Bills Digest no. 164 2008–09
Social Security Amendment (Training Incentives) Bill
2009
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
Abbreviation Definition
ACOSS Australian Council of Social Service
CDEP Community Development Employment Project
DEEWR Department of Education, Employment and Industrial
Relations
EPP Employment Pathway Plan
FaHCSIA Department of Families, Housing, Community Services and
Indigenous Affairs
FAMT Family Actual Means Test
FTB A Family Tax Benefit Part A
NSA Newstart Allowance
PP Parenting Payment
PES Pensioner Education Supplement
PSP Personal Support Program
SSA Social Security Act 1991
SAA Student Assistance Act 1973
YA Youth Allowance
Passage history
Date
introduced: 28 May
2009
House: House of Representatives
Portfolio: Education, Employment and Workplace
Relations
Commencement:
For Schedule 1, on the
latter of:
- Immediately after the commencement of items 2 to 5 and 8
and 9 of Schedule 4 of the Social Security Legislation
Amendment (Employment Services Reform) Act 2009,
and
- On the
day this Act receives Royal Assent.
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/.
The purpose of this Bill is
to:
- introduce a new temporary Training Supplement for persons
without a year 12 certificate to assist them achieve a year 12
completion, or its equivalent, and
- remove access to Youth Allowance (YA) for an unemployed young
person who is not undertaking training or education.
The Government announced the introduction of a proposed new
temporary Training Supplement in the 2009-10 Budget.[1] The Training Supplement
will be available to job seekers on Newstart Allowance
(NSA)[2] or Parenting
Payment (PP)[3] who
have not completed Year 12, or equivalent, and are undertaking
qualifying education or training. The Training Supplement will
apply to those who commence approved training during the period 1
July 2009 to 30 June 2011. Recipients of the Training Supplement
may also be eligible to receive the $208 Education Entry Payment
and the $950 Temporary Supplement.
The cost of providing the proposed Training Supplement is
estimated to be $46.0 million in 2009-10, $25.0 million in 2010-11
and $3.1 million in 2011-12.[4] This is a total of $74.1 million over three years.
The proposed Training Supplement is to be $41.60 per
fortnight.
There is currently another education supplement payment provided
to some recipients of income support payments. This is the
Pensioner Education Supplement (PES). A person may qualify for the
PES if they are receiving:
The higher rate of PES at $62.40 a fortnight is payable where
the person is:
- an approved student with at least a 50 per cent study
load,
- an approved student receiving either Disability Support
Pensioner or Invalidity Service Pension, or
- an approved student receiving a War Widow/er Pension and an
invalidity income support supplement and has a dependent
child.
The lower rate of PES at $31.20 a fortnight is payable where the
person is:
- an approved student, other than those listed above, with at
least a 25 per cent load, or
- a single parent or carer and has a study load of at least 25
per cent but less than 50 per cent.
It is estimated that 50 000 low skilled jobseekers will take up
the Training Supplement over the period 1 July 2009 to 30 June
2011.[5] In June
2008, approximately 46 700 income support recipients were receiving
the PES.[6] It
remains to be seen whether the estimated 50 000 NSA and PP
recipients will undertake the requisite education or training
(mostly full time) to claim and qualify for the Training Supplement
in the two year period from 1 July 2009 to 30 June 2011.
The Training Supplement is only to be available for those NSA or
PP recipients commencing approved training from 1 July 2009 to 30
June 2011. It is only a temporary payment. There isn t much
discussion in the Budget announcement as to why the Training
Supplement is to be provided for only two years. The Minister said
in the second reading speech that:
Early school leavers and people with low skills
are likely to experience particular disadvantage during both the
economic downturn and the recovery. In times of economic downturn,
we know that youth unemployment tends to rise rapidly and then it
falls back more slowly during the recovery. In the recession of the
early 1990s, young people without year 12 were around three times
more likely than their counterparts with year 12 to not be in
further education and to be unemployed. In fact, around one in
three early school leavers was unemployed.
The initiatives in this bill support the
government s commitment to improve the educational attainment level
of Australians by encouraging completion of year 12, or its
equivalent. They also support the government s commitment to
unemployed Australians to provide improved access to education and
training opportunities.[7]
The Minister clearly says this is to be a temporary assistance
measure that is designed to assist people achieve year 12
completion, or its equivalent, during the anticipated period of the
global recession.[8]
It is also interesting to note that the payment is to only be made
where the approved training is being undertaken for a period of
less than 12 months. Again, reinforcement that the Training
Supplement is to only be a temporary payment.
As was highlighted in the Minister s second reading speech, the
job outcomes between those with, or without, year 12 completion are
starkly different. While the Government has introduced this as a
temporary measure, perhaps they could review its success to examine
its need as an on going program of assistance.
The training that can qualify a person for the Training
Supplement is to be set out by the Secretary. The Bill does require
that the course is a full-time course except where the person has a
partial work capacity or the person is a principal carer of a
child.
The actual detail of what can constitute an approved course is
not prescribed in the Bill. Rather, the Bill provides broad
parameters and then empowers the Secretary to describe, within
these parameters, what course can attract the Training Supplement.
These broad parameters are set out below.
For the person:
- the person is a full-time student or where the person has a
partial capacity for work or is a principal carer, the person is
undertaking sufficient level of study considered reasonable,
- the person has not completed final year of secondary school or
its equivalent, or
- the person:
- has been awarded a VET qualification at certificate I, II, III
or IV in the Australian Qualifications Framework, and
- is not studying for or has not been awarded a qualification at
diploma level in the Australian Qualifications Framework.
For the course:
- the course is for less than 12 months,
- the course is accredited at certificate I, II, III or IV in the
Australian Qualifications Framework or in the Secretary s opinion
is the equivalent of this level, and
- where the person has been awarded a VET qualification at
certificate I, II, III or IV in the Australian Qualifications
Framework, and is not studying for or not been awarded a
qualification at diploma level in the Australian Qualifications
Framework, the course will:
- lead to a qualification higher than the person s current VET
qualification, or
- would in the Secretary s opinion enhance the person s
employment prospects by allowing the person to acquire skills not
in their area of their VET qualification.
There is some degree of flexibility in these legislative
requirements for assessments to be made on a case by case basis for
the approval of payment of the Training Supplement. This is
probably necessary given the diversity of circumstances faced by
jobseekers. That is, jobseekers who are being paid NSA or PP and
who do not have a year 12 certificate, or its equivalent.
The statistics quoted by the Minister in the second reading
speech about jobseeker levels of unemployment when not completing
year 12 are quite stark.[9] The anticipated numbers expected to gain assistance of
50 000 is not a small number and if they are realised the measure
will be of some assistance.
The government announced in the 2009-10 Budget a proposal to no
longer allow qualification for YA for some unemployed jobseekers
aged 15 to 20.[10]
Young people without a year 12 certificate, or its equivalent, will
be classified as early school leavers and will be required to be in
full-time education or training to be able to qualify for YA, or
for their parent to qualify for Family Tax Benefit Part A
(FTB-A).
Currently, a young person may be eligible for YA if they are
aged 16 to 20 years and are:
- studying or undertaking an Australian Apprenticeship full-time,
or
- looking for full time work or undertaking a combination of
approved activities, or have temporary exemption from the
participation and activity test requirements.
A young person may also qualify for YA if they are:
- aged 21 24 years and studying or undertaking an Australian
Apprenticeship full-time.
Some 15 year old persons are eligible for YA.
These are those who are:
- considered
independent,
- aged above the school leaving age in their State of Territory,
and
- looking for work, studying or undertaking an Australian
Apprenticeship full-time.
The provisions in the Bill propose to remove the qualification
to YA for those aged 15 to 20 years who are unemployed and looking
for full time work.
The Budget initiative proposes to preclude YA to a young person
who is an early school leaver, is aged under 21 years and is not in
full time education or training. The initiative also proposes to
preclude payment of FTB-A to the parent of a dependant young person
in the same circumstances.[11]
For a dependent student who is not classified as independent
(that is they are dependent), they can qualify for YA so long as
their personal income and assets are below the YA income and assets
test limits. The other test a dependant student must pass is the
parental means testing. This is made up of the parental income test
and for some families the Family Actual Means Test (FAMT) is
applied.[12] The YA
parental income test cut off limits are lower than the parental
income test cut off limits for FTB-A. See example below referring
to the 2009 year.
|
Family
situation: number of dependent child/ren
|
YA parental
income test cut-off limit
$ per
annum
|
FTB-A family
income test cut-off limit
$ per
annum
|
|
1 child aged 18 at home
|
$58,288
|
$102,249
|
This means, where the parental income exceeds the YA parental
income test limit and then therefore YA is not payable to the young
person, a parent may qualify for FTB-A, where the family income is
below the FTB-A income test cut off limit.
There are no provisions in this Bill to amend the A New Tax
System (Family Assistance) Act 1999, which is necessary to
preclude payment of FTB-A to a parent, where his or her dependant
child is an early school leaver and is aged under 21 years and is
not in full time education or training. However, the Minister
stated in his second reading speech that the changes to the FTB-A
will proceed by way of separate legislation later in 2009.[13]
The Budget papers estimate that the net cost over four years for
this initiative will be $41.9 million. This will be made up of net
expenditure of $71.6 million in 2009-10 and $8.7 million in 2010-11
and net savings of $7.0 million in 2011-12 and $41.4 million in
2012-13.
The savings in the Department of Families, Housing, Community
Services and Indigenous Affairs (FaHCSIA) portfolio will be mainly
in reduced outlays of FTB-A. In the Department of Education,
Employment and Industrial Relations (DEEWR) portfolio there will be
increased outlays for education programs expenditure and some
reduced outlays on the YA program. These estimates are mainly based
on estimates about the impact of the change by the government. This
proposal hasn t been done before and no one really knows how many
of the current numbers of unemployed jobseekers aged 15 to 20, who
are early school leavers, who will take up the education
requirements to maintain their access to YA payments.
As at April 2009, there were 78 441 YA recipients who were
unemployed jobseekers.[14]
At the 30 April 2009 meeting of the Council of Australian
Governments (COAG), one of the agreements was the Jobs, Training
and Youth Transitions Agreement.[15] Part of this agreement was the Compact with Young
Australians. Under this Compact, the Commonwealth and the States
agreed to implement a National Youth Participation Requirement, to
commence on 1 January 2010, which will make participation in
education, training or employment compulsory for all young people
until they turn 17. The National Youth Participation Requirement
will include:
- a mandatory requirement for all young people to participate in
schooling (meaning in school or an approved equivalent) until they
complete Year 10, and
- a mandatory requirement for young people who have completed
year 10, to participate in full-time (defined as at least 25 hours
per week) education, training or employment, or a combination of
these activities, until age 17.
To support the National Youth Participation Requirement, the
Commonwealth agreed to make education and training a precondition
for obtaining YA or FTB-A.[16]
The Minister said in the second reading speech that there would
be flexibility for young persons in special circumstances.
The arrangements will be flexible for young
people with complex needs. Young people with multiple barriers such
as homelessness or substance abuse issues will have alternative
ways in which to meet their participation and qualification
requirements. Similarly, young people with a partial capacity to
work or young parents will have their hours of participation
tailored to their assessed capacity. The present legislative
exemptions that deal with any difficulties a young person may be
having, for example alcohol or drug abuse issues or homelessness,
will continue.[17]
The type of young unemployed jobseekers who would probably need
the benefit of any flexibility of the application of mandatory
education participation to access YA would be those in the Personal
Support Program (PSP). The PSP is a pre employment program aimed at
helping individuals to tackle their non vocational barriers such as
homelessness, mental health issues, drug or gambling problems, or
social isolation that are preventing them from getting a job or
benefiting from employment assistance programs. The PSP is
delivered by a network of community based and private organisations
providing individualised support and assistance to participants for
up to two years. The participant and their provider jointly develop
an intervention plan to address the participant s non vocational
barriers. Providers monitor participants' progress regularly and
formally complete a report after 8 and 16 months of assistance.
The objective of PSP is to assist participants to overcome their
non vocational barriers so they can then move on to employment
assistance programs and actively seek work or participate in
education. PSP participants are required to enter into an activity
agreement in order to commence in PSP. As a part of their activity
agreement, PSP participants are required to at least fully
participate in the PSP with their provider, and to attend all
scheduled appointments as notified.
Access to the PSP is for those assessed as having a capacity to
benefit from PSP and who are in receipt of the income support
payment provided to those of working age. The main payments are
NSA, YA, Widow Allowance, PP, Partner Allowance and Disability
Support Pension. For a young person, they need not be in receipt of
income support (that is YA); so long as they are registered as
unemployed and are aged 15 to 20 (inclusive) and not in full-time
study, they can access the PSP.
It is probable that those YA recipients participating in PSP
will be provided with an exemption to be in full time study to
access YA. In the 2007 08 year, the PSP assisted approximately 87
7000 participants.[18] However, there is no detail provided as to how many of
these were YA recipients who were unemployed jobseekers under 21
years of age. This means that of the 78 441 YA recipients currently
aged 15 to 20,[19]
we don t know how many could benefit from the suggested legislative
exemptions that deal with any difficulties a young person may have,
for example alcohol or drug abuse issues or homelessness.
The Australian Council of Social Service (ACOSS) was cautiously
supportive of any proposal to deny access to YA for persons aged 15
to 20 and not in full time education. ACOSS said prior to the
Budget:
We will be looking closely at the Youth
Allowance conditions so that disadvantaged young Australians are
not unfairly penalised by having their payments withheld and face
greater hardship. Some young people those with mental illnesses, or
homeless people for instance need ongoing training and mentoring
that suits their circumstances. [20]
The National Union of Students put out a response stating:
David Barrow, President of the National Union
of Students said Young people stripped of their youth allowance
payments are being unfairly characterised as dole bludgers . It is
good to see that the government is expanding the number of tertiary
and training places. A renewed government focus on education will
help our generation through the recession he said. However the COAG
policy is all stick and no carrot. The Federal Government should
increase youth allowance and stop pandering to the outdated
stereotype of lazy young people. Most of us have been working since
we were 14 he concluded.[21]
Item 1 inserts a definition of approved
training course for the Training Supplement. Item
2 inserts a definition of Training Supplement.
Item 4 inserts a new definition of an approved
training course for the Training Supplement.
Item 6 inserts a provision to prevent a PP
recipient getting a program of work supplement and the Training
Supplement at the same time. The program of work supplement is
currently $20.80 per fortnight and can be paid to a PP recipient
undertaking an approved work training or work assistance program.
Where both are payable, only the Training Supplement ($41.60) is
paid.
Item 7 inserts a new section
503B which contains the main qualification criteria for a
person on PP to qualify for the Training Supplement. Item
8 inserts provisions detailing that a PP recipient is
meeting their activity test requirements if they are undertaking a
qualifying course for the Training Supplement and they are making
satisfactory progress.
Item 9 does the same as Item 6
above but for a NSA recipient.
Item 12 does the same as Items
6 and 9 above but for a Community
Development Employment Project (CDEP) payment recipient. The CDEP
participant supplement is the same as the program of work
supplement at $20.80 per fortnight.
Item 12 does the same as Items
6 and 9 above but for the language,
literacy and numeracy supplement, which, like the other supplements
is $20.80 per fortnight.
Items 13 and 14 inserts
provisions that will ensure that where the Training Supplement is
incorrectly paid it is a debt under the SSA and the debt recovery
provisions apply.
Item 15 inserts a new definition of early
school leaver being a person who:
- is aged under 21 years,
- has not completed final year of secondary school or its
equivalent, and
- is not undertaking full time study.
Items 16 to 20 amend the YA
activity test provisions so that early school leavers only satisfy
the activity test requirement by undertaking full time study.
Item 25 inserts a provision so that a person
can only fail their activity test requirements, like to undertake a
labour market program or to undertake work, when the requirement is
written into their EPP.
Items 26 to 36 inserts
amendments so that where a person is temporarily unable to comply
with their EPP because of a temporary illness, he/she can be
excused.
Item 38 extends the remote area exemption
provisions for activity test compliance to the full time education
requirements for YA for those aged under 21 in this Bill. There are
remote area exemptions for activity testing. This can apply to both
the work search and program of work participation requirements. In
short, a young person in a remote area will be able to access an
exemption to the full time education requirements for YA, where
there is no locally accessible approved program of education.
Section 543A of the SSA sets the minimum qualifying age for YA.
Generally it is age 16 but it can it be age 15 if the person is
independent. For a person aged 15 to 17, independence can be met a
number of ways. For example, where the person is a member of a
couple, or is a refugee, or is an orphan, or is in state care. One
of the independent criteria is where the young person has been self
supporting from employment.[22] Item 40 amends section 543A(2A)
to remove paragraph (e), which is the self supporting from
employment independence test . This means a person cannot qualify
for YA if aged 15 to 17 unless they are in full time study or have
entered into a YA EPP. Item 41 amends paragraph
(l), which allows the meeting of the independence test where the
claimant is undertaking work or education (or a combination of
both) for 20 hours a week to 25 hours a week. Item
42 removes paragraph (o), which is allows meeting of the
independence test where the claimant is within 3 months of turning
age 18.
Item 44 inserts new
section 544DA which sets out the requirements for
an early school leaver and the qualification requirement to have
and comply with an EPP.
New sub section 544DA(2) will require the
person to undertake an appropriate number of hours per week of
training or education or other activities specified by the
Secretary. A lesser number of hours will be required where the
claimant has a reduced work capacity. The exercise of this
discretion will be set out in guidelines.
New sub section 544DA(3) allows the Secretary
to specify other activities, other than education or training, to
make up the requirements of a EPP. The exercise of this discretion
will be set out in guidelines.
New sub section 544DA(4) sets out the
appropriate number of hours is 25 hours per week or another number
of hours as set out by the Secretary. This will allow flexibility
where the person has a reduced work capacity or is a principal
carer of a child. The exercise of this discretion will be set out
in guidelines.
New sub section 544DA(5) provides for remote
locations where this isn t an approved training or education course
available or other special circumstances. The exercise of this
discretion will be set out in guidelines.
New sub section 544DA(6) allows for a course to
be an approved course for an EPP, where it is a an approved
secondary or tertiary course under section 5D of the Student
Assistance Act 1973 (SAA) and would, in the Secretary s
opinion allow or assist the person to complete their final year of
secondary school.
New sub section 544DA(7) empowers the Secretary
to set guidelines, by way of a legislative instrument, for the
exercise of discretion in matters such as special circumstances.
This might refer to:
- where the person should not be required to undertake an
education or training, for example they are undertaking the PSP.
The exercise of this discretion will be set out in guidelines,
- determining if a course would allow the person to complete
secondary school, or it s equivalent. The exercise of this
discretion will be set out in guidelines.
The actual detail and guidelines as to how and in
what circumstances this discretion is to be exercised are not set
out in this Bill, rather it is to be set out in Legislative
Instrument to be written by the Secretary. Legislative Instruments
are generally disallowable by the parliament under the
Legislative Instruments Act 2003 (LIA),[23] unless the Principal Act
otherwise provides.
New sub section 544DA(8) will
require the Secretary to have regard to the guidelines that already
exist, when exercising discretion under new sub section
544DA(6), that is whether a course is a an approved
secondary or tertiary course under section 5D of the Student
Assistance Act 1973 (SAA).
Item 45 sets out some transition and start date
provisions for the provisions in Part 2. Essentially the new YA
provisions, the YA for early school leaver requirements , are to
start from 1 January 2010. For claimants who claim on or after 1
January 2010, the Part 2 provisions will apply from the date of
commencement of payment. For existing YA recipients who are an
early school leaver, the Part 2 provisions are to start from the
start date of their EPP.
Concluding comments
Given the different job outcomes for persons with and without
year 12 completion,[24] the Training Supplement will be of benefit. Whether the
estimated 50 000 NSA and PP recipients actually take up the
requisite education or training (mostly full time) in the two year
period the Training Supplement is available for[25] remains to be seen. If the
Training Supplement is estimated to benefit 50 000 NSA and PP
recipients, it raises the question as to whether the performance of
the Training Supplement could be reviewed to examine if it should
be an on going program of assistance.
The proposal to exclude access to YA for young persons aged 15
to 20 years who do not have year 12 completion, or its equivalent
and who are not undertaking full time education or training is a
radical step. As at April 2009, there were 78 441 YA recipients who
were young unemployed jobseekers.[26] These are persons aged 15 to 20 years. The
Minister said in the second reading speech that there would be
flexibility for young persons in special circumstances.[27] Some of the current 78
441 young unemployed jobseekers would be on the PSP program but
there is very little detail as to what this flexibility will be
made up of and who it will apply to. Some unemployed jobseekers do
have significant issues like homelessness, substance abuse, partial
capacities for work or they are a young parent.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
2413.
[14]. Department of Education,
Employment and Industrial Relations (DEEWR), Labour Market and
Related Payments: a monthly profile: April 2009, Canberra,
DEEWR, 20 May 2009, p. 3, viewed 1 June 2009,
http://www.workplace.gov.au/workplace/Publications/LabourMarketAnalysis/LabourMarketandRelatedPaymentsMonthlyProfile
[23]. Moira Coombs, Acts Interpretation Amendment
(Legislative Instruments) Bill 2005, Bills digest no. 11,
2005-06, Parliamentary Library, Canberra, 8 August 2005, viewed 4
June 2009, http://www.aph.gov.au/library/pubs/bd/2005-06/06bd011.htm
Peter Yeend
12 June 2009
Bills Digest Service
Parliamentary Library
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