Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY AND FAMILY ASSISTANCE LEGISLATION AMENDMENT (WEEKLY
PAYMENTS) BILL 2010
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families, Housing, Community Services and Indigenous Affairs,
the Hon Jenny Macklin MP)
SOCIAL SECURITY AND FAMILY ASSISTANCE LEGISLATION AMENDMENT (WEEKLY
PAYMENTS) BILL 2010
OUTLINE
This bill gives effect to an important element of the Australian
Government's strategy for addressing homelessness, announced in its White
Paper, The Road Home: a National Approach to Reducing Homelessness, which
was released in December 2008.
This measure enables weekly payments for a 'class of persons' who receive a
social security periodic payment, family tax benefit or baby bonus and is
intended to include people who are assessed as being vulnerable, such as
those who are homeless or at risk of homelessness.
This bill provides for weekly payments under the Social Security
(Administration) Act 1999 to come into effect on the commencement of the
legislative instrument defining 'vulnerable customers'.
This legislation also updates the A New Tax System (Family Assistance)
(Administration) Act 1999 to enable the Government to introduce weekly
payments for family tax benefit and baby bonus payments at a later date if
evaluation of the social security measure indicates that extension of
weekly payments to this customer group is warranted.
Minor technical corrections are also being made.
Financial impact statement
In fiscal balance terms, there are no administered costs for this
initiative. Departmental costs will be absorbed within existing resources
by the responsible departments.
SOCIAL SECURITY AND FAMILY ASSISTANCE LEGISLATION AMENDMENT (WEEKLY
PAYMENTS) BILL 2010
NOTES ON CLAUSES
Clause 1 sets out how the Act is to be cited, that is, as the Social
Security and Family Assistance Legislation Amendment (Weekly Payments)
Act 2010.
Clause 2 provides that the Act commences on the day on which it receives
the Royal Assent.
Clause 3 provides that each Act that is specified in a Schedule is amended
or repealed as set out in that Schedule.
This explanatory memorandum uses the following abbreviations:
. 'Acts Interpretation Act' means the Acts Interpretation Act 1901;
. 'Family Assistance Administration Act' means the A New Tax System
(Family Assistance) (Administration) Act 1999;
. 'FTB' means family tax benefit;
. 'Social Security Act' means the Social Security Act 1991; and
. 'Social Security Administration Act' means the Social Security
(Administration) Act 1999.
Schedule 1 - Weekly payments
Summary
This Schedule enables weekly payments for a 'class of persons' who receive
a social security periodic payment, FTB or baby bonus and is intended to
include people who are assessed as being vulnerable, such as those who are
homeless or at risk of homelessness.
Background
The Australian Government's White Paper, The Road Home: a National Approach
to Reducing Homelessness, was released in December 2008. As part of the
strategy for addressing homelessness, this measure introduces weekly
payments of social security periodic payment, FTB and baby bonus for a
'class of persons' intended to include people who are assessed as being
vulnerable, such as those who are homeless or at risk of homelessness.
In relation to family assistance, if an individual makes an effective claim
for FTB by instalment and is eligible for the payment, the Secretary is
required to make an entitlement determination under section 16 of the
Family Assistance Administration Act. The rules for paying FTB by
instalment are in section 23. The usual rule is that the Secretary must,
after each instalment period after the claim is determined, pay an
instalment amount to the claimant at such time as the Secretary considers
appropriate and into a relevant bank account. An 'instalment amount' is
the amount accruing for the days in the instalment period for which a
claimant is entitled to be paid FTB, and, prior to these amendments, by
definition, an 'instalment period' was 14 days.
Prior to these amendments, there was some capacity in section 23 to change
the day on which an instalment period began and to pay an instalment
earlier than it would otherwise have been paid (for example, when the usual
payday is a public holiday). However, there was no capacity in section 23
to adopt a weekly payment cycle for certain groups of customers under
family assistance law. The amendments enable FTB to be paid on a weekly
basis to vulnerable individuals, including customers who are homeless.
The payment rules for baby bonus are set out in section 47 of the Family
Assistance Administration Act. The usual rule is that the Secretary must,
after each of the first 13 instalment periods after the claim is
determined, pay to the claimant 13 equal instalments of baby bonus.
Prior to these amendments, there was some capacity in section 47 to change
the day on which a baby bonus instalment period began and to determine an
alternative payment arrangement in specific circumstances. However, there
was no capacity in section 47 to adopt a weekly payment cycle for certain
groups of customers. The amendments enable baby bonus to be paid on a
weekly basis for 26 weeks to vulnerable individuals.
For social security, section 43 of the Social Security Administration Act
provides for social security periodic payments to be paid to social
security recipients in arrears and in instalments of not more than 14 days,
as determined by the Secretary. Currently, in most cases, social security
payments are paid in arrears in respect of a 14-day instalment period. On
its face, the legislation is unclear on the extent of the Secretary's
discretion to determine that more than one payment can be made in respect
of an instalment period. This Schedule clarifies that social security
periodic payments may be paid on a weekly basis in respect of a 14-day
instalment period to vulnerable individuals, including customers who are
homeless or at risk of homelessness.
The Minister has the power to determine, by legislative instrument, the
class of persons to whom the weekly payment cycle could apply. It is
expected that the instrument would cover vulnerable people, including those
who are homeless and those at risk of becoming homeless. Other classes of
vulnerable people might also be covered. The Secretary will then determine
whether a particular person who is within that class of persons should be
paid weekly.
In practice, weekly payments will only be offered after discussion with the
person concerned. At that time, the person might also be offered or
maintain access to other relevant services aimed at stabilising and
improving their financial situation. It may be that weekly payments start
as soon as practicable after the person is identified as coming within the
class of persons specified by the Minister (for the purposes of family
assistance payments, the seven-day instalment period could start from the
day after the date paid) or at a later time. There would need to be some
flexibility in the timing of when a person is moved to being paid weekly.
The changes will apply to people who claim family assistance and social
security payments in future, as well as people who are already receiving
family assistance and social security payments.
The amendments made by this Schedule commence on Royal Assent.
Explanation of the changes
Part 1 - Family assistance
Division 1 - Family tax benefit
Amendments to the Family Assistance Administration Act
Item 1 amends subsection 22(1). Section 22 provides that the Secretary
must give notice of determination of a claim to the claimant. However,
this amendment, which inserts the words 'except subsection 23(3B)', means
that the Secretary does not have to give the claimant notice of a
determination that the claimant is of a class of persons who have a seven-
day instalment period.
Item 2 repeals and substitutes the definition of instalment period to allow
that an instalment period may be either 14 days or, for certain classes of
persons, seven days.
Item 3 inserts new subsections (3A), (3B), (3C) and (3D) at the end of
section 23. The effect of these subsections is to set out the people who
will have seven-day instalment periods. Subsection (3A) provides that the
Minister may, by legislative instrument, specify a class of persons whom
the Secretary may determine to have seven-day instalment periods.
Under subsection (3B), the Secretary then has the discretion to determine
whether a particular claimant who is a member of a class of persons
specified under a legislative instrument made by the Minister has a seven-
day instalment period.
Subsection (3C) provides that the Secretary must revoke a determination
under subsection (3B) if the Secretary is satisfied that the person is no
longer a member of the class of persons specified in subsection (3A).
However, subsection (3D) provides that subsection (3C) does not affect the
operation of subsection 33(3) of the Acts Interpretation Act. Subsection
33(3) of the Acts Interpretation Act provides that, where an Act confers a
power to make, grant or issue any instrument (including rules, regulations
or by-laws), the power shall, unless the contrary intention appears, be
construed as including a power exercisable in the like manner and subject
to the like conditions (if any) to repeal, rescind, revoke, amend, or vary
any such instrument. This means that the Secretary has the discretion to
revoke a determination made under subsection (3B) for reasons other than
that the claimant is no longer a member of a class of persons specified
under subsection (3A).
Item 4 inserts new subsections at the end of section 25. Section 25
obliges a claimant who is entitled to be paid family assistance to notify
the Secretary of any change of circumstances that has occurred or is likely
to occur which will result in the claimant being eligible for a rate of FTB
less than that specified in the determination relating to the claimant.
Failure to do so is an offence.
New subsection (3) extends this obligation and requires a claimant who has
a 7-day instalment period to notify the Secretary of anything that causes
the claimant to cease to be a member of the class of persons specified
under subsection 23(3A). However, because the change in circumstances only
affects the claimant's instalment period and not the claimant's rate of
payment, failure to notify the Secretary is not an offence.
New subsection (4) provides that a claimant may be in the situation where
his or her change of circumstances will result in the claimant being
eligible for a rate of FTB less than that specified in the determination
and result in the claimant not being a member of the class of persons who
may be paid in seven-day instalments. In that case, the claimant is
obliged under subsection (3) alone to notify of the circumstances which
will lead to the claimant being eligible for a lower rate of FTB.
Division 2 - Baby bonus: main amendment
Amendments to the Family Assistance Administration Act
Item 5 repeals and substitutes section 47. Prior to these amendments,
section 47 set out how baby bonus and maternity immunisation allowance is
paid. However, new section 47 only deals with payment of baby bonus;
payment of maternity immunisation allowance is dealt with in new
section 47AA. Subsection (1) continues the present arrangement for payment
of baby bonus, which is that it is to be paid in 13 fortnightly
instalments. Similarly, subsections (4) to (7) and (12) continue existing
arrangements relating to payment of baby bonus, such as payment to a bank
account.
However, subsection (2) provides that, if the Secretary determines that the
claimant has a weekly instalment period and makes that determination before
the end of what would be the claimant's first fortnightly instalment period
for payment of baby bonus, the Secretary must pay the claimant in 26 weekly
instalments.
Subsections (8) and (9) set out persons who may have weekly instalment
periods. Subsection (8) provides that the Minister may, by legislative
instrument, specify a class of persons whom the Secretary may determine to
have weekly instalment periods. Under subsection (9), the Secretary then
has the discretion to determine whether a particular claimant who is a
member of a class of persons specified in a legislative instrument made by
the Minister has weekly instalment periods.
Subsection (10) provides that the Secretary must revoke a determination
under subsection (9) if the Secretary is satisfied that the person is no
longer a member of the class of persons specified in subsection (8).
However, subsection (11) provides that subsection (10) does not affect the
operation of subsection 33(3) of the Acts Interpretation Act. Subsection
33(3) of the Acts Interpretation Act provides that, where an Act confers a
power to make, grant or issue any instrument (including rules, regulations
or by-laws), the power shall, unless the contrary intention appears, be
construed as including a power exercisable in the like manner and subject
to the like conditions (if any) to repeal, rescind, revoke, amend, or vary
any such instrument. This means that the Secretary has the discretion to
revoke a determination made under subsection (9) for reasons other than
that the claimant is no longer a member of a class of persons specified
under subsection (8).
New subsection (3) continues the Secretary's current ability to direct that
the whole or a part of an amount is to be paid in a way other than
fortnightly instalments. However, it extends this arrangement to weekly
instalments and allows the Secretary to determine that a person is to
switch from fortnightly instalments to weekly instalments and vice versa.
Subsection (13) defines the terms 'fortnightly instalment period',
'instalment period' and 'weekly instalment period'.
Item 5 also inserts new sections 47AA and 47AB. New section 47AA sets out
how maternity immunisation allowance is paid and continues existing
arrangements relating to payment of maternity immunisation allowance.
New section 47AB sets out other rules about payment of baby bonus and
maternity immunisation allowance dealing with rounding of payments
(subsection (1)) and the relationship of sections 47 and 47AA with other
provisions (subsection (2)). These subsections continue existing
arrangements.
Division 3 - Baby bonus: related provisions
Amendments to the Family Assistance Act
Item 6 changes a reference in subparagraph 38(c)(ii) from
subsection 47(1AA) of the Family Assistance Administration Act to
subsection 47(1), (2) or (3). This change is consequential on the changes
set out in item 5 above.
Item 7 sets out application arrangements. It provides that people who have
already been determined to be eligible for baby bonus or maternity
immunisation allowance may be subject to the new payment arrangements set
out in these amendments.
Item 8 sets out transitional arrangements. Subitem (1) provides that the
Secretary may give a direction under new subsection 47(3) in relation to a
claimant who has been determined before the commencement of these
amendments to be entitled to be paid baby bonus, and who has been
determined to have weekly instalment periods. This means that the
Secretary may determine that payment of baby bonus to a person is to switch
from fortnightly instalments to weekly instalments.
Subitem (2) provides that subparagraph 38(c)(ii) of the Family Assistance
Act applies from the commencement of these amendments as if a reference to
subsection 47(1)(2) or (3) of the Family Assistance Administration Act
included a reference to:
a) subsections 47(1AA) or (4A) of that Act as in force immediately before
commencement; and
b) subsections 47(1A), (2), (3) or (5) of that Act as in force
immediately before 1 January 2009.
Paragraph (a) is to ensure that eligibility for unpaid amounts of baby
bonus if a carer dies continues if the amount paid before death was paid
under the payment provisions in force before the commencement of these
amendments.
Paragraph (b) is similar to paragraph (a), but relates to the situation
where the amounts paid before death were paid under the payments provisions
in force before 1 January 2009.
Subitem (3) provides that a direction made under certain subsections of
section 47 which were in force immediately prior to the commencement of
these amendments has effect as if it were a direction made under certain
subsections of section 47 as in force from the commencement of these
amendments. This recognises that many subsections of section 47 have
remained the same but have been renumbered.
Part 2 - Social security
Division 1 - Main amendment
Amendments to the Social Security Administration Act
Item 9 inserts new subsections 43(3A) to 43(3F) after subsection 43(3) of
the Social Security Administration Act. These new subsections provide for
weekly payments of a person's social security periodic payment to be paid
in respect of a 14-day instalment period.
Subsection 43(3A) provides that the Secretary may determine that the total
amount of a person's social security periodic payment, in respect of a 14-
day instalment period (determined under subsection 43(1)), is to be paid to
the person in two payments (the part payments). Part payments made under
this subsection may only be made to a person who is a member of a class
specified under new subsection 43(3B).
Subsection 43(3B) provides that the Minister may specify, by legislative
instrument, a class of persons, for the purposes of subsection 43(3A). It
is intended that, where a class has been specified by the Minister, the
discretion to pay a person's social security periodic payment in weekly
payments should not be exercised more broadly than the class that has been
specified.
Subsection 43(3C) provides a number of requirements in relation to the
first of the part payments made to a person in respect of a 14-day
instalment period. The amount of the first part payment is not to exceed
the total of the amounts of the social security periodic payment that is
expected to be payable to the person for those days on which the social
security periodic payment was payable to the person that fall within the
first seven days of the 14-day instalment period.
The Secretary has the discretion to pay the first part payment at any time
after the first seven days of the instalment period. That is, the first
part payment may be paid at any time from day 8 of the instalment period.
The amount of the social security period payment is calculated according to
the daily rate of payment expected to be applicable to each day, subject to
subsections 43(4) and 43(5A).
Section 43(3D) provides for the second part payment in respect of a 14-day
instalment period. The amount of the second part payment is the total
amount of the person's social security periodic payment that is payable for
the instalment period (as determined under subsection 43(3)) less the
amount of the first part payment that the person has already received in
respect of the 14-day instalment period.
The amount of the second part payment is to be paid at a time which is
determined by the Secretary that is after the end of the 14-day instalment
period. That is, the second part payment may be paid at any time from
day 15 in relation to the 14-day instalment period.
The amount of the social security period payment is calculated according to
the daily rate of payment applicable to each day, subject to subsections
43(4) and 43(5A).
The amounts of the payments calculated in respect of a 14-day instalment
period under subsections 43(3C) and (3D) may be calculated on the basis of
information in Centrelink's possession at the time of the calculation. It
may subsequently need to be adjusted if Centrelink receives further
information that could alter the amount of the social security periodic
payment, for example, that the social security recipient earned income
during the instalment period. If this is the case, this 'new' information
should not invalidate the payment that was made to the person. Adjustments
will be made at the time of the second part payment in respect of the 14-
day instalment period.
Subsection 43(3E) deems that, if the person is, or is to be, paid the total
amount of the social security periodic payment in part payments in respect
of a 14-day instalment period, then it is taken for the purposes of the
social security law that:
. a single instalment of the social security periodic payment is, or is
to be, paid in respect of the instalment period; and
. that instalment is, or is to be, paid when the final of the part
payments is, or is to be, made; and
. that instalment is equal to the total of the part payments.
This subsection ensures that those provisions under the social security law
which do not support the concept of weekly payments being made for an
instalment period or assume that there will only be one single payment in
respect of an instalment period continue to apply as originally intended.
That is, if a person receives two weekly payments in respect of a 14-day
instalment period, these payments are taken to be one instalment of the
person's social security payment and are both taken to be made (as one
combined payment) on the day the final instalment in relation to that
particular instalment period is made.
The note to subsection 43(3E) clarifies that the total of the part payments
should equal the amount of a person's social security periodic payment as
worked out under subsection 43(3) (as affected by subsection 43(4), if
relevant), which is the amount that is paid to the person as an instalment
of the social security periodic payments in respect of the instalment
period.
Subsection 43(3F) is also a deeming provision, which provides that each
part payment, made in respect of an instalment period, is taken to be a
separate instalment for the purposes of section 61, Division 5 of Part 3B
and subsection 238(2) of the Social Security Administration Act (which
relate to deductions from instalments).
This subsection ensures that deductions may be made from weekly payments
that are made in respect of an instalment period. For example, if weekly
payments are taken to be made on the day the final instalment is made in
respect of an instalment period (which is the intention of new
subsection 43(3D) above), there may be some doubt that deductions could be
made from payments that are, in practice, made prior to that final
instalment. This type of narrow interpretation could result in the total
amount of the deduction that is made from a person's social security
periodic payment being deducted from the final instalment, rather than from
each part payment made in respect of an instalment period.
Notes 1 to 5 insert headings to subsections 43(1), 43(2), 43(3), 43(5A) and
43(6) respectively.
Division 2 - Consequential amendments
Amendments to the Social Security Act
Item 10 adds a note at the end of the definition of 'payday' in
subsection 23(1) of the Social Security Act. The note signposts to the
reader that subsection 43(3E) affects the application of when an instalment
is, or would normally be, paid to a person if the Secretary has made a
determination under subsection 43(3A) that the person's social security
period payment is to be paid in two part payments in respect of a 14-day
instalment period. Under subsection 43(3E), the total amount of the social
security periodic payment in respect of an instalment period is taken to be
paid when the final part payment is made.
Amendments to the Social Security Administration Act
Item 11 adds a note at the end of the definition of 'instalment' in
subsection 54(1) of the Social Security Administration Act. The note
signposts to the reader that subsection 43(3E) affects the meaning of an
instalment of social security period payment if the Secretary has made a
determination under subsection 43(3A) that the person's social security
period payment is to be paid in two part payments in respect of a 14-day
instalment period. Under subsection 43(3E), the total amount of the social
security periodic payment in respect of an instalment period is taken to be
paid when the final part payment is made.
Schedule 2 - Technical corrections
Summary
This Schedule makes minor technical corrections which are unrelated to the
main part of the bill.
Background
This measure makes minor technical amendments to section 43 of the Social
Security Administration Act, which correct cross-references to provisions
in the Social Security Act.
The amendments made by this Schedule commence on Royal Assent.
Explanation of the changes
Amendments to the Social Security Administration Act
Item 1 makes a minor technical correction to paragraphs 43(4)(c) and
(5A)(a) of the Social Security Administration Act by inserting 'of the 1991
Act' after the reference to 'subsection 1061VA(1)' of the Social Security
Act.
Item 2 makes a minor technical correction to subsection 43(5A) of the
Social Security Administration Act by inserting 'of the 1991 Act' after the
reference to 'subsection 1210(3)' of the Social Security Act.