Chapter 1Introduction
1.1On 4 September 2025, the Minister for Social Services, the Hon Tanya Plibersek MP, introduced the Social Security and Other Legislation Amendment (Technical Changes No. 2) Bill 2025 (the bill) to the House of Representatives.
1.2On 4 September 2025, the Senate referred the provisions of the bill to the Senate Community Affairs Legislation Committee (the committee) for inquiry and report by 21 October 2025.
Structure of the report
1.3This report contains two chapters. This chapter sets out:
the purpose of the bill;
background information relating to the historic use of income apportionment and debt waivers;
an overview of the bill’s key provisions; and
general information outlining the conduct of the inquiry and other committees’ consideration of the bill.
1.4Chapter 2 outlines the inquiry participants’ key views on the bill and concludes with the committee’s view and recommendation.
Purpose of the bill
1.5According to the bill’s Explanatory Memorandum (EM), the provisions of the bill would prescribe an apportionment method for income earned, derived or received from employment between 1 July 1991 and 6 December 2020 inclusive, that better accords with the way in which the Social Security Act 1991 (Social Security Act) was administered during that period.
1.6Further, the bill retrospectively validates prior calculations and provides for three approaches to calculating employment income after the validation provisions commence.
1.7Additionally, the bill provides for amendments to be made to social security and family payments law to reform and improve debt waiver regimes under the Social Security Act, the A New Tax System (Family Assistance) (Administration) Act 1999 (Family Assistance Administration Act), the Student Assistance Act 1973 (Student Assistance Act) and the Paid Parental Leave Act 2010 (Paid Parental Leave Act).
1.8The bill also establishes the Income Apportionment Resolution Scheme (the Resolution Scheme), to be implemented by legislative instrument, and creates a new standing appropriation for payments made under the bill.
Background
1.9This section provides background information on the bill’s provisions by exploring matters related to the historic use of income apportionment by Services Australia and existing debt waiver provisions.
Income apportionment
1.10According to the Department of Social Services (the department) and Services Australia (together, the agencies) and the EM, income apportionment was a long-standing method used by Services Australia, and its predecessors, to assess employment income when calculating the rate of a means-tested social security payment.
1.11The Impact Analysis (attached at the end of the EM) explained that this practice involved allocating employment income across more than one social security payment instalment period in instances when the evidence for the employment income did not provide the necessary detail needed to determine how much the person earned each day.
1.12The Impact Analysis further explained that the use of income apportionment dates back to at least the early 1990s, and that it was a ‘practical solution to the difficulties of assessing income for an employment period that did not align with the Centrelink instalment period and where evidence such as payslips did not include daily earnings’.
1.13However, in its submission, the agencies explains that it is now recognised that in many cases, the use of income apportionment was inconsistent with the social security law in force at the time.
Income apportionment inconsistent with social security law
1.14The EM explains that the effects of section 1073B of the Social Security Act required employment income taken to have been earned, derived or received in an instalment period to be attributed on a daily basis to each day in that instalment period.
1.15The EM further describes that the effect of this provision was generally mistaken within Services Australia as being consistent with the use of income apportionment.
1.16However, the EM explains that:
… income apportionment involves apportioning income over more than one instalment period and section 1073B only allows for apportionment of income “earned, derived or received”, or “taken to have been earned, derived or received”, within an instalment period.
1.17As such, the EM notes that income apportionment is now recognised to be inconsistent with section 1073B.
1.18The Impact Analysis noted that this practice was used due to a ‘genuine misunderstanding of how the provisions of the Social Security Act required income to be assessed’.
Time period
1.19According to the agencies, sampling undertaken by Services Australia confirmed that debts back to at least 2003 were calculated using income apportionment. Additionally, research undertaken by the department indicates that income apportionment was likely common practice in 2003, and was likely used as far back as the 1990s.
Impacted debts
1.20According to the agencies, around 5.5 million historical debts may potentially be affected by income apportionment. The agencies elaborated that exploratory sampling undertaken by Services Australia found that around 63 per cent of employment income related debts were found to have relied on income apportionment when manually reviewed.
1.21However, the agencies clarified that it is not possible to know if a debt is or is not affected without a manual review of each debt. Based on Services Australia sampling, it was noted that approximately 35 to 40 per cent of cases sampled would have had a slightly higher debt if income apportionment had not been applied.
1.22The EM also outlined that there are approximately 148,000 outstanding debts potentially affected by income apportionment and that around 97 per cent of potentially affected debts have been fully repaid.
1.23Further, it explained that the average age of potentially affected debts is 19 years, and that over half of the potentially affected debts are held by people who no longer receive social security or family assistance payments.
Change in practices
1.24On 7 December 2020, amendments to the Social Services and Other Legislation Amendment (Simplying Income Reporting and Other Measures) Act 2020 took effect.
1.25While these changes were not specifically aimed at addressing income apportionment, the EM explains that they simplified income reporting by introducing a method of daily income attribution based on the instalment period in which an income amount was ‘paid’, rather than ‘earned’ or ‘received’.
1.26It elaborates that using ‘paid’ made it unnecessary to use income apportionment as the new method is based on information that is more readily available to the decision maker, and it specifically overrides the requirements to take income into account in the fortnight it is first ‘earned’.
1.27In mid-2021, Services Australia stopped raising and reviewing debts for entitlements prior to 7 December 2020, due to concerns about income apportionment.
1.28The EM explains that recovery of debts that were potentially affected by income apportionment were paused in October 2023 and that in April 2024, more debts were identified and paused.
1.29The EM further notes that income apportionment was seen as a fair and reasonable assessment method that was thought to fairly reflect a person’s means at the time they incurred employment income, and that income apportionment was adopted in good faith by Services Australia and its predecessors.
Identification of the issue
1.30The Parliamentary Library Bills Digest No. 16 of 2025–26 explained that government agencies became aware of the income apportionment issue following questioning in a Senate Estimates hearing in October 2020 and several Administrative Appeals Tribunal decisions in early 2021.
1.31The Bills Digest further noted that the agencies first sought external legal advice on the issue in March 2021.
1.32The EM also outlined that the Commonwealth Ombudsman conducted two own-motion investigations into income apportionment in August 2023 and December 2023.
1.33The Commonwealth Ombudsman described that the first investigation found income apportionment was against the law, and the second investigation found that the agencies ‘had not yet done enough to fix the problem’.
1.34The August 2023 report also found that income apportionment arose ‘due to the agencies genuinely holding an incorrect understanding of the relevant legislative provisions’.
Matthew Chaplin v Secretary, Department of Social Services
1.35The issue of how to correctly calculate debts prior to 7 December 2020 was considered by the Full Federal Court in Chaplin v. Secretary, Department of Social Services (Chaplin). A decision was handed down on 15 July 2025, which accepted the department’s preferred methodology for calculating debts prior to 7 December 2020.
1.36Following the Chaplin decision, the Secretary of the department announced paused debts activities would recommence in line with the Federal Court’s decision, and his obligations as Secretary.
Debt waivers
1.37The bill provides for amendments to be made in relation to waivers in special circumstances and waivers for small debts. The existing legislative arrangements for these matters are discussed below.
Waivers in special circumstances
1.38The bill would allow a person’s broader circumstances to be considered by the Secretary when deciding whether to apply special circumstances waivers, which is discussed further in later sections of this chapter.
1.39The existing special circumstances waiver provisions in the Social Security Act, the Family Assistance Administration Act, the Student Assistance Act, and the Paid Parental Leave Act provide that the Secretary (or their delegate) may waive the right to recover all or part of a debt if:
the Secretary is satisfied that there are special circumstances in the case (other than financial hardship alone) that make it desirable to waive the debt, and
it is more appropriate to waive than to write off the debt.
1.40The EM explains that the Secretary must also be satisfied that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or representation, or failing or omitting to comply with relevant laws.
1.41The EM identifies that this could have an unintended consequence where the waiver may not be applied even where the debtor’s circumstances demonstrate it was justified for them to have knowingly provided false information, or failed to comply with relevant laws, in connection with the debt.
1.42For example, the EM raises that the current regime prevents decision makers from waiving a debt which arose due to a debtor intentionally providing false information to Services Australia, even where the debtor was coerced to do so by an abusive former partner in an instance of family and domestic violence.
1.43The EM provides the below case study to illustrate this unintended consequence:
Person L incurred a parenting payment (partnered) (PPP) debt because they reported their partner’s earnings to be $500 per fortnight from part-time employment, when in fact their partner was earning $3,500 per fortnight. However, the only reason Person L did this was because their partner coerced them into doing so, in order to gain a financial benefit from underreporting. The false income reporting was subsequently discovered by Services Australia, and a debt was raised against Person L.
A social worker recommended the special circumstances waiver be applied to waive the debt, based on the fact that the debt was a result of coercion, and because Person L’s other circumstances, including that Person L was a victim of domestic violence, were considered special. However, the decision maker was precluded from waiving the debt because the debt arose as a result of Person L knowingly providing false information to Services Australia.
1.44The EM explains that the amendments to this waiver respond to part of recommendation 58 of the 2024 Parliamentary Joint Committee on Corporations and Financial Services’ inquiry into Financial Abuse, which recommend that amendments be progressed to:
… ensure that a victim-survivor is not precluded from accessing a special circumstances waiver if a perpetrator lies to Services Australia without the debtor’s knowledge or consent, or the debtor makes a false statement or misrepresentation as a result of coercion or duress by a perpetrator.
Small debt waivers
1.45According to the EM, the existing small debt waiver provisions in the Social Security Act, Family Assistance Administration Act and the Paid Parental Leave Act require the Secretary to waive the right to recover a debt if the debt is, or is likely to be, less than $200 and it is not cost effective for the Commonwealth to take action to recover the debt.
1.46The EM explains that the $200 threshold was first established by Social Security (Budget and Other Measures) Legislation Amendment Act 1993.
1.47Further, the EM outlines that for the Social Security Act, the Family Assistance Administration Act, and the Paid Parental Leave, the current small debt waiver may not be applied if the debt is at least $50 and could be recovered by deduction or setting off against a social security or family payment.
1.48The EM notes that the $50 threshold was first established by the Social Security Legislation Amendment (Carer Pension and Other Measures) Act 1995.
1.49In the Student Assistance Act, the small debt waiver provision applies to debts less than, or likely to be less than, $50 and where it is not cost effective for the Commonwealth to take action to recover the debt.
1.50The EM explains that the current legislative regimes for waiving small debts are complex to implement and have caused inconsistency and inefficiency in how Services Australia administers small debts.
1.51For example, the EM describes that the small debt waiver thresholds have lost their real value over time as they have not been indexed since commencement, and the relevant thresholds vary depending on payment types and whether the debtor is a current or formal social security or family payment recipient.
1.52The EM outlines that while small debts make up a large proportion of debts by number, their cumulative value is relatively low. As such, the administrative burden and costs associated with processing these debts are disproportionate to their actual value.
Financial impact statement
1.53According to the EM, the bill’s amendments have a financial impact of $286.4 million, including administered and departmental costs, over the forward estimates from 2025–26 to 2028–29.
Key provisions of the bill
1.54This section explores the key provisions of the bill, which are comprised of four Schedules:
Schedule 1 – Income Apportionment
Schedule 2 – Debt waivers
Schedule 3 – Income Apportionment Resolution Scheme
Schedule 4 – Appropriation
1.55Clause 1 provides the short title of the Act, Clause 2 sets out commencement details, and Clause 3 provides that ‘legislation that is specified in a Schedule is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the new Act has effect according to its terms’.
Schedule 1 – Income Apportionment
1.56According to the EM, Item 1 inserts new definitions to the Social Security Act and Item 2 inserts ‘Part 3.11 – Income earned from employment between 1 July 1991 and 6 December 2020’ into the into the Social Security Act.
1.57There are three Divisions in Part 3.11, which are outlined below.
Division 1 - Preliminary
1.58Section 1112 provides a simplified outline of Part 3.11 and Section 1113 defines several new terms for the purposes of Part 3.11, including ‘Division 2 work income’, which means ordinary income for remunerative work of a person as an employee in an employer/employee relationship.
1.59Section 1114 provides a general income apportionment method statement, which describes how income apportionment was used to apply income earned in a payroll period to an entitlement period, or days in an entitlement period.
1.60The statement is as follows:
Step 1. Divide the amount of the income by the number of days in the payroll period.
Step 2. Work out how many days in the payroll period fall within the entitlement period.
Step 3. Multiply the amount from step 1 by the number of days from step 2. This is the total amount for the entitlement period.
Step 4. Divide the total amount for the entitlement period by the number of days in the entitlement period. This is the daily amount for the entitlement period.
1.61Section 1115 similarly provides the income apportionment method statement for the Youth Training Allowance (YTA) and section 1116 provides the farm household support (FHS) income apportionment method statement, both of which are in substantially the same terms as section 1114.
Division 2 – Calculations before the validation time
1.62Section 1117 validates income apportionment for the purpose of social security benefits and social security pensions. The EM explains that it applies to cases where the income apportionment involved the income of a person or their partner.
1.63The EM outlines that the method would otherwise have been an invalid method in relation to social security payments payable before 7 December 2020. Further, that all things done or having occurred due to income apportionment being used where it would not have been lawful to do so are taken to have been validly done.
1.64The EM also states that this validation extends to the flow-on effects of using income apportionment to other benefits and payments, including the effects on the payability of payments under other enactments.
1.65Section 1117(5) clarifies that this validation does not capture income averaging of Australian Taxation Office income information used in Robodebt cases, as income apportionment is distinct from the income averaging used in Robodebt.
1.66Further, provisions under Division 2 validate the practice of income apportionment and its effects in the context of YTA and former FHS for entitlement periods ending before 1 July 1998 and 1 July 2014 respectively.
1.67Additionally, section 1117C provides for the preservation of any cause of action in respect of an accrued general law right. The EM explains that the effect of this clause is that the validation of the past use of income apportionment for the purpose of the social security law, Student Assistance Act, Farm Household Act 1992, and any other relevant enactment, does not operate to extinguish any cause of action in respect of general law rights accrued prior to the validation time.
Division 3 – Calculations after the validation time
1.68According to the EM, Division 3 provides for a lawful method of determining the amount of employment income to be allocated to an entitlement period for prospective decisions (i.e. decisions required to be made after the validation time) in respect of entitlement periods before 7 December 2020 for social security benefits and pensions.
1.69The EM explains that such decisions may be necessary in the following instances:
a debt decision that related to employment income for periods prior to 7 December 2020 has been on hold;
a past debt decision is subject to merits review on some other basis than the use of income apportionment alone; or
the Secretary obtains evidence after the Bill is enacted that a person may have incurred an overpayment of a relevant entitlement prior to 7 December 2020.
1.70The EM further outlines that the new method aligns with the approach taken by Services Australia prior to 7 December 2020 and includes the use of income apportionment in certain circumstances.
1.71The EM notes that this places new decisions on the same footing as the method of assessment validated in Division 2 of Schedule 1.
1.72Further, provisions in this Division provide for lawful methods of determining employment income for decisions made after the validation time in the context of YTA and former FHS payments for entitlement periods before 1 July 1998 and 1 July 2014 respectively after commencement of Part 3.11.
1.73The EM also explains that where a decision maker is required to assess employment income, defined for the purpose of Division 3 as Division 3 work income, they must engage with the available evidence and use one of the three approaches prescribed in Division 3 in a set order.
1.74The approaches are as follows:
The First Approach is used where the evidence is sufficient for the decision maker to allocate a Division 3 work income to the entitlement period in which it was earned.
The Second Approach is to use income apportionment (as set out in the general income apportionment method statement in section 1114 of the Act) if the First Approach does not apply, but available evidence identifies the payroll period to which the Division 3 work income amount relates.
The Third Approach is to be used if neither the First or Second Approach apply and provides for income to be assessed in the entitlement period in which it is received, if neither the entitlement period in which the income was earned can be identified, nor a relevant payroll period.
1.75The EM clarifies that the same approaches are to be used when recalculating YTA or former FHS payments payable in respect of an entitlement period, including for the purpose of determining a debt.
Schedule 2 – Debt waivers
1.76There are three Parts in Schedule 2. Part 1 relates to the waiver in special circumstances, Part 2 relates to the small debt waiver and Part 3 delates to the one-off waiver.
1.77These matters are discussed below.
Part 1 – Waiver in special circumstances
1.78Part 1 makes amendments to the Family Assistance Administration Act, the Paid Parental Leave Act, the Social Security Act and the Student Assistance Act.
Division 1 – Amendments
1.79Item 1 repeals existing paragraph 101(a) of the Family Assistance Administration Act, and substitutes new paragraph 101(a), which prescribes new circumstances in which the special circumstances waiver may be applied to waive debts under that Act.
1.80The EM explains that subparagraph 101(a)(i) preserves the existing requirement that the waiver may only apply in instances where the Secretary is satisfied that the debt did not result from the debtor or another person knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the family assistance law.
1.81However, the EM outlines that new paragraphs 101(a)(ii)–(iv) prescribe instances where the waiver may still be applied, despite the Secretary being satisfied the relevant debt resulted from the debtor or another person knowingly making a false statement or false representation, or by failing or omitting to comply with a provision of the family assistance law.
1.82This extends to instances where the Secretary is satisfied the debt resulted wholly or partly from:
subparagraph 101(a)(ii): the debtor knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the family assistance law, but that act or omission was justified in the circumstances; or
subparagraph 101(a)(iii): another person knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the family assistance law, but the debtor did not know about that act or omission; or
subparagraph 101(a)(iv): another person knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the family assistance law, and the debtor knew about that act or omission but it was justified in the circumstances for the debtor not to correct that act or omission.
1.83The EM explains that this provides the Secretary with additional discretion in considering whether the conduct of the debtor in relation to the debt arising, as provided in these subparagraphs, was justified in the circumstances.
1.84The EM notes that it is intended that the term ‘justified’ will have its ordinary meaning. That is, the Secretary must be satisfied that there is an acceptable or satisfactory reason warranting the debtor’s conduct, in relation to the cause of the debt. The EM clarified that this is a subjective test based on the circumstances of the particular case.
1.85The EM provides some examples of what the Secretary could consider relevant, where the debtor is experiencing issues relating to:
financial coercion, family and domestic violence;
mental health;
the impact of natural disasters;
serious dependence on drugs and alcohol;
homelessness, or;
duress.
1.86The EM further explains that whether the debtor’s conduct is justified in the circumstances under subparagraphs 101(a)(ii) and (iv) is to be considered separately to whether there are ‘special circumstances’ that make it desirable to waive the debt, as provided in paragraph 101(b).
1.87Item 2, Item 3 and Item 4 prescribe equivalent changes to the Paid Parental Leave Act, the Social Security Act, and the Student Assistance Act respectively, as those made by Item 1 in respect of the Family Assistance Administration Act discussed above.
Division 2 – Application of amendments
1.88Item 5 under Division 2 prescribes that ‘the amendments made by Part 1 of Schedule 2 to the Bill will apply in relation to a debt that is raised before or after item 5 commences’.
1.89The EM explains that Item 5 will commence the day after the new Act receives the Royal Assent in accordance with clause 2.
Part 2 – Small debt waiver
1.90According to the EM, Part 2 of Schedule 2 prescribes amendments to the small debt waiver provisions in the Social Security Act, the Family Assistance Administration Act, the Student Assistance Act and the Paid Parental Leave Act.
Division 1 – Amendments
1.91Items 6 to 12 make a series of amendments to reform the legislative regime that governs the waiver of small debts under the above-mentioned Acts. The EM explains that these amendments introduce a new increased waiver threshold for debts which are, or are likely to be, less than $250, and prescribe that the threshold is indexed on a yearly basis according to CPI on 1 July each year.
1.92The EM further outlines that the amendments remove:
the considerations relating to whether it is cost effective to take action to recover small debts, and;
the prohibition on the small debt waiver applying in instances where a small debt of at least $50 could be recovered by making deductions or setting off the debt against the person’s future social security or family payments.
1.93The EM explains that these amendments will improve the efficiency of Service’s Australia’s debt administration processes, and ensure consistency in the treatment of debtors, regardless of whether the person is a current recipient of payments.
Division 2 – Application of amendments
1.94Item 13 under Division 2 prescribes an application provision for the amendments made by Items 6 to 12. The EM outlines that subitem 13(1)(a) provides those amendments apply to a debt that is raised after commencement, being the prescribed commencement for Part 2 of Schedule 2 set out in clause 2.
1.95Further, subitem 13(1)(b) prescribes that amendments made by items 6 to 12 will also apply to a debt that is raised before, but is varied after, commencement.
Part 3 – One-off waiver
1.96Item 14 provides a one-off waiver of the Commonwealth’s right to recover undetermined social security and family payment debts which are recorded in Service Australia’s systems on commencement as amounts that would, or would likely be, a debt of less than $250 if that amount were to be raised a debt under Social Security Act, the Family Assistance Administration Act, the Student Assistance Act or the Paid Parental Leave Act.
1.97The EM notes that this is provided the amount has not been raised as a debt immediately before item 14 commences.
Schedule 3 – Income Apportionment Resolution Scheme
1.98Schedule 3 establishes the Resolution Scheme. The EM explains that the operational details of the Resolution Scheme will be provided by a legislative instrument made by the Minister (referred to as ‘the Determination’).
1.99Item 1 under Schedule 3 provides definitions for the Schedule, such as the definition an ‘effective acceptance’ for the purposes of the Resolution Scheme. The EM notes that the Determination will detail the requirements necessary for a person to lodge an effective acceptance under the Resolution Scheme.
1.100The Resolution Scheme is established under Item 2(1), and subitem 2(2) broadly provides that to be entitled to a resolution payment under the Resolution Scheme, a person must:
owe or have owed a debt to the Commonwealth under the social security law (which includes the FHS Act 2014), the repealed FHS Act 1992, the family assistance law or any other Act determined by the Minister under paragraph 3(1)(a) in the Determination;
the debt must have been raised prior to the commencement of the item because of an overpayment of a payment or benefit under the social security law, the repealed FHS Act 1992, the family assistance law or any other payment or benefit under an Act determined for the purposes of subparagraph 2(2)(a)(iv);
the debt must relate to a period (in full or in part) beginning on 20 September 2003 and ending on 6 December 2020; and
the debt must arise (wholly or partly, or directly or indirectly) because the Division 2 work income of the individual, or of a partner of the individual, was worked out using the method set out in section 1114 or section 1116 of the Social Security Act (as inserted by Schedule 1 to the Bill). This method is referred to as the income apportionment method.
1.101Further, subitem 2(3) provides that a person is entitled to a resolution payment in other circumstances determined in the Determination.
1.102Subitem 2(5) provides that where an applicant accepts an offer of a resolution payment, the applicant will be required to release the Commonwealth from all liability against any future claims that arises as a result (whether directly or indirectly) of the Division 2 work income of the individual, or of the partner of the individual, being worked out using the method set out in section 1114 or 1116 of the Social Security Act.
1.103Further, the individual cannot bring or continue any such claim against the Commonwealth, including in their capacity as an individual, as a representative party or a member of a group.
1.104Subitems 2(5) and (6) confer immunity from civil liability, which the EM explains will be conferred only where an individual elects to accept a resolution payment. The EM notes that this reflects a voluntary decision by the person to forego any existing right to bring proceedings against the Commonwealth by instead accepting a resolution payment.
1.105Further, it is open to an applicant to refuse a resolution payment offer and retain their existing rights to pursue claims against the Commonwealth regarding the use of income apportionment.
1.106Item 3 provides the power for the Minister to determine matters in relation to the Resolution Scheme, including matters such as the application process for applying for the Resolution Scheme and the amount of resolution payment that a person is entitled to be paid.
1.107The EM explains that it is proposed the Determination will include a pre-determined scale for the amount of a resolution payment a person is entitled to based on the original amount of the income apportionment affected debt. The EM further notes that it is proposed that the amount of resolution payment will range from $200 to $600 depending on the original amount of the affected debt.
1.108Subitems 3(2), 3(3) and 3(4) provide details on other matters relating to determination, such as that the Determination must provide for a review of any decision under the Resolution Scheme.
1.109Item 5 creates a debt to the Commonwealth arising under the Resolution Scheme, where a debt may arise where there is an overpayment of a resolution payment.
Schedule 4 – Appropriation
1.110According to the EM, Schedule 4 creates a new unlimited special appropriation for the purposes of the bill.
1.111Item 1 of Schedule 4 provides that the Consolidated Revenue Fund is appropriated for the purposes of making resolution payments and an amount payable as a result of working out an individual’s Division 3 work income under Part 3.11 of the Social Security Act.
Compatibility with human rights
1.112The bill’s Statement of Compatibility with Human Rights (the statement) notes that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
1.113According to the statement, the bill engages the right to social security contained in:
Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESR),
Article 28(2)(b) of the Convention of the Rights of Persons with Disabilities (CRPD), and
Article 26 of the Convention on the Rights of the Child (CRC).
1.114That statement explained that the bill also engages the right to an adequate standard of living contained in Article 11 of the ICESR.
1.115The statement concluded that the bill is compatible with human rights as it promotes and supports the right to social security and the right to an adequate standard of living. Further, the statement explained that to the extend a human rights obligation is engaged or limited, the impact is for a legitimate objective and is necessary and proportionate.
Consideration by other committees
1.116In its Report 5 of 2025, the Parliamentary Joint Committee on Human Rights (PJCHR) noted that the bill ‘retrospectively validates income apportionment as a lawful method of assessing employment income during the period from 1 July 1998 to 6 December 2020 for the purposes of certain social security entitlements’.
1.117The PJCHR considered that by enforcing debts owed to the Commonwealth that were made without a legal basis, the bill engages and limits the right to social security. It further noted that as the validation of income apportionment may limit the right to social security, effective remedies should be available.
1.118The PCHR noted that the statement identifies the engagement of the right to social security but not the right to an effective remedy. Consequently, the PJCHR considered that further information is required to assess the compatibility of this measure with the right to social security and the right to an effective remedy.
1.119As such, the PJCHR has sought the minister’s advice in relation to:
(a)what is the cost to the Commonwealth in recovering the ‘paused’ debts;
(b)whether the decision to pursue recovery of a debt calculated using the income apportionment method would take account of the merits of an individual case;
(c)whether the validation of income apportionment limits the basis, or the likelihood of success, to challenge affected debt decisions;
(d)whether the validation of the income apportionment method is consistent with the right to an effective remedy; and
(e)what remedies are available to persons where the validation of income apportionment results in a violation of their right to social security, and in particular, what actions may be brought against the Commonwealth.
1.120At the time of writing, the Senate Scrutiny of Bills Committee had not commented on the bill.
Conduct of the inquiry
1.121Details of the inquiry were made available on the committee’s website. The committee also contacted a number of organisations and individuals to invite them to lodge written submissions by 25 September 2025.
1.122The committee received 10 submissions, which are listed at Appendix 1 of this report.
1.123The committee held one public hearing in Canberra and via videoconference on 3 October 2025.
1.124A list of witnesses who gave evidence at the public hearing is available at Appendix 2.
Note on references
1.125References to Committee Hansard are to the proof transcript. Page numbers may vary between the proof transcript and the official transcript.
Acknowledgements
1.126The committee thanks the organisations and individuals who contributed to the inquiry by making written submissions and appearing as witnesses at the public hearing.