Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Christian Porter MP)
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
Contents
OUTLINE .................................................................................................................................. 3
FINANCIAL IMPACT STATEMENT ..................................................................................... 3
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS........................................... 3
NOTES ON CLAUSES ............................................................................................................. 4
Schedule 1 - Social Security Amendments ............................................................................... 5
Schedule 2 - Family Assistance Amendments ........................................................................ 12
Schedule 3 - National Rental Affordability Scheme Amendments......................................... 17
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS......................................... 22
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
OUTLINE
The Bill introduces the following measures:
Automatic Rent Deduction Scheme
National Rental Affordability Scheme Amendments
Schedules 1 and 2 - Social security amendments and Family assistance
amendments
The social security law and the family assistance law are amended to incorporate a
scheme for the automatic deduction of rent and other household payments. The
amendments provide that lessors of social (public and community) housing may
request the Secretary to deduct payments of rent and household utilities, or tribunal
or other authorised body -ordered or agreed costs relating to the occupancy of the
premises, from the social security or family tax benefit payments of tenants and other
adult household members who have entered into an agreement that contemplates
deductions being made under this scheme.
Schedule 3 - National Rental Affordability Scheme Amendments
This Schedule clarifies and corrects certain ambiguous provisions in the National
Rental Affordability Scheme Act 2008 (NRAS Act), and provides further flexibility in
the future administration of the National Rental Affordability Scheme so as to further
the objects of the NRAS Act.
FINANCIAL IMPACT STATEMENT
MEASURE FINANCIAL IMPACT OVER THE FORWARD
ESTIMATES
Automatic Rent Deduction Not for publication
Scheme - Schedule 1 - Social
Security Amendments and
Schedule 1 - Family Assistance
Amendments
Schedule 3 - National Rental Nil
Affordability Scheme Amendments
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
explanatory memorandum.
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
NOTES ON CLAUSES
Abbreviations used in this explanatory memorandum
Social Security Act means the Social Security Act 1991.
Social Security Administration Act means the Social Security
(Administration) Act 1999.
Family Assistance Administration Act means the A New Tax System
(Family Assistance) (Administration) Act 1999.
National Rental Affordability Scheme Act means the National Rental
Affordability Scheme Act 2008.
Clause 1 sets out how the new Act is to be cited - that is, as the Social Services
Legislation Amendment (Housing Affordability) Act 2017
Clause 2 provides a table setting out the commencement dates of the various
sections in, and Schedules to, the new Act.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule.
Schedule 1 - Social Security Amendments
Schedule 1 - Social Security Amendments
Summary
The social security law is amended to incorporate a scheme for the automatic
deduction of rent and other household payments. The amendments provide that
lessors of social (public and community) housing may request the Secretary to
deduct payments of rent and household utilities, from the social security payments of
tenants and other adult members of their households who have entered into an
agreement with the lessor (however described) that authorises deductions being
made under this scheme. Tribunal or other authorised body-ordered or agreed costs
relating to the occupancy of the premises may also be deducted.
Background
The scheme enables a social housing lessor to request the Secretary make a
deduction from a person's social security payments (subject to some exceptions), to
pay for rent, utilities or for tribunal or other authorised or agreed body -ordered costs
relating to loss of or damage to property arising as a result of the occupancy of the
premises. In order to request a deduction, a lessor must be a social housing lessor
(as defined) and the person in receipt of various social security payments must be a
social housing tenant (as defined).
The scheme also provides for the recovery of overpayments made to social housing
lessors, and enables the Secretary to charge a social housing lessor fees for various
services associated with the scheme. Associated amendments are also made to
Division 2 (Internal review) of Part 4 and Division 1 (Information gathering) of Part 5
of the Social Security Administration Act.
The amendments made by this Schedule commence on the later of the day after
Royal Assent and 1 March 2018.
Explanation of the changes
Part 1 - Main amendments
Social Security (Administration) Act 1999
Inalienability
Social security payments are absolutely inalienable under section 60 of the Social
Security Administration Act. Item 1 amends paragraph 60(2)(aa) to provide that the
inalienability of social security payments is subject to the new Part 3E of the Social
Security Administration Act inserted by item 8.
Income management regime
Under Part 3B (income management regime), a person who is subject to income
management will have part of their payments deducted in order to pay for the priority
needs of that person, their partner, their children, and any other dependants. The
Schedule 1 - Social Security Amendments
part of their payments available to be subject to income management will not include
any amount deducted under new Part 3E or new Part 3A under the Family
Assistance Administration Act in the case of family tax benefit. Income management
only applies to the 'net amount' of a payment, after all deductions for other purposes
under other Acts have occurred. This term is defined in section 123TC. Items 2
and 3 amend this definition to include reference to deductions under new sections
124QG and 67E.
'Household utilities' is currently defined in section 123TH(1)(h). Item 4 amends this
definition to remove references to specific household utilities, as this definition is
moved to Schedule 1 under item 15.
Trial of cashless welfare arrangements
Under Part 3D (Trial of cashless welfare arrangements), section 124PL provides for
the manner of payment of a restrictable payment, where that payment is payable to a
trial participant or voluntary participant. When a deduction is made from, or an
amount is set off against the restrictable payment (for instance, under various
provisions of the social security law or the Family Assistance Administration Act), the
balance of the restricted portion that is to be paid to a restricted bank account is
reduced by the amount deducted. Items 5 and 6 insert references to include
deductions under new section 124QG, and new section 67E of the Family
Assistance Administration Act.
Item 7 repeals and substitutes section 124PM. The existing wording of the section
relating to splitting a restrictable welfare payment into restricted and unrestricted
portions implies that deductions for other purposes, including for payments of tax,
other Commonwealth debts and now for automatic rent deduction, cannot be made
from the unrestricted portion of a cashless debit card participant's payment. This is
because paragraph 124PM(b) provides that the unrestricted portion may be used at
the person's discretion. This item removes this part of the provision to allow such
deductions to be made from the unrestricted portion of a cashless debit card
participant's welfare payment, if necessary.
Automatic deductions of rent or other household payments
Item 8 inserts new Part 3E - automatic deductions of rent or other household
payments, after existing Part 3D.
Division 1 - Introduction
Sections 124Q and 124QA set out the simplified outline and the objects of this Part.
Section 124QB defines a divertible welfare payment for the purposes of this Part
as a social security payment or a payment under the ABSTUDY scheme that is
payable (except as an advance), that is not an Australian Victim of Terrorism
Overseas Payment, a Disaster Recovery Allowance, a student start-up loan, or an
ABSTUDY student start up loan under the Student Assistance Act 1973. The
Schedule 1 - Social Security Amendments
Minister may also determine, by legislative instrument, that one or more kinds of
social security payments are not divertible welfare payments.
Subsection 124QC(1) defines a social housing lessor as an authority of a State or
Territory that provides social housing, or a body that has been approved by a State
or Territory to provide social housing (provided that the Chief Executive Centrelink
has been notified of the approval in writing). In either case, the authority or body
must have a written agreement with the Human Services Department relating to the
body's ability to request deductions under this Part.
Subsection 124Q(2) enables the Minister, by written instrument, to determine that a
specified authority or body may not be a social housing lessor for the purposes of
this Part.
Subsection 124QC(3) provides that such a written instrument is not a legislative
instrument. This provision is included to assist readers as the instrument is not a
legislative instrument within the meaning of subsection 8(1) of the Legislation Act
2003.
Section 124QD defines a social housing tenant as a person who is 18 or older,
who pays, or is liable to pay rent in relation to premises let by a social housing
lessor, whether or not the person is named in an agreement (however described)
with the lessor for occupancy of the premises. State and Territory social housing
schemes provide for rent to be calculated based upon the income of all members of
a tenant's household, despite the fact not all members of the household may be
party to the lease with the social housing lessor. This definition will allow deductions
to be sought from the welfare payment of any of the adult occupants of the house.
A note alerts the reader that 'rent' is defined in section 13 of the Social Security Act.
The definition is broad, and includes all amounts payable as a condition of
occupancy of premises, which would generally include bond payments.
Section 124QE expressly provides that this Part binds the Crown in each of its
capacities.
Division 2 - Deductions from divertible welfare payments
Subsection 124QF(1) provides the circumstances in which a social housing lessor
may request the Secretary to deduct an amount from a social housing tenant's
divertible welfare payment. If a social housing tenant has an ongoing or outstanding
obligation to pay an amount for rent, household utilities or both, in relation to the
tenant's occupancy of premises let by the lessor, and the tenant's agreement with
the lessor for the occupancy of the premises, or another written agreement with the
lessor, authorises the lessor to make requests under this Part, then the lessor may
request a deduction. The lessor may also request a deduction if the tenant is to pay
to the lessor an amount for loss or damage to the property as a result of their
occupancy of premises, so as to comply with an order or a court, or of a tribunal or
other body that has the power to make orders, and the order is not appealed within
the period for appealing, or an appeal is finally determined or otherwise disposed of.
A deduction may also be requested where the tenant agrees, in writing, to pay to the
Schedule 1 - Social Security Amendments
lessor an amount for loss of or damage to property, as a result of the occupancy of
premises.
Subsection 124QF(2) provides that a deduction may be requested whether the
obligation arose, or the order was made, before, on or after the commencement of
this section.
Subsection 124QF(3) provides that the social housing lessor's request must specify
the amount to be deducted, which must not be more than that required to satisfy
rent, household utilities or both payable by the tenant, and any outstanding payment
or rent, household utilities or both payable by the tenant, and an order as described
in paragraph 124QF(1)(b), and any amount agreed as mentioned in paragraph 1(c).
The lessor's request must also specify the date from which deductions are to be
made.
Subsection 124QF(4) provides that the social housing lessor may amend the request
to specify a different amount to be deducted. An amended request must satisfy the
requirements of subsection (3).
Subsection 124QF(5) provides that the social housing lessor must give the request
and any amendment of the request to the Secretary in a way approved by the
Secretary, for the request or amendment to be effective. The Secretary may
approve a way of giving requests and a way of giving amendments.
Under section 124QG, the Secretary has discretion to deduct an amount from a
social housing tenant's divertible welfare payment, if a request has been made by a
social housing lessor under section 124QF. However, the Secretary must not make
a deduction if the social housing lessor's request is revoked, if the Secretary is
notified under section 124QI that the social housing tenant ceases to be a social
housing tenant in relation to the lessor, if the social housing lessor ceases to be a
social housing lessor, or at any time the tenant is covered by a determination under
subsection 124QG(3).
Subsection 124QG(3) enables the Minister, by legislative instrument, to determine
that deductions must not be made from divertible welfare payments payable to
specified social housing tenants. A note alerts the reader that subsection 13(3) of
the Legislation Act 2003 provides for specification by class.
If the Secretary does not make a deduction in accordance with a request made,
including where the Secretary deducts less than was requested, the Secretary must
give written notice to the lessor of that fact (subsection 124QG(4)).
If a divertible welfare payment payable to a social housing tenant is suspended
under this Act, but subsequently resumes, the Secretary may deduct any amounts
that would otherwise have been deducted under this Part during the period of
suspension from payments paid to the tenant after the suspension ends
(subsection 124QG(5)).
Section 124QH provides that the Secretary is to determine the amount of the
deduction. The amount must not exceed the amount specified in a request made
under section 124QF, or the amount of the divertible welfare payment remaining
Schedule 1 - Social Security Amendments
after all deductions specifically required by a law of the Commonwealth (other than
Part 3E) are made.
Section 124QI sets out the requirements for notifications by social housing lessors.
Subsection 124QI(1) provides that a social housing lessor may revoke a request
made under section 124QF by giving notice to the Secretary in a way approved by
the Secretary. If a request has been made under section 124QF in relation to a
person and the person ceases to be a social housing tenant in relation to that social
housing tenant lessor, the lessor must notify the Secretary as soon as practicable
(subsection 124QI(2)). Similarly, if the social housing lessor ceases to be a social
housing lessor (other than because of section 124QC(2)), the authority or body must
notify the Secretary as soon as practicable after ceasing to be a social housing
lessor (subsection 124QI(3)). A notification under subsection 124QI(2) or (3) must
be given in a way approved by the Secretary (subsection 124QI(4)).
Division 3 - Treatment of amounts deducted
Under section 124QJ, Division 3 will apply when the Secretary deducts an amount
under Division 2 from a divertible welfare payment payable to a social housing
tenant.
Section 124QK requires the Secretary to pay the amount deducted to the social
housing lessor.
Section 124QL provides that if the Secretary pays the amount to the social housing
lessor and the amount, or a part of the amount relates to a particular liability, then
the liability is discharged to the extent of the amount, or part of the amount paid to
the social housing lessor. In other words, if a deduction was sought for combined
amounts representing rent and utilities, and a deduction is made, the amount paid to
the lessor extinguishes each of the liabilities for rent and utilities, to the extent that
part of the deduction relates to that liability. The liability is extinguished even if the
liability is not yet due and payable (subsection 124QL(2)). However, this section
does not reduce a liability in respect of an amount paid to the lessor that gives rise to
a debt due to the Commonwealth by the lessor (subsection 124QL(3)).
Section 124QM provides that for the purposes of all laws of the Commonwealth
(except any law specified under subsection 124QM(4)), the social housing tenant is
taken to have been paid the amount deducted, at the time the divertible welfare
payment was paid, or would have been paid but for the deduction, whether or not the
Secretary paid the amount to the social housing lessor (subsections 124QM(1)
to (3)). This provision is subject to new section 124QO and any law of the
Commonwealth specified in an instrument under subsection 124QM(4). Subsection
124QM(4) provides that the Minister may, by legislative instrument, make a
determination specifying a law of the Commonwealth for the purposes of
subsection 124QM(2).
Division 4 - Overpayments to social housing lessors
Section 124QN applies where a payment to a lessor purportedly made under
Division 3 is made in connection with a deduction properly made under Division 2. If
Schedule 1 - Social Security Amendments
the amount paid to the social housing lessor exceeds the deduction, the excess is a
debt due to the Commonwealth by the social housing lessor. A note under
subsection 124QN(2) directs the reader to section 124QP for debt recovery.
Section 124QO applies where a payment of a deduction has been made to a social
housing lessor under Division 3 and the deduction exceeded the amount (which may
be nil) determined by the Secretary under section 124QH (subsection 124QO(1)). In
such cases, the amount a social housing tenant is taken to have been paid under
subsection 124QM(1) is reduced by the excess (subsection 124QO(2)). Subsection
124QO(3) provides that the excess is a debt due to the Commonwealth by the social
housing lessor. A note under subsection 124QN(2) directs the reader to section
124QP for debt recovery.
Subsection 124QO(4) provides that the Secretary must pay the social housing tenant
an amount equal to the excess that was deducted, whether or not the
Commonwealth recovers the debt, and that amount will be taken to be a payment of
the divertible welfare payment. Subsection 124QO(5) provides that the Secretary
must not pay an amount under subsection 124QO(4) to the extent that the sum of
that amount, and the amount that should have been deducted, would exceed the
amount of the divertible welfare payment that would have been payable to the tenant
apart from Part 3E. Subsection 124QO(6) provides that subsection 124QO(4) has
effect for the purposes of all laws of the Commonwealth, except any law specified by
the Minister by legislative instrument under subsection 124QO(7).
Section 124QP allows the Secretary to set off amounts payable to a social housing
lessor under Division 3 against debts due to the Commonwealth by the lessor under
Division 4 (subsection 124QP(1)). Subsection 124QP(2) provides that the
Commonwealth may recover a debt due to it under Division 4 in a court of competent
jurisdiction. A note directs the reader to Part 5.4 of the Social Security Act for other
recovery action in relation to debts.
Section 124QQ provides that there is no time limit for the commencing legal
proceedings or taking any action under Part 3E for the recovery of a debt or
overpayment.
Division 5 - Fees
Section 124QR enables the Secretary to charge social housing lessors fees, on the
Commonwealth's behalf, for deducting amounts under Division 2, paying amounts to
the lessor under Division 3, and for services provided to the lessor in the
administration of Part 3E.
Item 9 is a consequential amendment.
Review of decisions
Item 10 inserts new subsection 127(3A), which provides that a decision to make a
determination under subsection 124QC(2) is not reviewable by the Secretary.
Schedule 1 - Social Security Amendments
Item 11 inserts new paragraph 129(4)(daa) into section 129. It provides that a
person may not apply under subsection 129(1) for review of a decision to make a
determination under subsection 124QC(2).
Information management
Paragraph 192(db) is amended by item 12 to include a reference to Part 3E in the
Secretary's general information-gathering powers.
Item 13 inserts new paragraph 195(1)(cd) to enable the Secretary to require a
person to give information about a class of persons to the Department to facilitate
the administration of Part 3E.
Item 14 inserts new paragraph 195(2)(m) to enable the Secretary to require, about
each person in the class of persons, for the purposes of Part 3E, evidence to support
a request made by the social housing lessor under section 124QF.
Definitions
Item 15 inserts new definitions into subclause 1(1) of Schedule 1, for divertible
welfare payment, household utilities, social housing lessor and social housing
tenant.
Part 2 - Consequential amendments
Social Security Act
Item 16 inserts new paragraph 1235(ca) into the Social Security Act to extend the
definition of debt, for the purposes of Part 5 of that Act, to a debt due by a social
housing lessor under Division 4 of Part 3E of the Social Security Administration Act.
Item 17 adds a reference to Part 3E of the Social Security Administration Act into
subsection 1237AB(1), enabling the Secretary, on behalf of the Commonwealth, to
decide to waive the Commonwealth's right to recover debts arising under Part 3E.
Schedule 2 - Family Assistance Amendments
Schedule 2 - Family Assistance Amendments
Summary
The Family Assistance Administration Act is amended to incorporate a scheme for
the automatic deduction of rent and other household payments. The amendments
provide that lessors of social (public and community) housing may request the
Secretary to deduct payments of rent and household utilities, from the family tax
benefit payments of tenants and other adult members of their households who have
entered into an agreement with the lessor (however described) that authorises
deductions being made under this scheme. Tribunal or other authorised body-
ordered or agreed costs relating to the occupancy of the premises may also be
deducted.
Background
The scheme enables a social housing lessor to request the Secretary make a
deduction from a person's family tax benefit payments (other than family tax benefit
advances), to pay for rent, utilities or for tribunal or other authorised body-ordered
costs or agreed relating to loss of or damage to property arising as a result of the
occupancy of the premises. In order to request a deduction, a lessor must be a
social housing lessor (as defined in Part 3E of the Social Security Administration Act)
and the person in receipt of family tax benefit payments must be a social housing
tenant (as defined in Part 3E of the Social Security Administration Act).
The scheme also provides for the recovery of overpayments made to social housing
lessors, and enables the Secretary to charge a social housing lessor fees for various
services associated with the scheme. Associated amendments are also made to
Division 1 (Information gathering) of Part 6 of the Family Assistance Administration
Act.
The amendments made by this Schedule commence on the later of the day after
Royal Assent and 1 March 2018.
Explanation of the changes
Family Assistance Administration Act
Definitions
Item 1 inserts definitions of household utilities, social housing lessor and social
housing tenant. which are given the same meanings as they have in the Social
Security Administration Act. Any determination made by the Minister for the
purposes of subsection 124QC(2) will also apply for the purposes of the family
assistance law.
Schedule 2 - Family Assistance Amendments
Payment of family tax benefit
Item 2 adds references to new Part 3A into subsections 23(6), 24(4) and 24A(2),
which relate to the payment of family tax benefit.
Inalienability
Family tax benefit payments are absolutely inalienable under section 66 of the
Family Assistance Administration Act. Item 3 adds new paragraph 66(2)(ac) to
provide that the inalienability of family tax benefit payments is subject to the new Part
3A of the Family Assistance Administration Act inserted by item 5. Item 4 provides
similarly in relation to Part 3E of the Social Security Administration Act.
Automatic deductions of rent or other household payments
Item 5 inserts new Part 3A into the Family Assistance Administration Act.
Division 1 - Introduction
Sections 67A and 67B set out the simplified outline and the objects of this Part.
Section 67C expressly provides that this Part binds the Crown in each of its
capacities.
Division 2 - Deductions from family tax benefit payments
Subsection 67D(1) provides the circumstances in which a social housing lessor may
request the Secretary to deduct an amount from a social housing tenant's family tax
benefit payment (other than family tax benefit advance). If a social housing tenant
has an ongoing obligation to pay an amount for rent, household utilities or both, and
the tenant's agreement with the lessor for the occupancy of the premises, or another
written agreement with the lessor, authorises the lessor to make requests under this
Part, then the lessor may request a deduction. The lessor may also request a
deduction if an amount for loss or damage to the property as a result of their
occupancy of premises let by the lessor, so as to comply with an order of a court, or
of a tribunal or other body that has the power to make orders, and the order is not
appealed within the period for appealing, or an appeal is finally determined or
otherwise disposed of. A deduction may also be requested where the tenant agrees,
in writing, to pay to the lessor an amount for loss of or damage to property, as a
result of the occupancy of premises.
Subsection 67D(2) provides that a deduction may be requested whether the
obligation arose, or the order was made, before, on or after the commencement of
this section.
Subsection 67D(3) provides that the social housing lessor's request must specify the
amount to be deducted, which must not be more than that required to satisfy rent,
household utilities or both payable by the tenant, and any outstanding payment or
rent, household utilities or both payable by the tenant, and an order as described in
Schedule 2 - Family Assistance Amendments
paragraph 67D(1)(b). The lessor's request must also specify the date from which
deductions are to be made.
Subsection 67D(4) provides that the social housing lessor may amend the request to
specify a different amount to be deducted. An amended request must satisfy the
requirements of subsection (3).
Subsection 67D(5) provides that the social housing lessor must give the request and
any amendment of the request to the Secretary in a way approved by the Secretary,
for the request or amendment to be effective. The Secretary may approve a way of
giving requests and a way of giving amendments.
Under section 67E, the Secretary has discretion to deduct an amount from a social
housing tenant's family tax benefit payment, if a request has been made by a social
housing lessor under section 67D. However, the Secretary must not make a
deduction if the social housing lessor's request is revoked, if the Secretary is notified
under section 67G that the social housing tenant ceases to be a social housing
tenant in relation to the lessor, if the social housing lessor ceases to be a social
housing lessor, or at any time the tenant is covered by a determination under
subsection 67E(3).
Subsection 67E(3) enables the Minister, by legislative instrument, to determine that
deductions must not be made from family tax benefit payments payable to specified
social housing tenants. A note alerts the reader that subsection 13(3) of the
Legislation Act 2003 provides for specification by class.
If the Secretary does not make a deduction in accordance with a request made,
including where the Secretary deducts less than was requested, the Secretary must
give written notice to the lessor of that fact (subsection 67E(4)).
Section 67F provides that the Secretary is to determine the amount of the deduction.
The amount must not exceed the amount specified in a request made under
section 67D, or the amount of family tax benefit remaining after all deductions
specifically required by a law of the Commonwealth (other than Part 3A) are made.
Section 67G sets out the requirements for notifications by social housing lessors.
Subsection 67G(1) provides that a social housing lessor may revoke a request made
under section 67D by giving notice to the Secretary in a way approved by the
Secretary. If a request has been made under section 67D in relation to a person and
the person ceases to be a social housing tenant in relation to that social housing
tenant lessor, the lessor must notify the Secretary as soon as practicable
(subsection 67G(2)). Similarly, if the social housing lessor ceases to be a social
housing lessor (other than because of section 124QC(2) of the Social Security
Administration Act), the authority or body must notify the Secretary as soon as
practicable after ceasing to be a social housing lessor (subsection 67G(3)). A
notification under subsection 67G(2) or (3) must be given in a way approved by the
Secretary (subsection 67G(4)).
Schedule 2 - Family Assistance Amendments
Division 3 - Treatment of amounts deducted
Under section 67H, Division 3 will apply when the Secretary deducts an amount
under Division 2 from family tax benefit payable to a social housing tenant.
Section 67J requires the Secretary to pay the amount deducted to the social housing
lessor.
Section 67K provides that if the Secretary pays the amount to the social housing
lessor and the amount, or a part of the amount relates to a particular liability, then
the liability is discharged to the extent of the amount paid to the social housing
lessor, even if the liability is not yet due and payable. In other words, if a deduction
was requested for combined amounts representing rent and utilities, and a deduction
is made, the amount paid to the lessor extinguishes each of the liabilities for rent and
utilities to the extent that part of the deduction relates to that liability. However, this
section does not reduce a social housing tenant's liability in respect of an amount
paid to the lessor that gives rise to a debt due to the Commonwealth by the lessor
(subsection 67K(3)).
Section 67L provides that for the purposes of all laws of the Commonwealth (except
any law specified under subsection 67L(4)), the social housing tenant is taken to
have been paid the amount deducted, at the time the family tax benefit payment was
paid, or would have been paid but for the deduction, whether or not the Secretary
paid the amount to the social housing lessor (subsections 67L(1) to (3)). This
provision is subject to new section 67N and any law of the Commonwealth specified
in an instrument under subsection 67L(4). Subsection 67L(4) provides that the
Minister may, by legislative instrument, make a determination specifying a law of the
Commonwealth for the purposes of subsection 67L(2).
Division 4 - Overpayments to social housing lessors
Section 67M applies where a payment to a lessor purportedly made under Division 3
is made in connection with a deduction properly made under Division 2. If the
amount paid to the lessor exceeds the deduction, the excess is a debt due to the
Commonwealth by the social housing lessor. A note under subsection 67M(2) directs
the reader to section 67P for debt recovery.
Section 67N applies where a payment of a deduction has been made to a social
housing lessor under Division 3 and the deduction exceeded the amount (which may
be nil) determined by the Secretary under section 67F (subsection 67N(1)). In such
cases, the amount a social housing tenant is taken to have been paid under
subsection 67L(1) is reduced by the excess (subsection 67N(2)). Subsection 67N(3)
provides that the excess is a debt due to the Commonwealth by the social housing
lessor. A note under subsection 67N(2) directs the reader to section 67P for debt
recovery.
Subsection 67N(4) provides that the Secretary must pay the social housing tenant an
amount equal to the excess that was deducted, whether or not the Commonwealth
recovers the debt, and that amount will be taken to be a payment of family tax
benefit. Subsection 67N(5) provides that the Secretary must not pay an amount
Schedule 2 - Family Assistance Amendments
under subsection 67N(4) to the extent that the sum of that amount, and the amount
that should have been deducted, would exceed the amount of family tax benefit that
would have been payable to the tenant apart from Part 3A. Subsection 67N(6)
provides that subsection 67N(4) has effect for the purposes of all laws of the
Commonwealth, except any law specified by the Minister by legislative instrument
under subsection 67N(7).
Section 67P allows the Secretary to set off amounts payable to a social housing
lessor under Division 3 against debts due to the Commonwealth by the lessor under
Division 4 (subsection 67P(1)). Subsection 67P(2) provides that the Commonwealth
may recover a debt due to it under Division 4 in a court of competent jurisdiction.
Subsection 67P(3) provides that Part 4 of the Family Assistance Administration Act
does not apply to a debt due by a social housing lessor to the Commonwealth under
Division 4.
Section 67Q provides that there is no time limit for the commencing legal
proceedings or taking any action under Part 3E for the recovery of a debt or
overpayment.
Division 5 - Fees
Section 67R enables the Secretary to charge social housing lessors fees, on the
Commonwealth's behalf, for deducting amounts under Division 2, paying amounts to
the lessor under Division 3, and for services provided to the lessor in the
administration of Part 3A.
Information gathering
Item 6 and 7 inserts new paragraph 154(1)(c) to enable the Secretary to require a
person to give information or produce a document to a specified agency if the
Secretary considers that the information or document may be relevant to the
operation of Part 3A.
Item 8 and 9 inserts new paragraph 157(1)(c) to enable the Secretary to require a
person to give information about a class of persons to a specified agency to facilitate
the administration of Part 3A.
Item 10 inserts new paragraph 157(2)(m) enabling the Secretary to require, about
each person in the class of persons, for the purposes of Part 3A, evidence to support
a request made by the social housing lessor under section 67D.
Schedule 3 - National Rental Affordability Scheme Amendments
Schedule 3 - National Rental Affordability Scheme Amendments
Summary
The purpose of this Schedule is to clarify and correct certain ambiguous provisions in
the National Rental Affordability Scheme Act 2008 (NRAS Act), and to provide
further flexibility in the future administration of the National Rental Affordability
Scheme (the Scheme) so as to further the objects of the NRAS Act.
Background
The Scheme has been in operation since 2008 and is established by section 5 of the
NRAS Act.
The object of the Scheme is to encourage large-scale investment in housing so as to
increase the supply of affordable rental dwellings and reduce rental costs for low and
moderate income households. To accomplish this, the Scheme provides approved
participants with a financial incentive for a period of 10 years (the incentive period) to
rent dwellings to eligible tenants (being low to middle income earners) at a rate of at
least 20 per cent below market rates.
In order to receive an incentive, approved participants must comply with a number of
additional conditions of allocation provided for in section 7 of the NRAS Act,
including that the dwelling must be rented to eligible tenants, and must not be vacant
for longer than a period prescribed by the National Rental Affordability Scheme
Regulations 2008 (NRAS Regulations). Further conditions of allocation are set out in
the NRAS Regulations.
Approved participants who satisfy the conditions of allocation receive a financial
incentive each NRAS year (1 May to 30 April).
Ambiguous provisions
The Scheme has been in operation since 2008. During that time, several provisions
have been identified that are ambiguous in their application. In order to address this
ambiguity, this Schedule amends the NRAS Act to provide clarity to approved
participants and other relevant stakeholders.
Rent charged
One of the conditions of allocation provided for in the NRAS Act is that eligible
tenants must be charged rent that is at least 20 per cent lower than the market value
rent for the dwelling.
Specifically, sub-paragraph 7(2)(b)(ii) of the NRAS Act provides that one of the
conditions of an allocation that must be prescribed in the Scheme is 'that to the
extent that the rental dwelling is rented during an NRAS year that falls within the
incentive period ... the rent that is charged for the rental dwelling is, at all times
during the year, at least 20 per cent less than the market value rent for the dwelling'.
Schedule 3 - National Rental Affordability Scheme Amendments
The intent of this provision is that each time that rent is charged, the amount charged
(and subsequently paid) must be at least 20 per cent below the market value rent.
Consequently, the approved participant cannot charge a higher rent for part of the
year, and then a lower rent for other parts of the year to compensate. This is to
protect eligible tenants from being subject to a higher rent at any time during the
year.
There is some ambiguity in the provision, in that it could be interpreted to require that
the rent charged must be at least 20 per cent below the market value rent for the
dwelling when averaged over the course of the whole year. Such an interpretation
would leave eligible tenants open to circumstances where an approved participant
requires a higher rent be paid for a portion of the year, potentially leading to financial
hardship and uncertainty. In order to deal with this ambiguity, it is necessary to
amend the NRAS Act.
Transfer of allocations to other dwellings
As set out in the explanatory memorandum for the National Rental Affordability
Scheme Bill 2008, from the inception of the Scheme it was predicted that allocations
may need to be transferred from one dwelling to another. Requests to transfer an
allocation to another dwelling, come, for example, where a dwelling has been sold or
where an owner of a dwelling no longer wishes to take part in the Scheme. Rather
than losing the allocation from the Scheme, the allocation may be transferred to a
different dwelling, generally while remaining with the same approved participant.
The ability to transfer allocations from one dwelling to another is crucial to achieving
the objects of the Scheme. Without this discretion, numerous allocations would fall
out of the Scheme where the owners of the dwellings no longer wish to participate.
This would lead to a significant reduction in the stock of affordable housing provided
for under the Scheme. An amendment to the NRAS Act will provide clarity by giving
express legislative authority for the NRAS Regulations to provide for the transfer of
an allocation to another rental dwelling in certain circumstances.
Increased flexibility
The intention of the NRAS Act has always been to include most of the administrative
details of the Scheme's operation in the NRAS Regulations rather than in the NRAS
Act to provide the flexibility required to address changing circumstances. The initial
intent in designing the Scheme (as outlined in the explanatory memorandum to the
NRAS Act) was to allow for greater flexibility for the administration of the Scheme to
respond to changes in determining market rent, tenant eligibility criteria, acceptable
periods of vacancy and reporting requirements in support of eligibility for incentives.
Vacancy periods
One of the conditions of allocation in the NRAS Act is that a dwelling must not be
vacant for longer than a period prescribed by the NRAS Regulations. Paragraph
7(2)(c) is highly prescriptive in the way in which vacancy periods must be prescribed.
Currently, the Regulations must prescribe two specific types of maximum vacancy
periods. The first is a period within one NRAS year, and the second is a continuous
Schedule 3 - National Rental Affordability Scheme Amendments
period that crosses two NRAS years. The highly prescriptive nature of this section is
particularly notable when viewed in the context of the other provisions in the NRAS
Act that provide for significant flexibility in the establishment and administration of the
Scheme.
The prescriptiveness of paragraph 7(2)(c) limits the Scheme's ability to adapt and
develop in response to emerging issues and demands and is contrary to the initial
intent in relation to how the Scheme should be administered. Greater flexibility is
required to ensure that the Scheme can continue to operate effectively.
Conditions of allocation
Allocations are made subject to certain conditions. Some conditions are specifically
set out in subsection 7(2) of the NRAS Act. Paragraph 7(1)(c) provides that the
NRAS Regulations can prescribe other conditions of allocation not specifically
provided for in the NRAS Act. The NRAS Regulations currently set out several
further conditions of allocation, including conditions in relation to calculating the
market value rent for a dwelling, and a condition that a rental dwelling must not have
been lived in before the first day of an incentive period.
There is currently no express legislative authority to vary conditions of allocation that
are prescribed by the NRAS Regulations. Amendments are made to ensure there is
a clear legislative basis for varying conditions of allocation to enable the Scheme to
continue to respond to emerging issues that arise from time to time.
The amendments made by this Schedule, other than item 3 and its application
provision, commence on 1 May 2018, which is the beginning of the next 'NRAS
year'. An NRAS year begins on 1 May and ends on 30 April of the following year.
This commencement date will reduce the administrative burden associated with
implementing these amendments and will also promote consistency in the operation
of the Scheme following implementation from the next NRAS year. The amendments
made by item 3 and its application provision commence on the day after the Royal
Assent. These amendments promote clarity and certainty and are included for the
avoidance of doubt.
Explanation of the changes
Item 1 repeals and substitutes subparagraph 7(2)(b)(ii) of the NRAS Act. The new
subparagraph inserted by this item clarifies that the NRAS Regulations must provide
that a condition of allocation is that each and every time rent is charged for a
dwelling (whether that be on a weekly, fortnightly, monthly or other basis), that rent
must be at least 20 per cent below the market value rent.
This amendment is made for the sake of clarity to remove any ambiguity about the
operation of subparagraph 7(2)(b)(ii), and to protect eligible tenants from being
subject to higher rent at any time during the year.
Item 2 repeals and substitutes paragraph 7(2)(c) of the NRAS Act. Vacancy periods
will continue to be prescribed by the NRAS Regulations, but the substituted provision
Schedule 3 - National Rental Affordability Scheme Amendments
provides greater flexibility in how maximum vacancy periods are prescribed,
including how the vacancy periods may be calculated, or what form they may take.
This is necessary to ensure that approved participants are not subject to excessive
penalties as a result of vacancy periods, while ensuring that the Scheme continues
to meet its objective of increasing the stock of affordable rental dwellings.
Item 3 adds new subsections (4) and (5) to section 7 of the NRAS Act.
New subsection 7(4) allows the Scheme to provide for the variation of a condition of
allocation. Paragraph 7(1)(c) of the NRAS Act allows the Scheme to provide for
conditions of allocation not prescribed by the NRAS Act, however there is no express
legislative authority to vary conditions of allocation. New subsection 7(4) makes this
clear and ensures there is a clear legislative basis for varying conditions of allocation
to enable the Scheme to continue to respond to emerging issues that arise from time
to time. Conditions of allocation may be varied where it is necessary or appropriate
to give effect to the objects of the Scheme.
The power to vary conditions of allocation cannot be used to vary the conditions
specifically provided for in the NRAS Act under paragraph 7(2)(a) and subparagraph
7(2)(b)(ii). This ensures that the NRAS Regulations cannot override the operation of
the NRAS Act. Subparagraph 7(2)(b)(i) and paragraph 7(2)(c) have not been
specifically excluded as the conditions mentioned in those provisions have operation
only if certain matters are set out in the NRAS Regulations.
New subsection 7(5) clarifies that a condition provided for by the Scheme may be
imposed on an allocation after it is made. A condition prescribed by the Scheme
includes new or varied conditions of allocation. New conditions of allocation may be
imposed to deal with emerging issues and circumstances.
The ability to implement new and varied conditions of allocations are important to
further the objects of the Scheme, and to protect eligible tenants and ensure the
safety and viability of dwellings. For example, new conditions of allocation may be
imposed to deal with certain safety issues, such as a requirement to use certain non-
flammable materials, or replace existing dangerous materials.
Item 5 inserts a new paragraph 8(ba). This provision puts beyond doubt that the
NRAS Regulations may provide for the circumstances in which an allocation can be
transferred from one rental dwelling to another rental dwelling. For example, an
allocation may be transferred to a different dwelling where a dwelling is sold and the
new owner does not wish to participate in NRAS. The ability to transfer allocations
between dwellings is crucial to achieving the objects of the Scheme.
Without this discretion, numerous allocations would fall out of the Scheme where the
owners of the dwellings no longer wish to participate. This would lead to a significant
reduction in the stock of affordable housing provided for under the Scheme.
Item 6 is an application provision providing that subsection 7(4) as inserted by item 3
applies to all allocations, including those made before, on or after the day the
Schedule commences. New subsection 7(4) provides that subject to some
exceptions, the NRAS Regulations can vary conditions of allocation from time to
Schedule 3 - National Rental Affordability Scheme Amendments
time. The purpose of this application provision is to ensure that any future variation
of conditions of allocation will apply to conditions that were in effect before, on or
after the commencement of this Schedule which will mean that different allocations
cannot be subject to different conditions.
Item 7 confirms that the NRAS Regulations that are made in relation to maximum
vacancy periods for the purposes of paragraph 7(2)(c) of the NRAS Act and are in
force for immediately before the commencement of this Schedule, remain in force
despite the fact that amendments are made by item 2 of this Schedule to paragraph
7(2)(c).
Statements of compatibility with human rights
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SCHEDULE 1 - SOCIAL SECURITY AMENDMENTS
SCHEDULE 2 - FAMILY ASSISTANCE AMENDMENTS
These Schedules are compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of Schedules 1 and 2
Schedules 1 and 2 of the Bill establish the Automatic Rent Deduction Scheme
(ARDS). ARDS will enable rent and other social housing tenancy costs to be
deducted from social housing tenants' social security payments, (other than a
student start-up loan or an advance), a payment under the ABSTUDY scheme (other
than an ABSTUDY student start up loan or an advance) and family tax benefit.
Deductions will then be able to be changed or ceased only by agreement with the
tenant's social housing provider.
ARDS recognises that social welfare payments should be used towards a person's
and their family's basic needs and is intended to support security of tenure in
housing. It also recognises that a person's home is an important precondition to
their ability to exercise their human rights and their economic, social and cultural
rights in particular.
ARDS aims to:
1. reduce the risk that social housing tenants will accumulate rental arrears and
other housing debt risking their tenancies,
2. reduce the cost of managing social housing arrears and debt, and
3. better secure the income stream associated with housing assets.
It is a condition of lease in most jurisdictions that public housing tenants use the
Department of Human Services provided (voluntary) Rent Deduction Scheme
(RDS) to pay their public housing tenancy costs. In addition, tenancy tribunals
often order defaulting tenants to use RDS to pay for rent, rental arrears and
property damage. Similarly, community housing and Indigenous community
housing tenants are expected to use the Department of Human Services (DHS)
provided Centrepay service to pay their tenancy costs.
Under social security and family assistance law, social security payments and Family
Tax Benefit are 'absolutely inalienable'. This enables tenants to bypass their social
housing provider and cancel their authorised or tenancy tribunal ordered voluntary
rent deductions directly with DHS.
This Bill will amend the Social Security (Administration) Act 1999, Social Security
Act 1999 and A New Tax System (Family Assistance) (Administration) Act 1999 to
Statements of compatibility with human rights
provide that social housing tenants will need to negotiate changes to deduction
amounts with their social housing provider, which will advise DHS of any
changes.
To the extent that the Bill may limit human rights, those limitations are reasonable,
necessary and proportionate to achieving the legitimate objective of preventing
evictions due to arrears and debt which may force a person, and their children,
into homelessness.
Human rights implications
The Bill engages the following Human Rights.
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises 'the right of everyone to social security, including social
insurance'. The ICESCR requires a country to, within its maximum available
resources, provide a minimum essential level of benefits to all individuals and
families that will enable them to acquire at least essential health care, basic shelter
and housing, water and sanitation, foodstuffs, and the most basic forms of education.
People subject to ARDS will benefit by way of a reduction of their liability to a social
housing lessor. As such, ARDS will be compatible with the right to social security as
expressed in the ICESCR.
Although a person's ability to choose how to spend social welfare payments may be
limited, ARDS is designed to ensure persons continue to enjoy an adequate
standard of living by reducing the risk of arrears build-up which may lead to eviction
and possible homelessness. ARDS also ensures that a deduction can only be made
in relation to actual amounts owing, and safeguards are built into ARDS to prevent a
deduction that exceeds the amount specified.
Article 26 of the Convention on the Rights of the Child (CRC) also recognises 'for
every child the right to benefit from social security' and that 'benefits should, where
appropriate, be granted, taking into account the resources and the circumstances of
the child and persons having responsibility for the maintenance of the child'.
Article 3 of the CRC provides that in all actions concerning children, the best
interests of the child must be a primary consideration. ARDS will work to support this
by ensuring that rent is paid on time and in full for households living in social
housing, including families with children to prevent rental arrears and potential
eviction.
The Bill recognises that recipients of a range of social security payments and family
tax benefit have children and that the best interests of children are served when
parents responsibly ensure that their welfare benefits are directed towards housing
as a primary and basic need. The Bill also aims to reduce pressure on child
protection services by maintaining continuity of accommodation through ARDS.
Statements of compatibility with human rights
The right to an adequate standard of living including housing
Article 11.1 of the ICESCR states that everyone has the right to 'an adequate
standard of living for himself and his family, including adequate food, clothing and
housing, and to the continuous improvement of living conditions' and that
'appropriate steps' be taken to 'ensure the realization of this right'.
Under ARDS, amounts will be deducted from their social security payments,
ABSTUDY or instalments of family tax benefit and directed to their social housing
provider to pay rent and other tenancy costs payable under the rental agreement.
This will protect people's social housing tenancies by preventing arrears build-up and
reducing the risk of eviction due to arrears or debt. As such, ARDS is designed to
operate to reduce the likelihood of a person becoming homeless and is compatible
with and enhancing the right to an adequate standard of living including housing.
Article 10 of the ICESCR recognises the rights of the family and child to protection
and assistance. The introduction of an ARDS seeks to support this objective through
ensuring rental payments are made seamlessly and regularly. This will prevent rental
arrears, possible eviction, and will assist with a person's capacity to meet the basic
needs of his or her family.
Article 27 of the CRC also recognises 'the right of every child to a standard of living
adequate for the child's physical, mental, spiritual, moral and social development'.
The Article also states that 'States Parties, in accordance with national conditions
and within their means, shall take appropriate measures to assist parents and others
responsible for the child to implement this right and shall in case of need provide
material assistance and support programmes, particularly with regard to nutrition,
clothing and housing'.
By ensuring social housing rent is paid, the Bill is compatible with children's rights to
an adequate standard of living by ensuring children of social welfare payment
recipients affected by ARDS are at lower risk of being without a home.
Article 18.2 of the CDC places an obligation on States to render appropriate
assistance to parents and legal guardians in the performance of their child-rearing
responsibilities. ARDS will work alongside other available support services, to ensure
that tenants continue to be housed safely and affordably while they get the help they
need to sustain their tenancies.
The right to self-determination
Article 1 of the ICESCR states that 'all peoples have the right of self-determination.
By virtue of that right they freely determine their political status and freely pursue
their economic, social and cultural development'. ARDS will be compatible with a
person's right to freely pursue their economic, social or cultural development
because ARDS is intended to protect the tenancies of persons affected in
recognition of the important role housing plays in a person's ability to economically,
socially and culturally develop.
Statements of compatibility with human rights
The right to privacy
Article 17 of the ICCPR provides that no one shall be subjected to arbitrary or
unlawful interference with their privacy. Privacy guarantees a right to secrecy from
the public of personal information. For interference with privacy not to be arbitrary,
it must be in accordance with the provisions, aims and objectives of the ICCPR and
should be reasonable in the particular circumstances. Reasonableness in this
context incorporates notions of proportionality to the end sought and necessity in the
circumstances.
To operate, ARDS will only require limited information to be provided about a person.
The Secretary will be able to act on a request to make a deduction without requiring
sensitive information about a person's tenancy and circumstances being disclosed.
Conclusion
Schedules 1 and 2 are compatible with human rights. ARDS will limit people's
capacity to withdraw from their social housing deductions to meet their
obligations under their leases.
To the extent that this may limit human rights those limitations are reasonable,
necessary and proportionate to achieving the legitimate objective of preventing
evictions due to arrears and debt which may force a person, and their children,
into homelessness.
Statements of compatibility with human rights
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SCHEDULE 3 - NATIONAL RENTAL AFFORDABILITY SCHEME AMENDMENTS
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
The purpose of this Schedule is to clarify and correct certain ambiguous provisions in
the National Rental Affordability Scheme Act 2008 (NRAS Act), and to provide
further flexibility in the future administration of the National Rental Affordability
Scheme (the Scheme) so as to further the objects of the NRAS Act. This Schedule
provides the Secretary with explicit legislative authority to transfer allocations to
alternate dwellings to ensure that the allocations do not fall out of the Scheme;
provides greater flexibility in prescribing maximum vacancy periods; clarifies the
Scheme's ability to vary conditions of allocation; and clarifies provisions to ensure
that eligible tenants cannot be forced to pay a higher rent at any time, even if that is
only for a portion of a year.
Human rights implications
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in the definition of human rights in
section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Of the human rights and freedoms recognised or declared in the international
instruments listed in the definition of human rights at section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011, this Schedule engages the right to an adequate
standard of living, including housing, as referred to in Article 11.1 of the International
Covenant on Economic, Social and Cultural Rights (done at New York on 16
December 1966 ([1976] ATS 5)).
This Schedule supports the right to adequate housing, as it is addresses areas of the
NRAS Act that lack clarity. This is a beneficial measure as it will enable
improvements to be made to the Scheme that can only be realised through changes
to the NRAS Act, thereby providing a clear legislative framework for approved
participants in the Scheme to continue to deliver more affordable rental
accommodation to tenants.
Conclusion
This Schedule is compatible with human rights because it supports the protection of
the right to adequate housing.
[Circulated by the authority of the Minister for Social Services,
the Hon Christian Porter MP]