Commonwealth of Australia Explanatory Memoranda

[Index] [Search] [Download] [Bill] [Help]


SOCIAL SERVICES LEGISLATION AMENDMENT (STRENGTHENING INCOME SUPPORT) BILL 2021

                            2019-2020-2021




     THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                    HOUSE OF REPRESENTATIVES




SOCIAL SERVICES LEGISLATION AMENDMENT (STRENGTHENING INCOME
                      SUPPORT) BILL 2021




                    EXPLANATORY MEMORANDUM




                     (Circulated by the authority of the
 Minister for Families and Social Services, Senator the Hon Anne Ruston)


SOCIAL SERVICES LEGISLATION AMENDMENT (STRENGTHENING INCOME SUPPORT) BILL 2021 OUTLINE This Bill:  Increases the maximum basic rates of working age social security payments by $50 per fortnight;  Extends until 30 June 2021 the criteria for a person to qualify for youth allowance (other) or jobseeker payment in circumstances where the person is in quarantine or self-isolation or caring for a family member or household member in quarantine or self-isolation due to COVID-19;  Extends until 30 June 2021 the waiver of the ordinary waiting period for jobseeker payment and youth allowance (other);  Extends until 30 June 2021 the portability period for certain age pensioners and recipients of the disability support pension (for severely disabled persons) unable to return to, or depart from, Australia within 26 weeks due to the impact of COVID-19; and  Permanently increases the ordinary income-free area for jobseeker payment, youth allowance (other), parenting payment partnered and related payments to $150 per fortnight. Financial impact statement The financial impact of this Bill is approximately $9 billion. 1


SOCIAL SERVICES LEGISLATION AMENDMENT (STRENGTHENING INCOME SUPPORT) BILL 2021 NOTES ON CLAUSES Clause 1 sets out how the new Act is to be cited - that is, as the Social Services and Other Legislation Amendment (Strengthening Income Support) Act 2021 (the Act). Clause 2 provides a table setting out the commencement dates of the various sections in, and Schedules to, the Act. Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in that Schedule, and any other item in a Schedule to the Bill has effect according to its terms. 1


Schedule 1 - Amendments Part 1 - Increasing working age payments This Part effects a $50 increase to the base rate of working age social security payments, with effect from 1 April 2021 when the current social security coronavirus supplements cease. The increase is added to the current rate of these payments when most recently indexed, in most cases on 20 March 2021, and future indexations will apply to the rates as increased. Payments covered are:  Jobseeker payment  Youth allowance and youth disability support pension  Parenting payment  Austudy Recipients of partner allowance and widow allowance will receive the same increases to their rate of jobseeker, before these payments cease on 1 January 2022. Equivalent changes will also be made to ABSTUDY living allowance by changes to the ABSTUDY manual, and to special benefit, which is paid at a discretionary rate. The increases will flow through to the farm household allowance and various veterans' student programs. Social Security Act 1991 Items 1 and 2 increase the maximum basic fortnightly rate of disability support pension paid to persons under 21 years of age in various circumstances, by repealing and substituting the tables which set the basic rates within the rate calculator at sections 1066A and 1066B. Items 3, 4 and 5 increase the maximum basic fortnightly rate of youth allowance paid in various circumstances, by repealing and substituting the tables which set the basic rates within the rate calculator at section 1067G. Item 3 repeals and substitutes the table (Table BA) at point 1067G-B2 with increased fortnightly rates of payment in the rate calculator at point 1067G-B2 for the various circumstances in which the payment is payable. Item 4 repeals and substitutes the table (Table BB) at point 1067G-B3 with increased fortnightly rates of payment in the rate calculator at point 1067G-B3 for the various circumstances in which the payment is payable. Item 5 repeals and substitutes the table (Table BC) at point 1067G-B4 with increased fortnightly rates of payment in the rate calculator at section 1067G-B4 for the various circumstances in which the payment is payable. 2


Items 6 and 7 repeals and substitutes the tables (Tables BA and BB) at subpoint 1067L-B2(1) and point 1067L-B3 with increased fortnightly rates of austudy payment in the rate calculator at section 1067L for the various circumstances in which austudy payment is payable. Item 8 repeals and substitutes the table (table B) at point 1068-B1 in the rate calculator at section 1068 which provides for the fortnightly rate of jobseeker payment for the various circumstances in which jobseeker is payable. The substituted annual rate is the equivalent of an increase by $50 per fortnight to the rate of austudy payable on 20 March 2021 after indexation. Item 9 repeals and substitutes point 1068A-B1 in the rate calculator in section 1068A which provides for an annual rate of parenting payment (single). The substituted annual rate is the equivalent of an increase by $50 per fortnight to the rate of parenting payment (single) payable on 20 March 2021 after indexation. Item 10 repeals and substitutes the table (Table C) at point 1068B-C2 for the rate calculator at section 1068B providing for the fortnightly rate of parenting payment (partnered), for the various circumstances in which parenting payment (partnered) is payable. Item 11 provides for the application and transitional effects of the amendments made by this Part. Subitem 11(1) provides that the amendment apply in relation to working out the rate of a social security payment for days on or after commencement (proposed to be 1 April 2021). Where an instalment period includes 1 April 2021, the daily rate for days on or after 1 April 2021 will be calculated using the rates as increased by these amendments. Subitem 11(2) provides that for the purposes of indexing an amount on the first indexation day that occurs after the commencement of this item, the point or subpoint amended or repealed by an item of this Part is taken to be the current figure for the amount. This ensures that these rates will continue to be indexed under usual arrangements in future. 3


Part 2 - Qualification for youth allowance or jobseeker payment - coronavirus Qualification for youth allowance and jobseeker payment recipients to continue to receive payment even if affected by COVID-19 is set out under various provisions of the social security law, which will be repealed on 1 April 2021 by Division 2, Part 2, of Schedule 1 to the Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Act 2020 (the Extension of Coronavirus Support Act). The Social Security (Coronavirus Economic Response - 2020 Measures No. 16) Determination 2020, made under the Social Security Act, currently sets out the criteria a person must meet in order to qualify for youth allowance (other) payment or jobseeker payment in circumstances relating to the COVID-19 pandemic. The determination is made under subsections 540BA(2) and 593(6) of the Social Security Act and will cease to operate from 1 April 2021 when those empowering provisions are repealed by the Extension of Coronavirus Support Act. Part 2 of Schedule 1 temporarily modifies the Social Security Act to temporarily expand, for the period 1 April 2021 to 30 June 2021, the criteria a person may meet in order to qualify for youth allowance (other) or jobseeker payment in circumstances relating to the COVID-19 pandemic. The requirements take into consideration the loss of, or reduced, employment and wages including where this is the result of quarantine or self-isolation requirements, or the result of carer responsibilities within families or households arising from quarantine or self-isolation requirements. The provisions are beneficial in nature. Social Security Act 1991 Item 12 is a technical amendment to subsection 7(7) to expand the circumstances in which a person is exempt from the residence requirement by reference to new paragraph 540BA(f)(ii) inserted by item 13 below and new subparagraph 593(5)(e)(ii) inserted by item 14 below. Item 13 inserts new section 540BA into the Social Security Act after section 540B. Section 540BA sets out the requirements a person must satisfy in order to meet the youth allowance qualification criteria in circumstances relating to the effects of quarantine and self-isolation due to the COVID-19 pandemic, during the period 1 April 2021 to 30 June 2021 ('the relevant period'). Under section 540BA, a person will meet the requirements if the Secretary is satisfied that, throughout the relevant period, the person is in quarantine or self-isolation as a result of advice from the Commonwealth, a State or Territory or from a health professional regarding the coronavirus, or is caring for an immediate family member or a member of the person's household who is in quarantine or self-isolation in accordance with paragraph 540BA(a), and: - as a result, the person's working hours were reduced (including reduced to zero) in accordance with paragraph 540BA(b); and 4


- the person meets, or is not required to meet, the activity test for the relevant period in accordance with Subdivisions B or C in accordance with paragraph 540BA(c); and - the person meets, or is not required to meet, the requirements relating to leave payments for the relevant period in accordance with paragraph 540(d). Paragraph 540BA(d) covers a person if the Secretary is satisfied that during the relevant period the person needs to isolate or quarantine, the person: (i) is not entitled to receive a leave payment; or (ii) has taken reasonable steps to access any leave payment to which the person may be entitled; or (iii) is receiving a leave payment but as a result of the adverse economic effects of the coronavirus the payment is less than it otherwise would have been; or (iv) is receiving a leave payment but the total amount is less than the amount of youth allowance that would be payable to the person in the relevant period if the person's claim were granted. Under paragraph 540BA(e), the person must for the period be of youth allowance age. Under paragraph 540BA(f), throughout the period, the person must be an Australian resident, or exempt from the residence requirement (under subsection 7(7)). Health alert information relevant to coronavirus and quarantine or self-isolation is available from the Commonwealth Department of Health website, www.health.gov.au, and from state and territory government websites. Item 14 inserts new subsection 593(5) into the Social Security Act after subsection 593(4). Subsection 593(5) sets out additional bases on which a person may meet the jobseeker qualification criteria in circumstances relating to the effects of quarantine and self-isolation due to the COVID-19 pandemic, during the period 1 April 2021 to 30 June 2021 ('the relevant period'). Under subsection 593(5) a person will qualify for jobseeker in respect of the relevant period if the person is in quarantine or self-isolation as a result of advice from, or a requirement made by the Commonwealth, a State or a Territory or a health professional due to the coronavirus, or the person is caring for an immediate family member or member of the person's household who is in such quarantine or isolation, and this reduces their working hours (including to zero). Additionally, the person must either meet or is not required to meet the activity test, during the relevant period, in accordance with paragraph 593(5)(c). The person must meet, or is not required to meet, the requirements relating to leave payments for the relevant period in accordance with subparagraphs 593(5)(d)(i)-(iv). 5


Subsection 593(5)(d) provides that a person will be covered by this provision if the Secretary is satisfied that during the relevant period, the person: (i) is not entitled to receive a leave payment; or (ii) has taken reasonable steps to access any leave payment to which the person may be entitled; or (iii) is receiving a leave payment but as a result of the adverse economic effects of the coronavirus the payment is less than it otherwise would have been; or (iv) is receiving a leave payment but the total amount is less than the amount of jobseeker payment that would be payable to the person in the relevant period if the person's claim were granted. The person must be at least 22 years of age and have not reached the pension age, be an Australian resident or exempt from the residence requirements within the meaning of subsection 7(7) and not in receipt of youth allowance during the period, under paragraphs 593(5)(e) and (f). Health alert information relevant to coronavirus and quarantine or self-isolation is available from the Commonwealth Department of Health website, www.health.gov.au, and from state and territory government websites. 6


Part 3 - Ordinary waiting periods The Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Act 2020 (the Extension of Coronavirus Support Act) inserted section 1262 into the Social Security Act (section 1262) with effect from 1 January 2021. This section provides the Minister with the power to determine, by disallowable legislative instrument, temporary modifications of certain provisions of the social security law in response to circumstances relating to COVID-19. Generally, a determination under subsection 1262(1) must end at the end of 31 March 2021. A determination that relates to modifications to subsections 23(4A) or (4AA) of the Social Security Act (regarding the employment income nil rate period) must end at the end of 16 April 2021. The Social Security (Coronavirus Economic Response-2020 Measures No. 16) Determination 2020 was made under section 1262. The determination waived the ordinary waiting period for parenting payment, jobseeker payment and youth allowance until 31 March 2021. Part 3 of Schedule 1 to the Bill amends the Social Security Act to extend the current waivers of the ordinary waiting period from 1 April 2021 immediately after the current waivers end, until 30 June 2021. Social Security Act 1991 Item 15 amends section 500WA to include reference to new subsection 500WA(4) when considering whether a person is subject to an ordinary waiting period for parenting payment. Item 16 amends section 500WA to add new subsection 500WA(4) to extend the waiver of the ordinary waiting period for parenting payment in respect of a claim made in the period 1 April 2021 to 30 June 2021. In this case, the whole of the ordinary waiting period does not apply. Item 17 amends subsection 549CA(2) to insert reference to new subsection 549CA(6) inserted by item 18 below. Item 18 amends section 549CA to insert new subsection 549CA(6) relating to the ordinary waiting period for youth allowance (other). Item 19 amends subsection 620(1) to insert reference to new subsection 620(5) inserted by item 46 relating to the ordinary waiting period for jobseeker payment. Item 20 inserts new subsection 620(5) providing that if a person makes a claim for jobseeker payment during the period 1 April 2021 to 30 June 2021 they are not subject to the whole of the ordinary waiting period. 7


Part 4 - Income free areas and taper rates The Social Security (Coronavirus Economic Response-2020 Measures No. 4) Determination 2020, Social Security (Coronavirus Economic Response-2020 Measures No. 14) Determination 2020 and Social Security (Coronavirus Economic Response-2020 Measures No. 16) Determination 2020 set concessional income free areas and taper rates until 31 March 2021 for recipients of jobseeker payment (except single principal carers) and youth allowance (other) (that is, recipients of youth allowance who are not undertaking full-time study and are not a new apprentice). A payment recipient's income is disregarded to the extent it does not exceed the income free area. Income above this rate affects the rate of payment, by lower reduction rate, generally of 50 per cent. The amount of this excess income, which exceeds the upper range reduction amount, then affects their payment at the upper range reduction amount, generally of 60 per cent. Part 4 of Schedule 1 to this Bill permanently applies concessional income free areas from 1 April 2021. The jobseeker income free area will no longer be indexed. Social Security Act 1991 Items 21-22 relate to the rate of youth allowance in section 1067G. Module H29 of the rate calculator at 1067G provides for the calculation of a person's ordinary income free area. Item 21 amends point 1067G-H29 ordinary income free area to substitute the amount of $150 as the new income free area amount for recipients who are not full- time students or new apprentices. Item 22 amends paragraphs 1067G-H32(c) and 1067G-H33(c) to substitute the amount of $100 as the amount of excess income, which, if exceeded, results in the upper range reduction applying. Item 23 amends point 1068-G12, which applies an income reduction to rate of jobseeker payment to substitute the amount of $150 as the new income free area amount. Item 24 is a technical amendment that repeals note 1 at point 1068-G12, as the amount will no longer be indexed. Item 25 is a technical amendment clarifying that the repeal of Note 1 by item 24 above means that note 2 is now the first note. Item 26 amends points 1068-G15 and 1068-G16 to substitute the amount of $106 as the amount of excess income that results in the person's upper range reduction applying. Item 27 amends point 1068B-D27 to substitute the amount of $150 as the new income free area amount for the calculation of parenting payment (partnered). 8


Item 28 is a technical amendment that repeals note 1 at point 1068B-D27, to remove reference to indexation. Item 29 is a technical amendment clarifying that the repeal of Note 1 by item 27 above means that point 1068-D27 is subject to one note. Item 30 amends point 1068B-D27 in relation to a person's ordinary income-free area and 1068B-D31 in relation to a person's upper range reduction amount to substitute the amount of $106 as amount of excess income that results in the upper range reduction rate applying. Items 31 and 32 amend sections 1190 and 1191(1) to remove the provisions which effect indexation of the income free area thresholds (at 1190 table item 20AAA and 1191 table item 14AAA). Application provision Item 33 ensures that the changes to the income free areas made by Part 4 apply in relation to working out the rate of a person's youth allowance, jobseeker payment, partner allowance, widow allowance or benefit parenting payment (partnered) in respect of days occurring on or after 1 April 2021. 9


Part 5 -Portability The Social Security (Coronavirus Economic Response-2020 Measures No. 10) Determination 2020 modified the Social Security Act so the Secretary can extend the portability periods for certain age pensioners and recipients of the disability support pension (for severely disabled persons) until 31 December 2020. The Social Security (Coronavirus Economic Response-2020 Measures No. 16) Determination 2020 extended this until 31 March 2021. This has addressed payment portability issues for pensioners unable to return to, or depart from, Australia within 26 weeks due to travel restrictions resulting from COVID-19. The extended portability period maintains their entitlements as if they had been able to return home as planned. Part 5 of Schedule 1 amends the Social Security Act to introduce a temporary discretionary power, ending on 30 June 2021, allowing the Secretary to extend the portability period for age pensioners and certain recipients of the disability support pension if they are unable to return to, or depart from, Australia within 26 weeks because of the impact of the coronavirus (subject to the Secretary being satisfied of certain matters detailed below). Generally, after 26 weeks overseas, the rate of age pension or disability support pension for recipients with unlimited portability is recalculated based on their Australian Working Life Residence and may be reduced. A person also loses access to certain supplementary payments such as rent assistance. The portability extensions ensure their pension rate and relevant supplements are unaffected after 26 weeks overseas due to the impact of the COVID-19 pandemic. The Secretary will have the discretion to extend the pension portability period beyond 26 weeks if satisfied that the person's absence from Australia or their usual country of residence is temporary and their inability to return to, or leave, Australia before the end of the 26-week or extended portability period is a result of the impact of COVID-19 (including where the person has previously been granted an extension under the No. 10 and No.16 Determinations). This could include a person being hospitalised for COVID-19. Social Security Act 1991 Item 34 is a technical amendment that makes the existing content of section 1216 subsection 1216(1). Item 35 amends section 1216 of the Social Security Act to insert new subsections 1216(2) and (3) to provide that if a person was temporarily absent from Australia, and they are unable to return to Australia because of the impact of COVID-19 when their 26-week absence (or that absence as previously extended) ends, and this occurs on or after 11 March 2020, then the Secretary may determine that a reference to 26 weeks is taken to be a reference to a greater number of weeks. This will enable the addition of various amounts to rate, as though the 26 weeks has not been exceeded. However, the Secretary must make sure that a determination under this provision does not result in an extended period that ends after 30 June 2021. 10


Subsection 1216(3) exempts a determination under subsection 1216(2) creating a retrospective favourable determination from the date of effect limitations otherwise applied by Subdivision B of Division 9 of the Social Security (Administration) Act 1999. This will allow the full benefit of the determination to be applied to the person's rate. Item 36 amends section 1220A to insert subsections 1220A(6) and (7) to allow age pensioners who were temporarily absent from Australia and unable to return to Australia when their 26-week absence ends, and this occurs on or after 11 March 2020, and the Secretary is satisfied they are unable to return because of the impact of COVID-19, then the Secretary may determine that a reference to 26 weeks is taken to be a reference to a greater number of weeks. This will give the Secretary the discretion to increase the portable rate of payment for a period if satisfied that the person's absence from Australia is temporary and their inability to return before the end of the 26-week portability period where this occurs on or after 11 March 2020 is a result of circumstances beyond the individual's control. The Secretary must make sure that a determination under this provision does not result in an extended period that ends after 30 June 2021. Subsection 1220A(7) exempts a determination under subsection 1220A(6) creating a retrospective favourable determination from the date of effect limitations otherwise applied by Subdivision B of Division 9 of the Social Security (Administration) Act 1999. Item 37 amends sections 1220B to insert subsections 1220B(3) and (4) to allow disability support pensioners who are temporarily absent from Australia, and they are unable to return to Australia when their 26 week absence ends, and this occurs on or after 11 March 2020, and the Secretary is satisfied they are unable to return because of the impact of COVID-19, then the Secretary may determine that a reference to 26 weeks is taken to be a reference to a greater number of weeks. This will give the Secretary the discretion to increase the portable rate of payment for a period if satisfied that the person's absence from Australia is temporary and their inability to return before the end of the 26-week portability period where this occurs on or after 11 March 2020 is a result of COVID-19. The Secretary cannot make a determination under this provision to extend the period after 30 June 2021. Subsection 1220B(4) exempts a determination under subsection 1220B(3) creating a retrospective favourable determination from the date of effect limitations otherwise applied by Subdivision B of Division 9 of the Social Security (Administration) Act 1999. 11


Item 38 amends Part 4.2 to add new section 1221A of the Social Security Act, in a new Division 4 'Other portability rules' to clarify that the Secretary may determine a reference to 26 weeks in paragraph 6(3)(6) or (4)(d) or 14(3)(d) or (4)(d) of Schedule 4 to the Social Services and Other Legislation Amendment Act 2014 to be taken as a reference to a greater number of weeks where certain conditions are satisfied. This will allow pensioners who were grandfathered under previous portability changes, and normally live overseas, to apply for an extension of the time for which they are permitted to remain in Australia and remain grandfathered if they are temporarily in Australia and unable to return to their home country within 26 weeks because of the impact of COVID-19. Where the 26-week period in Australia ends on or after 11 March 2020, this discretion will apply. The Secretary must make sure that a determination under this provision does not result in an extended period that ends after 30 June 2021. Subsection 1221A(2) exempts a determination under subsection 1220B(3) creating a retrospective favourable determination from the date of effect limitations otherwise applied by Subdivision B of Division 9 of the Social Security (Administration) Act 1999. Item 39 amends clause 128 of Schedule 1A to the Social Security Act to insert new subclauses 128(4) and (5) to clarify that the saving of rate of pension effected for persons who have not returned to Australia for a continuous period of 26 weeks or more may continue to apply, if the Secretary is satisfied that the relevant 26-week period ends on or after 11 March 2020, the person's return to Australia is temporary, and the person is unable to leave before the end of that period because of the impact of COVID-19, that the 26-week period is taken to be a longer period. The Secretary must make sure that a determination under this provision does not result in an extended period that ends after 30 June 2021. Subclause 128(5) exempts a determination under subclause 128(4) creating a retrospective favourable determination from the date of effect limitations otherwise applied by Subdivision B of Division 9 of the Social Security (Administration) Act 1999. 12


DRAFT STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Social Services Legislation Amendment (Increasing Working Age Payments and Extending Portability) Bill 2021 The Bill is compatible with the human rights and freedoms recognized or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Overview of the Bill The Bill provides for a $50 per fortnight increase from 1 April 2021 to working age payments, including jobseeker payment; parenting payment single; parenting payment partnered; youth allowance (student and apprentice); youth allowance (other); youth disability support pension; austudy; widow allowance; special benefit; and farm household allowance. The Bill also provides for an increase to $150 per fortnight from 1 April 2021 of the income-free area for jobseeker payment, parenting payment, youth allowance (other) and related payments. The Bill extends the following temporary social security measures to 30 June 2021:  (Part 2 of Schedule 1) qualification for recipients of jobseeker payment and youth allowance (other) payment in circumstances relating to persons being required to quarantine or self-isolate due to COVID-19; and  (Part 3 of Schedule 1) waivers of the ordinary waiting period for jobseeker payment, parenting payment and youth allowance; and  (Part 5 of Schedule 1) extends the portability period for certain age pensioners and recipients of the disability support pension (for severely disabled persons) until 30 June 2021. Human rights implications The Bill engages the following rights:  the right of everyone to social security in Article 9, and the right of everyone to an adequate standard of living for an individual and their family, including adequate food, clothing and housing, and the continuous improvement in living conditions in Article 11 of the International Covenant on Economic, Social and Cultural Rights;  the rights of the child in Article 26 of the Convention on the Rights of the Child. 13


Increased payment rates Human rights are promoted by increasing working age payment rates by $50 per fortnight, which will assist income support recipients. The increased payments are targeted at vulnerable groups who receive Government assistance and have a flow-on effect to the children of recipients by increasing the support for families. Qualification for youth allowance and jobseeker payment Human rights are promoted by extending eligibility changes for jobseeker payment and youth allowance (other) to enable people required to self-isolate or quarantine due to COVID-19 or care for members of their family or household for those reasons, to access payment if unable to work during the period of isolation or quarantine. Waiting periods The extension of the waiver of the ordinary waiting period is consistent with human rights as it facilitates faster access to social support should a person lose their job. Income free area The increased income free area associated with relevant payments, promotes human rights through assisting income support recipients to continue to access payment for longer while also earning income from employment. Portability Access to portability arrangements for age pensioners (and certain recipients of the disability support pension) promotes human rights because the extension prevents pension entitlements being affected for extended absences from Australia or the recipient's home country due to the COVID-19 pandemic. Conclusion This Bill is compatible with human rights because it promotes the protection for human rights for some of the most vulnerable groups in society. Circulated by the authority of the Minister for Families and Social Services, Senator the Hon Anne Ruston 14


 


[Index] [Search] [Download] [Bill] [Help]