On 17 June 2014 the Senate referred the Social Security Legislation
Amendment (Stronger Penalties for Serious Failures) Bill 2014 (Bill) to the
Community Affairs Legislation Committee (committee) for inquiry and report by 26
Purpose of the Bill
The Bill seeks to ensure that more jobseekers meet their mutual
obligation requirements and transition from welfare to gainful employment.
The Bill will help restore the integrity of our welfare
system and ensure available resources are used effectively and efficiently... The
ability to waive the penalty means that job seekers who commit a serious
failure can avoid the financial consequences of their actions, and continue to
receive income support, despite their poor behaviour.
The Bill would give effect to the government's commitment to strengthen
jobseeker compliance frameworks by ensuring that penalties are applied more
rigorously where jobseekers fail to comply with participation obligations while
in receipt of an activity tested income support payment.
Conduct of inquiry
Details of the inquiry were made available on the committee's website.
The committee also contacted 38 organisations inviting submissions to the
inquiry by 18 July 2014. Submissions were received from nine individuals and
organisations, as detailed in Appendix 1.
A public hearing was held in Canberra on 18 August 2014. The witness
list for the hearing is available in Appendix 2.
To give effect to measures announced in the 2008–09 Budget, the former
government introduced a package of reforms to employment services and a new
jobseeker compliance system
that attempted to introduce measures to provide capacity for individual
circumstances of jobseekers to be taken into consideration and to find better
ways to ensure jobseeker compliance with participant obligations.
At this time, the eight week penalty for wilful and persistent
non-compliance was maintained. However, a number of provisions were introduced
to provide flexibility in the application of the penalty. As such, currently:
where a jobseeker commits a 'serious failure' participant
payments will not be payable for eight weeks.
Serious failures are persistent non-compliance with participation obligations
and failure to accept, without reasonable excuse, an offer of suitable
Participant payments are Newstart allowance and, in some instances, youth
allowance, parent payments and special benefits;
the Department of Social Security Secretary (Secretary) may waive
the above mentioned eight week non-payment penalty where a jobseeker begins to
comply with a 'serious failure requirement' or, does not have the capacity to
undertake a 'serious failure requirement' and would be in 'severe financial
hardship' if the non-payment period was not ended.
Serious failure requirements include Work for the Dole and job search training.
A person is in severe financial hardship if the value of their liquid assets is
less than $5 000 for a member of a couple and/or a person who has a
dependent child, or less than $2 500 for a single person with no children.
Key provisions of the Bill
The Bill seeks to amend the Social Security (Administration) Act 1999
(Act) to introduce a stronger compliance framework for jobseekers in receipt of
a 'participant payment'.
Schedule 1 of the Bill would abolish the ability of the Secretary to
waive a non-payment penalty for jobseekers who incur an eight week non-payment
penalty for refusing suitable work.
Schedule 1 of the Bill also provides that where a jobseeker incurs an
eight week penalty for persistent non-compliance with participation
obligations, the Secretary may only waive the eight week non-payment penalty
Consideration of the Bill by other committees
The Bill has been considered by the Senate Standing Committee for the
Scrutiny of Bills (Scrutiny committee) and the Parliamentary Joint Committee on
Human Rights (Human Rights committee).
The Scrutiny committee detailed its consideration of the Bill in Alert
Digest 7/14, tabled in the Senate on 26 June 2014. The Scrutiny committee had
no comment on the provisions of the Bill.
Human Rights committee
The Human Rights committee examined the Bill in its Ninth Report, tabled
in the Senate on 15 July 2014.
The government's Statement of Compatibility with Human Rights considered
that the Bill did not appear to give rise to human rights concerns, but did
note that the Bill engages the right to work, the right to social security and
the right to an adequate standard of living.
The Human Rights committee considers that the measures of the Bill that
remove and limit the ability to waive the non-payment penalty for refusal of
suitable work, or for persistent non-compliance may limit the right to social
security, the right to an adequate standard of living, and the rights to
equality and non-discrimination.
The Human Rights committee expressed concerns that, notwithstanding the
assurances in the explanatory memorandum, it remains 'unclear how limiting the
availability of the waiver on the ground of a jobseeker's severe financial
hardship, or because a jobseeker agrees to undertake more intensive activities,
such as Work for the Dole, would achieve the stated objective of the measures.'
The Human Rights committee considered the characterisation of the Bill in the
explanatory memorandum as a promotion of the right to work by providing 'a
stronger incentive to accept an offer of suitable work',
as an inaccurate assessment of the Bill's limitation on human rights.
The Human Rights committee suggested that the Bill also has potential to
disproportionately or unintentionally impact negatively upon particular groups
resulting in the engagement and limitation of the rights to equality and non-discrimination.
The Human Rights committee has sought clarification from the Assistant
Minister for Employment as to whether the removal or limitation of the ability
to have the non-penalty waived is compatible with the right to social security
and the rights to equality and non-discrimination.
The Assistant Minister for Employment is yet to provide a response to
the Human Rights committee's request for clarification, however, the Department
of Education (department) indicated in their submission to this inquiry that a
response is forthcoming.
Financial Impact Statement
The explanatory memorandum submits that the Bill would have a financial
impact, resulting in net savings for the Social Services portfolio of $9.3
million over three years and $20.5 million over five years.
The committee thanks those individuals and organisations who made
submissions and who gave evidence at the public hearing.
Notes on References
Reference to the committee Hansard is to the proof Hansard. Page numbers
may vary between the proof Hansard and the official Hansard transcript.
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