Bills Digest no. 67 2007–08
Social Security and Veterans' Affairs Legislation
Amendment (Enhanced Allowances) Bill 2008
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
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Social Security and Veterans' Affairs
Legislation Amendment (Enhanced Allowances) Bill
House: House of Representatives
Portfolio: Families, Housing, Community Services
and Indigenous Affairs
On Royal Assent, with the
Schedules commencing on the earlier date of either 20 March
2008 or Royal Assent.
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
The Bill extends eligibility for,
changes the timing of, and increases the rates of, payment of
Utilities Allowance. It increases the rates of, and changes the
timing of, payments of Seniors Concession Allowance. It also
introduces a higher rate of Telephone Allowance for certain
recipients with an internet connection.
The measures in this bill were first proposed during the 2007
election campaign. Those concerning the Utilities Allowance and the
Seniors Concession Allowance were first proposed by the Coalition
on 23 October 2007 and later adopted by the ALP and extended to
veterans. The Telephone Allowance measure was also added by the
This payment originated from an election commitment by the
Coalition in the 2004 election. It was first paid in December
2004. At that time
Utilities Allowance was $100 for a single person and $50 for each
member of a couple, and was paid annually to age pensioners and age
service pensioners. The allowance was paid in two instalments in
March and September of each year and was indexed to the CPI. It was
intended to help pensioners with the cost of utilities such as
electricity and gas.
In June 2006 an additional one-off payment of Utilities
Allowance of $102.80 for a single person or $51.40 for a partnered
person, was paid to people of age pension age in receipt of income
support and recipients of Mature Age Allowance, Widow Allowance and
From July 2006 Eligibility for Utilities Allowance was extended
to recipients of Mature Age Allowance, Widow Allowance and Partner
people were all over 50 years of age with little recent work force
attachment. The payments they are receiving are either closed to
new applicants or are being phased out.
Again in June 2007 an additional one-off payment was made to
recipients of Utilities Allowance. This time the rate was $500 for
each person who qualified.
This Bill will:
- increase the annual rate of the allowance to $500 for a single
person and $250 for each member of a couple,
- extend eligibility to people under age pension age who are
recipients of Disability Support Pension, Carer payment, Wife
Pension, Widow B Pension, Bereavement Allowance, Service Pension
and Income Support Supplement, and
- provide for quarterly payments rather than biannual
The rationale for the changes is set out in
Minister Macklin s second reading speech:
understands the cost of living pressures faced by many in our
community. Increases in the cost of living and staple items like
food and housing mean those on fixed incomes and those caring for
the most vulnerable in our society need our support. That is why
the government is acting to help with these pressures.
The reference to fixed incomes perhaps gives a
clue as to why other income support recipients such as sole parents
and the unemployed have not been included in the eligibility
expansion. The groups targeted are those with the lowest rates of
The Seniors Concession Allowance originated from an election
promise made by the Coalition during the 2004 election
December 2004 it was payable to self-funded retirees who were
holders of the Commonwealth Seniors Health Card (CSHC) to
compensate for them being ineligible for the same range of State
and Territory concessions as social security pensioners. The
allowance was paid in two instalments in December and June of each
In June 2006 an additional one-off payment of $102.80 was paid
to those eligible for the Seniors Concession Allowance.
In June 2007 a further one off payment of $500 was paid to those
eligible for the Seniors Concession Allowance.
This Bill will increase the annual rate of the allowance from
$218 to $500 and provide for it to be paid in quarterly instalments
rather than biannually.
The Seniors Concession Allowance is paid to self-funded retirees
who are ineligible for the age pension because of the level of
their income or their assets. Eligibility ceases when their incomes
exceed $50 000 per annum if single and $80 000 per annum if a
couple. Given this income profile, the introduction of the
allowance and this increase in the rate raise issues of the
appropriate targeting of assistance to retirees. The age pension is
squarely aimed at poverty alleviation, but falls short in that
regard for those pensioners without homes of their own and without
much private income. The equity of offering payments like the
Seniors Concession Allowance to a comparatively well off group
while not addressing the need of the poorest pensioners more
adequately can be questioned.
Assistance for pensioners with the costs of telephones was
introduced in 1964 to help often frail aged people afford a vital
means of staying in touch with family and friends and seeking
assistance in time of emergency.
From July 1992 Telephone Allowance was introduced to replace the
telephone voucher scheme. Quarterly payments totalling $51.80 per annum were paid
to pensioners who qualified for fringe benefits and were telephone
subscribers. The allowance is indexed annually to movements in the
CPI. It is paid quarterly.
This Bill will introduce a higher annual rate of payment of $132
(rather than the usual rate which is currently $88) for recipients
who have an internet connection at home. This rate will not be
available for all Telephone Allowance recipients who are under age
pension age. Only recipients of Disability Support Pension, Carer
Payment and veterans in that age group will qualify. The rationale
for this position is given in Minister Macklin s second reading
understands that, in today s Australia, the internet is a critical
means for families to stay in touch with their loved ones. Some
Australians on income support pensions and payments can be at risk
of becoming isolated from the community, and that is why we are
helping them stay in touch with friends, children and grandchildren
around the country and the world via the internet. Affordable home
access to the internet has the potential to connect them with a new
world of communication, information and entertainment.
The higher internet rate is therefore targeted at those with the
highest potential for social isolation: those with disabilities and
carers. Other Telephone Allowance groups such as sole parents
receiving parenting payment or Newstart Allowance would be excluded
by this rationale. However it is less clear why people with a
partial capacity to work because of a disability who receive
Newstart or Youth Allowance are excluded. They are in many cases no
less disabled than many recipients of Disability Support Pension.
This is due to the fact that most Disability Support Pensioners
were assessed under the pre 2006 legislation and are saved from the
effects of the Welfare to Work reforms of 2006.
The changes to Utilities Allowance will cost $3.746 billion over
the four years from 2007-08. Those to Seniors Concession Allowance
and Telephone Allowance will cost $222 million and $126 million
over the same period respectively.
Item 1 amends the Social Security Act
1991 to extend eligibility for Utilities Allowance to
recipients of Disability Support Pension, Carer Payment, Wife
Pension, Widow B Pension and Bereavement Allowance.
Items 3 and 6 amend the Social Security Act
1991 to provide for quarterly payments.
Item 4 amends the Social Security Act
1991 to increase the annual rate of Utilities Allowance to
Items 7 and 13 amend the
Veterans Entitlements Act 1986 to provide for quarterly
Items 8 to 10 amend the Veterans
Entitlements Act 1986 to extend eligibility to all Service
Pensioners and Income Support Supplement recipients regardless of
Item 12 amends the Veterans Entitlements
Act 1986 to increase the annual rate of Utilities Allowance to
Item 2 and 7 amend the Social Security Act
1991 to provide for quarterly payments of Seniors Concession
Item 3 amends the Social Security Act
1991 to increase the annual rate of Seniors Concession
Allowance to $500.
Items 10 and 15 amend the Veterans
Entitlements Act 1986 to provide for quarterly payments.
Item 14 amends the Veterans Entitlements
Act 1986 to increase the annual rate of Seniors Concession
Allowance to $500.
Item 4 replaces old section
223 with a new section and adds new section 223A
to the Military Rehabilitation and Compensation Act 2004.
They provide for the increased rate of Telephone Allowance for
certain people with home internet connections.
Item 23 adds new sections
1061SA and 1061SB to the Social
Security Act 1991. They provide for the increased rate of
Telephone Allowance for certain people with home internet
Item 34 adds new sections 118SA and
118SB to the Veterans Entitlements Act 1986. They
provide for the increased rate of Telephone Allowance for certain
people with home internet connections.
. The Coalition
policy document was called More Support for Pensioners, Self-funded
Retirees, People with Disabilities and Their Carers , 23 October
2007. Full text at:
PARTYPOL&Criteria=CITATION_ID:8ASO6%3B the ALP policy was
announced in Making Ends Meet - Federal Labor's Plan For Older
Australians, People With Disabilities And Carers , 1 November 2007.
Full text at: http://www.alp.org.au/media/1107/msagediscfcsloo010.php,
accessed on 20 February 2008.
21 February 2008
Bills Digest Service
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