BILLS DIGEST NO. 42, 2014–15              24 October 2014

Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014

Luke Buckmaster and Michael Klapdor
Social Policy Section

This Bills Digest should be read in conjunction with the Bills Digest for the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014

Date introduced: 2 October 2014

House:  House of Representatives

Portfolio: Social Services

Commencement:  Schedule 1: immediately after commencement of Parts 1 to 6 of Schedule 1 to the Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Act 2014 (intended commencement date is 20 September 2014); Sections 1 to 3: on Royal Assent.

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.

History of the Bill

All of the main legislative amendments required to implement the 2014–15 budget measures in the Social Services Portfolio were previously proposed in two omnibus Bills:

•       the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 (the No. 1 Bill)[1] and

•       the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014 (the No. 2 Bill).[2]

Neither of those Bills has proceeded beyond the second reading stage in the Senate, most likely because the Government was unable to secure their passage due to opposition to various measures from the Australian Labor Party (Labor), the Australian Greens (the Greens), minor parties and independent senators.

It appears that in order to secure passage of those measures which were supported by either Labor or the Greens, the Government has reintroduced measures from the No. 1 Bill and the No. 2 Bill in four new Bills:

•       the Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014 (the Seniors Supplement Bill)[3]

•       the Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014 (the No. 4 Bill)[4]

•       the Social Services and Other Legislation Amendment (2014 Budget Measures No. 5) Bill 2014 (the No. 5 Bill)[5] and

•       the Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014 (the No. 6 Bill).[6]

The Greens have stated that they ‘could’ support the measures proposed by the Seniors Supplement Bill.[7] Labor has expressed support for the measures proposed by the No. 6 Bill.[8] The No. 4 Bill contains measures from the No. 1 and No. 2 Bills which are due to commence from Royal Assent or in 2015. It does not appear at the time of writing this Bills Digest that these measures are supported by Labor or crossbench senators. Schedule 1 of the No. 5 Bill contains measures from the No. 2 Bill which are due to commence from 2017 or later. At the time of writing this Bills Digest these measures were not supported by Labor or crossbench senators.

Structure of the Bills Digest

The provisions in this Bill are equivalent to the provisions of Schedule 1 of the No. 1 Bill with a few exceptions. Background and analysis of the measures proposed in this Bill were provided in the Bills Digest for the No. 1 Bill.[9]

As analysis and discussion about the relevant provisions has already been provided, this Bill Digest will briefly set out the particular amendments proposed in this Bill, highlight the differences between those in the No. 1 Bill and in this Bill and set out new issues of relevance to this Bill.

Purpose of the Bill

The purpose of the Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014 (Seniors Supplement Cessation Bill) is to amend social services and veterans’ legislation from 20 September 2014, to cease payment of the Seniors Supplement for holders of the Commonwealth Seniors Health Card (CSHC) or the Veterans’ Affairs Gold Card.

Background

Seniors Supplement is a quarterly payment targeted mainly at self-funded retirees (persons of retired age not receiving an income support payment) to assist them with regular bills such as energy, rates, phone and motor vehicle registration.[10] The next payment of Seniors Supplement to eligible cardholders is due in December 2014.

The Seniors Supplement Cessation Bill proposes to abolish the Seniors Supplement. In brief, this is to be done by substituting current references to Seniors Supplement with references to an existing payment, Energy Supplement (proposed to be renamed from Clean Energy Supplement by the No. 6 Bill).[11]

For details, see the Parliamentary Library Bills Digest for the No. 1 Bill (pages 7-10).

Committee consideration

Senate Selection of Bills Committee

At the time of writing this Bills Digest the Bill had not been referred to Committee for inquiry and report.[12]

However, No. 1 Bill was referred to the Senate Standing Committee on Community Affairs.[13] The Committee report notes that:

Submitters expressed support for cessation of the Seniors Supplement, noting that it is not dependent on any income or assets test and is a poorly targeted form of income support … ACOSS noted that most recipients of the seniors supplement fall within the top 20 per cent of households over 65 years of age and is unlikely to cause financial hardship.[14]

Senate Standing Committee for the Scrutiny of Bills

At the time of writing this Bills Digest the Senate Standing Committee for the Scrutiny of Bills had not commented on the Bill.[15]

However the Committee generally comments in cases where legislation is retrospective in its effect. This Bill, introduced on 2 October 2014 is intended to commence on 20 September 2014 and is therefore retrospective in its effect.

As a matter of practice, there is no prohibition on a Bill which seeks to have retrospective impact, although an explanation would be expected. In this case the amendments will generally ‘only affect payment of the supplement from 20 December 2014 which marks the next relevant quarter’.[16] In addition, ‘no person’s interest will be adversely affected’ due to the savings provision which is contained in item 58 of the Bill.[17]

Statement of Compatibility with Human Rights

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.[18] The Government considers that the Bill is compatible.

Changes from the No. 1 Bill

The only notable differences between the measure proposed by the No. 1 Bill and the Seniors Supplement Cessation Bill are:

•       a change in the date of abolition of Seniors Supplement from 20 June 2014 to 20 September 2014

•       a reduction in the expected savings from the abolition of Seniors Supplement from $1.1 billion to $999.4 million, reflecting the delayed implementation of the measure

•       a change in the amounts of Energy Supplement to be paid to eligible recipients to reflect current rates of payment. Rates of payment for the Energy Supplement are set out in the tables in proposed section 1061UB of the Social Security Act 1991 and proposed subsection 118PB(1) of the Veterans’ Entitlements Act 1986 and

•       a transitional provision in the Seniors Supplement Cessation Bill preventing any debt from arising if Seniors Supplement is paid on or after 20 September 2014 but before passage of the Bill (item 58).

Concluding comments

As suggested in the Parliamentary Library Bills Digest for the No. 1 Bill, it could be argued that the provision of supplementary payments attached to the CSHC has seen it drift from its original purpose of providing access to the Pharmaceutical Benefits Scheme (PBS) for those not on an income support pension but who were still in need of some assistance. The Government’s explanation for the measure is that it will ‘help ensure that payments to senior Australians remain targeted to those who need them most’.[19] The Greens’ position that they ‘could’ support abolition of Seniors Supplement also reflects the view that support to older Australians should be better targeted.[20]

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Parliament of Australia, ‘Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 homepage’, Australian Parliament website, accessed 20 October 2014.

[2].              Parliament of Australia, ‘Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014 homepage’, Australian Parliament website, accessed 20 October 2014.

[3].              Parliament of Australia, ‘Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014 homepage’, Australian Parliament website, accessed 20 October 2014.

[4].              Parliament of Australia, ‘Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014 homepage’, Australian Parliament website, accessed 20 October 2014.

[5].              Parliament of Australia, ‘Social Services and Other Legislation Amendment (2014 Budget Measures No. 5) Bill 2014 homepage’, Australian Parliament website, accessed 20 October 2014.

[6].              Parliament of Australia, ‘Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014 homepage’, Australian Parliament website, accessed 20 October 2014.

[7].              Australian Greens, Dissenting report, Senate Community Affairs Committee, Inquiry into the provisions of the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (Budget Measures No. 2) Bill 2014, The Senate, Canberra, 2014, accessed 20 October 2014. See also R Siewert, Greens statement on Seniors Supplement, media release, 1 October 2014, accessed 20 October 2014.

[8].              J Macklin (Shadow Minister for Families and Payments), ‘Second reading speech: Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014’, House of Representatives, Debates, 2 October 2014, p. 9, accessed 20 October 2014.

[9].              P Yeend and L Buckmaster, Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014, Bills digest, 14,
2014–15, Parliamentary Library, Canberra, 2014, accessed 20 October 2014.

[10].              Department of Human Services (DHS), ‘Seniors Supplement’, DHS website, accessed 22 October 2014.

[11].              P Yeend and L Buckmaster, Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014, op. cit.

[12].              Selection of Bills Committee, Report No. 13 of 2014, The Senate, Canberra, 2 October 2014, accessed 23 October 2014.

[13].              Information about the terms of reference, submissions to the Committee and the Community Affairs Committee’s final report are on the inquiry homepage, accessed 23 October 2014.

[14].              Standing Committee on Community Affairs, Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 [Provisions]; Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014 [Provisions], The Senate, Canberra, September 2014, p. 36, accessed 23 October 2014.

[15].              Standing Committee for the Scrutiny of Bills, Alert Digest No. 13 of 2014, The Senate, Canberra, 1 October 2014, accessed 23 October 2014.

[16].              Explanatory Memorandum, Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014, p. 2, accessed 23 October 2014.

[17].              Ibid.

[18].              The Statement of Compatibility with Human Rights can be found at page 6 of the Explanatory Memorandum to the Bill.

[19].              K Andrews, ‘Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014’, House of Representatives, Debates, 2 October 2014, p. 4, accessed 22 October 2014.

[20].              Australian Greens, Dissenting report, op. cit.