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2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT
(SUPPORTING THE TRANSITION TO WORK) BILL 2023
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Amanda Rishworth MP)
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT
(SUPPORTING THE TRANSITION TO WORK) BILL 2023
OUTLINE
This Bill amends the Social Security Act 1991, Veterans' Entitlements Act 1986 and
the family assistance law to encourage and support social security and
veterans' entitlement recipients to engage in paid employment. To achieve this, the
Bill amends relevant legislation to make changes to the pension work bonus scheme
and expand access to the employment income nil rate period, as well as extending the
length of the employment income nil rate period where it applies.
The Bill will enable eligible social security pensioners over age pension age and
certain veterans' entitlement recipients over qualifying age to earn up to $4,000 before
the income test is applied and their payments are affected. This will occur through a
$4,000 increase in the work bonus unused concession balance for all newly
commencing eligible recipients. Further, the current temporary $4,000 increase to the
maximum unused concession balance, from $7,800 to $11,800, will be available to all
eligible pensioners on an ongoing basis.
The Bill will also enable eligible social security recipients, including recipients who take
up full-time work, to benefit from an extended employment income nil rate period of 24
weeks under the Social Security Act 1991. This will allow more recipients to continue
to access supplementary benefits, such as concession cards and additional child care
subsidy, where their own and/or their partner's income (including some employment
income) is above the relevant income limit, for a longer period. Recipients will also
have an extended period in which their payment can be easily restored if they lose
their job or report a fall in income that results in their payment becoming payable again.
These measures are not only beneficial over the long term, but are of importance in
the current economy. Specifically, these measures will encourage workforce
participation, which may assist in addressing current skills and labour shortages.
Financial impact statement
The measure in this Bill is part of MYEFO 2023-2024. The legislative component has
financial impact as follows:
o Amendments to increase the pension work bonus income bank:
$42.4 million (indicative cost) over the forward estimates from 2023-24.
o Amendments to increase the employment income nil rate period:
$42.8 million over the forward estimates from 2023-24.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
explanatory memorandum.
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT
(SUPPORTING THE TRANSITION TO WORK) BILL 2023
NOTES ON CLAUSES
Abbreviations and acronyms used in this explanatory memorandum
• ACCS means additional child care subsidy;
• CCS means child care subsidy;
• Family Assistance Act means the A New Tax System (Family Assistance) Act
1999;
• Family Assistance Administration Act means the A New Tax System
(Family Assistance) (Administration) Act 1999;
• Social Security Act means the Social Security Act 1991;
• Veterans' Entitlements Act means the Veterans' Entitlements Act 1986.
Section 1 sets out how the new Act is to be cited, that is, as the Social Security and
Other Legislation Amendment (Supporting the Transition to Work) Act 2023.
Section 2 provides a table setting out the commencement dates of various sections
in, and Schedules to, the new Act. The table specifies that sections 1 to 3, and any
other part of the Act not elsewhere covered by the table, commence the day after the
Act receives the Royal Assent.
Schedule 1 of the new Act (dealing with the pensioner work bonus) is to commence
on 1 January 2024, and Schedule 2 of the new Act (dealing with extending the
employment income nil rate period) is to commence on 1 July 2024.
Section 3 provides that legislation that is specified in a Schedule to this new Act is
amended or repealed as set out in that Schedule, and any other item in a Schedule
has effect according to its terms.
Schedule 1 - Pensioner work bonus
Summary
This Schedule will enable eligible social security pensioners over age pension age,
and certain veterans' entitlement recipients over qualifying age, to benefit from a
$4,000 work bonus concession balance on commencement, and a permanent
increase to the maximum concession balance they can accrue. These amendments
will support pensioners who wish to re-enter the workforce or increase their work
hours, as they will enable pensioners to earn more before the pension income test is
applied, and their payments affected.
Background
The work bonus applies to age pension, disability support pension and carer payment
recipients who take up work or continue working beyond age pension age, and certain
veterans' entitlement recipients who take up or continue working beyond qualifying
age. Under the work bonus, the first $300 of work income each fortnight is disregarded
from the pension income test. Unused amounts of the $300 income concession
accumulate each fortnight in an "unused concession balance", or "income bank", to a
maximum of $7,800. The amendments made by this Schedule will not affect the
existing application of the $300 fortnightly income concession.
This Schedule will provide $4,000 to the unused concession balance of all new eligible
payment recipients on commencement. This means that each new eligible recipient
will be able to have an extra $4,000 of income from work immediately disregarded
from the income test, rather than having to start with a nil balance and accumulate the
balance over time. Providing new recipients with a starting balance of $4,000 removes
the need for them to build up their balance from $0 and ensures they are in a position
to immediately engage in employment without impacting their payment. From 1 July
2024, eligible recipients will be able to receive a "top-up" payment to a maximum of
$4,000 once every two years.
Further, this Schedule will permanently increase the maximum unused concession
balance from $7,800 to $11,800. Section 1073AC of the Social Security Act and
section 46ACA of the Veterans' Entitlements Act have temporarily provided for this
higher maximum of $11,800, but this is specified to end after 31 December 2023.
These amendments will ensure that eligible recipients can continue to accrue a higher
concession balance of up to $11,800 beyond 31 December 2023.
Explanation of the changes
Social Security Act 1991
Item 1 repeals subsection 1073AB(1) of the Social Security Act and inserts new
subsections 1073AB(1), (1A), (1B), (1C) and (1D).
New subsection 1073AB(1) provides that if a person has an unused concession
balance immediately before 1 January 2024, that balance is retained on
1
1 January 2024. This includes all existing unused concession balances, including
where a person has a balance of nil or a retained balance under new
subsection 1073AB(3). New subsection 1073AB(3) provides that a person who has
ceased to be part of the work bonus scheme because they ceased to receive their
pension will retain the unused concession balance they had immediately prior to
cessation. Referring to retained balances under new subsection 1073AB(1) ensures
that everyone who benefited from the temporary increase under section 1073AC,
including people who have at some time in the past participated in the work bonus
scheme but ceased to receive their pension on or before 31 December 2023, will retain
their increased balance from 1 January 2024.
It is intended that there will be no reduction to pre-existing unused concession
balances on 1 January 2024 as a result of this Schedule, and that all previous balances
from immediately before that date will be carried across on commencement of these
amendments.
New subsection 1073AB(1A) provides that on the first day that is on or after 1 January
2024 and is a day on which section 1073AA applies to the person, the person's initial
unused concession balance will be $4,000. That is, new pensioners to whom the work
bonus provisions have not previously applied, will be provided with an immediate
work bonus balance of $4,000 upon commencement, and they will not need to accrue
this amount over time.
New subsection 1073AB(1B) provides that subsection 1073AB(1A) does not apply on
a day if the person has an unused concession balance immediately before that day.
This includes unused concession balances of nil ($0), and retained balances under
subsection 1073AB(3). This provision is intended to ensure that the $4,000 starting
work bonus balance in subsection 1073AB(1A) is only available to eligible new
pensioners, and not those to whom the work bonus provisions have applied previously.
However, all pensioners who have a retained work bonus balance under the temporary
measure, that is carried over on 1 January 2024, have already received $4,000 to their
work bonus balance in accordance with section 1073AC as in force immediately before
this Schedule commences.
New subsection 1073AB(1C) provides for an increase of up to $4,000 in some
circumstances. Where a person ceases to receive their pension and retains an
unused concession balance (referred to as "the old balance", being a balance that is
retained in accordance with subsection 1073AB(3)) of less than $4,000, then on a day
that section 1073AA applies to the person again (on or after 1 July 2024), the person's
unused concession balance is increased by an amount equal to the difference
between their old balance and $4,000. That is, the pensioner's unused concession
balance will be increased by up to $4,000, to a balance of $4,000.
However, this increase of up to $4,000 (which only becomes available from 1 July
2024) is not available to pensioners if they have either received an initial balance of
$4,000 under subsection 1073AB(1A), or previously received an increase of up to
$4,000 under subsection 1073AB(1C), in the most recent two year period that starts
on or after 1 July 2024.
2
For example, if a new pensioner commenced receiving age pension in July 2024 and
started with an initial unused concession balance of $4,000, had their pension
cancelled in September 2024 with a retained balance of $3,000, and then age pension
is granted to them again under a new claim in January 2025, section 1073AA will again
apply to the pensioner. However, the requirement in paragraph 1073AB(1C)(c) will
not be met, and the increase to a $4,000 balance will not be available, as the pensioner
has already had the benefit of subsection 1073AB(1A) in the most recent two year
period starting on or after 1 July 2024.
However, if the pensioner in this scenario had age pension granted to them again in
accordance with a new claim in June 2027, paragraph 1073AB(1C)(c) would be
satisfied, and the pensioner would receive an increase of $1,000, to make a total
unused concession balance of $4,000 as the new grant is more than two years since
the pensioner obtained the benefit of the $4,000 starting balance under
subsection 1073AB(1A) in July 2024. That is, $1,000 is the difference between the
pensioner's retained old balance of $3,000, and $4,000, as provided in
subsection 1073AB(1C).
New subsection 1073AB(1D) provides that subsection 1073AB(1C) does not apply if
section 1073AA applies to the person again immediately following the person's
pension being suspended, or immediately following the person being taken to be
receiving the pension under subsection 23(4A) of the Social Security Act.
Subsection 23(4A) operates to deem a person to still be receiving a pension for the
purposes of their concession card and other supplementary benefits if certain
requirements are met.
Although the pensioner has actually ceased to receive the pension in these
circumstances, it is not intended that the increase of up to $4,000 will be available to
pensioners if their pension is resumed after a period of suspension or if they have
been deemed to continue receiving the payment under subsection 23(4A). That is
because the $4,000 increase is intended to be available only for new pensioners, or
pensioners who are effectively new because they ceased to be eligible for their
pension for a period of time and have re-established their eligibility through a new
claim. Pensioners who have their payment suspended or who are taken to be receiving
the payment under subsection 23(4A) continue to maintain a connection to their
payment, and will not have to re-establish their eligibility through a new claim to begin
receiving the pension again. Such pensioners are not intended to be provided with a
top-up of their concession balance, but will retain their previous unused concession
balance in accordance with subsection 1073AB(3).
Item 2 amends subsection 1073AB(2) to replace the references to "$7,800" in this
provision to "$11,800". This provides for the permanent higher maximum unused
concession balance of $11,800.
Item 3 repeals the example following subsection 1073AB(2) and inserts a new
example. This is in the same terms as the previous example, but the new amounts
specified reflect the higher maximum unused concession balance, as provided by
item 2.
3
Item 4 repeals section 1073AC from the Social Security Act. Section 1073AC has
provided for increases to unused concession balances, and the maximum unused
concession balance available, during the "temporary increase period". This period
commenced on 1 December 2022 and is ending on 31 December 2023
(subsection 1073AC(2)).
Section 1073AC will no longer have any operation after the temporary increase period
ends on 31 December 2023. However, from commencement of this new Act on
1 January 2024, the amendments made by item 1 above will provide new pensioners
with a starting initial unused concession balance of $4,000 instead of nil ($0), as has
been the case during the temporary increase period (subsection 1073AC(4)). The
amendments made by item 2 above will also provide for the same maximum unused
concession balance as has been available during the temporary increase period
(subsection 1073AC(6)), but on an ongoing basis.
Item 5 is an application provision which is intended to clarify the application of the
permanent higher maximum unused concession balance in subsection 1073AB(2).
For the avoidance of doubt, item 5 provides that the amendments of
subsection 1073AB(2) made by this Schedule apply regardless of any effect of
subsections 1073AC(7) and (8).
Before being repealed by item 4 above, subsections 1073AC(7) and (8) provided for
unused concession balances to go back to a maximum of $7,800 after the temporary
increase period ends. However, this will no longer need to occur given the new
ongoing maximum concession balance will be $11,800 (as provided by item 2 above),
consistent with the maximum available during the temporary increase period
(subsection 1073AB(6)). That is, it is intended that pensioners will retain any unused
concession balances of between $7,800 and $11,800 from 1 January 2024, and
subsections 1073AC(7) and (8) (as in force immediately before that date) will
effectively have no operation.
Veterans' Entitlements Act 1986
Item 6 repeals subsection 46AC(1) of the Veterans' Entitlements Act and inserts new
subsections 46AC(1), (1A), (1B), (1C) and (1D).
New subsection 46AC(1) prescribes that if a person has an unused concession
balance, or a balance immediately before 1 January 2024, that balance is retained on
1 January 2024. This includes all existing unused concession balances, including
where a person has a balance of nil or a retained balance under subsection 46AC(3).
Subsection 46AC(3) provides that a person who has ceased to be part of the work
bonus scheme because they ceased to receive their payment will retain the unused
concession balance they had immediately prior to cessation. Referring to retained
balances under new subsection 46AC(1) ensures that everyone who benefited from
the temporary increase under section 46ACA, including people who have at some time
in the past participated in the work bonus scheme but ceased to receive their payment
on or before 31 December 2023, will retain their increased balance from 1 January
2024.
4
It is intended that there will be no reduction to pre-existing unused concession
balances on 1 January 2024 as a result of this Schedule, and that previous balances
from immediately before that date will be carried across on commencement of these
amendments.
New subsection 46AC(1A) provides that, on the first day that is on or after 1 January
2024 and is a day on which section 46AA applies to the person, the person's unused
concession balance will be $4,000. That is, people to whom the work bonus provisions
have not previously applied will be provided with an immediate work bonus balance of
$4,000 upon commencement, and they will not need to accrue this amount over time.
New subsection 46AC(1B) provides that subsection 46AC(1A) does not apply on a
day if the person has an unused concession balance immediately before that day.
This includes unused concession balances of nil ($0), and retained balances under
subsection 46AC(3). This provision is intended to ensure that the $4,000 starting work
bonus balance in subsection 46AC(1A) is only available to eligible new recipients, and
not those to whom the work bonus provisions have applied previously. However, all
recipients who have a retained work bonus balance under the temporary measure,
that is carried over on 1 January 2024, have already received $4,000 to their
work bonus balance in accordance with section 46ACA as in force immediately before
this Schedule commences.
New subsection 46AC(1C) provides for an increase of up to $4,000 in some
circumstances. Where a person ceases to receive their service pension or income
support supplement and retains an unused concession balance (referred to as "the
old balance", being a balance that is retained in accordance with subsection 46AC(3))
of less than $4,000, then on a day that section 46AA applies to the person again, the
person's unused concession balance is increased by an amount equal to the
difference between their old balance and $4,000. That is, the person's unused
concession balance will be increased by up to $4,000, to a balance of $4,000.
However, this increase of up to $4,000 (which only becomes available from 1 July
2024) is not available to recipients if they have either received a starting balance of
$4,000 under subsection 46AC(1A), or previously received an increase of up to $4,000
under subsection 46AC(1C), in the most recent two year period that starts on or after
1 July 2024.
For example, if a person commenced receiving a service pension or income support
supplement in July 2024 for the first time and started with an unused concession
balance of $4,000, had their payment cancelled in September 2024 with a retained
balance of $3,000, and then the payment is granted to them again under a new claim
in January 2025, section 46AA will again apply to that person. However, the
requirement in paragraph 46AC(1C)(c) will not be met, and the increase to a $4,000
balance will not be available, as the person has already had the benefit of
subsection 46AC(1A) in the most recent two year period starting on or after 1 July
2024.
However, if the person in this scenario had a service pension or income support
supplement granted to them again in accordance with a new claim in June 2027, this
is more than two years since the person obtained the benefit of the $4,000 starting
5
balance under subsection 46AC(1A) in July 2024. In this situation, paragraph
46AC(1C)(c) would be satisfied, and the person would receive an increase of $1,000,
to make a total unused concession balance of $4,000. That is, $1,000 is the difference
between the person's retained old balance of $3,000, and $4,000, as provided in
subsection 46AC(1C).
New subsection 46AC(1D) provides that subsection 46AC(1C) does not apply if
section 46AA applies to the person again immediately following the person's service
pension or income support supplement being suspended.
Although the person will technically cease to receive their payment if it is suspended,
it is not intended that the increase of up to $4,000 will be available to people if their
payment is resumed after a period of suspension. The increase up to $4,000 is
intended to be available only for new eligible recipients, or recipients who are required
to re-establish their eligibility through a new claim. Recipients who have their payment
suspended continue to maintain a connection to their payment, and will not have to
re-establish their eligibility through a new claim to begin receiving the payment again.
Such recipients are not intended to be provided with a top-up of their concession
balance, but will retain their previous unused concession balance in accordance with
subsection 46AC(3).
Item 7 amends subsection 46AC(2) to replace the references to "$7,800" in this
provision to "$11,800". This provides for the permanent higher maximum unused
concession balance of $11,800.
Item 8 repeals the example following subsection 46AC(2) and inserts a new example.
This is in the same terms as the previous example, but the new amounts specified
reflect the higher maximum unused concession balance, as provided by item 7.
Item 9 repeals section 46ACA from the Veterans' Entitlements Act. Section 46ACA
has provided for increases to unused concession balances, and the maximum unused
concession balance available, during the "temporary increase period". This period
commenced on 1 December 2022 and is ending on 31 December 2023
(subsection 46ACA(2)).
Section 46ACA will no longer have any operation after the temporary increase period
ends on 31 December 2023. However, from commencement of this new Act on
1 January 2024, the amendments made by item 6 above will provide new pensioners
with a starting unused concession balance of $4,000 instead of nil ($0), as has been
the case during the temporary increase period (subsection 46ACA(4)). The
amendments made by item 7 above will also provide for the same maximum unused
concession balance as has been available during the temporary increase period
(subsection 46ACA(6)), but on an ongoing basis.
Item 10 is an application provision which is intended to clarify the application of the
permanent higher maximum unused concession balance in subsection 46AC(2). For
the avoidance of doubt, item 10 provides that the amendments of subsection 46AC(2)
made by this Schedule apply regardless of any effect of subsections 46ACA(7) and
(8).
6
Before being repealed by item 9 above, subsections 46ACA(7) and (8) provided for
unused concession balances to go back to a maximum of $7,800 after the temporary
increase period ends. However, this will no longer need to occur given the new
ongoing maximum concession balance will be $11,800 (as provided by item 7 above),
consistent with the maximum available during the temporary increase period
(subsection 46ACA(6)). That is, it is intended that pensioners will retain any unused
concession balances of between $7,800 and $11,800 from 1 January 2024, and
subsections 46ACA(7) and (8) (as in force immediately before that date) will effectively
have no operation.
7
Schedule 2 - Extend employment income nil rate period
Summary
This Schedule will enable eligible social security recipients, including recipients who
take up full-time work, to benefit from an extended employment income nil rate period
of 24 weeks under the Social Security Act. This will enable more recipients to continue
to access supplementary benefits, such as concession cards and additional child care
subsidy (ACCS), where their own and/or their partner's income (including some
employment income) is above the social security income limit, for a longer period.
Background
Currently, under the social security income test, social security benefit and pension
recipients whose personal and/or partner income (that includes some employment
income) is above the income limit have a 12 week period where they are recorded as
receiving a nil rate of social security before their payment is cancelled. This 12 week
period (known as the "employment income nil rate period") applies to eligible recipients
of jobseeker payment, youth allowance, austudy payment, parenting payment,
age pension, disability support pension and carer payment.
An employment income nil rate period starts on the date of effect of the nil rate
determination (the cessation day) and ends 12 weeks after the instalment period
(fortnightly payment period) that the cessation day occurred.
Throughout the 12 week nil rate period, a person is taken to be continuing to receive
their relevant social security payment for certain purposes provided they remain
qualified for the payment they are taken to be receiving and continue to report their
fortnightly income to Services Australia. This enables individuals to retain access to
concession cards and other supplementary payments, such as pensioner education
supplement and telephone allowance. Further, the recipient's partner is treated as if
both members of the couple are receiving a payment for the purposes of rent
assistance and the allowance income test, which can result in a higher overall payment
for the partner. It also allows eligible individuals to retain access to ACCS under the
Family Assistance Act and the Family Assistance Administration Act.
During the employment income nil rate period, a person's social security payment can
be restored if they lose their job or report a fall in their income that results in their
payment becoming payable again. This makes it easier for people to return to
social security if they need to. If the person's income remains higher than the income
cut out amount at the end of the nil rate period, their payment will be suspended or
cancelled.
These amendments will extend the employment income nil rate period from 12 weeks
to 24 weeks, to enable working recipients to continue accessing concession cards and
other supplementary benefits for an extended period, and to have their social security
payment restored more efficiently if they stop work or their income decreases.
8
These amendments will also enable eligible social security recipients who take up
full-time work to access the employment income nil rate period if being employed
full-time would otherwise remove their qualification for their relevant payment. This
will remove a potential disincentive to people taking up full-time work, and assist these
people in transitioning into full-time employment.
Explanation of the changes
Part 1-Main amendments
Social Security Act 1991
Item 1 amends paragraph 23(4A)(h) of the Social Security Act to increase the
employment income nil rate period. Currently, this period is a maximum of 12 weeks
after the end of the instalment period in which the person's cessation day occurs. This
item changes this reference to 12 weeks to 24 weeks, to double the maximum
employment income nil rate period available to eligible recipients.
Item 2 adds a note at the end of subsection 23(4A) of the Social Security Act to refer
the reader to new subsection 23(4AB), in relation to paragraph 23(4A)(g). This note
is complimentary to the amendments made by item 3 below, and is only relevant to
the circumstances specified in new subsection 23(4AB).
Item 3 adds new subsection 23(4AB) into the Social Security Act following
subsection 23(4AA). New subsection 23(4AB) provides that, for the purposes of
applying an employment income nil rate period under subsection 23(4A),
subparagraphs 540(2)(a)(iii), 540(2)(b)(iii) and 593(1)(a)(i) of the Social Security Act
do not apply in relation to determining whether the person continues to be qualified for
the relevant pension or benefit under paragraph 23(4A)(g).
A note at the end of new subsection 23(4AB) clarifies that subparagraphs 540(2)(a)(iii)
and (b)(iii) relate to youth allowance qualification, and subparagraph 593(1)(a)(i)
relates to jobseeker payment qualification. The new subsection 23(4AB) operates to
"switch off" these provisions when determining whether a person continues to be
qualified for the pension or benefit under paragraph 23(4A)(g) of the Social Security
Act, which has the effect of allowing these people to access the employment income
nil rate period, even if they are working full-time.
Item 4 repeals paragraph 1061ZEA(2)(h) of the Social Security Act and replaces this
with a new paragraph to provide relevant recipients with access to a pensioner
concession card for a longer period.
Section 1061ZEA currently provides for an extended qualification period of 12 weeks
for a pensioner concession card, where a recipient loses their eligible payment due to
employment income of their own or their partner. This provision operates in a similar
way to the employment income nil rate period in subsection 23(4A) of the
Social Security Act. It is intended that eligible recipients to whom section 1061ZEA
applies will also be able to retain their pensioner concession card for an increased
period of 24 weeks, or 26 weeks in some cases. This item does not change the
9
qualification requirements in subsection 1061ZEA(2) for an extended period of
pensioner concession card qualification, but only increases the relevant period.
New subparagraph 1061ZEA(2)(h)(i) provides that in relation to recipients covered by
subparagraph 1061ZEA(2)(ga)(iia) or (iib), an extended qualification period of
26 weeks will apply. These provisions apply to principal carers of a child who cease
to receive youth allowance or jobseeker payment, and continue to be qualified for that
payment, except that paragraph 540(1)(a) (in the case of youth allowance) or
paragraphs 593(1)(a) and (b) (in the case of jobseeker payment) no longer apply to
the person. These are single principal carers who have been qualified for a pensioner
concession card under subsection 1061ZA(2A) or (2B), and then qualify for an
extended qualification period due to losing their youth allowance or jobseeker payment
as a result of employment income. This amendment will enable this cohort to benefit
from retaining a single pensioner concession card, instead of a pensioner concession
card followed by a health care card, for the same 26-week period specified in
subsection 1061ZM(1BA).
New subparagraph 1061ZEA(2)(h)(ii) applies to all other eligible recipients to whom
subsection 1061ZEA(2) applies. These recipients will benefit from an extended
qualification period for their pensioner concession card of 24 weeks. This is consistent
with the amendments made by Part 1 above, and will enable eligible recipients to
access the benefits of their pensioner concession card for a longer period.
Item 5 makes a consequential amendment to subsection 1061ZEA(4) to remove the
reference to "12 weeks" and replace this with a reference to either 24 or 26 weeks, as
applicable in the circumstances. This reflects the new paragraph 1061ZEA(2)(h), as
inserted by item 4 above.
Similarly, items 6 and 7 amend paragraph 1061ZMA(2)(h) and
subsection 1061ZMA(3) of the Social Security Act respectively to remove the
references to "12 weeks" and replace them with "24 weeks". Section 1061ZMA
currently applies to extend health care card qualification for a 12 week period in certain
circumstances similar to section 1061ZEA above. This period will also be increased
to 24 weeks in accordance with these amendments.
Subitem 8(1) prescribes that the changes to paragraph 23(4A)(h) made by item 1
above will apply in relation to instalment periods in which the cessation day mentioned
in subsection 23(4A) of the Social Security Act occurs, and that either start on or after
1 July 2024, or start before 1 July 2024 and end on or after that day.
This means that people who are part way through their employment income nil rate
period when the amendments commence on 1 July 2024 (i.e. less than 12 weeks of
their nil rate period has been used) will obtain the benefit of the extended nil rate
period.
Subitem 8(2) prescribes that new subsection 23(4AB), as inserted by item 3 above,
will apply in relation to instalment periods in which the cessation day mentioned in
subsection 23(4A) of the Social Security Act would occur but for the operation of
subsection 23(4AB), and that start on or after 1 July 2024.
10
Subitem 8(3) specifies that the amendments of sections 1061ZEA and 1061ZMA of
the Social Security Act made by items 4 to 7 above, will apply in relation to instalment
periods in which the payment ceases to be payable to the person or the person ceases
to receive the payment, pension or benefit (as applicable), and that either start on or
after 1 July 2024, or start before 1 July 2024 and end on or after that day.
This means that people who are part way through an extended qualification period for
their pensioner concessioner card or health care card when the amendments
commence on 1 July 2024 (i.e. less than 12 weeks of their extended qualification
period has been used) will obtain the benefit of the increased qualification period.
Part 2-Consequential Amendments
A New Tax System (Family Assistance) Act 1999
Items 9 and 10 make consequential amendments to the heading of
subsection 85CK(2) and body text of paragraph 85CK(2)(b) of the Family Assistance
Act to omit references to "12 weeks", and substitute those references with "24 weeks".
This ensures that individuals accessing an employment income nil rate period under
subsection 23(4A) of the Social Security Act will continue to be eligible for ACCS
(transition to work) under subsection 85CK(2) of the Family Assistance Act throughout
that period. This means that, during the extended employment income nil rate period
for a person's social security payment that is a "transition to work" payment (referred
to in subsection 85CK(3)), the person will retain access to ACCS (transition to work)
throughout that period.
Clause 7 of Schedule 2 to the Family Assistance Act provides for the amount of ACCS
(transition to work), which is a higher hourly rate of subsidy compared to child care
subsidy (CCS). Section 85CK sets out the requirements for a person to be eligible for
ACCS (transition to work), including continuing to be eligible if the person stopped
"receiving" (within the meaning of subsections 23(2) and (4) of the Social Security Act)
a transition to work payment before the end of the employment income nil rate period
for the payment (subsection 85CK(2) of the Family Assistance Act).
Item 11 provides the amendments to section 85CK of the Family Assistance Act in
items 9 and 10 above will apply in relation to an individual for a session of care
provided to a child in a CCS fortnight that starts on or after 8 July 2024 if the individual
stopped receiving the transition to work payment mentioned in subsection 85CK(3) on
or after 15 April 2024.
If a person ceased receiving their payment on or after 15 April 2024, they will have
ceased to receive their payment less than 12 weeks before 8 July 2024. This
application provision is intended to ensure that people who are part way through their
employment income nil rate period before the CCS fortnight commencing 8 July 2024
(i.e. less than 12 weeks of their nil rate period has been used) will get the benefit of
the extended nil rate period.
The CCS fortnight commencing 8 July 2024 is the first CCS fortnight after these
amendments commence on 1 July 2024. Subsection 3(1) of the Family Assistance
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Act defines "CCS fortnight" as meaning a period of 2 weeks beginning on
Monday 2 July 2018 or every second Monday after that Monday.
A New Tax System (Family Assistance) (Administration) Act 1999
Item 12 makes consequential amendments to subsection 67FB(3) of the
Family Assistance Administration Act to omit a reference to "12 week", and substitutes
that reference with "24 week". This ensures the notification requirement for a person
receiving ACCS (transition to work) remains consistent with the amendments made to
the Social Security Act under Part 1, and items 5 and 6 above.
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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 AND OTHER LEGISLATION AMENDMENT
(SUPPORTING THE TRANSITION TO WORK) BILL 2023
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
This Bill amends the Social Security Act 1991 (Social Security Act), Veterans'
Entitlements Act 1986 and the family assistance law to encourage and support social
security and veterans' entitlement recipients to engage in paid employment. To
achieve this, the Bill amends the relevant legislation to make changes to the pension
work bonus scheme and expand access to the employment income nil rate period, as
well as extending the length of the employment income nil rate period where it applies.
The Bill will enable eligible social security pensioners over age pension age and
certain veterans' entitlement recipients over qualifying age to earn up to $4,000 before
the income test is applied and their payments affected. This will occur through a $4,000
increase in the work bonus unused concession balance for all new eligible recipients.
Further, the current temporary $4,000 increase to the maximum unused concession
balance, from $7,800 to $11,800, will be available to all eligible pensioners on an
ongoing basis.
The Bill will also enable eligible working social security recipients, including recipients
who take up full-time work, to benefit from an extended employment income nil rate
period of 24 weeks under the Social Security Act. This will enable more recipients to
continue to access supplementary benefits, such as concession cards and additional
child care subsidy, where their income (including some employment income) is above
the relevant income limit, for a longer period.
These measures are not only beneficial over the long term, but are of importance in
the current economy. Specifically, these measures will encourage workforce
participation, which may assist in addressing current skills and labour shortages.
Human rights implications
The amendments contained in this Bill are beneficial and engage the following
human rights:
• the right to social security - Article 9 of the International Covenant on Economic,
Social and Cultural Rights (ICESCR);
• the right to an adequate standard of living - Article 11 of ICESCR; and
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• the right to work - Article 6 of ICESCR.
The Right to Social Security
Article 9 of the ICESCR recognises the right of everyone to social security. The
amendments contained in this Bill are beneficial to pensioners and relevant
veterans' entitlements recipients as new recipients will be able to immediately engage
in work before their pension is affected, and all recipients will permanently be able to
earn more before their pension is affected. Recipients will also be able to access
supplementary benefits for a longer period, and have greater flexibility to easily move
between periods of work and a social security payment.
The Right to an Adequate Standard of Living
Article 11 of the ICESCR recognises the right of everyone to an adequate standard of
living including adequate food, water and housing, and to the continuous improvement
of living conditions. This Bill gives Australians, including senior Australians, greater
opportunities to improve their standard of living by working, by being able to earn more
before the pension income test is applied, and maintaining their link to payments and
supplementary benefits for an extended period.
Pensioners who engage in paid employment during their retirement typically have
higher incomes and are able to support a higher standard of living than those who do
not. They also gain significant non-financial benefits, including stronger social
connection, staying mentally active and keeping physically fit.
The Right to Work
Article 6 of ICESCR recognises the right of every person to the opportunity to gain a
living by work which they freely choose or accept. This Bill supports pensioners,
including retired pensioners, to freely choose whether or not they would like to engage
in work. Pensioners who would like to re-enter the workforce are able to and those
who are already working can increase their hours. This gives pensioners more choice
and flexibility in how they manage their retirement.
Conclusion
This Bill is compatible with human rights as it provides Australians, including senior
Australians, with greater pension flexibility to help improve their standard of living.
[Circulated by the authority of the Minister for Social Services,
the Hon Amanda Rishworth MP]
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