Bills Digest no. 106 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.
Dale Daniels
Social Policy Section
7 April 2016
Contents
Purpose of the Bill
Committee
consideration
Policy position
of non-government parties/independents
Financial
implications
Statement of
Compatibility with Human Rights
Key issues
and provisions
Date introduced: 2
December 2015
House: House of
Representatives
Portfolio: Social
Services
Commencement: Sections
1 to 3 upon Royal Assent; Schedules 1 to 3 and 5 to 9 on the day after Royal
Assent; Schedule 4 on the 28th day after 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.
All hyperlinks in this Bills Digest are correct as at April 2016.
Purpose of
the Bill
The purpose of the Social Services Legislation Amendment
(Miscellaneous Measures) Bill 2015 (the Bill) is to amend the Social Security Act
1991 (SS Act) and the A New Tax System
(Family Assistance) (Administration) Act 1999 (FAA Act) to:
- prevent
people serving an income maintenance period receiving Special Benefit
- provide
for time limits for people who are not required to lodge tax returns to provide
information about their adjusted taxable income so that entitlement
reconciliation can occur
- ensure
that only one course of education can be taken into account when assessing the
full-time study load for Youth Allowance (Student) or Austudy Payment
- remove
the need for an apprentice to have a Commonwealth Registration Number (CRN) to
qualify for Youth Allowance or Austudy Payment
- specify
that a person is exempt from the Austudy Payment Assets Test only where their
partner currently receives a pension, benefit or allowance or if their partner
has at any time received a lump sum compensation payment under the Military
Rehabilitation Compensation Act 2004
- correct
minor inconsistencies concerning abbreviations and cross references in
provisions dealing with the indexation of Pharmaceutical Allowance (PhA)
- ensure
that only the maximum rate of Newstart Allowance and the Energy Supplement are
used when calculating the amount of income that would be sufficient to prevent
both members of a one-income couple receiving Newstart Allowance, for the
purposes of assessing eligibility for a Health Care Card
- repeal
a delegation provision in the family assistance law which does not allow the
Secretary of the Department of Social Services to delegate any of their powers
to officers of the Department of Human Services unless the Secretary of the
Human Services Department has agreed and
- correct
minor incorrect references in paragraph 8(8)(z) of the SS Act and repeal
redundant clause 49 of Schedule 1A of the SS Act.
The Bill contains a number of measures which are unrelated
to each other. Many of the measures are minor in nature. This Bills Digest
discusses in detail only those amendments contained in Schedules 1–3 of the
Bill.
Committee
consideration
Senate Community Affairs
Legislation Committee
The Bill was referred to the Senate Community Affairs
Legislation Committee for inquiry and report by 10 March 2016.[1] The report recommended that the Bill should be passed.[2] The ALP and the Greens dissented from the main report. Both parties
recommended that Schedule 1 (Special Benefit) should not be passed.[3] The Greens also recommended that Schedule 3 (Study Load Assessment) should not
be passed.[4]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills made
no comment about the Bill.[5]
Policy
position of non-government parties/independents
In the course of the second reading debate in the House of
Representatives, Julie Collins indicated that the ALP would support all the
measures in the Bill.[6] However, the ALP members of the Senate Community Affairs Legislation Committee
recommended that Schedule 1 (Special benefit) should be omitted from the Bill.
Schedule 1 was also opposed by the Green members of the Committee,
who also objected to Schedule 3 (Study Load Assessment).[7]
Financial
implications
According to the Explanatory Memorandum to the Bill, ‘there
is no financial impact’ from the measures in the Bill.[8]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human
Rights (Parliamentary Scrutiny) Act 2011 (Cth), the 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 Government considers that the Bill is compatible.9]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights (Human
Rights Committee) made comments about the amendments in Schedule 3 to the Bill.[10] These comments are set out under the heading ‘Key issues and provisions’ below.
Key issues
and provisions
Schedule 1—Special Benefit and
Income Maintenance Periods
Background
Special Benefit is a safety net payment for people who
cannot access another income support payment and are in severe financial
hardship due to circumstances outside their control.[11]
An income maintenance period (IMP) is a period of time during
which an income support payment is not payable to a claimant who has received
sick leave, annual leave or a redundancy payment from a former employer when
that job ended.[12] During the IMP the claimant is expected to maintain him or herself from those
funds. There are hardship provisions so that IMPs can be reduced or waived
where hardship results from unavoidable or reasonable expenditure.
Centrelink does not generally pay Special Benefit to a person
who is serving an IMP and is in financial hardship. However there have been
cases where the Administrative Appeals Tribunal has found that Special Benefit can
be paid.[13] Schedule 1 makes amendments to prevent the payment of Special Benefit to people
serving an IMP.
The National Welfare Rights Network has advocated for reform
of the hardship provisions for people serving IMPs for some years because it has
encountered cases where severe hardship has not been adequately handled by the
application of the IMP hardship provisions. The Network feels that the hardship
provisions are too restrictive and that people serving long IMPs often
experience hardship because they are not made aware at the time that they cease
employment that they must serve an IMP before receiving income support
payments.
The Network’s submission to the Senate Community Affairs
Legislation Committee states:
The current provisions for waiving or reducing an IMP are
insufficient as they are inflexible and consider only the expenditure of the
funds and do not consider the overall circumstances of the person.
Problems with the design of IMPs has resulted in a poverty
trap. The poverty that ensues is absolute. While other reforms to IMP rules and
administration are called for, removal of access to special benefit in the
absence of other reform would be a grave mistake.[14]
Jobs Australia supported the submission by the National
Welfare Rights Network adding:
Our understanding is that Special Benefit is a Social
Security safety-net for citizens at risk of absolute penury. As such if a
citizen has failed to realise the impact of the Income Management [sic] Period
on their future social security entitlements, they would not have had
sufficient warning to know how to manage this event.[15]
People with Disability (PWDA) also expressed concern at
the measure.
PWDA believes that the proposed changes to eligibility for
special benefit in this legislation remove the discretionary nature of the
payment in regard to income maintenance periods, potentially leading to
hardship and poverty. This will disproportionately impact on people with
disability.[16]
The Commonwealth Ombudsman has also published a report
into the policy followed by Centrelink with regard to Special Benefit and
Income Maintenance Periods.[17] This report:
… makes three recommendations. The first recommends that DSS
amend the policy instruction for IMP reduction so that it takes account of each
person’s circumstances including the portion of the termination payment that
was spent on non-permitted items in relation to the actual size of the payment
and the length of the IMP. The second recommends that DSS amend its instruction
about the grant of Special Benefit during an IMP so that DHS is permitted to
properly consider, and, where appropriate, grant claims in that situation. The
third recommends that DSS do what it can to raise community awareness of the
impact of employment termination upon income support non-payment and waiting
periods.
All three of these recommendations were accepted by DSS and
changes were made to the Guide to Social Security Law on 8 February
2016. However, those changes were not satisfactory and Part 5 of this report
concludes that more should be done to properly implement the recommendations.[18]
Provisions
Item 1 of Schedule 1 to the Bill inserts proposed
section 734A into the SS Act to explicitly state that Special
Benefit is not payable while a person is serving an IMP.[19] This change removes the existing option for the granting of Special Benefit
when the initial decision is made or when that decision is appealed. In
practise that has only infrequently occurred and only on appeal to the AAT. The
amendment does not change the long standing government policy on this matter.
Schedule 2—Family Tax Benefit
Background
Families claiming Family Tax Benefit Part A (FTBA) and Family
Tax Benefit Part B (FTBB) by fortnightly instalments are required, after the
end of each financial year to reconcile their actual income for the year with
the estimated income that formed the basis of the rate of payment that they
received.[20] This is done once their income tax return has been lodged and assessed. If they
were paid too little, or too much, an adjustment is made. To minimise the
number of families who might be overpaid Family Tax Benefit (FTB), supplements are
payable after the completion of the reconciliation process. Most overpayments
are able to be recovered by reducing the amount of the supplement paid to a family.
Where a family is not required to submit an income tax
assessment because their income is below the tax-free threshold they need to
notify Centrelink of their actual income so that the reconciliation process can
proceed.[21] In some cases Centrelink has sufficient information to do the reconciliation
without receiving further information from the family.
Schedule 2 of the Bill amends the FAA Act to address
a problem related to time limits for families to provide income information to
Centrelink. At present time limits are in place for families to lodge income
tax returns but not for income notifications from families who are not required
to lodge an income tax return for the relevant financial year. Schedule 2
contains amendments to apply the same time limits to families in both
situations.
The National Welfare Rights Network (NWRN) supports this
amendment but recommends that administrative procedures be improved to ensure
that families are fully aware of what they need to do to ensure that
reconciliation can occur within the time limits and the FTB supplements can be
paid. The Network’s concern is that, at present, it is unclear to many families
who receive income support payments (for example Newstart Allowance or
Parenting Payment) as well as FTB that they need to provide additional
information when Centrelink already has income information about them as a
result of the income testing of their income support payments.[22]
Provisions
Item 2 of Schedule 2 to the Bill inserts proposed
subsection 14A(3A) into the FAA Act so that a person who is not
required to lodge a tax return for a past period income year must notify
Centrelink of the amount of their adjusted taxable income by the end of the
first income year after the past period income year or a later time if the
Secretary is satisfied that there are special circumstances that prevented the
person from making that notification before the end of that first income year.[23]
Items 4, 7 and 10 of Schedule 2 to the Bill repeal
and replace paragraph (a) of subsections 32J(2), 32M(2) and 32N(2) of
the FAA Act in equivalent terms to provide time limits within which people
who are not required to lodge tax returns must notify Centrelink of the amount
of their adjusted taxable income where they have received FTB by instalments,
so that reconciliation can occur.
Schedule 3—study requirements
Currently sections 541B and 569A of the SS Act set
out the criteria to be satisfied for a person to be considered to be undertaking
full-time study for the purposes of Youth Allowance or Austudy respectively.
This is based on the enrolment load in a given study period. The Bill introduces
an additional requirement that the full-time enrolment load must be from one
course of education only.
The National Union of Students (NUS) submitted to the
Senate Community Affairs Legislation Committee that this would seem ‘to
restrict student choice and undermine the rhetoric of student centred learning
that has dominated higher education policy considerations over the last
decade’.[24]
The lack of flexibility that the amendments will impose on
students is of particular concern in the context of labour market forecasts
which predict ‘both the rapid obsolescence and the creation of new types of
jobs’.[25] According to the NUS, ‘some students may need maximum flexibility to be able to
mix and match courses to meet the unmet needs of emerging and yet to emerge
industries’.[26]
Human Rights Committee
The Human Rights Committee also commented on the amendments
in Schedule 3 noting:
The amendments will affect certain individuals’ access to a
social security payment which they are currently receiving and as such the
measure engages the right to social security. The receipt of social security is
an important resource to enable students to complete their education and,
accordingly, the measure also engages the right to education.[27]
The Human Rights Committee assessed the requirements for
Youth Allowance (student) or Austudy against articles 9 and 13 of the International
Covenant on Economic, Social and Cultural Rights (right to social security
and the right to education).[28] As the Human Rights Committee considered that the amendments in Schedule 3 to
the Bill raise questions about whether preventing multiple courses from being aggregated
to enable eligibility for Youth Allowance (student) and Austudy is a justifiable
limitation on the right to social security and the right to education it has
written to the Minister for Social Services seeking further advice.
Provisions
Items 2 and 4 of Schedule 3 to the Bill insert proposed
sections 541C and 569AA respectively into the SS Act to provide that
the full-time enrolment load for recipients of Youth Allowance and Austudy must
be from one course of education only.
Schedules 4 to 9—housekeeping
These schedules ‘correct technical errors and clarify
intended policy by removing minor ambiguities and anomalies’.[29] Further information on these amendments is set out in the Explanatory
Memorandum to the Bill.[30]
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
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