CHAPTER 1
Introduction
Reference
1.1
On 25 September 2014 the Hon. Luke Hartsuyker, MP, introduced the Social Security Legislation Amendment (Strengthening the Job
Seeker Compliance Framework) Bill 2014 (bill) in the House of
Representatives.[1]
On 2 October 2014 the Senate referred the provisions of the bill to the Senate
Education and Employment Committee (committee) for inquiry and report by 24
November 2014.[2]
Conduct of the inquiry
1.2
Details of the inquiry were made available on the committee's website.[3]
The committee also contacted a number of organisations inviting submissions to
the inquiry. Submissions were received from 12 individuals and organisations,
as detailed in Appendix 1.
1.3
A public hearing was held in Canberra on 18 November 2014. The witness
list for the hearing is at Appendix 2.
Background
1.4
Australia's social security system requires individuals to comply with
participation requirements in order to receive government-provided income
support.[4]
1.5
Job seekers must be actively seeking and willing to undertake suitable
paid work and must attend scheduled appointments with an employment services
provider in order to receive a participant payment.[5]
Appointments with employment service providers are known as connection and
reconnection appointments.[6]
Participant payments are Newstart Allowance, and in some instances, Youth Allowance,
parent payments and special benefits.[7]
1.6
To give effect to measures announced in their 2010 election commitment,
the former Labor Government introduced tougher rules for job seekers,[8]
with the aim of improving attendance rates at appointments with employment
service providers.[9]
Specifically, the Social Security Legislation Amendment (Job Seeker Compliance)
Bill 2011 that was assented to on 27 June 2011[10]
tightened the compliance rules for connection and reconnection appointments.[11]
As such, currently:
-
where a job seeker fails to attend a connection or reconnection
appointment the Department of Social Security Secretary (Secretary) may suspend
their payment;[12]
and
-
where the Secretary suspends a job seeker's payment, as soon as a
job seeker indicates their intention to attend a re-scheduled appointment,
their payment is reinstated.[13]
1.7
These measures, however, have only made a modest improvement on the
attendance rate of job seekers and the larger problem still remains.
35 per cent of all scheduled appointments are missed each
year and more than one in five of all job seekers who receive a payment in any
year have at least one participation failure applied for missing an appointment
with their provider.[14]
1.8
In the 2014–15 federal Budget, a series of welfare reforms were outlined
by the government to increase every Australian's ability to contribute to the
economy and improve the long-term sustainability of the welfare system.[15]
To implement this commitment the government has already introduced a number of
bills into Parliament aimed at facilitating these reforms, including the Social
Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill
2014, the Social Services and Other Legislation Amendment (2014 Budget Measures
No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014
Budget Measures No. 2) Bill 2014.
Purpose of the bill
1.9
The bill seeks to ensure that more job seekers meet their mutual
obligation requirement to attend appointments with their employment services
provider[16]
and transition from welfare to employment.[17]
The bill will markedly improve attendance rates at employment
provider appointments and reduce the costs and impact for employment providers,
whilst also maintaining taxpayer confidence in our social security system.[18]
1.10
The bill would give effect to the government's commitment to ensure the
integrity of Australia's income support system by strengthening the job seeker
compliance framework by providing appropriate incentives and sanctions for job
seekers.[19]
The bill also seeks to ensure that mature aged job seekers are participating in
the workforce.[20]
Key provisions of the bill
1.11
Schedule 1, Part 1 of the bill provides that where a job seeker's
payment is suspended following a failure to attend an appointment it would not
be restored until the job seeker actually attends their next appointment. On
attendance, the job seeker would receive full back pay.[21]
1.12
Schedule 1, Part 1 of the bill also provides for the removal of appeal
rights in relation to compliance suspension decisions.[22]
1.13
Schedule 1, Part 2 of the bill provides that where a job seeker does not
have a reasonable excuse for failing to attend their appointment, the job
seeker would not be back paid for their period of non-compliance.[23]
1.14
Schedule 1, Part 2 of the bill also seeks to enable the Department of
Social Security Secretary (Secretary) to specify through a legislative
instrument a class of persons who are not to be exempt from activity test and
participation requirements as a result of their participation in approved
voluntary or paid work.[24]
It is intended that this provision would affect a cohort of job seekers aged
55–59 and receiving Job Services Australia assistance.[25]
1.15
Schedule 2 of the bill would extend the Secretary's powers of delegation,
such that, where instruments and regulations made under the Social Security law[26]
contain powers of the Secretary, those powers can be exercised by delegated
officers.[27]
Human rights implications
1.16
The provisions in the bill engage a number of human rights, including
the right to social security, the right to an adequate standard of living, the
right to equality before the law and non-discrimination, and the right to work.[28]
The bill's explanatory memorandum states that the proposed legislation is compatible
with human rights.[29]
1.17
The Parliamentary Joint Committee on Human Rights deferred its
consideration of the bill.[30]
Financial Impact Statement
1.18
The explanatory memorandum submits that the bill would have budgetary
implications resulting in an expense of $14.1 million in the year 2014–15, and
savings of $161.1 million in the years 2015–18.[31]
Acknowledgment
1.19
The committee thanks those individuals and organisations who contributed
to this inquiry by preparing written submissions and giving evidence at the hearing.
Notes on references
1.20
References in this report to the Hansard for the public hearing
are to the Proof Hansard. Please note that page numbers may vary between
the proof and official transcripts.
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