Posted 16/03/2022 by Michael Klapdor
Following the 2019–20 bushfires and the recent flooding in NSW and Queensland, the Australian Government has made changes to the level of assistance offered through disaster recovery payments and has previously made changes to eligibility criteria. Both the Productivity Commission and a recent royal commission have recommended structural reforms to improve the fairness and effectiveness of these payments. The Productivity Commission previously recommended that eligibility criteria be legislated rather than subject to ministerial discretion. The Royal Commission which followed the 2019–20 bushfires called for an evaluation of natural disaster financial assistance measures, suggesting assistance be linked to the level of impact of each disaster.
Australian Government disaster payments
The Australian Government provides financial assistance for those affected by natural disasters indirectly via the Disaster Recovery Funding Arrangements with state and territory governments, or directly through disaster recovery payments made under the Social Security Act 1991.
There are two main Australian Government assistance payments that can be provided via Services Australia (Centrelink) during or following a disaster:
The Minister for Emergency Management and National Recovery makes determinations to activate these payments which set out specific eligibility criteria and rates of payment. Both payments are generally only payable to Australian citizens and permanent residents but some temporary visa-holders (such as refugees/asylum seekers) are also eligible—see the list of visa subclasses eligible for Special Benefit. Ex gratia payments equivalent to the AGDRP and DRA are usually made to New Zealanders holding Special Category Visas who do not meet the residency requirements.
Changes to disaster recovery payments
Both the AGDRP and the DRA have been activated in response to the recent floods in NSW and Queensland. On 9 March 2022, the Government announced two additional payments to be made to those who had already claimed the AGDRP in the Lismore, Richmond Valley and Clarence Valley Local Government Areas (LGAs). This would mean two further payments of $1,000 to each eligible adult and two further payments of $400 per child. According to a media release, the National Recovery and Resilience Agency (NRRA) and Emergency Management Australia had determined that these LGAs were the ‘highest impacted areas and in need of additional support’. The NRRA would assess whether other LGAs would also qualify for the extra payments.
The decision to limit the additional payments to these LGAs has been criticised by residents in other flood-affected areas and Labor MP Justine Elliot described the exclusion of areas in her electorate of Richmond as ‘disgusting’.
Additional AGDRP payments for adults have not been made in response to previous natural disasters. In response to the 2019–20 bushfires, an additional $400 payment was made to those with dependent children who had received the AGDRP.
Changes were also made to the DRA in response to the 2019–20 bushfires. A new rate calculator was issued on 19 January 2020 which allowed the maximum payment rate to be paid to those whose disaster-affected income was less than the average weekly earnings for a full-time adult. This was a more generous income test than had previously been used to calculate the rate of DRA.
There have been several changes to the eligibility criteria for the AGDRP since it was introduced in 2006 including changes to the definition of ‘major damage’, excluding those who had lost access to their home or were isolated in their residence, and allowing for claims for damage to major assets (p. 4). The payment rate for the AGDRP has not changed since it was introduced.
Recommendations for reform
The recent decision to boost the level of support offered through the AGDRP for some recipients and the decision to provide additional support for children following the 2019–20 bushfires suggest the static payment rate may not provide an effective level of support, or that different disasters may require different levels of support. Regarding the additional payments for the three flood-affected LGAs in NSW, the Prime Minister stated: ‘The sheer scale and impact to these areas in northern NSW highlights the need for extra support right now’.
Changing eligibility criteria for different disasters or during disaster events can risk confusion and controversy and may lead to some individuals missing out on support where they are not aware of the changes. The Royal Commission following the 2019–20 bushfires found that individuals can have ‘engagement fatigue’ navigating different support programs and that many people make eligibility assumptions and do not attempt to access supports available to them (p. 461).
In a 2014 report on natural disaster funding arrangements, the Productivity Commission found that ‘tinkering with the AGDRP eligibility criteria has led to inequality and perceptions of unfairness (including the perception that the criteria have been both too narrow and too broad)’ (p. 117). The Commission recommended the criteria for the payment be legislated and that ministerial discretion should be removed (p. 42).
The report of the 2020 Royal Commission into National Natural Disaster Arrangements documented concerns over the effectiveness of the existing financial assistance measures provided by the Australian Government and via state and territory governments. The report stated:
We agree that establishing a broad set of recovery assistance measures that are tied to the level of impact will ensure governments can quickly deploy assistance as the effect of a natural disaster becomes known. It would also promote consistency in the treatment of affected individuals and businesses and provide greater certainty to communities by avoiding changes in recovery policies and changes in eligibility months after the disaster … (p. 463)
The Royal Commission recommended all levels of government ‘evaluate the effectiveness of existing financial assistance measures to inform the development of a suite of pre-effective pre-determined recovery supports’ (p. 463).
The Government’s response to the COVID-19 pandemic made use of different models of ‘disaster payments’, with broader eligibility (including to temporary visa holders) and higher rates of payment. While the context for the COVID-19 payments differs from that of the DRA, there are similarities in that they were designed to assist individuals whose source of income had been unexpectedly interrupted or lost.
Michael Klapdor, Income support for households affected by natural disasters: a quick guide, Research paper series, 2019–20, (Canberra: Parliamentary Library, 2020).
Michael Klapdor and Anthony Lotric, Australian Government COVID-19 disaster payments: a quick guide, Research paper series, 2021–22, (Canberra: Parliamentary Library, 2022).
Helen Portillo-Castro, Emergency management and disaster resilience: a quick guide, Research paper series, 2019–20, (Canberra: Parliamentary Library, 2019).