Bills Digest no. 3 2007–08
Social Security Amendment (2007 Measures No. 1) Bill
2007
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Conclusion
Endnotes
Contact Officer & Copyright Details
Passage History
-
Enhancements to the provision of mobility
allowance,
-
A tightening of the transition to employment
assistance for former full time students on youth allowance,
-
Enhancement of access to supplementary payments
for parenting payment - partnered recipients with a partial
capacity for work,
-
Changes to the payment rate rules for some
allowance income support payments. This will allow the care
provided for a child to be recognised by the payment the higher,
with dependent child rate, for persons providing a significant
level of care, and
-
Changes to the participation rules regarding
the acknowledgment of self employment for mature aged unemployed
jobseekers.
The government announced the changes to the
qualification criteria for mobility allowance presented in
Schedule 1 in the 2007-08 Budget. [1]
Mobility allowance is an income supplement
payment to provide financial support to persons who have difficulty
in using transport for reason of a disability to help them engage
in employment or work training. The standard rate of mobility
allowance is $74.30 per fortnight and there is a higher rate
payable of $104.00 per fortnight. Qualification for these rates is
explained below. [2]
Mobility allowance is not subject to an income or asset test and is
not taxable income.
The current qualification requirements for
mobility allowance are the person:
-
is 16 or over, and
-
has a disability that prevents them from using
public transport without substantial help for the next 12 months or
longer (there does not need to be public transport in the area to
qualify), and
-
is undertaking vocational training,
voluntary work, paid work, independent living/life skills training,
or a combination of these for at least 32 hours every four weeks on
a continuing basis, or
-
has an agreement to look for work through
the Job Network, or
-
is getting newstart allowance (NSA), youth
allowance (YA) or Austudy and is required to satisfy the activity
test, and
-
needs to travel to and from home as part of
work, training or job seeking, and
-
is an Australian resident, in Australia and not
subject to the two year newly arrived residents waiting
period.
To qualify for the higher rate of mobility
allowance, a person needs to be receiving Disability Support
Pension (DSP), newstart allowance or youth allowance (other)
[3] and one of the
following apply:
The higher rate of mobility allowance was
introduced with the Welfare to Work reforms that commenced from 1
July 2006. [6]
The amendments proposed in Schedule
1 of the Bill to the Social Security Act 1991
(SSA) aim to expand access to the standard rate of mobility
allowance to a person with a disability undertaking a vocational
rehabilitation program. The amendments also will expand assistance
to the higher rate of mobility allowance to:
-
a parenting payment (PP)
[7] recipient who meets the requirement to
qualify for the standard rate of mobility allowance, and
-
a recipient of newstart allowance, DSP, youth
allowance or PP who is also working for at least 15 hours a week on
wages levels set under the supported wage system.
[8]
The Financial Impact Statement in the
Explanatory Memorandum details that the cost of the expanded access
to mobility allowance is estimated to be $2.6 million in 2007-08,
$2.8 million in 2008-09, $2.8 million in 2009-10 and $2.9 million
in 2010-11. [9]
As a result of the government s Welfare to
Work changes, the numbers of jobseekers required to look for, and
accept work, with different characteristics from those of the past
and who also have differing needs is likely to increase. [10] For example, these
include:
-
jobseekers with a partial capacity for work,
being those who would have previously qualified for the DSP. These
are the persons assessed as being able to work for more than 15
hours a week and therefore do not now qualify for DSP, but may not
be capable of full-time work. These jobseekers would have only
part-time employment participation requirements,
-
jobseekers who are partnered parents who do not
have a qualifying child under age six. These persons would have
previously qualified for parenting payment partnered (PPP), but are
now provided with NSA or YA and required to look for and accept
part-time work (up to 15 hours a week),
-
jobseekers who are single parents who do not
have a qualifying child under age eight. They can no longer claim
parenting payment single (PPS) from 1 July 2006. They are now
provided with NSA or YA and required to look for and accept
part-time work (up to 15 hours a week).
There are also more jobseekers who have
recently entered the pool. From 1 July 2007 a further 233 000
jobseekers on PPP or PPS will be required to look for at least 15
hours a week work. [11] These are the PPP or PPS recipients who claimed before
1 July 2006 and are therefore allowed to stay on PPP or PPS until
their youngest child turns age 16. However, from 1 July 2006 they
had a year before being required to seek part-time work (up to 15
hours a week). The year ends when their youngest child turns seven
or 1 July 2007, whichever is the later.
The expansions of access to mobility allowance
and also to the higher rate of mobility allowance contained in the
provisions presented in Schedule 1 are logical and
are mostly a catch up reflecting the increased number of jobseekers
who have a disability and/or are parents required to look for and
accept work arising from the Welfare to Work changes.
The amendments to the SSA presented in
Schedule 2 of the Bill basically place the
emphasis on the young person receiving youth allowance as a full
time student to advise Centrelink when they cease full-time study.
Failure to immediately advise that they have ceased full-time study
will mean they will run the risk of not being entitled to youth
allowance (or newstart allowance).
The amendments presented in Schedule
2 arise from the initiative announced by the government in
the 2007-08 Budget. [12]
Currently, youth allowance is payable to a
full time student 16 to 24, or if they are an unemployed jobseeker,
aged 16 to 20. Unemployed jobseekers aged 21 or more may qualify
for newstart allowance and full time students aged 25 or more may
qualify for Austudy payment. For a full time student, once they
cease full time study they can only qualify for youth allowance (or
newstart allowance if aged 21 or more) if they are then an
unemployed jobseeker who satisfies the work search activity
test.
Under the amendments presented in
Schedule 2 of the Bill, where a youth allowance
recipient does not immediately advise Centrelink that they have
ceased full time study and there is then a gap between when this
study stopped and when they register as an unemployed jobseeker,
they cannot be paid youth allowance (or newstart allowance) in the
gap. The reason they cannot qualify for payment is the new
provisions will specify that the Secretary could not be satisfied
the person is actively seeking work in the gap. This potentially
could see a gap in qualification and therefore a gap in payments
for some individuals between the date when they ceased full time
study and when they advise Centrelink of this and then register as
an unemployed jobseeker.
There are generic provisions in the Social
Security (Administration) Act 1999 (SSAA) empowering the
issuing of notices to payment recipients requiring them to notify
(Centrelink) of changes in their circumstances. Section 68 of the
SSAA is one of these provisions. [13] These notification requirements are on all
letters sent by Centrelink to payment recipients, like the letter
of grant of payment and any other correspondence sent. One of the
notifiable events that is provided to all full time students
receiving youth allowance is the requirement to notify if they
cease full time study.
The fact that there will be gaps in payment
for some individuals is evidenced in the Financial Impact Statement
in the Explanatory Memorandum. It details that the changed
provisions for youth allowance in Schedule 2 of
the Bill is estimated to cost $0.2 million in 2007-08 but
thereafter realise some savings of $0.6 million in 2008-09, $0.6
million in 2009-10 and $0.6 million in 2010-11. [14]
The Explanatory Memorandum explains the
rationale behind the provisions presented in Schedule
2:
This measure will ensure the equity of treatment
of job seekers receiving youth allowance in that all recipients
will undertake job seeking efforts at an acceptable and appropriate
level in order to remain eligible for the allowance.
[15]
It is probable that for a number of youth
allowance recipients ceasing full time study and then intending to
go on to youth allowance (or newstart allowance) as an unemployed
jobseeker, they do not immediately notify Centrelink when they
cease study. This therefore leaves gaps up until when they do
notify and are then advised to register as an unemployed jobseeker.
The onus will be on the youth allowance recipient to notify
immediately they cease study, otherwise there will be a gap in
their payments.
The amendments
presented in Schedule 3 arise from the initiative
announced by the government in the 2007-08 Budget. [16] Essentially the
provisions are to expand access to a range of supplementary
payments and concessions for PPP recipients with a partial capacity
to work, being assistance and concessions that are also currently
provided to PPS recipients with a partial capacity to work.
The current access to the supplementary
payments and concessions for PPS recipients with a partial capacity
to work were provided with the passage of the Employment and
Workplace Relations Legislation Amendment (Welfare to Work and
Other Measures) Act 2005. [17] This Schedule is like the mobility allowance
provisions in Schedule 1, in that it is a catch up
for like income support recipients with similar needs who should
receive the same level of assistance.
The extra assistance to be provided to PPP
recipients is access to the:
-
pensioner education supplement (PES),
[18]
-
telephone allowance,
[19]
-
pensioner concession card (PCC)
[20], and
-
pharmaceutical allowance.
[21]
As referred to in the background to
Schedule 1, there are also more jobseekers soon to
enter the pool of persons required to look for and accept work to
qualify for payment. From 1 July 2007 a further 233 000 jobseekers
on PPP or PPS will be required to look for at least 15 hours a week
work. [22] These
are the PPP or PPS recipients who claimed before 1 July 2006 and
are therefore allowed to stay on PPP or PPS until their youngest
child turns age 16. However, they had a year before being required
to seek part-time work (work of up to 15 hours a week). The year
ends when their youngest child turns seven or 1 July 2007,
whichever is the later.
The Financial Impact Statement in the
Explanatory Memorandum details that the cost of the expanded access
to PPP recipients, as presented in Schedule 3 of
the Bill, is estimated to be $1.6 million in 2007-08, $0.6 million
in 2008-09, $0.7 million in 2009-10 and $0.7 million in 2010-11.
[23]
The small estimated costs with this expanded
access to supplementary payments and concessions for certain PPP
recipients indicates the initiative will not be accessed by many
recipients.
Not all PPP recipients with a partial capacity
to work will qualify for the PES. Only those who are described as a
transitional DSP applicant will qualify. This refers to those who
claimed and were granted DSP between the 11th of May
2005 (day of the announcement of the Welfare to Work changes in the
2005-06 Budget) and the 30th of June 2006 (day before
the Welfare to Work changes commenced from 1 July 2006). The DSP
recipients granted in this period could be required to undertake a
review of their work capacity. At this review, some may have been
found to be able to work for more than 15 hours a week and
subsequently cancelled from DSP. Some of these former DSP
recipients may alternatively qualify for and be paid PPP. The
provisions in Schedule 3 allow these PPP
recipients (who are former DSP recipients) access to the PES.
For the other supplementary payments to be
provided to PPP recipients in Schedule 3, being
telephone allowance, the PCC and pharmaceutical allowance, access
is less restrictive than that for the PES. Essentially a PPP
recipient with a partial capacity for work will be able to access
the telephone allowance, the PCC and the pharmaceutical
allowance.
The amendments presented in Schedule
4 of the Bill have their origins in the Ministerial
Taskforce report on child support called In the Best Interests
of the Children reforming the child support scheme. [24] The amendments
proposed will insert new definitions into the SSA for:
These definitions will mirror like definitions
in the Family Law Act 1975 (FLA) and also in the A New
Tax System (Family Assistance) Act 1999 (FAA). The FAA is the
legislation that provides for the income supplement payments paid
to families in respect of children being Family Tax Benefit (FTB)
and Child Care Benefit (CCB).
The government s main legislative amendments
made in response to the recommendations contained in the In the
Best Interest of the Children report were to the FLA and the
Child Support Scheme (CSS) arrangements. The Acts concerned were
the Family Law Amendment (Shared Parental Responsibility) Act
2005 [25] and
also the Child Support Legislation Amendment (Reform of the
Child Support Scheme - New Formula and Other Measures) Act
2006. [26]
The net effect of inserting these new
definitions into the SSA and then amending some references and
applications using these definitions will mean that for some
payments, recipients will be paid a rate of assistance that
acknowledges their care of a child. The child care provided will
need to be for a minimum period, being for at least 14 per cent of
the time over the payment period. These amendments accord with
recommendations in the In the Best Interest of the
Children report. The specific recommendation was:
Recommendation 1.15
Non-resident parents who have care of a child between 14% and
34% of nights per year should continue to have access to Rent
Assistance, the Health Care Card, and the Medicare Safety Net if
they meet the other eligibility criteria for FTB Part A at the
required rate. They should also be paid the with child rate for the
relevant income support payments, where they meet the relevant
eligibility criteria. The Government should also consider the
adequacy of the current level of this rate in the light of the
research on the costs of children conducted by the Taskforce.
[27]
Where a minimum level of care is being
provided for a child (that is for at least 14 per cent of the
time), the amendments will allow an increased rate of payment for
youth allowance, newstart allowance, mature age allowance and
sickness allowance. For example, the current single rate of
newstart allowance with no dependent children is $424.30 per
fortnight, whereas for a single person with a dependent child the
fortnightly rate is $458.90. [28] Sickness allowance and mature age allowance have
the same rates as newstart allowance, being all paid at the benefit
rate. For youth allowance, the single rate for a person aged 18 or
more living away from home is $348.10 per fortnight, whereas for a
single person with a dependent child the fortnightly rate is
$456.00. [29]
The amendments do not propose to refer to
other payments, especially PPS, which is more commonly referred to
as the sole parent pension. The amendments proposed do not refer to
the definition of principle carer in the SSA, [30] so it will continue that only
one person at a time can be paid PPS in respect of a child.
The Financial Impact Statement in the
Explanatory Memorandum details that the cost of the payment of
higher rates of allowances to persons with a dependent child, as
presented in Schedule 4 of the Bill, is estimated
to be $1.2 million in 2007-08, $1.2 million in 2008-09, $1.3
million in 2009-10 and $1.3 million in 2010-11. [31]
Schedule 5 of the Bill
contains minor amendments to include self employment as an
acceptable activity for the activity test requirements for
parenting payment or newstart allowance. Currently, the references
in the SSA are only to suitable paid work for another person ,
which doesn t include self employment. [32] The provisions change the references
to paid work that the Secretary regards as suitable , so it will
encompass both paid work for another person and also self
employment.
Of course, for newstart allowance, the basic
requirement that the person is unemployed would still need to be
met, so if the person was engaged in self employment and not
unemployed, qualification to newstart allowance could not be met.
Any self employment would need to be minimal and the person still
satisfies the requirement that they are essentially unemployed and
actively seeking suitable paid employment.
For parenting payment, the participation
requirements arise from the Welfare to Work changes made by the
government from 1 July 2006. [33]
The Financial Impact Statement in the
Explanatory Memorandum details that there are no extra costs
arising from these changes. [34]
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Items 1 and 2 insert the
requirements about a vocational rehabilitation program into the
qualification requirements for mobility allowance. Item
3 adds a definition of a vocational rehabilitation program
into the SSA. Item 11 inserts provisions setting
out when a person can qualify for the higher rate of mobility
allowance if they are working for 15 or more hours a week and being
paid under a SWS arrangement.
Item 2 inserts a new sub
section into section 541 of the SSA, being the activity test
section stipulating that a person cannot satisfy the activity test
if they haven t advised they are ceasing full time study.
Item 3 inserts provisions for the application of
the amendment to section 541 being on or after the later of Royal
Assent or 1 January 2008.
Item 2 inserts provisions
allowing for the qualification to the payment of PES where the
person is a transitional DSP recipient, has a partial capacity for
work and is undertaking the requisite study. Item
3 inserts a provision that will provide for the rate of
PES payable to be same as if the person was still a DSP
recipient.
Item 5 provides for PPP
recipients with a partial capacity for work to access the telephone
allowance. Item 7 does likewise but referring to
the PCC. Item 21 inserts a provision to apply the
provisions in Schedule 3 to persons claiming PP on
or after 1 July 2006, being the date the Welfare to Work measures
also commenced.
Items 1, 2 and 3 inserts
provisions into the definitions section of the SSA, being section
23 to define family law order , parenting plan and registered
parenting plan respectively.
Items 4 and 5 insert new
provisions into the rate calculator provisions of the SSA to allow
for the payment of the higher, with dependent child rate for
newstart allowance, sickness allowance, mature age allowance and
youth allowance. The provisions refer to a person providing for the
care of a child for at least 14 per cent of the time for a
period.
Items 1, 2 and 3 replace
existing provisions in the SSA that currently refer to paid work
for another person to paid work that the Secretary regards as
suitable .
Conclusion
The amendments to the SSA provided in this
Bill are essentially beneficial. The provisions in
Schedules 1 and 3 providing expanded access to
mobility allowance and also other payments and concessions to PP
recipients with partial capacities for work are a catch up with the
Welfare to Work provisions and arrangements that commenced from 1
July 2006.
The Schedule 4 provisions,
which will allow increased rates of assistance for persons caring
for a child, could see two persons receiving the higher with child
rates of assistance in respect of one child. This is unprecedented
but accords with the recommendations made in the In the Best
Interests of the Children report. [35]
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Endnotes
[2] . Mobility
allowance rates effective as at July 2007.
[3] . Youth allowance
(other) is paid to unemployed jobseekers aged 16 to 20.
[4] . Department of
Employment and Workplace Relations.
[5] . DEWR funded
service provider refers to a contracted Job Network provider.
[6] . Dale Daniels
and Peter Yeend, Employment and Workplace Relations Legislation
Amendment (Welfare to Work and Other Measures) Bill 2005, Bills
Digest No. 70 2005-06, Parliamentary Library, Canberra, 6
December 2005. http://www.aph.gov.au/library/pubs/bd/bd05-06.htm
[7] . Parenting payment single (PPS) is more
commonly known as the sole parent pension. Parenting payment
partnered (PPP) is paid to a partnered person who has at least one
child aged under 6 who is wholly or substantially in their care and
has a partner and they and/or their partner's income and assets are
below a certain amount.
[8] . This supported
wage system (SWS) incorporates a process of productivity-based wage
assessment. For example, if a person involved in the SWS is
assessed as having a productivity level of 70% compared to
co-workers performing the same duties, the worker and the employer
can agree to ongoing employment at a pay rate of 70% of the normal
rate.
[9] . Explanatory
Memorandum, Financial impact statement.
[10] . Dale Daniels
and Peter Yeend, Employment and Workplace Relations Legislation
Amendment (Welfare to Work and Other Measures) Bill 2005, op.
cit.
[11] . The Hon. Joe
Hockey, MP, Minister for Employment and Workplace Relations,
Speech to the Australian Mines and Metals Association,
Perth, Australia, 27 March 2007.
[14] . Explanatory
Memorandum, Financial impact statement.
[15] . Explanatory
Memorandum, p. 7.
[17] . Dale Daniels
and Peter Yeend, Employment and Workplace Relations Legislation
Amendment (Welfare to Work and Other Measures) Bill 2005, op.
cit.
[18] . To qualify
for PES, a person must be in receipt of either DSP, carer payment,
(adult or child), special benefit (as a sole parent), widow B
pension, widow allowance, wife pension or PPS and undertaking
approved full-time or part-time study. Part-time study must be at
least 25% of a full-time study load and can be approved if is a
sole parent, carer or has a substantial disability. The PES rate is
$62.40pf if claimant is studying at least 50% of full-time study
load and qualified for DSP, Invalidity Service Pension or war
widows/ers pension and also receiving ISS and has a dependent
child. The PES rate is $31.20pf for other qualified persons.
[19] . Telephone
allowance is a quarterly payment of $21.40 (single) or $10.70
(partnered each) to persons who are telephone subscribers and are
eligible to a PCC or a Commonwealth Seniors Health Card.
[20] . A PCC is issued to a
person receiving:
The PCC
entitles the holder to reduced cost medicines under the
Pharmaceutical Benefits Scheme (PBS). The holder may also be
entitled to extra concessions from State and local government
authorities, which may include:
-
reductions in property and water rates,
-
reductions in energy bills,
-
a
telephone allowance,
-
reduced
fares on public transport,
-
reductions on motor vehicle registration, or
-
one or
more free rail journeys within the State each year.
PCC
concessions vary from State to State and some of these extra
concessions are also available for dependents.
[21] . Pharmaceutical
allowance is $5.80pf (single) or $2.90pf (partnered each). It is
paid to recipients of pension,
sickness allowance,
bereavement allowance,
carer payment (adult),
carer payment (child), or
parenting payment (single). It is also payable to a person
receiving
mature age allowance,
youth allowance,
newstart allowance, Abstudy,
partner allowance or
widow allowance during a period of temporary illness. It is
also payable to a person receiving
newstart allowance,
widow allowance,
partner allowance,
parenting payment (partnered),
Austudy , Abstudy
payment or
special benefit and who has turned age 60 and
has also been receiving income support payment continuously for at
least nine months.
[22] . The Hon. Joe
Hockey, MP, Minister for Employment and Workplace Relations,
Speech to the Australian Mines and Metals Association, op.
cit.
[23] . Explanatory
Memorandum, Financial impact statement.
[24] . Ministerial
Taskforce on Child Support, In the Best Interests of the
Children reforming the child support scheme, Canberra,
Australia, 3 June 2005.
[26] . Peter Yeend,
Child Support Legislation Amendment (Reform of the Child Support
Scheme - New Formula and Other Measures) Bill 2006, Bills
Digest No. 43 2006-07, Parliamentary Library, Canberra, 18
October 2006. http://www.aph.gov.au/library/pubs/bd/index.htm
[27] . Ministerial
Taskforce on Child Support, In the Best Interests of the
Children reforming the child support scheme, op. cit.,
recommendation 1.15, p. 161.
[28] . Newstart
payment rates refer to July 2007.
[29] . Youth
allowance payment rates refer to July 2007.
[30] . In the SSA,
section 5 sets out the definitions of family relationships and
children. Principal care is defined in sections 5(15) to 5(24) and
section 5(15) provides:
(a) the child is a
dependent child of the person; and
(b) the child has not turned 16.
Note: The definition of dependent child
in subsection (2) requires:
(a) the adult to be legally responsible (whether alone or jointly
with another person) for the day-to-day care, welfare and
development of the child: subsection (16) deals with the
circumstances in which a step-parent is taken to have such legal
responsibility; and
(b) a child to be in an adult's care: subsection (17) deals with
the circumstances in which a child is taken to remain in an adult's
care.
[31] . Explanatory
Memorandum, Financial impact statement.
(a)
is engaged in approved unpaid voluntary work for an approved
organisation for at least 30 hours in the period; or
(b)
is engaged, for at least 30 hours in the period in a combination
of:
(i)
approved unpaid voluntary work for an approved organisation;
and
(ii)
suitable paid work for another person; or
(c)
is engaged for at least 30 hours in the period in paid work that
the Secretary regards as suitable.
[33] . Dale Daniels
and Peter Yeend, Employment and Workplace Relations Legislation
Amendment (Welfare to Work and Other Measures) Bill 2005, op.
cit.
[34] . Explanatory
Memorandum, Financial impact statement.
[35] . Ministerial
Taskforce on Child Support, In the Best Interests of the
Children reforming the child support scheme, op. cit.
Peter Yeend
20 July 2007
Social Policy Section
Parliamentary Library
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