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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
SOCIAL SECURITY (ADMINISTRATION) AMENDMENT (CONSUMER LEASE
EXCLUSION) BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by authority of the Hon. Senator Doug Cameron)
SOCIAL SECURITY (ADMINISTRATION) AMENDMENT (CONSUMER LEASE
EXCLUSION) BILL 2015
OUTLINE
The purpose of the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill
2015 is to amend the Social Security (Administration) Act 1999 to provide that consumer leases are
excluded goods for the purposes of Part 3B of the Act.
The Bill is needed to remove the potential for Centrelink clients and participants in the income
management regime under Part 3B of the Act to suffer financial harm as a result of entering into one
or more consumer leases for household goods for which income management measures, including
Centrepay deductions, are available.
The main provisions of the Bill will make consumer leases an excluded good for the purposes of
Part 3B of the Act.
Centrepay was established in 1998 as a budgeting and financial capability tool to assist Centrelink
clients by paying rent and utility bills through automatic deductions from their welfare payments.
More than 600,000 people use Centrepay to pay bills, rent and ongoing expenses.
However, Centrepay has been open to access by businesses whose products, particularly consumer
leases, which disadvantage consumers and have the potential to cause financial harm. Consumer
leases can lead to people typically paying three times and up to seven times the normal retail price
for common household goods obtained under a consumer lease.
Centrepay was established to enable people to budget and ensure that regular bills and essential
living expenses are paid directly from their welfare payment or pension payment. The proliferation
of consumer leasing businesses as approved Centrepay service providers is contrary to the policy
rationale for Centrepay. It indicates that Centrepay is being used for the benefit of commercial
interests, rather than the interests of Centrelink clients making the payments.
NOTES ON CLAUSES
1. Short Title
This clause is a formal provision and specifies the short title of Bill, once enacted, as the Social
Security (Administration) Amendment (Consumer Leases Exclusion) Act 2015.
2. Commencement
This clause provides for the commencement of the Act. Sections 1 to 3 commence on the day the
Act receives the Royal Assent. Schedule 1 commences on the day after it receives the Royal Assent.
3. Schedules
This clause states that each Act specified in a Schedule to the Bill is amended or repealed according
to the provisions of the Bill.
Schedule 1 - Amendments to the Social Security (Administration) Act 1999
Item 1
This item amends section 123TC of the Act to provide a definition of consumer lease.
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A consumer lease means a contract for the hire of goods by a natural person or strata
corporation under which that person or corporation does not have a right or obligation to
purchase the goods.
Item 2
This item amends subsection 123TI(1) of the Act to provide that consumer leases are excluded
goods for the purposes of Part 3B of the Act.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015
This 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.
Overview of the Bill
The purpose of the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill
2015 is to amend the Social Security (Administration) Act 1999 to provide that consumer leases are
excluded goods for the purposes of Part 3B of the Act.
The Bill is needed to remove the potential for Centrelink clients and participants in the income
management regime under Part 3B of the Act to suffer financial harm as a result of entering into one
or more consumer leases for household goods for which income management measures including
Centrepay deductions are available.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Conclusion
This 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.
Senator the Hon. Doug Cameron
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