Bills Digest no. 39 2015–16
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Matthew Thomas
Social Policy Section
5 November 2015
Purpose
of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Date introduced: 10
September 2015
House: House of
Representatives
Portfolio: Employment
Commencement: Sections
1–3 on Royal Assent; all other provisions on 1 July 2016.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The purpose of the Social Security Legislation Amendment
(Further Strengthening Job Seeker Compliance) Bill 2015 (the Bill) is to amend
the Social Security (Administration) Act 1999 (the SSA Act)[1]
to, from 1 July 2016:
- remove
the possibility of waiver of the eight week non-payment period imposed on job
seekers who refuse a suitable job offer
- provide
for job seekers who fail, without a reasonable excuse, to enter into an Employment
Pathway Plan, to have their payment suspended immediately, the suspension to
continue until they enter into a plan, with no back-payment for the period in
which they failed to comply
- provide
for job seekers who fail, without a reasonable excuse, to attend all required
appointments—not just those with their employment services providers—to have
their payment suspended immediately, the suspension to continue until they
attend a re-scheduled appointment, with no back-payment for the period in which
they fail to attend the appointment
- provide
for job seekers who act in an inappropriate manner, such that the purpose of
required appointments is not met, to have their payment suspended immediately, the
suspension to continue until they attend a re-scheduled appointment and behave
in a manner deemed to be appropriate, with no back-payment for the period in
which they fail to attend the appointment and behave appropriately and
- provide
for job seekers who fail, without a reasonable excuse, to undertake adequate
job search efforts (to be specified in a legislative instrument) to have their
payment suspended immediately, the suspension continuing until they meet their
job search requirements. In this case, when the payment suspension is ended,
job seekers will receive full back pay.
The Bill gives effect to job seeker compliance measures
that were announced as part of the 2015–16 Budget.[2]
Introduction of no show no pay
penalties for missed appointments
It also seeks to extend some of the changes that were inserted
into the SSA Act by the Social Security Legislation Amendment
(Strengthening the Job Seeker Compliance Framework) Act 2014 (2014 Act).[3]
Under amendments in the 2014 Act, from 1 January
2015, job seekers who miss an appointment with their employment services
provider, without a reasonable excuse, have their payment suspended immediately
and reinstated only when they attend a rescheduled appointment.[4]
Further, from 1 July 2015, job seekers who miss an appointment with their
employment services provider do not receive back pay for the period in which
they failed to attend the appointment.[5]
This form of sanction is referred to as a no show no pay penalty
under current job seeker compliance arrangements.
Under previous arrangements, a job seeker in this
situation would have committed a connection failure, for which a penalty did
not apply so long as the job seeker agreed to attend a rescheduled appointment.
That is, the job seeker would have been back-paid from the date on which they
agreed to attend the further appointment.
The introduction of no show no pay penalties for job
seeker non-attendance at appointments with employment service providers would
appear to have achieved the Government’s objectives. The Government claims that
it has increased the number of job seekers attending appointments with employment
service providers and reduced the average duration of income support
suspensions for non-compliance.[6]
If this is indeed the case then it will undoubtedly have helped to reduce the
administrative burden on providers associated with job seeker non-attendance.
Broadening of no show no pay
penalties
Accordingly, the Government is seeking to apply no
show no pay penalties more broadly, to job seekers who: fail to enter
into an Employment Pathway Plan; miss other required appointments; fail to
undertake adequate job search efforts; and, fail to act in an appropriate
manner at appointments such that the purpose of the appointment is not
achieved. In effect, the Government seeks to do away with connection, reconnection
and non-attendance failures altogether in favour of no show no pay failures.[7]
Waiver of non-payment penalties
The Bill also removes the possibility for job seekers who
commit a serious failure by refusing or failing to accept an offer of suitable
employment to have their eight week non-payment penalty waived. In doing so, it
seeks to realise the main objective of the Social Security Legislation
Amendment (Stronger Penalties for Serious Failures) Bill 2014 (the first Bill)
which was introduced into the House of Representatives on 4 June 2014 in order
to give effect to job seeker compliance measures that were announced as part of
the 2014–15 Budget. The 2014 Bill failed to be passed by both houses of
Parliament.[8]
Senate Education and Employment
Legislation Committee
The Bill has been referred to the Senate Education and
Employment Legislation Committee (Education and Employment Committee) for
inquiry and report by 24 November 2015.[9]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills (Scrutiny
of Bills Committee) has considered the Bill and raised some concerns.[10]
The Scrutiny of Bills Committee noted that under proposed
subsections 42SA(5), (6) and (7) of the SSA Act (at item 34
of the Bill) the Secretary is able to determine by legislative instrument
matters that must be considered by the Secretary when deciding whether a job
seeker has acted in an inappropriate manner at an appointment. While proposed
subsection 42SA(5) empowers the Secretary to make a legislative instrument
to determine those matters that must be taken into account, it does not require
such an instrument to be made.
The Scrutiny of Bills Committee’s concern is that without
the matters to be considered having been included in the primary legislation,
or a requirement for the Secretary to make a legislative instrument that spells
these matters out, the Secretary ‘has a broadly framed power to determine what
constitutes inappropriate behaviour at an appointment’.[11]
That being the case, the Scrutiny of Bills Committee has sought the Minister’s
advice on this issue.
The Australian Labor Party (Labor) has indicated that it
supports some of the measures in the Bill, but not others.
Speaking in relation to the Bill, Shadow Minister for
Employment Services, Julie Collins stated that Labor will not support three of
its five measures.[12]
Accordingly, Labor has moved amendments to remove these from the Bill.[13]
The first of the measures Labor refuses to support is the measure that allows
for the suspension of a job seeker’s income support where they fail to enter
into an Employment Pathway Plan at their first appointment with their
employment service provider. The second is the measure that allows for job
seekers who act in an inappropriate manner at required appointments to have
their payment suspended and potentially to be penalised. The third is the
measure that removes the possibility for job seekers who refuse a suitable job
offer to have their penalty waived by complying with a serious failure
requirement or if it would cause serious financial hardship.
Labor’s position on the above measures is considered in further
detail in the Key issues and provisions section, below.
The position of Labor and the Australian Greens (the
Greens) in relation to the removal of waiver provisions for job seekers who
commit a serious failure by refusing or failing to accept an offer of suitable
employment is summarised in the Bills Digest for the first Bill.[14]
Further details of Labor’s and the Greens’ position with regard to this measure
are provided in their dissenting reports which are a part of the report by the
Senate Education and Employment Legislation Committee on the first Bill.[15]
Both Labor and the Greens were strongly opposed to the measure.
The independents do not appear to have publicly expressed
a position with regard to the Bill.
A number of submissions have been made to the Education
and Employment Committee inquiry.[16]
Generally speaking, there appears to be some broad support for simplification
of the job seeker compliance framework. This is typically on the basis that:
The existing job seeker compliance framework is complex, with
a range of different rules and consequences for, and even within, different
categories of non-compliance. Simplification is desirable because a compliance
framework that is more consistent and more readily understood is more likely to
result in job seeker compliance. That means fewer payment suspensions and less
financial harm, and greater engagement in services that support people into
work. To that end, penalties for different compliance failures should be
aligned as much as possible.[17]
However, the Australian Council of Social Service (ACOSS)
has recommended that before any major changes are made to the system, such as
those proposed in the Bill, an independent review of the compliance system
should be undertaken. Such a review would consider trends in compliance and
sanctions, reasons for non-compliance, whether the system strikes an
appropriate balance between providing incentives for compliance and ensuring
that a safety net is maintained, and, ways in which the system could be
simplified while maintaining such a balance.[18]
The submissions have also expressed concerns with specific
aspects of the Bill. Some of these are considered in the Key issues and
provisions section, below.
The positions of major interest groups on the measure that
removes the possibility for job seekers who refuse a suitable job offer to have
their eight week non-payment period waived were canvassed in the Education and
Employment Legislation Committee’s inquiry into the first Bill.[19]
A summary of the submissions to the inquiry is provided in the Bills Digest for
the first Bill.[20]
The Explanatory Memorandum estimates that
the measures contained in the Bill will cost $24.5 million over the forward
estimates period (2015–16 to 2018–19).[21]
The 2015–16 Budget Papers put the figure at $24.9 million.[22]
Typically, stronger compliance measures such
as those included in the Bill result in savings due to the reduced amount paid
out in income support payments. However, the anticipated savings of $6.9
million over the three years from 2016–17 to 2018–19 are more than offset by
the expected cost of $31.6 million over four years, with a net cost of around $24.9
million over four years.[23]
Australian Greens Senator, Rachel Siewert,
has criticised the measure on the basis of its cost (among other things)
arguing that ‘if the government is going to spend $3 to earn just $1 back, it
should be better invested on measures that genuinely help people to engage
with, find and maintain attachment to work’.[24]
Speaking about the Bill, then Assistant Employment Minister, Luke Hartsuyker,
defended the cost of the measure as follows:
I note there has been complaint from some
quarters about the funding provided by the Government for the changes in the
Bill. Let me put this into context. The Government is spending $6.8 billion
over four years to help job seekers into work through jobactive. The $24.5
million provided for the measures in this Bill is a very small but important
investment to maintain the overall integrity of the social security and
employment services systems.
It is very important to remember that
non-compliance by job seekers does come at a cost. It costs provider
organisations in terms of red tape and downtime, and it costs the job seeker in
terms of lost opportunity and benefits, and it costs the taxpayer in terms of
the overall welfare bill.
The Australian Government is committed to
ensuring the integrity of our income support system so that it is affordable
and sustainable over the long term.
In order to do this, we need a stronger and
more streamlined job seeker compliance framework that includes appropriate
incentives and sanctions for job seekers who fail to meet their mutual
obligation requirements.[25]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act.
The Parliamentary Joint Committee on Human Rights (Human
Rights Committee) has released its comments on the Bill and the Statement of Compatibility.[26]
The statement of compatibility acknowledges that the
measure that allows for the suspension of people’s benefits where they act
inappropriately during required appointments engages both the right to social
security and the right to an adequate standard of living. However, it defends
the limits placed on these rights by the measure on the grounds that the
measure ‘has the legitimate objective of discouraging job seekers from
deliberately resisting assistance provided to them to identify and find work’.[27]
The statement goes on to argue that the measure is proportionate ‘as
protections would be added to the compliance framework to ensure that a job
seeker’s behaviour can be assessed in a fair and reasonable manner’.[28]
That being the case, the Government considers that the Bill is compatible.[29]
The Human Rights Committee has taken issue with the
Government’s assessment. In the first instance, it has questioned whether the
measure that allows for the suspension of people’s benefits where they act inappropriately
during required appointments could be said to be pursuing a legitimate
objective, where no evidence has been provided to justify or support it:
A legitimate objective must address a substantial and
pressing concern and be based on empirical research or reasoning. No evidence
is provided as to the extent to which individuals on social security are
frustrating job search activities by inappropriate behaviour during
appointments.[30]
In the second instance, the Human Rights Committee has
observed that the Bill does not provide any guidance as to what constitutes
inappropriate behaviour, instead leaving such judgements to the providers of
employment and related services. (The Secretary may determine matters that must
be taken into account when deciding whether a job seeker has acted in an
inappropriate manner at an appointment by legislative instrument—further
details are provided below.) In the absence of statutory guidance, the Human
Rights Committee has argued that the Bill ‘may result in individuals losing
social security benefits in circumstances which are unfair or unreasonable’.[31]
The Human Rights Committee’s concern is that without the
matters to be considered having been included in the primary legislation, or a
requirement for the Secretary to make a legislative instrument that spells
these matters out, the Secretary ‘has a broadly framed power to determine what
constitutes inappropriate behaviour at an appointment’.[32]
As noted above, the Scrutiny of Bills Committee has expressed similar concerns,
and both Committees have sought the Minister’s advice on the matter. It is
worth observing that the Human Rights Committee might have further added that
the people who are most likely to be impacted upon by this measure are disadvantaged
job seekers, such as those with a mental illness.
The Human Rights Committee has also expressed concerns
about the measure that would remove the possibility for job seekers who refuse
a suitable job offer to have their eight week non-payment period waived. It has
argued that insufficient evidence has been provided to justify the statement of
compatibility’s claim that the measure has a legitimate objective. For example,
while the Explanatory Memorandum argues that the waiver provisions act as an
incentive for noncompliance, the Human Rights Committee points out that no
evidence has been provided to demonstrate that the waivers have not been
granted for genuine reasons. If the waivers are being applied appropriately by
the Department, then the Human Rights Committee has reflected that their
removal could result in undue hardship for some job seekers. The Human Rights Committee
made a similar assessment in its previous consideration of the measure.[33]
For a summary of that earlier assessment and further analysis of issues raised
by the measure, see the Bills Digest for the first Bill.[34]
In short, the Human Rights Committee concludes that the
statement of compatibility has not sufficiently justified the limits to the
right to social security and an adequate standard of living for the purposes of
international human rights law and sought the advice of the Minister on the
points raised.
Timing of no show no pay failure
deductions
Division 3A in Part 3 of the SSA Act contains the
compliance framework which applies to recipients of participation payments.
These are Newstart allowance, Youth Allowance for persons who are not
apprentices or full-time students, parenting payment for persons who have
participation requirements and special benefit for certain visa holders.[35]
Within Division 3A, subdivision B, subsection 42C(1) sets
out the conduct which will lead to a person committing a no show no pay
failure and subsection 42C(5) specifies the means by which the
Secretary must determine the instalment period in which a no show no pay penalty
is to be deducted, should the Secretary decide to make a determination.[36]
Currently, the SSA Act provides that the earliest time at which a no
show no pay penalty amount may be deducted is the income support instalment
following the income support instalment in which the person is notified of the no
show no pay failure.[37]
The practical effect of this is that there is a delay of at least 15 days in
the imposition of the penalty.
The original purpose behind delaying the imposition of
penalties in this way was to try to reduce the hardships faced by income
support recipients who are penalised. The rationale was that the delay would
give penalised income support recipients time to organise their finances such
that the negative impact of the penalty could be reduced. Given the low payment
rates of Newstart Allowance and Youth Allowance, it might be argued that this
is an important consideration. However, the competing view has it that delaying
the penalty weakens the link between the failure and the sanction, and thereby
reduces the impact of the sanction. The Government is seeking to restore this
link and, to this end, the Bill removes from subsection 42C(5) the
requirement that the penalty be delayed.[38]
The effect of this change is to allow for no show no pay
penalties to be imposed immediately.
Judging by Labor Members’ speeches during the debate on
the Bill in the House of Representatives, Labor supports the imposition of more
immediate penalties where job seekers either fail to participate in required
activities or to undertake adequate job search activities, without reasonable
excuse.[39]
This is largely on the basis that the change should enable job seekers to
become aware of their non-compliance sooner and act to remedy it, and enable
any possible administrative mistakes to be corrected more quickly.
It is worth noting that there is an alternative approach
to the imposition of more immediate sanctions for no show no pay failures,
and one that could potentially satisfy both of the objectives mentioned above.
The 2010 independent review of the job seeker compliance framework considered
the issue of the timing of sanctions and concluded:
There is a case for trying to make financial sanctions take
effect from the job seeker’s first, rather than second, pay day after a failure
is imposed. This could induce earlier compliance in some cases and reduce the
risk of incurring a large loss of payment. On the other hand, it could also
cause considerable hardship and, in many cases, not significantly improve the
job seeker’s understanding or speed of compliance. A more effective approach is
to ensure that job seekers receive immediate and clear notification of the loss
which they are beginning to incur and of ways to prevent further sanctions.[40]
Strengthened and aligned sanctions
for failure to meet participation requirements
Entering into an Employment Pathway Plan, complying with
the requirements of such a plan and attendance at compulsory employment-related
activities are all requirements of job seekers. Where a job seeker fails,
without reasonable excuse, to comply with such requirements then this may
constitute a connection failure.[41]
There is no immediate penalty for a connection failure, but the
job seeker may be required to comply with a reconnection requirement.[42]
Typically, this would entail attending a re-scheduled appointment or resuming
the relevant activity.
If a job seeker fails to meet their reconnection
requirement without a valid excuse then this amounts to a reconnection
failure and sanctions apply.[43]
For every day that a job seeker fails to meet their reconnection requirement,
they incur a penalty equivalent to their daily rate of income support payment.[44]
As noted above, the Government is dissatisfied with the operation
of the connection failure, primarily on the grounds that it is
considered to provide insufficient incentive for job seekers to comply with
their requirements under the Social
Security Act 1991 and the SSA Act.[45]
The Government’s preference is for the immediate non‑payment of income
support to job seekers who fail to meet their requirements and for penalties to
be applied for the period in which they fail to comply, without having a
reasonable excuse. To this end, the Bill repeals Subdivision C of Division 3A
of Part 3 (that is, sections 42E–42L), thereby effectively removing connection
and reconnection failures from the SSA Act.[46]
Further, the Bill incorporates a number of connection
failures into Subdivision EA—Immediate non-payment of participation payments
for certain failures and Subdivision EC—Non-attendance failures, thus
ensuring that these failures result in the immediate non-payment of income
support to job seekers who fail to meet their requirements under the SSA Act.
The failures inserted into subsection 42SA include:
- not
complying with the requirement to enter into an Employment Pathway Plan[47]
- failing
to satisfy the Secretary that adequate job search efforts[48]—as
specified in the Employment Pathway Plan—have been undertaken[49]
and
- failing
to act in an appropriate manner such that the purpose of a required appointment
is not achieved, as determined by the Secretary.[50]
The Bill inserts proposed subsections 42SA(1B), (1C)
and (1D). The proposed subsections relate to making adequate job search
efforts. Proposed subsection 42SA(1C) requires the Secretary to make a
determination, by legislative instrument, which sets out what a person is
required to do in order to satisfy the Secretary that they have made adequate
job search efforts. If the Secretary makes a determination under subsection
42SA(1) that a participation payment is not payable to a person because he, or
she, has failed to undertake adequate job search efforts, the Secretary must
notify the person of the job search requirements they must comply with. This
notification is necessary to enable the job seeker to comply with their
requirement, and for the suspension of their income support payment to end.
In the case of the last of the failures listed above, the
Secretary may determine, by legislative instrument, those matters that must be
taken account when deciding whether a job seeker has acted in an inappropriate
manner at an appointment under proposed subsections 42SA(5),(6) and (7).[51]
Currently subparagraphs 42C(1)(a)(iii) and (iv) empower the Secretary to
determine that a job seeker has committed a no show no pay failure
where they commit misconduct while participating in an activity that they are
required to undertake by an Employment Pathway Plan.
Comment
A number of issues have been raised in relation to the above
proposed measures.
Labor Members have expressed concerns about the measure that
would allow for the suspension of income support for a job seeker who fails to
enter into an Employment Pathway Plan at their first appointment with their
employment service provider.[52]
Their argument is that the current arrangement, under which job seekers are only
penalised after their second failure to enter into an Employment Pathway Plan
(through a reconnection failure), is appropriate. At present, job seekers are
given time to negotiate their plan with their employment services provider and
to consider the plan in detail before being required to sign it—a ‘cooling off’
period, so to speak. This, Labor argues, allows job seekers to seek advice on
the requirements being placed on them, and provides a potential safeguard
against employment service providers imposing inappropriate obligations on job
seekers.
A number of submissions to the Education and Employment
Committee inquiry into the Bill have similarly argued that job seekers should
continue to have 48 hours’ ‘think time’ before being required to sign an
Employment Pathway Plan. Without such time, the Australian Unemployed Workers’
Union argues, ‘vulnerable job seekers will be at risk of signing Job Plans that
do not accurately reflect their personal circumstances, potentially resulting
in mental distress, injury and other serious consequences’.[53]
Labor Members also have serious reservations about the measure
that would allow for the imposition of a penalty where the Secretary is
satisfied that job seekers have acted in an inappropriate manner during a
required appointment. Their main objections to the measure are similar to those
of the Human Rights Committee and Scrutiny of Bills Committee which are
discussed above. The first of these is that the term ‘inappropriate behaviour’
has not been defined and is to be left to the discretion of the Secretary. The
second related objection is that, as a result of this lack of clarity, job
seekers could be penalised for behaviour that is not inappropriate, or that is uncooperative,
but justifiably so.[54]
The National Welfare Rights Network (NWRN) has argued in its
submission to the Education and Employment Committee inquiry that allowing employment
service providers the discretion to recommend suspension for inappropriate
behaviour is likely to result in inconsistent, unfair or unreasonable
decisions.[55]
Its concerns relate in particular to instances in which the behaviour may be
the result of: ‘an underlying mental health problem or behavioural problem; an
intellectual disability or acquired brain injury; chronic pain from physical
injuries; drug and alcohol dependence; cultural practices or misunderstandings;
the person expressing a legitimate consumer complaint; stress and difficult
coping with personal circumstances; or other complex underlying causes.’[56]
The Department of Employment has insisted in its submission
that excuse provisions will still apply, ‘so that vulnerable job seekers are not
penalised where the behaviour was not within their control’.[57]
It is also the case that the final decision will still be made by the Secretary
rather than employment services providers. However, the NWRN has serious
reservations with regard to the proposed measure, arguing that ‘in practice,
the assessment of the employment services provider is likely to be persuasive’.[58]
Labor Members do, however, support the harmonisation and
simplification of failures and sanctions that the Bill provides for.[59]
This is something that the independent review of the job seeker compliance
framework saw considerable scope for and recommended.[60]
However, the review did express concerns regarding practical difficulties
associated with no show no pay failures that are of some
consequence given that the Bill, should it be passed in its current form, would
see these applied far more broadly. The independent review observed that
The no show, no pay failure concept is good in principle but
it faces substantial practical difficulties. These relate partly to monitoring
and reporting of non-attendance at activities which are conducted by external
organisations instead of the providers themselves ... and to the need ... to
identify a specific date for the failure.[61]
Strengthened penalties for serious
failures related to failing to accept or commence in a suitable job
Currently, the Secretary may determine that a job seeker
has committed a serious failure in two circumstances—firstly for persistent
non-compliance with participation obligations[62]
and secondly, where the person has refused or failed to accept an offer of
suitable employment.[63]
The penalty for a serious failure is an eight week income support non-payment
period.[64]
Section 42NC of the SSA Act currently provides that
if the Secretary determines that a person has committed a serious failure,
the Secretary must also determine that the non-payment period will apply. There
is one exception, with two parts. The first is that the Secretary is satisfied
that the job seeker does not have the capacity to undertake any serious failure
requirement, for example, ‘because they now have significant caring
responsibilities, or if undertaking the activity would aggravate an existing
health condition’.[65]
The second is that the Secretary is satisfied that serving the penalty would
cause them to suffer severe financial hardship.[66]
Item 10 of the Bill repeals this section so that the option of not
having to serve the eight week income support non-payment period at all is
removed.
The procedures for serious failures which
were introduced by the Rudd-Gillard Government in 2009 enabled job seekers to
have the eight week income support non-payment period waived or brought to an
end early by complying with a serious failure requirement.[67]
Job seekers are given the option of participating in an activity similar to
work experience—a Compliance Activity—for at least 25 hours a week for the
eight week period, rather than losing their payment.[68]
As noted above, the Government holds the firm view that
tougher penalties need to be applied to job seekers who fail to accept or
commence in a suitable job without good reason. It argues that too many job
seekers who refuse a suitable job are having their penalties waived, and that,
as a result, the serious failure penalty no longer provides an adequate
deterrent to refusing work.[69]
The amendments to the Bill treat the two forms of serious
failure differently.
For serious failure due to persistent non-compliance the
Secretary will continue to be able to bring to an early end the serious failure
period by requiring the person to comply with a serious failure
requirement.[70]
That option is no longer available for serious failure for
refusing or failing to accept an offer of suitable employment.
For detailed analysis of the Bill’s proposed changes in
relation to serious failures, including stakeholder concerns and the potential
impacts of the changes, see the Bills Digest for the first Bill.[71]
The Education and Employment Legislation Committee’s report in relation to that
Bill also contains relevant information.[72]
Labor Members have once again opposed this measure, with
Julie Collins labelling it Labor’s ‘largest concern’ with the Bill.[73]
Labor’s main problems with the measure are twofold. Firstly, it has argued that
removing the ability of job seekers to have their penalty waived through
participating in some form of compliance activity would result in the
counterproductive outcome of these job seekers becoming disengaged. Secondly,
it maintains that the penalty is severe and likely to result in financial
hardship and related problems such as homelessness. Labor insists that the data
indicate that relatively few penalties are being applied for job seekers refusing
or failing to accept reasonable work offers, and that these figures do not
support the need for the proposed changes.
A number of submissions to the Education and Employment
Committee inquiry on the Bill make similar arguments, with most being highly
critical of the proposal to remove the waiver provisions. The NWRN maintains
that given that no evidence has been provided to suggest that the waivers have
been applied inappropriately a more proportionate response would have been to
tighten rather than get rid of job seekers’ ability to ‘work off’ the penalty.[74]
This could have involved, for example, limiting the number of times a job
seeker could have had a waiver applied for failing to accept or commence in a
suitable job without good reason.
Other provisions
Item 22 repeals and replaces subsection 42SA(2) of
the SSA Act so that the period for which a job seeker’s income support
is not payable—the start and end days—for a range of different failures is set
out in table form. Proposed subsection 42SA(2AAA) provides for the
Secretary to end the non-payment period earlier than the time specified in the
table, where this is considered appropriate.
The provisions in Subdivision EC of Division 3A of Part 3
of the SSA Act (that is, sections 42SC and 42SD) are currently about
non-attendance failures. Items 35 and 36 of the Bill repeal the headings
referring to non‑attendance failures and substitute headings concerning no
show no pay failures relating to appointments or to entry into Employment
Pathway Plans. Among other things, most of the remaining items in the Bill repeal
all subsequent references to non-attendance failures,
substituting no show no pay failures. They also repeal all
references to connection and reconnection requirements and failures, which are
now redundant.
Item 38 of the Bill amends subsection 42SC(1)
of the SSA Act to enable the Secretary to determine that a job seeker
commits a no show no pay failure in relation to specific failures
listed in subsection 42SA(1).[75]
The effect of this change is to enable penalty amounts to be deducted in the
case of these failures, in addition to the immediate non-payment of income
support.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Social Security
(Administration) Act 1999, accessed 19 October 2015.
[2]. Australian Government, Budget
measures: budget paper no. 2: 2015–16, p. 83, accessed 19
October 2015.
[3]. Social Security
Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Act
2014, accessed 19 October 2015; M Thomas, Social
Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill
2014, Bills digest, 17, 2014–15, Parliamentary Library, Canberra, 22
August 2014, accessed 19 October 2015.
[4]. Social
Security (Administration) Act, subsection 42SA(2AA).
[5]. Social
Security (Administration) Act, section 42SC and 42SD.
[6]. The
Australian Association of Social Workers has questioned the data provided in
the Explanatory Memorandum, arguing that the figures seem ‘exceptionally high
in view of other data that is publicly available’. Australian Association of
Social Workers, Submission
to the Senate Education and Employment Legislation Committee, Inquiry into
the Social Security Legislation Amendment (Further Strengthening Job Seeker
Compliance) Bill 2015, October 2015, p. 2, accessed 4 November 2015.
[7]. Connection
and reconnection failures formed a part of the new job seeker compliance system
that was introduced along with the Job Services Australia employment services
system in July 2009. See Parliament of Australia, Social
Security Legislation Amendment (Employment Services Reform) Bill 2009 homepage,
Australian Parliament website, accessed 21 October 2015.
[8]. Parliament
of Australia, Social
Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill
2014 homepage, Australian Parliament website,
accessed 21 October 2015.
[9]. The
terms of reference, submissions to the Senate Education and Employment
Legislation Committee and the final report (when published) are available on
the inquiry
homepage, accessed 21 October 2015.
[10]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 10, 2015, The Senate, 16 September 2015, p. 6, accessed 12
October 2015.
[11]. Ibid.
[12]. J
Collins, ‘Second
reading speech: Social Security Legislation Amendment (Further Strengthening
Job Seeker Compliance) Bill 2015’, House of Representatives, Debates,
(proof), 13 October 2015, p. 83, accessed 21 October 2015.
[13]. Proposed
amendments (House of Representatives), Social
Security Legislation Amendment (Further Strengthening Job Seeker Compliance)
Bill 2015, accessed 4 November 2015.
[14]. Thomas,
op. cit., pp. 6–7.
[15]. Senate
Education and Employment Legislation Committee, Social
Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill
2014 [Provisions], The Senate, Canberra, August 2014, accessed 15
October 2015.
[16]. Senate
Education and Employment Legislation Committee, Inquiry
into the Social Security Legislation Amendment (Further Strengthening Job
Seeker Compliance) Bill 2015 [Provisions], accessed 21 October 2015.
[17]. Jobs
Australia, Submission
to: Senate Education and Employment Legislation Committee Inquiry into: Social
Security Amendment (Strengthening Job Seeker Compliance) Bill 2015, p. 4,
accessed 4 November 2015.
[18]. Australian
Council of Social Service, Submission
re: Inquiry into the Social Security Legislation Amendment (Further
Strengthening Job Seeker Compliance) Bill 2015, 16 October 2015, p. 2,
accessed 4 November 2015.
[19]. Senate
Education and Employment Legislation Committee, Submissions,
Inquiry into the Social Security Legislation Amendment (Stronger Penalties
for Serious Failures) Bill 2014, accessed 15 October 2015.
[20]. Thomas,
op. cit., p. 7.
[21]. Explanatory
Memorandum, Social Security Legislation Amendment (Further Strengthening
the Job Seeker Compliance) Bill 2015, p. 3, accessed 19 October 2015.
[22]. Australian
Government, Budget
measures: budget paper no. 2: 2015–16, p. 83, accessed 19 October 2015.
[23]. Ibid.
[24]. See
D Hurst, Federal
Budget 2015: jobseeker penalty increases to cost more than savings, The
Guardian, (online edition), 14 May 2015, accessed 19 October 2015.
[25]. L
Hartsuyker, ‘Second
reading speech: Social Security Legislation Amendment (Further Strengthening
Job Seeker Compliance) Bill 2015’, House of Representatives, Debates,
10 September 2015, p. 9746, accessed 19 October 2015.
[26]. Parliamentary
Joint Committee on Human Rights, Twenty-ninth
report of the 44th Parliament, October 2015, pp. 25–30,
accessed 19 October 2015.
[27]. Explanatory
Memorandum, Social Security Legislation Amendment (Further Strengthening
the Job Seeker Compliance) Bill 2015, p. 46, accessed 19 October 2015.
[28]. Ibid.
[29]. The
Statement of Compatibility with Human Rights can be found at page 36 of the Explanatory
Memorandum to the Bill.
[30]. Parliamentary
Joint Committee on Human Rights, Twenty-ninth
report of the 44th Parliament, op. cit., p. 27.
[31]. Ibid.,
p. 28.
[32]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 10, 2015, The Senate, 16 September 2015, p. 6, accessed
12 October 2015.
[33]. Parliamentary
Joint Committee on Human Rights, Ninth
report of the 44th Parliament, The Senate, July 2014, pp.
66–70, accessed 19 October 2015.
[34]. Thomas,
op. cit., pp. 8–9.
[35]. Explanatory
Memorandum, Social Security Legislation Amendment (Further Strengthening
Job Seeker Compliance) Bill 2015, p. 5. See the definition of ‘participation
payment’ in the Dictionary at Schedule 1 to the SSA Act.
[36]. A job seeker may incur one or more no show no pay failures
if they: fail to participate in a compulsory activity required by a Job Plan;
fail to comply with a serious failure requirement (also known as a compliance
activity); fail to attend a job interview; or during a job interview, deliberately
behave in a way that results in them not receiving a job offer. Department of
Social Security (DSS), 3.1.13.20,
No show, no pay failures, Guide to
social security law, version 1.216, released 20
October 2015, accessed 23 October 2015.
[37]. Subsection
42C(5) of the SSA Act. The penalty amount is calculated in accordance
with the Social
Security (Administration) (Penalty Amount) Determination 2015 (No. 1),
accessed 21 October 2015.
[38]. Item
6 of the Bill.
[39]. For
instance L Chesters, ‘Second
reading speech: Social Security Legislation Amendment (Further Strengthening
Job Seeker Compliance) Bill 2015’, House of Representatives, Debates,
(proof), 14 October 2015, p. 18 and C O’Neil, ‘Second
reading speech: Social Security Legislation Amendment (Further Strengthening
Job Seeker Compliance) Bill 2015’, Debates, (proof), 14 October
2015, p. 23, accessed 21 October 2015.
[40]. J
Disney (Chair), Independent
review of the job seeker compliance framework: a report to the Parliament of
Australia, [Department of Education, Employment and Workplace
Relations, Canberra], 2010, p. 69, accessed 21 October 2015.
[41]. Social
Security (Administration) Act, section 42E.
[42]. Social
Security (Administration) Act, section 42G.
[43]. Social
Security (Administration) Act, section 42H.
[44]. The
penalty amount is calculated in accordance with the Social Security
(Administration) (Penalty Amount) Determination 2015 (No. 1), accessed 21
October 2015.
[45]. When
connection failures were introduced in 2009, it was intended that losses of
payment would be incurred on the next day on which the job seeker’s regular
payment was due. However, in the face of concerns about the hardships this
might cause, the Social Security Legislation Amendment (Employment Services
Reform) Bill 2009 was changed to delay the loss of payment for one payment
period.
[46]. Item
8 of the Bill.
[47]. Item
16 of the Bill inserts proposed paragraph 42SA(1)(aa) into the Social
Security (Administration) Act.
[48]. The
job search requirements of activity tested income support recipients are
specified at Section
3.2.9.30 of the Guide to Social Security Law. Job search efforts include
activities such as: looking for job vacancies in newspapers, contacting
employers about jobs, preparing and sending job applications, using job search
sites and tools on the internet, registration with an employment services
provider, and attending the office of an employment services provider to
undertake job search-related activities. Job seekers must provide information
about their job search efforts to Centrelink through an application for payment
form, job seeker diary and/or employer contact certificates. One
consequence of the incorporation of job search related failures into
subdivision EA (under item 17) and the repeal of Subdivision C (connection and
reconnection failures) (under item 8) is that neither Job Seeker Diaries nor
employer contact certificates will be used.
[49]. Item
17 of the Bill inserts proposed paragraph 42SA(1)(baa) into the Social
Security (Administration) Act.
[50]. Item
18 of the Bill repeals and replaces paragraph 42SA(1)(c) of the Social
Security (Administration) Act which relates to reconnection requirements
and is no longer relevant as a result of other changes made by the Bill. The
same holds for item 19 of the Bill which repeals and replaces the note
at the end of existing subsection 42SA(1).
[51]. Item
34 of the Bill.
[52]. See
for example Collins, op. cit.
[53]. Australian
Unemployed Workers’ Union, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Social Security Legislation Amendments (Further Strengthening Job Seeker
Compliance) Bill 2015, 12 October 2015, p. 5, accessed 4 November 2015.
[54]. Ibid.
[55]. National
Welfare Rights Network, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Social Security Legislation Amendments (Further Strengthening Job Seeker
Compliance) Bill 2015, accessed 4 November 2015.
[56]. Ibid.
[57]. Department
of Employment, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Social Security Legislation Amendments (Further Strengthening Job Seeker
Compliance) Bill 2015, p. 3, accessed 4 November 2015.
[58]. National
Welfare Rights Network, op. cit.
[59]. Ibid.
[60]. Disney,
op. cit., p. 69.
[61]. Ibid.,
p. 68.
[62]. Social
Security (Administration) Act, section 42M.
[63]. Social
Security (Administration) Act, section 42N.
[64]. Social
Security (Administration) Act, subsection 42P(2).
[65]. Department
of Employment, Submission to Senate Standing Committee on Community
Affairs, Inquiry into the Social Security Legislation Amendment (Stronger
Penalties for Serious Failures) Bill 2014, [2014], accessed 4 November
2015.
[66]. Under
Part 1.2, Subsection 14A(7) of the SSAct a person is considered to be in
financial hardship if the value of their liquid assets does not exceed $2,500
for a person who is not a member of a couple and does not have a dependent
child or $5,000 in any other case.
[67]. Social
Security (Administration) Act, subsection 42P(3) and subsection
42Q(1).
[68]. Department
of Human Services (DHS), Penalties
for not meeting your mutual obligation requirements, DHS website, accessed
21 October 2015.
[69]. Explanatory
Memorandum, Social Security Legislation Amendment (Further Strengthening
Job Seeker Compliance) Bill 2015, p. 6.
[70]. Items
11 to 13 of the Bill.
[71]. Thomas,
op. cit.
[72]. Senate
Education and Employment Legislation Committee, Social
Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill
2014 [Provisions], The Senate, Canberra, 2014, accessed 15 October
2015.
[73]. Collins,
op. cit., p. 85.
[74]. National
Welfare Rights Network, op. cit.
[75]. These
are: failure to enter into an Employment Pathway Plan; failure to attend an
appointment that is a requirement of the Employment Pathway Plan; failure to
attend an appointment required under subsection 63(2); and, if the Secretary is
satisfied that the person acted in an inappropriate manner such that the
purpose of an appointment was not achieved.
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