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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the Government
(Circulated by the authority of the
Minister for Families and Social Services, the Hon Paul Fletcher MP)
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
Amendments to be moved on behalf of the Government
OUTLINE
Amendments to be moved on behalf of the Government to Schedules 1, 2 and
3 of the Social Services Legislation Amendment (Housing Affordability) Bill
2017 (the Bill).
Schedules 1 and 2 to the Bill introduce a scheme for the automatic deduction
of rent and other household payments in the social security law and family
assistance law.
Schedule 3 to the Bill clarifies 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.
These amendments are moved in response to the recommendations of the
Community Affairs Legislation Committee in their report published on
6 December 2017. The amendments also address concerns that have arisen
since the Bill was introduced.
The amendments omit the commencement provisions in items 2 to 7 of clause
2 of the Bill and substitute new items 2 to 9. The Bill's current commencement
provisions contain commencement dates that are now obsolete or are
administratively impracticable due to the delayed passage of the Bill.
The commencement provisions are amended to provide for the expected
passage date of the Bill.
Schedules 1 and 2 will commence on the later of the day after Royal Assent
and 1 January 2019.
Schedule 3 will commence on the day after Royal Assent, except the
provisions which require changes to the National Rental Affordability Scheme
Regulations 2008, which are to commence on a single day fixed by
Proclamation.
They also make the following changes to each Schedule:
Schedule 1
This Schedule is amended to limit the scope of the Automatic Rent Deduction
Scheme to rent and household utilities, and ensure that any arrears incurred
due to the suspension of a divertible welfare payment cannot be deducted
from a single payment.
2
The definition of a social housing lessor is amended to require, as a
precondition for participating jurisdictions, the Minister responsible for housing
in a relevant State or Territory to provide a letter or document to the
Commonwealth Minister setting out the social housing policies of the State or
Territory. The Commonwealth Minister may publish the letters.
The amendments also clarify that the definition of social housing lessor
includes community housing providers registered under a law of a State or
Territory.
The amendments will also provide that a tenant's agreement with the lessor
that authorises the lessor to make a request under the Automatic Rent
Deduction Scheme, other than a tenancy agreement, is not required to be in a
written form.
The amendments clarify that, for social housing tenants who are subject to the
income management regime or the cashless debit card trial within the
meaning of the Social Security (Administration) Act 1999, a deduction under
the Automatic Rent Deduction Scheme will only be made from the income
managed or restricted portion of their payments.
Schedule 2
This Schedule is amended to limit the scope of the Automatic Rent Deduction
Scheme to rent and household utilities. The amendments will also provide that
a tenant's agreement with the lessor that authorises the lessor to make a
request under the Automatic Rent Deduction Scheme, other than a tenancy
agreement, is not required to be in a written form. The amended definition of a
social housing lessor in Schedule 1 applies to the Automatic Rent Deduction
Scheme in relation to the Family Assistance Law through the application of
item 1 of Schedule 2 to the Bill.
The amendments clarify that, for social housing tenants who are receiving
family tax benefit and are subject to the income management regime or the
cashless debit card trial within the meaning of the Social Security
(Administration) Act 1999, a deduction under the Automatic Rent Deduction
Scheme will only be made from the income managed or restricted portion of
their family tax benefit.
Schedule 3
The amendments to Schedule 3 of the Bill will clarify that the object of the
NRAS Act is to be achieved in ways that include protecting tenants in NRAS,
protecting investors, providing rights to investors and recognising that State
and Territories contributions are complementary to NRAS.
The amendments will expressly identify the Constitutional powers being relied
upon and giving the NRAS Act operation within the scope of those
Constitutional powers.
The amendments will also clarify other regulation making powers including to
support the making of new regulations to replace the National Rental
3
Affordability Scheme Regulations 2008 (NRAS Regulations), which are due to
sunset on 1 April 2019. No new allocations will be made under NRAS and so
the amendments to the Bill will ensure that the regulations do not need to
provide for the approval of new participants under NRAS.
FINANCIAL IMPACT STATEMENT
The amendments in this Bill have no financial impact on Government revenue.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
Supplementary Explanatory Memorandum.
4
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
SOCIAL SERVICES LEGISLATION AMENDMENT
(HOUSING AFFORDABILITY) BILL 2017
Amendments to be moved on behalf of the Government
NOTES ON AMENDMENTS
Amendment (1) omits the commencement provisions in table items 2 to 7 of clause
2 to the Bill and substitutes new table items 2 to 9.
The substituted table item 2 of clause 2 provides that Schedules 1 and 2 will
commence on the later of 1 January 2019 and the day after this Act receives the
Royal Assent.
The substituted table item 4 of clause 2 provides that items 1A to 1E will commence
the day after the Act receives the Royal Assent.
Substituted table item 5 provides that Item 1F will commence on a single day to be
fixed by Proclamation.
Substituted table item 6 provides that items 1G to 4A will commence the day after
the Act receives the Royal Assent.
Substituted table item 7 provides that Item 4B will commence on a single day to be
fixed by Proclamation.
Substituted table item 8 provides that items 5 to 7 will commence the day after the
Act receives the Royal Assent.
Substituted table item 9 provides that item 8 will commence on a single day to be
fixed by Proclamation.
5
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
SCHEDULES 1 AND 2 - SOCIAL SECURITY AND FAMILY ASSISTANCE
AMENDMENTS
Summary
The Bill is amended to limit the scope of the Automatic Rent Deduction Scheme to
rent and household utilities, and ensure that any arrears incurred due to the
suspension of a divertible welfare payment cannot be deducted from a single
payment.
The definition of a social housing lessor is amended to require, as a precondition for
participating jurisdictions, the Minister responsible for housing in a relevant State or
Territory to provide a letter or document to the Commonwealth Minister setting out
the social housing policies of the State or Territory. The Commonwealth Minister
may publish the letters. The amendments also clarify that the definition of social
housing lessor includes community housing providers registered under a law of a
State or Territory.
The amendments will also provide that a tenant's agreement with the lessor that
authorises the lessor to make a request under the Automatic Rent Deduction
Scheme, other than a tenancy agreement, is not required to be in a written form.
The amendments clarify that, for social housing tenants who are subject to the
income management regime or the cashless debit card trial within the meaning of
the Social Security (Administration) Act 1999, a deduction under the Automatic Rent
Deduction Scheme will only be made from the income managed or restricted portion
of their payments.
Background
The Automatic Rent Deduction Scheme enables a social housing lessor to request
that the Secretary make a deduction from a person's social security payments
(subject to some exceptions) or family tax benefit payments other than family tax
benefit advances, to pay rent and utilities arising as a result of the person's
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 or family tax benefit
payments must be a social housing tenant (as defined).
On 19 October 2017, the Senate referred the Bill to the Senate Community Affairs
Legislation Committee (the Committee) for inquiry and report. The Committee's
report was published on 6 December 2017. The proposed amendments give effect to
some of the Committee's recommendations. Other aspects of the Committee's
recommendations will be dealt with administratively, rather than legislatively.
The amendments providing for an Automatic Rent Deduction Scheme will
commence on the later of the day after Royal Assent and 1 January 2019.
6
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
7
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
Explanation of the changes
Amendments (2), (3), (6) to (8), and (16) to (20) amend various provisions of the
Bill to remove references to deductions made under the Automatic Rent Deduction
Scheme being used for the recovery of an amount for loss or damage that arises
from the tenant's occupancy of premises let by the social housing lessor.
These amendments ensure that deductions under the Automatic Rent Deduction
Scheme may only be used for the payment of rent, household utilities, or both.
Amendments (2), (3) and (6) to (8) amend Schedule 1 to the Bill.
Amendment (2) amends the simplified outline in subsection 124Q by omitting the
second paragraph and substituting a new paragraph, which states that a social
housing lessor may request the Secretary to make a deduction to satisfy an ongoing
or outstanding obligation of the social housing tenant for rent, household utilities
or both.
Amendment (3) omits the words ", or loss of or damage to property arising as a
result of occupancy of the premises" from section 124QA, providing for the objects of
the Part.
Amendment (6) omits and substitutes a new subsection 124QF(1), which states that
a social housing lessor may request the Secretary to make a deduction from a
divertible welfare payment payable to a social housing tenant if both of the following
conditions apply. Firstly, the 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. Secondly, the tenant's agreement with the lessor for
occupancy of the premises, or another agreement with the lessor, authorises the
lessor to make requests under Part 3E for deductions from divertible welfare
payments payable to the tenant.
Amendment (6) also results in a tenant's other agreement with the lessor, referred
to in paragraph 124QF(1)(b), which is not a tenancy agreement, but authorises the
lessor to make requests for deductions, is not required to be in a written form.
Amendments (7) and (8) are consequential to the substitution of new subsection
124QF(1) and omit references to orders made by a court or tribunal requiring the
social housing tenant to pay an amount to the social housing lessor for loss or
damage to premises.
Amendments (16) to (20) amend Schedule 2 to the Bill.
8
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
Amendment (16) amends the simplified outline in subsection 67A by omitting the
second paragraph and substituting a new paragraph, which states that a social
housing lessor may request the Secretary to make a deduction to satisfy an ongoing
or outstanding obligation of the social housing tenant for rent, household utilities
or both.
Amendment (17) omits the words ", or loss of or damage to property arising as a
result of occupancy of the premises" from section 67B, providing for the objects of
the Part.
Amendment (18) omits and substitutes a new subsection 67D(1), which states that
a social housing lessor may request the Secretary to make a deduction from family
tax benefit (other than family tax benefit advance), whether an instalment or other
payment, payable to a social housing tenant if both of the following conditions apply.
Firstly, the 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. Secondly, the tenant's agreement with the lessor for occupancy of the
premises, or another agreement with the lessor, authorises the lessor to make
requests under Part 3E for deductions from family tax benefit payable to the tenant.
Amendment (18) also results in a tenant's other agreement with the lessor, referred
to in paragraph 67D(1)(b), which is not a tenancy agreement but authorises the
lessor to make requests for deductions, is not required to be in written form.
Amendments (19) and (20) are consequential to the substitution of new subsection
67D(1) and omit references to orders made by a court or tribunal requiring the social
housing tenant to pay an amount to the social housing lessor for loss or damage to
premises.
Amendments (4) and (5) amend the definition of a social housing lessor in
Schedule 1 to the Bill to include registered community housing providers under a law
of a State or Territory, and set out a new precondition for an authority or body to be
considered a social housing lessor.
Amendment (4) omits and substitutes a revised subsection 124QC(1) and a new
subsection 124QC(1A).
Revised subsection 124QC(1) provides that an authority of a State or Territory is a
social housing lessor where all preconditions are met. The authority must provide
social housing in the State or Territory, and have a written agreement with the
Human Services Department relating to the authority's ability to request deductions
under Part 3E. A Minister of the authority's State or Territory must have also
provided a letter or document to the Commonwealth Minister setting out the social
housing policies of the State or Territory. This is subject to subsection 124QC(2).
9
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
New subsection 124QC(1A) provides that a body is a social housing lessor where all
preconditions are met. The body must provide social housing in a State or Territory
and is either approved to provide social housing by the State or Territory, or is
registered as a community housing provider under a law of a State or Territory, and
this approval or registration has been notified in writing to the Secretary. The body
must have a written agreement with the Human Services Department relating to the
body's ability to request deductions under Part 3E. A Minister of the body's State or
Territory must have also provided a letter or document to the Commonwealth
Minister setting out the social housing policies of the State or Territory. This is
subject to subsection 124QC(2).
New subsection 124QC(1A) will enable a provider registered under the National
Regulatory System for Community Housing to be considered a social housing lessor
under Part 3E, subject to meeting the other preconditions in the subsection.
The purpose of the new precondition introduced in paragraphs 124QC(1)(c) and
124QC(1A)(d) is to provide transparency that social housing lessors are regulated
by States and Territories, and operate under State or Territory legislation and policy
regimes. In practice, the letter or document from the relevant Minister of a State or
Territory will include information on how their policies apply limits to the amount that
tenants can be charged, and how tenants are protected from financial hardship. The
letter will also confirm to the Commonwealth Minister that social housing lessors in
the jurisdiction are responsible for informing tenants of their intention to request a
deduction and the reasons for making that request under the Automatic Rent
Deduction Scheme.
Amendment (5) inserts new subsections 124QC(4) and (5) into the Bill. Subsection
124QC(4) states that the Commonwealth Minister may publish a letter or document
provided by a Minister of a State or Territory setting out the social housing policies of
the State or Territory, as referred to in proposed paragraphs 124QC(1)(c) and
124QC(1A)(d), on the Department's website to ensure transparency. The
Department referred to in subsection 124QC(4) is the Department of Social Services.
Subsection 124QC(5) defines Commonwealth Minister for the purposes of section
124QC.
Amendments (9) to (10), (12) to (15), and (21) to (26) amend various provisions of
the Bill to make clear that a social housing tenant, who is subject to either the
Income Management Regime or the Cashless Debit Card Trial under the Social
Security (Administration) Act 1999 (the Administration Act), can only have an
automatic rent deduction made from the income managed or restrictable portion of
their payments.
However, this does not preclude a social housing tenant from voluntarily authorising
the Secretary (under section 61A of the Administration Act or section 228A of the A
New Tax System (Family Assistance) (Administration) Act 1999 or using existing
administrative arrangements such as Centrepay) to make a deduction under the
10
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
Automatic Rent Deduction Scheme for the discretionary or unrestricted portion of
their payments.
Amendments (9) to (10) and (12) to (15) amend Schedule 1 to the Bill.
Amendments (9) and (10) amend section 124QG by inserting the word 'or' at the
end of paragraph 124QG(2)(b), and inserts two new sets of circumstances in which
the Secretary must not make a deduction under the Automatic Rent Deduction
Scheme.
New paragraph 124QG(2)(c) provides that if a social housing tenant is subject to the
income management regime within the meaning of Part 3B of the Administration Act
and the following two criteria are met, the Secretary must not make a deduction.
Firstly, all or part of the tenant's divertible welfare payment is a category E welfare
payment, category H welfare payment, category I welfare payment, category P
welfare payment, category Q welfare payment, category R welfare payment or
category S welfare payment within the meaning of Part 3B of the Administration Act.
Secondly, the deductible portion under Division 5 of Part 3B of the Administration Act
is nil.
New paragraph 124QG(2)(d) provides that if a social housing tenant trial participant
or voluntary participant within the meaning of Part 3D of the Administration Act and
the following two criteria are met, the Secretary must not make a deduction. Firstly,
all or part of the divertible welfare payment is a restrictable payment within Part 3D of
the Administration Act. Secondly, the tenant's percentage of the payment that is the
restricted portion under paragraph 124PJ(1)(a) or subsection 124PJ(2) is 0%.
Amendments (12) to (15) amend section 124QH. Section 124QH provides that the
Secretary is to determine the amount of a deduction under section 124QG, and also
outlines that a deduction must not exceed certain amounts as prescribed in
subsection 124QH(2).
Amendments (12) to (14) are consequential to the addition of new subsections
124QH(3) and 124QH(4) as inserted by amendment (15).
Amendment (12) omits the word 'either' from subsection 124QH(2), which provides
the rules that regulate the amount that the Secretary deducts from a divertible
welfare payment, and substitutes the word 'any'.
Amendment (13) adds a semicolon to the end of paragraph 124QH(2)(b) to allow for
the continuation of the list of paragraphs that regulate the amount that the Secretary
deducts from a divertible welfare payment.
Amendment (14) inserts a new paragraph 124QH(2)(c).
11
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
New paragraph 124QH(2)(c) provides that the amount of a deduction determined by
the Secretary, in relation to a divertible welfare payment payable to a social housing
tenant, must not exceed an amount worked out under subsection (3) or (4).
Amendment (15) inserts new subsections 124QH(3) and 124QH(4).
New subsection 124QH(3) provides that if a social housing tenant is subject to the
income management regime under Part 3B of the Administration Act, and all or part
of the divertible welfare payment is a payment of a type outlined in paragraph
124QH(3)(b), then the amount of a deduction must not exceed the amount that
would be the deductible portion, under Division 5 of Part 3B of the Administration
Act, if no deduction was made under section 124QG.
New subsection 124QH(4) provides that if a social housing tenant is a trial
participant or voluntary participant under Part 3D of the Administration Act, and all or
part of the divertible welfare payment is a restrictable payment under Part 3D, then
the amount of a deduction must not exceed the amount equal to the tenant's
percentage under paragraph 124PJ(1)(a) or subsection 124PJ(2).
Amendments (21) to (26) amend Schedule 2 to the Bill.
Amendments (21) and (22) amend section 67E by inserting the word 'or' at the end
of paragraph 67E(2)(b), and inserts two new sets of circumstances in which the
Secretary must not make a deduction under the Automatic Rent Deduction Scheme.
New paragraph 67E(2)(c) provides that if a social housing tenant is subject to the
income management regime within the meaning of Part 3B of the Administration Act
and the deductible portion under Division 5 of Part 3B of the Administration Act is nil,
then the Secretary must not make a deduction.
New paragraph 67E(2)(d) provides that if a social housing tenant is a trial participant
or voluntary participant within the meaning of Part 3D of the Administration Act and
the tenant's percentage of the restricted portion under paragraph 124PJ(1)(a) or
subsection 124PJ(2) of that Act is 0%, then the Secretary must not make a
deduction.
Amendments (23) to (26) amend section 67F. Section 67F provides that the
Secretary is to determine the amount of a deduction under section 67E, and also
outlines that a deduction must not exceed certain amounts as prescribed in
subsection 67F(2).
Amendments (23) to (25) are consequential to the addition of new subsections
67F(3) and 67F(4) as inserted by amendment (26).
12
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
Amendment (23) omits the word 'either' from subsection 67F(2), which provides the
rules that regulate the amount that the Secretary deducts from family tax benefit
payable to a social housing tenant, and substitutes the word 'any'.
Amendment (24) adds a semicolon to the end of paragraph 67F(2)(b) to allow for
the continuation of the list of paragraphs that regulate the amount that the Secretary
deducts from family tax benefit payable to a social housing tenant.
Amendment (25) inserts a new paragraph 67F(2)(c).
New paragraph 67F(2)(c) provides that the amount of a deduction determined by the
Secretary, in relation to family tax benefit payable to a social housing tenant, must
not exceed an amount worked out under subsection (3) or (4).
Amendment (26) inserts new subsections 67F(3) and 67F(4).
New subsection 67F(3) provides that if a social housing tenant is subject to the
income management regime within the meaning of Part 3B of the Administration Act,
then the amount of a deduction must not exceed the amount that would be the
deductible portion, under Division 5 of Part 3B of the Administration Act, of the family
tax benefit if no deduction was made under section 67E of this Act.
New subsection 67F(4) provides that if the social housing tenant is a trial participant
or voluntary participant within the meaning of Part 3D of the Administration Act 1999,
then the amount of a deduction must not exceed the amount equal to the tenant's
percentage under paragraph 124PJ(1)(a) or subsection 124PJ(2) of that Act.
Amendment (11) omits and substitutes subsection 124QG(5) to state that if a
divertible welfare payment payable to a social housing tenant is suspended under
the Social Security (Administration) Act 1999 but such payments subsequently
resume, the Secretary may deduct any amounts that would otherwise have been
deducted under Part 3E during the period of suspension from payments paid to the
tenant after the suspension ends. New paragraph 124QG(5)(b) makes clear that the
Secretary must make any deduction from more than one payment paid to the tenant
after the suspension ends.
This amendment reduces the likelihood of a tenant experiencing financial hardship,
as it prevents arrears incurred due to a suspension of a payment from being
deducted from a single payment under the Automatic Rent Deduction Scheme.
13
SOCIAL SERVICES LEGISLATION AMENDMENT (HOUSING AFFORDABILITY)
BILL 2017
Amendments to be moved on behalf of the Government
Schedule 3 - Amendments to National Rental Affordability Scheme Act 2008
Background
The National Rental Affordability Scheme (NRAS) is established by the National
Rental Affordability Scheme Regulations 2008 (NRAS Regulations), made under the
National Rental Affordability Scheme Act 2008 (the NRAS Act). The object of NRAS
is to increase the supply of affordable rental housing for low to middle income
earners, by enabling eligible individuals and families to rent NRAS dwellings at a rate
that is at least 20 per cent below market value rent. NRAS also provides incentives
to persons to build and rent NRAS dwellings. Under NRAS, an 'approved participant'
may apply for an 'allocation' in relation to a rental dwelling, subject to certain
conditions. If the conditions are satisfied, the approved participant is eligible to
receive an 'incentive', either in the form of a monetary payment or a tax offset for a
period of ten years. The 'incentive' includes a Commonwealth component which is
paid in accordance with the NRAS Regulations. There is also a State and Territory
contribution which is paid in accordance with an agreement between the relevant
State/Territory Government and an approved participant.
Often, an approved participant is not the owner of the rental dwelling; rather the
owners are third party 'investors'. The approved participant usually acts as a service
provider to the investor by managing the compliance with the requirements under the
NRAS Regulations in exchange for a fee (generally a portion of the incentive).
Under NRAS, an approved participant has an obligation to pass on an incentive to
an investor if there is a contractual arrangement in place to this effect (regulations
30A and 30B). There have been issues surrounding approved participants failing to
pass on incentive payments to investors and other issues around the conduct of
approved participants. The Government amendments to the Bill clarify that the
objects of the NRAS Act are to be achieved in ways that include protecting tenants in
NRAS, protecting investors, providing rights to investors and recognising that State
and Territory contributions are complementary to NRAS. The amendments will also
allow for the Secretary to accept a voluntary written undertaking from an approved
participant in relation to NRAS.
NRAS will end in 2026 as the last allocations were made in 2016 and each allocation
has a 10 year incentive period. New allocations are no longer being made.
The NRAS Regulations are due to sunset on 1 April 2019. The Government
amendments to the Bill will ensure there is clear and sufficient legislative authority in
the NRAS Act to allow for regulations to be made until NRAS ends in 2026.
14
NOTES ON AMENDMENTS
Item 1A amends section 3 to insert subsections in order to clarify the object of the
NRAS Act.
Item 1B inserts a new subsection 3(2) which clarifies that the object of the NRAS Act
is to be achieved in ways that include the matters mentioned in new paragraphs
3(2)(a) to (d).
Paragraph 3(2)(a) provides for protecting tenants of rental dwellings that are rented
during an NRAS year. Section 5 of the NRAS Act provides that the regulations that
prescribes NRAS must provide for certain matters that further the objects of the
NRAS Act. Together with the amendments made by item 1K, this item will ensure
that regulations can be made in respect of protecting tenants in NRAS.
Paragraph 3(2)(b) provides that the object of the NRAS Act may be achieved by
ways that include protecting investors of an NRAS rental dwelling.
Since NRAS began in 2008, there have been instances where approved participants
have failed to pass on incentives to investors. Approved participants and investors
usually enter into a contract to facilitate this, outside of the Department's scope, as
investors are not defined under the Act. Investors provide a significant proportion of
properties in NRAS and, if they are not supported, investors are likely to withdraw
their properties from NRAS which would reduce the number of rental properties in
NRAS. Therefore, the inclusion of investors in this amendment will clarify that the
purpose of NRAS is also to protect investors.
Paragraph 3(2)(c) provides that the object of the Act is to be achieved by providing
rights to investors in NRAS. If investors' rights are not protected, they may be out of
pocket and may seek to remove their properties out of NRAS, which would lead to a
decline of available affordable housing for low and moderate income households.
Paragraph 3(2)(d) makes clear that there are separate contributions, in cash or in
kind, made by States and Territories, to approved participants in NRAS.
Item 1C inserts a new section 3A.
Section 3A provides that NRAS is supported by a variety of Constitutional powers.
The effect of this section is that if a court finds that the Commonwealth's legislative
power does not support the Act, a particular provision or multiple provisions of the
Act or the Income Tax Assessment Act 1997, the Act shall nevertheless be valid to
the extent to which it is supported by other legislative powers.
Subsections 3A(1) and (2) are provisions relating to the severable operation of the
Act. Subsections 3A(3) to (6) set out additional and severable heads of legislative
power under the Constitution which support the Act.
15
Subsection 3A(3) provides that the Act has the effect it would have if its operation
were expressly confined to give effect to Australia's rights and obligations under
paragraph 1 of Article 2 and Article 11 of the International Covenant on Economic,
Social and Cultural Rights (ICESCR) to which paragraph 51(xxix) of the Constitution
applies. NRAS and its goal to provide for more affordable housing is a suitable
method for Australia to comply with its international obligations under the ICESCR.
Subsection 3A(4) provides that the Act has the effect it would have if its operation
were expressly confined to:
(a) the regulation of activities, functions, relationships or business of an investor
or approved participant that is a constitutional corporation;
(b) the creation of rights or privileges belonging to an investor or approved
participant that is a constitutional corporation;
(c) the imposition of obligations on an investor or approved participant that is a
constitutional corporation;
(i) in respect of the matters mentioned in paragraphs (a) to (c), the
regulation of the employees or shareholders of the constitutional
corporation;
(d) the regulation of persons or entities whose conduct affects or is capable of
affecting the activities, functions, relationships or business of an investor or an
approved participant that is a constitutional corporation.
Subsection 3A(5) provides that the Act has the effect it would have if its operation
were expressly confined to determining the tax liability of a person.
Subsection 3A(6) provides that the Act has the effect it would have if its operation
were expressly confined to apply in relation to the following:
(a) an approved rental dwelling located in a Territory;
(b) an approved participant or investor who is a resident in a Territory; or
(c) an approved participant or investor that is:
(i) a body corporate that is incorporated in a Territory; or
(ii) a body corporate that is taken to be registered in a Territory under
section 119A of the Corporations Act 2001; or
(iii) a trust, if the proper law of the trust and the law of the trust's
administration are the law of a Territory; or
(iv) an entity, the core or routine activities of which are carried out in or in
connection with a Territory.
Item 1D amends the definition of 'allocation' to substitute 'an approved rental' with 'a
rental'. This amendment is required as 'approved rental dwelling' is a defined term in
the NRAS Regulations and is not defined in the NRAS Act.
Item 1E inserts new definitions.
16
A new definition of 'constitutional corporation' is inserted to mean a corporation to
which paragraph 51(xx) of the Constitution applies.
New section 3A will include references to an investor or approved participant that is
a constitutional corporation. It is therefore necessary to define 'constitutional
corporation'.
A new definition of 'investor', similar to the definition in the NRAS Regulations, is
also inserted to mean a person who is the legal or beneficial owner of a rental
dwelling covered by an allocation and who is not an approved participant in relation
to the rental dwelling.
A number of other amendments to Schedule 3 to the Bill will result in provisions of
the NRAS Act including references to investors. It is therefore necessary to define
'investor'.
Investors are the owners of rental dwellings covered by an allocation in NRAS who
are not approved participants themselves. This amendment will ensure that investors
are acknowledged as being part of NRAS.
'Tax law provisions' is defined to mean item 23 of the table in section 67-23 and
provisions of Division 380 of the Income Tax Assessment Act 1997.
New section 3A will include references to tax law provisions. It is therefore necessary
to define 'tax law provisions'.
Item 1F repeals paragraph 5(a) and substitutes a new paragraph.
Current paragraph 5(a) states that the NRAS Regulations must prescribe a Scheme
about the approval of participants by the Secretary. However, allocations are no
longer being made under NRAS and, as such, the Secretary is no longer approving
new approved participants. Given this, it should be possible for future regulations not
to include provisions relating to the approval of participants.
Therefore, this item amends the NRAS Act to state that the NRAS Regulations must
prescribe a Scheme about the obligations of existing approved participants.
17
Item 1G inserts new paragraph 6(ca).
Section 6 sets out matters for which NRAS, contained in the NRAS Regulations, may
provide. New paragraph 6(ca) allows for regulations to be made in relation to the
adjustment, in certain circumstances of the amount of an incentive that:
(i) is to be provided to an approved participant; or
(ii) has previously been provided to an approved participant;
Approved participants are entitled to an incentive if they satisfy the conditions of
allocations, set out in the NRAS Regulations, for an NRAS year. The adjustment of
an incentive paid and payable may be required in circumstances where an approved
participant has failed to pass on the incentive to the investor. Adjustments will only
be made where there has been a transfer under regulation 21A.
Item 1H inserts 'covered by an allocation' after 'dwelling'.
Section 6 sets out matters for which NRAS, contained in the NRAS Regulations, may
provide. Currently, paragraph 6(d) states that NRAS may provide for how the market
value rent of a rental dwelling for an NRAS year is to be determined. This current
wording appears to be broad and these amendments are a technical amendment
because rental dwelling is defined in a general way not connected to NRAS.
Item 1J inserts new paragraph 6(cb).
Section 6 sets out matters for which NRAS, contained in the NRAS Regulations, may
provide. New paragraph 6(cb) provides that regulations may be made in relation to
the passing on of State and Territory contributions, or their monetary equivalent, by
approved participants in certain circumstances.
Under NRAS, an approved participant that satisfies the conditions of allocation is
entitled to a Commonwealth incentive payment. The relevant State and Territory
Government also pays an additional contribution, either through a cash payment or
through an in-kind payment. There have been instances where approved participants
have failed to pass on this State/Territory contribution to investors. However, it is not
clear that the NRAS Act currently permits regulations to be made relating to the
circumstances in which the State/Territory contribution must be passed on to
investors. New paragraph 6(cb) will clearly allow for such regulations to be made.
Item 1K inserts new paragraphs 6(e), (f) and (g).
Section 6 sets out matters for which NRAS, contained in the NRAS Regulations, may
provide. New paragraphs 6(e), (f) and (g) provide that regulations may be made in
relation to the protection of tenants of rental dwellings in NRAS that are rented
during an NRAS year, the protection of investors and the rights of investors.
18
Item 1L inserts a heading 'Conditions imposed by Secretary under the Scheme' to
clarify that the provisions following it relate to conditions imposed by Secretary under
NRAS.
Item 3 inserts new subsections 7(4) to (6)
Current section 7 sets out matters for which NRAS, contained in the NRAS
Regulations, must provide.
New subsection 7(4) clarifies that the NRAS Regulations made for the purposes of
subparagraph 2(b)(i) may provide for the Secretary to make a legislative instrument
prescribing matters relating to the income of eligible tenants under NRAS.
Item 1 of Schedule 3 to the Bill will repeal subparagraph 7(2)(b)(ii) of the Act, and
substitute a new subparagraph which has the effect that the NRAS Regulations must
provide for the Secretary to make an allocation on the condition that each charge of
rent for the rental dwelling is at least 20% less than the market value rent for the
dwelling.
Evidence given to the Senate Community Affairs Legislation Committee's inquiry on
the Bill suggested that it is possible for a tenant to be overcharged rent inadvertently
in a number of circumstances. While the Government's policy is for each charge of
rent to be at least 20 per cent below the market rent, it is appropriate for the NRAS
Regulations to be able to set out circumstances in which this rule should not apply.
New subsection 7(5) empowers the NRAS Regulations to provide that in certain
circumstances, the Secretary may decide that the condition mentioned in
subparagraph 7(2)(b)(ii) does not apply if it will not result in an increase in rental
costs for low and moderate income households. The NRAS Regulations will confine
the Secretary's power to disapply the condition to very limited circumstances.
The Secretary will only be able to use the discretion in relation to a specific charge
for rent, for a specific allocation, where overcharging of rent was inadvertent and the
tenant had been compensated.
The ability to implement new and varied conditions of allocations is important to
further the objects of NRAS, 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 emerging safety issues, such as a requirement to use certain
non-flammable materials, or replace existing dangerous materials.
New subsection 7(6) provides express legislative authority for NRAS to impose a
new condition or vary conditions of an existing allocation. If the NRAS Regulations
provide, the new or varied condition could automatically apply to all existing
allocations by force of law, without any further action required by the Department to
individually vary those allocations. However, this subsection does not apply to a
condition that is varied or imposed by the Secretary (such as special conditions
made by the Secretary).
19
New subsection 7(7) provides that subsection 7(6) has effect despite anything in the
Act or the NRAS Regulations.
Item 4 inserts new paragraphs 8(ba) and 8(bb)
The current paragraph 8(b) states that NRAS may provide for the transfer of an
allocation to another approved participant in certain circumstances, however it is
unclear whether it allows for regulations to be made to allow for the transfer of all of
an approved participant's allocations. In some circumstances, approved participants
engage in undesirable conduct in relation to a large number of allocations.
Therefore, this item inserts a new paragraph 8(ba) to allow for NRAS to provide for
the transfer of all allocations made to an approved participant, in certain
circumstances.
If the NRAS Regulations provide, the Secretary would have the power to make a
'bulk' transfer of all of the participant's allocations to another approved participant, in
certain circumstances. This power would only be exercised on the Secretary's own
initiative, and does not automatically trigger upon every request by an investor.
New paragraph 8(bb) confirms that NRAS may provide for the circumstances in
which an allocation can be transferred from one rental dwelling to another rental
dwelling. This ability is necessary in instances where a dwelling is sold and the new
owner does not wish to participate in NRAS.
Without this discretion, numerous allocations would fall out of NRAS 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 NRAS.
Item 4A inserts new sections 10A and 10B
The conduct of some approved participants towards investors has at times, been
unacceptable. Approved participants have sent incorrect or misleading
communications to investors, failed to perform their contractual obligations to
investors and taken action to require investors to use particular property
management services.
This item inserts new sections that allows an approved participant to voluntarily
provide a written undertaking to the Secretary in relation to any conduct relating to
NRAS. In appropriate cases, the acceptance of an enforceable undertaking by an
approved participant to remedy prior undesirable conduct, or to not engage in the
undesirable conduct in the future, may avoid the need for the Secretary to respond to
the conduct in another way, for example, by transferring an allocation.
Whilst this Bill has not adopted the enforceable undertakings provisions as provided
for under Part 6 of the Regulatory Powers (Standard Provisions) Act 2014, the
provisions are similar. These provisions are broader that the Regulatory Powers
20
(Standard Provisions) Act 2014 as it allows the Secretary to enforce broader
conduct, not in an Act or a legislative instrument, in relation to NRAS. Through these
provisions, the Secretary may accept a voluntary undertaking from an approved
participant relating to any conduct connected with NRAS (including the approved
participant's dealings with investors) and then enforce that undertaking, if necessary
in the Federal Court. .
Subsection 10A(1) enables the Secretary to accept a written undertaking given by an
approved participant, committing them to particular action (or inaction) in order to
prevent or respond to an undesirable conduct committed by an approved participant
in relation to NRAS.
Undertakings provide a remedy other than financial sanctions to past or prospective
conduct committed by an approved participant in relation to NRAS.
Subsection 10A(2) states that the undertaking must be expressed to be an
undertaking under this section.
Subsection 10A(3) states that the approved participant may withdraw or vary the
undertaking at any time, but only if the Secretary provides written consent to the
withdrawal or variation.
Subsection 10A(4) states that the consent of the Secretary is not a legislative
instrument. This is to assist readers to understand the status of consent given under
this clause; it does not meet the meaning of legislative instrument under subsection
8(1) of the Legislation Act 2003, and is not intended as an exemption from that Act.
Subsection 10A(5) provides that the Secretary may cancel the undertaking by
providing a written notice to the approved participant.
Subsection 10B(1) states that the Secretary may apply to the Federal Court of
Australia for an order of enforceable undertaking if an approved participant has been
given an undertaking under section 10A, the undertaking has not been withdrawn or
cancelled, and the Secretary considers that the approved participant has breached
the undertaking.
Subsection 10B(2) provides the list of orders the Federal Court of Australia may
impose to remedy a breach of an undertaking. This includes the ability to make
orders to comply with the undertaking, to pay a pecuniary penalty to the
Commonwealth, to compensate other people, or to make any other orders the court
sees fit, if it is satisfied that the approved participant has breached the undertaking.
Item 4B repeals subsection 11(1) and substitutes a new subsection.
Current subsection 11(1) states that the Secretary may, by written instrument,
delegate their power to approve a participant, to approve a rental dwelling and to
decide whether to make an allocation under NRAS, to an SES employee in the
21
Department. However, allocations are no longer being made under NRAS and as
such, the Secretary is no longer approving new approved participants or deciding
whether to make an allocation. Given this, new delegation instruments are no longer
required for the purposes of approving a participant or making an allocation
under NRAS.
This item substitutes a new subsection to state that the Secretary may still, by written
instrument, delegate the Secretary's power to approve a rental dwelling for the
purposes of NRAS, to an SES employee in the Department.
Item 5 sets out six application provisions.
Subitem 5(1) provides that paragraph 5(a) of the Act 'obligations of approved
participants' applies to an obligation that arose before, or arises on or after, the day
this item commences as the NRAS Regulations already includes matters relating to
the obligations of approved participants.
Subitem 5(2) provides that paragraph 6(ca) applies to an incentive provided before,
on or after the day this item commences. This would allow the NRAS Regulations to
provide for the adjustment of an incentive paid and payable in relation to an
allocation in a past period. This would assist investors to recover incentives which
had not been passed on to them from past periods.
Subitem 5(3) provides that paragraph 6(cb) applies to a contribution made by a State
or Territory before, on or after the day this item commences.
Subitem 5(4) provides that paragraphs 6(f) and (g) applies in relation to an investor,
whether the person becomes an investor in NRAS, before, on or after the day this
item commences. In other words, the NRAS Regulations may be made to provide for
the protection of investors, including existing ones.
Subitem 5(5) provides that subsections 7(5), (6) and (7) apply in relation to an
allocation that exists on the day this item commences. This is because no new
allocations can be made and all allocations would have already been made on the
day this item commences.
Subitem 5(6) provides that paragraphs 8(ba) and (bb) apply in relation to an
allocation that exists on the day this item commences. This is because no new
allocations can be made and all allocations would have already been made on the
day this item commences.
Item 7: Transitional - variation of condition relating to charges of rent
This item provides an exception to paragraph 7(6)(a) of the Act so that the NRAS
Regulations may vary the condition of an allocation mentioned in subparagraph
7(2)(b)(ii) of the Act for the purposes of the amendment made by item 1 of this
Schedule.
22
This would allow the NRAS Regulations to vary existing allocations with the condition
that 'the rent that is charged is at all times during the year at least 20% less than the
market value rent for the dwelling' to the condition that 'each charge of rent for the
rental dwelling during the year is at least 20% less than the market value rent for the
dwelling'.
Item 8: Transitional - delegation
Subsection 11(1) allows the Secretary to delegate their powers to an SES employee
in the Department, through a written instrument. This item clarifies that any existing
delegation instrument made under subsection 11(1) of the Act that has been in force
before the amendment of subsection 11(1) continues to be in force.
This clarifies that despite the repeal of the current subsection 11(1), all existing
delegation instruments still continue to be in force.
23
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
SOCIAL SERVICES LEGISLATION AMENDMENT (HOUSING AFFORDABILITY)
BILL 2017
Schedule 1 - Social Security Amendments
Schedule 2 - Family Assistance Amendments
The amendments 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 the amendments
The amendments to Schedule 1 and 2 of the Bill change the commencement date of
the Automatic Rent Deduction Scheme on the later of 1 January 2019 and the day
after the Royal Assent.
The Bill is amended to limit the scope of the Automatic Rent Deduction Scheme to
rent and household utilities, and ensure that any arrears incurred due to the
suspension of a divertible welfare payment cannot be deducted from a single
payment.
The definition of a social housing lessor is amended to require, as a precondition for
participating jurisdictions, the Minister responsible for housing in a relevant State or
Territory to provide a letter or document to the Commonwealth Minister setting out
the social housing policies of the State or Territory. The Commonwealth Minister
may publish the letters. The amendments also clarify that the definition of social
housing lessor includes community housing providers registered under a law of a
State or Territory.
The amendments will also provide that a tenant's agreement with the lessor that
authorises the lessor to make a request under the Automatic Rent Deduction
Scheme, other than a tenancy agreement, is not required to be in a written form.
The amendments clarify that, for social housing tenants who are subject to the income
management regime or the cashless debit card trial within the meaning of the Social Security
(Administration) Act 1999, a deduction under the Automatic Rent Deduction Scheme will
only be made from the income managed or restricted portion of their payments.
Human rights implications
The Parliamentary Joint Committee on Human Rights (Joint Committee) first
reported on the Bill on 28 November 2017 in its Report 12 of 2017, and requested a
response from the Minister for Social Services. The Minister's response was
discussed by the Joint Committee in its Report 1 of 2018, which notes that,
24
notwithstanding the legitimate objective of the Bill, the Automatic Rent Deduction
Scheme may be incompatible with the right to social security, the right to an
adequate standard of living, the right to privacy, the right to protection of the family
and the rights of children. Additionally, the Joint Committee was unable to conclude
that the Automatic Rent Deduction Scheme is compatible with the right to equality
and non-discrimination.
These rights, and a number of other specific human rights, are addressed in
turn below.
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 United Nations Committee of Economic, Social and Cultural Rights
(the UN Committee) has stated that implementing this right requires a country, within
its maximum available resources, to 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
form of education'.
The amendments to the Bill ensure that the scope of the Automatic Rent Deduction
Scheme is for social housing rent and household utilities only. Deductions are
therefore limited to amounts which the tenant is already obligated to pay, regardless
of the application of the Automatic Rent Deduction Scheme.
The amendments do not detract from the eligibility of a person to receive welfare, nor
reduce the amount of a person's social security entitlement. Rather, these
amendments assist tenants to avoid rental arrears in a managed and affordable way,
helping them to sustain their social housing tenancies.
The right to an adequate standard of living
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 realisation of this right'.
The Joint Committee notes that it is unclear whether the Automatic Rent Deduction
Scheme will 'increase financial hardship or would operate in a manner that
prevented a person having funds available to meet other basic and reasonable
needs'.
The Automatic Rent Deduction Scheme does not limit the right to an adequate
standard of living for tenants under the Automatic Rent Deduction Scheme.
The amendments to the Bill increase the safeguards to ensure persons are not
placed in financial hardship, and is compatible with, and enhances the right to an
adequate standard of living, including housing.
25
Deductions under the Automatic Rent Deduction Scheme allow tenants to sustain
their tenancies in social housing, and ensures that they continue to enjoy an
adequate standard of living by reducing the risk of arrears build-up, which may lead
to eviction and possible homelessness. The Joint Committee notes that the
Automatic Rent Deduction Scheme 'seems to be rationally connected to the
objective of reducing the risk of homelessness insofar as it could reduce tenancy
eviction rates by preventing rental arrears from occurring'.
The amendments to the Bill require the Minister responsible for housing in a relevant
State or Territory to provide a letter or document setting out their social housing
policies, including how tenants are protected from financial hardship.
The amendments will also limit the scope of the Automatic Rent Deduction Scheme
to rent and household utilities only, and ensure that arrears incurred due to the
suspension of a tenant's social security payment cannot be deducted from a
single payment.
These amendments strengthen protections against financial hardship.
The amendments do not restrict access to the essential goods and services required
to maintain an adequate standard of living. Deductions are limited to amounts for
rent and utilities, which are essentials for which the tenant must pay regardless of
the application of the Automatic Rent Deduction Scheme. Tenants will have access
to funds to ensure that they can still purchase other items, which contribute to an
adequate standard of living.
The right to protection of the family
Article 10 of the ICESCR recognises the rights of the family and child to the widest
possible protection and assistance. The amendments to the Bill protect individuals
and families from financial hardship, and ensures that they are able to meet the
basic needs of their family, including the need for housing.
The rights of children
Article 27 of the Convention on the Rights of the Child (CRC) 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'. Article 3 of the CRC
provides that in all actions concerning children, the best interests of the child must be
a primary consideration.
The amendments to the Bill will support this by ensuring that households in social
housing, including families with children, are sustaining their tenancies and are
protected from financial hardship.
The right to equality and non-discrimination
26
The rights of equality and non-discrimination are provided for in a number of the
seven core international human rights treaties to which Australia is a party, most
relevantly the ICCPR and the CERD. In particular, article 5 of the CERD requires
parties 'to prohibit and eliminate racial discrimination in all its forms and to guarantee
the right of everyone, without distinction as to race, colour or national or ethnic origin,
to equality before the law', notably in the enjoyment of 'the right to ... social security
and social services' (article 5(e)(iv)).
Discrimination is impermissible differential treatment among persons or groups that
results in a person or a group being treated less favourably than others, based on a
prohibited ground for discrimination, such as race. However, the UN Human Rights
Committee has recognised that 'not every differentiation of treatment will constitute
discrimination, if the criteria for such differentiation are reasonable and objective, and
if the aim is to achieve a purpose which is legitimate under the Covenant'.
The rights to equality and non-discrimination are not limited by the amendments to
the Bill.
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'.
The amendments do not interfere with the right to self-determination.
The amendments to the Automatic Rent Deduction Scheme will be compatible with a
person's right to freely pursue their economic, social or cultural development.
The amendments will ensure tenants are able to freely pursue their economic, social
or cultural development, and sustain their tenancies in recognition of the important
role housing plays in a person's ability to develop economically, socially and
culturally.
The right to privacy
Article 17 of the International Covenant on Civil and Political Rights (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. In this context, interference with a right to privacy must
be proportional to the end sought and necessary in the circumstances.
The amendments to the Bill do not require social housing tenants subject to the
Automatic Rent Deduction Scheme to disclose sensitive information.
The amendments do not interfere with a person's right to privacy.
Conclusion
The amendments are compatible with human rights.
27
28
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
SOCIAL SERVICES LEGISLATION AMENDMENT (HOUSING AFFORDABILITY)
BILL 2017
Schedule 3 - National Rental Affordability Scheme Amendments
The amendments 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 the amendments
The Bill expands and clarifies the objects of the National Rental Affordability Scheme
Act 2008 (NRAS Act) and the Constitutional powers that support the NRAS Act.
The Bill also expands and clarifies the power to make regulations under the NRAS
Act. The National Rental Affordability Scheme (NRAS) is prescribed in the National
Rental Affordability Scheme Regulations 2008. These amendments made by the Bill
are technical in nature and do not impact the rights or freedoms of any person.
The Bill includes provisions enabling the Secretary of the Department to accept an
enforceable undertaking from an "approved participant" in NRAS. There are
130 approved participants who have allocations in NRAS associated with rental
dwellings, who are entitled to receive an annual incentive for 10 years if the
conditions of allocation are satisfied. Some approved participants contract with
investors, who own rental dwellings, to make the dwellings available to rent as part
of NRAS. The behaviour of some approved participants to investors is undesirable.
For example, some approved participants delay or fail to pass on incentives to
investors or make misleading statements to investors. Under NRAS, investors may
request the Secretary to transfer the allocation associated with their rental dwelling in
certain circumstances. Enforceable undertakings are voluntary and will only be given
by an approved participant if the approved participant wishes to do so. An approved
participant cannot be required to give an enforceable undertaking. However, where
an enforceable undertaking is given, the Secretary will be able to enforce the
undertaking if the Secretary considers that the undertaking has been breached.
Enforceable undertakings will provide a further flexible mechanism to enable the
Secretary of the Department to act to protect the interests of investors. The use of
enforceable undertakings may reduce the need to transfer allocations in some
circumstances. For example, if the Secretary accepts an enforceable undertaking
from an approved participant not to send particular communications to investors that
are misleading, the Secretary may decide not to transfer an allocation to another
approved participant, even if previous misleading conduct by the approved
participant means that a ground for transfer exists.
29
Human rights implications
The proposed amendments do not engage any of the applicable rights or freedoms.
Conclusion
This Bill/Disallowable Legislative Instrument is compatible with human rights as it
does not raise any human rights issues.
Minister for Families and Social Services, the Hon Paul Fletcher MP
30
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