Social Services Legislation Amendment (Payment Integrity) Bill 2017

Bills Digest No. 31, 2017–18

PDF version [724KB]

Michael Klapdor
Social Policy Section
7 September 2017

Contents

Purpose of the Bill

Structure of the Bill and Bills Digest

Committee consideration

Senate Community Affairs Legislation Committee
Senate Standing Committee for the Scrutiny of Bills

Financial implications

Statement of Compatibility with Human Rights

Parliamentary Joint Committee on Human Rights

Schedule 1—Enhanced residency requirements for pensioners

Background
Current residency requirements
Short history of Age Pension residency requirements
Short history of Disability Support Pension residency requirements
Policy position of non-government parties/independents
Position of major interest groups
Federation of Ethnic Communities’ Councils of Australia
National Social Security Rights Network
Australian Council of Social Service
Key issues and provisions
Rationale for the measure
Changes introduce a contributory element to the social security system
Measure affects older migrants
Key provisions
Social Security Act 1991

Schedule 2—Stopping the payment of pension supplement after 6 weeks overseas

Background
History of the pension supplement
Policy position of non-government parties/independents
Position of major interest groups
National Social Security Rights Network
Australian Council of Social Service
Key issues and provisions
Rationale for the measure
Measure reduces payment rates for those taking long trips or who live overseas
Numbers affected
Key provisions
Table 1: payment calculators amended by Schedule 2

Schedule 3—Taper rate for Part A rate of Family Tax Benefit (Method 2)

Background
FTB-A income tests
Proposed change
Dropped FTB measures
Policy position of non-government parties/independents
Policy position of major interest groups
Australian Council of Social Service
National Social Security Rights Network
Key issues and provisions
Complexity of the income test
Numbers affected
Cameos
Table 2: estimates of the impact of the proposed taper rate on Family Tax Benefit Part A entitlements, rates and thresholds as at July 2017
Key provisions

Schedule 4—Liquid assets test waiting period

Background
Liquid assets
Liquid assets waiting periods
Policy position of non-government parties/independents
Policy position of major interest groups
National Social Security Rights Network
Australian Council of Social Service
Key issues and provisions
Rationale
Numbers affected
Measure affects those with significant savings or resources
Key provisions

Date introduced: 21 June 2017
House: House of Representatives
Portfolio: Social Services
Commencement: Schedule 1 on 1 July 2018 if Royal Assent is before that date, otherwise the first 1 January or 1 July after Royal Assent; Schedule 2 on 1 January 2018 if Royal Assent is before that date, otherwise the first 1 January, 1 April, 1 July or 1 October after Royal Assent; Schedule 3 on the first 1 July after Royal Assent; Schedule 4 on 20 September 2018.

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 Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at September 2017.

Purpose of the Bill

The purpose of the Social Services Legislation Amendment (Payment Integrity) Bill 2017 (the Bill) is to amend the Social Security Act 1991 (SS Act), the Veterans’ Entitlements Act 1986 (VE Act) and the A New Tax System (Family Assistance) Act 1999 (FA Act) to:

amend the residency requirements for Age Pension and Disability Support Pension (DSP) so that, in order to qualify for these payments, a new claimant from 1 July 2018 must have:
- ten years continuous residency in Australia including at least five years during the person’s working life (age 16 to age pension age) or
- ten years continuous residency in Australia and the person must not have been in receipt of an allowance or student income support payment for a period or combined periods exceeding five years when they were aged at least sixteen years (whether or not these periods in receipt of income support occur during the ten qualifying residency period) or
- 15 years continuous residency in Australia.
stop payment of the pension supplement after six weeks of a temporary overseas absence, or immediately for permanent departures from 1 January 2018
tighten the income test for Family Tax Benefit Part A for certain families with income over the higher income free area (currently $94,316) from 1 July 2018 and
increase the maximum liquid assets waiting period for Newstart Allowance, Youth Allowance, Austudy and Sickness Allowance from 13 weeks to 26 weeks from 20 September 2018.

The pension supplement measure was announced in the 2016–17 Mid-Year Economic and Fiscal Outlook (MYEFO) and was previously included in the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017.[1] This Bill was discharged from the Notice Paper in the Senate on 23 March 2017.[2]

The three other measures were announced in the 2017–18 Budget.[3]

Structure of the Bill and Bills Digest

The Bill contains four schedules. As the measures proposed in each schedule are distinct and unrelated, this Bills digest will provide background and analysis to each schedule in separate sections.

Committee consideration

Senate Community Affairs Legislation Committee

The Bill has been referred to the Senate Community Affairs Legislation Committee for inquiry and report by 7 September 2017. Details of the inquiry are on the Committee’s website.[4]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills raised a concern as to the retrospective effect of Schedule 1 of the Bill. The Committee noted that while their commencement was prospective, the effect of the amendments was that ‘a person who may have made arrangements based on an understanding of the existing law may have to wait a further five years to satisfy the residency requirements for the Age Pension or DSP’.[5]

The Committee noted that it has ‘a long-standing scrutiny concern about provisions that, while not technically retrospective, may raise questions as to the fairness of applying a change in the law to individuals who have arranged their long-standing affairs on the basis of the existing law’.[6]

The Committee sought the Minister for Social Service’s advice as to why it is considered necessary to apply the amended requirements to those who may have arranged their affairs on the basis of the existing law, and the numbers likely to be adversely affected.[7]

The Minister provided advice to the Committee on 28 August 2017. The Minister stated:

If grandfathering arrangements were to be applied to this measure, they would be required to operate for a significant period. Operating parallel residency systems for the Age Pension and DSP would also be complex from a policy and administrative perspective.[8]

The Committee stated in response to this advice: ‘The committee does not consider that administrative complexity, of itself, is sufficient justification for applying a change in the law to individuals who may have arranged their long-standing affairs on the basis of the existing law’.[9] The Committee requested that information provided by the Minister in his response be included in the Explanatory Memorandum to the Bill and drew its scrutiny concerns with the Bill to the attention of senators.[10]

Financial implications

According to the Explanatory Memorandum to the Bill, the measures are expected to provide around $823.2 million in savings over the forward estimates.[11] The impact of each schedule is estimated as follows:

$119.1 million in savings from Schedule 1—Enhanced residency requirements for pensioners
$150.2 million in savings from Schedule 2—Stopping the payment of pension supplement after six weeks overseas
$415.4 million in savings from Schedule 3—Taper rate for Part A rate of family tax benefit (Method 2) and
$138.5 million in savings from Schedule 4—Liquid assets test waiting period.

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.[12]

In regards to Schedule 1—Enhanced residency requirement for Australian pensions, the Statement of Compatibility with Human Rights only considers the right to social security under article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).[13] However, the measure is explicitly targeted at migrants to Australia with limited residency in Australia during working life. The Minister for Social Services Christian Porter explains part of the rationale for this Schedule in his second reading speech to the Bill by stating: ‘the community reasonably expects that those choosing to migrate to Australia should be self-sufficient to the greatest extent possible’.[14] In targeting migrant residents, the measure would appear to engage with the right to be free from discrimination as to national origin (under Article 2 of the ICESCR).

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights raised concerns with the proposed changes to the residency requirements for Australian pensioners in Schedule 1 to the Bill. The Committee considers that the proposal constitutes a limitation on the right to social security and the right to an adequate standard of living, which was not acknowledged or justified in the Bill’s Statement of Compatibility with Human Rights.[15] Accordingly, the Committee sought the advice of the Minister on this matter, including advice on whether the proposal is aimed at achieving a legitimate objective for the purposes of human rights law and whether the resulting limitation on human rights is a reasonable and proportionate measure to achieve that objective.[16] The Committee also questioned the compatibility of the measure with the right to equality and non‑discrimination, on the basis that it ‘may have a disproportionate negative effect on particular groups’.[17] Noting that this issue was not addressed in the Statement of Compatibility, the Committee also sought the Minister’s advice on this issue.[18]

At the time of writing, a response from the Minister had not been received but not published.[19]

Schedule 1—Enhanced residency requirements for pensioners

Schedule 1 will amend the residency requirements for Age Pension and Disability Support Pension (DSP) so that, in order to qualify for these payments, a new claimant from 1 July 2018 must have:

ten years continuous residency in Australia including at least five years during the person’s working life (age 16 to age pension age) or
ten years continuous residency in Australia and the person must not have been in receipt of an allowance or student income support payment for a period or combined periods exceeding five years when they were aged at least sixteen years (whether or not these periods in receipt of income support occur during the ten year qualifying residency period) or
15 years continuous residency in Australia.

The measure will extend the current residency requirements by five years for those without five years working life residency or for those who have been in receipt of allowance or student payment for more than five years during their working life.

The proposed changes are expected to provide savings of $119.1 million over five years and will primarily affect older migrants to Australia.[20]

Background

The Australian social security system differs from most other developed countries (except for New Zealand) in that payments are flat-rate and paid from general government revenue.[21] Qualification requirements primarily rest on Australian residency and means testing—with the specific category and rate of payment dependent on other factors such as age, disability or family circumstances. Most other developed countries have in place contributory social insurance systems for the provision of unemployment benefits, sickness and disability benefits and for retirement pensions. Eligibility for and rates of payment are linked to the length of time and amount of contributions paid into the scheme (often paid through specific payroll taxes) and to previous earnings. In these countries, only a minimal level of social assistance is offered to those in need of income support who are not covered by the social insurance schemes.

The design of Australia’s social security system is focused on protection against poverty while other developed countries’ systems are focused on income maintenance across a person’s life-cycle (with poverty relief an additional objective).[22] As the Australian system is not based around contributions, the residency requirements play an important role in determining who is eligible for assistance.

Current residency requirements

One of the current qualification requirements for Age Pension and DSP is for at least ten continuous years of Australian residency, or for multiple periods exceeding ten years with at least one period of five years duration or more.[23] There is an exemption from this requirement for refugees or former refugees who reside in Australia and, for DSP, for those who are Australian residents at the time their disability arises.

To be an Australian resident a person must reside in Australia and be an Australian citizen, the holder of a permanent visa or a New Zealander with a Special Category Visa who was in Australia on, just before, or just after 26 February 2001.[24]

Short history of Age Pension residency requirements

When the Age Pension was introduced in 1909, the residency requirement was for 20 years continuous residence (with absences of up to one tenth of total residency allowed).[25]

This was amended in 1952 so those with 18 years of residence could be deemed to have been resident during occasional absences totalling two years (plus six months for each year of residence exceeding 18 years).[26]

This requirement was further reduced in 1962 to ten years continuous residence or, when continuous residence was at least five years, the ten year requirement was reduced by all periods of residence totalling in excess of ten years.[27]

Most of the current requirements were introduced in 1985.[28] However, in 1987, the requirements were changed to exclude temporary residents and prohibited non-citizens.[29]

Refugees applying for pensions were made exempt from length of residence requirements from 1995.[30]

Short history of Disability Support Pension residency requirements

When DSP (known as the Invalid Pension prior to 1991) was introduced in 1910, the residency requirement was for five years continuous residence (absences up to one tenth of the total residency period were allowed).[31] A claimant was required to have become permanently incapacitated while in Australia.

In 1912, those who were blind or those permanently incapacitated as a result of a birth defect and who were brought to Australia before the age of three years old could be considered eligible for DSP.[32] In 1923, those not born in Australia, who were blind or were permanently incapacitated as result of a birth defect, and who arrived after turning three years old, could become eligible for DSP after 20 years continuous residence in Australia.[33]

From 1947 eligibility was broadened so that incapacity or blindness that occurred during temporary absence from Australia did not disqualify a claimant. Any incapacity that had occurred outside of Australia did not disqualify a claimant if they arrived in Australia before the age of three years or had resided continuously in Australia for 20 years.[34]

In 1952, residence requirements were eased so that where a claimant had resided in Australia for periods totaling 18 years they could be deemed to have been resident during occasional absences totaling two years plus six months for each year of residence in excess of 18 years.[35]

In 1962, the residence requirements were modified so that permanent incapacity or blindness which occurred outside of Australia did not disqualify a person from eligibility for DSP if continuous residence at any time exceeded ten years.[36] Where continuous residence was at least five years, the ten‐year continuous residency requirement was reduced by all periods of residence totalling in excess of ten years.

In 1974, people, who became permanently incapacitated for work in Australia, no longer had to satisfy a period of residence requirement.[37]

In 1985, the current residency requirements were introduced for those who were not incapacitated while an Australian resident. A claimant had to have been resident for ten years at least five of which had to be for a continuous period.[38] In 1987, the requirements were changed to exclude temporary residents and prohibited non‐citizens.[39]

Refugees applying for pensions were made exempt from length of residence requirements from 1995.[40]

Policy position of non-government parties/independents

The position of non-government parties or independents on this measure was not clear at the time of writing.

Position of major interest groups

Federation of Ethnic Communities’ Councils of Australia

The Federation of Ethnic Communities’ Councils of Australia (FECCA) has criticised the proposed changes stating that the measures ‘will have a disproportionate impact on Australia’s migrant communities’.[41] FECCA’s statement in response to the Budget said: ‘FECCA believes that migrant Australians should not be punished in their older age or because they require support for living with a disability’.[42]

National Social Security Rights Network

The National Social Security Rights Network (NSSRN) is opposed to the measure:

It affects relatively few people. However, in the NSSRN’s view, there is no justification for tightening the residence requirements for age pension and DSP. The measure would achieve a small saving, but is likely to cause severe financial hardship to some very vulnerable elderly Australians.

It is likely that this measure will result in more elderly migrants over age pension age relying on the poverty level special benefit payment for extended periods, rather than age pension. This includes some elderly victims of violence, abuse and neglect.[43]

The NSSRN noted that the existing residency requirements result in elderly migrants relying on Special Benefit, particularly migrants who have arrived in Australia under the contributory parent visa scheme.[44] Under this scheme, migrants must have an assurer ‘who guarantees to provide financial support or repay any recoverable social security payments made to the migrant during their first 10 years of Australia residence’ (the assurance of support scheme).[45]

The NSSRN is concerned that some elderly migrants who need to access income support as a result of violence, neglect or abuse by their assurer or another family member will only be able to access lower rate Special Benefit rather than a pension payment. It notes that under the assurance of support scheme, any Special Benefit paid to these migrants can be recovered from the assurer. The NSSRN has recommended that victims of violence, abuse and neglect should be exempt from the residency requirements and that the assurance of support scheme be extended so that pensions can be recoverable amounts under the scheme.[46]

Australian Council of Social Service

The Australian Council of Social Service (ACOSS) has stated that it is opposed to the measure ‘because it will deny appropriate income support to people in need’.[47]

Key issues and provisions

Rationale for the measure

In explaining the rationale for the measure, Minister for Social Services Christian Porter compared Australia’s residency requirements with those for contributory pension schemes in other developed countries:

Currently, to qualify for the age pension or DSP, a person must be an Australian resident for a total of 10 years, with at least five of those years being continuous. However, there is no requirement for those 10 years to be during a person's working life—that is, between 16 years of age and age pension age—or for a person to demonstrate any level self-sufficiency during that time.

The current residency requirements are generous when compared to the qualifying contribution periods required to receive a pension in other countries. A number of OECD countries require greater than 10-years contributions in order to receive even a part pension.[48]

The Minister stated Australia’s social security system is based on the principles of need and residency and argued that the measures will ‘reinforce and strengthen the residence connection’.[49] He also stated that ‘the community reasonably expects that those choosing to migrate to Australia should be self-sufficient to the greatest extent possible’.[50]

Changes introduce a contributory element to the social security system

The Minister’s rationale aligns working life residency with the contribution periods used to determine qualification for and rates of pensions in overseas schemes. As noted above, these social insurance schemes are very different to Australia’s social security system.

Social insurance schemes are funded—at least partly—by direct contributions usually collected through specific payroll taxes. Australia’s social security system is funded from general government revenue. While Australia had a period where a component of income tax was known as the ‘social services contribution’, eligibility for social security payments was never dependent on a person having paid income tax and there was no direct link between the revenue from this contribution and social security expenditure.[51] As a system designed to act as a safety net and focused on poverty alleviation, it would be ineffective to link contributions to government revenue with eligibility for payments as some individuals will never be able to contribute or will contribute very little. This could arise for a range of reasons including disability, illness, carer responsibilities or other barriers to earning income.

The residency requirements could be viewed as implicitly requiring some sort of contribution to Australia in order to qualify for pension payments—as most migrants will contribute to government revenue during their residency period (on top of visa fees and taxes other than income tax). In fact, this was the reason cited by Robert Menzies in 1961 in announcing the policy to reduce the Age Pension residency requirement from 20 years to 10 years:

The great stream of migration since the War, so valuable to Australia, has produced its own problems. One of them has been that it is felt by elderly migrants, who have worked and paid taxes in Australia for long periods failing short of 20 years, that it is unreasonable that they should not qualify for age pension. We have examined this matter. We attach great importance to family migration, since it helps assimilation in the new country. We will legislate to reduce the 20 years period to 10.[52]

However, despite the suggestion that migrants will have worked and paid taxes, there was no requirement for migrants to have actually done so in order to qualify for the pension.

The proposed changes indicate a significant shift in the principles underlying Australia’s social security system, despite only affecting a small number of people. By setting a lower residency requirement for those with residence in Australia during their working life and those without long periods of income support receipt compared to those who do not fit these criteria, the measure adds an explicit link between working or paying income tax and qualification for a pension payment.

Measure affects older migrants

The Government estimates that around 2,390 pension claimants will be affected by the change each year—2,300 will be delayed from claiming a pension due to the new requirement to have at least five years of the ten-year continuous residence requirement as a resident during the person’s working life (aged 16 to pension age), and an estimated 90 people a year on parent or partner visas who have been in receipt of an income support payment for longer than five years will have to wait an additional five years before claiming an Age Pension.[53]

While some expatriate Australians who have not spent much of their working life in Australia may be affected, the majority of those affected are likely to be older migrants who move to Australia late in their lives and will have to wait a longer time before they are able to access the Age Pension.

Some younger migrants whose disability occurred prior to moving to Australia may have to wait longer before they can access DSP, particularly if they have had periods in receipt of another payment such as Newstart Allowance or Youth Allowance (which can generally be accessed by migrants after serving a two-year Newly Arrived Residents Waiting Period).

Key provisions

Social Security Act 1991

The Age Pension qualification requirements are set out in section 43 of the SS Act. Paragraph 43(1)(a) provides that one criterion for qualification, where the person has reached pension age, is that they have ten years qualifying Australian residence (other criteria are that the person has a qualifying residence exemption, or that the person was previously in receipt of one of a number of specified payments prior to reaching pension age). Qualifying Australian residence is defined at section 7.

Item 1 substitutes paragraph 43(1)(a) so that the criterion refers to the person meeting the residency requirements set out by proposed section 43A (inserted by item 4). New section 43A sets out the proposed new qualifying residency requirements for the Age Pension.

The new requirements are that a person must have been an Australian resident for a continuous period of at least 15 years; unless they satisfy proposed subsections 43A(2) or (3) in which case the requirement is for a period of at least ten years. Proposed subsections 43A(2) and (3) provide the criteria for needing only a period of ten years continuous residency:

43A(2)—if at least five years of the residency period was during a period where the person was aged at least sixteen but before they reach pension age (currently 65 years and six months)
43A(3)—if, for a period that exceeds five years, or for two or more periods that in aggregate exceed five years (whether or not these periods are during the qualifying continuous residency period), the person:
- was not receiving a payment of Austudy Payment, AUSTUDY Allowance, Newstart Allowance (or previous payments the Job Search Allowance or Unemployment Benefit), Youth Allowance or a Youth Training Allowance, or Special Benefit (under the current SS Act or the previous Social Security Act 1947)
- was aged at least 16 years during the period or periods and
- was an Australian resident during the period or periods.

Proposed subsection 43A(4) provides that periods when an assurance of support is in for force for an individual and they are receiving one of the payments listed above are not to be considered periods where a person was receiving a payment (for the purposes of subsection 43A(3)).

Section 94 of the SS Act sets outs the qualification requirements for DSP. Item 6 substitutes subparagraph 94(1)(e)(ii) (which sets the requirement for ten years qualifying Australian residence or a qualifying residence exemption) with new subparagraphs 94(e)(ii) and (iia). These new subparagraphs require a person to either meet the qualifying residency requirements set out at proposed section 95A (inserted by item 10) or have a qualifying residency exemption.

The residency requirements set out in proposed section 95A are the same as those in proposed subsection 43A (set out above).

The application provisions for Schedule 1 of the Bill state that the amendments apply in relation to claims for the Age Pension or DSP made on or after commencement or for claims made before commencement where the person does not qualify for the relevant pension before commencement. The amendments do not apply to a person who was in receipt of the Age Pension or DSP prior to commencement if they later made a claim for the same payment. That is, those already in receipt of the Age Pension or DSP prior to commencement will not be subject to the proposed new requirements if they lose eligibility for the payment and then make a new claim at a later date.

Schedule 2—Stopping the payment of pension supplement after 6 weeks overseas

Schedule 2 will limit the portability of the pension supplement so it can only be received during temporary absences overseas for a maximum of six weeks. The measure was announced in the 2016–17 MYEFO and was previously included in the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017.[54]

Background

The pension supplement is payment provided in addition to certain income support payments including the Age Pension, Veterans’ Service Pension, Carer Payment and DSP.[55]

People who leave Australia temporarily for fewer than six weeks typically continue to receive the same rate of pension supplement during their travel period.[56] Currently, those who leave Australia permanently or for more than six weeks and remain eligible for their qualifying payment (such as the Age Pension) receive a reduced rated of pension supplement, known as the basic amount.

The annual pension supplement rate for singles is $1,713.40 (basic amount $598.00) and for members of a couple is $1,292.20 (basic amount $491.40).[57] Parenting Payment (Single) recipients under Age Pension age receive the pension supplement basic amount. The pension supplement is paid fortnightly, or a recipient can elect to receive a reduced fortnightly rate and a quarterly payment of the ‘minimum pension supplement amount’.[58]

The pension supplement is subject to the pension income and assets test but the minimum pension supplement amount is the last component of the pension rate to be reduced when the income test is applied. The minimum pension supplement amount remains payable if any pension supplement is payable after the application of the income and assets test.

History of the pension supplement

The current pension supplement was created as part of a major pension reform in 2009 from a combination of existing supplements and allowances and an additional increase.[59] These included the GST pension supplement, which had been introduced in 2000 to compensate for the reduced purchasing power of the pension, and ‘was structured as a supplement so as to ensure that the value of the compensation for the GST was always preserved as an amount additional to the pension rate’.[60] Other payments bundled together in the pension supplement were:

the Utilities Allowance, introduced in 2004 as a twice yearly payment to assist with utility bills
the Telephone Allowance, introduced in 1992 as a payment for pensioners with a telephone account and
the Pharmaceutical Allowance, introduced in 1990 to compensate pensioners for reduced entitlements to free pharmaceuticals.[61]

Policy position of non-government parties/independents

The Australian Labor Party has previously stated its opposition to the measure.[62] Shadow Minister for Families and Social Services Jenny Macklin described the measure as ‘stripping pensioners of the pension supplement’ and part of a broader sweep of pension ‘cuts’.[63]

The Australian Greens, in their dissenting report to the Senate Community Affairs Committee inquiry into the previous Bill, stated that they were opposed to the measure.[64]

Position of major interest groups

National Social Security Rights Network

The NSSRN has previously stated that it was opposed to this measure. In its submission to the Senate Community Affairs Committee inquiry into the previous Bill the NSSRN stated:

The rules concerning payment of income support overseas (known as portability) have been progressively tightened over a number of years, especially since 2004. We consider that the rules already place great weight on the principle of residence and this further tightening is unjustified because it does not give enough weight to the importance of travel overseas, especially for the many older Australians who are migrants and have strong ties to family and communities overseas.[65]

The NSSRN was particularly concerned that the measure would affect those already overseas stating:

Individuals already overseas have always been protected from the potential detrimental impact of portability changes ... [the measure] departs from this principle unacceptably, as it applies to all pensioners whether overseas on date of commencement or not. Many of these pensioners will have already exercised the right they have under Australian social security law to choose their country of retirement and this will cut their incomes even though they may be unable to do anything about it.[66]

Australian Council of Social Service

While ACOSS was opposed to the Bill the measure was previously proposed in, it did not state a clear position on this particular measure.[67] In its submission to the Senate Community Affairs Committee inquiry into the previous Bill, ACOSS suggested that supplements should be rolled into the base rate of payment.[68]

Key issues and provisions

Rationale for the measure

The Government has stated that ‘the intent of the Pension Supplement is to assist with specific cost of living pressures for pensioners living in Australia’.[69] The Explanatory Memorandum to the Bill notes that the pension supplement basic amount is equivalent to the former GST supplement and argues ‘pensioners who leave Australia permanently or who are temporarily absent from Australia for more than six weeks are unlikely to be impacted by the Australian GST and it is therefore not appropriate to continue to pay them the pension supplement basic amount’.[70]

Measure reduces payment rates for those taking long trips or who live overseas

While the pension supplement’s historical components may have initially been for the purpose of specific costs, it has essentially become an income supplement for certain income support recipients. The rate of the supplement and its indexation arrangements are not directly linked to any specific costs.

While it is arguable that those travelling or living overseas no longer need this income supplement, many pensioners already living overseas will have come to rely on the additional income and planned their finances accordingly.

Numbers affected

The Department of Social Services estimates that 175,000 pensioners will be affected by the measure in the first year and an additional 80,000 recipients each year afterwards.[71]

Key provisions

Schedule 2 amends the SS Act and the VE Act to stop payment of the pension supplement for those who leave Australia permanently or who are temporarily absent from Australia for a continuous period exceeding six weeks.

The main amendments are to the rate calculators for various payments setting out the new residency conditions for the receipt of the pension supplement. The amendments specify that a pension supplement amount can be added to a person’s maximum basic rate if the person is residing in Australia and is either:

in Australia or
temporarily absent and has been for a continuous period not exceeding six weeks.

Table 1 sets out which payment calculators are affected by which amendment.

Table 1: payment calculators amended by Schedule 2

Item numbers	Amended calculator	Pension type affected	Amended Act
3–6	Pension rate calculator A	Age Pension, Carer Payment, Disability Support Pension and Wife Pension	SS Act
8–11	Pension rate calculator B	Age Pension and Disability Support Pension for permanently blind people aged 21 and older
13–16	Pension rate calculator C	Bereavement Allowance and Widow B Pension
18–22	Parenting Payment rate calculator	Parenting Payment Single
34–37	Rate calculator	Service Pension	VE Act

Items 24 and 25 respectively repeal the current method statements in the SS Act for calculating the transitional maximum pension payment rate for single people and couples outside Australia for longer than six weeks. These items also insert new method statements which do not include the step of calculating and adding the pension supplement for the person, because Schedule 2 renders them ineligible for the pension supplement. Items 29 and 30 similarly amend method statements in the VE Act.

The application provision at item 26 provides for the amendments to the SS Act to apply in relation to temporary or permanent absences from Australia that begin before, on or after the day of commencement. This means that those living overseas or those who leave Australia temporarily prior to commencement (and remain overseas for longer than six weeks) will lose the pension supplement. Item 38 is an identical application provision for the amendments to the VE Act.

Schedule 3—Taper rate for Part A rate of Family Tax Benefit (Method 2)

Schedule 3 tightens the Family Tax Benefit Part A (FTB-A) income test by adjusting an amount by which payment rates are withdrawn for family income over what is known as the higher income free area.

The measure was announced in the 2017–18 Budget and is expected to provide savings of $415.4 million over five years, commencing 1 July 2018.[72]

Background

Family Tax Benefit (FTB) is the main form of direct financial assistance the Commonwealth provides to families with children. There are two FTB payments: FTB-A and Family Tax Benefit Part B (FTB-B). Both payments are means tested to target higher levels of assistance at lower income families. FTB-A is available to all families who meet the care, residence and income test requirements.[73] Different income test requirements for FTB-B restrict the payment to single parent families and couple families where one parent has a low income or is not in paid employment.[74]

FTB-A income tests

In calculating FTB-A entitlements, two different income tests are generally applied with the one that provides the highest rate being used.[75] The first test (Method 1) reduces the maximum rate of FTB-A by 20 cents for each dollar of adjusted taxable income above $52,706 (this amount is known as the lower income free area).

The maximum fortnightly rate is currently $182.84 for each child aged 0–12 years and $237.86 for each eligible teenager.[76]

The second test (Method 2) reduces the base rate of FTB-A by 30 cents for each dollar above $94,316 (the higher income free area). The fortnightly base rate is $58.66 per fortnight.

Families with income under $80,000 per annum are eligible for the FTB-A supplement of $737.30 per annum per child. It is included in the rate calculation process but not paid until the end of the financial year.[77]

The income test methods are applied in the following way:

families with income equal to, or below $52,706 receive the maximum rate of FTB-A
families whose income falls in the range of $52,706–$94,316 receive either the reduced rate worked out under Method 1 or the base rate of FTB-A, whichever is higher
families with income over $94,316 receive the rate worked out under Method 1 or Method 2, whichever is higher.

Under the current income test design, families with income over $94,316 who have their rate determined using Method 1 are generally those with three or more children.

Proposed change

The amendments in Schedule 3 will see the Method 1 rate adjusted, so that that the 20 cent reduction of the maximum rate will apply for each dollar of income between $52,706 and $94,316, but each dollar of income over $94,316 (if any) will reduce the individual’s rate by 30 cents. Families will still receive the higher of the rates worked out using Method 1 and Method 2.

The change will be inserted into the Method 2 rate calculator. The amendments will essentially provide for one calculation using the modified Method 1 income test to be compared to the current Method 2 income with the higher rate applying.

Dropped FTB measures

Since the 2014–15 Budget, the Coalition Government has attempted to pass a wide range of savings measures affecting the FTB program but it has been unable to win support in the Senate for all of these. Some measures have passed, including:

the tightening of the Family Tax Benefit Part B (FTB-B) income test
removing the FTB-A ‘per child add-on’, a component of the FTB income test which reduced the payment withdrawal rate for those with more than one child
closing FTB-B to couple families with children aged 13 years or older
closing the FTB-A end of year supplement to families with income over $80,000 per annum
indexation pauses (so that income test thresholds and some payment rates do not increase in line with inflation)
reductions in the level of assistance provided to large families and
closing off the Energy Supplement payment to new FTB recipients.[78]

In the 2017–18 Budget, the Government confirmed that it would not proceed with any of its previously announced but unlegislated FTB measures, including:

the phase out of the FTB-A and FTB-B end of year supplements—which was estimated to save $4.7 billion over the forward estimates
an increase in fortnightly rates of FTB-A (as well as some related youth payment rates)—which was estimated to cost $2.4 billion (intended to partly offset the supplement phase-out) and
a reduction in FTB-B rates for single parents with a youngest child aged 13–17 and the removal of FTB-B for single parent families from 1 January in the calendar year their youngest child turns 17 (with some older parents and grandparent/great-grandparent carers exempt)—which was estimated to save $787.9 million over the forward estimates.[79]

Policy position of non-government parties/independents

At the time of writing, it is unclear what position non-government parties and independents hold on this measure.

Policy position of major interest groups

Australian Council of Social Service

ACOSS has stated that it does not oppose the changes proposed in this Schedule ‘as they affect households on incomes of $94,000 and over’.[80]

National Social Security Rights Network

The NSSRN has stated that it does not oppose the changes proposed in this Schedule.[81]

Key issues and provisions

Complexity of the income test

The complexity of the FTB-A income test derives from its origins. The FTB program was introduced as part of tax reforms that saw the introduction of the Goods and Services Tax in 2000.[82] The FTB program was a rationalisation of an array of different family payments and family tax assistance arrangements. FTB-A replaced Family Allowance, Family Tax Payment Part A and Family Tax Assistance Part A.[83] FTB-B replaced Basic Parenting Payment, Guardian Allowance, Family Tax Payment Part B, Family Tax Assistance Part B, Sole Parent Tax Rebate and Dependent Spouse Tax Rebate (with children).[84]

The design of FTB-A, including the use of different income test thresholds and different rates for children based on their ages, was derived from its predecessors.[85] The use of different rate calculators for different income levels, and the use of a base rate, meant that families would continue to receive similar or higher levels of assistance following the rationalisation. Overall, rates of family assistance were increased and the income tests eased.[86]

The design of the FTB-A income test, while complex, means:

low income families and those reliant on income support payments generally receive the maximum rate
middle income families with adjusted taxable income between $52,706 and $94,316 receive a reduced maximum rate but at least the base rate and
those with higher incomes (over $94,316) will generally receive a reduced base rate if they are eligible for any family assistance at all.

As FTB-A is paid on a per child basis, there are some larger families with high incomes who receive a higher rate if their entitlement is calculated under the income test that generally applies to middle income families (a 20 cent reduction in the maximum rate for every dollar of family income over $52,706) than if their rate was calculated under the income test for higher income families (30 cent reduction in the base rate for every dollar of family income over $94,316). Step 4 of the method statement at clause 25 of Schedule 1 of the FA Act (the Method 2 FTB-A rate calculator) specifies that families in this situation receive whatever the higher rate is when calculated under the two income tests.

While only a relatively small number of families fall into this category, pauses on the indexation of the higher income free area ($94,316) could have potentially increased the numbers who fall into this group over time. The FTB-A higher income free area has been the same amount since 1 July 2008.[87] Prior to this date, the free area was indexed annually in line with movements in the Consumer Price Index (in order to maintain its value over time). Ongoing indexation freezes mean that it is not due to be indexed again until 1 July 2020.[88]

Numbers affected

The Government estimates that 24,900 families will lose access to FTB-A and 71,800 will see a reduction in their payment rates as a result of the measure.[89] Media reports suggest that the average household income for those who will lose eligibility for FTB-A is $125,490, and for those who will see a reduction it is $107,622.[90]

Cameos

Table 2 sets out estimates of FTB-A entitlements under the current rates and income tests, and if the proposed taper rate were to apply to the current income tests. Note that the actual impact of the proposed taper rate will be different due to the commencement date in July 2018 (the lower income test threshold will be indexed to CPI on that date—other relevant rates and thresholds are frozen).

Table 2: estimates of the impact of the proposed taper rate on Family Tax Benefit Part A entitlements, rates and thresholds as at July 2017

Family adjusted taxable income	Current FTB-A entitlement	Under proposed taper rate change	Difference
Family with three children aged 14, 15 and 16
$125,000	$4,145	$1,077	-$3,068
$110,000	$7,145	$5,577	-$1,568
$100,000	$9,145	$8,577	-$568
Family with four children aged 12, 13, 14 and 16
Family adjusted taxable income	Current FTB-A entitlement	Under proposed taper rate change	Difference
$160,000	$1,912	$0	-$1,912
$140,000	$5,912	$1,344	-$4,568
$125,000	$8,912	$5,844	-$3,068

Note: Energy Supplement not included.
Source: Parliamentary Library estimates.

Key provisions

Item 2 inserts a note into the method statement at clause 25 of Schedule 1 of the FA Act to state that step 3 is modified by clause 25D (which is inserted by item 3). Clause 25 is part of Part 3 of Schedule 1 which contains the Method 2 rate calculator. Steps 1 and 2 of the method statement provide for working out what an individual’s reduced base rate amount would be (where they have income over the higher income free area of $94,316). Step 3 provides for then working out what the person’s FTB-A rate would be using the Method 1 rate calculator (but disregarding any Rent Assistance). Step 4 provides for the individual’s actual payment rate to be the higher of the two different rates.

Item 3 inserts proposed clause 25D at the end of Division 1 of Part 3 of Schedule 1 of the FA Act. The new clause modifies the application of Step 3 of the method statement at clause 25. The modification amends the calculation of a person’s FTB-A rate under the Method 1 rate calculator, replacing Step 2 of the method statement at clause 3 of Schedule 1.The modified method statement applies a 20 cents in the dollar reduction in a person’s maximum FBT-A rate for each dollar of income between the lower and higher income free areas, added to a 30 cents in the dollar reduction in the person’s maximum rate for each dollar of income over the higher income free area. This modified Method 1 rate is then compared to the Method 2 rate worked out using steps 1 and 2 of the method statement at clause 25 and the higher of the two rates is the individuals’ actual payment rate.

Applying the modified Method 1 calculator to the first cameo described above (three children, income of $125,000) using the current rates and income test thresholds works as follows:

the family’s maximum FTB-A rate for these three children (not including the FTB-A supplement as income is over the income limit of $80,000) before the income test is applied would be $18,604.05
the 20 per cent taper rate between the lower and higher income free areas will reduce this maximum rate by $8,322.00
the 30 per cent taper applying to the income over the higher income free area will reduce this maximum rate by an additional $9,205.20
this will result in a modified Method 1 entitlement of $1,076.85.

This amount is higher than the nil rate worked out using the Method 2 test so will be the rate used.

Schedule 4—Liquid assets test waiting period

Schedule 4 proposes to extend the maximum liquid assets waiting period (LAWP) from 13 weeks to 26 weeks. The measure was announced in the 2017–18 Budget and commences on 20 September 2018.[91] The Government estimates the measure will result in savings of $138.5 million over the forward estimates.[92]

Background

A LAWP can apply to all Youth Allowance, Austudy, Newstart Allowance and Sickness Allowance recipients whose liquid assets exceed a certain amount.[93]

Liquid assets

The term ‘liquid assets’ refers to any cash or readily realisable assets a person can draw on to support themselves as an alternative to receiving income support. It includes any such assets belonging to the person’s partner and any such assets owned by both the person and their partner. Examples of liquid assets include:

cash on hand (including borrowed money)
shares and debentures, term deposits
ten year insurance bonds
amounts deposited or lent to banks or other financial institutions, whether or not the amount can be withdrawn or repaid immediately (excluding bonds or bank guarantees for the purposes of an assurance of support)
assets given to a son or daughter (in certain circumstances)
loans to other people
unencumbered proceeds from the sale of a business
money in trust funds, bank accounts including mortgage offset accounts (not balances of mortgage redraw accounts)
compensation payments and
some payments made or due by a person’s previous employer.[94]

Certain assets are not considered liquid. These can include proceeds from the sale of a person’s home (in some circumstances); draw down loan facilities, mortgage redraw account balances or credit card limits; the value of a person’s investment in a first home saver account; the surrender value of a life insurance policy; National Disability Insurance Scheme (NDIS) amounts and returns on NDIS amounts; and, superannuation and termination payments that have been rolled over or are going to be rolled over directly from the person’s employer.[95]

Full-time tertiary students claiming Youth Allowance or Austudy can have their liquid assets reduced for reasonable expenditure incurred or likely to be incurred on purchases directly related to their course of study (including fees, text books and equipment).[96]

Liquid assets waiting periods

Currently, if an individual’s liquid assets exceed certain limits, then a liquid assets waiting period (LAWP) of between one and 13 weeks can apply. They will not receive income support while serving this LAWP as the person is expected to draw on their assets to support themselves.

The current limit, or reserve amount, of liquid assets a single person without dependent children can hold before they are subject to a LAWP is $5,000. For a person who is a member of a couple and/or has a dependent child, the reserve amount is currently $10,000.[97]

The length of the LAWP, in weeks, is worked out as follows:

for single person without dependent children: the value of their liquid assets minus the reserve amount, divided by $500
for a person who is a member of a couple and/or has a dependent child: the value of their liquid assets minus the reserve amount divided by $1,000.[98]

If the result of this calculation is less than one week then no LAWP is served. If the result is less than 13 whole weeks then it will be the whole number of weeks, with fractions rounded down to the nearest whole week. If the result is 13 or more weeks then the LAWP is 13 weeks.[99]

The LAWP will generally commence on the day after the individual or their partner ceases work/study or, if incapacitated, the day the person became incapacitated.[100]

Exemptions or waivers from the LAWP are available in certain circumstances including where the person is transferring from another social security payment, is in severe financial hardship due to unavoidable or reasonable expenditure, or where they have recently served a LAWP.[101]

Policy position of non-government parties/independents

At the time of writing, it is unclear what position non-government parties and independents hold on this measure.

Policy position of major interest groups

National Social Security Rights Network

The NSSRN has stated that it is opposed to this measure. The NSSRN holds that the liquid assets test can undermine a person’s financial stability:

... because it puts them in a position where they may be unable to meet an unanticipated substantial one-off expense (e.g. car repairs) or ride out a period of unemployment without major disruption to their lives (e.g. moving house). It can therefore compound the effect of insecure employment for people without job security, or with irregular or unstable working hours, who are more likely to access income support. The greatest impact tends to be on more vulnerable people with less capacity to access additional support when needed such as single parents (who do not have a partner with a second income) or new migrants with fewer ties in the community.[102]

The NSSRN also raised concerns that the provisions for waivers/exemptions are too restrictive:

A liquid assets waiting period may be waived if someone is in severe financial hardship, but only if they have depleted their savings through unavoidable or reasonable expenditure. Although this may sound like a reasonable test, in practice it is not. The main reason is that under the current law any weekly expenditure above the poverty level newstart allowance is deemed to be unreasonable. In effect, most of an ordinary person’s normal expenses are deemed to be unreasonable.[103]

The NSSRN stated that the LAWP can lead to ‘arbitrary and inequitable’ differences in treatment for social security recipients as result of small differences in savings.[104]

The NSSRN has recommended removing the LAWP.[105]

Australian Council of Social Service

In its response to the Budget, ACOSS did not state whether it was opposed to the measure or not, but raised concerns regarding its impact. ACOSS stated that ‘this will greatly disadvantage people affected. Making individuals and families, wait six months for payment will see them exhaust savings, make saving for a home or retirement harder and remove any buffer for emergencies like healthcare, appliances, cars etc.’.[106]

Key issues and provisions

The proposed measure will raise the maximum number of weeks an LAWP can last from 13 weeks to 26 weeks. The method for calculating the LAWP will otherwise remain the same.

The new maximum LAWP would apply to those single people without dependent children with more than $18,000 in liquid assets; and to partnered people or single people with dependent children with more than $36,000 in liquid assets.

Rationale

In his second reading speech on the Bill, Minister for Social Services Christian Porter stated the measure is:

... designed to require those with greater means to support themselves for longer before receiving a taxpayer funded payment. It ensures that the liquid assets waiting period better reflects the current profile of claimants and their capacity to support themselves. It also better targets access to payment to those who have limited other means of support and are more in need of immediate assistance.[107]

The Minister stated that in 2015–16, the average value of liquid assets held by those serving the 13-week maximum LAWP was $63,000.[108]

Numbers affected

The Government estimates that around 13,700 claimants will be affected by the measure annually.[109] Around 2,800 claimants would have their LAWP extended by 1–13 weeks and around 11,000 would see their LAWP reach the new 26 week limit. On average, the Government estimates that affected claimants would be required to wait 11 additional weeks before they would start receiving their payment.[110]

Measure affects those with significant savings or resources

The measure will only affect those with significant levels of readily available financial resources. The new maximum LAWP of 26 weeks will only apply to those with liquid assets at a level much higher than the annual rates of the allowance payments the waiting period applies to. This is consistent with the principles of Australia’s social security system which encourages individuals to provide for themselves and to only seek income support when necessary.

The measure may not be consistent with other objectives raised by the community sector—such as individuals being able to save for a home or retirement, or protecting themselves against insecure employment. However, the means tested nature of Australia’s social security system means that it is not designed to assist income recipients to secure these kinds of objectives.

The reserve amounts will continue to allow claimants to keep some resources on-hand for large expenses.

Key provisions

Items 1–4 replace ‘13’ with ‘26’ at paragraphs 549C(1)(a) and (b); paragraphs 575C(1)(a) and (b); subsection 598(2B); and subsection 676(3B) of the SS Act to increase the maximum period a LAWP can apply for. The provisions amended provide for the working out of a LAWP for recipients of Youth Allowance, Austudy, Newstart Allowance and Sickness Allowance, respectively.

[1]. S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2016–17, p. 194; D Arthur, A Dunkley, M Klapdor and M Thomas, Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, Bills digest, 76, 2016–17, Parliamentary Library, Canberra, 2017, p. 38.

[2]. Parliament of Australia, ‘Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 homepage’, Australian Parliament website.

[3]. Australian Government, Budget measures: budget paper no. 2: 2017–18, pp. 147–148, 152.

[4]. Senate Community Services Legislation Committee, ‘Social Services Legislation Amendment (Payment Integrity) Bill 2017’, Inquiry homepage, The Senate, 2017.

[5]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 8, 2017, The Senate, 9 August 2017, p. 22.

[6]. Ibid.

[7]. Ibid.

[8]. C Porter (Minister for Social Services), ‘Response to Senate Scrutiny of Bills Committee letter of 10 August 2017’, Attachment A, 28 August 2017, [p. 26]. See Ministerial responses attached to Senate Scrutiny of Bills Committee, Scrutiny digest, 10, 2017, The Senate, 6 September 2017.

[9]. Senate Scrutiny of Bills Committee, Scrutiny digest, 10, 2017, The Senate, 6 September 2017, p. 78.

[10]. Ibid., p. 79.

[11]. Explanatory Memorandum, Social Services Legislation Amendment (Payment Integrity) Bill 2017, [p. 2].

[12]. Ibid., [p. 18].

[13]. International Covenant on Economic, Social and Cultural Rights, done in New York on 16 December 1966, [1976] ATS 5 (entered into force for Australia 10 March 1976).

[14]. C Porter, ‘Second reading speech: Social Services Legislation Amendment (Payment Integrity) Bill 2017’, Debates, House of Representatives, 21 June 2017, p. 7196.

[15]. Parliamentary Joint Committee on Human Rights, Report, 7, 2017, Parliament of Australia, Canberra, 8 August 2017, p. 17.

[16]. Ibid., p. 19.

[17]. Ibid., p. 20.

[18]. Ibid.

[19]. Parliamentary Joint Committee on Human Rights, ‘Correspondence register’, Australian Parliament website, Table 2: recent correspondence received.

[20]. Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 148; Federation of Ethnic Communities’ Councils of Australia (FECCA), FECCA concerned about impact of key budget measures on migrant Australians, media release, 9 May 2017.

[21]. P Whiteford and G Angenent, The Australian system of social protection: an overview, Occasional paper, 6, 2nd edn, Department of Family and Community Services, 2002, p. 13.

[22]. Ibid.

[23]. Department of Social Services (DSS), ‘3.4.1.10 qualification for age’, Guide to social security law, version 1.235, DSS website, 1 July 2014; DSS, ‘3.6.1.12 qualification for DSP: 15 hour rule’, Guide to social security law, version 1.235, DSS website, 15 August 2016.

[24]. DSS, ‘3.1.1.10 residence requirements’, Guide to social security law, version 1.235, DSS website, 1 July 2015.

[25]. D Daniels, Social security payments for the aged, people with disabilities and carers 1909 to 2010, Background note, Parliamentary Library, Canberra, 21 February 2011, p. 5.

[26]. Social Services Consolidation Act 1952.

[27]. Social Services Act 1962.

[28]. Daniels, op. cit., p. 8.

[29]. Social Security and Veterans’ Entitlements Amendment Act 1987.

[30]. Social Security (1994 Budget and White Paper) Amendment Act 1994.

[31]. Daniels, op. cit., p. 11.

[32]. Invalid and Old-age Pensions Act 1912.

[33]. Invalid and Old‐age Pensions Act 1923.

[34]. Social Services Act 1947.

[35]. Social Services Consolidation Act 1952.

[36]. Social Services Act 1962.

[37]. Social Services Act (No. 3) 1974.

[38]. Social Security and Repatriation Legislation Amendment Act 1985.

[39]. Social Security and Veterans’ Entitlements Amendment Act 1987.

[40]. Social Security (1994 Budget and White Paper) Amendment Act 1994.

[41]. FECCA, op. cit.

[42]. Ibid.

[43]. National Social Security Rights Network (NSSRN), Budget 2017: residence rules for pensions, NSSRN, May 2017, p. 2.

[44]. Ibid.

[45]. Ibid.

[46]. Ibid.

[47]. Australian Council of Social Service (ACOSS), ‘Budget 2017: social security’, ACOSS website, May 2017.

[48]. Porter, op. cit., p. 7196.

[49]. Ibid., p. 7197.

[50]. Ibid.

[51]. I Scott, The national welfare fund, Parliamentary Library, Canberra, 21 May 1985.

[52]. R Menzies (Prime Minister), Federal election 1961: joint policy speech, speech, 15 November 1961, p. 19.

[53]. DSS, Welfare: other measures, 2017 Budget fact sheet, DSS, May 2017, pp. 3–4.

[54]. Morrison and Cormann, Mid-year economic and fiscal outlook 2016–17, op. cit., p. 194; Arthur et al, Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, op. cit., p. 38.

[55]. DSS, ‘3.12.1 pension supplement: qualification and payability’, Guide to social security law, version 1.235, DSS website, 2 January 2015.

[56]. Ibid.

[57]. The single rates also apply to each member of an eligible couple separated by illness or imprisonment. Rates are updated on 20 March and 20 September each year. DSS, ‘5.1.9.10 pension supplement: current rates’, Guide to social security law, version 1.235, DSS website, 20 March 2017.

[58]. The annual rate of the pension supplement is the same regardless of how the recipient elects to receive the payment. DSS, ‘3.12.1 pension supplement: qualification and payability’, op. cit.; DSS, ‘1.2.10.10 pension supplement: description’, Guide to social security law, version 1.235, DSS website, 1 July 2013.

[59]. DSS, ‘1.2.10.10 pension supplement: description’, op. cit.

[60]. D Daniels, L Buckmaster and P Yeend, Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009, Bills digest, 179, 2008–09, Parliamentary Library, Canberra, 2009, p. 13.

[61]. Ibid., pp. 12–13.

[62]. J Macklin, ‘Second reading speech: Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017’, House of Representatives, Debates, 27 February 2017, p. 1477.

[63]. J Macklin (Shadow Minister for Families and Social Services), Liberals are the party of pension cuts, media release, 20 December 2016.

[64]. Australian Greens Senators, ‘Stopping the payment of pension supplement after six weeks overseas’, Dissenting report, Senate Community Affairs Committee, Inquiry into the provisions of the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, The Senate, Canberra, March 2017, p. 50.

[65]. NSSRN, Submission to Senate Community Affairs Committee, Inquiry into the provisions of the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, 3 March 2017, p. 3.

[66]. Ibid.

[67]. ACOSS, Submission to Senate to Community Affairs Committee, Inquiry into the provisions of the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, 3 March 2017, p. 5.

[68]. Ibid.

[69]. Morrison and Cormann, Mid-year economic and fiscal outlook 2016–17, op. cit., p. 194.

[70]. Explanatory Memorandum, Social Services Legislation Amendment (Payment Integrity) Bill 2017, [p. 9].

[71]. Senate Community Affairs Legislation Committee, Official committee Hansard, 2 March 2017, p. 114.

[72]. Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 147; Explanatory Memorandum, Social Services Legislation Amendment (Payment Integrity) Bill 2017, [p. 2].

[73]. Department of Human Services (DHS), ‘Family tax benefit’, DHS website, 17 July 2017.

[74]. Ibid.

[75]. DHS, A guide to Australian Government payments: 1 July–19 September 2017, DHS, Canberra, p. 3.

[76]. Ibid., p. 2.

[77]. Ibid., pp. 2–3.

[78]. See Arthur et al, op. cit., pp. 10–13 and M Klapdor, ‘Omnibus Bill dropped and new savings Bill introduced to fund child care package’, FlagPost, Parliamentary Library blog, 22 March 2017.

[79]. Explanatory Memorandum, Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017, p. 6; and Explanatory Memorandum, Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2016, p. 2; Australian Government, Budget measures: budget paper no. 2: 2017–18, op. cit., pp. 77–78.

[80]. ACOSS, ‘Budget 2017: social security’, op. cit.

[81]. NSSRN, Budget 2017: family payments, NSSRN, May 2017, p. 3.

[82]. A New Tax System (Family Assistance) Act 1999.

[83]. D Daniels, Social security payments for people caring for children, 1912 to 2008: a chronology, Background note, Parliamentary Library, Canberra, 29 January 2009, p. 18.

[84]. Ibid., p. 55.

[85]. H Hodgson, ‘Mum: it’s not fair! an analysis of transfer payments to Australian families applying the criteria of equity and simplicity’, Australian Tax Forum, 19(3), 20 September 2004, pp. 303–304.

[86]. P Whiteford, G Redmond and E Adamson, ‘Middle class welfare in Australia: how has the distribution of cash benefits changed since the 1980s?’, Australian Journal of Labour Economics, 14(2), 2011, p. 88.

[87]. DSS, ‘3.1.1.60 indexation of FTB’, Family assistance guide, version 1.196, DSS website, 3 July 2017.

[88]. Ibid.

[89]. DSS, Welfare: other measures, op. cit., p. 1.

[90]. R Morton, ‘Big family welfare cut down to size’, The Australian, 10 May 2017.

[91]. Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 152.

[92]. Ibid.

[93]. The Farm Household Support Amendment Act 2017 removed the liquid assets waiting period provisions that previously applied to recipients of the Farm Household Allowance.

[94]. DSS, ‘1.1.L.50 liquid assets’, Guide to social security law, version 1.235, DSS website, 3 July 2017.

[95]. Ibid.

[96]. Ibid.

[97]. DSS, ‘3.1.2.20 liquid assets waiting period’, Guide to social security law, version 1.235, DSS website, 21 March 2016.

[98]. Ibid.

[99]. Ibid.

[100]. Ibid.

[101]. DSS, ‘3.1.2.70 exemptions from waiting periods’, Guide to social security law, version 1.235, DSS website, 3 July 2017; DSS, ‘3.1.2.20 liquid assets waiting period’, op. cit.

[102]. NSSRN, Budget 2017: increase to the maximum liquid assets waiting period, NSSRN, June 2017, p. 2.

[103]. Ibid.

[104]. Ibid.

[105]. Ibid.

[106]. ACOSS, ‘Budget 2017: social security’, op. cit.

[107]. Porter, op. cit., p. 7199.

[108]. Ibid.

[109]. DSS, Welfare reform, 2017 Budget fact sheet, DSS, May 2017, p. 5

[110]. Ibid.

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