Commonwealth of Australia Explanatory Memoranda

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SOCIAL SECURITY AMENDMENT (ENTRY PAYMENTS) BILL 1997

1996-97

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE

SOCIAL SECURITY AMENDMENT
(ENTRY PAYMENTS) BILL 1997

EXPLANATORY MEMORANDUM

(Circulated by the authority of the Minister for Social Security,
Senator the Hon Jocelyn Newman)

88761 Cat. No. 96 9151 0 ISBN 0644 50446 3

SOCIAL SECURITY AMENDMENT
(ENTRY PAYMENTS) BILL 1997

OUTLINE AND FINANCIAL IMPACT STATEMENT

This Bill gives effect to two measures announced in the Government's 1996-97 Budget although they will come into effect at a later date than previously advised.

The legislation involved is the Social Security Act 1991.

Schedule 1 - Amendments of the Social Security Act 1991 to abolish the employment entry payment and modify the education entry payment

The amendments made by Schedule 1 abolish the employment entry payment. In addition, education entry payments for allowees are abolished.


Date of effect: 1 January 1998.

Financial impact: For employment entry
payment (net outlays) 1997-98 $ 7.605m (savings)
1998-99 $16.192m (savings)
1999-2000 $16.192m (savings)

For education entry
payment (net outlays) 1997-98 $ 1.165m (savings)
1998-99 $ 2.592m (savings)
1999-2000 $ 2.592m (savings)

PRELIMINARY

Clause 1 of the Social Security Amendment (Entry Payments) Bill 1997 sets out how the amending Act is to be cited.

Clause 2 specifies that the Act is to commence on 1 January 1998.

Clause 3 says that each Act that is specified in a Schedule is amended in accordance with the applicable items in the Schedule concerned.

SCHEDULE 1

AMENDMENT OF THE SOCIAL SECURITY ACT 1991
TO ABOLISH THE EMPLOYMENT ENTRY PAYMENT AND
MODIFY THE EDUCATION ENTRY PAYMENT

1. Summary of proposed changes

These amendments abolish the employment entry payment. Similarly, education entry payment is abolished except for social security pensioners who commence a course of education (ie recipients of sole parent pension (and in the future, those receiving parenting payment under sole parent pension conditions), disability support pension, disability wage supplement, widow B pension, carer pension (carer payment from 1 July 1997) and wife pension).

2. Background

The purpose of this measure is to achieve greater simplicity and targeting in social security administration.

Although the education entry payment and employment entry payment schemes were initially introduced as incentive provisions, Departmental evaluations of the employment entry payment scheme have indicated that neither scheme appears to have been a major factor in influencing customers' decisions to take up work or education. In addition, the schemes are complex and there are differences in the rates and conditions attaching to the schemes that depend on the customers' payment types.

This measure therefore provides for the abolition of employment entry payment for all customers who may currently access that payment and education entry payment for all but certain pensioners.

3. Schedule and clauses involved in the changes

Clause 2: specifies the commencement date as 1 January 1998.

Clause 3: provides that the Social Security Act 1991 (the Social Security Act) is amended in accordance with Schedule 1.

Schedule 1: amends the Social Security Act to abolish the employment entry payment and the education entry payment (except for certain pensioners who start a course of education).

Item 1: repeals Part 2.13 that provides for payment of the employment entry payment.

Items 2 to 4: repeals those provisions in Part 2.13A (education entry payment) that allow payment of education entry payment to be made to certain beneficiaries/allowees who start a course of education.

4. Explanation of the changes

The qualification and payability rules for an employment entry payment are contained in Part 2.13 of the Social Security Act. Item 1 repeals of Part 2.13.

The qualification and payability rules for an education entry payment are contained in Part 2.13A of the Act. Although education entry payment will be retained for certain pensioners who start a course of education, it will no longer be available to beneficiaries and allowees.

Sections 665M to 665ZF inclusive currently provide for payment of education entry payment to recipients of special benefit, job search allowance, youth training allowance, newstart allowance, mature age allowance and widow allowance. Item 2 repeals these provisions.

Sections 665ZG to 665ZK inclusive provide for payment of education entry payment to recipients of mature age partner allowance. Item 3 repeals these provisions.

Sections 665ZQ to 665ZX inclusive provide for payment of education entry payment to recipients of partner allowance and parenting allowance. Item 4 repeals these provisions.

5. Commencement

The amendments made by Schedule 1 commence on 1 January 1998.

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