Social Security Payments for the Unemployed, the Sick and those in Special Circumstances, 1942 to 2006


Chronology Index

Social Policy Section

Social Security Payments for the Unemployed, the Sick and those in Special Circumstances, 1942 to 2006

Dale Daniels- Social Policy Section

Last updated 7 July 2006

This Chronology is issued electronically. It will be kept up-to-date online. The date of the latest update is noted clearly above.

All enquiries: Dale Daniels, Research Specialist.

back to contents

Unemployment Benefit 1945 to 1991, Job Search Allowance 1991 to 1996, Newstart Allowance from 1991


Commencement Date
Details Government at Commencement

Original Enabling Legislation

Unemployment and Sickness Benefits Act 1944 (No. 10 of 1944)

1945

From July Unemployment benefit (UB) was introduced. UB was paid to people who were out of work, were capable of undertaking and willing to undertake suitable work and had taken reasonable steps to obtain work. Direct participation in a strike disqualified a person from receiving UB and voluntary unemployment could result in postponement or cancellation of benefit.

A waiting period of seven days existed before payment of benefit commenced and residence in Australia of 12 months immediately prior to application for benefit was required. Payment of benefit could be made conditional on the beneficiary undertaking training, undergoing a medical examination, receiving treatment or doing work as required.

An additional benefit of one pound per week was payable for a dependent spouse. The first child also qualified for an additional benefit of five shillings per week. Child-related payments are treated more fully in Commonwealth Social Security Payments for Children 1912 to 2004

An income test applied to the UB but not an assets test. Income above certain limits reduced benefit on a dollar for dollar basis (see Table 2 for changes over time in means testing limits). The income of a beneficiary's spouse was taken into consideration as was any 'unearned' income of dependent children.

Curtin, ALP

1947

From July pension income of a spouse was partially exempted and the income of dependent children was totally exempted under the income test.

Provision was made for payment of a partial additional benefit for a partially dependent wife.

Additional benefit was payable for a housekeeper where a beneficiary had dependent children under 16 years of age and received no benefit for a wife.

Where a beneficiary, living apart from his spouse, was paying spousal maintenance additional benefit was not to exceed the amount of such maintenance.

Wives permanently living apart from their husbands became eligible for benefit.

Residency requirements were waived where claimants satisfied the Director‑General of Social Services that they intended to reside permanently in Australia.

Chifley, ALP

1950

From November war pensions were no longer treated as income under the income test.

Menzies, LCP

1960

From February restrictions on the eligibility of Aboriginal people for UB were removed.

 

1966

From September UB was made payable to qualified ex‑servicemen immediately upon termination of repatriation sustenance payments from the Repatriation Department.

Holt, LCP

1969

From September adult rates of benefit became payable to unmarried minors with no parents living in Australia.

Gorton, LCP

1973

From March UB became payable at the same rate as pensions. A standard rate for unmarried beneficiaries and a married rate for married beneficiaries and for their spouses were introduced. In the process the lower rate of benefits for unmarried juniors was abolished.

Pension income of a spouse was fully exempted under the income test.

Whitlam, ALP

1974

From November payment of an additional benefit in respect of a de facto wife of an unemployment or sickness beneficiary could be made where the relationship had existed for at least three years.

 

1975

From October the junior rate of benefit for people under the age of 18 was re‑introduced.

The requirement that a de facto relationship exist for three years before the married rate was payable was eliminated.

Benefits began to be paid weekly in advance instead of weekly in arrears as had been the practice from 1945.

 

1976

From March the definition of 'suitable work' was modified:

  • Single people over 18 could now be expected to change their locality to find a job.
  • The work test could now be failed by a person on the grounds of unacceptable dress or appearance.
  • A provision was introduced whereby skilled workers who had not found an appropriate job within six weeks would be required to accept any unskilled job even though that involved a reduction in wages or status.

People who became unemployed voluntarily had to wait six weeks before they became eligible for benefit.

School leavers were made ineligible for UB until the commencement of the new school year.

Fortnightly income statements were to be lodged in person with the Commonwealth Employment Service (CES).

From May UB was made payable to primary producers subject to a means test.

From July UB became taxable.

From November benefit increases were to be indexed every six months as were pensions (except for unmarried people under 18).

Benefits became payable fortnightly rather than weekly.

Fraser, LNCP

1977

From November new claims for UB were paid two weeks in arrears.

New administrative guidelines for proof of identification for UB were issued.

The legislation was amended to preclude payment of benefit to school‑leavers for six weeks after they ceased full‑time secondary education.

There were alterations regarding the seven‑day waiting period for UB. At the discretion of the Director‑General, the waiting period could begin from the date of the applicant's unemployment or from seven days prior to the application, whichever was the later.

UB recipients were required to notify the Department immediately on starting work. Previously they had to notify the Department within seven days of receiving income, not when commencing employment.

 

1978

From November automatic indexation of UB was removed for beneficiaries without dependants. Indexation of other UB rates was changed to an annual adjustment. (The only annual consumer price index (CPI) adjustment took place in November 1979.)

 

1979

From October beneficiaries were expected to accept casual, short‑term temporary or part‑time work provided it paid the appropriate award or going rate.

UB recipients were to be interviewed at least once every three months.

Payment of UB was not made to a person whose unemployment was due to their involvement in industrial action or the involvement of a union of which they were a member. The spouse of such a person could qualify for benefit at the single rate plus additional benefits for children. This new provision applied only while the industrial action was taking place.

There was a further tightening of procedures for establishing the identity of applicants for UB.

A beneficiary who refused a job where the travelling expenses to and from the job were less than ten per cent of the wages paid was considered to have failed the work test. Previously the maximum was five per cent.

People who refused an offer of suitable work, or who had become voluntarily unemployed without good reason, had benefits postponed for a minimum of six weeks and a maximum of 12 weeks. Previously the postponement period had been at the Director‑General's discretion.

 

1980

From May twice yearly automatic indexation of those benefits still subject to indexation was reintroduced.

From September the pay and allowances of Defence Force Reserve members were exempted under the income test.

From November the income test was liberalised so that income above $6 per week to $50 per week reduced benefit by 50 cents in the dollar ($3 to $40 for unmarried 16 or 17 year olds). Only income above $50 per week reduced benefit by $1 for each $1 of income.

 

1982

From June a person registered as unemployed with the CES could make a claim for UB within 14 days of that registration. The date of registration was taken to be the date on which the person made the claim.

From August rent subsidies provided by a government or a government housing authority were exempted from the income test.

From November the income tests for all unemployment and sickness benefits (SB) were standardised. Under the new arrangements benefits were reduced by 50 cents for each $1 of income above a 'free area' of $10 per week. Above $60 a week, benefits were reduced by $1 per week for each $1 of income.

 

1984

From March the income test 'free area' was increased to $20 per week and benefit reduced by $1 for each $1 of income above $70 a week.

From May single unemployment beneficiaries with children became eligible for mothers/guardians allowance (MGA).

Benefit for unemployment beneficiaries aged 18 years or more without dependants was again subject to automatic indexation.

All beneficiaries became eligible for remote area allowance.

From July income tax rebates were introduced for beneficiaries.

From November benefits were increased despite a fall in the CPI.

Hawke, ALP

1985

From November a new rates structure for single people on UB was established. A 'Junior' rate for 16 and 17 year olds was set at $50.00 per week. An 'Intermediate' rate for 18 to 20 year olds was set at $88.20 per week. Indexation was not to apply to these benefits. An 'Adult' rate for those aged 21 and over was set at $91.45 per week and subject to indexation.

The waiting period when a person transferred from other income support payments to UB was removed.

 

1986

From May Rent Assistance (RA) was payable to UB and Special Benefit (SpB) recipients on benefit for over six months, excluding those aged 1824 years living with parents or guardians.

The income test 'free area' was increased to $30 per week.

From July the Young Homeless Allowance (YHA) was introduced. It was an allowance paid in addition to UB, SB or SpB to under 18 year olds, without dependants, who were homeless. Young people were considered to be homeless if they:

  • had no parental home; or
  • were not allowed by the parent(s) to live at home: or
  • could not, because of circumstances such as domestic violence, sexual abuse or comparable exceptional circumstances, be expected to live with their parents; and
  • were not receiving continuous support of any kind from either parent; and
  • were not receiving income support from another government body; and
  • had been away from home for at least six continuous weeks.

YHA was set at a rate which brought the combined payment up to the level of AUSTUDY payable to independent 16 and 17 year old students.

YHA was also paid as a supplement to homeless AUSTUDY recipients of the same age.

From September regional UB review teams were established to conduct risk‑based entitlement reviews and verify efforts by beneficiaries to find work.

From November indexation of benefits was deferred for six weeks. Increases were delayed until December and June. Previously they had been paid in November and May.

UB recipients were required to lodge income statements personally and registration with the CES was made compulsory.

UB recipients over 55 years of age who had received benefit for more than one year were required to lodge income statements only every 12 weeks rather than every 2 weeks.

 

1987

From March those in receipt of UB for over two years were to be interviewed by DSS and CES to verify entitlements, ensure that their rights and obligations were understood and provide information on community, employment and training services.

From July the waiting period for voluntary job leavers, those dismissed for misconduct and those who failed the work test was made standard and cumulative. The waiting period was to increase by two weeks for each occurrence (up to 12 weeks for six occurrences over a three year period).

RA ceased to be income tested separately.

The waiting period for UB was to be calculated from the date of registration with the CES rather than the date unemployment commenced.

A work intention questionnaire was introduced to check on the adequacy of the job search activities of UB recipients.

From September the waiting period for education leavers under 21 years of age, without dependants, was increased from 6 to 13 weeks.

Eighteen to 20 year old UB recipients were to be reviewed after 12 months on benefit. In addition an activity test was substituted for the work test after one year on benefit.

Applicants for UB were required to provide a certificate from their previous employer stating the date and reason for their job loss.

From December an assets test was applied to benefits for those aged 25 and over. Those with assets above the pension assets test free area were no longer eligible for benefit.

 

1988

From January Job Search Allowance (JSA) replaced UB for 16 and 17 year olds. Allowees were subject to the UB work test, and were also required to pass an activity test after six months on JSA. The test involved counselling by the CES and the offer of suitable training or work. JSA recipients were required to have their payment continuation forms endorsed by the CES fortnightly.

The rate of JSA was $50 per week but a parental income test was applied. Parental income above $16 000 per annum reduced the payment from $50 per week to a minimum of $25 per week. The income limit was increased by $1200 for the first dependent child other than the allowee and $2500 for each additional dependent child. Certain JSA recipients were exempt from the parental income test. The main exempted groups were those who were married, had children or were not supported by their parents. The normal income test also applied.

Indexation of JSA and UB for 18 to 20 year olds was deferred until January 1989.

AUSTUDY recipients who received UB between 1 January and the first AUSTUDY payment of that year had the amount paid as UB recovered from the first AUSTUDY payment.

From February benefit for recipients living apart from their spouse indefinitely due to illness was made payable at the single rate.

A work effort certificate was introduced to be used selectively in conjunction with the work intention certificate. UB recipients whose job search efforts were in doubt were required to obtain the signatures of the employers they had approached about work.

From June a separate maintenance income test was introduced. Benefit was reduced by 50 cents for each dollar of maintenance income above $15 per week for one child plus $5 for each subsequent child.

 

1989

From January mobile benefits delivery teams were set up to provide service to remote areas.

From February the Newstart program to improve the employment prospects of long‑term UB recipients operated. The program had the following components:

  • Up to 40 000 long‑term UB recipients were to undergo intensive interviews conducted jointly by DSS and CES staff. Assessment of labour market prospects, referral to training or work opportunities and counselling were provided.
  • Increased information provision about employment, education and training for the target group.
  • A doubling of labour market program places for the target group.
  • Increased CES job placement activity for the target group.
  • Transition to work incentives were provided by the payment of an employment entry payment of $100, the waiving of the waiting period for UB where the job did not last and the introduction of a wider vocational activity provision which allowed a wider range of activities to be undertaken by the target group without loss of benefit.

From July UB recipients were required to seek and accept any part‑time, casual or temporary work within their capacity.

UB recipients were expected to commute from one centre to another to seek or accept work.

From September the waiting period for UB was to be extended by up to four weeks if holiday pay was received for that period.

From November the first of three advances in the timing of indexation of benefits occurred. (The second and third of these advances occurred in April 1990 and September 1990.) These advances changed the timing of indexation by bringing indexation forward by three months from June and December to September and March.

A waiting period of 12 weeks was introduced where an unemployment beneficiary changed residence to an area with less employment prospects.

Applicants for and recipients of benefit were required to supply a tax file number.

 

1990

From January UB recipients aged 55 and over were allowed to participate in CES-approved training courses or voluntary work for up to 13 weeks at a time or 26 weeks in the year, after 12 months on benefit. They were also allowed to participate in regular part-time work which paid at least 35 per cent of average weekly earnings as an alternative to the requirement to seek full-time work.

UB recipients aged 55 and over were given access to the Newstart program.

The minimum rate of JSA was made subject to indexation on 1 January every year.

An independent rate of JSA equivalent to the independent rate of AUSTUDY was introduced for allowees not subject to the parental income test because they were not supported by their parents.

An employment entry payment of $50 was paid to JSA recipients who took up full time work after at least 9 months on the allowance.

The waiting period for YHA was abolished for those who could not live at home because of domestic violence, sexual abuse or comparable exceptional circumstances. Waiting periods for other claimants were reduced to two weeks.

YHA as a separate allowance ceased to be paid. Those qualifying for YHA were paid at the homeless rate of JSA, SA or SpB.

From June the rate of benefit for single beneficiaries aged 60 or over, with no dependants, who had been on benefit for six months, was raised to the single pension rate.

From August a disaster relief payment equivalent to two weeks of maximum rate pension was introduced for those beneficiaries suffering disruption due to a major disaster. The measure was backdated to December 1989 to cover the Newcastle earthquake.

From September, under 21 year old beneficiaries without dependants were paid at the single rate regardless of their marital status. Spouses had to qualify in their own right before any payment was made for them.

An 'at home' rate of $69.20 per week was paid to unmarried 1821 year old beneficiaries without dependants living at a parent's home.

Married beneficiaries with a spouse receiving AUSTUDY were paid half the combined married rate.

UB recipients could be required to attend the CES when requested or their benefit would cease.

Beneficiaries who were custodial parents were required to seek reasonable maintenance from the non-custodial parent of their children. Failure to seek maintenance could result in non-payment of additional benefit for the children concerned.

Married beneficiaries and their spouses were allowed to earn an additional $30 per fortnight each from salaries or wages before their benefit was reduced under the income test.

The benefits assets test was extended to under 25 year olds.

 

1991

From January beneficiaries were required to provide the tax file number of their spouse.

From February a liquid assets test was applied to UB recipients. Claimants with liquid assets (cash and deposits with financial institutions) of $5 000 if single or $10 000 if married or single with dependants were required to serve an additional waiting period of four weeks.

From March cash in hand and money deposited with financial institutions was deemed to be earning a minimum interest rate for the purposes of the benefit income test. The first $2000 was exempt from this provision.

From April computerised data matching was used to detect inconsistent payments being made to people by two or more Commonwealth agencies. DSS, the Department of Veterans' Affairs, the Department of Health, Housing and Community Services, the Department of Employment Education and Training and the Australian Taxation Office were involved in this data matching.

From July income support for the unemployed was restructured. UB was replaced by two payments, Job Search Allowance (JSA) and Newstart Allowance (NSA):

  • Job Search Allowance for 16 and 17 year olds was not changed, but it was extended to cover those registered by the CES as unemployed for less than 12 months. Recipients had to meet the requirements of an activity test. This test was similar to the work test which previously applied but greater emphasis was placed on vocational training and labour market program participation.
  • Newstart Allowance was paid to those aged 18 years and over who had been registered with the CES as unemployed for longer than 12 months. The activity test for JSA recipients also applied to NSA recipients. In addition NSA recipients were required to enter into a Newstart Activity Agreement with the CES. The agreement outlined activities which the person could be required to undertake, such as job search, vocational training, labour market program participation, paid work experience, job search training or training to reduce labour market disadvantage.
  • The conditions and rates applying to UB were continued in most cases under the new payments. Failure to comply with the new activity tests or the terms of a Newstart Activity Agreement was added to the list of situations in which a non-payment period could be imposed.
  • Formal Training Allowance paid by the Department of Employment Education and Training was abolished and recipients received JSA or NSA.

The free areas under the maintenance income test were indexed annually in July.

From December people who entered agreements with the Commonwealth undertaking to assure support for migrants who were unlikely to be able to support themselves, were required to lodge a refundable bond with the Commonwealth Bank. Any expenditure on JSA/NSA was to be deducted from the bond with any residue being refunded once the migrant had been settled in Australia for two years.

 

1992

From January, 16 and 17 year olds in substitute care (foster care for example) who were not receiving State Government allowances were made eligible for the independent rate of JSA.

Under 16 year olds who were above minimum school leaving age, or over 15 years of age with an exemption from attending school, who had an employment history and who were not living with or being supported by either parent became eligible for the independent rate of JSA.

16 and 17 year olds who had been registered with the CES as seeking full time work for at least 13 weeks in the previous six months were made eligible for the independent rate of JSA.

From March new grants of JSA or NSA to a member of a couple whose partner was not receiving DSS income support were limited to half the married rate.

From November the waiting period for school leavers was modified. The waiting period was changed to 13 weeks or until 15 February whichever was the earlier for those aged under 21 years who were not part of a couple and did not have dependent children. Other education leavers served a six-week waiting period. Those who had undertaken a course of education for longer than six months, and then returned to income support within 12 months of the cancellation of their income support, had the waiting period waived. Those who would otherwise qualify for SpB also had the waiting period waived. Part-time or casual work undertaken since leaving school and prior to the start of the waiting period was to be taken into account when setting the length of the waiting period.

Keating, ALP

1993

From January migrants who arrived in Australia after 1 January 1993 were not eligible for JSA/NSA until six months after their arrival or their receipt of permanent residence, whichever was later.

From March NSA recipients aged 50 to 54 years of age had their job search reporting requirements under the work test brought into line with those aged 55 to 64 years of age. They were required to report every 12 weeks rather than every two weeks if they were not receiving regular private income. If they were in substantial part-time work they were exempt from the usual activity test.

Restrictions on the amount of voluntary work permitted under the work test were changed. Up to six weeks full-time voluntary work per year was allowed for those aged under 50 years and unemployed for more than six months. (Previously only part-time voluntary work up to 20 hours per week was permitted.) JSA recipients aged 16 and 17, who had been receiving the allowance for three months or more, were able to do full-time voluntary work for six weeks per year, an increase of two weeks. JSA recipients aged 50 to 54 years were able to do full-time voluntary work for up to 13 weeks per year, the same provision as had previously applied to those aged 55 years or older.

The independent rate of JSA was made available to those who have lived away from home for 18 weeks rather than 26 weeks as had previously been the case.

15year-old people were given eligibility for JSA/NSA if they had an employment history or had been registered with the CES for at least 13 weeks.

From September single recipients of JSA/NSA were able to earn an additional $30 per fortnight before the income test reduced their payment. A similar earned income disregard for couples was increased from $30 to $50 each per fortnight.

The ordinary waiting period was waived where the claimant had been in receipt of income support within the previous 13 weeks.

A person with a partner in prison was treated as if they were not part of a couple.

 

1994

From January fringe-benefits valued at over $1000 per annum were taken into consideration under the parental income test for JSA.

A $200 Education Entry Payment was introduced for recipients under 18 years of age who had been registered with the CES for at least 12 months and who enrolled in a full-time course of study.

From March an earnings credit was introduced. Maximum rate recipients were able to build up a credit of up to $500 at the rate of $90 per fortnight for single recipients and $80 per fortnight for each member of a couple. If a recipient earned income in a fortnight below the amount of their credit their payment was not reduced under the income test. However, if their earned income was greater than the cut off point for their payment under the income test, they could not use the credit.

From July deferment periods due to breaches of the activity test were changed so that they related to the length of time a person had been unemployed. Deferment periods for administrative breaches remained unchanged. For those unemployed for less than 12 months the penalty for the first activity test breach was a two-week deferment of income support. Subsequent breaches attracted an additional six-week deferment for each breach. The initial deferment period was raised from two weeks to four weeks for those unemployed for 12 to 18 months and to six weeks for those unemployed for over 18 months. A deferment period could not commence until the person had been notified and had received two instalments of JSA or NSA after that notification.

From September the additional amount of JSA/NSA paid to recipients who had a dependent spouse was replaced by a Partner Allowance (PA) paid directly to the dependent spouse. It was paid at the same rate as the married rate of JSA/NSA.

 

1995

From January JSA for people under 18 years of age was replaced by a Youth Training Allowance (YTA) administered by the Department of Employment Education and Training but paid by DSS. JSA recipients under 18 years of age on 1 January continued to receive JSA, but no new grants were made to people in this age group from that date. The general eligibility conditions for YTA were the same as for JSA for people under 18 years of age with the exception that the AUSTUDY assets test replaced the DSS benefit assets test. YTA recipients were provided with intensive case management and access to training, education and work experience placements.

From March recipients of JSA and NSA were able to receive an advance payment of their allowance of from $250 to $1000 in certain situations. Their allowance was reduced over the subsequent six to 12 months to allow repayment of the advance payment.

The development of self-employment and participation in co-operative enterprises was included in the range of activities available for long-term unemployed recipients.

Restrictions on the amount of voluntary work that a recipient could undertake were removed.

Simplified regrant procedures were applied for up to 26 weeks after the last receipt of payment rather than for 13 weeks only as had previously been the case.

Recipients starting casual or part-time work which would be sufficient to preclude payment were not automatically cancelled from the JSA/NSA system for 12 weeks rather than the six weeks which had previously applied.

From July the income test was modified. The 'earnings disregard' was removed leaving a standard $60 per fortnight income test free area for all recipients, both single and partnered. The 100 per cent withdrawal rate was changed to a 70 per cent withdrawal rate (the 50 per cent withdrawal rate on the first $40 earned after the free area remained unchanged). Each member of a couple was made individually subject to the standard income test. Once the income of one partner reduced their own payment to nil any additional income began to reduce the payment received by the other partner.

 

1996

From March

  • People who were temporarily incapacitated for work due to illness were not transferred to or granted SA. They remained on or were granted the payment they were otherwise eligible for, but were exempt from the activity test while they were ill.
  • The earnings credit was changed so that the credit accrued at a rate equal to the amount of the unused free area in any fortnight. The maximum amount of earnings credit that could be used in any fortnight was limited to $100.

From July a major reform of the income test treatment of financial assets was introduced. A system called 'Extended Deeming' was introduced. When assessing income under the income test, the total value of all financial assets was added together. A rate of return of 5 per cent was deemed to have been received on the first $30 000 ($50 000 for a couple) worth of assets and a rate of 7 per cent was deemed for asset holdings above these levels. The first $2000 ($4000 for a couple) was exempt from extended deeming. These rates were set at levels considered to be easily achievable using safe investments. The Minister for Social Security could vary the deeming rates as market rates changed.

Financial assets included:

  • bank, building society and credit union accounts
  • cash
  • term deposits
  • cheque accounts
  • friendly society bonds
  • managed investments
  • investments in superannuation funds, approved deposit funds and deferred annuities after age pension age
  • listed shares and securities
  • loans, debentures and bonds
  • shares in unlisted public companies
  • gifted assets above the allowable limits
  • gold and other bullion.

Financial assets did not include:

  • homes, contents or other real estate
  • cars, boats or caravans
  • antiques or stamp and coin collections
  • investments in superannuation funds, approved deposit funds and deferred annuities before age pension age
  • standard life insurance policies
  • income streams such as superannuation pensions allocated pensions, immediate annuities or allocated annuities.

From September

  • More flexible reporting requirements were introduced for certain groups. Four weekly reporting was allowed for those under case management, those in training and those doing voluntary work. Twelve weekly reporting was allowed for those over fifty years of age. People in remote locations could negotiate reporting arrangements to suite their circumstances.

Job Search Allowance and Newstart Allowance were amalgamated under the title Newstart Allowance.

Howard Lib-NP

1997

From January the minimum rate of payment for NSA, YTA and SA was abolished for those under 18 years of age. As a result the full rate of payment for these people was subject to the parental means test.

Advance payments were restricted to amounts of up to $500 and limited to one each twelve months.

The definition of 'unsuitable paid work' for job seekers was modified as follows:

  • Lack of qualifications, skills or experience no longer made work unsuitable only if the employer provided no training.
  • Medical evidence was required if the work was unsuitable because of an injury, disability or illness suffered by the job seeker.
  • Work was unsuitable if it required enlistment in the Defence Force or the Reserve Force.

The non-payment period incurred when a person moved to an area of lower employment prospects was increased from 12 to 26 weeks.

A person unemployed as a result of industrial action that was in breach of an order, direction or injunction, could not qualify for an unemployment payment for six weeks after the industrial action ceased.

From March a rate reduction period replaced a deferment period as a penalty for administrative breaches. Those serving a rate reduction period had their rate of payment reduced by 16 per cent for 13 weeks.

Activity test breaches could be imposed for a failure to attend an interview, failure to complete a labour market program and non-declaration of income from remunerative work.

The earnings credit scheme was abolished.

The calculation of preclusion periods due to the receipt of compensation after 20 March 1997 was altered. The compensation amount was divided by the amount above which no pension was payable to a single person under the income test. Previously the compensation amount had been divided by 'all persons average weekly earnings'. For compensation received after 20 March 1997, the compensation preclusion period was applied only to the recipient and not to his or her spouse as had previously been the case.

The exemption under the 'extended deeming' provisions for the first $2000 ($4000 for a couple) held by a pensioner was removed.

A Newly Arrived Residents Waiting Period of 104 weeks was introduced. Migrants who arrived after 4 March 1997 were unable to apply for a range of payments until the period had expired. Refugees, their immediate family and certain spouse visa holders were exempt.

From July the Health Benefit Card was replaced by the Health Care Cards for SA recipients and incapacitated for work NSA recipients.

The activity test arrangements were amended to allow recipients to be directed to participate in the Work for the Dole Scheme (WFTD). A payment of $20 per fortnight was made to participants.

From September:

Superannuation assets were assessed under the income and assets tests after a person had been in receipt of income support for 39 weeks after reaching the age of fifty five years.

Voluntary work arrangements for those not subject to activity agreements were adjusted. Those aged 50 years or more could satisfy the activity test by undertaking voluntary work for an unlimited number of days per year or by a combination of voluntary and paid work with an approved organisation for at least 40 hours per fortnight. Those aged under 50 years and in receipt of income support for 3 months or more could satisfy the activity test by undertaking full-time voluntary work for six fortnights in their first 12 months on income support.

An income maintenance period was introduced. Leave payments were treated as income from the date they were received for the period for which they were calculated. Eligible termination payments rolled over into an appropriate fund were exempt.

The liquid assets test was amended so that people with liquid assets of over $2500 if single or $5000 if partnered were subject to waiting periods of from one to thirteen weeks depending on the amount they had.

 

1998

From July high income seasonal, contract or intermittent workers were subject to a non-payment or preclusion period following the end of their employment. The income derived from that period of work was divided by average weekly ordinary time earnings (AWOTE). If the period that resulted from that calculation was longer than the period actually worked, the person was precluded from receiving a payment for the remainder of that period. The partner of such a worker was also precluded from receiving certain payments during the preclusion period. In the case of a worker with a partner twice AWOTE was used in the calculation of the preclusion period.

From July Youth Allowance (YA) was introduced. It was the main income support payment for young people. It replaced YTA and NSA for 15 to 20 year old unemployed people.

From July Enhanced Mutual Obligation arrangements were introduced for 18 to 24 year olds. All young unemployed people who had been receiving payment for six months were required to undertake an additional activity in return for receiving payments. For more detail on the history of Mutual Obligation see Mutual Obligation/Work for the Dole e-brief

 

1999

From July a one-off crisis payment was introduced for people in hardship due to being forced out of their home by such causes as domestic violence or house fires. The payment was equivalent to one week of allowance. The new payment also replaced the existing prisoner release payment.

From September participants in the Community Development Employment Projects Scheme (CDEP) were eligible for a $20 per fortnight participation supplement, rent assistance, pharmaceutical allowance and a health care card.

 

2000

From July the rate of allowances was increased as part of a package of measures to compensate for the impact of the introduction of the GST. An increase of four per cent was paid to all recipients. Indexation provisions were adjusted so that half of this four per cent increase would effectively be an advance on whatever rate increase occurred in March 2001. This left an effective long term increase in the allowance rate of two percent.

The income and asset test free areas that applied to allowances were also increased by two and a half percent as part of the compensation package.

 

2001

From April overpayments caused by administrative error gave rise to recoverable debts.

From July the superannuation assets of people aged between 55 years and age pension age were exempt from the income and assets tests.

Certain activity test breach penalties were waived for recipients upon commencement in the Community Support Programme. This practise already applied to those commencing a Work for the Dole Project.

From September partners of compensation recipients were no longer subject to dollar for dollar reduction of their payment. Instead once the compensation recipient's payment was reduced to nil by dollar for dollar deductions the excess was treated as income under the income test for their partner.

 

2002

From July recipients subject to activity test breach penalties had them waived if they started to participate in a rehabilitation program or a range of vocational training or labour market programs.

Breach penalties for not attending an interview ceased to be activity test breach penalties. They were treated as administrative breach penalties only.

 

2003

From September a $20.80 pf supplement was paid to people participating in approved language, literacy and numeracy training programs.

A Working Credit for workforce age people on income support was introduced. Credits of up to $48 per fortnight would be accumulated up to a total of $1000. Any income earned would reduce the amount of credit accumulated each week on a dollar for dollar basis. In fortnights where earnings exceeded the income test free area the accumulated credit would be reduced before any reduction was made to income support under the income test.

NSA recipients aged at least 50 years were able to participate in a broader range of activities in order to satisfy their participation requirements. They also were able to have penalties waived if they rectified any failure to comply with the terms of their activity agreement.

Activity test breach penalties were changed so that where a first activity test or administrative breach was incurred the penalty period could be shortened if the recipient complied with the activity requirements.
The penalty period could be reduced from 26 weeks to 8 weeks for an activity test breach penalty and from 13 weeks to 8 weeks for an administrative breach penalty.

Reduced breach penalties were not available if the recipient:

  • did not start a job as planned,
  • declined the offer of a job interview,
  • became voluntarily unemployed,
  • was dismissed from employment for misconduct,
  • knowingly or recklessly declared incorrect earnings from employment, or
  • failed to submit a satisfactory jobseeker diary.
 
2006

From July new claimants for income support with disabilities who had a partial capacity to work were no longer eligible to apply for Disability Support Pension. Most of them could apply for NSA instead and were required to seek suitable paid work of at least 15 hours per week.

New claimants for income support who were principal carers for children were no longer eligible to apply for Parenting Payment if their youngest child was aged 6 years or older if partnered or 8 years or older if single. Most could apply for NSA instead and were required to seek suitable paid work of at least 15 hours per week. Access to child care and reasonable travel times were taken into account in determining whether work was suitable. Principal carers could be exempt from the requirement to satisfy the activity test if they were: affected by domestic violence, had children with a disability or illness, had a large family, or were foster carers, home or distance educators.

NSA recipients who had a partial capacity to work or were principal carers were eligible for Pharmaceutical Allowance and a Pensioner Concession Card.

Very long term unemployed people with a pattern of work aviodance could be required to undertake full-time Work for the Dole for 50 hours per fortnight.

Recipients aged 55 years or more could satisfy job search requirements by undertaking at least 15 hours per week of voluntary or paid work. Younger recipients all had the same job search requirements.

Penalties under the compliance regime were changed so that an eight week non-payment period was imposed after three participation failures within 12 months. Each participation failure resulted in a non-payments period that lasted until compliance occurred.

The income test was changed so that income between $62 and $250 per fortnight reduced payment by 50 cents for each dollar of income. Income over $250 per fortnight reduced payment by 60 cents for each dollar of income.

Debts resulting from knowingly incorrectly declaring earnings resulted in a one off 10% recovery fee rather than a fixed amount penalty.

 

back to contents

Chronology Index

Sickness Benefit 1945 to 1991, Sickness Allowance from 1991

Commencement Date

Details

Government at Commencement

Original enabling legislation:

Unemployment and Sickness Benefits Act 1944 (No. 10 of 1944)

1945

From July Sickness Benefit (SB) was introduced. Benefits were paid to people who were temporarily incapacitated for work due to sickness or accident and who had consequently suffered a loss of income. A medical certificate and proof of loss of income were required.

A waiting period of seven days existed before payment of benefit commenced and residence in Australia of 12 months immediately prior to application for benefit was required. Payment of benefit could be made conditional on the beneficiary undertaking training, undergoing a medical examination, receiving treatment or doing work as required.

An income test applied to SB but not an assets test. Income above certain limits reduced benefit by one pound for each pound of income (see Table 2 for changes over time in means testing limits). The income of a beneficiary's spouse was taken into consideration as was any 'unearned' income of dependent children. Such income affected only the additional allowances for dependents in the case of SB. However the rate of SB could not exceed the income lost by the beneficiary as a result of their sickness. Sick pay from friendly societies was partially exempt. SB was recoverable from future compensation or damages awards.

Curtin, ALP

1947

From July provision was made for payment of a partial additional benefit for a partially dependent wife.

Additional benefit was payable for a housekeeper where a beneficiary had dependent children and received no benefit for a wife.

Where a beneficiary, living apart from his spouse, was paying spousal maintenance, additional benefit was not to exceed the amount of such maintenance.

Wives permanently living apart from their husbands became eligible for benefit.

Where SB was claimed within six weeks of the incapacity commencing no loss of benefit was to occur due to the delay.

Residency requirements were waived where the claimant satisfied the Director‑General that they intended to reside permanently in Australia.

Pension income of a spouse was partially exempted and the income of dependent children was totally exempted from the income test.

Chifley, ALP

1950

From November the period during which a person could claim SB without loss of arrears was extended from six weeks after the date on which the incapacity arose to 13 weeks.

War pensions were exempted from the income test.

Menzies, LCP

1952

From September amounts received from registered hospital benefit organisations, up to the amount of the hospital fees paid, were exempted from the income test.

 

1953

From October amounts received from registered medical benefit organisations, up to the amount of fees paid, were exempted from the income test.

 

1958

From September benefits received from registered hospital and medical benefits organisations and friendly societies were wholly exempted from the income test.

 

1960

From September restrictions on the eligibility of Aboriginal people were removed.

 

1966

From September SB was made payable in arrears to a person discharged from a mental hospital. SB could be paid for a maximum of 12 weeks of the period of hospitalisation if the claim was lodged within 13 weeks of discharge.

Holt, LCP

1969

From September adult rates of benefit became payable to unmarried minors with no parents living in Australia.

Gorton, LCP

1970

From September a higher rate of benefit, equivalent to the standard rate of age and invalid pension, was introduced for people receiving SB for more than six weeks.

Long‑term sickness beneficiaries became eligible for supplementary allowance (later renamed rent assistance).

 

1973

From March SB became payable at the same rate as pensions. A standard rate for single beneficiaries and a married rate for married beneficiaries and for their spouses were introduced. In the process the lower rate of benefits for single juniors and the higher long‑term SB rate were abolished. Entitlement to supplementary benefit for long term sickness beneficiaries was retained.

Pension income of a spouse was fully exempted from the income test.

Whitlam, ALP

1974

From November payment of additional benefit in respect of a de facto wife of an unemployment or sickness beneficiary could be made where the relationship had existed for at least three years.

 

1975

From May benefits began to be paid weekly in advance instead of weekly in arrears as had been the practice since 1945.

From October the junior rate of benefit for people under the age of 18 years was re‑introduced.

The requirement that a de facto relationship exist for three years before the married rate was payable was eliminated.

 

1976

From June SB became taxable.

From October benefit increases were to be indexed every six months as were pensions (except for unmarried people under 18 years of age).

Benefits became payable fortnightly.

Fraser, LNCP

1977

From November a married woman was no longer disqualified from receiving SB if it was reasonably possible for her husband to maintain her. The combined income of the beneficiary and their spouse was to be taken into account in assessing the rate of SB.

 

1978

From November indexation of SB was changed to an annual adjustment. (The only annual CPI adjustment took place in November 1979.)

 

1980

From May twice yearly automatic indexation of SB was re-introduced.

From September the pay and allowances of Defence Force Reserve members was exempted from the income test.

From November Commonwealth fringe benefits became available to sickness beneficiaries subject to the same income test as applied to age pensioners and supporting parent beneficiaries.

SB was extended to mental hospital patients.

The income test was liberalised so that income above $6 per week to $50 per week reduced benefit by 50 cents in the dollar ($3 to $40 for single 16 or 17 year olds). Only income above $50 per week reduced benefit by $1 for each $1 of income.

 

1984

From March the income test 'free area' was increased to $20 per week and benefit reduced $1 per week for each $1 of income above $70 per week.

From May single sickness beneficiaries with children became eligible for mother's/guardian's allowance (MGA).

Sickness beneficiaries became eligible for remote area allowance.

From July tax rebates were introduced for beneficiaries.

From November benefits were increased despite a fall in the CPI.

Hawke, ALP

1985

From November the waiting period when a person transferred from other income support payments to SB was removed.

 

1986

From May the income test 'free area' was increased to $30 per week.

From July receipt of a lump sum compensation payment precluded the payment of SB for a period determined by formula.

In November indexation of benefits was deferred for six weeks. Increases were delayed until December and June. Previously they had been paid in November and May.

 

1987

In June SB was not indexed. New grants of SB from December were to be at the same as the equivalent rates for UB and entitlement to rent assistance was to be the same as for UB. These measures were to bring SB and UB rates into line.

From July RA ceased to be income tested separately.

From October regular medical and entitlement reviews for SB recipients were introduced.

From December an assets test was applied to benefits for those aged 25 and over. Those with assets above the pension assets test free area were no longer eligible for benefit.

 

1988

From February benefit for recipients living apart from their spouse indefinitely due to illness was made payable at the single rate.

From June a separate maintenance income test was introduced. The benefit was reduced by 50 cents for each dollar of maintenance income above $15 per week for one child plus $5 per week for each subsequent child.

From December a standard medical certificate was introduced for determining eligibility for SB. Information on the nature of the illness and how it affects capacity to work was required.

 

1989

From January mobile benefits delivery teams were set up to provide service to remote areas.

From September the waiting period for SB was to be extended by up to four weeks if holiday pay was received for that period.

From November the first of three advances in the timing of indexation of benefits occurred. (The second and third of these advances occurred in April 1990 and September 1990.) These advances changed the timing of indexation by bringing indexation forward by three months from June and December to September and March.

Applicants for and recipients of benefit were required to supply a tax file number.

 

1990

From January an independent rate of SB for 16 and 17 year olds, equivalent to the independent rate of AUSTUDY was introduced for beneficiaries not subject to the parental income test because they were not supported by their parents.

From June the rate of benefit for single beneficiaries aged 60 or over, with no dependants, who had been on benefit for six months, was raised to the single pension rate.

From August a disaster relief payment equivalent to two weeks of maximum rate pension was introduced for those beneficiaries suffering disruption due to a major disaster. The measure was backdated to December 1989 to cover the Newcastle earthquake.

From September under 21 year old beneficiaries without dependants were paid at the single rate regardless of their marital status. Spouses had to qualify in their own right before any payment was made for them.

Married beneficiaries and their spouses were allowed to earn an additional $30 per fortnight each from salaries or wages before their benefit was reduced under the income test.

An 'at home' rate of $69.20 per week was paid to unmarried 1821 year old beneficiaries without dependants living at a parent's home.

Married beneficiaries with a spouse receiving AUSTUDY were paid half the combined married rate.

The deferment period for people ceasing education was extended to sickness beneficiaries.

Beneficiaries who were custodial parents were required to seek reasonable maintenance from the non-custodial parent of their children. Failure to seek maintenance could result in non-payment of additional benefit for the children concerned.

Married beneficiaries and their spouses were allowed to earn an additional $60 each per fortnight from salaries or wages before their benefit was reduced under the income test.

The benefits assets test was extended to under 25 year olds.

From November lodgement of a compensation claim for work related injury or illness became a pre-condition to eligibility for benefit.

 

1991

From January sickness beneficiaries were required to provide the tax file number of their spouse.

From February a liquid assets test was applied to SB recipients. Claimants with liquid assets (cash and deposits with financial institutions) of $5000 if single or $10 000 if married or single with dependants, were required to serve an additional waiting period of four weeks.

From March a minimum interest rate was deemed on cash in hand and money deposited with financial institutions for the purposes of the benefit income test. The first $2000 was exempt from this provision.

From April computerised data matching was used to detect inconsistent payments being made to people by two or more Commonwealth agencies. DSS, the Department of Veterans' Affairs, the Department of Health, Housing and Community Services, the Department of Employment, Education and Training and the Australian Taxation Office were involved in this data matching.

From July the maintenance income test free areas was indexed annually.

From November SB was replaced by Sickness Allowance (SA). SA was payable to people who were temporarily incapacitated for work because of sickness or accident. SA was payable for a period of up to 13 weeks at which time fresh medical and other evidence was required if payment was to continue. Payment beyond one year and up to three years was only possible were a person had a second or subsequent incapacity or where an existing incapacity became markedly worse. Deferment periods could be imposed where a recipient refused a request to complete a questionnaire, contact a DSS officer, attend an interview or attend a medical examination.

 

1992

From January, 16 and 17 year olds in substitute care who were not receiving State Government allowances were made eligible for the independent rate of SA.

Under 16 year olds who were above minimum school leaving age or over 15 years of age with an exemption from attending a school, who had an employment history and who were not living with or being supported by either parent became eligible for the independent rate of SA.

16 and 17 year olds who had been registered with the CES as seeking full time work for at least 13 weeks in the previous six months were made eligible for the independent rate of SA.

From March new grants of SA to a member of a couple whose partner was not receiving DSS income support were limited to half the married rate.

From November the waiting period for school leavers was modified. The waiting period was changed to 13 weeks or until 15 February whichever was the earlier for under 21 year old people who were not part of a couple and did not have dependent children. Other education leavers served a six-week waiting period. Those who had undertaken a course of education for longer than six months and then returned to income support within twelve months of the cancellation of their income support had the waiting period waived. Those who would otherwise qualify for SpB also had the waiting period waived. Part-time or casual work undertaken since leaving school and prior to the start of the waiting period was to be taken into account when setting the length of the waiting period.

Keating, ALP

1993

From January migrants who arrived in Australia after that time were not eligible for SA until six months after their arrival or their receipt of permanent residence, whichever was later.

From March the independent rate of SA for people under 18 years of age was available to those who have lived away from home for 18 weeks rather than the present 26 weeks.

15-year-old people were given eligibility for JSA/NSA if they had an employment history or had been registered with the CES for at least 13 weeks.

From September 1993 single recipients of SA were able to earn an additional $30 per fortnight before the income test reduced their payment. A similar earned income disregard for couples was increased from $30 to $50 each per fortnight.

The ordinary waiting period was waived where the claimant had been in receipt of income support within the previous 13 weeks.

A person with a partner in prison was treated as if they were not part of a couple.

 

1994

From March an earnings credit was introduced. Maximum rate recipients were able to build up a credit of up to $500 at the rate of $90 per fortnight for single recipients and $80 per fortnight for each member of a couple. If a recipient earned income in a fortnight below the amount of their credit, their payment was not reduced under the income test. However, if their earned income was greater than the cut off point for their payment under the income test, they could not use the credit.

From September the additional amount of SA paid to recipients who had a dependent spouse was replaced by a Partner Allowance (PA) paid directly to the dependent spouse. It was paid at the same rate as the married rate of SA.

 

1995

From July the income test was modified. The 'earnings disregard' was removed leaving a standard $60 per fortnight income test free area for all recipients, both single and partnered. The 100 per cent withdrawal rate was changed to a 70 per cent withdrawal rate (the 50 per cent withdrawal rate on the first $40 earned after the free area remained unchanged). Each member of a couple was made individually subject to the standard income test. Once the income of one partner reduced their own payment to nil any additional income began to reduce the payment received by the other partner.

 

1996

From March people who were temporarily incapacitated for work due to illness were not transferred to or granted SA. They remained on or were granted the payment they were otherwise eligible for, but were exempt from the activity test while they were ill.

From July a major reform of the income test treatment of financial assets was introduced. A system called 'Extended Deeming' was introduced. When assessing income under the income test, the total value of all financial assets was added together. A rate of return of 5 per cent was deemed to have been received on the first $30 000 ($50 000 for a couple) worth of assets and a rate of 7 per cent was deemed for asset holdings above these levels. The first $2000 ($4000 for a couple) was exempt from extended deeming. These rates were set at levels considered to be easily achievable using safe investments. The Minister for Social Security could vary the deeming rates as market rates changed.

Financial assets included:

  • bank, building society and credit union accounts
  • cash
  • term deposits
  • cheque accounts
  • friendly society bonds
  • managed investments
  • investments in superannuation funds, approved deposit funds and deferred annuities after age pension age
  • listed shares and securities
  • loans, debentures and bonds
  • shares in unlisted public companies
  • gifted assets above the allowable limits
  • gold and other bullion.

Financial assets did not include:

  • homes, contents or other real estate
  • cars, boats or caravans
  • antiques or stamp and coin collections
  • investments in superannuation funds, approved deposit funds and deferred annuities before age pension age
  • standard life insurance policies
  • income streams such as superannuation pensions allocated pensions, immediate annuities or allocated annuities.

Howard Lib-NP

1997

From January advance payments were restricted to amounts of up to $500 and limited to one each twelve months.

From March the calculation of preclusion periods due to the receipt of compensation after 20 March 1997 was altered. The compensation amount was divided by the amount above which no pension was payable to a single person under the income test. Previously the compensation amount had been divided by 'all persons average weekly earnings'. For compensation received after 20 March 1997, the compensation preclusion period was applied only to the recipient and not to his or her spouse as had previously been the case.

The exemption under the 'extended deeming' provisions for the first $2000 ($4000 for a couple) held by a pensioner was removed.

A Newly Arrived Residents Waiting Period of 104 weeks was introduced. Migrants who arrived after 4 March 1997 were unable to apply for a range of payments until the period had expired. Refugees, their immediate family and certain spouse visa holders were exempt.

From July the Health Benefit Card was replaced by the Health Care Cards for SA recipients and NSA recipients who were incapacitated for work.

From September superannuation assets were assessed under the income and assets tests after a person had been in receipt of income support for 39 weeks after reaching the age of fifty five years.

 

1998

From July Youth Allowance (YA) was introduced. It was the main income support payment for young people. It replaced SA for 15 to 20 year old unemployed people.

 

2000

From July the rate of allowances was increased as part of a package of measures to compensate for the impact of the introduction of the GST. An increase of four per cent was paid to all recipients. Indexation provisions were adjusted so that half of this four per cent increase would effectively be an advance on whatever rate increase occurred in March 2001. This left an effective long term increase in the allowance rate of two percent.

The income and asset test free areas that applied to allowances were also increased by two and a half percent as part of the compensation package.

 

2001

From April overpayments caused by administrative error gave rise to recoverable debts.

From July the superannuation assets of people aged between 55 years and age pension age were exempt from the income and assets tests.

From September partners of compensation recipients were no longer subject to dollar for dollar reduction of their payment. Instead once the compensation recipient's payment was reduced to nil by dollar for dollar deductions the excess was treated as income under the income test for their partner.

 

2003

From September a Working Credit for workforce age people on income support was introduced. Credits of up to $48 per fortnight would be accumulated up to a total of   $1000. Any income earned would reduce the amount of credit accumulated each week on a dollar for dollar basis. In fortnights where earnings exceeded the income test free area the accumulated credit would be reduced before any reduction was made to income support under the income test.

 
2006 From September the seasonal worker preclusion period was extended to cover people applying for SA.  

back to contents


Chronologies are written for Members of Parliament, being located on the Internet they can be read by members of the public, however some linked items are available to Members of Parliament only, due to copyright reasons.

Back to top


Top