Submitters raised a number of concerns about the Bill in written submissions
and in oral evidence to the committee. These issues included:
creation of Jobseeker Payment and cessation of certain payments;
changes to activity tests for persons aged 55 to 59;
start day for some participation payments;
removal of intent to claim provisions;
establishment of a drug testing trial;
removal of exemptions for drug and alcohol dependence;
changes to reasonable excuses; and
The order in which these issues are discussed in this chapter reflects
the structure of the Bill and Explanatory Memorandum (EM).
Schedules 1 to 7 – Creation of Jobseeker Payment and cessation of certain
Under the proposed changes in Schedules 1 to 7 of the Bill, a number of
current welfare payments will cease and a new Jobseeker Payment will be
introduced as the main income support payment for working age people.
The proposed amendments allow for the automatic transfer of some income
support recipients to other payments, and will also provide exemptions from
some conditions for certain recipients transferring from ceased payments to
ensure that these people are not disadvantaged by the changes. The joint
submission by the Departments of Social Services, Employment and Human Services
(joint departmental submission) states that about 811 000 welfare recipients
will transition from an existing payment to the Jobseeker Payment and about 5
000 recipients will transfer to other payments including the Age Pension.
A number of submitters expressed support for the move to simplify or
streamline the administration of payments to welfare recipients.
However, some submitters raised concerns in relation to the cessation of
specific payments and/or some of the transitional arrangements affecting some payment
For example, the Australian Council of Social Service (ACOSS) recommended that:
transitional payment for Wife and Widow B Pensioners be indexed.
200 Wife Pension recipients living overseas continue to receive a pension
Bereavement Allowance be retained as a separate payment, paid at its current
rate with current indexation, and not rolled into the Jobseeker Payment.
The joint departmental submission indicated that:
Over 99.9 per cent of recipients will have the same or a
higher rate of payment under this measure. It will create one set of rules for
working-age income support payments for people with capacity to work.
In addition, the joint departmental submission stated that the new Jobseeker
Payment will make using the system easier for welfare payment claimants and
recipients. For example, recipients will not need to make a claim for a new
payment type should they become temporarily unable to work due to illness or
Schedule 9 – Changes to activity tests for persons aged 55 to 59
The proposed amendments in Schedule 9 would change the activity test
requirements for job seekers aged 55 to 59 years, so that from 20 September
2018, someone cannot be excused from looking for paid work by engaging in only
These changes will be supported by three new programs targeting mature
age workers to be introduced from 1 July 2018:
Career Transition Assistance Program;
National Work Experience Program; and
Pathway to Work pilots.
The Department of Employment provided the committee with data on the employment
participation rate for people aged 55 to 59, which it stated is similar to the
overall participation rate.
The key difference for mature age workers aged over 50 is the time taken to
find work: the average time taken for job seekers aged 50 and over is around 73
weeks, compared to the overall average of between 40 to 50 weeks.
Some organisations argued that the proposed changes to the activity test
requirements fail to recognise the challenges facing mature age job seekers in
However, the Department of Employment stated that the proposed amendments
acknowledge and seek to address these challenges:
The amendments will encourage 55-59 year old job seekers to
engage in paid work for 15 hours per fortnight and highlight the importance of
individuals' involvement and efforts on improving their own well-being. Many
mature age workers have a lot of experience and skills, and this measure aims
to increase employment outcomes for them and help change perceptions about the
abilities of older job seekers.
The Department of Employment also noted that jobseekers who currently fully
satisfy activity test requirements through approved volunteer or other suitable
paid work are not able to access support through the Employment Fund.
The proposed changes would provide a trigger for workers aged 55 to 59 to access
this existing means of support.
Concerns were also raised that the Career Transition Assistance Program would
start in 2020, some time after the commencement of the proposed changes to
activity tests for persons aged 55 to 59.
However, the Department of Employment made clear that the Career
Transition Assistance Program will actually commence in 2018 in five pilot
sites, in order to evaluate and refine the program, before a national roll-out from
Volunteering Australia, the national peak body for the volunteer sector,
expressed concerns about the impact that the proposed changes would have on the
The joint departmental submission stated that there will be minimal impact
on the volunteering sector. The proposed amendments will not prevent any job
seekers from undertaking volunteer work, and new activity requirements for job
seekers aged 60 and over, which also form part of the broader welfare reform
package, can be met entirely through approved volunteer work.
Schedule 10 – Start date for some participation payments
Schedule 10 of the Bill provides that, from 1 January 2018, the starting
date of some income support payments will generally change to align with the
day that a job seeker who is subject to RapidConnect holds their first meeting
with their jobactive or Transition to Work provider.
Organisations representing community service providers expressed concern
that the proposed amendments would impose waiting times on people at a difficult
time and reduce a recipient's first income support payment.
The joint departmental submission stated that the proposed Schedule 10
amendments are intended to encourage those job seekers subject to RapidConnect
to engage with their jobactive or Transition to Work provider as soon as
noting that there is also an obligation on the service providers to have
appointments available for job seekers within two business days.
The EM indicates that the proposed changes will not apply to any job
seekers who are not subject to RapidConnect, and it will not apply to people
who are referred to the Community Development Program (CDP) or Disability Employment
Services. In addition, it will not apply to new apprentices or those
undertaking full time study who claim Youth Allowance.
Schedule 11 – Removal of intent to claim provisions
Schedule 11 of the Bill amends the Social Security (Administration)
Act 1999 to remove intent to claim provisions, which currently enable
social security payment claimants to receive payments from the date of first
contact with the Department of Human Services.
The joint departmental submission stated that the intention of the amendments
is to 'simplify the claim process and encourage social security claimants to
provide timely and complete information in support of claims'.
Some submitters expressed concern at the removal of these provisions,
particularly for people with limited or no access to the internet, or who
otherwise face difficulties in being able to contact the Department of Human
Services or provide all the required documentation in a timely way, through
circumstances beyond their control.
Concern was also raised that removal of intent to claim provisions:
will remove any flexibility for decision makers and it also
fails to recognise that, even with the most intuitive, quick and simple online
system, there will be circumstances where it will be reasonable to backdate payments
to the date an applicant established their entitlement. This capacity should
In evidence, the Department of Human Services made it clear that there
will be scope for discretion where:
someone either can't complete online or has difficulties
associated with, for example, going through a change in personal circumstances
and they don't have the paperwork et cetera, they would be able to contact the
department. The date of claim would still be the date that they contacted the
Some evidence presented to the committee referred to the sometimes
lengthy delays currently experienced by some social security claimants.
In evidence, the Department of Human Services indicated that the proposed
amendments in Schedule 11 will assist to address these delays:
What we believe though is that, for the vast majority of
people who will have the convenience of doing this online and at home, the
ability to supply all their information to complete the claim will assist us
with the processing of the claim and will assist us with giving them a quicker
Schedule 12 – Drug testing trial
The proposed amendments in Schedule 12 introduce a mandatory drug
testing trial from 1 January 2018 in three locations for new Newstart Allowance
and Youth Allowance (other) recipients. In its 2017–2018 Budget information,
the Department of Social Services stated that:
This measure will trial the use of random drug testing in
three locations as a way of better identifying and supporting those with
substance misuse issues... This forms part of a larger measure to better target
assistance activities to jobseekers, including identifying and resolving
barriers to work.
A number of issues were raised in submissions and oral evidence in
relation to the proposed establishment of drug testing trials, including:
a lack of evidence to support the use of drug testing;
the cost, availability and reliability of drug testing;
availability of treatment services to meet potential increased
reliance on delegated legislation to set out significant detail
about the operation of the trial; and
Critics of the introduction of a drug testing trial have stated that
there is no evidence that drug testing will achieve the desired outcome. Submitters
referred to drug testing of welfare recipients introduced in, for example, the
United States of America and New Zealand, where only small numbers of those
tested returned positive test results.
The committee heard that, while information relating to the cost and
detection rates of the New Zealand drug testing program is available,
outcome data is not available.
Similarly, results of drug testing programs in, for example, Florida in the
United States, have focused on the input costs and savings achieved as a result
of the program.
The Department of Social Services noted that the overseas examples of
drug testing 'relate to either penalising people on welfare or preventing them
from obtaining welfare'.
By contrast, the department indicated that the proposed drug testing trial is
assess the value of drug testing as a way of identifying
those for whom drug misuse is a barrier to work, and as a means of supporting
them to undertake treatment...This trial is not about penalising jobseekers with
drug abuse issues. It is about finding new and better ways of identifying these
jobseekers and ensuring they are referred to the support and treatment they
In further evidence, the Department of Social Services stated that the objective
of the drug testing trial is to:
provide the evidence as to whether an additional trigger for
people who are receiving unemployment payments and have substance abuse
problems will encourage them to self-disclose and/or be found to have that
problem and to be quickly linked to treatment.
Drug testing – cost, availability
and reliability of tests and avoidance of detection
Some evidence before the inquiry raised issues in relation to the cost, availability
and reliability of drug testing, depending on which type of test will be used,
and the reliability of testing on its own to identify people with drug
The Department of Social Services indicated that the specific type of
drug testing and the specific drugs to be tested for would be identified in
consultations between the Department of Human Services and the company that
secures the contract to deliver drug testing services.
In relation to the reliability of drug testing to identify and assist people
with drug dependency problems, the Department of Social Services stated that
the trial will focus on the detection of illicit drug use and is one part of a broader
suite of measures being undertaken to assist unemployed people with drug dependence
issues which impact on their ability to obtain employment.
Concerns were raised by some submitters and witnesses about the potential
for welfare recipients to seek to avoid drug use detection by shifting to
unlisted, and possibly more harmful drugs.
The Department of Social Services stated that the avoidance of testing had been
raised by stakeholders, and the department had been unable to find any evidence
of this behaviour occurring in other drug testing trials.
However, the department noted that the consequences of a positive test result
in the proposed trial – income management, referral for medical assessment and
potentially treatment – will be without financial penalty, and therefore 'not a
strong incentive' for people to avoid a positive test result by using drugs
other than those listed for testing.
The Department of Social Services also indicated that a comprehensive
evaluation of the drug testing trial will be conducted in parallel with the
trial, through which the department will be assessing unintended consequences,
'because the whole point of the trial is to have a positive outcome for those
Availability of treatment services
Some submissions have stated that the proposed drug testing will capture
both recreational drug users as well as people with a drug dependence problem,
the impact of which could be increased demand for drug treatment services not
necessarily resourced to meet this demand.
In response to these concerns, the Department of Human Services
indicated that only a second positive drug test would trigger a referral to a
medical professional, who would be an addiction specialist.
The department has estimated that of the 5 000 people to be tested over
the three trial sites, around 420 to 450 people would test positive once and
between 100 and 120 people test positive a second time and be sent for medical
The department believes that this treatment might involve a range of different
services, 'anything from counselling sessions through to, at the most extreme
end, residential rehabilitation'.
Consultations with the Department of Health and other health services
undertaken by the Department of Social Services have indicated that there are
services available for the provision of treatment services.
In addition, the department has:
built into the policy that, if you can't access treatment
immediately, as long as you are committed to undertaking it, you can be managed
until such time as it becomes available.
The Government has also announced a $10 million fund that
will be available to provide additional assistance to drug treatment services
in the three trial sites.
Some submitters raised concerns about the lack of detail in the Bill in
relation to the implementation of the drug testing trial and the reliance on
delegated legislation which had not yet been made publicly available for
consultation and comment.
The Department of Social Services tabled an exposure draft of the Social
Security (Drug Test) Rules 2017 at the committee's public hearing on 30 August
2017 in Sydney.
The rules cover the following aspects of the drug testing trial:
up to 3 discrete areas for the purposes of the definition of drug test trial
area in subsection 23(1);—
substances for the purposes of the definition of testable drug in subsection
and taking samples of persons' saliva, urine or hair for use in drug tests;
- dealing with such samples;
- carrying out drug tests;
results of drug tests in certificates or other documents and the evidentiary
effect of those certificates or documents;
- confidentiality and disclosure of results of drug
relating to contracts entered into for the carrying out of drug tests;
- keeping and
destroying records relating to:
- samples for use in
drug tests; or
- drug tests.
The joint departmental submission indicated that there will be
consultation with the contracted testing provider and key stakeholders in the
drug and alcohol sector on the exposure draft of the drug testing rules, and
that this expert advice would be taken into account.
Some submitters raised issues in relation to the potential impacts on
some income support recipients who would be placed on income management
following a positive drug test result.
The Commonwealth Ombudsman and the Western Australian Network of Alcohol
and Other Drug Agencies (WANADA) made reference to proposed subsection
123UFAA(1C) which provides that the Secretary may determine that a
person will not be subject to income management where it will pose a serious
risk to the person's mental, physical or emotional wellbeing.While
WANADA strongly supports this provision, the Commonwealth Ombudsman recommends
that participants be made aware of the right to request an exclusion from
Further, the Ombudsman referred to the proposed new subsection
123UFAA(1D), which provides that the Secretary has no duty to consider whether
to make a determination under subsection 123UFAA(1C).
Concern in relation to the interaction of these two provisions was also raised
by the Senate Standing Committee on the Scrutiny of Bills and referred for
advice to the Minister for Social Services.
In his response, the Minister agreed to amend new subsection 123UFAA(1C) of the
Bill, so that the Secretary 'will', rather than 'may', determine that a person
is not subject to the income management regime where being subject to the
regime would pose a serious risk to the person's mental, physical or emotional
Schedules 13 and 14 – Removal of exemptions for drug or alcohol dependence
and Changes to reasonable excuses
Schedule 13 of the Bill introduces amendments that limit the ability of
income support recipients to access exemptions from mutual obligation
requirements due to drug and alcohol dependence.
Schedule 14 provides for the Secretary to make rules setting out what
cannot be taken into account in deciding whether a recipient has a reasonable
excuse for breaching a mutual obligation requirement – the EM indicates that this
would be used to prevent recipients from using drug or alcohol abuse or
dependency more than once where that person has chosen not to engage in
Some submitters argued against removing exemptions and limiting access
to reasonable excuses due to drug or alcohol misuse from activity tests or
other forms of mutual obligation.
These submitters stated that drug and alcohol dependence is a health problem,
and should be dealt with in the same manner as other health conditions.
The joint departmental submission provided evidence that the number of
job seekers being exempted from mutual obligation requirements due to drug and
alcohol dependency 'has nearly doubled over the last five years, from 2,920 in
September 2011 to 5,256 in September 2016'.
In addition, the submission stated that:
In 2016, 2,258 people tried to use drug and alcohol issues as
a reasonable excuse for not meeting their mutual obligations on 4,325
occasions. In 1,351 cases 720 job seekers had their drug or alcohol dependency
accepted as a reasonable excuse for not meeting their mutual obligations. In
addition, the number of accepted reasonable excuses due to drug or alcohol
dependency in 2016 was over twice the 2015 level (1,351 compared to 637).
The Minister's second reading speech outlined the rationale for the proposed
changes under schedules 13 and 14 of the Bill:
Jobseekers who are no longer eligible for an exemption will
instead remain connected to their employment service provider and actively
engaged in appropriate activities tailored to their particular circumstances
and barriers to work, including their substance misuse issues.
In addition, the Minister referred to other measures to be implemented
which would complement the measures contained in the Bill, including that, for
the first time, ' all jobseekers are able to undertake drug or alcohol
treatment as an approved activity in their job plan'.
Broad powers delegated to the
A number of submissions have expressed concern at the proposed inclusion
of Section 28C in the Social Security Act 1991 which provides a broad
power for the Secretary to determine by legislative instrument 'declared
program participants' and to modify how social security law will apply to people
The EM states that the intention is to prevent participants from certain
employment services programs, including CDP, from being subject to the removal
of exemptions for drug and alcohol dependence.
However, as was pointed out by the Human Rights Law Centre in its
the exceptionally broad power given to the Secretary in
proposed section 28C to determine who 'declared program participants'
are and how the social security law applies to them goes far beyond what
is necessary to achieve the stated purpose of excluding CDP participants from
these measures. More fundamentally, it is a power to modify how social security
rights and obligations apply, not only to CDP participants, but to other
classes of people whom the Federal Government may decide in the future should
have different entitlements or be subject to different conditions under social
The Department of Social Services stated in evidence that Section 28C
was drafted as such based on advice that this would avoid the necessity to
amend the primary legislation should the name of the program change, indicating
that 'it would be possible to narrow that without changing the intent. The
intent is just that CDP be excluded'.
Schedule 15 – Targeted compliance framework
The changes to the compliance framework in schedule 15 include the
introduction of graduated sanctions for failure to meet mutual obligation
requirements. This seeks to address some deficiencies in the existing framework
which can 'unnecessarily penalise' some job seekers, while not addressing ongoing
failures of some recipients to satisfy their mutual obligations.
All job seekers, with the exception of CDP participants, will be subject to the
new compliance system.
In his second reading speech, the Minister for Social Services stated
The new targeted framework is designed to change the
behaviour of non-genuine jobseekers, while supporting the majority of
jobseekers who are absolutely genuine in their efforts to find work.
Some submitters indicated support for the some aspects of this measure,
in so far as it will address deficiencies within the existing compliance system.
However, concerns were raised in relation to the introduction of non-waivable
The joint departmental submission states that of the estimated 1.22
million job seekers per annum who will be subject to the new framework, around
1.14 million job seekers will experience more streamlined administration and face
no financial penalties. The joint submission estimates that around 83 000 job
seekers may receive financial penalties in the first year, ranging from the
loss of one week's income support to payment cancellation lasting four weeks.
However, the Minister for Social Services has stated that there will be
a number of points at which an individual's circumstances and the reasons for
non-compliance with an obligation can be reviewed and assessed prior to any
financial penalty being imposed: 'No penalty will be applied to any jobseeker if
they have a reasonable excuse for any failure to observe a mutual obligation'.
The committee notes the views expressed by stakeholders in support of
the core principles underlying the Bill: simplification and streamlining of the
administration of the welfare system, providing earlier and more targeted
support to working age job seekers in need of assistance, and improving the
targeted compliance framework.
The committee acknowledges the Government's intention to promote ready
access to support and assistance for people who are seeking work or who are temporarily
unable to work. In particular, the committee notes the amendments that will
provide for more efficient processing of income support claims and other
aspects of social security administration, and the amendments that will enable
mature age job seekers to access the targeted support available.
The committee also notes that concerns have been raised in relation to
specific aspects of the Bill, particularly in relation to the drug testing
The committee acknowledges that, in evidence, the Departments of Social
Services, Employment and Human Services have indicated that many of the
concerns raised will be addressed in the consultations currently under way, in
particular in relation to the drug testing trial. The release of the exposure
draft of the drug testing rules for consultation during this inquiry is a
measure of the departments' intention to engage with stakeholders to address
issues raised through this inquiry.
The committee further notes the undertaking by the Minister to amend
certain aspects of the Bill in relation to protecting the wellbeing of
participants in the drug testing trial.
While acknowledging the concerns raised by submitters and witnesses, the
committee considers that both the Minister and the responsible departments have
indicated a willingness to review aspects of the reforms, where issues have
been identified during stakeholder consultations.
The committee considers the proposed reforms will create a simpler, more
efficient and better targeted welfare system. The changes will provide an
opportunity to trial and evaluate a new way to assist people who are facing
specific challenges in entering or re-entering the workforce.
The committee recommends that the Bill be passed.
Senator Slade Brockman
Navigation: Previous Page | Contents | Next Page