Bills Digest no. 52 2008–09
Families, Housing, Community Services and Indigenous
Affairs and Other Legislation Amendment (Further 2008 Budget and
Other Measures) Bill 2008
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
Concluding comments
Contact officer & copyright details
Passage history
Families, Housing, Community
Services and Indigenous Affairs and Other Legislation Amendment
(Further 2008 Budget and Other Measures) Bill
2008
Date introduced: 18 September 2008
House: House of Representatives
Portfolio: Families, Housing, Community Services
and Indigenous Affairs
Commencement: The
provisions of this Bill are to commence at a variety of times as
set out in proposed section 2.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
- To provide for the payment of Maternity Immunisation Allowance
(MIA) in two instalments as children progress through the National
Immunisation Program.
- To provide for the payment of MIA to children adopted from
overseas up until they turn 16 years of age.
- To end eligibility for Partner Service Pension (PSP) for people
under age pension age who are separated from their veteran
spouse.
- To set an eligibility age of 50 years for PSP for partners of
veterans in receipt of a disability pension at less than the
special rate but above the general rate.
- To make minor amendments to the child support legislation
especially with regard to a formula that commenced in July
2008.
Schedule 3 of the Bill has been referred to Senate Community
affairs Committee for inquiry and report by 10 November 2008. The
committee has decided to take submissions on Schedule 2 as well.
Details of the inquiry are at the Committee s webpage.[1]
The 1997 Budget included a package of
measures under the label Comprehensive National Immunisation
Strategy with the objective of significantly boosting child
immunisation rates in Australia. Part of the strategy involved
changes to Maternity Allowance.
From January 1998, a portion of
Maternity Allowance was renamed Maternity Immunisation Allowance
(MIA). It was paid in respect of children who had reached the age
of 18 months and who had received age-appropriate immunisation
(unless the child was exempt from that requirement). MIA was also
paid in respect of children who were stillborn or died before
reaching the age of 18 months. The rate of MIA at that time was
$200.
In July 2004 MIA was made income test free at the same time that
Maternity Allowance was reformed and renamed Maternity Payment
(later renamed Baby Bonus).
Certain of the changes provided for in this Bill were announced
in the 2008 Budget. The media release issued at the time by
Ministers Macklin and Roxon indicated that:[2]
"The object of the change is to bring the MIA
in line with the National Immunisation Program and provide an
incentive for parents to ensure their four-year-old children also
receive recommended boosters before they start school," Ms Macklin
said.
"From 2009, the MIA will be divided equally
into two payments for around 270,000 families who receive the
entitlement each year," Ms Roxon said. "Both instalments will be
indexed twice yearly."
"Under the change, the first MIA instalment
will be made when the child is aged between 18 months and 2 years.
The second will be paid when the child is aged between 4 years, 3
months, and 5 years."
Vaccinations for four-year-olds as recommended
in the National Immunisation Program currently include:
- diphtheria, tetanus and whooping cough
- measles, mumps and German measles
- polio.
The Bill also includes changes to MIA to
allow it to be paid to children adopted from overseas who arrive in
Australia before turning 16 years of age.
The rate of MIA as at October 2008 is a lump sum of $243.30. In
the 2007-08 year, MIA was paid in respect of 265 000 children to
260 000 families.[3]
In the 2007-08 year, the MIA is estimated to cost $61 853 000
and in the 2008-09 year MIA is estimated to cost $50 229
000.[4]
The changes to MIA will save $81.9 million over four years due
to the delay in the payment of part of the MIA.
The government announced changes to the qualification for the
Partner Service Pension (PSP) in the 2008 09 Budget.[5] The changes will cease
eligibility for PSP for those partners who are separated but not
divorced from their veteran partner and who have not reached Age
Pension age[6] or Age
Service Pension age.[7] Eligibility for PSP will cease 12 months after
separation or immediately if the veteran enters into another
marriage-like relationship.
The other change to PSP presented in the Bill is to set the
eligible age for PSP at age 50 for the partner of a veteran who is
in receipt of a relevant disability pension or who has at least 80
impairment points under the Military Rehabilitation and
Compensation Act 2004. The two disability pension rates paid
above the General rate and below the Special rate are the
Intermediate rate[8]
and the Extreme Disablement Adjustment (EDA) rate.[9]
The Financial Impact Statement in the Explanatory Memorandum
details there will be some savings attached to this proposed
tightening of the qualification requirements for the Partner
Service Pension. These savings are estimated to be $4.0 million in
2008 09, $10.6 million in 2009 10, $12.1 million in 2010 11 and
$13.9 million in 2011 12.
The Budget papers said:
This measure is expected to provide savings of
$77.8 million over four years. Some affected partners will transfer
to other income support payments, resulting in net savings of $33.9
million over four years.[10]
Most of these savings will arise from lesser number of persons
being able to access the PSP, which is paid at the higher pension
rate[11] and also
has the more generous pension means testing (income and assets
tests). See How will claimants be affected below.
A PSP can be paid to an eligible:
- partner of a veteran with qualifying service,
- former partner of a veteran with qualifying service, or
- widow or widower of a veteran who had qualifying service.
Eligibility to Partner Service Pension for current
partners
A person is eligible for PSP if:
- they are legally married to and living with a veteran, or
living in a marriage like relationship with a veteran, and
- the veteran is receiving, or is eligible to receive, an Age
Service Pension, or
- an Invalidity Service Pension,
- or the veteran is registered as a member of the pension bonus
scheme, and
the person meets the age and other eligibility requirements see
below.
A person is also eligible if they are a member of a couple and
their partner is a veteran who has rendered qualifying service and
the person is eligible for an Age Pension see age requirement for
Age Pension below.
Eligibility to Partner Service Pension for former partners
PSP may be paid to former partners who are legally married to,
but separated from a veteran. They are eligible if they:
- are the former partner of a veteran who is receiving or is
eligible to receive the Service Pension; and
- meet the age and other eligibility requirements see below.
Eligibility to Partner Service Pension for widows or
widowers
If a person was receiving the PSP immediately before a veteran's
death, they continue to be eligible for PSP. In certain
circumstances, a person may also be eligible for the PSP if:
- immediately before the veteran's death they were receiving a
Centrelink pension or were registered as a member of the pension
bonus scheme with Centrelink or the Department of Veterans Affairs
(DVA), or
- before the veteran's death they had made a claim for PSP which
had not been determined at the time of their veteran partner s
death.
Eligibility to Partner Service Pension - age and other
eligibility requirements
A person must also meet one of the following criteria for PSP.
This does not apply if the person needs to be eligible for an Age
Pension. The person:
- must be qualifying age,[12]
- must have a dependent child when the claim is made,
- their veteran partner is receiving the Special rate disability
pension,[13]
or
- their veteran partner is receiving, or eligible to receive, a
Special Rate Disability Pension (SRDP) under the Military
Rehabilitation and Compensation Act 2004.
What is qualifying age for Partner Service Pension?
Qualifying age for PSP is equivalent to veteran Age Service
Pension age.[14]
The qualifying age is 60 years for males and currently 58.5 years
for females.
Age requirement for age pension
Some PSP claimants need to be eligible for an Age Pension
provided under the Social Security Act 1991 (SSA). This
applies to a person who is the partner of a person who has rendered
qualifying war or warlike service. To be eligible for an Age
Pension under the SSA a person must be of Age Pension age.[15]
What is a marriage-like relationship?
The changes presented in this Bill to PSP qualification will
cease access to the PSP immediately where a person has separated
from a veteran and the veteran enters into another marriage-like
relationship. A marriage-like relationship is where a couple lives
in a marriage-like situation but are not legally married. Some of
the factors considered when deciding whether two people are living
in a marriage-like relationship are whether they:
- think of themselves as a couple,
- share financial and household responsibilities,
- undertake joint social and leisure activities, and
- appear as a couple to the general community.
This Bill proposes to tighten the access to the PSP to cease
eligibility for those partners who are separated but not divorced
from their veteran partner and who have not reached Age Pension age
or Age Service Pension age. See Eligibility to Partner Service
Pension for former partners above. Where the partner is aged less
than Age Pension age and separated from the veteran, qualification
to PSP will cease 12 months after separation or immediately if the
veteran enters into another marriage-like relationship.
There have been recent changes to the qualification requirements
for the PSP which took effect from 1 July 2008.[16] Those changes saw the raising of
the PSP qualification age from age 50 to Age Service Pension or Age
Pension qualification age. This raised qualification age did not to
apply where the person is a partner of a Special rate disability
pensioner[17] or
has a dependent child. This Bill slightly undoes those changes and
restores the age 50 qualification age and access to PSP, where
their partner is a veteran and is in receipt of:
- the Intermediate rate[18] disability pension,
- the EDA rate disability pension,[19] or
- who has at least 80 impairment points under the Military
Rehabilitation and Compensation Act 2004.
There is no explanation provided in the Explanatory Memorandum
or in the Minister s second reading speech, when presenting the
Bill, as to why these changes to access to the PSP, that were made
earlier this year, are being made when earlier this year different
options were taken. Where the partner is providing full-time care
to the disability pensioner they may be able to access Carer
Payment[20]and this
would obviate the need to access the PSP. Perhaps it was felt the
restrictions to accessing PSP for partners of disability pensioners
on higher rates of payment (which apply when their impairment is
significant) had gone too far. Some partners may not be providing
full-time care so they would not qualify for Carer Payment, but
they may still be providing significant levels of care. Therefore
their capacity to qualify for Newstart Allowance (NSA) and meet
work search, work participation and Mutual Obligation requirements
may be limited.
The persons who will not be able to access the PSP will be those
who are married to a veterans service pension recipient, are
separated for more than 12 months but not divorced. Most of these
persons not able to access the PSP will be required to access some
other form of income support, mainly Newstart Allowance
(NSA).[21]
NSA is paid at the lower allowance rate of payment[22] and has tighter means
testing than PSP, which is paid at the higher pension rate.[23] Also, on NSA a Health
Care Card (HCC) is issued, which basically only provides access to
concessional pharmaceuticals under the Pharmaceutical Benefits
Scheme (PBS). This contrasts with the PSP which qualifies the
recipient to the Pensioner Concession Card (PCC) and access to
associated concessions.[24] NSA has activity test, work search and Mutual
Obligation requirements. PSP has no Mutual Obligation
requirements.
A few persons may be able to access a pension rate payment like
the Carer Payment[25] or Parenting Payment Single[26] but most will be required to access
NSA.
There is no detail provided in the Budget papers, the
Explanatory Memorandum or in the Minister s second reading speech
when presenting the Bill as to the numbers of PSP claimants and
recipients estimated to be affected by the reduced access to the
PSP for separated partners. In a submission to the Senate Community
Affairs Committee by the Partners of Veterans Association of
Australia Inc it was claimed there are 1 170 separated wives
receiving the PSP see below.
A total of 1170 Separated wives receive
Partners Service Pension and 420 of these are the Partners of TPI
veterans.
DVA has indicated that 590 who are of aged
pension age (63 yrs) will be retained by DVA. The remaining 580
Separated wives are made up as follows:
265 wives are aged between 58.5yrs and
63urs,
240 wives are aged between 50 yrs and
58.5yrs
75 wives are under 50 years of age.
Total 580
It is of great concern to PVA to note that 362
of these separated wives are married to veterans who have PTSD as
an accepted disability by the Department of Veteran
Affairs.[27]
The source of this information is only indirectly indicated as
being the Department of Veterans Affairs (DVA), which is probable,
being the only source that could provide this data. However, this
information has not been published by the Government or DVA.
PSP is a pension rate income support payment that qualifies the
person where they are the partner of a veteran. This is somewhat
like the other partner based income support payments provided under
the Social Security Act 1991, such as the Wife
Pension[28] and the
Widow Allowance.[29]
There have been no more new grants of
Wife Pension since 1 July 1995. The then government started to
phase out the payment on the grounds that persons of working age
should qualify for an income support payment in their own right,
not just because they are partnered to a person who qualifies for
an income support payment. Interestingly, there has never been a
male counterpart of the wife pension, which is different to PSP
where the male partner of a female veteran can qualify for PSP.
The then government contradicted the logic of the phase out of
the Wife Pension a bit with the introduction of the Widow Allowance
from January 1995. Widow Allowance was paid to women who were no
longer partnered, who became separated, divorced or widowed after
turning 50 years of age and who had little or no recent workforce
experience. The Widow Allowance was paid under the same rates and
conditions and under the same income and assets tests as NSA. Widow
Allowance was not activity tested and no job searching was
required. However, recipients were eligible for certain labour
market assistance, employment entry payment and education entry
payment.
The Widow Allowance was originally to be phased out from July
2005 by raising the age of eligibility by one year in each
subsequent year. Widow Allowance arose from the then government
concerns about asking older aged women, who had been dependent on a
male partner for a prolonged period and had no recent attachment to
the workforce, to claim NSA and satisfy the work search and work
acceptance requirements. From March 1997, qualification was
extended to women aged 50 years or more who had been widowed after
turning 40 years of age rather than 50 years of age.
Most of the other formerly passive income support programs (that
is, those having no Mutual Obligation) have been modified or
curtailed in the past few years. There have been no more new grants
for
Widow Pension since 20 September 1997 and no more new grants of
Partner Allowance or
Mature Age Allowance since 20 September 2003. There have been
no more new grants of
Widow Allowance after 1 July 2005, unless the woman was born on
or before 1 July 1955 and new claimants are now required to attend
an annual interview.
As said above, the emphasis has been that persons of working age
should qualify for an income support payment in their own right,
not just because they are the partner of a person who qualifies for
a payment. Also, the other emphasis has been for persons of working
age to support themselves from their own employment where they can
be reasonably expected to do so. This was an underlying emphasis in
the Welfare to Work and the associated Mutual Obligation changes of
1 July 2006, which saw access to Parenting Payment Partnered and
Parenting Payment Single modified. From July 2006, Parenting
Payment Partnered qualification ceases where the youngest child is
aged 6 or more and also for Parenting Payment Single, where the
youngest child is aged 8 or more. Where the youngest child is above
these ages, the person is provided with NSA, with its associated
requirement to look for and accept work and Mutual Obligation
requirements.
PSP, with its pension rate of payment and pension means test
arrangements, is welfare assistance. In the context of the changes
to other comparable welfare assistance payments, it now seems
anomalous a person of working age can qualify for an income support
payment in their own right, just because they are the partner, or
former partner of a veteran.
A major reworking of the Child Support Scheme was introduced
from July 2007. This Bill includes a series of small amendments to
the new scheme that address anomalies that have come to light since
July 2007.
Item 2 inserts new subsection
39(2A) into the A New Tax System (Family
Assistance) Act 1999 which allows for eligibility for MIA for
children aged between four and five years of age.
Item 6 adds new subsections 39(5) to
39(10) which provide for the eligibility of children
adopted from overseas for MIA up to the age of 16 years. Older
adopted children must meet the immunisation requirements within two
years of their arrival in Australia.
Item 8 adds new subsections 67(2) to
67(5) which provide for the rate of MIA to be divided into
two payments or paid as one payment under various
circumstances.
Items 1 and 2 make amendments to the basic
qualification provisions in the VEA for PSP expanding access to
partners of a disability pensioner aged 50 or more where the
disability pensioner is:
- on the Intermediate rate,
- on the EDA rate, or
- is a recipient of a Military Rehabilitation and
Compensation Act 2004 Special rate pension with 80 impairment
points or more.
Item 5 inserts new provisions into section 38
to cease qualification to PSP where a PSP recipient is separated
from the veteran and the veteran either enters into another
marriage-like relationship or 12 months has elapsed after
separation from the veteran. Item 7 proposes to
insert application provisions referring to the 12 month separation
period. It essentially provides for the counting of the end of the
12 month separation period to apply in a manner that is not
retrospective. The end of the 12 month period cannot be before the
commencement of the application of these provisions which is 1
January 2009.
The schedule makes minor amendments to the child support
legislation that deal with anomalies in the reforms to the formula
that commenced in July 2007.
The amendments to the Partner Service Pension (PSP)
qualification allowing access to PSP for partners of disability
pensioners with more significant levels of impairment is perhaps an
indication that the changes to the PSP access rules went too far
earlier this year. However, there is no actual explanation provided
as to why this back tracking is being done.
The changes to PSP qualification for separated partners of
veterans where the veteran enters into a marriage-like relationship
or 12 months after separation may be appropriate. However, these
changes raise the whole issue of access to PSP for partners of
veterans where the partner is of working age. The question which
arises is whether there should still be such generous access to a
passive income support payment for people merely because they are,
or were, partnered with a veteran.
[2]. The Hon. J Macklin MP, Minister for Families, Housing,
Community Services and Indigenous Affairs, and the Hon. N Roxon MP,
Minister for Health and Aging, Maternity Immunisation Allowance
eligibility change , Media Release, 13 May 2008.
[5]. Australian
Government, Budget Paper No. 2: Budget Measures 2008 09,
Commonwealth of Australia, Responsible Economic Management Partner
Service Pension cease payment to married partners who are separated
but not divorced, Canberra, 13 May 2008, p. 410, http://www.budget.gov.au/2008-09/content/bp2/html/expense-11.htm
, accessed on 30 September 2008.
[6]. The age pension
age for a male is age 65. For a female, the age is being raised by
six months every two years so that by 1 January 2014, female and
male pension ages will be the same. The table below show when
females qualify.
Date of Birth Qualifying age
Before 1 July 1949 Eligible
1
July 1949 to 31 December 1950 58.5
1
January 1951 to 30 June 1952 59
1
July 1952 to 31 December 1953 59.5
[7]. For males, the
age service pension age is 60. For female veterans with qualifying
service and female ISS qualifying age, the age is being raised by
six months every two years so that by 1 January 2014, female and
male age service pension ages will be the same. The table below
show when females qualify.
Date of Birth Qualify at
Born
before 31 December 1947 now
1
January 1948 to 30 June 1949 58
1 July
1949 to 31 December 1950 58.5
1
January 1951 to 30 June 1952 59
1 July
1952 to 31 December 1953 59.5
[13]. Special
rate disability pension is more commonly known as the Totally and
Permanently Incapacitated pension (T&PI) and is payable where
the person has an impairment of 70% of more and is unable to work
for at least 8 hours a week.
[20]. A person may get Carer Payment (adult) if they
provide constant care in the home of the person they care for and
the caree is a person aged 16 or over with a severe disability or
medical condition.
[24].
Concessions from state and local government authorities 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.
[29]. Widow allowance is
payable to a female person was born on or before 1 July 1955, is
not a member of a couple, has become widowed, divorced or separated
(including separated de facto) since turning 40 and has no recent
workforce experience.
Dale Daniels and Peter Yeend
31 October 2008
Bills Digest Service
Parliamentary Library
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