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Social Security Legislation Amendment (Fair Incentives to Work) Act 2012
1.1
The Social Security Legislation Amendment (Fair Incentives to Work) Bill
2012 was introduced into Parliament on 31 May 2012. The amendments removed
'grandfathering' transitional arrangements for particular social security
benefits with the result that from 1 January 2013, eligibility for Parenting
Payment for all recipients ceases when the child of a partnered parent turns six
or when the child of a single parent turns eight, and most recipients will be
transferred to Newstart Allowance.
1.2
The Parliamentary Joint Committee on Human Rights (the committee) tabled
an interim report on the bill on 20 September 2012 that recommended that the
government defer these measures until the outcome of a related Senate inquiry
into the adequacy of Newstart was known (see further below). The bill, however,
passed both the Houses on 9 October 2012 and received Royal Assent on 24
October 2012.
1.3
When the committee examined the changes to Parenting Payment last year,
it acknowledged that it could not finalise its views on this legislation until the
related Senate inquiry was completed. With that in mind, the committee decided
to issue an interim report at the time and revisit these issues in 2013.
1.4
This report updates the interim report to take account of the additional
material available to the committee since September 2012. The report confirms
the committee's interim views where relevant and presents the committee’s final
views on this legislation.
1.5
On 15 June 2012 the Australian Council of Social Service and 14 other
signatories (ACOSS) wrote to the committee seeking an inquiry under section 7
of the Human Rights (Parliamentary Scrutiny) Act 2011 into the Social
Security Legislation Amendment (Fair Incentives to Work) Bill 2012.
1.6
As an initial response to ACOSS' request, the committee held a public
hearing in Canberra on 21 June 2012. The purpose of that hearing was to allow
the committee to gather information that would enable it to properly consider
the concerns raised in ACOSS' letter and to afford the government an
opportunity to expand upon the claims made in the statement of compatibility
that accompanied the bill. At that hearing the committee received evidence
from representatives of ACOSS, the National Council of St Vincent de Paul
Society, the National Council for Single Mothers and their Children, the
Australian Human Rights Centre, the National Welfare Rights Centre, the Social
Policy Research Centre and the Department of Education, Employment and
Workplace Relations (the Department)[1].
1.7
Following this hearing, the committee received additional information
from both ACOSS and the Department in answer to questions on notice. The
committee subsequently wrote to and received clarification from the Minister
for Employment and Workplace Relations on several matters that had been
highlighted through the committee's investigation of the bill.
1.8
In undertaking its consideration of the bill the committee was mindful
of the importance of establishing a robust analytical framework. The committee
considered that such a framework would not only aid its analysis of the bill,
but would enhance the committee's ability to adopt a consistent approach to the
analysis of other legislation that engages similar human rights principles. The
committee therefore devoted some time to considering how it would approach its
examination of legislation and examining key sources on the application of the
specific human rights and principles engaged by this bill.
1.9
In its interim report, the committee concluded that:
-
If Newstart combined with other benefits is not sufficient to
provide an adequate standard of living for affected individuals, the measures
risk being a violation of human rights under article 9 of the International
Covenant on Economic, Social and Cultural Rights.
-
The committee was not yet convinced that the affected single
parents would be able to maintain access to appropriate levels of social
security support if placed onto Newstart.
-
It would be premature for the government to introduce these
measures prior to the completion of the related Newstart inquiry; the findings
of that inquiry were due to be released on 29 November 2012.
1.10
The committee therefore recommended that the bill be delayed. As noted
above, the bill nevertheless passed the Parliament on 9 October 2012.
1.11
In response to a complaint by ACOSS and other welfare groups,[2]
the UN Special Rapporteur on Extreme Poverty and Human Rights and the UN
Working Group on the Issue of Discrimination against Women in Law and Practice wrote
to the government asking for an explanation for the decision to transfer
individuals from parenting payments to Newstart.[3]
1.12
The UN noted that these measures may be incompatible with Australia’s international
human rights obligations, including the right to social security, the right to
an adequate standard of living and the right to non-discrimination.
1.13
The government does not appear to have responded to the UN’s concerns to
date.
1.14
The Social Security Legislation Amendment (Fair Incentives to Work)
Act 2012 amended the Social Security Act 1991 to remove as of 1
January 2013 the 'grandfathering' transitional arrangements which were put in
place on 1 July 2006 for certain Parenting Payment recipients.[4]
1.15
Parenting Payment (PP) is the main income support payment for parents
with principal care of a young child. Since 1 July 2006 new recipients applying
for PP were required to have principal care of a qualifying child aged less
than six years for partnered recipients, and less than eight years for single
recipients. Parents who had been in receipt of payment before 1 July 2006 (comprising
one third of PP recipients) were ‘grandfathered’ on their pre-2006 conditions
and were allowed to remain on payment until their youngest child turned 16, as
long as they continued to meet all other eligibility criteria.
1.16
As part of the 2012-13 Budget, the government announced the removal of these
grandfathering conditions from 1 January 2013. The Social Security Legislation
Amendment (Fair Incentives to Work) Bill 2012 was introduced to give effect to
this intention.
1.17
Some 63,000 PP recipients were affected by these changes on the
commencement date of 1 January 2013 (as their children were already six or
eight). These changes will eventually affect all 147,000 grandfathered PP
recipients, the majority of whom are single parents.
1.18
Parents who are no longer eligible for PP may apply for Newstart
Allowance (Newstart). Newstart is the primary working age income support
payment. Recipients must satisfy an activity test and are required to search
for jobs as a condition of payment, unless they are exempted from activity
requirements.
Differences between Parenting Payment and Newstart Allowance
1.19
The thresholds for the income and assets tests are lower for Newstart
than under PP. The cut-off point for Newstart is approximately $36, 000 p.a,
while the cut-off point for PP Single is $47,000 p.a.[5]
Therefore, not all of the previously grandfathered PP recipients are eligible
to receive Newstart. It is estimated that just under 30% of PP Single
recipients will not be eligible to transfer to Newstart.[6]
1.20
Newstart provides for a lower payment rate than PP Single.[7] The maximum rate
per fortnight for PP Single is $663.70 while the maximum rate per fortnight for
Newstart is $533.[8]
Newstart, however, provides the same payment rate as PP Partnered ($444.70 per
fortnight). The key impact of these measures is therefore on single parent
families. For those coming from PP Single this means a lower rate of payment
and similar participation or activity requirements.[9]
1.21
Newstart also has a stricter 'income free area', that is, the amount of
money that may be earned without impacting a recipient's payment. On PP Single,
parents may earn $176.60 a fortnight, plus an additional $24.60 for each
additional child, before the payment is reduced by 40 cents in the dollar. This
means parents can earn up to $1,835.85 per fortnight (plus $24.60 for each
additional child) before their payments cease. Parents transitioned to Newstart,
however, would start to see a reduction in payments after they earn more than
$62 a fortnight (also by 40 cents in the dollar), which means that they will be
ineligible for the payment once they earn $1,394.50 per fortnight. [10]
1.22
The government has provided two case studies to illustrate the financial
impact of these changes.[11]
The first example describes the circumstances of a grandfathered single parent
on PP Single with a nine year old child. The parent satisfies their
participation requirement of 30 hours per fortnight, earns $500 per fortnight,
and pays $350 per week in rent. This recipient would receive $140.79 less per
fortnight following these changes. The second example describes the
circumstances of a grandfathered single parent on PP Single with two children
aged nine and 14. The parent satisfies their participation requirement of 30
hours per fortnight, earns $500 per fortnight, and pays $350 per week in rent.
This recipient would receive $139.77 less per fortnight following these changes.
1.23
Newstart is also subject to different indexing arrangements than PP. Newstart
is indexed by movements in the Consumer Price Index (CPI). By comparison, pensions
are indexed by the greater of the movement in the CPI, the Pensioner and
Beneficiary Living Cost Index (PBLCI) or the Male Total Average Weekly Earnings
(MTAWE). PP is more akin to pensions and is indexed to CPI movements and
benchmarked to wages.[12]
The effect of this is that pensions and PP have, since 1997, been increasing in
line with wage rises while allowances such as Newstart have increased only in
line with the CPI. ACOSS has pointed out that wages have risen more than
inflation over the past two decades and given that Newstart has been indexed to
CPI over this same period, its value has fallen further behind other household
incomes:
Since 1994, the single rate
of [Newstart] has fallen from 92% to 72% of the poverty line and from 26% to
21% of the fulltime median wage.[13]
1.24
This has resulted in a widening of the gap between the payments. The
Henry Tax Review suggested that:
... some difference in
the level of payments can be justified on the basis of differing needs and
presenting different incentives to different groups ... Harder to justify is the
fact that rates of pension and allowances are not merely different, but the gap
between them is widening ... If the current indexation arrangements remain in
place, it is likely that by 2040, a single pensioner would be paid more than
twice as much as a single unemployed person. A continuous decline in Newstart
Allowance against community standards would have major implications for payment
adequacy and the coherence—in terms of horizontal equity—of the income support
system.[14]
1.25
The Australian Council of Trade Unions (ACTU) has pointed out that the
real, CPI-adjusted value of Newstart has remained almost constant for the past
two decades:[15]
In
constant 2011 dollars, the unemployment benefit was around $188 per week in
March 1982, compared with $244.85 in 2012. When the unemployment benefit became
Newstart Allowance in July 1991, it was worth $233.80 in 2011 dollars. Eighty
per cent of the real increase in the payment rate therefore occurred in the
1980s; the payment has remained more or less constant in real (CPI-adjusted)
terms for the past two decades.
Supplementary payments
1.26
A number of supplements, concessions and services are available to both
eligible PP recipients and eligible Newstart recipients. These include: Family
Tax Benefit A and B, Child Care Rebate, Child Care Benefit, job and training
services, rent assistance and concessions. Therefore, under the combined
package of assistance a single unemployed parent with two children on Newstart
could receive a maximum of $1,239.87 a fortnight, which approximates the national
minimum wage of $1,212.80.[16]
1.27
However, it is important to note that families with one parent working
fulltime at the national minimum wage of $1,212.80 receive more than this
amount once family supplements and other forms of government assistance are
taken into account. For example, a working single parent on the minimum wage with
two children receives $1,823 a fortnight – approximately $500 more (or 30 per
cent more) than a single parent family in the same situation who is unemployed
and who receives the Newstart payment.[17]
New initiatives
1.28
The government has recently taken steps to provide some additional
support to Newstart recipients to ‘assist vulnerable [individuals], including
those on [Newstart], to manage unforseen expenses and increasing costs'.[18] The
Social Security and Other Legislation Amendment (Income Support Bonus) Bill
2012[19]
introduced a new lump sum payment, the Income Support Bonus, to be paid twice
yearly to certain income support recipients from March 2013. The new payment
will provide an extra $210 per year (or $4 a week) for single Newstart
recipients and $175 per year (or $3 a week) for a member of a couple.
1.29
The committee considered this bill in its First Report of 2013
and noted that it would promote the enjoyment of the right to social security
and the right to an adequate standard of living. The committee, however, sought
further clarification from the Minister as to whether the total income
available to the recipients of the bonus is sufficient to satisfy minimum
essential levels of social security and the minimum requirements of the right
to an adequate standard of living in Australia, and the basis on which on which
the government makes that assessment.[20]
In response, the Minister provided information about the type of schemes and
payments that are available to recipients of the income support bonus but did
not address the specific questions that the committee had raised regarding the
adequacy of the overall income support provided to individuals.[21]
1.30
Coinciding with the committee's consideration of the human rights
implications of the Social Security Legislation Amendment (Fair Incentives to
Work) Bill 2012, the Senate initiated separate inquiries into this bill and the
related matter of the adequacy of the allowance payment system, including Newstart.
1.31
The committee noted that the two Senate inquiries had elicited
submissions and evidence from a broad range of organisations and individuals
with relevant knowledge and expertise around the policy issues engaged by the
bill. The committee therefore did not propose to duplicate these inquiries by
inviting public submissions or holding further public hearings on the bill.
1.32
On 19 June 2012, the Senate Education, Employment and Workplace
Relations Legislation (EEWRL) Committee commenced an inquiry into the Social
Security Legislation Amendment (Fair Incentives to Work) Bill 2012. The inquiry
attracted submissions from 37 individuals and organisations and received
evidence from seven organisations at a public hearing in Melbourne on 9 August
2012, including ACOSS and other co-signatories to ACOSS' letter of 15 June 2012.
The committee tabled its report on 22 August 2012.[22]
1.33
The EEWRL Committee’s report expressed concern about the decrease in income
support resulting from transferring single parents from PP to Newstart and recommended
that the government consider deferral of these measures until the Senate
Education, Employment and Workplace Relations References Committee completed
its inquiry into the adequacy of Newstart and other payments, and the
government had an opportunity to respond to any recommendations that might be
forthcoming.
1.34
The PJCHR’s interim report on the bill took into account the findings of
the EEWRL Committee inquiry.
1.35
On 26 June 2012, the Senate Education, Employment and Workplace
Relations References Committee (EEWRR Committee) commenced an inquiry into,
among other things, the adequacy of the allowance payment system for jobseekers
and others, including the adequacy of Newstart. The inquiry received 78
submissions and held four public hearings in Sydney, Melbourne and Canberra. The
committee tabled its report on 29 November 2012.[24]
1.36
The issue of the adequacy of Newstart and related allowances was
extensively canvassed in the inquiry by the EEWRR Committee. The EEWRR
Committee stated:
At
its core this inquiry relates to whether a person dependent on income support
can meet their basic, everyday living costs in a manner acceptable in the
Australian context. Adequacy is, therefore, about more than the ability to
simply pay for food and shelter. As put by the Business Council of Australia
‘Adequacy refers to the minimum standards required to meet basic needs and
sustain some level of social engagement'.[25]
1.37
The PJCHR considers that the definition of ‘adequacy’ adopted by the
EWRR Committee is likely to be broadly analogous to the standard that Australia
would be held to vis-à-vis its international human rights obligations and therefore
its findings would be directly relevant to the deliberations of this committee.
Is Newstart adequate?
1.38
The majority report of the EEWRR Committee considered that ‘[Newstart]
is effectively discharging its primary duty: to support people through a short
term transitional period of unemployment’.[26]
However, the Committee noted that the evidence had ‘convincingly expos[ed] how
difficult it is to eke out an existence and secure paid employment while living
on [Newstart]',[27]
and agreed that Newstart ‘does not allow people to live at an acceptable
standard in the long term’.[28]
1.39
The EEWRR Committee expressed concern that 42 per cent of new recipients
each year did not transition quickly back into the workforce and that ‘62 per
cent of current recipients have been on [Newstart] or some form of income
support for more than a year’.[29]
1.40
Emphasising that the allowance was never intended to be a long term
solution to unemployment, the Committee stated:
On the
weight of evidence, the committee questions whether [Newstart] provides
recipients with a standard of living that is acceptable in the Australian
context for anything but the shortest period of time.[30]
1.41
The majority report of the EEWRR Committee, however, did not recommend
an increase to Newstart.[31]
Instead, the Committee recommended measures to get people back into the
workforce more quickly, such as relaxing the income-free threshold; tailoring
assistance to meet the needs of particular groups of jobseekers; and improving
employment assistance.
1.42
In additional comments to the majority report, the Government Senators
on the EEWRR Committee said that the Newstart rate for singles was too low and in
principle favoured an increase:
It is
plain that [Newstart] is too low, particularly for single recipients. For this
reason [Newstart Single] should be increased ... [and] consideration given to
whether, like pensions, the payment should not decrease in real terms each
year.[32]
1.43
The Government Senators also questioned whether the current Newstart
rate was an impediment to people’s ability to re-engage with the workforce:
If
payments are so low that welfare agencies and social security experts tell us
that being reliant on [Newstart] actually impedes people’s ability to gain
employment, then this is counterproductive to the very objective of the
allowance payment, which is to support people temporarily as they transition
into paid employment.[33]
1.44
In additional comments, the Australian Greens similarly considered that
Newstart was too low and recommended a specific increase by $50 per week.[34]
Is Newstart combined with other
benefits adequate?
1.45
As discussed above, recipients on Newstart may also be eligible for a
range of additional benefits such as Rent Assistance and Family Tax Benefit. The
EEWRR Committee commented on the complexity of the overall package of
assistance:
The
allowance payment system is too complex. The committee has received evidence of
the difficulties that recipients and their advocates have encountered as they
attempt to navigate the web of entitlements, exclusions and supplements. Indeed
the committee itself has struggled at times to comprehend the material
presented to it by the government.[35]
1.46
The EEWRR Committee examined cost of living pressures for allowance
recipients including the costs of caring for children, housing, food and the
costs of searching for work and noted that:
The overwhelming
majority of submissions expressed the view that the current rate of payment was
inadequate, impeding recipients’ ability to meet their basic costs of living in
an acceptable manner.[36]
1.47
The evidence presented to the EEWRR Committee indicated that many
recipients of allowances struggled to make ends meet and households reliant on
allowance payments were much more likely to experience deprivation and
financial stress.[37]
1.48
The government, however, argued that:
It is ...
inappropriate to consider allowance payment rates in isolation as they are one
component of a broader package of assistance that is targeted to the needs of
recipients.[38]
1.49
The government noted that different household types could receive a
range of benefits depending on their circumstances and that while many
low-income families reported persistent financial stress, many others did not
report any such stress.[39]
1.50
The government did not put forward an explicit position as to whether
current payment rates were adequate or not. It did, however, put forward the
view that the current system is fairly effective at encouraging people to
transition from income support into the workforce quickly, with those
experiencing the most financial difficulties being the long-term unemployed and
those with significant barriers to participation.
1.51
The Australian Greens were critical of the government’s submission:
Such arguments simply
cannot disguise the stark reality that the single rate of Newstart is now less
than 45 per cent of minimum wage, and $130 per week below the poverty line or
that it is declining in real terms, while cost of living pressures,
particularly relating to energy, food, transport and housing, are increasing.[40]
...
Evidence presented to
this inquiry clearly demonstrates that capabilities such as the ability to
secure appropriate housing; maintain adequate nutrition; and participate in the
labour market are significantly diminished by long periods spent on Newstart.[41]
1.52
The Australian Greens also questioned the idea that the government
provides a package of supports that offsets the inadequacy of the base payment
and noted that current programs, such as Family Tax Benefit and Rent
Assistance, are also extended to families living on the minimum wage.[42]
They were unconvinced by the government’s arguments that other policies were
sufficient to offset the inadequacy of the base-payment of Newstart and other
allowances:
[W]hile there is
clearly a package of supports available from the government that does modestly
supplement the income of allowance recipients, particularly families, this
still has not been demonstrated to sufficiently lift those families,
particularly single parent families, out of poverty. In fact, other submitters
such as Anglicare and ACOSS have presented evidence that clearly demonstrates
the extent to which families living on Newstart experience poverty, even with
the current suite of additional payments.[43]
1.53
The committee's formal remit is to consider bills and legislative
instruments introduced into the Parliament for compatibility with human rights
as defined in the Human Rights (Parliamentary Scrutiny) Act 2011. The
Act defines human rights by reference to the rights and freedoms contained in
seven core human rights treaties to which Australia is a party. These treaties
are:
- International Covenant on Civil and Political Rights;
- International Covenant on Economic, Social and Cultural Rights;
- International Convention on the Elimination of All Forms of
Racial Discrimination;
- Convention on the Elimination of All Forms of Discrimination against
Women;
- Convention against Torture and Other Cruel, Inhuman or Degrading
Treatment or Punishment;
- Convention on the Rights of the Child; and
- Convention on the Rights of Persons with Disabilities
1.54
The committee recognises that the nature and scope of the rights and
freedoms expressed in these treaties requires some interpretation on the
committee's part. The committee considers that, where relevant and appropriate,
the views of human rights treaty bodies and international and comparative human
rights jurisprudence can provide useful sources. At the same time, the committee
considers that its interpretation of these rights and freedoms must have
relevance within an Australian context.
1.55
Article 9 of the ICESCR recognises the right to social security and
provides that:
The States Parties to the present Covenant recognize
the right of everyone to social security, including social insurance.
1.56
The right to social security is also recognised in the International
Convention on the Elimination of All Forms of Racial Discrimination (article
5(e)(iv)); the Convention on the Elimination of All Forms of Discrimination against
Women (articles 11(1)(e) and 14(2)(c)); the Convention on the Rights of the
Child (article 26) and the Convention on the Rights of Persons with
Disabilities (article 28).[44]
Is parenting payment a form of
social security?
1.57
The UN Committee on Economic, Social and Cultural Rights (CESCR)[45]
has stated that the term ‘social security’ in article 9 covers the risks
involved in the loss of means of subsistence for reasons beyond a person's
control and that it encompasses the right to access and maintain benefits,
whether in cash or in kind in order to secure protection from (a) lack of work‐related
income, (b) unaffordable healthcare, or (c) insufficient family support.[46]
1.58
The committee considers that PP is likely to be a form of 'social
security' for the purposes of article 9 of ICESCR.
Nature and scope of obligations
1.59
States’ obligations in relation to the right to social security, as with
all human rights, rest on the need to respect (ie not interfere with), to
protect (ie take measures to prevent others from interfering with), and to
fulfil (ie take positive measures to fully realise) rights. In other words,
they entail both negative and positive obligations.
1.60
Economic, social and cultural rights also involve obligations of
immediate effect and obligations of progressive realisation. The former broadly
comprise obligations not to unjustifiably deprive individuals of their existing
access to a right (ie the obligation to respect); to ensure the satisfaction
of, at the very least, minimum essential levels of each of the rights; and to
ensure that individuals enjoy these rights without discrimination. The latter,
based on the recognition that their full realisation may not be possible
immediately, involves obligations to adopt measures that are capable of
facilitating the full realisation of economic, social and cultural rights over
time. States are therefore accorded a measure of discretion with regard to the
progress of realisation.
1.61
In relation to the right to social security, the CESCR has identified
various immediate obligations. For example, the duty to ensure minimum
essential levels of social security requires that individuals are able to
acquire at least essential health care, basic shelter and housing, water and
sanitation, foodstuffs, and the most basic forms of education. Part of the
minimum core is also respect for existing social security schemes. This relates
to the right not to be subject to arbitrary and unreasonable restrictions of
existing social security coverage as well as the right to equal enjoyment of
adequate protection from social risks and contingencies (that is, the right of
access to such schemes on a non-discriminatory basis – in other words, any
distinction on prohibited grounds must be reasonable and justified in the
circumstances).[47]
Adequacy and related rights, in
particular the right to an adequate standard of living
1.62
The CESCR has also stated that social security should be available,
adequate and accessible.[48]
Adequacy means that:
... the benefits must be
adequate in amount and duration in order that everyone may realize his or her
rights to family protection and assistance, an adequate standard of living and
adequate access to health care, as contained in articles 10, 11 and 12 of the [ICESCR].
States parties must also pay full respect to the principle of human dignity
contained in the preamble of the Covenant, and the principle of
non-discrimination, so as to avoid any adverse effect on the levels of benefits
and the form in which they are provided’.[49]
The CESCR has stressed that the adequacy of benefits should be ‘monitored
regularly to ensure that beneficiaries are able to afford the goods and
services they require to realize their [ICESCR] rights’[50]
Limitations and retrogressive
measures
1.63
Limitations: Like all economic, social and cultural rights, the
right to social security in article 9 of ICESCR is not absolute and may be
subject to permissible limitations.[51]
Article 4 of ICESCR provides that economic social and cultural rights may be
subject only to such limitations 'as are determined by law only in so far as
this may be compatible with the nature of these rights and solely for the
purpose of promoting the general welfare in a democratic society'. The CESCR
has stated that limitations must be proportional, and must be the least
restrictive alternative where several types of limitations are available, and
that even where such limitations are permitted, they should be of limited
duration and subject to review.[52]
1.64
Retrogressive measures: The ICESCR does not contain a definition
of retrogressive measures, but these are generally understood to mean measures
that directly or indirectly lead to backward steps being taken with respect to
the rights recognised in the ICESCR. A deliberate retrogressive measure has
been described to mean any measure which implies a backwards step in the level
of protection of ICESCR rights as a consequence of an intentional decision by
the state and includes any unjustified reduction in public expenditure in the
absence of adequate compensatory measures aimed to protect the affected
individuals.[53]
Deliberate retrogressive measures are not prohibited per se under international
human rights law but will require close justification, even during times of
severe resource constraints, whether caused by a process of adjustment,
economic recession, or by other factors.[54]
For example, the CESCR has explained that:
There is a strong presumption that retrogressive
measures taken in relation to the right to social security are prohibited under
the Covenant. If any deliberately retrogressive measures are taken, the State
party has the burden of proving that they have been introduced after the most
careful consideration of all alternatives and that they are duly justified by
reference to the totality of the rights provided for in the Covenant, in the
context of the full use of the maximum available resources of the State party.
The Committee will look carefully at whether: (a) there was reasonable justification
for the action; (b) alternatives were comprehensively examined; (c) there was
genuine participation of affected groups in examining the proposed measures and
alternatives; (d) the measures were directly or indirectly discriminatory; (e)
the measures will have a sustained impact on the realization of the right to
social security, an unreasonable impact on acquired social security rights or
whether an individual or group is deprived of access to the minimum essential
level of social security; and (f) whether there was an independent review of
the measures at the national level.[55]
Are these measures retrogressive or
a limitation on the right to social security?
1.65
If there is more than one way to provide adequate social security the
government is obviously entitled to make a choice. The government, however,
acknowledges that some parents may be less well-off overall as a result of
these changes. In a letter to the committee on 18 September 2012, the Minister
for Employment and Workplace Relations said that:
The financial status of
each parent impacted by the changes will vary depending on each individual
family's circumstances, including their levels of employment income, other
government payments received and their level of taxation. When all these are
taken into account, some parents may experience a reduction in their total
fortnightly income.
1.66
If particular PP recipients who are transitioned to Newstart are likely
to be worse off overall – for example, because the reduction in income support
will be not be adequately met by some other benefit or through earning income –
these measures are likely to be considered as either retrogressive or a
limitation on the right to social security because they reduce existing social
security entitlements.
1.67
The committee therefore considers that the government must justify these
measures accordingly.
1.68
The committee notes that concerns have been raised that removing the
'grandfathered' arrangements may indirectly discriminate against women because the
vast majority of PP Single recipients (95%) are women.[56]
1.69
Article 2(2) of the ICESCR guarantees the right to non-discrimination in
the exercise of economic, social and cultural rights. Article 2(2) therefore
prohibits any direct[57]
or indirect[58]
discrimination, whether in law or in fact, on prohibited grounds, including
sex, which has the intention or effect of nullifying or impairing the equal
enjoyment or exercise of the right to social security.[59]
1.70
The right to non-discrimination is also recognised in the International
Covenant on Civil and Political Rights; the International Convention on the
Elimination of All Forms of Racial Discrimination; the Convention on the Rights
of the Child; the Convention on the Elimination of All Forms of Discrimination against
Women; and the Convention on the Rights of Persons with Disabilities.
1.71
A difference in treatment on prohibited grounds, however, will not be
directly or indirectly discriminatory provided that it is (i) aimed at
achieving a purpose which is legitimate; (ii) based on reasonable and objective
criteria, and (iii) proportionate to the aim to be achieved.
1.72
The committee considers that if the measures are found to be compatible
with the right to social security, then they are also likely to be consistent
with the right to non-discrimination.
1.73
The committee notes that these measures also engage children’s rights
under the Convention on the Rights of the Child (CRC). Article 3(1) of the CRC requires
that, ‘in all actions concerning children, whether undertaken by public or
private social welfare institutions, courts of law, administrative authorities
or legislative bodies, the best interests of the child shall be a primary
consideration.’ Article 27 of the CRC guarantees the right to an adequate
standard of living for all children without discrimination of any kind.
1.74
The UN Committee on the Rights of the Child has stated that the best
interests of the child principle requires:
... active measures
throughout Government, parliament and the judiciary. Every legislative,
administrative and judicial body or institution is required to apply the best
interests principle by systematically considering how children’s rights and
interests are or will be affected by their decisions and actions - by, for
example, a proposed or existing law or policy or administrative action or court
decision, including those which are not directly concerned with children, but
indirectly affect children.[60]
1.75
A key element in the committee's consideration of human rights in the
legislative process is the statement of compatibility. The Human Rights
(Parliamentary Scrutiny) Act 2011 requires that all bills and disallowable legislative
instruments introduced into the Parliament must be accompanied by a statement
of compatibility. [61]
1.76
The Social Security Legislation Amendment (Fair Incentives to Work) Bill
2012 was introduced with a statement of compatibility, which was prepared by
the Department of Education, Employment and Workplace Relations.
1.77
The statement of compatibility noted that the changes to the
grandfathering arrangements engaged the right to social security in article 9
of the ICESCR and provided the following explanation:
The changes to the eligibility rules for
‘grandfathered’ parenting payment recipients will make access to parenting
payment consistent for all claimants regardless of when they first claimed
payment. The justification for this is to accelerate the closing of the
grandfathered conditions for parenting payments which will help to restore
equity across the parenting payment population. This limitation is further
justified because it will encourage parents with older children to re-enter the
workforce earlier, thereby reducing long term welfare reliance and, over time,
the prevalence of intergeneration welfare dependency. A person’s access to
social security is not impacted, as recipients who are affected by this measure
are entitled to apply for other income support payments, such as Newstart
Allowance.
1.78
The statement concluded that the bill was compatible with human rights
because it generally advanced human rights and that to the extent that it may
have an adverse impact on human rights, that impact was reasonable and for
legitimate reasons.
1.79
In its interim report, the committee noted that, while the statement of
compatibility correctly identified the removal of the 'grandfathering'
provisions as engaging the right to social security, the analysis contained in
the statement fell short of the committee's expectations.
1.80
The committee stated that it regretted the fact that the government did
not provide Parliament with a statement of compatibility which included a
detailed analysis of the bill’s compatibility with human rights. Providing such
information to Parliament would have assisted the committee in its scrutiny
tasks and also improved Parliament’s understanding of the precise impacts of
these changes in a more timely way.
1.81
The committee, however, acknowledged that the government had since
provided further information to the committee which has gone some way in
providing the level of detail that was absent in the statement of
compatibility.
1.82
In its interim report, the committee took the view that there is
considerable overlap between limitations on rights and retrogressive measures,
particularly when they interfere with an existing enjoyment of a right. Both
can generally be considered through the same lens in the sense that they
broadly require the government to demonstrate that the measures in question
pursue a legitimate objective and have a
reasonable relationship of proportionality between the means employed and the
objective sought to be realised.[62]
1.83
The committee therefore adopted a three-fold
inquiry to assess whether these measures are compatible with human rights:
(i) Whether the measure is aimed at achieving a legitimate objective;
(ii) Whether there is a rational connection between the measure and
the objective; and
(iii) Whether the measure is proportionate to that objective.
Legitimate objective
1.84
A legitimate objective is one that addresses an area of public or social
concern that is pressing and substantial enough to warrant limiting the right.
1.85
The government has stated that the purpose of these measures is to:
- provide greater incentives and opportunities, particularly for
single parents, to re-engage in the workforce, and
- provide greater equity and consistency in the PP eligibility
rules by ensuring that all parents are assessed on the same basis, regardless
of when they first claimed income support.
1.86
In its submissions to this committee and the Senate Education,
Employment and Workplace Relations Legislation Committee, the government submitted
that:
Findings by the OECD and in other
literature show that long periods in receipt of income support are associated
with high levels of social and economic disadvantage, often extending to
children in these families and future generations. There is also evidence that
helping parents find work can be more effective than providing cash payments.
Joblessness among families is a significant social and economic problem facing
this country. Australia has one of the highest proportions of children living
in jobless families in the OECD.[63]
1.87
Both the majority and minority reports on the bill by the Senate Education,
Employment and Workplace Relations Legislation Committee affirmed the
importance of supporting parents to participate meaningfully in the workforce,
particularly as their children get older and their capacity to work increases.[64]
1.88
The Senate Education, Employment and Workplace Relations References
Committee similarly acknowledged the value of measures to encourage higher
workplace participation, and noted that ‘parents who work are more likely to
have children who will successfully participate in the labour market as adults,
and in so doing break the cycle of intergenerational unemployment’.[65]
Committee view
1.89
In its interim report, the committee noted that it considers that
supporting parents to re-enter the workforce and achieving equity for all
parents on income support are legitimate objectives. The committee remains of
this view.
1.90
However, as indicated in the interim report, the committee considers
that it does not follow that the particular means by which the government has
sought to achieve this equity are justified. For example, an alternative
approach would be to give later recipients the same benefits as earlier
recipients, rather than reducing the benefits of earlier recipients. It is not
apparent to the committee that the government considered any alternative options
in this regard.
Rational connection
1.91
The key issue here is whether the measures in question are likely to be
effective in achieving the objective being sought. It is not sufficient to put
forward a legitimate objective if in fact the measure limiting the right will
not make a real difference in achieving that aim. In other words, the objective
might be legitimate but unless the proposed measure will actually go some way
towards achieving that objective, the limitation of the right is likely to be
impermissible.
1.92
In its submissions to this committee and the Senate Education,
Employment and Workplace Relations Legislation Committee, the government cited
evidence indicating that previous changes to PP, including the introduction of
participation requirements for parents with school age children, did increase
workforce participation and reduce income support reliance for some parents
during 2006-07. According to the government, single parents receiving Newstart
have a slightly higher placement rate (65 per cent) than parents receiving
grandfathered parenting payment (57 per cent).[66]
1.93
In particular, the government pointed to a 2010 Welfare to Work
Evaluation Report which showed that:[67]
-
Recipients left income support faster, primarily for jobs. During
2006–07, 38 per cent of single principal carer parents with a youngest child
aged eight to 15 years on Newstart Allowance had left income support after six
months compared to only 15 per cent in the years immediately preceding;
- The proportion of those parents with children aged six to 15 who
were in paid employment after six months increased to 29 percent from 20 per
cent;
- Over 70 per cent principal carer parents left income support for
employment; and
- 70 per cent of principal carer parents directly affected by
Welfare to Work participated in employment services throughout the year.
1.94
In addition, an increased demand for Jobs, Education
and Training Child Care Fee Assistance (JETCCFA) indicates that more
parents on income support want to undertake training, studying and working
activities. In 2006-07 around 18,000 parents were assisted by JETCCFA. In
2010-11, this had increased to over 31,000 parents.
1.95
In further information provided to the committee on 18 September 2012,
the government said that its research shows that:
65% of principal carer parents on Newstart are able to
find paid employment, compared to 55% of all job seekers. Further, thirteen
weeks after placement in a job, these parents on Newstart are nearly 10% more
likely to still be in work, and after 26 weeks they are 5% more likely to still
be in paid work than all job seekers.[68]
1.96
The government, however, acknowledged in evidence provided to the Senate
Education, Employment and Workplace Relations References Committee inquiry that
principal carer parents receiving Newstart have an average duration of income
support of more than four years, which is considerably longer than the average
duration for all recipients on Newstart of approximately 3.5 years.[69]
The government also noted that in meeting their participation requirements, parents
on Newstart, in particular single parents, and PP (Single) recipients, exhibit
the highest frequency of earnings of all groups on income support by a
considerable margin.[70]
1.97
Various submissions to the Senate Education, Employment and Workplace Relations
Legislation Committee suggested that moving grandfathered recipients from PP
Single to Newstart would result in a reduction in support for vulnerable
families, while also failing to provide recipients with an incentive to obtain
work, or increase the amount of work they undertake. The Senate Education,
Employment and Workplace Relations Legislation Committee's report on the bill
cites several examples:[71]
- ACOSS submitted that the proposed change would be negative rather
than incentivising, as the vast majority of parents affected by the proposals
are already required to seek part time employment and would face no additional
job seeking requirements.
- Mission Australia suggested that while single parents may have casual
work, it could cite no evidence to support the proposition that parents who
moved from Parenting Payment to Newstart were more likely to obtain
'sustainable work'.
- The National Welfare Rights Network pointed out that any increase
in participation rates could not necessarily be attributed to reduced payment
rates, but rather to the activity requirements and increased support to obtain
employment.
1.98
The Senate Education, Employment and Workplace Relations Legislation Committee
majority was not convinced by the government's evidence that the measures are
fair and would promote workforce participation.[72]
1.99
While the Senate Education, Employment and Workplace Relations References
Committee majority agreed that Newstart was effectively discharging its primary
duty to support people through a short term transitional period of unemployment,
it expressed concern that 42 per cent of new recipients each year do not
transition quickly back into the workforce and believed that the allowance
payment system could better encourage workforce participation.[73]
Committee view
1.100
In its interim report, the committee recognised that these are
not matters that can be conclusively proven upfront and it considered that, on
balance, the government has provided sufficient supporting evidence to suggest
that these measures may go some way towards achieving its stated objectives. The
committee remains of this view.
1.101
The committee, however, considered that the lack of decisive
evidence highlighted the need for appropriate monitoring mechanisms to
accompany changes like these. It was not apparent that the government had taken
steps to establish post-legislative mechanisms to evaluate whether the measures
were indeed achieving their objectives or to monitor their impact on
individuals and groups, particularly with regard to the risks of hardship and
discrimination. The committee remains concerned that these measures do not
include any such safeguards in this respect.
1.102
The committee also notes that the marginal increase in workplace
participation by Newstart recipients over PP (Single) recipients,[74]
combined with the evidence suggesting that both categories of recipients
demonstrate equal diligence in meeting their participation requirements[75]
and the longer than average durations which principal carer parents remain on
income support[76],
raises the question whether these measures place additional stress on
vulnerable families, without providing a correspondingly better outcome in
terms of work prospects.
Proportionality
1.103
Proportionality requires that even if the objective of
the limitation is of sufficient importance and the measures in question are
rationally connected to the objective, it may still not be justified, because
of the severity of the effects of the measure on individuals or groups.
1.104
While individuals who are transitioned from PP to Newstart will still
have access to social security benefits, the adequacy of those benefits has
been questioned by a wide range of experts and community groups.[77]
1.105
As discussed above, the evidence presented to the Senate Education,
Employment and Workplace Relations References Committee inquiry into Newstart
‘overwhelmingly expressed the view that the current rate of payment was
inadequate, impeding recipients’ ability to meet their basic costs of living in
an acceptable manner’[78]
and the EEWRR Committee agreed that Newstart ‘does not allow people to live at
an acceptable standard in the long term’.[79]
1.106
The Australian Human Rights Commission agrees that Newstart is 'not adequate
to provide a reasonable standard of living for jobseekers'. The Commission has
recommended that Newstart and supplements should be increased 'so that they
accurately reflect the costs of living, job-seeking and skill development
activity'.[80]
1.107
The government did not expressly comment on the adequacy or otherwise of
Newstart during the Senate Education, Employment and Workplace Relations
Committee inquiries. However, the government noted in its submission to this
committee that:
The level of social security welfare
support is a matter for the Government however, the Government has been clear
that it considers the breadth of financial assistance with employment and other
services provides adequate support for recipients while also providing
appropriate incentives to work. ... People are supported through the income
support safety net as well as family payments and a range of programs and other
services provided by Commonwealth and State governments such as education and
housing.[81]
1.108
The committee understands that individuals transitioning to Newstart
will have access to two additional services to support their participation in
education and employment.[82]
The committee, however, notes that all the financial benefits available to
Newstart recipients are already received by parents on PP.
Committee view
1.109
In its interim report, the committee stated that it considers
that if Newstart combined with other benefits was not sufficient to provide an
adequate standard of living for affected individuals, the measures to remove
the grandfathered PP provisions risk being incompatible with the obligation in
article 9 of ICESCR to ensure minimum essential levels of social security.
1.110
The committee therefore recommended that the government should
defer these measures until the outcome of the Senate Education, Employment and
Workplace Relations References Committee inquiry into the adequacy of Newstart was
finalised.
1.111
Having now had the benefit of considering the evidence elicited
during the Newstart inquiry, the committee sets out its final views on these
measures below.
1.112
The question of whether individuals transitioning to Newstart from PP could
be deprived of minimum essential levels of social security and an adequate
standard of living goes directly to the issue of the compatibility of these
measures with human rights. The adequacy of Newstart and supplementary supports
is therefore central to an assessment of whether these measures are compatible
with human rights, in particular the right to social security in article 9 of
the ICESCR, the right to an adequate standard of living in article 11 of the
ICESCR, the right to non-discrimination in article 2(2) of the ICESCR and
related children's rights in the Convention on the Rights of the Child.
1.113
Evidence provided by the government suggests that Newstart is structured
to create incentives to assist individuals to move to employment, while still
providing a level of income support. However, it is also clear that the income
support provided under Newstart is less than that available under PP, thus
raising concerns that single parents will face additional financial stress in
meeting the basic costs of living for them and their dependants.
1.114
The evidence suggests that the proportion of parents generating
additional income from part time work under Newstart is not appreciably higher
than the proportion working under PP. In that respect, it is arguable whether
moving single parents to Newstart is likely to be more effective or provide a
greater incentive to work than under the more generous PP scheme. The committee
is concerned that these measures place additional stress on vulnerable
families, without providing a correspondingly better outcome in terms of work
prospects.
1.115
Central to the committee’s consideration is the question of whether
Newstart and additional supports are adequate to meet the needs of single
parent families. The evidence appears mixed at best, and the committee
acknowledges that the matter of adequacy is not easily determined. It is not
within the scope of the committee’s competence to make a definitive judgment on
what constitutes adequacy in dollar terms. The burden of demonstrating adequacy,
however, does lie with the government.
1.116
In this regard, the committee notes that much of the government analysis
it has considered has pointed to the range of other payments available to
support families on Newstart and has sought to benchmark the total available
income against the national minimum wage. The purpose of referencing the
minimum wage is unclear to the committee. It may be that it is intended to
imply a measure of adequacy, but the committee considers this is a simplistic
and unconvincing measure. Indeed, many government allowances for families with
school age children such as the Family Tax Benefit B apply to families with
income levels far in excess of the minimum wage.
1.117
The committee has previously noted[83]
that the UN Committee on Economic, Social and Cultural Rights has on a number
of occasions recommended that the government adopt an official poverty line ‘so
that a credible assessment can be made of the extent of poverty in Australia’.[84] The
government has not taken up this recommendation, explaining to the CESCR in
2009 that ‘one reason Australia did not set a poverty threshold was that
assessing poverty on the basis of income only gave a partial view of a
population’s level of poverty or economic well-being.’[85]
1.118
The committee accepts that governments must be accorded a degree of
discretion in public expenditure matters. However, there must be a reasonable
basis and a relationship of proportionality between the legitimate aim pursued
and the means used. The committee notes that the evidence suggests that the
government has neglected to fully integrate human rights considerations into the
development and implementation of these measures as required under the ICESCR.[86]
Of particular concern to the committee in this regard is:
- the apparent lack of consultation with affected individuals during the
course of developing these measures and the lack of information whether
alternatives were considered and why they were considered to be inappropriate;[87]
-
the absence of a detailed impact assessment with regard to the impact of
these measures on human rights;[88]
and
- the lack of any express monitoring mechanism to assess the impact of
these measures on the rights of those affected.[89]
1.119
The committee considers that the government must make a more concerted
effort to address the question of adequacy and be prepared to review the new
arrangements after a period of 12 months to determine the actual impact of the
changes. If it is found that the impacts have been disproportionately
detrimental to single parent families, reasonable adjustments must be made.
1.120
The committee considers that the government has not provided the
necessary evidence to demonstrate that the total support package available to individuals
who are subject to these measures is sufficient to satisfy minimum essential
levels of social security as guaranteed in article 9 of the ICESCR and the
minimum requirements of the right to an adequate standard of living in
Australia as guaranteed in article 11 of the ICESCR. Nor has it indicated the
basis on which it makes that assessment. In the absence of this information, the
committee is unable to conclude that these measures are compatible with human
rights.
Mr Harry Jenkins MP
Chair
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