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1996-97
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY AND VETERANS' AFFAIRS LEGISLATION AMENDMENT (FAMILY AND OTHER MEASURES) BILL 1997
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Social
Security,
Senator the Hon Jocelyn Newman)
88818 Cat. No. 96 9209 6 ISBN 0644 50503 6
SOCIAL SECURITY AND VETERANS' AFFAIRS LEGISLATION AMENDMENT (FAMILY AND OTHER MEASURES) BILL 1997
OUTLINE AND FINANCIAL IMPACT STATEMENT
This Bill gives effect to a number of measures announced in the
Government's 1997-98 Budget, a measure announced in the 1996-97 Budget, the
introduction of a maternity immunisation allowance that forms part of the
Government's strategy to improve the rate of child immunisation in Australia and
to a number of non-Budget measures that will assist in more effective and
efficient social security administration.
The legislation involved is the
Social Security Act 1991, the Student and Youth Assistance
Act 1973, the Data-matching Program (Assistance and Tax) Act
1990, the Veterans' Entitlements Act 1986, the
Income Tax Assessment Act 1936 and the Income Tax Assessment
Act 1997.
Schedule 1 - Maternity allowances
Schedule 1 provides for the introduction of a maternity
immunisation allowance that will be payable in respect of children born on or
after 1 January 1998 and who, having reached 18 months of age, have
received age-appropriate immunisation up to that stage (unless the child is
otherwise exempted from the requirement). The maternity immunisation allowance
of $200 will be payable in addition to a maternity allowance of $750 that will
be payable following the birth of such a child.
The maternity
immunisation allowance will also be paid in respect of stillborn children or
children who die before reaching 18 months of age.
A maternity allowance,
currently $870.30, will continue to be payable following the birth of a child
who is born on or after 1 February 1996 but before 1 January
1998.
Date of effect: 1 January 1998.
Financial
impact: 1997-98 $12.912m (savings).
(net outlays) 1998-99 $31.013m
(savings).
1999-00 $ 7.971m.
Schedule 2 - Family payment: income test
Schedule 2 amends the Social Security Act 1991 to
remove the requirement that the Secretary make a determination that particular
events are assumed notifiable events for the purpose of the family payment
income test. Instead it will be sufficient that a family payment claim form,
that was approved by the Secretary and lodged by or on behalf of a person,
states that an event is an assumed notifiable event. This amendment will allow
for greater administrative flexibility as the Secretary will no longer be
required to make a determination in relation to each kind of assumed notifiable
event. It will enable the Department to rely on a questions in the family
payment claim form to impose an obligation on claimants to advise of events
before claim (assumed notifiable events) which may affect the payment of family
payment.
Date of effect: Royal Assent.
Financial
impact: Nil.
Schedule 3 - Family payment: rent assistance
The amendments in Schedule 3 address two unintended consequences
of the Social Security Amendment (Family Measures) Act 1995 in
relation to rent assistance. First, the link will be restored between the
payment of rent assistance to a family payment recipient and receipt by that
person of more than the minimum family payment rate (in line with the former
link between receipt by a family payment recipient of rent assistance and
qualification of that recipient for additional family payment). Second, a
person who is precluded from rent assistance as an adjunct to their family
payment will be entitled to rent assistance as an adjunct to their pension or
allowance, if the person would have been so entitled under the former
regime.
Date of effect: 1 January 1996.
Financial
impact: Negligible.
Schedule 4 - Family payment: maintenance income test
Schedule 4 amends the Social Security Act 1991
to clarify the intended scope of the family payment maintenance income
test.
Date of effect: 1 January 1996, immediately after the
commencement of Schedule 3 to the Social Security Legislation Amendment
(Family Measures) Act 1995.
Financial
impact: Negligible.
Schedule 5 - Family payment: qualification of approved care organisation
Schedule 5 amends the Social Security Act 1991 to
remove an anomaly that allows an approved care organisation to be paid family
payment in respect of a child who is a family payment child of a natural person,
but that person does not meet all the qualification criteria for family
payment.
Date of effect: Royal Assent.
Financial
impact: Negligible.
Schedule 6 - Family payment: child or parents outside Australia
Schedule 6 amends the Social Security Act 1991 to
allow above the minimum rate family payment to be paid when a family payment
child and/or the family payment recipient is outside Australia for up to 8
weeks.
Date of effect: 1 January 1998.
Financial
impact: 1997-98 $4.169m.
(net
outlays) 1998-99 $6.815m.
1999-00 $6.969m.
Schedule 7 - Family payment: hardship provisions
Schedule 7 amends the Social Security Act 1991 to
modify one of the existing family payment (FP) hardship provisions. This will
better target FP by excluding families with both a moderately high assets value
and a moderately high income or availability of liquid assets. Such families
cannot be regarded by current community standards as being in
hardship.
Date of effect: 1 January 1998.
Financial
impact: 1997-98 $0.083m.
(net outlays) 1998-99 $3.470m
(savings).
1999-00 $3.608m (savings).
Schedule 8 - Fringe benefits
Schedule 8 amends the Social Security Act 1991 to
extend the range of employer provided benefits currently taken into account in
the income test for family payment, maternity allowance and childcare
assistance. This extension will cover employer provided benefits received by
the employee in the form of financial investments (including units in cash
management trusts), as well as reimbursements to an employee for expenses
incurred for his or her private use.
Date of effect: 1 January
1998.
Financial impact: 1997-98 $0.225m
(net
outlays) 1998-99 $1.966m (savings).
1999-00 $1.993m (savings).
Schedule 9 - Resumption of family payment after termination of payment
Schedule 9 amends the Social Security Act 1991 to
correct an anomaly in the Act. Presently the Act provides for resumption of
payment following manual cancellation or suspension of family payment
pursuant to sections 880 or 881 but not following automatic termination
pursuant to section 876 of the Act. This amendment provides clear legislative
authority for the resumption of family payment following automatic termination
of payment.
Date of effect: Royal Assent.
Financial
impact: Nil.
Schedule 10 - Parenting allowance bereavement payment
The current parenting allowance bereavement provisions provide for the
continued payment of parenting allowance for 14 weeks following the death of the
last qualifying parenting allowance child if the parenting allowance recipient
was receiving more than the minimum rate of family payment.
Amendments
made in Schedule 10 enable the continued payment of parenting allowance
for 14 weeks after the death of child if either the parenting allowance
recipient or the recipient's partner was receiving more than the minimum rate of
family payment.
Date of effect: Royal Assent.
Financial
impact: Negligible.
Schedule 11 - Early claims for family, maternity and parenting allowances
Schedule 11 amends the early lodgment provisions in the
Social Security Act 1991 that relate to family payment, maternity
allowance and parenting allowance so that the provisions will not apply where
qualification for payment is dependent on the birth of a child.
Date
of effect: 1 January 1998.
Financial
impact: Negligible.
Schedule 12 - Residence requirements for refugees
Schedule 12 amends the Social Security Act 1991 to
ensure that a refugee who is permanently blind will not be disqualified from
receiving disability support pension merely because they do not have 10 years'
qualifying Australian residence.
Date of effect: 1 January 1995,
immediately after the commencement of Schedule 2 to the Social
Security (1994 Budget and White Paper) Amendment Act
1994.
Financial impact: Negligible.
Schedule 13 - Newstart allowance recipient with child under 18 receiving disability support pension
Schedule 13 amends the Social Security Act 1991 to
remove an inequity in the treatment of a sole parent receiving newstart
allowance who has a child over 16 and under 18 living with them and to whom a
disability support pension is being paid. The effect of the amendment is that
these people receive newstart allowance at the rate specified for a single
person with a dependent child.
Date of effect: Royal
Assent.
Financial impact: Negligible.
Schedule 14 - Medical examination following claim for disability support pension
Schedule 14 amends the Social Security Act 1991 to
remove the requirement that all disability support pensioner claimants (other
than those already exempted) must be examined by a medical
practitioner.
Date of effect: Royal Assent.
Financial
impact: Negligible.
Schedule 15 - Subsuming of disability wage supplement into disability support pension
Disability wage supplement was established in June 1994 as a separate
payment for people with disabilities participating in the Supported Wage System,
a productivity-wage based system administered by the Department of Health and
Family Services. Currently, people in receipt of disability support pension who
commence employment through the Supported Wage System are required to transfer
to disability wage supplement, even though the qualification criteria for the
two payments are very similar. Many customers have expressed a reluctance to
make this transfer and a preference to continue to receive disability support
pension. The take-up of disability wage supplement has been very slow, with
less than 300 customers in receipt of this payment two years after its
inception.
Schedule 15 provides for disability wage supplement to
be subsumed into disability support pension from 1 January 1998. All
existing disability wage supplement customers will be transferred to disability
support pension and the disability support pension provisions amended so that
participation in the Supported Wage System will be an alternative qualification
criterion to a person having a continuing inability to work because of an
impairment.
Date of effect: 1 January 1998.
Financial
impact: Negligible.
Schedule 16 - Disability support pension: impairment tables
The assessment processes for disability support pension will be tightened
to ensure that those people whose impairments have only a relatively small
impact on their overall inability to work will not qualify for that pension.
Rather, they will receive a more appropriate income support payment. To assist
in this process, revised impairment tables, which are used to assess whether a
person's impairment is 20 points or more, are being introduced. These revised
impairment tables are a refinement of amendments that were previously proposed
in the Social Security Legislation Amendment (Budget and Other Measures) Bill
1996.
Date of effect: Day to be fixed by proclamation. If no
proclamation has occurred within 6 months of the Social Security and
Veterans' Affairs Legislation Amendment (Family and Other Measures) Act
1997 having received the Royal Assent, all items in Schedule 16,
with the exception of item 3, will then commence. Item 3 is taken to have
commenced on 1 January 1997, immediately after the commencement of
Schedule 21 to the Social Security Legislation Amendment (Budget and Other
Measures) Act 1996.
Financial impact: 1997-98 $0.251m
(savings).
(net outlays) 1998-99 $2.799m (savings).
1999-00 $5.053m
(savings).
Schedule 17 - Conversion of foreign currency payments
The amendments made by Schedule 17 to the Social Security
Act 1991 provide for a new method of determining the value of a payment
received by a customer in a foreign currency. The new method will extend the
conversion of foreign currency to all social security payments not just social
security pensions and to all foreign currencies. There will also be a
requirement to apply an appropriate exchange rate from the first social security
pension payday each month.
Date of effect: 1 March
1998.
Financial impact: Negligible.
Schedule 18 - Entry contributions not to be regarded as rent
The amendments in Schedule 18 clarify that any amounts that can be
regarded as entry contributions to retirement villages (including deductions
from repayable entry contributions) are not "rent" for rent assistance
purposes.
Date of effect: Royal Assent.
Financial
impact: Negligible.
Schedule 19 - Rent assistance for people living with public housing tenants
Schedule 19 amends the Social Security Act 1991 and
the Veterans' Entitlements Act 1986 to remove the entitlement
to rent assistance of persons who live in public housing but do not pay rent
directly to the public housing authority (other than those who live in public
housing where market rent is being charged).
Date of effect: 1
January 1998.
Financial impact: 1997-98 $21.068m
(savings).
(net outlays) 1998-99 $58.090m (savings).
1999-00 $59.825m
(savings).
Schedule 20 - Lodgment of claims by telephone, facsimile or computer
Schedule 20 amends the Social Security Act 1991 and
the Student and Youth Assistance Act 1973 to allow the backdating
of certain payments, through the deemed earlier lodgement of a claim, in
circumstances where the person makes an inquiry about claiming payment and then
formally lodges a claim and qualifies for payment. In some payment types, a
provision of this type already exists, but only in relation to telephone
contact. This Schedule also extends the ambit of these provisions to include
contact by facsimile and computer.
Date of effect: Royal
Assent.
Financial impact: Negligible.
Schedule 21 - Qualification for newstart allowance of claimant for disability support pension
and
Schedule 22 - Qualification for newstart allowance of claimant for disability support pension
These Schedules will amend the Social Security Act 1991 and
the Student and Youth Assistance Act 1973 to provide the Secretary
of the Department of Social Security with a discretion to pay newstart allowance
or youth training allowance to a person who has claimed disability support
pension, while the disability support pension claim is being
determined.
Date of effect: 15 December 1997.
Financial
impact: Negligible.
Schedule 23 -Data-matching for the purposes of family tax payment
Schedule 23 amends the Data-matching Program (Assistance and
Tax) Act 1990 to enable the inclusion in the Data-matching Program of
the family tax initiative, which comprises family tax assistance and family tax
payment.
Date of effect: Royal Assent.
Financial
impact: Nil (Savings likely to flow from these amendments were
included in the original amendments implementing the family tax
initiative).
PRELIMINARY
Clause 1 of the Social Security and Veterans' Affairs
Legislation Amendment (Family and Other Measures) Bill 1997 sets out how the
amending Act is to be cited.
Clause 2 specifies when the various
clauses and Schedules of the amending Act are to commence.
Clause 3
says that each Act that is specified in a Schedule to the Social Security
and Veterans' Affairs Legislation (Family and Other Measures) Bill 1997 is
amended in accordance with the applicable items in those Schedules.
Schedule 1 - Maternity allowances
1. Summary of proposed changes
Schedule 1 provides for the introduction of a maternity
immunisation allowance that will be payable in respect of children born on or
after 1 January 1998 and who, having reached 18 months of age, have received
age-appropriate immunisation up to that stage (unless the child is otherwise
exempted from the requirement). The maternity immunisation allowance of $200
will be payable in addition to a maternity allowance of $750 that will be
payable following the birth of such a child.
The maternity immunisation
allowance will also be paid in respect of stillborn children or children who die
before reaching 18 months of age.
A maternity allowance, currently
$870.30, will continue to be payable following the birth of a child who is born
on or after 1 February 1996 but before 1 January 1998.
2. Background
From 1 January 1998, the payment of the new maternity immunisation
allowance, together with payment conditions applying for childcare assistance
and the childcare cash rebate, will be linked to the meeting of age-appropriate
immunisation requirements. This initiative forms part of a package of measures
announced by the Government that aim to significantly boost child immunisation
rates in Australia.
3. Clause and schedule involved in the changes
Clause 2: Provides that the amendments made by Schedule 1
commence on 1 January 1998.
Schedule 1:
Items 1 to
40: amend the Social Security Act 1991 (the Social Security
Act).
Item 1: inserts a new entry in the definition of recipient
statement notice in subsection 23(1).
Item 2: repeals the existing
heading for Part 2.17A and inserts a new Part heading.
Item
3: repeals the heading to Division 1 of Part 2.17A and inserts a new
Divisional heading.
Item 4: inserts a new section, new section
900AA that explains the structure of Part 2.17A.
Items 5 to
7: insert definitions of "Australian Immunisation Procedures Handbook",
"immunise" and "recognised immunisation provider" in section
900A.
Item 8: repeals the heading to Division 2 of Part 2.17A and
inserts new Divisional and Subdivisional headings.
Item 9: repeals
subsection 900B(2) as it is redundant.
Items 10 to 12: make
amendments consequential upon the amendment made by item
9.
Item 13: inserts new Subdivision B in Division 2 of Part
2.17A. The new Subdivision deals with qualification for the new maternity
immunisation allowance.
Item 14: repeals Division 3 of Part 2.17A
and inserts a new Division 3 that deals with the payability of both maternity
allowance and maternity immunisation allowance.
Item 15: repeals
the heading to Division 4 of Part 2.17A and inserts a new Divisional
heading.
Items 16 to 18: amend subsection 900H(1), paragraph
900H(2)(a) and paragraph 900H(2)(b), respectively, so that those provisions have
regard to both maternity allowance and maternity immunisation
allowance.
Item 19: inserts new subsections 900H(3) and
(4).
Item 20: repeals existing section 900J that deals with early
claims and inserts new section 900J.
Item 21: amends subsection
900K(2).
Item 22: repeals existing section 900L that deals with
lodgement of claims and inserts new section 900L.
Items 23 to
30: amend subsection 900N(1), subparagraph 900P(a)(ii), paragraph 900P(b),
paragraph 900P(c), section 900P, section 900Q, paragraph 900R(a) and
paragraph 900T(a), respectively, so that those provisions have regard to both
maternity allowance and maternity immunisation allowance.
Item
31: repeals the heading to Division 6 of Part 2.17A and inserts a new
Divisional heading.
Items 32 to 34: amend sections 900U, 900V and
900W, respectively, so that those provisions have regard to both maternity
allowance and maternity immunisation allowance.
Item 35: repeals
the heading to Division 7 of Part 2.17A and inserts a new Divisional
heading.
Items 36 to 38: amend sections 900X and 900Y,
respectively, so that those provisions have regard to both maternity allowance
and maternity immunisation allowance.
Item 39: inserts new
Division 8 that deals with recipient obligations.
Item 40: amends
subsection 1223(1A) so that the subsection has regard to both maternity
allowance and maternity immunisation allowance.
Items 41 to
45: amend the Income Tax Assessment Act 1936 and the
Income Tax Assessment Act 1997 to provide for the income tax treatment
of maternity immunisation allowance.
4. Explanation of the changes
The amendments essentially can be grouped as
follows:
(a) amendments that make changes to Part, Divisional or
Subdivisional headings so that those headings have regard not only to the
existing maternity allowance, but also to the new maternity immunisation
allowance;
(b) amendments that merely make changes to existing
provisions in Part 2.17A so that those provisions have regard not only to the
existing maternity allowance, but also to the new maternity immunisation
allowance; and
(c) more substantive
amendments.
(a) amendments that make changes to Part, Divisional
or Subdivisional headings so that those headings have regard not only to the
existing maternity allowance, but also to the new maternity immunisation
allowance
Items 2, 3, 8, 15, 31 and 35 are in this
group.
(b) amendments that merely make changes to existing
provisions in Part 2.17A so that those provisions have regard not only to
the existing maternity allowance, but also to the new maternity immunisation
allowance
Items 16 to 18, 21, 23 to 30, 32 to 34, 36 to 38 and 40
are in this group.
(c) more substantive
amendments.
Item 1 inserts a new entry in the definition of
recipient statement notice in subsection 23(1). This is required as a
result of the insertion of a recipient statement obligation provision (new
section 900Z) - refer item 39.
Item 4 inserts a new
section, new section 900AA that explains the structure of
Part 2.17A.
Part 2.17A will now deal with both maternity allowance
and maternity immunisation allowance.
Items 5 to 7 insert
definitions of "Australian Immunisation Procedures Handbook", "immunise" and
"recognised immunisation provider" in section 900A.
When maternity
allowance was first introduced, subsection 900B(2) provided that a qualification
criterion for a claim for maternity allowance in respect of a child was that the
child must be born on or after 1 February 1996. Subsection 900L(1) provided
that claims for maternity allowance could only be made up to 26 weeks after the
child's birth.
The net result is that by 1 January 1998, claims for
maternity allowance could only be accepted in respect of children born in the 26
weeks prior to that date. In other words, the criterion set out at subsection
900B(2) is no longer relevant and so is being repealed. Item 9 does
this.
Items 10 to 12 make amendments consequential upon the
amendment made by item 9.
Item 13 inserts new
Subdivision B in Division 2 of Part 2.17A. The new Subdivision deals with
qualification for the new maternity immunisation allowance.
As a general
rule, a person will not qualify for maternity immunisation allowance before a
child is 18 months old. However, exceptions to this rule will apply for
stillborn children or children who die within 18 months of their
birth.
New subsection 900EA(1) provides that a person qualifies for
maternity immunisation allowance in respect of a stillborn child if the child is
delivered on or after 1 January 1998 and maternity allowance is
payable to the person for that child.
To qualify for a maternity
immunisation allowance in respect of a child who is born alive on or after 1
January 1998 but who dies within 18 months of their birth, new subsection
900EA(2) provides that it will be requirement that the child was a dependent
child of the person at the time of the child's death. ("Dependent child" is
defined in subsection 5(2) of the Social Security Act.) In addition, either
maternity allowance will have to have been paid (or payable) in respect of the
child or the child will have to have been an "FP" child of the person at the
time of the child's death. A "FP" (family payment) child" is defined in
subsection 6(1) of the Social Security Act.
New subsections 900EA(3) and
900EA(4) set out the qualification criteria for maternity immunisation allowance
in respect of a child who is born on or after 1 January 1998 and who
is alive 18 months after their birth.
The requirements are
that:
• the child is a dependent child of the person;
and
• either the person has been paid maternity allowance for the
child or the child is an FP child of the person; and
• either the
Secretary to the Department of Social Security is satisfied that the child has
been immunised or the child has not been immunised and one of three situations
apply.
The Secretary will be able to be satisfied that a child has been
immunised if the child has received the vaccinations that a child who is 18
months old ought to have received under the Standard Vaccination Schedule made
available by the National Health and Medical Research Council (refer to the
definition of "immunise" in section 900A - see item 6).
To qualify
for payment of maternity immunisation allowance in respect of a child who has
not been immunised, it will be necessary that:
• a recognised
immunisation provider (as defined in section 900A - refer item 7)
certifies that they have discussed with the person the benefits and risks of
immunising the child and the person has a conscientious objection to the child
being immunised; or
• the child is also a dependent child of
another person and a recognised immunisation provider certifies that they have
discussed with that other person the benefits and risks of immunising the child
and that other person has a conscientious objection to the child being
immunised; or
• a recognised immunisation provider certifies that
the specifications set out in the Australian Immunisation Procedures Handbook
indicate that immunisation of the child would not be in the medical interests of
the child.
New subsection 900EA(5) defines when a person will have a
conscientious objection to a child being immunised.
It will be
if:
• the person's objection is based on a belief involving a
fundamental conviction that immunisation should not take place;
and
• the conviction is so compelling that the person has to refuse
to allow the child to be immunised.
New section 900EB provides that, as
with maternity allowance, an approved care organisation will not be able to
qualify for maternity immunisation allowance.
New section 900EC provides
that, as with maternity allowance, maternity immunisation allowance will not be
payable unless a person has provided the Secretary with the person's tax file
number or, where that is not done, the person satisfies one of a number of
alternatives to this requirement. The alternatives are the same as those that
apply for other social security payments.
New section 900ED provides
that, as with maternity allowance, maternity immunisation allowance will not be
payable to a person who is a member of a couple unless the person has provided
the Secretary with their partner's tax file number or, where this is not done,
the person satisfies one of a number of alternatives to this requirement.
Again, the alternatives are the same as those that apply for other social
security payments.
Item 14 repeals Division 3 of Part 2.17A and
inserts a new Division 3 that deals with the payability of both maternity
allowance and maternity immunisation allowance.
Subdivision A of Division
3 deals with the payability of maternity allowance.
New section 900F sets
out the amount of maternity allowance that will be payable.
For children
born before 1 January 1998, the amount of maternity allowance that is payable
will continue to be 3 times the amount stated in column 3 of item 1 in Table C
in point 1068A-C2 in Module C of the Parenting Allowance Rate Calculator in
section 1068A. This amount is indexed and is currently $870.30.
For
children born on or after 1 January 1998, the amount of maternity allowance that
will be payable is $750.00. If 2.4 times the amount stated in column 3 of
item 1 in Table C in point 1068A-C2 in Module C of the Parenting Allowance
Rate Calculator in section 1068A exceeds $750.00, then that greater amount will
be payable.
New section 900G sets out the payability rules for maternity
allowance. Essentially, this is a restatement of the current position that is
currently set out in existing section 900G except that it also clarifies
the intention that a maternity allowance should not be payable in respect of the
same child more than once (new subsection 900EG(6)).
New section
900GA sets out the amount of maternity immunisation allowance that will be
payable.
The amount of maternity immunisation allowance that will be
payable is $200. If 0.6 times the amount stated in column 3 of item 1 in Table
C in point 1068A-C2 in Module C of the Parenting Allowance Rate Calculator in
section 1068A exceeds $200, then that greater amount will be payable.
As
with maternity allowance, maternity immunisation allowance will be payable as a
lump sum.
New section 900GB sets out the payability rules for maternity
immunisation allowance. The payability rules are similar to those applying for
maternity allowance but take account of the fact that family situations will
sometimes have changed since the time of a child's birth when maternity
allowance was payable.
Section 900H deals with claims for maternity
allowance or maternity immunisation allowance.
As noted previously,
items 16 to 18 amend subsections 900H(1) and (2) so that those
subsections have regard not only to the existing maternity allowance, but also
to the new maternity immunisation allowance.
Item 19 inserts new
subsections 900H(3) and (4).
New subsection 900H(3) provides that if
a claim is made by a person (or on behalf of a person) for maternity allowance
and for maternity immunisation allowance in respect of a child (other than a
stillborn child) and the maternity allowance is paid to the person but the
person subsequently ceases to be qualified for family payment in respect of the
child before the person's claim for maternity immunisation allowance is
determined (usually, not until the child is 18 months old), then the claim for
maternity immunisation allowance will be taken not to have been made. New
subsection 900H(4) further provides that this won't prevent the person from
making another claim for maternity immunisation allowance for the child or any
other person from making such a claim.
Implicit in these provisions, as
with the provisions dealing with payability for maternity immunisation
allowance, is that a family's circumstances might change between the date of a
child's birth and when the child reaches 18 months of age.
Existing
section 900J deals with making early claims for maternity allowance. It is
consistent with other family-related payments (family payment and parenting
allowance).
Item 20 repeals the existing section 900J and
inserts new section 900J.
New subsection 900J(1) deals with early claims
for maternity allowance and restates existing section 900J. It allows a person
to make a claim when they are not qualified for maternity allowance and for that
claim to be a proper claim, provided that the person becomes qualified during
the next 13 weeks.
New subsection 900J(2) deals with early claims for
maternity immunisation allowance. It provides that even if a person is not
qualified for a maternity immunisation allowance in respect of a child on the
day that the person lodges a claim for that allowance, provided that the person
becomes qualified during the next 117 weeks (13 weeks plus 104 weeks) or by the
day on which the child reaches the age of 2 years, the claim will be a proper
claim.
Item 22 repeals existing section 900L that deals with
lodgement of claims and inserts new section 900L. Again, it is essentially a
restatement of existing section 900L except that it takes account of maternity
immunisation allowance and removes the inappropriate reference to international
agreements.
Item 39 inserts new Division 8 that deals with
recipient obligations.
Recipient obligation provisions were not
previously included in the maternity allowance provisions as they were not
necessary given that it was a once-off payment. However, as a change in the
circumstances of either the person paid maternity allowance in respect of a
child or the child might affect any future payment of maternity immunisation
allowance to the person in respect of the child, recipient obligation provisions
need to be included.
New section 900Z sets out the recipient obligation
requirements. They are the same as those applying for other social security
payments.
Items 41 to 45 deal with the income taxation treatment
of maternity immunisation allowance. Maternity immunisation allowance will not
be a taxable payment.
Item 41 inserts a reference to maternity
immunisation allowance in the table in section 24AB of the Income Tax
Assessment Act 1936.
Item 42 inserts new section 24ABXAAA
into that Act so as to provide that payments of maternity immunisation allowance
are exempt.
Item 43 amends the definition of "separate net income"
in subsection 159J(6) of the Income Tax Assessment Act 1936 to
include a reference to maternity immunisation allowance.
Items 44 and
45 amend sections 52-10 and 52-40 of the Income Tax Assessment
Act 1997, respectively, to insert a reference to maternity
immunisation allowance in the tables in those sections.
5. Commencement
The amendments made by Schedule 1 to provide for the introduction
of the maternity immunisation allowance will commence on 1 January 1998.
Schedule 2 - Family payment: income test
1. Summary of proposed changes
This Schedule contains an amendment to the Social Security Act
1991 (the Social Security Act) to remove a requirement that the
Secretary make a determination that an event is an assumed notifiable event for
the purpose of the family payment income test. Instead, an event will be an
assumed notifiable event if a claim form lodged by or on behalf of a person
states that the event is an assumed notifiable event.
2. Background
The family payment income test is generally based on income for the
previous financial year (the base year); eg. in the 1997 calendar year, the base
year for family payment is the tax year ending 30 June 1996. However, the
income test may use current tax year income if a notifiable event or assumed
notifiable event has occurred and the income in the current tax year is expected
to be at least 10% above the base year income.
A notifiable event is an
event which might affect the payment of the family payment of a recipient
of family payment. It is a feature of the legislation that the class of
notifiable events does not include events which occur before a person becomes a
recipient of family payment. As noted above, however, the family payment income
test depends on circumstances in a previous income period which, in relation to
new claims, will be before the person became a recipient. A claimant - not yet
being a recipient - cannot therefore be asked to advise of notifiable events.
To deal with this situation, the concept of the assumed notifiable event was
invoked. Assumed notifiable events are notifiable events which occur after the
end of the base tax year and before the beginning of the family payment period,
ie prior to the claim.
The Department has previously relied on a question
in the family payment claim form about whether the claimant or his or her
partner had started or recommenced work during the current tax year in order to
impose an assumed notifiable event obligation. This had been intended to
provide the basis for changing the appropriate tax year in the family payment
income test. This practice has been criticised by the Social Security Appeals
Tribunal.
In response this amendment removes the requirement for a
determination by the Secretary that particular events are assumed notifiable
events. Instead the Social Security Act is to be amended to provide that an
assumed notifiable event is one which is identified as such in a claim
form.
3. Clause and schedule involved in the changes
Clause 2: provides that the amendments made by Schedule 2
commence on Royal Assent.
Schedule 2:
Item
1: repeals points 1069-H5 and 1069-H6 and substitutes new
points 1069-H5 and 1069-H6 which give effect to this change.
Item
2: provides that item 1 applies to all events occurring after the
commencement of this Schedule.
4. Explanation of the changes
Point 1069-H5 will be repealed and a new point 1069-H5 substituted.
Point 1069-H5 presently provides that the Secretary may make a determination
that an event, which is described in a notice given under
subsection 872(1), is an assumed notifiable event. New point 1069-H5
will provide that an assumed notifiable event is one which is stated to be so in
a family payment claim form approved by the Secretary and lodged by or on
behalf of a person.
Point 1069-H6 will be repealed and a new point
1069-H6 substituted. Point 1069-H6 presently provides that if the Secretary
gives a person a notice under subsection 872(1) the Secretary may state in the
notice that an event described in the notice is an notifiable event. New point
1069-H6 restates this provision so that it appears in the same form as new point
1069-H5.
5. Commencement
The amendments in Schedule 2 commence on the day of Royal
Assent.
Schedule 3 - Family payment: rent assistance
1. Summary of proposed changes
The amendments address two unintended consequences of the Social
Security Amendment (Family Measures) Act 1995 (the Family Measures Act)
in relation to rent assistance.
2. Background
The Family Measures Act implemented a new family payment regime with
effect from 1 January 1996. This Act replaced the existing family payment
regime (comprising family payment and additional family payment) with a new
single family payment. As a result of the changes, the following two unintended
consequences have arisen.
(i) rent assistance for persons receiving more
than the minimum standard family payment rate
Prior to 1 January 1996,
the qualification of a family payment recipient for rent assistance was linked
to qualification of the person for additional family payment. Under the new
regime, additional family payment was abolished and there was no longer a link
between the payment of rent assistance and the receipt of more than the minimum
family payment rate.
This has led to certain unintended consequences (for
example, nothing precludes the payment of rent assistance to a person absent
from Australia for more than 13 weeks, even though such a person would, under
the former legislation, have been precluded from receiving additional family
payment and, hence, could not have received rent assistance). It is proposed to
restore the link between the payment of rent assistance and the receipt of more
than the minimum family payment rate. This will be achieved by adding to the
qualification provisions for rent assistance the requirement that a person's
standard family payment rate must exceed the minimum family payment
rate.
(ii) rent assistance for certain pensioners and
allowees
Prior to 1 January 1996, a pensioner or allowee who was also a
family payment recipient might not qualify for additional family payment (for
example, because the person's only dependent child was overseas, or because of
the person's failure to take reasonable maintenance action). However, even
though this would have precluded payment of rent assistance as an adjunct to the
person's family payment, the person may have been entitled to rent assistance as
an adjunct to their pension or allowance.
Under the new regime, such an
entitlement could no longer arise. It is proposed to amend the legislation to
ensure that a person is entitled to rent assistance as an adjunct to their
pension or allowance, if the person would have been so entitled under the former
regime.
3. Clauses and schedule involved in the changes
Clause 2: specifies that Schedule 3 is taken to have
commenced on 1 January 1996, immediately after the commencement of Schedule
2 to the Family Measures Act.
Schedule 3:
Items 1 to
10: amends the Social Security Act 1991 (the Social Security
Act).
Items 1-8: repeal the following paragraphs in rate
calculators and substitute new paragraphs 1064-D1(f), 1066-D1(e), 1066A-EA2(h),
1066A-EB2(i), 1067-F1(h), 1067E-D1(f), 1068-F1(f) and
1068A-F1(g).
Item 9: makes a minor technical amendment to subpoint
1069-B5(1).
Item 10: inserts new paragraph
1069-E2(1)(e).
Item 11: amends the Student and Youth
Assistance Act 1973 (the Youth Act).
Item 11: repeals
paragraph D1(f) in Schedule 1 and substitutes a new paragraph.
4. Explanation of the changes
Amendments to the Social Security Act
Recipients of
a "social security pension" or a "social security benefit" (see
subsection 23(1)) may be entitled to receive rent assistance under one of
various rate calculators in Chapter 3. For example, point 1066-D1 in pension
rate calculator C (Part 3.4) provides that an additional amount to help
cover the cost of rent is to be added to a person's maximum basic rate if
certain conditions are satisfied. Currently, one of those conditions is that
neither the person nor the person's partner has a dependent child who is an FP
child. (The term "dependent child" is elaborated in subsections 5(2) - (9), and
"FP child" is defined in subsection 6(1).) A consequence of this condition is
that a person whose pension is calculated under Part 3.4 cannot receive rent
assistance as an adjunct to their pension if either the person or the person's
partner has an FP child.
Under the former legislation, a pensioner who
was also a family payment recipient might not have qualified for additional
family payment (for example, because the person's only dependent child was
overseas, or because of the person's failure to take maintenance action). This
would have precluded payment of rent assistance as an adjunct to the person's
family payment (as qualification for additional family payment was a
precondition to rent assistance entitlement). However, a pensioner in these
circumstances might have been qualified to rent assistance as an adjunct to
their pension (because former paragraph 1066-D1(e) entitled a person to
rent assistance if "neither the person nor the person's partner is qualified for
additional family payment for a dependent child of the person").
Items
1-8 propose to restore the entitlement to rent assistance of persons in such
circumstances (ie. those persons who would have been entitled to rent assistance
as an adjunct to their pension or benefit). For example, item 2
substitutes new paragraph 1066-D1(e), which provides that, where the person
or the person's partner is receiving family payment in respect of a dependent
child who is an FP child, the person will be entitled to rent assistance if the
standard family payment rate of the person or the partner does not exceed the
minimum family payment rate of the person or partner, as the case may be. (The
term "standard family payment rate" is defined in subsection 6(1) to mean
the amount worked out under Table B in point 1069-B2 in Module B of the Family
Payment Rate Calculator in section 1069. The term "minimum family payment
rate", also defined in subsection 6(1), generally means the "minimum standard
family payment rate", which has the meaning given by point 1069-B6 in
Module B of the Family Payment Rate Calculator in section 1069.)
Items
1 and 3-8 make corresponding amendments to rent assistance modules in other
relevant rate calculators.
Item 9 makes a minor technical
amendment to subpoint 1069-B5(1). The phrase "standard rate of family payment"
is replaced with the term "standard family payment rate", which is defined in
subsection 6(1).
Item 10 amends the family payment rate calculator
to ensure that a person is entitled to rent assistance only if the person
receives more than the minimum family payment rate. This amendment restores the
legislation to a position corresponding with that which existed under the former
regime, when a family payment recipient was entitled to rent assistance only if
the recipient was qualified for additional family payment.
Certain
unintended consequences flowed from the removal of the link between the payment
of rent assistance to a family payment recipient and the receipt of more than
the minimum family payment rate. For example, under the current legislation
nothing precludes the payment of rent assistance to a person absent from
Australia for more than 13 weeks, even though such a person would, under
the former legislation, have been precluded from receiving additional family
payment and, hence, could not have received rent assistance. Item 10
will overcome such problems by adding to the qualification provisions for rent
assistance (for a family payment recipient) the requirement that a person's
standard family payment rate must exceed the person's minimum family payment
rate.
Amendment to the Youth Act
Module D in
Schedule 1 provides for the payment of rent assistance to recipients of youth
training allowance. Item 11 amends paragraph D1(f) in terms
corresponding to the amendments made by items 1-8.
5. Commencement
The amendments made by Schedule 3 are taken to have commenced on
1 January 1996, immediately after the commencement of Schedule 2 to
the Social Security Legislation Amendment (Family Measures) Act
1995.
Schedule 4 - Family payment: maintenance income test
1. Summary of proposed changes
Schedule 4 amends the Social Security Act 1991 (the
Social Security Act) to clarify the intended scope of the family payment
maintenance income test.
2. Background
The Social Security Legislation Amendment (Family Measures) Act
1995 (the Family Measures Act) implemented a new family payment regime,
with effect from 1 January 1996. This Act replaced the existing
family payment regime (incorporating family payment and additional family
payment) with a new single family payment.
However, a problem has emerged
in relation to the maintenance income test, (and point 1069-J1 in
particular). Point 1069-J1 provides a method statement for working out how a
person's maintenance income affects the person's rate of family payment. The
problem relates to step 1 of that method statement.
Under the former
regime, maintenance income only affected additional family payment (AFP).
Therefore, if payment for the child was limited to basic family payment (FP),
then any maintenance received in relation to that child was
disregarded.
However, with the repeal of the former provision and its
replacement with new point 1069-J1 in the Family Measures Act, the
reference to AFP child in step 1 of the method statement in point 1069-J1 was
replaced by a reference to FP child. The result of this is that maintenance
income for any dependent child who qualifies a person for family payment
(regardless of the rate) is assessed under the maintenance income
test.
Two groups of people have been identified as being disadvantaged by
this change. The first, being those people whose child is temporarily overseas
and whose rate of family payment for the child is limited because of the
application of point 1069-B7. The second group are those people who, while they
still receive some maintenance income in respect of their child, have not
satisfied the Secretary that they are taking reasonable maintenance
action. In such a case, point 1069-K3 applies to specify that the person is to
be paid in accordance with point 1069-B6.
3. Clauses and schedule involved in the changes
Clause 2: specifies that the amendments made by Schedule 4
commence on 1 January 1996, immediately after the commencement of Schedule 3 to
the Family Measures Act.
Schedule 4:
Item 1 : amends
step 1 of the Method statement in point 1069-J1 to exclude certain children from
the operation of the maintenance income test.
Item 2: makes
consequential amendments to point 1069-J8(1), necessary as a result of the
amendments in item 1 above.
4. Explanation of the changes
Part 3.7 of the Act sets out the provisions relating to the payment of
family payment. Module J lays down the maintenance income test. Point 1069-J1
includes a method statement which is used to work out the effect of a person's
maintenance income on the person's rate of family payment.
Item 1
of Schedule 4 omits the phrase "for a dependent child who is not an FP
child" which has the effect of applying the maintenance income test to all FP
children. This phrase is replaced with three paragraphs which exclude certain
children from the test.
The first paragraph excludes maintenance income
received in relation to dependent children who are not an "FP child". This
provision duplicates current point 1069-J1.
However, the second and third
paragraphs introduce two new groups of children who are excluded from the
operation of the maintenance income test, even though they are an "FP child",
and thus family payment is paid in relation to them (albeit at a lower
rate).
The first (in new paragraph 1069-J1(b)) excludes those children
who attract a specified (lower) rate of family payment because they are
temporarily outside Australia and so attract the operation of point
1069-B7.
The second, (in new paragraph 1069-J1(c)) excludes children to
whom point 1069-K3 applies. Point 1069-K3 applies where a person (or their
partner) is able to claim maintenance for the child, it would be reasonable for
the person to do so, but the person does not pursue the maintenance, or does not
satisfy the Secretary that the action taken is reasonable. In such a case, the
family payment to be paid in respect of that child is limited to the amount set
out in the formula in point 1069-B6.
The rationale of limiting the effect
of point 1069-J1 in relation to people affected by point 1069-K3 is that they
have already been 'penalised' by failing to take maintenance action. It would
then be unfair to include the amount of the maintenance actually received by the
person in working out the impact of maintenance where the person has other
children for whom a higher rate of family payment may be paid.
As a
result of the amendments in item 1, it has also been necessary to amend
point 1069-J8(1).
Point 1069-J8 specifies how to calculate a
person's maintenance income free area. This is worked out by using Table J in
point 1069-J8. Point 1069-J8(1) describes the process for working out the free
area. In this point, the reader is directed to work out the relevant amount in
column 3 for the person's circumstances, and, if the person has more than one
child, an additional amount from column 5 is added for each FP child after the
first. As certain FP children will be excluded from the operation of the
maintenance income test because of the amendments in item 1, it is also
necessary to amend point 1069-J8(1) to also exclude those children from the
calculation of the maintenance income free area. Thus, item 2 amends
point 1069-J8 to exclude those children from this calculation.
5. Commencement
The amendments inserted by Schedule 4 commence on 1 January 1996,
immediately after the commencement of Schedule 3 to the Family Measures
Act.
Schedule 5 - Family payment: qualification of approved care organisation
1. Summary of proposed changes
This Schedule contains an amendment to the Social Security Act
1991 (the Social Security Act) to remove an anomaly that allows an
approved care organisation to be paid family payment in respect of a child who
is a family payment child of a natural person, but that person does not meet all
the qualification criteria for family payment.
2. Background
The Social Security Act provides for different rules for qualification
for family payment as between natural persons and approved care
organisations.
To qualify for family payment, a person must have an 'FP
child' and an approved care organisation must have an 'FP child of an approved
care organisation'. The intention has always been that where a person has an FP
child, then, irrespective of whether that person meets the other family payment
qualification criteria, family payment is not payable to an approved care
organisation in respect of that FP child. Currently, that intention is not
reflected in the Social Security Act because nothing precludes family payment
from being paid to an approved care organisation where a person has an FP child.
For example, where a person does not qualify for family payment in respect of an
FP child because the person's income exceeds the income ceiling, an approved
care organisation can still satisfy the qualification criteria for FP, despite
the fact that the young person is an FP child of the person.
A
consequence flowing from the above described problem is that if double orphan
pension and/or child disability allowance is payable to a person in respect of a
child who is under 16 or is a student child, then family payment may also be
payable to an approved care organisation in respect of the same young
person.
3. Clause and schedule involved in the changes
Clause 2: provides that the amendments made by Schedule 5
commence on Royal Assent.
Schedule 5:
Item 1: amends
paragraph 839(1)(a).
4. Explanation of the changes
Section 839 provides for when an approved care organisation is qualified
for family payment for a young person. Item 1 amends
paragraph 839(1)(a) by inserting a phrase which operates with the effect
that for an approved care organisation to be qualified for family payment in
respect of a young person, the young person must not be an FP child of any
person. This amendment ensures that an approved care organisation is not
qualified for family payment in respect of any young person who is an FP child
of a natural person.
5. Commencement
The amendment made by Schedule 5 commences on Royal
Assent.
Schedule 6 - Family payment: child or parents outside Australia
1. Summary of proposed changes
This amendment is to allow above the minimum rate family payment to be
paid when a family payment child and/or the family payment recipient is outside
Australia for up to 8 weeks.
2. Background
At present, family payment under the Social Security Act
1991 (the Social Security Act) is paid above the minimum rate for up to
13 weeks when one or both parents leave Australia temporarily, as long as the
child remains in Australia. If the absence from Australia continues beyond 13
weeks, the rate drops to the minimum rate. However, if the child leaves
Australia at all, family payment drops to the minimum rate.
This has
produced some undesirable results when children have travelled overseas for
reasons such as community or school sponsored trips for educational, cultural,
medical or sporting purposes, compassionate trips (eg, terminally ill child or
relative) and visits to non-custodial parents. It has also tended to restrict
parents from taking their children with them on short trips
overseas.
This measure will allow above the minimum rate family payment
to continue for up to 8 weeks should the child and/or one or both parents
leave Australia temporarily. Therefore, the child will now be allowed to leave
Australia for a period without the payment rate being affected. Also, for the
sake of consistency, the period for which a parent may leave without the payment
rate being affected will be reduced from 13 to 8 weeks.
3. Clause and schedule involved in the changes
Clause 2: provides that the amendments will commence on
1 January 1998.
Schedule 6:
Item 1: omits
the reference to 13 weeks in paragraph 837(2)(a) and substitutes a reference to
8 weeks.
Item 2: omits the reference to 13 weeks (including some
obsolete words relating to the commencement of the new family payment package on
1 January 1996 and now not necessary) in subpoint 1069-B5(1) and
substitutes a reference to 8 weeks.
Item 3: omits the reference to
13 weeks (including some obsolete words relating to the commencement of the new
family payment package on 1 January 1996 and now not necessary) in
paragraph 1069-B5(2)(a) and substitutes a reference to 8 weeks. The
heading to point 1069-B5 is also consequentially amended.
Item
4: adds words to subpoint 1069-B7(1) relating to the family payment child
having been outside Australia for more than 8 weeks.
Item
5: repeals existing paragraph 1069-B7(2)(b) and substitutes a new paragraph
(b).
Item 6: omits the reference to 13 weeks in paragraph
1069-F2(2)(a) and substitutes a reference to 8 weeks.
Item
7: repeals existing paragraph 1069-F2(2)(b) and substitutes new paragraphs
(b) and (c).
Item 8: omits the words "the only FP child" from
subpoint 1069-F2(3) and substitutes the words "an FP child".
Item
9: omits the reference to 13 weeks (including some obsolete words relating
to the commencement of the new FP package on 1 January 1996 and now
not necessary) in paragraph 1069-F2(3)(a) and substitutes a reference to 8
weeks.
Item 10: provides the application clause for these
amendments.
4. Explanation of the changes
Above the minimum rate family payment is built into the "standard family
payment rate". This is worked out under Module B of the Family Payment Rate
Calculator in Part 3.7 of the Social Security Act. Point 1069-B2 provides that,
subject to the following provisions of the Module, a person's standard FP rate
is worked out by adding together the specified family payment child rates for
each family payment child of the person.
One of the following provisions
that modifies the standard family payment rate rule is subpoint 1069-B5(1).
This provides that a person's standard rate of family payment at a time when the
person has been absent from Australia for more than 13 weeks may not exceed the
person's "minimum family payment rate".
The term minimum family payment
rate is defined in subsection 6(1). It means, for a person for whom no large
family supplement or multiple birth allowance is included in the family payment
rate, the "minimum standard family payment rate". Otherwise, the minimum family
payment rate is the sum of those special components and the person's minimum
standard family payment rate. Minimum standard FP rate in turn is defined as
having the meaning given by point 1069-B6.
Point 1069-B6 provides that a
person's minimum standard family payment rate is the amount per fortnight
specified multiplied by the number of dependent family payment
children.
Thus, above the minimum rate family payment currently cuts out
when the person has been absent from Australia for more than 13 weeks. Item
2 of Schedule 6 will now substitute 8 weeks for the 13 weeks currently
specified in subpoint 1069-B5(1) to allow the family payment recipient to leave
Australia for up to 8 weeks without losing the above the minimum rate family
payment.
Item 3 makes a minor consequential amendment to paragraph
1069-B5(2)(a) to reflect the substantive change made by item 2. This
rule will now provide that a person who returns to Australia after having been
absent for more than 8 weeks (instead of 13 weeks) and who leaves again within
13 weeks will be taken to have continued to be absent from Australia during the
intervening period.
Item 1 makes an additional consequential
amendment to paragraph 837(2)(a). This currently provides that a child ceases
to be an FP child of the person if he or she continues to be absent from
Australia for more than 13 weeks and another person claims and is qualified for
family payment for the child. This reference is now changed to 8 weeks as a
consequence of this initiative.
Thus, items 1, 2 and 3 relate to
the period for which the family payment recipient may leave Australia without
losing above the minimum rate FP. Items 4 and 5 relate to the period for
which the child may leave Australia.
Subpoint 1069-B7(1) is another
provision that modifies the operation of point 1069-B2 dealing with a
person's standard FP rate. Subpoint 1069-B7(1) currently provides that, if an
family payment child of a person is outside Australia, the family payment child
rate for that child is a rate which is equal to the minimum standard
family payment rate; this overrides the higher family payment child rates
specified in Table B of point 1069-B2.
Thus, above the minimum rate
family payment for a particular family payment child currently cuts out when
that child is outside Australia. Item 4 now adds to
subpoint 1069-B7(1) after "If an FP child of a person is outside Australia"
the words "for more than 8 weeks". In this way, the child concerned will
attract the elimination of the above the minimum rate family payment after
8 weeks but other children in the family who remain in Australia will
continue to attract the higher rates dictated by
point 1069-B2.
Item 5 makes a minor consequential amendment
to paragraph 1069-B7(2)(b) that is for the same purpose as the amendment made by
item 3 above.
Items 6, 7, 8 and 9 relate to guardian
allowance. Since only minimum family payment rate is to be paid if either the
parent or the child leaves Australia for more than 8 weeks, these
amendments flow through to guardian allowance under Module F.
Subpoints
1069-F2(2) and (3) contain similar rules to current point 1069-B5. Guardian
allowance is not currently to be added to a person's standard FP rate if the
person has been outside Australia for more than 13 weeks. Nor is it to be added
if the person has only one family payment child and that child is outside
Australia. Furthermore, if the person or the only family payment child returns
to Australia after more than the requisite absence and then leaves again within
13 weeks, the person or the child is taken to have continued to be absent during
the intervening period (subpoint 1069-F2(3)).
Item 6 amends
paragraph 1069-F2(2)(a) to refer to the absence from Australia of the person
that is allowed without the payment of guardian allowance being affected as
being for 8 weeks instead of 13 weeks. Item 7 repeals
paragraph 1069-F2(2)(b) and substitutes new paragraphs (b) and (c). Paragraph
(b) applies when the person has only one family payment child; it allows that
child to be absent from Australia for up to 8 weeks without the payment of
guardian allowance being affected. Paragraph (c) applies when the person has 2
or more family payment children; it allows the payment of guardian allowance to
continue until all of those children have been outside Australia for more than 8
weeks.
The amendment made by item 8 is a minor consequential
amendment flowing from the substitution of new paragraphs 1069-F2(2)(b) and (c)
by item 7.
Item 9 makes a minor consequential amendment to
paragraph 1069-F2(3)(a) that is for the same purpose as the amendment made by
item 3 above.
Item 10 provides that the amendments made by
this Schedule apply to absences from Australia beginning on or after the
commencement of these amendments. An absence from Australia already in train at
the time of commencement will continue to attract the current rules.
5. Commencement
The amendments made by Schedule 6 commence on 1 January
1998.
Schedule 7 - Family payment: hardship provisions
1. Summary of proposed changes
This measure will modify one of the existing family payment (FP) hardship
provisions. This will better target FP by excluding families with both a
moderately high assets value and a moderately high income or availability of
liquid assets. Such families cannot be regarded by current community standards
as being in hardship.
2. Background
Qualification for individual FP under the Social Security Act is provided
by section 838. One of the essential qualification criteria is that the
value of the person's assets not exceed the specified assets value limit
(paragraph 838(1)(d)).
However, subsection 838(1A) points out that
paragraph (1)(d) does not apply to a person if a determination under subsection
1132A(1A), (1B) or (1C) is in force in relation to the person.
Those
three subsections provide special hardship rules to allow people in particular
circumstances of hardship to continue to qualify for FP when the assets value
limit would ordinarily disqualify them.
One of these hardship provisions
(provided by subsection 1132A(1B)) is now generally regarded as unduly generous,
allowing a person to continue to qualify for FP despite having both a moderately
high assets value and a moderately high income or availability of liquid assets.
This provision is to be repealed and reinserted in an amended form.
The
new hardship provision will allow the continued qualification for FP at minimum
rate of a person:
whose assets value is within the moderately high range
currently specified in subsection 1132A(1B) and whose liquid assets value
or estimated income is equal to or more than the moderate limits currently
specified in the subsection
BUT
whose estimated income is equal to or less than the cut-out point for the
payment of above the minimum FP for the appropriate number of children for the
person, based on the under age 13 rate.
The two remaining hardship
provisions (subsections 1132A(1A) and (1C)) will continue to provide relief for
people whose assets values are either moderately high or high and whose liquid
assets and estimated income levels are low.
3. Schedule and clauses involved in the changes
Clause 2(5): provides that the majority of these amendments will
commence immediately before 1 January 1998.
Clause
2(6): provides that the amendments made by items 4 and 5 of Schedule
7 are taken to have commenced on 1 January 1996, immediately after the new
FP package. This special commencement rule is to give retrospective effect to a
minor technical correction (made by the items referred to) to a provision
originally incorrectly inserted by that package.
Schedule
7
Item 1: repeals existing subsection 1132A(1B) and
substitutes new subsections (1B), (1BA) and (1BB).
Items 2 and
3: renumber as Note 1 the existing note to subsection 1132A(1C) and insert a
new Note 2 to the subsection.
Items 4 and 5: repeal the existing
definition in subsection 1132A(5) of "liquid assets value limit" and reinsert a
definition of "liquid assets limit" in exactly the same terms. This is to
correct a minor technical error that occurred in the original insertion of the
provisions. The term used elsewhere in the section, which should be the subject
of the definition, is "liquid assets limit".
Item 6: inserts a new
item 35 into the table of indexed and adjusted amounts in
section 1190.
Item 7: inserts a new item 26 into the CPI
indexation table in section 1191.
Item 8: inserts new
subsection (5) into section 1194.
4. Explanation of the changes
Item 1 of Schedule 7 removes the existing hardship rule provided
by subsection 1132(1B) and inserts a new rule in a new subsection (1B).
This provides that the essential FP qualification criterion provided by
paragraph 838(1)(d) that a person's assets value not exceed the specified limit,
does not apply in a particular situation of hardship. The situation is
when:
(a) the person's assets value exceeds the usual limit ($406,000 at
the time of drafting) but does not exceed the specified higher limit ($602,500
at the time of drafting); and
(b) either:
(i) the value of the
person's liquid assets is equal to or greater than the liquid assets limit laid
down in subsection 1132A(5); or
(ii) the person's estimated income is
equal to or greater than the threshold amount worked out under subsection
1132A(2); and
(c) the person's estimated income is equal to or less than
the income hardship limit for the person worked out under new
subsection 1132A(1BA).
New subsection 1132A(1BA) provides through a
table that a person's "income hardship limit" for the purposes of new paragraph
1132A(1B)(c) is an amount of $27,125 for a person with one FP child plus an
amount of $4,399 for each FP child after the first. These figures (current at
the time of drafting) represent the point at which above the minimum rate FP
ceases to be payable under the FP income test, based on the under age 13
rate.
New subsection 1132A(1BB) makes it clear that the term "FP child"
as used in new subsection (1BA) includes a student child who is aged 16 or
17 and who is receiving payments under a prescribed educational scheme and also
includes a child in respect of whom two people are sharing FP under a section
869 declaration. This rule, which is consistent with that laid down by point
1069-H30 relating to the FP income test, makes sure that the same children are
taken into account under the new hardship provision as are considered more
broadly under the FP income test.
A new Note 2 to subsection 1132A(1C),
inserted by item 3, points out that, if a person is the subject of a
hardship determination under either subsection 1132A(1B) or (1C), section 861A
limits the rate payable to the minimum FP rate. This rule already existed and
is consistent with this measure - the new Note is merely to highlight its
presence.
Items 6, 7 and 8 provide for the indexation of the
amounts used to work out a person's income hardship limit under new subsection
1132A(1BA). These figures need to be indexed to maintain their relativity to
the rate calculation process and preserve the effect of the policy behind this
measure.
Item 6 makes a new entry (item 35) in the indexed and
adjusted amounts table in section 1190 to set out the amounts to be
indexed, to create an abbreviated reference for the amounts and to record the
relevant provisions in which the amounts are used. In this case, both amounts
will be indexed as one and are given the abbreviated reference FP
HIL.
Item 7 makes a new entry (item 26) in the CPI indexation
table in section 1191. This will allow the income hardship limit amounts to be
indexed on each indexation day for the amounts, using the reference quarter and
base quarter for the amounts and indexation day, and rounding off as specified.
In this case, the indexation day will be 1 January each year. The
reference quarter will be June and the base quarter will be the most recent June
quarter before the reference quarter. However, the rounding up rule is not
provided in the table - new subsection 1194(5) (inserted by item 8)
provides a special rounding rule. This new subsection provides for the indexed
income hardship limit amounts to be rounded up to the nearest $1.
It
should be noted that the income hardship limit amounts specified in new
subsection 1132A(1BA) are current at the time of drafting these amendments.
However, the amounts are due to change on 1 January 1998 (the proposed date of
commencement of these amendments) because of indexation to the component parts
of the rate calculation process from which these amounts are derived. These
changes could not be predicted at the time of drafting.
To deal with this
technical difficulty, the commencement date for this measure provided by
clause 2(5) will be immediately before 1 January 1998 so that the
income hardship limit amounts will commence and then immediately be indexed by
the new indexation provision on 1 January 1998. This will keep the amounts in
step with the rate calculation components from which they are
derived.
This initiative will also flow through to maternity allowance
(MA) under Part 2.17A of the Social Security Act. However, specific amendment
is not needed to achieve this. Because qualification for MA is linked to
qualification for FP (see paragraph 900B(4)), these amendments to the FP
hardship rules will equally flow through to MA claimants in the same
circumstances.
5. Commencement
The majority of these amendments will commence immediately before 1
January 1998, for the reason discussed above. However, items 4 and 5 of
Schedule 7 will be taken to have commenced on 1 January 1996, immediately
after the commencement of Schedule 2 to the Social Security Legislation
Amendment (Family Measures) Act 1995. This is to overcome a minor technical
deficiency in a provision originally inserted by that Schedule.
Schedule 8 - Fringe benefits
1. Summary of proposed changes
Schedule 8 extends the range of employer provided fringe benefits
currently taken into account in the income test for family payment, maternity
allowance and childcare assistance. This extension will cover employer provided
fringe benefits received by the employee in the form of financial investments,
as well as reimbursements to an employee for expenses incurred for his or her
private use.
2. Background
An income test is applied to determine a person's eligibility to receive
family payment, childcare assistance and maternity allowance. The income test
that applies for all these payments is the family payment income test which
operates with the effect that:
• for family payment income
determines the rate payable;
• for childcare assistance income
determines the percentage of assistance payable, and;
• for
maternity allowance income determines qualification.
Income includes the
value of any assessable employer provided fringe benefits in the form of school
fees, health insurance, accommodation, cars and loans.
Given the
relatively narrow range of fringe benefits that are currently taken into account
in the family payment income test, there is potential for high income
individuals to qualify for family payment, childcare assistance or maternity
allowance because a large proportion of their income falls outside the range of
fringe benefits included in the income tests. Consequently, this amendment will
expand the range of fringe benefits to ensure that all forms of income of high
income earners are taken into account in determining eligibility for these
payments in accordance with the original policy intention that the payments are
targeted to those families most in need of assistance.
3. Clause and schedule involved in the changes
Clause 2: provides that the amendments made by Schedule
8 commence on 1 January 1998.
Schedule 8:
Items 1 to
7: amend subsection 10A(2).
Item 8: amends point
1067-G14A.
Item 9: amends point 1067-G14B.
Item
10: amends point 1067-G14C.
Item 11: inserts new point
1067-G14CA.
Item 12: amends subsection 1157A(1).
Item
13: inserts new subsections 1157JA, 1157JB and 1157JC.
Item
14: inserts new Divisions 8 and 9 into Part 3.12A and new subsections 1157UA
and 1157UB.
4. Explanation of the changes
Definitions
Section 10A(2) deals with definitions
relating to the family payment income test and the parental means test.
Items 1 to 7 amend these definitions to accommodate the two new fringe
benefits, as follows. Item 1 inserts new paragraphs (f) and (g) into the
definition of assessable fringe benefit in subsection 10A(2) to provide that an
expense benefit and a financial investment benefit come within the definition of
assessable fringe benefit. A reference is contained in new paragraph 10A(2)(f)
directing the reader to section 1157JA which defines an expense benefit. A
similar reference is contained in new paragraph (g) directing the reader to
section 1157JC which defines a financial investment benefit.
Item 5
inserts a definition of an expense fringe benefit which states that it means
a fringe benefit that is an expense benefit. Item 4 inserts a definition
of expense benefit which states that it has the meaning given by section 1157JA.
Item 2 inserts a reference into subsection 10A(2) which provides that an
exempt expense benefit is not included in the definition of an assessable fringe
benefit. Item 3 inserts a reference in the note to the definition of an
assessable fringe benefit directing readers to new section 1157JB which deals
with when an expense benefit is exempt from being an assessable fringe
benefit.
Item 7 amends subsection 10A(2) by inserting a definition
of a financial investment fringe benefit which provides that it means a fringe
benefit that is a financial investment benefit. Item 6 inserts a
definition of a financial investment benefit which states that it has the
meaning given by section 1157JC.
New fringe
benefits
Division 2 of Part 3.12A deals with benefits that may be
assessable fringe benefits, and item 13 inserts three new sections into
that division. Those new sections deal with expense benefits and financial
investment benefits, as detailed below.
Expense
benefits
Item 13 inserts new section 1157JA which provides
that an expense fringe benefit arises where an employer, an associate of the
employer or another person under an arrangement with the employer or associate
pays an amount for the employee's non-employment related use. The payment can
be made to any person connected with the employee. Section 1157JA further
provides that a person connected with the employee may be the employee's
partner, a dependent child of either the employee or his or her partner, or, a
person who would be a dependent child of either if the person was not receiving
a newstart or sickness allowance. Examples of expense fringe benefits include
telephone expenses, holiday expenses, medical or hospital expenses, union dues,
fuel or power expenses, grocery bills, entertainment expenses, credit card or
fuel accounts and eduction expenses. Expense fringe benefits do not include
amounts that are paid either to reimburse, or meet, expenses incurred in
connection with the employee's employment. That being the case, item 13
therefore also inserts new section 1157JB which provides that an expense benefit
is exempt from being treated as an assessable fringe benefit in those
circumstances.
Item 14 inserts new Division 8 of Part 3.12A of the
Social Security Act which deals with the value of an expense fringe benefit.
New section 1157UA provides that the value of an expense fringe benefit is the
actual amount of the payment made to cover, or reimburse, the particular
expense.
Financial investment fringe benefits
Item
13 inserts new section 1157JC which provides that a financial investment
fringe benefit arises where an employer, an associate of the employer or another
person under an arrangement with the employer or associate pays for, or
reimburses the cost of, the acquisition of a financial investment by the
employee or a person connected with the employee. A person connected with the
employee may be the employee's partner, a dependent child of either the employee
or his or her partner, or, a person who would be a dependent child of either the
employee or his or her partner if the person was not receiving a newstart or
sickness allowance. Examples of financial investment fringe benefits include
units in cash management trusts and shares.
The definition of a financial
investment is contained in subsection 9(1), and includes managed investments
which themselves are defined to include an investment in a superannuation fund,
or an ATO small superannuation account, where the investor has not yet turned
pension age. It is not intended that any payments made for superannuation
purposes are treated as financial investment fringe benefits, either before or
after pension age. This policy intention is provided for in new
subsection 1157JC(2).
Item 14 inserts new section 1157UB
which provides that the value of a financial investment fringe benefit is the
value of the financial investment benefit when it is received. Under new
subsection 1157JC (see Item 13) a person receives a financial investment
fringe benefit at the time the financial investment is paid for by the employer
(or associate, arranger or other person), or the cost of the financial
investment is reimbursed by the employer (or associate, arranger or other
person). That is, the value of the financial investment benefit is the amount
paid either to acquire, or reimburse acquisition of, the financial investment.
The value of the financial investment would, therefore, include any amount paid
to establish or maintain the investment, such as, for example, management or
brokerage fees.
Parental means test
The extension of
the range of assessable fringe benefits in the family payment income test is not
intended to extend to the parental means test. Consequently, Item 11
inserts new subsection 1067-G14CA into Module G of the Benefit Rate
Calculator A, (which deals with the parental means test) to provide that
references to assessable fringe benefits contained in points 1067-G14A to
1067-G14C do not include references to expense fringe benefits or financial
investment fringe benefits. Items 8 to 10 amend points
1067-G14A, 1067-G14B and 1067-G14C (which deal with the combined parental fringe
benefits value) to state that those points operate subject to new point
1067-G14CA.
Section 1157A sets out the purpose of Part 3.12A of the
Social Security Act which contains general provisions relating to the family
payment income test and the parental means test, including describing the kinds
of benefits that can be assessable fringe benefits. Item 12 amends
subsection 1157(1) to confine the operation of the provisions relating to
expense fringe benefits and financial investments fringe benefits to the family
payment income test only, and not the parental means test.
5. Commencement
The amendments in Schedule 8 will commence on 1 January
1998.
Schedule 9 - Resumption of family payment after termination of payment
1. Summary of proposed changes
This Schedule contains an amendment which provides a mechanism for the
resumption of payment following automatic termination of family payment.
This corrects an anomaly in the Social Security Act 1991 (the
Social Security Act).
2. Background
Section 883 of the Social Security Act provides a mechanism for
resumption of payment following a favourable review of a manual
determination - under section 880 or 881 - to cancel or suspend family payment.
However, there is no equivalent mechanism for resumption when the payment was
cancelled under the automatic termination provision
(section 876).
3. Clause and schedule involved in the changes
Clause 2: provides that the amendments made by Schedule 9
commence on Royal Assent.
Schedule 9:
Item
1: repeals subsection 883(1) and substitutes a new
subsection 883(1).
4. Explanation of the change
Presently, subsection 883(1) provides that the Secretary may, on review
of a decision that family payment ceased to be payable as a result of a manual
cancellation or suspension (under section 880 or 881), make a determination that
family payment was or is payable to the person.
The new subsection 883(1)
provides that the Secretary may, on review of a decision that family payment
ceased to be payable as a result of a manual cancellation or suspension (under
section 880 or 881) or automatic termination (under section 876), make a
determination that family payment was or is payable to the person. Such a
determination may be made whether the family payment ceased to be payable before
or after the commencement of this amendment.
5. Commencement
The amendment made by Schedule 9 commences on the day of Royal
Assent.
Schedule 10 - Parenting allowance bereavement payment
1. Summary of proposed changes
Amendments made in this Schedule to the Social Security Act
1991 (the Social Security Act) enable the payment of parenting allowance
to continue for 14 weeks after the death of the last parenting allowance child
if either the parenting allowance recipient or the recipient's partner were
receiving more than the minimum rate of family payment for the
child.
2. Background
Currently, if the last parenting allowance child of a parenting allowance
recipient dies, the recipient continues to qualify for parenting allowance for
further 14 weeks after the child's death if she or he was also receiving
additional family payment (or, from 1 January 1996, more than the minimum
rate of family payment) for the child.
If not the parenting allowance
recipient, but the recipient's partner, was receiving family payment for the
child, section 951W does not allow the recipient's qualification for parenting
allowance to continue after the death of the child.
As a result of these
amendments, the parenting allowance recipient whose last parenting allowance
child dies will remain qualified for parenting allowance for the bereavement
period of 14 weeks regardless of whether the recipient or the recipient's
partner was receiving family payment for the child at the specified
rate.
3. Schedule and clauses involved in the changes
Clause 2: specifies the commencement date as the day of Royal
Assent.
Schedule 10:
Item 1: amends subsection
951W(1).
Item 2: provides for the application of the item 1
amendments.
4. Explanation of the changes
Section 951W provides that if a parenting allowance recipient's last
qualifying child dies, the person is qualified for parenting allowance for the
period of 14 weeks that starts on the next day after the child's death if
the requirement specified in subparagraph 951W(1)(d)(i) or (ii) is
met.
Subparagraph 951W(1)(d)(i) requires that, immediately before the
child's death, the parenting allowance recipient was receiving additional family
payment for the child.
Subparagraph 951W(1)(d)(ii) is intended for
recipients of service pensions and limits the operation of section 951W to those
situations where a service pension includes child add-ons or guardian
allowance.
Item 1 repeals subparagraph 951W(1)(d)(i) and
substitutes a new subparagraph 951W(1)(d)(i) that refers to the person or
the person's partner receiving family payment for the child. This item
also amends the now obsolete reference in subparagraph 951W(1)(d)(i) to
"additional family payment" to refer to "family payment at a rate exceeding the
minimum family payment rate". (As a result of amalgamation of basic and
additional family payments from 1 January 1996, an additional family payment was
substituted by a family payment paid at a rate exceeding the minimum family
payment rate). As a consequence of the amendments made by item 1,
section 591W will provide for the parenting allowance recipient's 14-week
extension of qualification after the death of the last child when the recipient
or the recipient's partner was receiving family payment for the child at a rate
exceeding the recipient's or the recipient's partner's minimum family payment
rate. Section 951W will also operate if the recipient or the recipient's
partner receives family payment at a lower than the required rate if that rate
is paid as a result of the Secretary's determination under section 869
specifying the person's share of the family payment.
Item 2
specifies that the new subparagraph 951W(1)(d)(i) applies in respect of children
who died after the commencement of these amendments.
5. Commencement
The amendments in Schedule 10 commence on the day of Royal
Assent.
Schedule 11 - Early claims for family, maternity and parenting allowances
1. Summary of Changes
Schedule 11 amends the early lodgement provisions in the
Social Security Act 1991 (the Social Security Act) that relate to
family payment, maternity allowance and parenting allowance so that the
provisions will not apply where qualification for payment is dependent on the
birth of a child.
2. Background
The early lodgment provisions for family payment, maternity allowance and
parenting allowance were inserted in line with the early lodgement provisions
for social security pensions. However, the rationale for pensions early
lodgment provisions does not carry across to family payment, maternity allowance
and parenting allowance. In practice, family payment claims resulting from
qualification because of the birth of a child are not lodged in advance. In
most instances, the family payment form is given by hospital staff to potential
customers after the birth of a child and is lodged fairly promptly. The
introduction of maternity allowance has given extra stimulus to prompt lodgment
of family payment claims.
Early lodgment of claims for payments,
qualification for which rests on the birth of a child, is considered to be
undesirable in that there is no satisfactory process for finalising such claims.
For example, in making contact with the claimant the Department would run the
risk of upsetting mothers of children stillborn or who had died shortly after
birth. In other cases, where the baby's birth occurred outside the 13 week
early lodgment period, the initial claim would have to be rejected and a new
claim would need to be lodged.
There are some instances, however, where
early claims remain appropriate. For example, a person may become qualified for
family payment by commencing to meet the income test requirements at the start
of a financial year or a sole parent may commence to qualify for parenting
allowance through re-partnering. In these circumstances, lodgment of a claim in
advance of qualification is desirable.
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date for Schedule 11
as 1 January 1998 but, if the Social Security and Veterans'
Affairs Legislation Amendment (Family and Other Measures) Act 1997
contains a Schedule headed Maternity allowances, Schedule 11 commences
immediately after the commencement of that Schedule.
Schedule
11:
Item 1: repeals paragraph 843(3)(c) and inserts new
paragraph 843(3)(c) (for family payment).
Item 2: repeals
paragraph 900J(1)(c) and inserts new paragraph 900J(1)(c) (for maternity
allowance - see item 6).
Item 3: repeals paragraph
900J(2)(c) and inserts new paragraph 900J(2)(c) (for maternity immunisation
allowance - see item 6).
Item 4: repeals existing paragraph
900J(c) and inserts new paragraph 900J(c) (for maternity allowance - see
item 6).
Item 5: repeals existing paragraph 911(4)(c) and
inserts new paragraph 911(4)(c) (for parenting allowance - see item
6).
Application provision
Item
6: provides for the application of the amendments made by
Schedule 11.
4. Explanation of the changes
Item 1 amends paragraph 843(3)(c) of the Social Security Act to
provide that a claim for family payment may be lodged up to 13 weeks before the
claimant becomes qualified for the payment, and therefore set the provisional
commencement day as the first day on which the claimant is qualified for the
payment, except in the case where qualification is dependent on the birth of a
child.
Items 2 to 5 make the same amendments for the early
lodgment provisions relating to maternity allowance, maternity immunisation
allowance, and parenting allowance respectively.
Item 6 provides
that the amendments made by Schedule 11 apply to claims lodged on or
after 1 January 1998. Item 6 also outlines which of the Items noted
above, will or will not have effect, should a Schedule headed Maternity
Allowances, be included in the Social Security and Veterans' Affairs
Legislation Amendment (Family and Other Measures) Act 1997.
5. Commencement
These amendments in Schedule 11 will commence on 1 January 1998
but, if the Social Security and Veterans' Affairs Legislation Amendment
(Family and Other Measures) Act 1997 contains a Schedule headed
Maternity allowances, Schedule 11 will commence immediately after the
commencement of that Schedule.
Schedule 12 - Residence requirements for refugees
1. Summary of proposed changes
The amendments made by this schedule to the Social Security Act
1991 (the Social Security Act) will ensure that a refugee who is
permanently blind will not be disqualified from receiving disability support
pension merely because they do not have 10 years' qualifying Australian
residence.
2. Background
Schedule 2 to the Social Security (1994 Budget and White Paper)
Amendment Act 1994 (the 1994 Act) inserted provisions to exempt refugees
from the usual requirements to have a certain amount of Australian residence to
qualify for various social security pensions.
Among the amendments made
by the 1994 Act was the insertion into section 94 (governing the qualification
for disability support pension), for people who are not permanently blind, of
the words ", or has a qualifying residence exemption for a disability support
pension" as an alternative to the requirement that a person must have 10 years'
qualifying Australian residence.
However, a second qualification
provision was overlooked and should also have received the residence exemption
for refugees. Section 95, in the disability support pension provisions,
provides for qualification for a person who is permanently blind. Section 95
needs to be brought into line with section 94.
3. Clause and schedule involved in the changes
Clause 2: specifies that the amendments made by Schedule 12 are
taken to have commenced on 1 January 1995, immediately after the commencement of
Schedule 2 to the 1994 Act.
Schedule 12:
Item
1: amends paragraph 95(1)(c) consequential upon the amendment made by
item 2.
Item 2: inserts new subparagraph
95(1)(c)(iia).
4. Explanation of the changes
The qualification criteria for disability support pension for a person
who is permanently blind are set out in section 95 of the Social Security Act.
One of the qualification criterion is that a person have 10 years' qualifying
Australian residence.
The amendment made by item 2 to insert new
subparagraph 95(1)(c)(iia) will ensure that despite not having 10 years'
qualifying Australian residence, a person will still qualify for disability
support pension under section 95 of the Social Security Act if they have a
qualifying residence exemption for a disability support pension.
The
amendment made by item 1 is a grammatical one that is consequential upon
the amendment made by item 2.
5. Commencement
The amendments made by Schedule 12 are taken to have commenced on
1 January 1995, immediately after the commencement of Schedule 2 to
the 1994 Act.
The amendments, whilst retrospective, are beneficial in
that they will ensure that refugees who are permanently blind are not treated
any differently, from a residence perspective, from refugees who are not
permanently blind.
Schedule 13 - Newstart allowance recipient with child under 18 receiving disability support pension
1. Summary of proposed changes
Schedule 13 amends point 1068-B1A of the Social Security Act
1991 (the Social Security Act), to remove an inequity in the treatment
of a lone parent receiving newstart allowance who has a child over 16 and under
18 living with them and to whom a disability support pension is being paid. The
effect of the amendment is that these people will receive newstart allowance at
the rate specified for a single person with a dependent child.
2. Background
Point 1068-B1A of the Social Security Act provides that, for social
security benefit purposes, where a person has a child between the ages of 16 and
18 who is being paid a social security benefit or a youth training allowance,
and the child is substantially dependent on the person, the child is considered
to be dependent upon the person. This allows a higher maximum basic rate
applicable to the person to be paid.
A child in receipt of a disability
support pension is not included as a dependent child for the purposes of point
1068-B1A of the Social Security Act. The rate of disability support pension for
a child under 18 is set by reference to item 1 of Table B in
points 1066A-B1 or 1066B-B1. This rate is the same as for newstart
allowance that is applicable to a single person under 18 not homeless,
independent or in substitute care (see item 1 of Table B of point
1067-B1).
Schedule 13 corrects this anomaly, by repealing
paragraph (c) of point 1068-B1A and replacing it with a new paragraph (c) that,
in addition to picking up lone parents whose dependent children are receiving a
social security benefit or a youth training allowance, also picks up single
persons in receipt of newstart allowance who have a dependent child who is in
receipt of a disability support pension.
3. Clause and schedule involved in the changes
Clause 2: provides that Schedule 13 commences on Royal
Assent.
Schedule 13:
Item 1: provides for the repeal
of paragraph (c) of point 1068-B1A of the Social Security Act and the
substitution of a new paragraph (c).
4. Explanation of the changes
Section 1068 of the Social Security Act contains Benefit Rate Calculator
B, which provides for the rate of widow allowance, newstart allowance (18 or
over), sickness allowance (18 or over), partner allowance and mature age
allowance under Part 2.12B of the Social Security Act. Module B of the Rate
Calculator provides for the calculation of the maximum basic rate of the various
benefits covered by the calculator.
A higher maximum basic rate is
provided for persons with a dependent child. "Dependent child" is defined in
section 5 of the Social Security Act. Subsection 5(6) provides that a person
cannot be a dependent child if he or she is receiving a social security pension
or benefit, a youth training allowance or a payment under a Labour Market
Program. A disability support pension is a "social security pension" for the
purposes of the definition set out in subsection 23(1) of the Social Security
Act.
Point 1068-B1A provides that, in certain circumstances, a person who
is not a "young person" - defined in subsection 5(1B) as a person who is
under 16 years or is a student child - is to be treated as a dependent child for
the purposes of the Rate Calculator. It provides that if:
(a) a person
is not a member of a couple; and
(b) the person has at least one natural
or adopted child who has turned 16 but has not turned 18; and
(c) a
social security benefit or a youth training allowance is payable to the child;
and
(d) the child is substantially dependant on the person;
then
the person's maximum basic rate is worked out as if the person had a dependent
child.
This does not pick up persons in receipt of newstart
allowance who have a child under 18 who is in receipt of disability support
pension. It is regarded as an anomaly. Item 1 of Schedule 13
corrects this anomaly by repealing paragraph (c) above and replacing it with
a new paragraph (c), that refers to children to whom a social security benefit
or a youth training allowance is payable or (if the person on whom the
child is dependant is receiving newstart allowance) to whom a disability support
pension is payable.
5. Commencement
The amendment made by Schedule 13 commences on Royal
Assent.
Schedule 14 - Medical examination following claim for disability support pension
1. Summary of proposed changes
Remove the requirement that all disability support pensioner claimants
(other than those already exempted) must be examined by a medical
practitioner.
2. Background
At present, section 116 of the Social Security Act 1991
(the Social Security Act) provides that the Secretary must direct that a
claimant for disability support pension be examined by a medical practitioner
unless:
• it is manifest that:
* the claimant satisfies the
20% rule in the Impairment Tables; or
* the claimant has a continuing
inability to work; or
* the claimant is permanently blind;
or
• the claimant's rate of disability support would be nil;
or
• the claimant does not satisfy age or residency requirements;
or
• the claimant resides in a remote area (in which case the
Secretary may direct that the claimant submit a written medical
report).
Section 116 requires that a disability support pension claimant
be referred for a medical examination, even if it is obvious that the claim is
inappropriate or frivolous.
It is now proposed to add flexibility to the
disability support claim process by giving the Secretary a discretion as to
whether or not a claimant should be referred for a medical examination or be
required to submit a written report. This will also allow the use of
alternative non-medical assessment providers.
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date for Schedule 14
as the day of Royal Assent.
Schedule 14:
Item
1: makes consequential amendments to subsection 94(1A).
Item
2: repeals Division 4 of Part 2.3 of the Social Security Act.
4. Explanation of the changes
Division 4 of Part 2.3 of the Social Security Act contains a single
provision (section 116) which relates to medical examinations following
claims for disability support pension. In particular, subsection 116(1)
provides that the Secretary must direct a claimant for disability support
to be examined unless the person falls into one of the groups specified above.
The remainder of this section lays down various procedural
requirements.
Section 94 of the Social Security Act requires that, in
order to qualify for disability support pension, a person must have a physical,
intellectual or psychiatric impairment which results in a continuing inability
to work. Section 96(1) also provides that a person is not qualified for
disability support pension if the Secretary is of the opinion that the person
should attend a medical, psychiatric or psychological examination. Thus, if the
Secretary is satisfied that the person meets the qualification requirements in
section 94, then there is no need to refer the person to a medical examination.
However, if the Secretary has some doubt as to the extent of the person's
medical condition, then the Secretary may exercise the discretion in
subsection 96(1) to require the person to attend the medical
examination.
Accordingly, item 2 repeals Division 4 (ie, section
116), which obliges the Secretary to direct virtually all claimants of
disability support pension to undertake medical examinations. Item 1
makes consequential amendments to subsection 94(1A).
5. Commencement
The amendments included in Schedule 14 commence on the day of
Royal Assent.
Schedule 15 - Subsuming of disability wage supplement into disability support pension
1. Summary of the proposed changes
The Schedule amends the Social Security Act 1991 (the
Social Security Act) so that disability wage supplement will be subsumed within
disability support pension from 1 January 1998.
2. Background
Disability wage supplement was established in June 1994 as a separate
payment for people with disabilities participating in the Supported Wage System,
a productivity-wage based system administered by the Department of Health and
Family Services. Currently, people in receipt of disability support pension who
commence employment through the Supported Wage System are required to transfer
to disability wage supplement, even though the qualification criteria for the
two payments are very similar. Many customers have expressed a reluctance to
make this transfer and a preference to continue to receive disability support
pension. The take-up of disability wage supplement has been very slow, with
less than 300 customers in receipt of this payment two years after its
inception.
Accordingly, it is proposed that disability wage supplement be
abolished and all existing customers transferred to disability support pension.
The qualification criteria for disability support pension will be amended to
include participants in the Supported Wage System. In effect, the only
difference between disability wage supplement and disability support pension
customers is that the former participate in a Supported Wage System, whereas
disability support pension customers have a continuing inability to work because
of an impairment.
3. Clause and schedule involved in the changes
Clause 2: provides for the amendments made by Schedule 15
(other than items 17, 18, 25, 29 and 30) to commence on 1 January 1998,
for items 17, 18, 29 and 30 of Schedule 15 to commence on
1 February 1998 and item 25 of Schedule 15 to commence on
1 April 1998. If Schedule 16 (Medical Examination following claim
for disability support pension) commences, items 28 to 30 do not
commence.
Schedule 15:
Items 1, 5 to 8,
45,
46, 74 and 75: amends section 3, definitions in subsection
23(1), sub-subparagraph 1035(ca)(ii)(C), subparagraph 1058(1)(b)(iv),
paragraph 1240(2)(d), subsection 1299(5) to update references to the
Department of Health and Family Services, as it is now known.
Items 2
to 4, 9 to 15,
19 to 21, 31 to 44, and
47 to 73: amends
subsection 17(1), various definitions in subsection 23(1), paragraph
48(3)(a), subsections 94(1A) and (1B), subsection 94(6), subsection 95(2),
paragraph 225B(d), subparagraph 237(1)(d)(iia), sub-subparagraph
249(2)(b)(i)(B), sub-subparagraph 262(2)(b)(i)(B), subparagraph 303(1)(d)(iv),
Part 2.9, paragraph 665E(a), subsection 666(9), subsection 667(5),
subparagraph 771HA(1)(c)(i), paragraph 771NU(1)(e), paragraph 771NU(3)(e),
subsection 771NX(1), subsection 771NX(6), paragraph 1065(1)(b),
paragraph 1065(4)(b), paragraph 1065(4)(b), paragraph 1065(5)(b),
subsection 1066A(1), subsection 1066A(3), subsection 1066A(5),
subsection 1066A(6), paragraph 1066A-F2A(a), subsection 1066B(1),
subsection 1066B(2), subsection 1066B(4), subsection 1066B(5),
subparagraph 1133(1)(a)(va), subparagraph 1133(2)(a)(vi), subsection
1170(1), subsection 1184A(1), paragraph 1184(2)(b),
paragraph 1184(2)(c), subparagraph 1187(1)(a)(iva), section 1190,
paragraph 1210(4)(a), paragraph 1210-B5(a),
paragraph 1210-B6(a).
Item 16: repeal the existing paragraph
94(1)(c) and inserts a new paragraph 94(1)(c) to reflect revised
qualification criteria for disability support pension.
Item
17: this amendment is consequential upon item 18.
Item
18: repeals subparagraph 94(1)(c)(iii) from
1 February 1998.
Item 22: amends subsection 100(1)
consequential upon the repeal of subsection 100(1A) and the insertion of a
new subsection 100(5).
Item 23: repeals subsection 100(1A) as
it is not necessary given new subsection 100(5).
Item
24: repeals the existing subsection 100(5) and inserts a new
subsection 100(5).
Item 25 and 26: repeal subsections 100(5)
and 100(6) on 1 April 1998.
Item 26: repeals subsection
106(3).
Item 27: inserts a new section 114A to ensure
continuity in determinations previously made in relation to disability wage
supplement.
Item 28: inserts a new paragraph 116(1)(e).
Subsection 116(1) deals with the requirement for claimants for disability
support pension to be examined by a medical practitioner except in certain
circumstances.
Item 29: amends paragraph 116(1)(d)
consequential upon the amendment made by item 30.
Item
30: provides for the repeal of paragraph 116(1)(e). The repeal will occur
on 1 February 1998.
4. Explanation of the changes
The amendments made by Schedule 15 essentially can be grouped as
follows:
(a) substantive amendments that are required to give effect to
the decision to subsume disability wage supplement within disability support
pension;
(b) amendments that are consequential upon (a);
and
(c) amendments to update references to the Department of Health and
Family Services.
(a) substantive amendments that are required to
give effect to the decision to subsume disability wage supplement within
disability support pension
Section 94 of the Social Security Act sets
out the qualification criteria for disability support pension. Currently,
paragraph 94(1)(c) provides that one of the criterion is that because of an
impairment, the person has a continuing inability to work.
This paragraph
is to be amended by item 16 so that alternative criteria to having a
continuing inability to work because of an impairment will be
that:
• a person is participating in a supported wage system
administered by the Department of Health and Family Services (new subparagraph
94(1)(c)(ii)); or
• the person was last paid disability wage
supplement on or after 4 December 1997 and claims disability support pension
within 28 days of last being paid disability wage supplement (new
subparagraph 91(1)(c)(iii)) - this criterion reflects a concession already
afforded to previous disability wage supplement recipients.
It will not
be possible for a person to obtain qualification for disability support pension
using subparagraph 94(1)(c)(iii) by the end of January 1998. Accordingly, it is
proposed to remove this "spent" subparagraph from the Social Security Act from
1 February 1998. Item 18 does this and item 17 makes an
amendment consequential to the repeal of the subparagraph.
Section 100 of
the Social Security Act sets out the rules for dealing with the situation where
a person claims disability support pension within a specified time of disability
wage supplement having ceased to be payable to them.
In view of the fact
that amendments need to be made to take account of disability wage supplement
being subsumed within disability support pension and because
subsections 100(1A) and 100(5) potentially overlap and their co-existence
appears confusing, both subsections are to be repealed (item 23 and
24) and one rule inserted into the Social Security Act (item
24) - as new subsection 100(5) - that provides that if a person claims
disability support pension within a specified period after disability wage
supplement ceased to be payable to the person, the person's provisional
commencement day for disability support pension will be the first social
security pension payday after the day that payment of disability wage supplement
ceased being payable to them.
The specified period will
be:
• 28 days; or
• 3 months if the Secretary is
satisfied that an incapacity of the person was the sole or dominant cause why
the person did not make the claim within 28 days after the day that payment of
disability wage supplement ceased being payable to them.
Item 22
amends subsection 100(1) as a result of the repeal of subsection 100(1A) and
the insertion of a new subsection 100(5).
Again, as a person would only
be able to take advantage of subsection 100(5) no later than the end of March
1998, it is proposed that this "spent" subsection be removed from the Social
Security Act from 1 April 1998. Item 25 does this.
So that new
determinations will not have to be made in respect of customers transferring to
disability support pension as a result of the decision to subsume disability
wage supplement within disability support pension, a provision is to be inserted
into the disability support provisions - as new section 114A -to provide that if
a determination granting a claim for disability wage supplement is in force
immediately before 1 January 1998, the determination has effect, from 1 January
1998, as if it were a determination granting a claim for disability support
pension. Item 27 does this. Of course, "transferees" will still have to
maintain qualification for disability support pension and disability support
pension will still have to remain payable, in order for the person to be paid
disability support pension.
Section 116 deals with the requirement for
disability support pension claimants to undergo medical examinations in most
circumstances. The amendment made by item 28 to subsection 116(1)
will insert new paragraph 116(1)(e) to ensure that the Secretary will not direct
a person to be examined by a medical practitioner where the person satisfies the
requirements of subparagraph 94(1)(c)(iii), that is, the person was last paid
disability wage supplement on or after 4 December 1997 and claims disability
support pension within 28 days of last being paid disability wage supplement.
The objective of this provision is to avoid unnecessary medical examinations.
As noted above, subparagraph 94(1)(c)(iii) will have a limited duration in which
it will apply - it will be "spent" by the end of January 1998 and is to be
repealed from 1 February 1998. For this reason, paragraph 116(1)(e) is also to
be repealed with effect from 1 February 1998. Item 30 achieves
this and item 29 makes an amendment consequential to the repeal of the
paragraph.
However, as amendments made by Schedule 16 of this Bill
will repeal section 116, items 28 to 30 will not commence if
Schedule 16 commences.
(b) amendments that are
consequential upon (a)
These amendments remove references to
disability wage supplement that are no longer required because disability wage
supplement is being subsumed within disability support pension, remove
provisions that are no longer necessary for the same reason, insert a reference
to disability wage supplement as a former payment type for the purposes of the
compensation recovery provisions, repeal provisions that are now redundant or
make very minor amendments (for example, punctuation amendments to take account
of the omission of a paragraph).
Items 2, 3, 4, 9, 10 to 15, 19 to 21,
26, 31 to 44 and 47 to 73 provide for this.
(c) amendments to
update references to the Department of Health and Family Services
The
Supported Wage System, a productivity-wage based system is now administered by
the Department of Health and Family Services. The opportunity is being taken to
ensure that the Social Security Act reflects the name under which that
Department now operates.
Items 1, 5, 6, 7, 8, 45, 46, 74 and 75
provide for this.
5. Commencement
The amendments made by Schedule 15 (other than items 17, 18,
25, 29 and 30) commence on January 1998.
Items 17, 18,
29 and 30 of Schedule 15 commence on 1 February 1998.
Item 25 of
Schedule 15 commences on 1 April 1998.
If Schedule 16 (Medical
Examination following claim for disability support pension) commences,
items 28 to 30 of Schedule 15 do not commence.
Schedule 16 - Disability support pension: impairment tables
1. Summary of the proposed changes
Essentially, Schedule 16 amends Schedule 1B of the Social
Security Act 1991 (the Social Security Act) to introduce a revised set
of Impairment Tables for use in the assessment of disability support
pension.
2. Background
The medical criteria for disability support pension are that the person
has a physical, intellectual or psychiatric impairment, that the person's
impairment be 20 per cent or more as assessed under the Impairment Tables and
that the person has a 'continuing inability to work'. (Note that amendments
proposed in Schedule 14 provide for participation in the Supported Wage
System to be an alternative criterion to a person having a continuing inability
to work.) The Impairment Tables comprise 27 tables aligned to the various body
systems (for example, respiratory system) and assign impairment ratings in
proportion to the severity of the conditions and their impact on normal
function, particularly as they relate to work performance.
A committee of
medical experts was appointed to evaluate the Impairment Tables, to consider how
effectively the Impairment Tables assess whether a person has an impairment that
significantly affects his or her ability to work and to recommend any changes it
considered appropriate to improve the tables for that purpose.
The
committee included medical and allied health experts as well as representation
from the Australian Government Health Service (AGHS). The medical expertise
represented on the committee included rehabilitation medicine, neurology,
psychiatry and drug and alcohol dependence. In addition, all professional
bodies that represented fields of expertise relevant to the Impairment Tables
were given the opportunity to formally contribute to the
reviews.
Following that review, legislation was introduced into the
Parliament in 1996 in the Social Security Legislation Amendment (Budget and
Other Measures) Bill 1996 to introduce revised Impairment Tables. As a
result of comments made during the Second Reading Debate on the Bill, the
Government, in consultation with non-Government Senators, withdrew the
Impairment Table amendments and undertook to further consult on the Impairment
Tables with a view to refining them as appropriate and then reintroducing
amendments.
Invitations to lodge submissions were sent to ninety two peak
disability and welfare groups. Thirty eight submissions were received and
considered. The major changes made following this consultative process were the
re-introduction of some minor impairment scores and the clarification of issues
such as 'enforced' treatment, 'double assessing', assessing fatigue, and
investigations to be undertaken by Medical Officers. These changes were
clarified in the introduction and Table notes themselves to make explicit what
the medical officers were to take account of when assigning scores and what
investigations they should undertake to determine cases that have insufficient
clinical information.
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date as a day to be fixed by
proclamation. If no proclamation has occurred within 6 months of the
Social Security and Veterans' Affairs Legislation Amendment (Family and
Other Measures) Act 1997 having received the Royal Assent, all items in
Schedule 16, with the exception of item 3, will then commence. Item
3 is taken to have commenced on 1 January 1997, immediately after the
commencement of Schedule 21 to the Social Security Legislation Amendment
(Budget and Other Measures) Act 1996.
Schedule
16:
Item 1: amends paragraph 94(1)(b) to reflect new
terminology.
Item 2: explains to whom the new Impairment Tables
are to apply.
Item 3: repeals clause 97 of Schedule 1A of the
Social Security Act.
Item 4: introduces a revised set of
Impairment Tables in Schedule 1B of the Social Security Act for use in the
assessment of disability support pension.
4. Explanation of the changes
Item 1 amends paragraph 94(1)(b) so that reference is made to a
person's impairment being 20 points or more, rather than 20% or more, under the
Impairment Tables. This change is necessary because the new Impairment Tables
use a point system. The existing reference to percentages has often been
misunderstood as referring to the proportion of functional loss.
Item
2 inserts new clause 96A in Schedule 1A of the Social Security
Act. This clause provides that the new Impairment Tables will apply
to:
• claims lodged on or after the day on which items 1, 2 and
4 of Schedule 16 commence (the commencement day). (This is
proposed to be a day fixed by proclamation);
• medical, psychiatric
or psychological examinations attended, or reports required, under subsection
105(1) of the Social Security Act on or after the commencement
day;
• all legal proceedings, reviews of decisions or
determinations resulting from the above examinations or reports.
Item
3 repeals clause 97 of Schedule 1A of the Social Security Act with effect
from 1 January 1997, immediately after the commencement of Schedule 21
to the Social Security Legislation Amendment (Budget and Other Measures)
Act 1996.
When the decision was taken on the floor of the Senate
to withdraw the amendments relating to revised Impairment Tables from the Social
Security Legislation Amendment (Budget and Other Measures) Bill 1996, the
amendment to insert new clause 97 of Schedule 1A should have also been
withdrawn.
Accordingly, a retrospective amendment to remedy this
oversight is required.
Item 4 repeals Schedule 1B of the Social
Security Act and substitutes a new Schedule 1B. This will directly replace
the existing Impairment Tables in Schedule 1B with revised Impairment
tables.
As noted above at item 2, the new Impairment Tables will
apply to:
• claims lodged on or after the day on which items 1,
2 and 4 of Schedule 16 commence (the commencement day). (This is
proposed to be a day fixed by proclamation);
• medical, psychiatric
or psychological examinations attended, or reports required, under subsection
105(1) of the Social Security Act on or after the commencement
day;
• all legal proceedings, reviews of decisions or
determinations resulting from the above examinations or reports.
The
existing tables will continue to apply to persons not covered by clause
96A.
5. Commencement
Apart from the amendments made by item 3, the amendments contained in
Schedule 16 will commence on a day to be fixed by proclamation. If
no proclamation has occurred within 6 months of the Social Security and
Veterans' Affairs Legislation Amendment (Family and Other Measures) Act
1997 having received the Royal Assent, Schedule 16, with the
exception of item 3, will then commence.
Item 3 is taken to have
commenced on 1 January 1997, immediately after the commencement of Schedule 21
to the Social Security Legislation Amendment (Budget and Other Measures)
Act 1996.
Schedule 17 - Conversion of foreign currency payments
1. Summary of proposed changes
The amendments made by Schedule 17 introduce into the Social
Security Act 1991 (the Social Security Act) a new method of determining
the value of a payment received by a customer in a foreign currency. Under the
Social Security Act the conversion of foreign currency for income test purposes
can be made under section 1100 by a determination of the Secretary to the
Department of Social Security. That section has not been used because of system
limitations.
The new method will extend the conversion of foreign
currency to all social security payments, not just social security pensions, and
to all foreign currencies. There will also be a requirement to apply an
appropriate exchange rate from the first social security pension payday each
month.
The market exchange rate to be applied to a foreign currency is
currently the on-demand airmail buying rate for that currency available at the
Commonwealth Bank of Australia. This rate is not always available for
particular currencies and it is not always appropriate to apply it when it is
available (see below under Explanation). The amendments would allow the
Secretary to determine that another rate of exchange for the currency, available
at the Commonwealth Bank of Australia or from another source, as appropriate,
may be used.
2. Background
Currently, the Social Security Act provides for the conversion of foreign
currency to be determined for income test purposes under section 1100. This
conversion is the market exchange rate for the foreign currency on a particular
day and it is to be worked out using the market exchange rate of the
Commonwealth Bank of Australia. This can only be applied to a social security
pension but has not been made due to system limitations.
It is proposed
to amend the Social Security Act to allow automatic currency conversions across
all payment types and across all currencies and, in the interest of customer
service, to provide the flexibility to make more appropriate conversion
arrangements for particular currencies and certain payments when
necessary.
3. Schedule and clauses involved in the changes
Clause 2: 1 March 1998.
Clause 3: provides that the
Social Security Act is amended as set out in Schedule
17.
Schedule 17:
Item 1: repeals sections 1100
and 1101 of the Social Security Act and replaces them with a new section 1100
providing a new method of how to determine the value of a payment received in a
foreign currency.
Item 2: amends section 1250 of the Social
Security Act and introduces a customer's right of review in certain
circumstances.
4. Explanation of the changes
Schedule 17 of the Bill proposes to amend the Social Security Act
by replacing the current legislative rules for converting a customer's income
from a foreign currency into Australian currency.
Item 1 will
repeal sections 1100 and 1101 of the Social Security Act and substitute a new
section 1100 that will apply to all social security
payments.
Subsection 1100(1) will provide that if an amount received by a
customer in a foreign currency needs to be taken into account in working out the
customer's rate of social security payment and the rate of social security
payment is to be worked out on the calculation day then the value
of the foreign currency received is worked out according to section
1100.
Subsection 1100(2) will apply to all foreign currencies unless the
Secretary determines that this subsection is not to apply to a certain foreign
currency or to a payment or a class or kind of payments within a foreign
currency and specifies how to work out the value in Australian currency of the
amount that is received. The rate of exchange is specified to be the
appropriate market exchange rate on the 15th business day prior to the
calculation day.
Subsection 1100(3) will define what the
appropriate market exchange rate will be. In general terms this will usually be
the on-demand airmail buying rate available at the Commonwealth Bank of
Australia for that currency at the start of business in Sydney on that day. If
this rate is for whatever reason unavailable or not appropriate then either
another rate, available at the Commonwealth Bank of Australia (such as the
telegraphic transfer rate or the miscellaneous rate) or a rate from another
appropriate source can be used.
Subsection 1100(4) will be used for those
foreign currencies that do not have subsection 1100(2) applying. This provision
would be utilised in those rare cases, where, for example, the manner in which
the foreign currency is paid does not conform to the usual rules set down in
subsection 1100(2). For example, in the case of Istituto Nazionale della
Previdenza Sociale (INPS) pensions payable from the Italian Government to many
customers, the exchange rates are set by an overseas banking institution and the
payments are delivered in Australian dollars. The Department is notified of the
actual exchange rates applied and can adjust Australian social security
entitlements without reference to the Commonwealth Bank's on-demand airmail
buying rates for lire. In these circumstances, subsection 1100(4) would allow
the exact exchange rate for example, that used by the Italian authorities to
convert INPS pensions to Australian dollars, to be applied.
There are
also some cases where it is not possible to apply an appropriate market
exchange rate automatically, for example, some people receiving payments
under particular social security international agreements where those payments
are not automatically calculated under the pensions system. These cases have to
be calculated manually each time there is a need for a reassessment. These
cases will be automated in the future but, for the time being, they have to be
assessed manually every time there is a reassessment. It is proposed that the
exchange rates for these cases will be updated at least twice a year, when
manual CPI reassessments are carried out. This would be done under subsection
1100(4).
Another class of payments that will not have the appropriate
market exchange rates applied under subsection 1100(2) are the payments made
outside Australia, that is cases where the pensioner is overseas in receipt of
an Australian pension and receiving other income in foreign currency. At the
present time, computer processing lead times will not permit the automatic
application of an up-to-date exchange rate for these cases. It is proposed to
apply exchange rate variations to overseas cases twice a year only on CPI
paydays until such time as computer system processing times are enhanced and are
consistent with processing times for other payments. Appropriate exchange
rates will be applied under subsection 1100(4).
Subsection 1100(5)
specifies that the Secretary may make written determinations for the purposes of
section 1100.
Subsection 1100(6) defines the terms, business
day, calculation day and
month.
Item 2 will amend section 1250 of the
Social Security Act by repealing paragraph 1250(k) (which currently
provides that a determination by the Secretary under section 1100 is not
reviewable by the Social Security Appeals Tribunal (SSAT)) and substituting a
new paragraph 1250(k) which will provide that a determination made under
subsection 1100(2) is not reviewable (that is, a customer is not able to seek
review about the inclusion or exclusion of a particular foreign
currency).
In addition, item 2 will also provide that a customer
is not able to seek review from the SSAT if the exchange rate used in the
conversion of foreign currency is 5% more or less than the actual exchange rate
received by the customer. This limitation is necessary because the Secretary's
determination to specify the exchange rate will not necessarily be the exact
exchange rate received by some customers because the rate of exchange on the
calculation day may be different. A variation of more or less
than 5% between the exchange rate used and the actual exchange rate received by
the customer should produce minimal variations in the rate of the person’s
social security payment. It would not be cost effective to reassess these
payments. Customer gains and losses are expected to balance over
time.
5. Commencement
The amendments included in Schedule 17 will commence on 1 March
1998.
Schedule 18 - Entry contributions not to be regarded as rent
1. Summary of proposed changes
The amendments clarify that any amounts that can be regarded as entry
contributions to retirement villages (including deductions from repayable entry
contributions) are not "rent" for rent assistance purposes.
2. Background
Rent assistance is payable if, among other things, a person pays, or is
liable to pay, rent. Subsection 13(2) of the Social Security Act
1991 (the Social Security Act) defines the circumstances in which
amounts are "rent".
Two recent Federal Court decisions have considered
legal questions concerning entry contributions to retirement villages.
In
Department of Social Security v. Knight (unreported; No. NG of 1996), it
was held that regular instalments paid by Mrs Knight as part of her entry
contribution to a retirement village were rent. Accordingly, Mrs Knight was
entitled to rent assistance in respect of those payments.
It was never
intended that any amount that could be regarded as all or part of an entry
contribution, however payable, was rent. Accordingly, it is proposed to amend
the legislation to clarify the original intention.
In Secretary,
Department of Social Security v. Montgomery (unreported; No. WAG of 1996), a
single judge of the Federal Court, Nicholson J., held that notional annual
deductions from the refundable portion of an entry contribution were not rent.
Although the decision by Nicholson J. accords with the intention of the
legislation, an amendment is proposed to establish beyond doubt that such
notional deductions are not rent.
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date for Schedule 18
as the day of Royal Assent.
Schedule 18
Item
1: makes subsection 13(2) of the Social Security Act subject to new
subsections 13(3AA) and (3AB).
Item 2: inserts new subsections
13(3AA) and (3AB) of the Social Security Act.
4. Explanation of the changes
Subsection 13(2) of the Social Security Act defines the circumstances in
which amounts are rent.
Item 1 makes subsection 13(2) subject to
new subsections 13(3AA) and (3AB).
Item 2 inserts new subsections
13(3AA) and (3AB).
New subsection 13(3AA) of the Social Security Act is
intended to overturn the effect of the Knight decision (see Background)
and to forestall any possible future confusion about the treatment of entry
contributions for rent assistance purposes.
The provision refers to an
amount that is, or forms part of, a special resident's entry contribution in
respect of a retirement village under section 1147 of the Social Security Act.
(Subsection 12C(3) of the Social Security Act defines the term "special
resident" to mean, among other things, a retirement village resident.
Subsections 1147(1), (1A) and (1B) of the Social Security Act define a special
resident's entry contribution in terms of the resident's individual residence
contribution. For a retirement village resident, the individual residence
contribution is the total amount paid, or agreed to be paid, for the resident's
current right to live in the retirement village: subsection 1147(1C) of the
Social Security Act.) New subsection 13(3AA) of the Social Security Act
provides that such an amount is not rent, whether it is paid or payable (whether
wholly or partly) in a lump sum, by instalments or otherwise.
New
subsection 13(3AB) of the Social Security Act is intended to clarify the
operation of the legislation in relation to deductions from the refundable
portion of entry contributions. The provision deals with situations where the
whole or any part of an amount which is not rent because of new subsection
13(3AA) of the Social Security Act (ie an entry contribution to a retirement
village) is, or will, or may become repayable to the person. In such cases, any
amount by which the amount so repayable is reduced is not rent in relation to
the person, either at the time when the reduction occurs or at any later
time.
5. Commencement
The amendments included in Schedule 18 commence on the day of
Royal Assent.
Schedule 19 - Rent assistance for people living in public housing
1. Summary of proposed changes
The amendments remove the entitlement to rent assistance of persons who
live in public housing but do not pay rent directly to the public housing
authority (other than those who live in public housing where market rent is
being charged).
2. Background
Public housing tenants receive subsidised accommodation from Sate and
Territory housing authorities, which generally charge rent at around 20-25% of
income. Accordingly, public housing tenants are not entitled to rent
assistance. However, the legislation does not preclude the payment of rent
assistance to a person who is paying rent for living in the public housing. It
is anomalous that rent assistance may be payable to another person who is living
in Government subsidised accommodation. The legislation will be amended to
remove the entitlement to rent assistance of any person who pays rent for living
in premises for which a public housing tenant receives subsidised
accommodation.
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date for Schedule 19
as 1 January 1998.
Schedule 19:
Amendments
to the Social Security Act 1991
Item 1: inserts a note
after the definition of "Government rent" in subsection 13(1).
Item
2: inserts new subsection 13(3AC).
Amendments to the Veterans'
Entitlements Act 1986
Item 3: renumbers the note at the
end of the definition of "Government rent" in subsection 5N(1).
Item
4: inserts a note after the note at the end of the definition of "Government
rent" in subsection 5N(1).
Item 5: inserts new subsection
5N(4A).
4. Explanation of the changes
Amendments to the Social Security Act
1991
Subsection 13(1) defines "Government rent" to mean rent
payable to any of the authorities listed in the definition.
Item 2
inserts new subsection 13(3AC). This new subsection provides the general rule
that if a person pays, or is liable to pay, rent for living in premises in
respect of which someone else pays Government rent, the rent paid or payable by
the person for living in those premises is taken to be Government rent. Under
relevant rate calculators in Chapter 3 of the Social Security Act
1991 (the Social Security Act) and Schedule 1 of the Student and
Youth Assistance Act 1973, rent assistance is payable if a person pays
or is liable to pay rent (other than Government rent). Accordingly, the effect
of the new general rule is to remove the entitlement to rent assistance of a
person who lives in public housing.
New subsection 13(3AC) also provides
an exception to the general rule. Where the person paying Government rent (ie
the public housing tenant) pays rent at, or above, a rate that the relevant
housing authority has told the Department is a market rate, the entitlement to
rent assistance of anyone else living in those premises is not affected. In
other words, if a housing authority tells the Department that a public housing
tenant is paying market rent, any other person paying rent for living in those
premises may still be entitled to rent assistance (provided other conditions are
satisfied).
Item 1 inserts a note, after the definition of
"Government rent" in subsection 13(1), which alerts readers to the new rule in
subsection 13(3AC).
Amendments to the Veterans' Entitlements Act
1986
Item 5 inserts new subsection 5N(4A), which
introduces into the Veterans' Entitlements Act 1986 a rule
corresponding to new subsection 13(3AC) of the Social Security Act (see above
explanation).
Item 3 renumbers as "Note 1" the note at the end of
the definition of "Government rent" in subsection 5N(1). Item 4 inserts
a new note (Note 2), after the note renumbered as Note 1. New Note 2 alerts
readers to the new rule in subsection 5N(4A).
5. Commencement
The amendments included in Schedule 19 commence on 1 January
1998.
Schedule 20 - Lodgment of claims by telephone, facsimile or computer
1. Summary of proposed changes
These amendments are designed to assist people in claiming social
security payments. They will allow the backdating of certain payments, through
the deemed earlier lodgement of a claim, in circumstances where the person makes
an inquiry about claiming payment and then formally lodges a claim and qualifies
for payment. In some payment types, a provision of this type already exists,
but only in relation to telephone contact. This Schedule also extends the ambit
of these provisions to include contact by facsimile and computer.
2. Background
These amendments allow people to contact the Department and register
their intention to claim a disability related payment.
The amendments in
this Schedule affect both the Social Security Act 1991 (the Social
Security Act) and the Student and Youth Assistance Act 1973 (the
Youth Act).
These measures follow on from amendments enacted in Schedule
9 of the Social Security Legislation Amendment (Budget and Other Measures)
Act 1996. The original amendments allowed backdating of certain
payments where an initial telephone inquiry about receiving a social security
payment was made by a sick or disabled person, who then formally lodged and
qualified for payment. Once a person established qualification for the payment,
the person's date of lodgement of claim may be deemed to be the date of the
initial inquiry. The payments affected by these amendments were disability
support pension, sickness allowance, newstart allowance under the Social
Security Act and youth training allowance under the Youth Act.
The
rationale for the amendments was that the majority of sick or incapacitated
people who claim a social security payment have their payments backdated to
either the day they claimed payment or the date on which they became
incapacitated for work (provided they lodge a claim for payment within the
prescribed time). As payment of the pension or allowance is tied to lodgement,
this puts pressure on a person to lodge a claim as quickly as possible.
However, it is often difficult for a person who is sick or incapacitated to
lodge a claim quickly and many such claims often lack adequate accompanying
documentation. People with disabilities frequently have difficulty lodging a
claim in person, and can find it difficult to compile the necessary medical
evidence to support their claim within the necessary time.
It is now
proposed to extend the arrangements to the partners of those who claim
disability related payment to include telephone contact by persons wishing to
claim carer payment (carer pension until 1 July 1997), partner allowance and
parenting allowance.
In addition, the telephone lodgment provisions that
relate to newstart allowance and youth training allowance were amended in the
Reform of Employment Services (Consequential Provisions) Act 1996
to extend the application of the telephone lodgement to cases where the person
makes contact through facsimile or by computer. Accordingly, the amendments in
Schedule 20 extend the ambit of the telephone inquires provisions to
include enquires by facsimile or computer, in order to bring them into line with
the amendments to newstart allowance and youth training allowance.
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement day as the day of Royal
Assent.
Schedule 20:
Amendments to the Social
Security Act
Items 1 to 9: amends section 100A -
disability support pension - to extend the operation of the telephone contact
provisions.
Item 10: inserts a new section 201AA - 'Claims by
telephone, facsimile or computer' for carer payment.
Items 11 to
17: amends section 615A - newstart allowance - to extend the operation of
the telephone contact provisions.
Items 18 to 26: amends section
687A - sickness allowance - to extend the operation of the telephone contact
provisions.
Item 27: inserts a new section 771HNA - 'Claims by
telephone, facsimile or computer' for partner allowance.
Item
28: inserts a new section 911A - 'Claims by telephone, facsimile or
computer' for parenting allowance.
Amendments to the Youth
Assistance Act
Item 29 to 35: amends section 91A - youth
training allowance - to extend the operation of the telephone contact
provisions.
4. Explanation of the changes
Disability support pension, sickness
allowance
Items 1 to 9 make amendments to the telephone
contact provisions for disability support pension. In effect, these amendments
extend the ambit of the pre-existing provision to include situations where the
person contacted the Department by facsimile or where the person used a
computer. Accordingly, the amendments in items 1 to 5 and items 7 and
8 include references to facsimiles and computers in section 100A. The
heading to section 100A is also replaced with a new heading which reflects the
increased ambit of the provision. In addition, item 6 amends subsection
100A(3) which empowers the Secretary to give the person an extension of time
within which to lodge the claim for disability support pension. The amendments
in item 6 remove the requirements that the person request the
extension.
Finally, item 9 specifies that, where a person contacts
the Department by facsimile or by using a computer, the contact is taken to have
happened when the Department actually receives the message (as opposed from when
the person sends the message).
Items 18 to 26 make similar
amendments to section 687A, (the sickness allowance telephone contact
provision).
Carer payment, parenting allowance, partner
allowance
For the majority of people who claim carer payment,
payment is backdated to the day on which they lodged a claim for the pension.
Item 10 inserts new section 201AA in the Social Security Act which will
deem the date on which a person contacted the Department of Social Security by
telephone, facsimile or computer, inquiring about claiming carer payment to be
the date they lodged their claim for carer payment, provided a number of
conditions are fulfilled. For instance, the person must, at the time of the
call, be qualified to receive carer payment. In addition, the Secretary must
give the person a written acknowledgment that the Department has been contacted.
This notice must be either presented to the Department when making their actual
claim or the Department must have a written record that such a notice was
sent.
The claim for payment must also be lodged within a prescribed time.
New subsection 201AA(2) sets this time at 21 days. However, the Secretary
has a discretion under new subsection 201AA(3) to extend this period to up to 3
months from the date on which the Department was contacted. The first of any
such extensions must be determined by the Secretary within the 21 day period and
any further extensions must be determined before the expiry of the subsequent
extension. It is not possible to request an extension of time to lodge outside
the 21 day period (if no extension under subsection 201AA(3) has been notified),
or after the expiry of a person's last extension (if an extension has been
given).
New subsection 201AA(4) provides that, if the section applies to
the person, then the person is taken to have lodged a claim on the day that the
person originally contacted the Department.
Item 27 makes similar
amendments in relation to partner allowance, by inserting new subsection 771HNA
into the Social Security Act. However, there are a number of differences with
the carer payment amendments. For instance, new subsection 771HNA(1)
specifies that the partner allowance amendments only apply to those people who
have a partner to whom certain specified telephone contact provisions apply.
That is, the person's partner must be a person to whom the disability support
pension, newstart allowance, sickness allowance or youth training allowance
provisions apply.
Moreover, the person must have advised the Department
that he or she wishes to claim either partner allowance or parenting allowance
at the time of the initial contact.
Apart from these differences, the
partner allowance provisions reflect the carer payment
amendments.
Item 28 makes identical amendments to item 27,
but in relation to parenting allowance.
Newstart allowance and
youth training allowance
Items 11 to 17 amends subsection
615A(1) to (4) to make minor amendments to the newstart allowance telephone
contact provisions.
Item 11 amends paragraph 615A(1)(a) to make it
explicit that the Department is contacted by the person, or on behalf of the
person. This item also makes minor grammatical corrections to this
paragraph. A note to this item amends the heading to section 615A to ensure it
reflects the extended ambit of the provision.
Items 12 to 15
and item 17 make minor grammatical amendments to
subsections 615A(1) and (2). Finally, the amendments in item 16
remove the requirements that the person request the extension provided for in
subsection 615A(3).
Similar amendments are made to the equivalent
provisions of the Youth Act that pertain to youth training allowance by items
29 to 35. These amendments mirror those made to the newstart allowance
provisions discussed above.
5. Commencement
The amendments in Schedule 20 commence on the day of Royal
Assent.
Schedule 21 - Qualification for newstart allowance of claimant for disability support pension
1. Summary of proposed changes
It is proposed to amend the Social Security Act 1991 (the
Social Security Act) to provide the Secretary to the Department of Social
Security with a discretion to pay newstart allowance to a person who has claimed
disability support pension, while the disability support pension claim is being
determined.
2. Background
There are several income support payments which may be paid by the
Department of Social Security to people who are unable to work due to illness or
disability:
• disability support pension is paid to people who have
a long-term continuing inability to work due to a physical, intellectual or
psychiatric impairment (Part 2.3 of the Social Security Act
refers);
• sickness allowance is paid to those persons with
a job to return to, who suffer from a temporary incapacity for work caused by
sickness or an accident (Part 2.14 of the Social Security Act
refers);
• newstart allowance may be paid to those who are
unemployed and have temporary medical conditions, and are over 18 years of age
(Part 2.12 of the Social Security Act refers); and
• youth training
allowance may be paid to people who are unemployed, have a temporary medical
condition and are under 18 years of age (Part 8 of the Student and Youth
Assistance Act 1973 refers).
In addition, special benefit is
available as a 'payment of last resort' for those who do not qualify for any
other form of income support. The payment is made at the discretion of the
Secretary. However, subsection 729(2) of the Social Security Act lays down a
number of factors that the Secretary should consider in exercising this
discretion. Strict eligibility criteria also apply, such as a stringent assets
test. In addition, the rate of special benefit is determined by the Secretary
at his discretion, and is subject to the stringent 'available funds'
test.
At present, a person claiming disability support who is not in
receipt of income support from the Department of Social Security and is in
hardship, may claim special benefit for the period pending the determination of
their disability support pension claim. Given the complexity of the
qualification rules for disability support pension (particularly in establishing
that a person has a "continuing inability to work" as required by section 94 of
the Social Security Act), it is not uncommon for the Department to take several
weeks to determine a person's claim. Although special benefit is available to
most claimants of disability support pension, those who do not satisfy the
stringent qualification and payability criteria may not be eligible for other
forms of income support during this period. Also, if the disability support
pension claim is ultimately rejected, the person will then usually have to claim
newstart allowance (the person will then effectively be required to lodge 3
claims within a short period).
Alternative disability payments, such as
sickness allowance and newstart allowance or youth allowance, cannot usually be
granted under these circumstances, as a disability support pension claimant will
generally submit evidence that they have a long-term medical condition and,
therefore, their inability to work is not due to a temporary medical
condition.
In order to qualify for newstart allowance:
• the
person must satisfy the Secretary that he or she is unemployed;
and
• the person must either satisfy the activity test or is not
required to satisfy the activity test; and
• the person meets his
or her obligations in relation to a Newstart Activity Agreement;
and
• throughout the period the person is at least 16 years of age
and has not reached the pension age; and
• is an Australian
resident; and
• is in Australia; and
• is registered
by the CES as being unemployed; and
• the person was not in receipt
of a youth training allowance during the period.
3. Clauses involved in the changes
Clause 2: specifies the commencement date for Schedule 21
is 15 December 1997.
Schedule 21:
Item 1: makes
minor technical amendments to subsection 593(1).
Item 2: inserts
new subsection 593(1B) into the Social Security Act.
Item 3: makes
a minor amendment to subsection 593(2).
Item 4: inserts new
section 603BA (Subdivision not to apply to a person with a pending claim for
disability support pension) into the Social Security Act.
Item
5: inserts new subsection 604(1A) into the Social Security
Act.
Item 6: inserts new subsection 605(2B) into the Social
Security Act.
Item 7: inserts new section 614B (Provisional
commencement day: claimant for disability support pension) into the Social
Security Act.
Items 8 and 10: makes consequential amendments to
subsection 615(1) and paragraph 660(1)(c).
Item 9: inserts new
subsection 641(3) into the Social Security Act.
Item 11: inserts
new section 660AA (Automatic termination - change of basis of
qualification).
4. Explanation of the changes
The general qualification rules for newstart allowance are set out in
subsection 593(1) of the Social Security Act. Item 2 amends section 593
by inserting a new subsection 593(1B) which lays down the qualification
rules that allow newstart allowance to be paid to a person pending the
determination of the person's claim for disability support pension ("provisional
newstart allowance").
The qualification rules for provisional newstart
allowance mirror those that apply generally to newstart allowance, along with
the additional requirements that the person has claimed disability support
pension and the claim has yet to be determined (new paragraph 593(1B)(d)
refers). In addition, new paragraph 593(1B)(e) requires that the Secretary must
be satisfied that the person suffers from a medical condition which has a
significantly adverse effect on the person's ability to work. Finally, the
person must satisfy one of three conditions, which are specified in new
subsection 593(1C).
Under new subsection 593(1C):
• the
person must have been an Australian resident at the time when the injury or
illness occurred; or
• the person had 10 years qualifying
Australian residence or a qualifying residence exemption for newstart allowance;
or
• the person was born outside Australia and, when the illness or
injury first occurred, the person was not an Australian resident but was the
dependent child of an Australian resident and the person became an Australian
resident while the dependent child of an Australian resident.
New
subsection 593(1C) is to ensure that the person meets the residential
requirements for disability support pension.
Items 1 and 3 make
minor technical amendments to subsections 593(1) and (2) to correct
cross-references.
A new provision has been inserted in Subdivision BA of
Division 1 of Part 2.12 of the Social Security Act by item 4.
Subdivision BA specifies the group of people who are not required to satisfy the
activity test because they are temporarily incapacitated for work. New section
603BA specifies that Subdivision BA does not apply to a person who is qualified
for newstart allowance by virtue of new section 593(1A) (ie, item
2).
Similarly, item 5 inserts new subsection 604(1AA) into the
Social Security Act. Current subsection 604(1) specifies that each
recipient of newstart allowance is to have a Newstart Activity Agreement.
New subsection 604(1AA) specifies that subsection 604(1) does not apply to a
person who qualifies for newstart allowance through new subsection 593(1B).
That is, a person who is in receipt of provisional newstart allowance will not
have to enter into a Newstart Activity Agreement.
Subsections 605(1) and
(2) impose a similar requirement on claimants for newstart allowance to
enter into a Newstart Activity Agreement. Item 6 inserts new
subsection 605(2A) into the Social Security Act, to provide that the
requirements in subsections 605(1) and (2) do not apply to claimants of
provisional newstart allowance.
Item 7 inserts new section 614B,
which sets up a special rule for the provisional commencement day for persons
who qualify for provisional newstart allowance. In this case, the person's
claim for newstart allowance may be the day on which the person made the claim
for disability support pension (which is one of the qualifying criteria for the
provisional newstart allowance) (new subsection 614B(1) refers). This is in
line with the rules that apply to the commencement of disability support pension
(where qualification for disability support pension generally commences from the
date of claim). However, new subsection 614B(2) provides that, if the person's
claim for disability support pension is subsequently rejected, then the normal
rules for working out the person's provisional commencement day apply.
A
common scenario where this may occur is where a person incurs an accident and
claims disability support pension, believing the inability to work will last
longer than 2 years. Ultimately, the disability support pension claim is
rejected as it is believed the incapacity to be temporary. In this case, the
person may initially be paid provisional newstart allowance from the date of
lodgment of claim for disability support pension (new subsection 614B applies).
However, following rejection of the disability support pension claim, new
subsection 614B(2) provides that the normal rules are then applied to work out
the person's date of commencement for newstart allowance. This means, in
effect, that the person may be treated as if he or she was suffering from a
temporary incapacity when he or she claimed newstart allowance, and the
potentially more favourable commencement provisions would apply. This provision
operates in conjunction with new subsection 641(3) which provides the Secretary
with a power to vary the earlier determination relating to the commencement of
provisional newstart allowance.
Item 8 makes consequential
amendments to subsection 615(1), necessary because of item
7.
Item 9 inserts a new subsection in section 641. Currently,
section 641 relates to grant of newstart allowance. New subsection 641(3)
applies where a determination has previously been made under the section
granting a claim for provisional newstart allowance, and the person has ceased
to qualify for provisional newstart allowance but now qualifies for (normal)
newstart allowance under subsection 593(1). New subsection 641(3) allows the
Secretary to make a determination varying the earlier determination granting the
provisional newstart allowance, to give effect to a new provisional commencement
date. This provision works in conjunction with new subsection 614B(2) to set a
revised (earlier) date of commencement. This may have the effect of qualifying
the person for a payment of arrears.
A new automatic termination
provision is inserted by item 11. This provision applies where a person
ceases to be qualified for newstart allowance under new subsection 593(1B),
normally because the person's claim for disability support pension is
determined. The automatic termination provision come into operation if the
person ceases to satisfy new subsection 593(1B) and fails to satisfy the normal
qualification rules for newstart allowance (ie, subsection 593(1)) within
fourteen days. In that case, newstart allowance ceases to be payable at the end
of the 14 day period. Item 10 makes consequential amendments to
paragraph 660(1)(c).
5. Commencement
The amendments included in Schedule 21 commence on 15 December
1997.
Schedule 22 - Qualification for youth training allowance of claimant for disability support pension
1. Summary of proposed changes
It is proposed to amend the Student and Youth Assistance Act
1973(the Youth Act) to provide the Secretary to the Department of Social
Security with a discretion to pay youth training allowance to a person who has
claimed disability support pension, while the disability support pension claim
is being determined.
2. Background
There are several income support payments which may be paid by the
Department of Social Security to people who are unable to work due to illness or
disability:
• disability support pension is paid to people who have
a long-term continuing inability to work due to a physical, intellectual or
psychiatric impairment (Part 2.3 of the Social Security Act
1991 (the Social Security Act) refers);
• sickness
allowance is paid to those with a job to return to, who suffer from a
temporary incapacity for work caused by sickness or an accident (Part 2.14 of
the Social Security Act refers);
• newstart allowance may be paid
to those who are unemployed and have temporary medical conditions, and are over
18 years of age (Part 2.12 of the Social Security Act refers);
and
• youth training allowance may be paid to people who are
unemployed, have a temporary medical condition and are under 18 years of age
(Part 8 of the Youth Act refers).
In addition, special benefit is
available as a 'payment of last resort' for those who do not qualify for any
other form of income support. The payment is made at the discretion of the
Secretary. However, subsection 729(2) of the Social Security Act lays down a
number of factors that the Secretary should consider in exercising this
discretion. Strict eligibility criteria also apply, such as a stringent assets
test. In addition, the rate of special benefit is determined by the Secretary
at his discretion, and is subject to the stringent 'available funds'
test.
At present, a person claiming disability support pension who is not
in receipt of income support from the Department of Social Security and is in
hardship, may claim special benefit for the period pending the determination of
their disability support pension claim. Given the complexity of the
qualification rules for disability support pension (particularly in establishing
that a person has a "continuing inability to work" as required by section 94 of
the Social Security Act), it is not uncommon for the Department to take several
weeks to determine a person's claim. Although special benefit is available to
most claimants of disability support pension those who do not satisfy the
stringent qualification and payability criteria may not be eligible for other
forms of income support during this period. Also, if the disability support
pension claim is ultimately rejected, the person will then usually have to claim
newstart allowance or youth training allowance (the person will then effectively
be required to lodge 3 claims within a short period).
Alternative
disability payments, such as sickness allowance and newstart allowance or youth
training allowance, cannot usually be granted under these circumstances, as a
disability support pension claimant will generally submit evidence that they
have a long-term medical condition and, therefore, their inability to work is
not due to a temporary medical condition.
In order to qualify for youth
training allowance:
• the person must not have recently been in
receipt of job search allowance; and
• the person must satisfy the
Secretary that he or she is unemployed; and
• the person must
either satisfy the activity test or is not required to satisfy the activity
test; and
• the person meets his or her obligations in relation to
a Youth Training Activity Agreement; and
• throughout the period
the person is at least 16 years of age and has not reached the pension age;
and
• is an Australian resident; and
• is in
Australia; and
• is registered by the CES as being unemployed
(subsection 65(1) refers).
Special qualification rules apply to certain
15 year olds in subsection 65(3).
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date for Schedule 22
is 15 December 1997.
Schedule 22:
Item 1: makes
minor technical amendments to subsection 65(1) of the Youth Act.
Item
2: inserts new subsection 65(1A) into the Youth Act.
Item
3: makes a minor amendment to subsection 65(2) of the Youth
Act.
Item 4: inserts new section 78AA (Subdivision not to apply to
a person with a pending claim for disability support pension) into the Youth
Act.
Item 5: inserts new subsection 79(1AA) into the Youth
Act.
Item 6: inserts new section 90A (Provisional commencement
day: claimant for disability support pension) into the Youth
Act.
Items 7 and 9: makes consequential amendments to subsection
91(1) and paragraph 151(1)(c) of the Youth Act.
Item 8: inserts
new subsection 133(3) into the Youth Act.
Item 10: inserts new
section 151A (Automatic termination - change of basis of qualification) into the
Youth Act.
4. Explanation of the changes
The general qualification rules for youth training allowance are set out
in subsection 65(1) of the Youth Act. Item 2 amends section 65 by
inserting a new subsection 65(1A) which lays down the qualification rules that
allow youth training allowance to be paid to a person pending the determination
of the person's claim for disability support pension ("provisional youth
training allowance").
The qualification rules for provisional youth
training allowance mirror those that apply to youth training allowance
generally, along with the additional requirements that the person has claimed
disability support pension and the claim has yet to be determined (new paragraph
65(1A)(d) refers). In addition, new paragraph 65(1A)(e) requires that the
Secretary must be satisfied that the person suffers from a medical condition
which has a significantly adverse effect on the person's ability to work.
Finally, the person must satisfy one of three conditions, which are specified in
new subsection 65(1B).
Under new subsection 65(1B):
• the person must have been an Australian resident at the time when the injury or illness occurred; or
• the person had 10 years qualifying Australian residence or a qualifying residence exemption for youth training allowance; or
• the person was born outside Australia and, when the illness or injury
first occurred, the person was not an Australian resident but was the dependent
child of an Australian resident and the person became an Australian resident
while the dependent child of an Australian resident.
New subsection 65(1B) is
to ensure that the person meets the residential requirements for disability
support pension.
Items 1 and 3 make minor technical amendments to
subsections 65(1) and (3) to correct cross-references.
A new provision
has been inserted in Subdivision BAA of Division 2 of Part 8 of the Youth Act by
item 4. Subdivision BAA specifies the group of people who are not
required to satisfy the activity test because they are temporarily incapacitated
for work. New section 78AA specifies that Subdivision BAA does not apply
to a person who is qualified for youth training allowance by virtue of new
section 65(1A) (ie, item 2).
Similarly, item 5 inserts
new subsection 79(1AA) into the Youth Act. Current subsection 79(1)
specifies that each recipient of or claimant for youth training allowance is to
have a Youth Training Activity Agreement. New subsection 79(1AA) specifies that
subsection 79(1) does not apply to a person who qualifies for youth
training allowance through new subsection 65(1A). That is, a person who is in
receipt of provisional youth training allowance will not have to enter into a
Youth Training Activity Agreement.
Item 6 inserts new section 90A,
which sets up a special rule for the provisional commencement day for persons
who qualify for provisional youth training allowance. In this case, the
person's claim for youth training allowance may be the day on which the person
made the claim for disability support pension (which is one of the qualifying
criteria for the provisional youth training allowance) (new subsection 90A(1)
refers). This is in line with the rules that apply to the commencement of
disability support pension (as qualification for disability support pension
generally commences from the date of claim). However, new subsection 90A(2)
provides that, if the person's claim for disability support pension is
subsequently rejected, then the normal rules for working out the person's
provisional commencement day apply.
A common scenario where this may
occur is where a person incurs an accident and claims disability support
pension, believing the inability to work will last longer than 2 years.
Ultimately, the disability support pension claim is rejected as it is believed
the incapacity to be temporary. In this case, the person may initially be paid
provisional youth training allowance from the date of lodgment of claim for
disability support pension (ie, new subsection 90A(1) applies). However,
following rejection of the disability support pension claim, new subsection
90A(2) provides that the normal rules are then applied to work out the person's
date of commencement for youth training allowance. This means, in effect, that
the person may be treated as if he or she was suffering from a temporary
incapacity when he or she claimed the youth training allowance, and the
potentially more favourable commencement provisions would apply. This provision
operates in conjunction with new subsection 133(3) which provides the Secretary
with a power to vary the earlier determination relating to the commencement of
provisional youth training allowance.
Item 7 makes consequential
amendments to subsection 91(1), necessary because of the amendments in item
6.
Item 8 inserts a new subsection in section 133. Currently,
section 133 relates to grant of youth training allowance. New subsection 133(3)
applies where a determination has previously been made under the section
granting a claim for provisional youth training allowance, and the person has
ceased to qualify for provisional youth training allowance but now qualifies for
(normal) youth training allowance under subsection 65(1). New subsection
133(3) allows the Secretary to make a determination varying the earlier
determination granting the provisional youth training allowance, to give effect
to a new provisional commencement date. This provision works in conjunction
with new subsection 90A(2) to set a revised (earlier) date of commencement.
This may have the effect of qualifying the person for a payment of
arrears.
A new automatic termination provision is inserted by item
10. This provision applies where a person ceases to be qualified for youth
training allowance under new subsection 65(1A), normally because the
person's claim for disability support pension is determined. The automatic
termination provision come into operation if the person ceases to satisfy new
subsection 65(1A) and fails to satisfy the normal qualification rules for youth
training allowance (ie, subsection 65(1)) within fourteen days. In that case,
the youth training allowance ceases to be payable at the end of the 14 day
period. Item 9 makes consequential amendments to paragraph
151(1)(c).
5. Commencement
The amendments included in Schedule 22 commence on 15 December
1997.
Schedule 23 - Data-matching for purposes of family tax initiative
1. Summary of proposed changes
It is proposed to amend the Data-matching Program (Assistance and
Tax) Act 1990 (the Data-matching Act) to enable the inclusion in
the Data-matching Program of the family tax initiative, which comprises family
tax assistance and family tax payment.
2. Background
The family tax initiative was a policy commitment made by the Coalition
prior to the election in March 1996, and was introduced in January 1997. The
family tax initiative incorporates two forms of assistance, the family tax
payment and family tax assistance. Family tax payment is delivered by the
Department of Social Security as a fortnightly payment, while the family tax
assistance is delivered by the Australian Taxation Office as an increase in a
person's tax free threshold.
During the development of the family tax
initiative, it was recognised that, in order to ensure effective compliance, it
would be necessary to include the family tax initiative in the Data-matching
Program.
In order to bring the family tax initiative into the operation
of the Data-matching Program, it is necessary to amend the definitions of
"personal assistance" and "income data" in the Data-matching
Act.
"Personal assistance" is defined in section 3 of the Data-matching
Act. In particular, paragraph (c) of this definition includes a list of social
security payments which are included within the meaning of this term, and
accordingly, for which the data-matching process can be
undertaken.
"Income data" is also defined in section 3 of the
Data-matching Act and includes things such as "the declared income of the
person" and the "spouse rebate of the person".
3. Clause and schedule involved in the changes
Clause 2: specifies the commencement date as the day of Royal
Assent.
Schedule 23:
Item 1: inserts a reference to
"family tax payment" in the section 3 definition of personal assistance in the
Data-matching Act.
Item 2: amends the definition of income data to
include "family tax assistance".
4. Explanation of the changes
The section 3 definition of "personal assistance" in the Data-matching
Act will be amended by inserting a reference to "family tax payment" in
paragraph (c) immediately after the reference to "family payment advance" (item
1 refers). Item 2 amends the definition of "income data" to include a reference
to "any increase in the tax-free threshold claimed by the person under Division
5 of Part II of the Income Tax Rates Act 1986. These amendments
have the effect of extending the operation of the Data-matching Act to both the
family tax payment and family tax assistance.
5. Commencement
The amendments included in Schedule 23 commence on the day of
Royal Assent.