Bills Digest no. 26 2015–16
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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.
Anna Dunkley and Michael Klapdor
Social Policy Section
1 October 2015
Contents
Purpose
of the Bill
Background
Policy position of stakeholders and parliamentarians
Committee consideration
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Other provisions
Date introduced: 16
September 2015
House: House of
Representatives
Portfolio: Social
Services
Commencement: On
Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The Social Services Legislation Amendment (Cost of Living
Concession) Bill 2015 (the Bill) will exempt the new South Australian (SA) Government
Cost of Living Concession Payment from being counted as income under the Social Security
Act 1991 (the SS Act)[1] and
the Veterans’ Entitlements Act 1986 (the VE Act).[2]
In its 2014–15 Budget, the Australian Government announced
its decision to terminate the National Partnership Agreement on Certain
Concessions for Pensioners and Seniors Card Holders (NPA) and cease the
payments made to the states and territories under this agreement.[3]
In response, in its 2014–15 Budget, the SA Government stated that it would stop
funding the concession on local government rates it provided to pensioners and
low-income earners.[4]
In May 2015, following controversy around the removal of this concession and a
failed campaign to convince the Australian Government to reverse its NPA
decision, the SA Government announced it would introduce a Cost of Living
Concession payment (COLC payment).[5]
National Partnership Agreement
The NPA had its origins in a decision by the Australian
Government to extend access to the Pensioner Concession Card (PCC) to all
pensioners, including part-rate pensioners, from 1993.[6]
Eligibility for concessions provided by the state and territory governments is
linked to the PCC. Therefore the cohort of pensioners eligible for concessions expanded.
Recognising this, the Australian Government agreed to provide funds to the
states and territories to cover some of their increased costs from 1993.[7]
The formal 1993 agreement allocated set amounts to each state and territory, to
be indexed and adjusted for growth in state pensioner populations over time.[8]
The Australian Government funding would be in the form of a Specific
Purpose Payment, requiring states and territories to provide an agreed set of
concessions on essential services to all pensioners.[9]
The original agreement did not cover reciprocal transport
concessions to Seniors Card holders. Seniors Cards are allocated by states and
territories and have different conditions and entitlements, and Seniors Card
holders were initially unable to access concessional travel in jurisdictions other
than their own. In 2008, after a long period of campaigning and negotiations, the
Labor Government agreed to provide funding of $50 million over four years to
the states and territories to offer reciprocal transport concessions to Seniors
Card holders and it was included in the agreement on pensioner concessions to
form the NPA.[10]
The 2013–14 funding allocations under the NPA for the concessions for
pensioners component are set out in Table 1.
Table 1: Certain concessions for pensioners component
|
$million
|
NSW
|
VIC
|
QLD
|
WA
|
SA
|
TAS
|
ACT
|
NT
|
Total
|
|
2013–14
|
97.3
|
69.5
|
48.6
|
24.5
|
27.7
|
8.9
|
2.0
|
1.4
|
279.7
|
Source: Australian Government, ‘Part 2: payments for specific purposes’, Federal
financial relations: budget paper no. 3: 2013–14, p. 50, accessed 18 September
2015.
South Australian Government concessions under the NPA
Each jurisdiction determined what concessions it provided
under the NPA, however, concessions generally included reduced
local council rates, utility bills, motor vehicle registration charges and
public transport fares.[11]
The SA Government concession most relevant to the Bill is the local government
rate concession for eligible home owners, paid under the South
Australian Rates and Land Tax Remission Act 1986.[12]
Payments were sent directly to local councils to reduce rates paid by
pensioners and low-income earners (by $190 per year) and by eligible
self-funded retirees (by $100 per year).[13]
Cessation of the NPA
The Australian Government terminated the
most recent NPA from 1 July 2014, indicating that it would redirect the funding
to ‘repair the Budget and fund policy priorities’.[14] The budget papers
indicated that ceasing to provide financial assistance to the states and
territories for the provision of concessions would result in savings of $1.3
billion over four years.[15]
South Australian Government response
In response to the Australian Government’s decision to
terminate the NPA, the SA Government announced in its 2014–15 Budget that it
would remove the local government rate concession in 2015–16.[16]
This announcement was controversial and was criticised by the state Opposition,
local government associations and pensioners.[17]
Following the State Tax Review and public pressure from
advocacy groups and local councils, the SA Government announced the
introduction of the Cost of Living Concession Payment (COLC payment) on
14 May 2015.[18]
From 1 July 2015, eligible South Australians can receive a direct payment
of $200 or $100 per year. In announcing the new COLC payment, SA Premier Jay
Weatherill stated that it was being introduced after a failed campaign to
convince the Australian Government to reverse its decision to terminate the
NPA, and would provide assistance to a greater number of households than the
concession it was replacing.[19]
The SA Treasurer noted on 14 May 2015 that other South Australian concessions
remain unchanged, including concessions for ‘energy, medical heating and
cooling, public transport, Emergency Services Levy, water and sewerage’.[20]
Eligibility for the COLC payment
Similar to the previous arrangements, the COLC payment is
payable per household (rather than individual). The SA Government expects
approximately 205,000 households to be eligible for the COLC payment.[21]
The Cost of Living concession webpage provides full eligibility information,
but generally people may be eligible if, on 1 July, they hold one of the
following cards: Pensioner Concession Card, Gold Card from the Department of
Veterans’ Affairs, Low Income Health Care Card, or the Commonwealth Seniors
Health Card.[22]
People may also be eligible if they meet low income provisions, or are in
receipt of any one of a range of Centrelink and Department of Veterans’ Affairs
payments on 1 July of the relevant financial year, including Newstart Allowance,
Sickness Allowance, Youth Allowance or Parenting Payment Partnered.[23] The
low income provisions are the same as currently apply for eligibility to
concessions on water and sewerage charges—the claimant’s income from all
sources (including partner’s income if in a couple) must not be over the
following limits:
- single:
$16,305.07
- single
with children: $17,423.54 or
- partnered:
$29,961.29.[24]
The different eligibility criteria mean that approximately
20,000 people who received concessions under the previous arrangement will not
be eligible for the COLC payment.[25]
Unlike previous arrangements, tenants may be eligible for
the COLC payment in addition to homeowners. The SA Government anticipates approximately
45,000 people will be eligible for the COLC payment who were not entitled to
concessions under previous arrangements.[26]
Table 2: Comparison of previous and current concessions
|
$ per annum
|
|
|
|
|
Home owners (pensioners and low-income earners)
|
190
|
200
|
10
|
|
Home owners (self-funded retirees holding a Commonwealth Seniors
Health Card)
|
100
|
100
|
Nil
|
|
Tenants (pensioners and low-income earners)
|
0
|
100
|
100
|
|
Tenants (self-funded retirees holding a Commonwealth Seniors
Health Card)
|
0
|
100
|
100
|
Source: J Weatherill (South Australian Premier) and T
Koutsantonis (South Australian Treasurer), New
cost of living concession for pensioners, media release, 14 May
2015, accessed 21 September 2015.
Reception to the COLC payment
The COLC payment has been welcomed by major interest and
advocacy groups in South Australia, including COTA South Australia, National
Seniors’ South Australian policy
advisory group, South Australian
Council of Social Service, and the Local Government Association of South
Australia, which describes it as ‘a win for pensioners’.[27]
SA Opposition leader Steven Marshall said he was ‘delighted’ at the
introduction of the COLC payment, though he expressed a desire to find out more
information relating to the new conditions for self-funded retirees.[28]
At the time of writing, the Bill has not received any significant
comment from major stakeholders, non-government parties or independent
parliamentarians.
At the time of writing, the Bill has not been referred to
any committees.[29]
The Senate Standing Committee for the Scrutiny of Bills had not yet considered
the Bill.
The Explanatory Memorandum to the Bill states that the measure
will have no financial impact.[30]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Australian Government has
assessed the Bill’s compatibility with the human rights and freedoms recognised
or declared in the international instruments listed in section 3 of that Act.
The Australian Government considers that the Bill is compatible because it
supports people’s ‘human right to social security’.[31]
At the time of writing, the Parliamentary Joint Committee
on Human Rights had not commented on the Bill.
The provisions in Schedule 1 of the Bill will exempt the COLC
payment from being assessed as income under the SS Act and VE Act.
Item 1 adds the COLC payment to the list of ‘excluded amounts’ that are
not considered income for the purposes of the SS Act, at subsection 8(8)
of that Act.[32] Item
2 similarly adds the COLC payment to the list of excluded amounts that are
not considered income for the purposes of the VE Act, at subsection
5H(8) of that Act.[33]
As noted, the SA Government expects 205,000 households to
be eligible for the COLC payment.[34]
If the Bill is not passed, South Australians who claim a payment or concession
card under the SS Act or VE Act as well as a COLC payment from
the SA Government will have the latter assessed as income for the purposes of
the two Acts. As almost all Australian Government payments and concession
cards are means tested based on an individual’s income or assets, a higher
income can affect a person’s eligibility for a payment or concession card, or
their rate of payment.
The Australian Government has described this as a
‘beneficial Bill’; indeed the intention and likely outcome of the Bill are
positive for South Australian pensioners, low-income earners and concession
card holders, because it will enable them to receive their full entitlements from
both the SA and Australian Governments without penalty.[35]
The SA Government introduced the COLC payment from 1 July
2015 and South Australian households started to receive their cheques during
the week starting 21 September 2015.[36]
The final item of the Bill (the Application provision) ensures that COLC
payments are not counted as income in payments made under the SS Act or
VE Act, even if they are received before the Bill receives Royal Assent.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Social Security Act 1991,
accessed 21 September 2015.
[2]. Veterans’ Entitlement
Act 1986, accessed 21 September 2015.
[3]. Australian
Government, ‘Part 2:
Expense measures’, Budget measures: budget paper no. 2: 2014–15, p.
192, accessed 18 September 2015.
[4]. South
Australian Government, Budget
measures statement: budget paper no. 6: 2014–15, p. 4, accessed 18
September 2015.
[5]. J
Weatherill (South Australian Premier) and T Koutsantonis (South Australian
Treasurer), New
cost of living concession for pensioners, joint media release, 14 May
2015, accessed 21 September 2015.
[6]. P
Baldwin (Minister for Social Security), Pensioner
concessions delivered as promised, media release,
2 April 1993, accessed 21 September 2015.
The PCC was previously known as the Pensioner Health Benefits card. A PCC
entitles the holder to reduced-cost medicines under the Pharmaceutical Benefits
Scheme, lower expenditure thresholds for accessing the Medicare Safety Net,
access to free hearing services, discounted mail redirection services, and
there are incentives for doctors to bulk-bill holders. State, territory and
local governments also offer concessions to PCC holders. Pensioners, single
parents on income support, and some allowance payment recipients who are aged
60 or over or have a partial capacity to work are eligible for the PCC.
Department of Human Services (DHS), ‘Pensioner
Concession Card’, DHS website, accessed 23 September 2015.
[7]. Council
of Social Service of New South Wales, Cost
of living: Are concessions doing their job?, December 2014, p. 17,
accessed 21 September 2015.
[8]. B
Baldwin (Minister for Social Security), Pensioners
assured of Commonwealth and State concessions, media release, 6 July
1993, accessed 22 September 2015.
[9]. Ibid.
[10]. Council
on Federal Financial Relations, National
partnership agreement on certain concessions for pensioners and Seniors Card
holders, 2008, accessed 22 September 2015; Australian Government, Budget
measures: budget paper no. 2: 2008–09, accessed 22 September 2015.
[11]. House
of Representatives Standing Committee on Family and Community Affairs, Concessions
– who benefits?: a report on concession card availability and eligibility for
concessions, House of Representatives, Canberra, November 1997, Executive
Summary, accessed 21 September 2015; M Klapdor, ‘Changes
to support for pensioners and retirees’, Budget review 2014–15,
Parliamentary Library, Canberra, May 2014, accessed 21 September 2015.
[12]. Local
Government Association of South Australia, ‘Pensioner concessions’,
Local Government Association of South Australia website, accessed 21 September
2015. Rates
and Land Tax Remission Act 1986 (SA), accessed 1 October 2015.
[13]. South
Australian Government, Budget
measures statement: budget paper no. 6: 2014–15, op. cit., p. 12; D
Wills, ‘Extra
payout as white flag raised on pensions’, The Advertiser, 15 May
2015, p. 1, accessed 21 September 2015.
[14]. Australian
Government, ‘Part 2:
expense measures’, Budget measures: budget paper no. 2: 2014–15, p.
192, accessed 18 September 2015.
[15]. Ibid.
[16]. South
Australian Government, Budget
measures statement: budget paper no. 6: 2014–15, op. cit., p. 4; Australian
Government, ‘Part 2:
expense measures’, op. cit., p. 192.
[17]. ‘Threat
to rates bill concessions for pensioners sees SA Treasurer and Liberals at odds’,
ABC News website, 1 May 2015, accessed 22 September 2015.
[18]. South
Australian Government, Government
response to the State Tax Review, Department of Treasury and Finance,
2015, accessed 21 September 2015; Local Government Association of South
Australia, ‘Pensioner concessions’,
op. cit.; J Weatherill (South Australian Premier) and T Koutsantonis (South
Australian Treasurer), New
cost of living concession for pensioners, op. cit.
[19]. J
Weatherill and T Koutsantonis, New
cost of living concession for pensioners, op. cit.
[20]. T
Koutsantonis (South Australian Treasurer), State
tax reform – new cost of living concession for pensioners, media
release, 14 May 2015, accessed 21 September 2015.
[21]. J
Weatherill and T Koutsantonis, New
cost of living concession for pensioners, op. cit.
[22]. South
Australian Government, ‘Cost
of living concession’, South Australian Government website, accessed 21
September 2015.
[23]. South
Australian Government, ‘Annual
application for the cost of living concession’, Department for Communities
and Social Inclusion website, accessed 21 September 2015.
[24]. South
Australian Government, ‘Income
limits – low income earners’, South Australian Government website, accessed
22 September 2015.
[25]. D
Wills, ‘Extra
payout as white flag raised on pensions’, op. cit.
[26]. J
Weatherill and T Koutsantonis, New
cost of living concession for pensioners, op. cit.
[27]. COTA
SA, COTA
SA welcomes new cost of living payment, media release, 14 May 2015;
National Seniors Australia, SA
seniors welcome new concession, media release, 19 June 2015; South
Australian Council of Social Service (SACOSS), 205,000
households across South Australia to benefit from new concession, media
release, 14 May 2015; Local Government Association of South Australia, ‘Pensioner Concessions’,
op. cit., all accessed 21 September 2015.
[28]. D
Wills, ‘Concessions
for SA pensioners and low-income earners, self-funded retirees lose’, The
Advertiser (online edition), 15 May 2015, accessed 21 September 2015.
[29]. Senate
Selection of Bills Committee, Report,
12, 2015, The Senate, Canberra, 17 September 2015, accessed 21 September 2015.
[30]. Explanatory
Memorandum, Social Services Legislation Amendment (Cost of Living
Concession) Bill 2015, accessed 18 September 2015.
[31]. The
Statement of Compatibility with Human Rights can be found at page 3 of the
Explanatory Memorandum to the Bill. Explanatory
Memorandum, Social Services Legislation Amendment (Cost of Living
Concession) Bill 2015, p. 3, accessed 18 September 2015.
[32]. Social
Security Act, proposed paragraph 8(8)(zac).
[33]. Veterans’
Entitlements Act, proposed paragraph 5H(8)(zec).
[34]. J
Weatherill and T Koutsantonis, New
cost of living concession for pensioners, op. cit.
[35]. S
Morrison, ‘Second
reading speech: Social Services Legislation Amendment (Cost of Living
Concession) Bill 2015’, House of Representatives, Debates, (proof), 16
September 2015, p. 9, accessed 21 September 2015.
[36]. Z
Bettison (South Australian Minister for Communities and Social Inclusion), New
cost of living concession cheques start arriving this week, media
release, 21 September 2015, accessed 21 September 2015.
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