EEP to some YA and NSA recipients and the
expanded access to EEP. Item 3 contains provisions
for the expanded access to EEP for PP Partnered recipients.
Item 1 inserts the SWPP provisions to apply to
sickness allowance.
Items 4 to 42 in Part 1 of
this Schedule insert the same new activity test provisions as have
been proposed to be inserted for NSA and YA in this Bill. These
provisions are to only apply to those special benefit payment
categories that are subject to the work search activity test
participation requirements. When granting Special benefit for an
individual case, the Secretary selects which category of Special
benefit is to apply and this category sets the payment rate and the
requirements for the continuation of payment.
Items 43 to 53 in Part 2 of this Schedule
insert the same new participation compliance provisions as have
been proposed to be inserted for NSA and YA in this Bill. These
compliance provisions are to only apply to those special benefit
payment categories that are subject to the work search activity
test participation requirements.
Item 2 inserts new qualification provisions for
Mobility Allowance at the higher special rate. Item
5 inserts the provision to set the higher rate of Mobility
allowance at $100 per fortnight. Item 8 provides
for the continuance of Mobility Allowance for 8 weeks after a
person ceases to be qualified as they have stopped work this is in
line with current Mobility Allowance payment legislation.
Items 1, 2 and 3 insert the provisions to allow
the lump-sum advance payment of PP Partnered.
Item 3 provides for the payment of PES to
certain YA and NSA recipients being those who were formerly in
receipt of PP Single or DSP and were receiving PES when transferred
to NSA/YA and continue with the requisite qualifying study.
Item 2 in Part 1 inserts
provisions to provide for clarification of the continued payment of
telephone allowance to pension and allowance recipients (for
example DSP, PP Single, NSA and YA paid to principal carers or
persons with a partial capacity for work), where their income
support payment ceases due to employment income.
Part 2 amendments provide for the continued
payment of Telephone Allowance for NSA and YA recipients who have a
partial capacity to work or are single principal carers , The
extension of payment is 12 months for former DSP recipients on NSA
or YA and persons with a partial capacity for work and 6 months for
other payments.
Eligibility for the Pensioner Concession Card (PCC) is to be
extended to those on NSA and YA who have a partial capacity to work
or are single principal carers . Also, these persons are to be
allowed to retain their PCC for 12 months after payment ceases due
to employment income. Item 1 inserts provisions
into the SSA to provide for some YA recipients to have access to a
PCC being those who have a partial capacity to work or are single
principal carers . Item 11 inserts provisions to
provide for PCC qualification for persons with a partial capacity
for work.
Part 1 inserts the Income Maintenance Period
(IMP) provisions into the pension rate calculators applying to DSP
for persons aged 21 and over and not permanently blind.
Part 2 inserts the IMP provisions into the pension
rate calculators for those on DSP aged less than 21 and not
permanently blind.
Item 1 changes the upper income level taper
rate from 70 per cent down to 60 per cent. Item 3
changes the range of income reduced at the rate of 50 cents in the
dollar. Income between $62 and $250 per fortnight will reduce YA by
50 cents in the dollar, income above $250 per fortnight will be
reduced YA by 60 cents in the dollar.
Item 5 inserts a new maximum YA rate, being the
same as the higher PP Single rate to apply to certain types of YA
recipients being active a registered foster carer , home educator
and distance educator .
Items 6 and 7 provide for the payment of PhA to
YA recipients who are either a person with a partial capacity for
work, or are a principal carer , or have a temporary incapacity
exemption.
Youth disability supplement is an additional amount of YA
payable to DSP recipients aged less than 21 to make up to the full
adult age 21 and over rate. Item 10 provides for
the payment of the youth disability supplement to a YA recipients
under age 21 who also have a partial capacity for work.
Item 15 inserts provisions to exempt YA
recipients aged less than 21 from the parental means test where
they have a partial capacity for work. Normally on YA the parental
means test applies to jobseekers aged 16 to 20.
Item 29 inserts provisions to include
redundancy payments in the calculation of the IMP for YA.
Part 1 changes the income test that applies to
Austudy payment by reducing the taper rate fro 70% to 60%.
The Austudy payment income test is different to the NSA/YA
jobseeker income test, having a higher free area but a more sever
taper, designed to encourage moderate part-time work but not
substantive part-time work. This reflects that Austudy is a payment
for full-time students and is the same income test for YA paid to
full-time students.
Item 17 inserts provisions to include
redundancy payments in the calculation of the IMP for Austudy
payment.
The changes to the SSA in this Part for NSA mirror the changes
to the YA rate calculator see above (Schedule 18 Part 1).
Item 1 changes the upper income level taper rate from 70
per cent down to 60 per cent. Item 3 changes the
range of income reduced at the rate of 50 cents in the dollar.
Income between $62 and $250 per fortnight will reduce YA by 50
cents in the dollar, income above $250 per fortnight will be
reduced YA by 60 cents in the dollar.
The changes to the SSA in this Part for NSA mirror the changes
to the YA rate calculator see above (Schedule 18 Part 1).
Item 7 inserts a new maximum NSA rate, being the same as
the higher PP Single rate to apply to certain types of NSA
recipients being active a registered foster carer , home educator
and distance educator .
The changes to the SSA in this Part for NSA mirror the changes
to the YA rate calculator see above (Schedule 18 Part 1).
Item 9 provides for the payment of PhA to NSA recipients
who are either a person with a partial capacity for work or are a
principal carer .
Item 23 inserts provisions to include
redundancy payments in the calculation of the IMP for NSA, Widow
Allowance, Sickness Allowance, Partner Allowance and Mature Age
Allowance.
The changes to the SSA in this Part for PP Partnered mirror the
changes to the YA and NSA rate calculators see above
(Schedule 18 Part 1). Item 1 changes the upper
income level taper rate from 70 per cent down to 60 per cent.
Item 3 changes the range of income reduced at the
rate of 50 cents in the dollar.
Item 16 and 31 inserts provisions to include
redundancy payments in the calculation of the IMP for PP (both PP
Partnered and PP Single).
Item 2 inserts provisions to add 10 percent of
the debt amount where the debt arose from the recipient knowingly
provided incorrect earnings income information.
This Schedule makes consequential changes to the Social
Security (Administration) Act 1999 (SAA).
Item 3 places references to the proposed
RapidConnect claim processes for NSA and YA presented in this Bill
in to the SSAA.
Items 12 and 14 insert
suspension provisions into the SSAA to allow the suspension of DSP
(not cancellation) for up to 2 years where a DSP recipient obtains
paid employment and the income precludes payment.
Item 24 and 34 updates the provisions in the
SSAA stipulating that an income support payment recipient can be
asked to attend an interview and failure to attend could result in
a penalty.
Item 43 inserts provisions in the SSAA to allow
for the exchange of information between Commonwealth departments
and service providers, mainly Job Network providers.
Items 1 to 5 amend the Disability Services
Act 1986 (DSA) to amend the criteria under which
rehabilitation can be provided.
This Bill is probably the most substantive piece of welfare
legislation this Government has presented to the Parliament since
it came to office in March 1996. The Bill also presents the most
substantive package of welfare reform this Government has presented
to date.
The DSP reform involves reducing the incapacity for work
requirements from 30 hours a week down to 15 hours a week. This
policy has been presented in legislation on previous occasions but
was not passed by the Parliament. The Parenting Payment reforms
flow on from the Australians Working Together package in the
2001-02 Budget. These changes would achieve a close to full
application of the mutual obligation principle to all working age
income support payments. This is the culmination of a process that
began in the early 1990 s with the advent of reciprocal obligation
under Labor.
The feature of the Bill that has drawn the widest criticism is
the shifting of substantial numbers of sole parents and people with
disabilities from payments at the pension rate to payments paid at
the lower allowance rate. The contribution this change will make to
their ability to move into employment is yet to be seen. For those
who seek to use study as a route to independence, the reduction in
the level of income support provided is particularly marked.
Austudy Payment without entitlement to rent assistance compares
pretty unfavourably to DSP or PPS with the addition of PES.
There are measures in the Bill that partially cushion those
making this transition. Access to pensioner concessions, telephone
allowance and pharmaceutical allowance is retained and the
allowance income test is eased. However, even with these measures
the drop in income is likely to be substantial. The amendments to
the allowance income test taper rates will see the benefit of lower
EMTR.
There are new provisions setting out in detail, the requirements
for recipients of income support payments. These requirements
include activity test requirements, like look for work, attend a
training program, undertake a program of work etc. Likewise there
are new provisions setting out what the sanctions may be where a
jobseeker fails to meet these requirements, especially non-payment
periods. However, there are also proposed deletions of existing
provisions in the SSA that set out jobseekers rights in terms of
reasonable compliance, which will be replaced by guidelines to be
set out by the Secretary. Some of these guidelines are to be set
out in a Legislative Instrument so there will be some opportunity
for scrutiny by the Parliament. Some of the Secretary s guidelines
will be empowered by the SSA and not subject to any Parliamentary
scrutiny.
While there in this Bill a high level of prescription about
activity test participation requirements, a different approach has
been taken to the Secretary s powers to waive a sanction or take
into account the reasonable excuse of a jobseeker who does not
comply with the participation requirements. The Parliament may want
to consider that the Secretary s power to exercise appropriate
discretion in cases should remain in legislation, rather than being
contained in guidelines. These guidelines the Parliament may or may
not have the opportunity to examine.
The emphasis on jobseekers claiming NSA or YA to register with a
Job Network provider before the claim for assistance can be
progressed (under RapidConnect) is new and has the potential to be
confusing for claimants, unless it is handled and delivered well.
This change in emphasis is probably also another outcome associated
with income support policy for the working aged now being the
responsibility of DEWR.
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Welfare to Work increasing participation of people
with a disability, Commonwealth Government, Department of
Treasury, Canberra, 10 May 2005, pp. 135-136. http://www.budget.gov.au/2005-06/bp2/html/index.htm
- Peter Yeend, Family and Community Services Legislation
Amendment (Disability Reform) Bill 2002 , Bills Digest,
no. 157 2001-02, Parliamentary Library, Canberra, 28 may
2002. http://www.aph.gov.au/library/pubs/bd/2001-02/02bd157.pdf
- Peter Yeend, Family and Community Services Legislation
Amendment (Disability Reform) Bill (No. 2) 2002 , Bills Digest,
no. 3 2002-03, Parliamentary Library, Canberra, 8 August 2002.
http://www.aph.gov.au/library/pubs/bd/2002-03/03bd003.pdf
- Peter Yeend, Family and Community Services Legislation
Amendment.
(Disability Reform) Bill (No. 2) 2002 [No. 2] , Bills
Digest, no. 125 2002-03, Parliamentary Library,
Canberra, 19 March 2003. http://www.aph.gov.au/library/pubs/bd/2002-03/03bd125.pdf
- Occasional Paper Number 7, Income Support Customers: A
statistical overview 2001, Department of Family and Community
Services, Canberra, Australia, March 2003, p. 8.
- Department of Employment and Workplace Relations, Annual
Report 2004-05, p. 26.
- Peter Yeend, Family and Community Services Legislation
Amendment (Disability Reform) Bill 2002 , Bills Digest,
no. 157 2001-02, op. cit.
- Mr Patrick McClure, Chairperson Reference Group on Welfare
Reform, Participation Support for a More Equitable
Society, Canberra Australia 2000, pp. 44-45.
http://www.workplace.gov.au/workplace/Category/Publications/ProgrammeEvaluation/TheMcClureReport.htm
- ibid.
- Senate Employment, Workplace Relations and Education
Legislation Committee, 2005-2006 Budget Senate Estimates hearing 30
,31 May and 3 June 2005, Employment And Workplace Relations
Portfolio, answer to question on notice, Question no.
W156-06:
http://www.aph.gov.au/senate/committee/eet_ctte/estimates/bud_0506/dewr/w156_06.pdf
- Social Security Act 1991, section 94.
- Social Security Act 1991, op. cit., sub-section
94(4).
- Social Security Act 1991, op. cit., sub-section
94(3).
- Who is worse off? The regional distribution of people affected
by the Welfare to Work policy , Australian Council of Social
Service, Information Paper No 381, Sydney Australia,
October 2005.
http://www.acoss.org.au/Publications.aspx?displayID=1&subjectID=21
- Explanatory Memorandum, pp. 17 18.
- Social Security Act 1991, op. cit., sub-section
94(5).
- Australian Council of Social Service, Who is worse off? The
regional distribution of people affected by the Welfare to Work
policy , media release, 26 October 2005, Sydney Australia.
http://www.acoss.org.au/upload/publications/papers/353__info%20381%20worse%20off.pdf
- Senate Employment, Workplace Relations and Education
Legislation Committee, 2005-2006 Budget Senate Estimates hearing 30
,31 May and 3 June 2005, Employment And Workplace Relations
Portfolio, answer to question on notice, Question no.
W024-06:
Out of the 70,000 grants a year for Disability Support Pension,
how many fall between the 15-29 work capacity cohort?
Answer:
Approximately 14,200 of the 73,500 people granted DSP between
20/9/03 and 20/9/04 have an assessed work capacity of 15 to 29
hours per week
- Senate Employment, Workplace Relations and Education
Legislation Committee, 2005-2006 Budget Senate Estimates hearing 30
,31 May and 3 June 2005, Employment And Workplace Relations
Portfolio, answer to question on notice, no. W016-06.
http://www.aph.gov.au/Senate/committee/eet_ctte/estimates/bud_0506/dewr/w016_06.pdf
- Department of Treasury, Budget Related Paper No. 1.14,
Department of Social Security Portfolio Budget Statements, 1997-98
Welfare to Work increase in the Mobility allowance for certain
recipients, Department of Treasury, Canberra, 10 May 2005, p.
143. http://www.budget.gov.au/2005-06/bp2/html/index.htm
Department of Treasury, Budget Paper No. 2 Budget Measures 2005-06,
Welfare to Work increasing participation of people with a
disability , op. cit., p. 150.
- Susan Downing, Social Security and Veterans' Affairs
Legislation Amendment (Budget and Other Measures) Bill 1997 ,
Bills Digest no. 178 1997-98, Parliamentary Library
Canberra, 2 March 1998. http://www.aph.gov.au/library/pubs/bd/1997-98/98bd138.htm
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Welfare to Work increasing participation of people
with a disability , op. cit., p. 150.
- Secretary's determination-seasonal work
16A.(2) The
Secretary may determine in writing that a specified kind of
work that is intermittent is
seasonal work for the purposes of
this Act. The determination is a
disallowable instrument for the purposes of section 46A of the
Acts Interpretation Act 1901.
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Welfare to Work increasing participation of people
with a disability , op. cit., p. 150.
- Of working age persons aged 16 and up to age pension age (males
65, females 62 ).
- Final Report of the Reference Group on Welfare Reform (McClure
Report), Participation Support for a More Equitable
Society, Canberra, Australia, July 2000.
- McClure Report, op. cit., p.43.
- McClure Report, op. cit., p.42.
- D Daniels and N Hancock, Family and Community Services
Legislation Amendment (Australians Working Together and other 2001
Budget Measures) Bill 2002, Bills Digest no. 159 2001-02,
Parliamentary Library, Canberra, Australia, 3 June 2002. http://www.aph.gov.au/library/pubs/bd/2001-02/02bd159.pdf
- Department of Employment and Workplace Relations,
Australians Working Together Report, October 2005. Full
text available at:
http://www.workplace.gov.au/workplace/Category/Publications/ProgrammeEvaluation/AustraliansWorkingTogether-ReportOctober2005.htm
- Hon. K. Andrews MP, Welfare to Work - $389.7 Million to Help
Parents into Work , Media Release, 10 May 2005.
http://mediacentre.dewr.gov.au/mediacentre/MinisterAndrews/Releases/WelfareToWork-3897MillionToHelpParentsIntoWork.htm
- Hon. K. Andrews MP, Welfare to Work Increasing participation of
parents: Fact Sheet , Media Release, 10 May 2005. For full
text see:
http://www.dewr.gov.au/NR/rdonlyres/74A7D25E-3E70-4E28-8F7D-C82D048607E2/0/FactSheetWTWIncreasingparticipationparents.pdf
- Free area the amount of income that can be received without any
impact on the payment rate.
- Senator the Hon. K. Patterson, Carer Payment extension to also
assist parents otherwise affected by Welfare to Work reforms ,
Media Release 12 September 2005. Full text at:
http://www.dewr.gov.au/NR/rdonlyres/74A7D25E-3E70-4E28-8F7D-C82D048607E2/0/FactSheetWTWIncreasingparticipationparents.pdf
- Hon. K. Andrews MP and Hon. P Dutton MP, Providing Parents With
The Support And Assistance They Need To Work , Media
Release, 8 November 2005. Full text at:
http://mediacentre.dewr.gov.au/mediacentre/AllReleases/2005/November/ProvidingParentsWithTheSupportAndAssistanceTheyNeedToWork.htm
- Hon. K. Andrews MP and Hon. P Dutton MP, Parents With
Exemptions To Receive Special Income Supplement , Media
Release, 8 November 2005. Full text at:
http://mediacentre.dewr.gov.au/mediacentre/AllReleases/2005/November/ParentsWithExemptionsToReceiveSpecialIncomeSupplement.htm
- Hon. K. Andrews MP and Hon. P Dutton MP, Suitable Jobs Test For
Parents , Media Release, 8 November 2005. Full text at:
http://mediacentre.dewr.gov.au/mediacentre/AllReleases/2005/November/SuitableJobsTestForParents.htm
- Inquiry into Employment and Workplace Relations Legislation
Amendment (Welfare to Work and other Measures) Bill 2005 and Family
and Community Services Legislation Amendment (Welfare to Work) Bill
2005, Inquiry Report, Parliament House Canberra,
Australia, 28 November 2005.
http://www.aph.gov.au/senate/committee/clac_ctte/welfare_to_work/report/index.htm
- For submissions see:
http://www.aph.gov.au/senate/committee/clac_ctte/welfare_to_work/index.htm
- Senate Standing on Community Affairs Legislation Committee,
Inquiry into Employment and Workplace Relations Legislation
Amendment (Welfare to Work and other Measures) Bill 2005 and Family
and Community Services Legislation Amendment (Welfare to Work) Bill
2005, Report , 29 November 2005.
http://www.aph.gov.au/Senate/committee/clac_ctte/welfare_to_work/index.htm
- Hon. K. Andrews MP, Welfare to Work - $389.7 Million to Help
Parents into Work , Media Release, 10 May 2005, op.
cit.
- Senate Employment, Workplace Relations and Education
Legislation Committee, 2005-2006 Budget Senate Estimates Hearings,
30,31 May and 3 June 2005: Employment and Workplace Relations
Portfolio, Answer to a question on Notice, No. W157-06.
http://www.aph.gov.au/Senate/committee/eet_ctte/estimates/bud_0506/dewr/w157_06.pdf
- Department of Employment and Workplace Relations, Increasing
Participation Though Welfare to Work Reform , submission no. 47 to
the Senate inquiry into the Employment and Workplace Relations
Legislation Amendment (Welfare to Work and other Measures) Bill
2005 and the Family and Community Services Legislation Amendment
(Welfare to Work) Bill 2005. p. 18-21. Full text at:
http://www.aph.gov.au/senate/committee/clac_ctte/welfare_to_work/submissions/sub47.pdf
- Explanatory Memorandum, p. 41.
- Department of Employment and Workplace Relations, Increasing
Participation Though Welfare to Work Reform , submission no. 47 to
the Senate inquiry into the Employment and Workplace Relations
Legislation Amendment (Welfare to Work and other Measures) Bill
2005 and the Family and Community Services Legislation Amendment
(Welfare to Work) Bill 2005. op. cit. p.17.
- Explanatory memorandum, p. 83.
- Department of Treasury, Budget Related Paper No. 1.14,
Department of Social Security Portfolio Budget Statements, 1997-98
Welfare to Work increase participation of parents,
Department of Treasury, Canberra, 10 May 2005, p. 137. http://www.budget.gov.au/2005-06/bp2/html/index.htm
- For example see National Council of Single Mothers and their
Children Inc, submission no. 47 to the Senate inquiry into the
Employment and Workplace Relations Legislation Amendment (Welfare
to Work and other Measures) Bill 2005 and the Family and Community
Services Legislation Amendment (Welfare to Work) Bill 2005.
p.5. Full text at:
http://www.aph.gov.au/senate/committee/clac_ctte/welfare_to_work/submissions/sub19.pdf
- Response to the Government s Welfare to Work proposals July
2005 , ACOSS Info 378 August 2005. Full text at :
http://www.acoss.org.au/upload/publications/papers/292__info%20378_welfare%20reform%20joint.pdf
- National Council of Single Mothers and their Children
Inc , submission no. 47 to the Senate inquiry into the
Employment and Workplace Relations Legislation Amendment (Welfare
to Work and other Measures) Bill 2005 and the Family and Community
Services Legislation Amendment (Welfare to Work) Bill 2005. p.1.
Full text at:
http://www.aph.gov.au/senate/committee/clac_ctte/welfare_to_work/submissions/sub19.pdf
- Kevin Andrews, Second reading speech: Employment and Workplace
Relations Legislation Amendment (Welfare to Work and Other
Measures) Bill 2005 , House of Representatives, Debates, 9
November 2005, p. 2. http://www.aph.gov.au/hansard/reps/dailys/dr091105.pdf
- Senate Employment, Workplace Relations and Education
Legislation Committee, 2005-2006 Budget Senate Estimates Hearings,
30,31 May and 3 June 2005: Employment and Workplace Relations
Portfolio. Answer to a question on notice, No. W137-06,
http://www.aph.gov.au/Senate/committee/eet_ctte/estimates/bud_0506/dewr/w137_06.pdf
- Ann Harding , The Distributional Impact of the Proposed
Welfare-to-Work Reforms upon Sole Parents and People with
Disabilities , NATSEM Online Discussion Paper -
CP0514, September 2005. p.iii. Full text at:
http://www.natsem.canberra.edu.au/publications/papers/cps/cp05/cp2005_014/cp2005_014.pdf
- Ann Harding, Quoc Ngu Vu and Richard Percival
, Options for Reducing the Adverse Impact of the
Proposed Welfare-to- Work Reforms upon People with Disabilities and
Sole Parents , NATSEM Online
Conference Paper - CP0519, November 2005. Full text at:
http://www.natsem.canberra.edu.au/publications/papers/cps/cp05/cp2005_019/cp2005_019.pdf
- Who is worse off? The regional distribution of people affected
by the Welfare to Work policy , ACOSS Info 381 - October
2005, p.4. Full text at
http://www.acoss.org.au/upload/publications/papers/353__info%20381%20worse%20off.pdf
- Free area the amount of income that can be received without any
impact on the payment rate.
- Taper rate - the pension income test taper rate above the
threshold is 40% - the allowance income test taper rate is 70% (to
be lowered to 60% under proposed amendments in this Bill).
- Chris Field, Social Security Legislation Amendment (Work for
the Dole) Bill 1997, Bills Digest no. 136 1996-97,
Parliamentary Library, Canberra, 7 May 1997. http://www.aph.gov.au/library/pubs/bd/1996-97/97bd136.htm
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Employment Service Purchasing Arrangements,
Commonwealth Government, Department of Treasury, Canberra, 10 May
2005, p. 146. http://www.budget.gov.au/2005-06/bp2/html/index.htm
- The Hon. Mr Peter Dutton, MP, Minister for Workforce
Participation, Connecting Job Seekers With Services
Quicker, media release, Canberra, Australia, 10 May 2005.
http://mediacentre.dewr.gov.au/mediacentre/MinisterDutton/Releases/ConnectingJobSeekersWithServicesQuicker.htm
- Explanatory Memorandum, p. 45.
- ibid.
- The Auditor General, Australian National Audit Office,
Implementation of Job Network Employment Services Contract
3, Performance Audit No. 6 2005-06, Canberra Australia, 18
August 2005.
http://www.anao.gov.au/WebSite.nsf/Publications/C5B2E0B97B9232F4CA25705F0073A243
- The Auditor General, Australian National Audit Office,
Implementation of Job Network Employment Services Contract
3, op. cit. Chapter 4.
- The Auditor General, Australian National Audit Office,
Implementation of Job Network Employment Services Contract
3, op. cit. Chapter 5.
- ibid.
- 601(1) Subject to
subsections (1A) and
(3), a person satisfies the
activity test in respect of a period if the person satisfies
the Secretary that, throughout the period, the person is:
(a) actively seeking; and
(b) willing to undertake;
paid work in
Australia, other than paid work that is unsuitable to be
undertaken by the person.
- Dale Daniels and Nathan Hancock, Family and Community Services
Legislation Amendment (Australians Working Together and other 2001
Budget Measures) Bill 2002, Bills Digest, no. 159
2001-02, Parliamentary Library, Canberra, Australia, 3 June
2002.
- Section 601(1) of the SSA, op. cit.
- Activity test - General
- Unsuitable paid work - What is unsuitable
paid work
541D.(1) Subject to
subsections (1A) and
(1B), for the purposes of section
541, particular paid work is unsuitable for a person if, and
only if, in the Secretary's opinion:
(a) the person lacks the particular skills, experience or
qualifications that are needed to perform the work and no training
will be provided by the employer; or
(b) it has been established that there is medical evidence that
the person has an illness, disability or injury that would be
aggravated by the conditions in which the work would be performed;
or
(c) performing the work in the conditions in which the work
would be performed would constitute a risk to health or safety and
would contravene a law of the Commonwealth, a State or a Territory
relating to occupational health and safety; or
(d) the work would involve the person being self-employed;
or
(e) the work would be covered by an industrial award but the
employer would only employ the person if the person agreed to
become a party to an agreement reducing or abolishing rights that
the award confers on employees; or
(f) the work would not be covered by an industrial award and the
remuneration for the work would be lower than the minimum
applicable rate of remuneration for comparable work that is covered
by an industrial award; or
(g) commuting between the person's home and the place of work
would be unreasonably difficult; or
(ga) the place of work is not accessible by
public transport services and the person does not have access
to alternative transport facilities and could not reasonably be
expected to travel to the place of work; or
(h) the work would require enlistment in the Defence Force or
the Reserves; or
(ha) the work requires the person to move from a home in one
place to a home in another place; or
(i) for any other reason, the work is unsuitable for the
person
- Workplace Relations Amendment (Work Choices) Bill 2005.
http://parlinfoweb.parl.net/parlinfo/browse.aspx?NodeID=147
- Law and Bills Digest and Social Policy Sections, Workplace
Relations Amendment (Work Choices) Bill, Bills Digest,
Parliamentary Library, Canberra, Australia, 2 December 2005.
http://www.aph.gov.au/library/pubs/bd/2005-06/06bd066.pdf
- 541D.(3)
Subsection (2) does not limit the Secretary's discretion to
form the opinion that, for the purposes of
paragraph (1)(g), commuting is not unreasonably difficult.
- Explanatory Memorandum, p. 52.
- SSA sections 542A to 542C.
- SSE section 542B(1).
- Bob Bennet, Legislative Instruments Bill 1996, Bills
Digest, Parliamentary Library, Canberra, Australia, 14 October
1996. http://www.aph.gov.au/library/pubs/bd/1996-97/97bd038.htm
- Distance educators
A person is a distance educator of a
child if the Secretary is satisfied that:
(a) the child is enrolled to receive education by undertaking a
distance education curriculum; and
(b) the child is undertaking that curriculum; and
(c) the person is suitably involved in assisting and supervising
the child in relation to that curriculum.
- Section 544B(1) of the SSA.
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Working age payments extension of waiting
periods, op. cit. p. 150. http://www.budget.gov.au/2005-06/bp2/html/index.htm
- ibid.
- The Hon. Mr Peter Dutton, MP, Minister for Employment Services,
Welfare To Work $554.6 Million To Help People With Disabilities
Into Work , Media Release, Canberra, Australia, 10 May
2005.
http://mediacentre.dewr.gov.au/mediacentre/MinisterDutton/Releases/WelfareToWork5546MillionToHelpPeopleWithDisabilitiesIntoWork.htm
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Welfare to Work increasing participation of people
with a disability, op. cit. p. 143.
- ibid.
- Chris Field, Social Security (Budget and White Paper) Amendment
Bill 1994, Bills Digest no. 146 1994,
Parliamentary Library, Canberra, Australia, 31 August 1994.
http://parlinfoweb.parl.net/parlinfo/view_document.aspx?ID=3384&TABLE=BILLSDGS
- Australian Council of Social Service, Work & Study in
Government s Welfare package, media release, Sydney,
Australia, 27 June 2005. http://www.acoss.org.au/News.aspx?displayID=99&articleID=55
- Senate Employment, Workplace Relations and Education
Legislation Committee, 2005-2006 Budget Senate Estimates hearing 30
,31 May and 3 June 2005, Employment And Workplace Relations
Portfolio, answer to question on notice, Question no.
W156-06, op. cit.
- The Hon. P Keating, Working nation: Policies and
Programs, 4 May 1994, pp. 152-55.
- Taper rate - the pension income test taper rate above the
threshold is 40% - the allowance income test taper rate is 70% (to
be lowered to 60% under proposed amendments in this Bill).
- ibid.
- Ann Harding , The Distributional Impact of the Proposed
Welfare-to-Work Reforms upon Sole Parents and People with
Disabilities , NATSEM Online Discussion Paper -
CP0514, op. cit.
- Of working age persons aged 16 and up to age pension age (males
65, females 62 ).
- Department of Treasury, Budget Paper No. 2 Budget Measures
2005-06, Welfare to Work an improved
compliance framework, Commonwealth Government, Department of
Treasury, Canberra, 10 May 2005, p. 140. http://www.budget.gov.au/2005-06/bp2/html/index.htm
- ibid.
- Report of the Independent Review of the Breaches and Penalties
in the Social Security System, Making it Work, Sydney,
Australia, March 2002, 78 83.
http://www.acoss.org.au/Publications.aspx?displayID=1&subjectID=21
T Eardley, J Brown, M Rawsthorne, K Norris, L Emrys, The
Impact of Breaching on Income Support Customers, Social Policy
Research Centre, University of New South Wales, Sydney , Australia,
October 2005, pp. 87 - 90. http://www.sprc.unsw.edu.au/reports/index.htm
- T Eardley, J Brown, M Rawsthorne, K Norris, L Emrys, The
Impact of Breaching on Income Support Customers, op. cit. pp.
58 60.
- ibid.
- T Eardley, J Brown, M Rawsthorne, K Norris, L Emrys, The
Impact of Breaching on Income Support Customers, op. cit.
Table 1, p. 4.
- Chris Field, Social Security Legislation Amendment (Activity
Test Penalty Periods) Bill 1997, Bills Digest 150 1996-97,
Parliamentary Library, Canberra, Australia, 12 June 1997. http://www.aph.gov.au/library/pubs/bd/1996-97/97bd150.htm
- T Eardley, J Brown, M Rawsthorne, K Norris, L Emrys, The
Impact of Breaching on Income Support Customers, op. cit.,
Table 4, p. 14.
- SECT 20 - Provision of rehabilitation programs
- ibid
Dale
Daniels and Peter
Yeend
6 December 2005
Bills Digest Service
Information and Research Services
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