Michael Klapdor
The 2019–20
Budget includes a one-off Energy Assistance Payment for some social
security income support recipients, and veterans pension and compensation
recipients (p. 159). Eligible single recipients will receive $75 and eligible
couples will receive $125 ($62.50 each). The payment will be exempt from income
tax and not count as income for the purposes of means testing. It is intended
to be paid before the end of the 2018–19 financial year, with legislation
introduced and passed by both Houses of Parliament on 3 April 2019.
The original
announcement of the measure, and the measure as presented in the budget papers,
limited the payment to certain social security pensioners and recipients of
some veterans payments and compensation recipients (p. 159). The exclusion of
lower-rate allowance payments, such as Newstart Allowance and Youth Allowance,
attracted significant criticism, particularly in light of the personal income
tax cuts announced in the Budget. The Australian
Council of Social Service (ACOSS) stated that the Government was ‘ignoring
the people who are doing it the hardest’.
However, when the Government introduced the Bill
for the measure the morning after the Budget was released, it had expanded
the range of payments eligible for the Energy Assistance Payment to include all
social security allowances and some previously excluded pensions, such as Wife
Pension and Widow B Pension.
Treasurer
Josh Frydenberg and Minister for Families and Social Services Paul Fletcher
stated that the payment would ‘help with their next energy bill and cost of
living expenses’. The payment will be paid into eligible recipients’ bank
accounts and does not have to be put towards energy costs. Around five million
people are expected to be eligible for an Energy Assistance Payment. The
measure announced in the Budget was expected to cost
$284.4 million over two years (p. 159) while the expanded measure is
expected to cost $365.0 million over the forward estimates.
Eligible recipients
Under the revised measure, those in receipt of the following
social security and farm household support payments will be eligible for the
Energy Assistance Payment if they were residing in Australia on 2 April 2019:
- Age Pension
- Disability Support Pension
- Carer Payment
- Parenting Payment
- Austudy
- ABSTUDY Living Allowance
- Double Orphan Pension
- Newstart Allowance
|
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow Allowance
- Widow Pension B
- Wife Pension
- Youth Allowance
- Farm Household Allowance
|
Those in receipt of the following veterans’ affairs payments
will also be eligible: Service Pension, Income Support Supplement, Disability
Pension, War Widow’s/er’s Pension or Orphan’s Pension, Veteran Payment,
permanent impairment compensation under the Military Rehabilitation and
Compensation Act 2004 (the MRCA), Special Rate Disability Pension
under the MRCA, compensation as a wholly dependent partner under the MRCA,
and permanent impairment compensation under the Safety, Rehabilitation and
Compensation (Defence-related Claims) Act 1988.
Those in receipt of an eligible veterans’ affairs payment other
than the Service Pension or Income Support Supplement will receive an Energy
Assistance Payment of $75, regardless of whether or not they are a member of a
couple.
The Bill provides that only one Energy Assistance Payment can
made to an individual, even if they are in receipt of multiple qualifying
payments: for example, the veterans’ affairs Service Pension and Disability
Pension.
Ineligible payment recipients
Under the expanded eligibility criteria presented in the
Bill and in government statements relating to the payment, there appears to be
one group that may miss out on the Energy Assistance Payment. Young people in
receipt of an Education Allowance under the Veterans’
Children Education Scheme or the Military Rehabilitation and Compensation
Education and Training Scheme have not been referred to as being eligible
for the Energy Assistance Payment. These schemes, which offer a payment similar
to Youth Allowance, are provided for under legislative instruments and it is
possible provision may be made for an Energy Assistance Payment to these young
people under a separate determination.
2017 Energy Assistance Payment
A similar one-off Energy Assistance Payment was made to
certain pensioners and veterans’ affairs payment recipients in 2017. The 2017 payment
was implemented as
part of a deal between the Government and the Nick Xenophon Team to secure
passage of a Bill providing for company tax cuts. The 2017 payment was paid at
the same rates as the 2019 payment. It was payable
to almost the same categories of recipients as the 2019 Energy Assistance
Payment, as first announced, with the notable exception of the Carer
Payment. Allowance payment recipients were excluded from the 2017 payment.
Rationale for changing eligibility
for the allowance
According to the Government at the time, the 2017
payment was limited to ‘welfare recipients who have a limited ability to
earn additional income’. A similar rationale for excluding allowances from the
2019 Energy Assistance Payment was reportedly
provided by a spokesperson for the Minister for Families and Social Services
who stated ‘the one off payment is limited to those who don’t have the
opportunity to work or earn additional income’. There are some problems with
this rationale: many pensioners do work and earn additional income while many
allowance recipients are unable to work due to illness, a temporary incapacity,
or due to caring responsibilities. However, it indicates that the Government
intended to focus the one-off payment on those in receipt of income support
payments that do not carry work participation requirements.
No clear rationale has been provided for the decision to
alter the policy the day after the Budget. In response to a Question without Notice
on the changed position, Prime
Minister Scott Morrison stated:
... the performance of the budget over the last 12 months has
meant that we are $10 billion better off this time this year than we were at
the time when we handed down the last budget. We believe that when we’re in
that position where we have outperformed on our budget and where we’ve been
able to deliver a better financial outcome we should take the opportunity to
ensure that those who need it most are given the opportunity to ease their
cost-of-living pressures.
Attempts to close the Energy
Supplement
The payment of another new small supplementary payment to
assist with energy costs is notable in the context of the Government’s previous
policy—announced
in the 2016–17 Budget and then reversed
in August 2018—to close the Energy Supplement to all new income support
recipients (including pensioners and allowances) from September 2016. The
Energy Supplement is an ongoing payment introduced as part of the carbon price
compensation package in 2013. It is paid with eligible payments and the rates
vary between payments—it is worth around $366.60 per annum for single
pensioners and $228.80 per annum for single Newstart Allowance recipients with
no children. The Turnbull
Government tried three times to legislate for the payment to be closed to
new income support recipients. They did succeed
in passing legislation in September 2016 to close the payment to new
recipients of Family Tax Benefit Part A and Family Tax Benefit Part B; and to
new recipients of the Commonwealth Seniors Health Card.
No increase in allowance payment
rates
While the decision to extend access to the Energy Assistance
Payment to allowance payment recipients has been broadly welcomed, community
groups, supported by key
business lobby groups, continue
to campaign for an increase in the payment rates of Newstart Allowance and
Youth Allowance. ACOSS has been campaigning for a $75-per-week increase in the
single rate of Newstart Allowance.
All online articles accessed April 2019
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