Bills Digest no. 41 2007–08
Social Security Amendment (2007 Measures No. 2) 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
-
providing the Minister with the power to write
guidelines, in a Legislative Instrument, about work capacity
assessments and that the Secretary must comply with these
Ministerial guidelines
-
changes to who provides the impairment points
ratings for the Disability Support Pension (DSP)
-
the introduction of a new participation
requirement exemption category for a relative caring for a child
where that relative is also subject to a family law order,
and
-
smoother transfers from one payment to another,
where the Secretary has decided the person should be transferred
and removing the need for a claim for the new payment.
Schedule 1 inserts a new
definition of relatives (other than parents) into the Social
Security Act 1991 (SSA). This definition will be used in the
context of the work search and work participation requirements for
persons receiving:
-
newstart allowance
-
parenting payment - partnered (PPP)
[1]
-
parenting payment - single (PPS)
[2]
-
youth allowance (other),
[3] and
-
Participation requirements have been in place
for newstart allowance, youth allowance (other) and special benefit
(unemployed jobseeker) for a long period. New participation
requirements for PPS and PPP were introduced with the Welfare to
Work changes that commenced from 1 July 2006. [5] Under the Welfare to Work changes,
people who are principal carers [6] on newstart allowance, PPP or PPS with a youngest
child aged 6 or more can be subject to participation requirements
which might require them to look for and accept work. There are
specified circumstances where a principal carer might be exempted
from these participation requirements, for example where:
-
the person is an active, registered foster
carer
-
the person is providing home schooling for
their child(ren)
-
the person is facilitating distance education
for their child(ren), or
-
the person is caring for a large family (4 or
more children aged between 6 and 15 years).
The SSA allows the Secretary to set the length
of the period of a participation exemption as a matter of policy
and that period is currently for up to 12 months.
Provisions to provide for a new category of
participation requirement exemption are presented in
Schedule 1 of the Bill. Where a principal carer is
providing care for a child, as a result of a family law order under
the Family Law Act 1975 (FLA) and the person meets the
relatives (other than parents) definition for a child, they will
also be allowed access to a participation requirement exemption. It
is not necessary that the child for whom the person is a relative
and also the principal carer of is also the child who is subject to
the family law order; the participation exemption being designed to
recognise the extra effort required to take on the care of a
child.
In adding this category of relative who is a
principal carer but not a parent as an participation exemption
category, this will also allow the person, where they are single
and they receive newstart or youth allowance, access to the higher
PPS payment rate. [7]
It is not uncommon for a relative to take on
the care of a child. The child s parent may not be willing to care
for the child, or are ill, or are in jail, or their whereabouts are
unknown etc. In these cases, the relative can qualify for Family
Tax Benefit (FTB) if they are the principal carer of the child and
can make the primary decisions about the care of the child. The
provisions presented in Schedule 1 will allow a
relative principal carer of a child exemption from the
participation requirements for up to 12 months. There is no minimum
age requirement of the child for the person to qualify for this
participation requirement exemption.
These amendments essentially follow on from
participation requirements exemptions that were contained in the
original Welfare to Work legislation for persons caring for a
child. [8] This new
exemption category is probably being presented as a refinement of
the SSA after the experience of cases where the person caring for a
child is a relative but not the parent.
The government announced the intention to
reinforce the role of job capacity assessment providers [9] in the 2007-08 Budget.
[10] The Budget
initiative detailed that the SSA would be amended to ensure that
decisions made by the Social Security Appeals Tribunal (SSAT) and
the Administrative Appeals Tribunal (AAT) would take into account
evidence of work capacity. [11]
The announcement of the initiative in the
Budget detailed the estimated cost of the changes to the work
capacity assessment provisions in the Bill would be $1.9 million in
2007-08, $0.5 million in 2008-09, $0.1 million in 2009-10 and $-0.5
million in 2010-2011.
The savings figure in 2010-2011 probably
reflects tighter work capacity assessments and decision making in
the out years.
Work capacity assessments are primarily made
as a part of determining qualification for payments, especially the
Disability Support Pension (DSP). The two main qualification
requirements for DSP are:
Work capacity assessments are also made for
other purposes, for example where an unemployed jobseeker on
newstart allowance has a medical condition rendering him or her
unable to work for a temporary period, or where a person is able to
work for more than 15 hours a week but less than 30 hours a week
and therefore has a partial work capacity.
Job Capacity Assessors (JCA) have their
origins in a government initiative in the 2001-02 Budget to make
more use of independent expert assessors when assessing a persons
work capacity. [13]
In that initiative, the government allocated $65 million over 4
years to allow the greater use of external expertise in work
capacity assessments. Prior to this initiative, it was rare to
obtain an external expert opinion on work capacity by for example
an occupational therapist for a DSP claim assessment. The vast
majority of work capacity assessments used the Commonwealth Medical
Officer s report and reference to the reports provided by the
claimant and the occasional medical specialist report.
At present, decisions about work capacity
under the SSA use guidelines written by the Secretary. These
guidelines are descriptive and provide considerable detail. In all
work capacity assessments the assessment and determination of a
person s work capacity is subjective; it is not solely a
quantifiable assessment. It is a matter of judgement. This is
necessary because the way a medical condition affects an individual
and also affects their work capacity varies between individuals. A
medical condition may render one person unable to work for at least
15 hours a week yet the exact same condition may allow another
person to work for 20 hours a week. In work capacity assessments
other factors are at play like the person s age, their work history
and experience, their work skills, their communication skills,
their response to medication or other medical interventions, their
capacity to deal with and respond to their medical condition
etc.
Work capacity assessments are important as
they can determine if a person is qualified to access certain
payments, like DSP, which requires that the person is unable to
work for at least 15 hours a week at full award wages for at least
the next two years. [14] Where it is considered that a person can work for more
than 15 hours a week (and therefore is not entitled to DSP), then
another income support payment might be more appropriate, like
newstart allowance or PPP.
Newstart allowance (and sometimes PPP)
requires the person to look for and accept work. This is where a
partial work capacity assessment might be used, that is for a
person who has been assessed as being able to work for more than 15
hours a week, and therefore not entitled to DSP, but less than 30
hours a week. Likewise, for PPP (where the youngest qualifying
child is aged 6 or more), work capacity assessments can apply as
the participation requirements might require the person to look for
and accept work.
A significant change presented in the Bill to
the work capacity assessment provisions in the SSA is to replace
the guidelines for making these work capacity assessments from
those made by the Secretary with guidelines to be set out in a
Legislative Instrument by the Minister. The changes will also
require the Secretary to comply with these guidelines.
The Explanatory Memorandum does note that
there are currently no Secretary s guidelines in a Legislative
Instrument. The current guidelines being used are those authorised
by the Secretary, but not currently set out in any Legislative
Instrument.
As they currently exist, the Secretary s
guidelines are not law and are merely descriptions or clarification
of how the law should be applied or interpreted and they do not
bind decisions makers. By comparison, requiring the guidelines to
be made via a legislative instrument, will give the guidelines the
force of law. The guidelines will also be disallowable by either
House of Parliament in the usual manner under the
Legislative Instruments Act 2003
(LIA). [15] Thus there will be the potential for improved
Parliamentary scrutiny of the guidelines. The guidelines will also
be available on-line via the Federal Register of Legislative
Instruments.
Historically, the use of Legislative
Instruments attached to the SSA has been very minimal. Where there
needs to be qualification or payment requirements spelt out, this
has been generally placed inside the SSA, not in an attached
Legislative Instrument. The culture has been one of; if you are to
make payments to a person, the qualification requirements and the
payment conditions should be spelt out in legislation. More
recently this has changed. For example, in the major legislation
supporting the government s Welfare to Work initiatives was the
Employment and Workplace Relations Legislation Amendment
(Welfare to Work and Other Measures) Act 2005. [16] This Welfare to Work
Act did make extensive use of attached Legislative Instruments to
spell out in more detail the conditions of payment eligibility,
activity testing exemptions and other matters.
The provisions presented in this Bill are
aimed at making work capacity assessment decisions more secure at
law. It will also more closely confine the Secretary to decisions
made within the descriptions and restrictions as set out in the
words in the Legislative Instrument. While the Legislative
Instruments provided for this have not been tabled in the
Parliament yet, it is probably safe to assume (from the words in
the initiative announced in the Budget), [17] that the Instruments will be
detailed, descriptive and specific about work capacity
assessments.
The Secretary is the primary decision maker
under the SSA. Obviously the Secretary cannot actually make every
decision, so section 234 of the Social Security
(Administration) Act 1999 (SSAA) allows the Secretary to
delegate powers to other officers. [18]
The SSAT is established by provisions in the
SSA and provides a separate appeal forum for persons affected by a
decision made under the SSA. The SSAT is given the same decision
making powers as the Secretary under the SSA by section 151 of the
SSAA. [19] So the
SSAT can affirm a decision or substitute a different decision under
the SSA. Therefore, the words in the Bill that will require that
the Secretary is to comply with guidelines written in a Legislative
Instrument by the Minister will also equally apply to work capacity
decisions made by the SSAT.
Section 179 of the SSAA empowers the
Administrative Review Tribunal (AAT) to review decisions of the
SSAT. [20] So like
the SSAT, the AAT can change a decision under the SSA. So the words
in the Bill that will require the Secretary to comply with
guidelines written in a Legislative Instrument by the Minister will
also equally apply to decisions about work capacity made by the
AAT.
There are provisions in the Bill to alter
Schedule 1B of the SSA, which is used to provide the impairment
points rating for DSP. For DSP, before the continuing inability for
work requirements (see above) can be considered, the claimant must
have a minimum impairment of 20 points, as provided for by the
Impairment Tables in Schedule 1B of the SSA. [21] Currently Schedule 1B refers to
a medical officer providing the impairment points rating using the
Schedule. References to the medical officer in the Schedule are to
be replaced with assessor , being the JCA.
There is a long history of using medical
officers (doctors) to provide work capacity assessments for DSP and
previously Invalid Pension (IP). For a long time the assessment of
the Commonwealth Medical Officer as to whether a person was 85 per
cent permanently incapacitated for work was rarely challenged and
usually accepted. This is the main reason there is the references
to medical officer in Schedule 1B of the SSA, being the tables for
the assessment of work related impairment for DSP. The point
scoring arrived at by use of the tables is designed to arrive at a
level of work impediment arising from a medical condition/s.
[22] A medical
officer qualification is not required for the attribution of points
using the table and reference to medical officers is as much a
carryover of the long-standing practice of using medical officers
as work capacity assessors.
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Item 1 inserts a new
definition into the SSA for relatives (other than parents) .
Items 2, 3 and 4 amend
provisions in section 16(B) of the SSA to alter the word Secretary
to Minister and to also insert words complied with by the Secretary
. This will mean it will be the Minister rather than the Secretary
who is ultimately responsible for the guidelines about partial work
capacity assessments.
Item 5 inserts a new
definition of Aboriginal or Torres Strait Islander child into the
SSA.
Item 7 inserts a definition
of family law order into the SSA.
Items 8 and 10 inserts
provisions into the SSA referring to the qualification provisions
for Disability Support Pension (DSP) that empower the Minister to
write guidelines about DSP work capacity assessments and that the
Secretary must comply with any guidelines in force at the time of
the assessment.
Items 17, 18, 25 and 33
insert new provisions into the SSA regarding assessments of
temporary incapacity for work. These assessments commonly occur
when a person who is otherwise required to undertake work search
activity test requirements or participation requirements might be
temporarily unable to comply with those requirements due to a
medical condition.
Items 36 to 46 amend Schedule
1B of the SSA being the Impairment Tables used to determine
qualification to DSP. The provisions remove references to medical
officer in Schedule 1B and substitutes assessor and also replaces
the words medical officers using their clinical judgements with
assessor using their judgement . This will make it clear that it is
not medical officers who provide impairment rating assessments or
work capacity assessments but the Work Capacity Assessor. This is
based on the principle that while medical officers provide opinions
about a medical condition and about work capacity, it is the
assessor who makes the assessment of the impairment rating and also
the assessment of work capacity.
Items 47 and 48 inserts
provisions into the Social Security (Administration) Act
1999 (SSAA) about the Secretary s power to deem that a person
lodged a claim, even though they didn t actually physically make a
claim. This deeming of a claim lodgement is usually done in a
beneficial way especially where a person transfers from one payment
to another. For example, where a male DSP recipient reaches age 65
and is transferred to age pension.
Conclusion
The work capacity assessments made under the
SSA have always been contentious but they have been much more in
focus since the Welfare to Work legislation came into effect from 1
July 2006. [23] The
DSP qualification requirements were altered from being unable to
work for 30 hours a week down to being unable to work for 15 hours
a week. This made the incapacity for work requirements for DSP much
tougher. Also, there are now work search and work participation
requirements for some payments that did not previously have
participation requirements. These payments are PPP and PPS.
[24] There is some
incentive for persons to access DSP rather than newstart allowance
or PPP. DSP, being a pension payment has a higher rate of payment
and more generous income and asset testing. [25] DSP is also not taxable income and
does not have any participation requirements.
As said, the work capacity assessments for
DSP, and previously Invalid Pension, [26] have always been a matter of
contention. It is the nature of both the claim and the decision. A
person claims DSP thinking they are unable to work for at least 15
hours a week and supplies medical evidence supporting their claim
from their treating doctor/s. However, when the Secretary then
provides a decision that they can work for more than 15 hours a
week, it is often a matter of angst and contest. These decisions
about work capacity are subjective, a matter of judgement. It is
worth noting that notwithstanding that for a long period, and even
now, many think that it is the Commonwealth Medical Officer who
made the decision about work capacity; however this decision has
always been a matter for the Secretary.
The provisions presented in Schedule
1 of the Bill that empower the Minister to write
guidelines in a Legislative Instrument for work capacity
assessments and that also compel the Secretary to comply with these
guidelines are significant. Currently, guidelines for the
application of work capacity assessments are written by the
Secretary. Placing the guidelines into a Legislative Instrument
will give them more status in application, as they will be
guidelines in law, not just written guidelines separate to the
legislation to be used to interpret and apply legislation. The
Minister s work capacity assessment guidelines that this Bill will
provide for have not been tabled in the Parliament yet but it is
probable that to achieve the intention of the Government s Budget
initiative they will be detailed, descriptive and prescriptive.
While the Government s initiative about work
capacity assessments announced in the 2007-08 Budget does set out
what the intention of the provisions presented in the Bill are
aimed at (as does the Explanatory Memorandum), what is not detailed
are the factors and matters that lead to the Government to make
these changes.
This likewise applies to the provisions
presented in the Bill, to alter the words in Schedule 1B of the
SSA, to remove impairment point decisions from medical officers to
be replaced with Work Capacity Assessors. The Government has
provided no explicit policy rationale as to why they want to alter
the words in Schedule 1B of the SSA to remove impairment point
decisions from medical officers to be replaced with Work Capacity
Assessors. Along with the other changes to work capacity
assessments in the SSA elsewhere in the Bill, it is perhaps open to
speculation that the Government considers that some medical officer
decisions about impairment points have been overly generous in
favour of applicants for the various social security benefits.
The provisions to add another participation
requirement exemption category for a principal carer who is a
relative other than a parent is refinement of the SSA, adding to
the other participation exemptions categories originally contained
in the Welfare to Work Act. [27] It is probable that there
have been cases of relatives other than a parent providing
principal care for a child that have lead the Government to
conclude that amending the SSA to provide for these cases is
appropriate.
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Endnotes
[1]. A person may qualify for PPP, either as a parent,
grandparent or a foster carer, where they are partnered and have at
least one child aged under 6 who is wholly or substantially in
their care and they and their partner's income and assets are below
a certain amount.
[2]. A person may qualify for PPS, either as a parent,
grandparent or foster carer, where they are single and have at
least one child aged under 8 who is wholly or substantially in
their care. They have part-time participation requirements from
when their youngest child is aged 6.
[3]. Youth allowance (other) refers to youth allowance paid
to unemployed jobseeker aged 16 to 20 and in terms of participation
requirements it is virtually identical to newstart allowance paid
to unemployed jobseekers aged 21 or more.
[4]. Special benefit is payable where the person is in
severe financial hardship and cannot qualify for any other income
support payment. Some special benefit categories require the same
work search and participation requirements as newstart
allowance.
[5]. 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, Australia, 6 December 2005. http://www.aph.gov.au/library/pubs/bd/bd05-06.htm
[6]. A person is a principal carer of a child
where the child is a dependent child of the person and the child
has not turned 16.
[7]. PPS was formerly called sole parent pension and is paid
at the single pension rate - as at September 2007 $525.10 per
fortnight (pf). The newstart allowance single rate as at September
2007 is $424.30pf.
[8]. Dale Daniels and Peter Yeend, Employment and Workplace
Relations Legislation Amendment (Welfare to Work and Other
Measures) Bill 2005, op. cit.
[9]. Job capacity assessment (JCA) providers are
organisations contracted to the Department of Human Services to
provide a consolidated assessment of an individual's barriers to
participation (including medical), capacity to work and appropriate
interventions. In some cases, a person may require a more complex
assessment, where for example, the person has multiple physical
and/or psychological barriers. The JCA provider draws upon
appropriate specialist input to inform the assessment (eg.
neuropsychological assessment).
[12]. 94.(5) In
this section:
"work" means work:
(a) that is for at least 15 hours per week on wages that are at
or above the relevant minimum wage; and
(b) that exists in
Australia, even if not within the person's locally accessible
labour market.
[13]. Department of
Treasury, Budget Related Paper No. 1.8 Portfolio Budget Statements
2001-02, Family and Community Services Portfolio, Australians
Working Together A Better Deal for People with Disabilities,
Canberra, 8 May 2001, pp. 161-162.
[16]. Dale Daniels
and Peter Yeend, Employment and Workplace Relations Legislation
Amendment (Welfare to Work and Other Measures) Bill 2005, op.
cit.
[17]. Department of
Treasury, Budget Paper No. 2 - Budget Measures 2007-08, Job
capacity Assessment reinforcing the role, op. cit.
234. (1) Subject to
subsection (3), the Secretary may, in writing, delegate to an
officer all or any of the powers of the Secretary under the social
security law.
234. (2) Subject to
subsection (3), the Secretary may, in writing and in accordance
with service arrangements, delegate to the CEO or an employee of
the Agency all or any of the powers of the Secretary under the
social security law.
234. (3) The Secretary cannot delegate to anyone except the CEO
the Secretary's power under
subsection 208(1) to disclose information to a person referred
to in subparagraph 208(1)(b)(i).
234. (4) If the Secretary delegates to the CEO the Secretary's
power under
subsection 208(1) to disclose information to a person referred
to in subparagraph 208(1)(b)(i), the CEO cannot, in spite of any
provision to the contrary in the Agency Act, delegate the power to
an employee of the Agency.
[19]. 151. Powers of the SSAT
151. (1) Subject to
subsection (2), the SSAT may, for the purpose of reviewing a
decision under the social security law, exercise all the powers and
discretions that are conferred by the social security law on the
Secretary.
[20]. 179. Review of decisions by AAT
(a) a decision has been reviewed by the SSAT; and
(b) the decision has been affirmed, varied or set aside by the
SSAT;
application may be made to the AAT for review of the decision of
the SSAT.
[21]. 94. Qualification for disability support pension
continuing inability to work
94.(1) A person is qualified for disability support pension
if:
(a) the person has a physical, intellectual
or psychiatric impairment; and
(c) one of the following applies:
(i) the person has a continuing inability to
work;
[22]. The Tables represent an empirically agreed set of
criteria for assessing the severity of functional limitations for
work related tasks and do not take into account the broader impact
of a functional impairment in a societal sense. For this reason, no
specific adjustments are made for age and gender. The outcome of
the application of these Tables following a medical assessment is
termed work‑related impairment and this term is used
throughout this document.
[23]. Dale Daniels and Peter Yeend, Employment and Workplace
Relations Legislation Amendment (Welfare to Work and Other
Measures) Bill 2005, op. cit.
[24]. The exception is PPP, which had participation
requirements where the youngest child was aged 13 or more.
[25]. DSP for a single person $525.10 per fortnight (pf) (as
at September 2007). The newstart allowance single rate as at
September 2007 is $424.30pf.
[26]. DSP replace invalid pension from November 1991.
Previously Invalid Pension required the claimant to have an 85%
permanent incapacity for work and at least a 50% medically based
incapacity.
[27]. Dale Daniels
and Peter Yeend, Employment and Workplace Relations Legislation
Amendment (Welfare to Work and Other Measures) Bill 2005, op.
cit.
Peter Yeend
Social Policy Section
11 September 2007
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