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2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY LEGISLATION AMENDMENT (YOUTH JOBS PATH:
PREPARE, TRIAL, HIRE) BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment, the Senator the
Honourable Michaelia Cash)
SOCIAL SECURITY LEGISLATION AMENDMENT (YOUTH JOBS PATH:
PREPARE, TRIAL, HIRE) BILL 2016
GENERAL OUTLINE
This Bill would help to give effect to the Youth Jobs PaTH measure
announced in the 2016-17 Budget as part of the Youth Employment Package.
Youth Jobs PaTH (Prepare-Trial-Hire) is aimed at maximising the chance of
young job seekers obtaining a job and moving off income support. It will do
this by providing a three-stage pathway to work for young job seekers. The
elements of Youth Jobs PaTH are employability skills training (Prepare),
internship placements (Trial), and 'Youth Bonus' wage subsidies (Hire). This
Bill would assist to give effect to the internship and wage subsidy elements of
Youth Jobs PaTH.
Internship payments
Under the internship element of Youth Jobs PaTH, eligible young job seekers
will be given the opportunity to undertake unpaid work experience by
participating in internships. This will give young job seekers a chance to show
what they can do in a real workplace. Both businesses and eligible young job
seekers will be able to choose whether to participate in an internship. To
encourage eligible young job seekers to undertake an internship, participants
will receive a fortnightly incentive payment from the Department of Human
Services (which will initially be $200). The fortnightly incentive payment will be
paid in addition to eligible young job seekers' social security payments and will
not be remuneration for work.
This Bill would ensure that fortnightly incentive payments to eligible young job
seekers placed in internships under Youth Jobs PaTH are not 'income' for
social security and veterans' entitlements purposes. Doing this would make
sure that the incentive payments would not affect participants' social security
payments or veterans' entitlements.
Youth Bonus wage subsidy
The Youth Bonus wage subsidy element of Youth Jobs PaTH will encourage
businesses to employ young people. Businesses will be eligible to receive a
Youth Bonus wage subsidy if they employ a young job seeker under the age
of 25 who has been in employment services for at least 6 months.
The Bill would amend the social security law to protect young job seekers
whose employers are eligible to receive a Youth Bonus wage subsidy in
relation to them. It would allow these young people to have their income
support payments suspended for a period rather than cancelled. These young
people will be able to have their social security payments restored (without
having to make a new claim) if they lose their job (through no fault of their
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own) with an eligible employer within 26 weeks of ceasing to receive income
support because of that employment.
FINANCIAL IMPACT STATEMENT
The internship payment amendments contained in Schedule 1 to the Bill
would have no financial impact.
The Youth Bonus wage subsidy amendments contained in Schedule 2 to the
Bill would have the following budgetary implications:
Year Expense ($ million)
2015-16 4.3
2016-17 0.4
2017-18 0.4
2018-19 0.4
2019-20 0.4
TOTAL: 5.7
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The Statement of Compatibility with Human Rights appears at the end of this
explanatory memorandum.
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Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial,
Hire) Bill 2016
Clause 1 - Short Title
This clause provides for the short title of the Act to be the Social Security
Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) Act 2016.
Clause 2 - Commencement
This clause sets out when the various provisions of the Act commence.
Specifically:
sections 1 to 3 commence the day the Act receives Royal Assent,
Schedule 1 (the internship payment amendments) commences the
later of 1 April 2017 or the day the Act receives Royal Assent, and
Schedule 2 (the Youth Bonus wage subsidy amendments)
commences the later of 1 January 2017 or the day the Act receives
Royal Assent.
Clause 3 - Schedules
This clause provides that legislation that is specified in a Schedule to the Act
is amended or repealed as set out in that Schedule, and any other item in a
Schedule to the Act has effect according to its terms.
Abbreviations used in this Explanatory Memorandum
Social Security Act means the Social Security Act 1991
Administration Act means the Social Security (Administration) Act 1999
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Schedule 1 - Internship Payments
Summary
Under the 'Trial' element of Youth Jobs PaTH, eligible young job seekers will
be able to choose to participate in an internship of 4 to 12 weeks to give them
a chance to show what they can do in a real workplace.
To be eligible to participate, a person must:
be 17 to 24 years old,
have been in jobactive, Transition to Work or Disability Employment
Services for 6 months or more, and
be on income support payments.
Both businesses and eligible young job seekers will be able to choose to
participate in an internship. Further, businesses and eligible young job
seekers will be able to co-design internship placements. Participants will
attend host businesses for 15 to 25 hours a week. They will undertake unpaid
work experience and will not be employees of their host businesses.
So as to encourage eligible young job seekers to take up the opportunity to be
placed in an internship under the Youth Jobs PaTH, participants will be paid a
fortnightly incentive payment by the Department of Human Services (which
will initially be $200). The payment will not constitute remuneration for work.
Participants will receive the fortnightly incentive payment in addition to their
social security payments.
Schedule 1 would insert a provision into the Social Security Act and the
Veterans' Entitlements Act 1986 so that the fortnightly incentive payment is
not counted as 'income' for social security or veterans' entitlements purposes.
Detailed explanation
Social Security Act 1991
Item 1 - after paragraph 8(8)(tc)
This item inserts new paragraph 8(8)(td) after paragraph 8(8)(tc).
Section 8 of the Social Security Act provides a broad definition of 'income' for
social security purposes. Subsection 8(8) excludes specified amounts from
the definition of 'income'.
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New paragraph 8(8)(td) excludes a payment made by the Commonwealth to
an internship participant under Youth Jobs PaTH from the definition of
'income'. This means that the fortnightly incentive payment to internship
participants will not affect their social security payments. It will be paid in
addition to their social security payments.
Veterans' Entitlements Act 1986
Item 2 - after paragraph 5H(8)(xac)
This item inserts new paragraph 5H(8)(xad) after 5H(8)(xac).
Section 5H of the Veterans' Entitlement Act 1986 provides a broad definition
of 'income' for veterans' entitlements purposes. Subsection 5H(8) excludes
specified amounts from the definition of income.
This item makes an equivalent amendment to item 1 by inserting a new
paragraph 5H(8)(xad) into the Veterans' Entitlement Act 1986. The new
paragraph excludes a payment made by the Commonwealth to an internship
participant under Youth Jobs PaTH from the definition of 'income'. This means
that the fortnightly incentive payments will not affect internship participants'
entitlements under the Veterans' Entitlement Act 1986.
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Schedule 2 - Youth Bonus Wage Subsidy
Summary
The Youth Bonus wage subsidy element of Youth Jobs PaTH will encourage
businesses to employ young people. Businesses will be eligible to receive a
Youth Bonus wage subsidy if they employ a young job seeker under the age
of 25 who has been in employment services for at least 6 months. Wage
subsidies will be paid according to administrative eligibility criteria.
This Schedule amends the Administration Act to ensure that young people
who are employed by a business that is eligible to receive a Youth Bonus
wage subsidy will have their payment suspended for a period, rather than
automatically cancelled, if they cease to be qualified for income support or
their income support ceases to be payable because of that employment.
These young people will be able to have their social security payments
restored (without a waiting period) if they lose their job with the eligible
employer through no fault of their own within 26 weeks of ceasing to be
qualified for income support or their income support ceasing to be payable,
provided they remain otherwise qualified for the payment.
Under the current provisions, an eligible young job seeker commencing in
paid employment may no longer qualify for their payment if they are employed
full-time, because they will not meet the qualification requirement of being
unemployed. Similarly, a young job seeker's payment may no longer be
payable under the income test due to their employment income. Such young
job seekers will benefit from this measure by having 26 weeks during which
they may resume their social security payment if necessary, such as where
they lose their job with the eligible employer through no fault of their own. This
means they will not have to re-claim income support or serve any waiting
periods that might otherwise apply to a claim.
Detailed explanation
Social Security (Administration) Act 1999
Items 1 and 2 - subparagraph 85(1)(a)(i) and subparagraph 85(1)(a)(ii)
Item 1 amends subparagraph 85(1)(a)(i) to insert a reference to a cancellation
under new subsection 95C(2). Item 2 inserts new subparagraph 85(1)(a)(iia)
which refers to a suspension under subsection 95C(1).
Section 85 allows for the resumption of social security payments in particular
circumstances following a cancellation or suspension. These amendments to
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section 85 will enable the Secretary to reconsider section 95C suspensions or
cancellations and, in appropriate circumstances, to determine that a social
security payment was, or is, again payable to a person who was employed by
an employer that is eligible to receive a Youth Bonus wage subsidy.
These amendments are consequential to the main amendment at item 3,
which inserts new section 95C into the Act.
Item 3 - after section 95B
This item inserts a new section 95C after section 95B.
New section 95C overrides sections 93 and 94 of the Administration Act.
These sections automatically cancel a person's social security payment if an
event or change of circumstances occurs which results in that person ceasing
to be qualified for the payment, or if the payment ceases to be payable to the
person. (These sections only operate where the person has received a notice
under s 68 of the Administration Act requiring them to give certain information
to the Secretary). Instead, new section 95C provides that if the person ceases
to be qualified for a social security payment or the social security payment
ceases to be payable to them, and the Secretary is satisfied that the cessation
is because they are employed by a 'Youth Bonus wage subsidy employer' (as
defined), then the Secretary may make a determination under subsection
95C(1). More specifically, the Secretary may determine that the person's
social security payment is suspended, and that section 93 or 94 is taken not to
apply (or not to have applied) to their social security payment. The
determination results in any cancellation under either section 93 or 94 being
taken as not having occurred. The suspension takes effect from the day that
the person ceased to be qualified for a social security payment, or the day that
their social security payment ceased to be payable to them (as relevant).
A note to the subsection alerts the reader that Youth Bonus wage subsidy
employer is defined at subsection 95C(4), in relation to a person, to mean an
employer that is eligible to receive a Youth Bonus wage subsidy in respect of
the person under the program established by the Commonwealth and known
as "Youth Jobs PaTH". The 26 week suspension period is available to any
eligible young person (that is, a person under the age of 25 who has been in
employment services for at least 6 months) who is employed by an employer
eligible to receive a Youth Bonus wage subsidy in relation to that young
person (regardless of whether or not the employer claims the Youth Bonus
wage subsidy).
New subsection 95C(2) applies, subject to new subsection 95C(3), to cancel a
person's social security payment at the end of a 26 week suspension period.
More specifically, a person's social security payment will be cancelled if a
suspension under subsection 95C(1) remains in effect at the end of the 26
week period following a suspension, and the person is not qualified for the
social security payment or the social security payment is not payable to them
at that time. The payment is cancelled, by force of the subsection, on the day
after the end of that 26 week period of continuous suspension. If the person's
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payment has been restored within that 26 week period under section 85, or
has been cancelled for reasons not related to their employment, or cancelled
either during or after the 26 week period under subsection 95C(3), then the
automatic cancellation under subsection 95C(2) will not occur.
An earlier cancellation can occur under new subsection 95C(3) if the person
ceases to be employed by a Youth Bonus wage subsidy employer. This will
occur in circumstances where the Secretary determines that the person has
ceased to be employed as a direct or indirect result of a voluntary act of the
person that was not reasonable, or as a result of the person's misconduct as
an employee. These factors replicate the factors in section 42S of the
Administration Act, which would represent a serious failure and a participation
failure, and result in the person's participation payment not being payable to
the person for a period. If the Secretary makes this determination, then the
person's social security payment is taken to have been cancelled, by force of
the subsection, on the day of the cessation.
A note alerts the reader that if the Secretary does not make the determination
that the cessation is as a direct or indirect result of a voluntary act of the
person that was not reasonable, or as a result of the person's misconduct as
an employee, then the social security payment may again become payable to
the person (without the need for a further claim) if the Secretary makes a
determination under section 85. Section 85 allows for the resumption of social
security payments following a cancellation or suspension in particular
circumstances.
Item 4 - paragraph 123(1)(c)
This item amends paragraph 123(1)(c) to insert reference to a suspension
under subsection 95C(1). This makes clear that such a suspension ends the
continuing effect of a determination that a person's claim for social security
payment is granted, or that a social security payment is payable to a person.
This amendment is consequential to the main amendment at item 3, which
inserts new section 95C into the Act.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011
Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial,
Hire) Bill 2016
This Bill is compatible with 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 Bill
The Bill would amend the Social Security Act 1991, Social Security
(Administration) Act 1999 and the Veterans' Entitlements Act 1986 to help
give effect to the Youth Jobs PaTH measure announced in the 2016-17
Budget as part of the Youth Employment Package. More specifically, the Bill
would ensure that:
fortnightly incentive payments to young job seekers who undertake
internships under the Commonwealth program known as Youth Jobs
PaTH are not 'income' for social security and veterans' entitlements
purposes, and
eligible young people will be able to have their social security payments
restored (without having to make a new claim or serve waiting periods)
in particular circumstances. More specifically, if they lose their job
(through no fault of their own) with an eligible Youth Bonus wage
subsidy employer, they will have their payments restored within 26
weeks of ceasing to be qualified for income support, or of their income
support ceasing to be payable, because of that employment.
Human rights engaged by the Bill
The Bill engages the following rights:
the right to social security in article 9 of the International Covenant on
Economic, Social and Cultural Rights (ICESCR)
the right to an adequate standard of living in article 11(1) of the
ICESCR
the right to work in article 6 of the ICESCR, and
the right to equality and non-discrimination in article 2(2) of the
ICESCR and article 26 of the International Covenant on Civil and
Political Rights (ICCPR).
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Human rights implications of the Bill
Article 9 of the ICESCR recognises the right of everyone to social security.
The right to social security requires States to establish a social security
system and, to the maximum of its available resources,1 ensure access to a
social security scheme that provides a minimum essential level of benefits to
all individuals and families that will enable them to acquire at least essential
health care, basic shelter and housing, water and sanitation, foodstuffs, and
the most basic forms of education.2
Article 11(1) of the ICESCR recognises the right of everyone to an adequate
standard of living including adequate food, water and housing, and to the
continuous improvement of living conditions.
Article 6(1) of the ICESCR recognises the right to work, which includes the
right to the opportunity to gain a living by work which the job seeker freely
chooses or accepts. Article 6(2) specifically refers to States' obligations to
realise this right by implementing 'technical and vocational guidance and
training programmes, policies and techniques to achieve steady economic,
social and cultural development and full and productive employment'.
Article 2(2) of the ICESCR and article 26 of the ICCPR recognise the right to
equality and non-discrimination on a range of grounds including of race, sex,
colour, language, national origin or 'other status'. Age is considered to fall
within 'other status' for the purpose of these articles.
Incentive payments for internship participants
Exempting fortnightly incentive payments to young job seekers who complete
internships under Youth Jobs PaTH from being 'income' for social security
and veterans' entitlements purposes will promote the right to social security,
the right to an adequate standing of living and the right to work. It also
engages the right to equality and non-discrimination.
Right to social security and right to adequate standard of living
This measure will promote the right to social security and the right to an
adequate standard of living by ensuring that young job seekers do not have
their social security payments or veterans' entitlements reduced because they
are completing internships and receiving an additional fortnightly incentive
payment (which will initially be $200).
Right to work
This measure will promote the right to work because it will encourage young
job seekers to undertake internships to enable them to gain work experience
and skills that will ultimately assist them to identify and find available
employment. The Department's administrative data shows that, of job seekers
1
Article 2 of the ICESCR.
2
Committee on Economic, Social and Cultural Rights, General Comment 19, para 59.
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who undertook unpaid work experience, 48.6 per cent were in employment
three months later compared to 26.0 per cent across all activities.3
Right to equality and non-discrimination
This measure engages the right to equality and non-discrimination because it
involves differential treatment for people aged between 17 and 24 years of
age (these are the only people who are eligible to receive incentive payments
under Youth Jobs PaTH). This constitutes discrimination on the basis of age.
However, the right to equality and non-discrimination is subject to the
international human rights law principle of 'legitimate differential treatment'.
This principle allows particular groups of people to be treated differently where
the treatment is aimed at achieving a legitimate objective, is based on
reasonable and objective criteria and is proportionate to the objective to be
achieved. Differential treatment for young people in the manner proposed is
legitimate because the unemployment rate for young people is more than
twice as high as that for the general population, and unemployment can have
a particularly detrimental impact on young people who lack experience and life
skills. This measure will achieve the legitimate objective of encouraging young
people to gain work experience and skills that will ultimately assist them to
avoid long-term unemployment. Further, the measure is reasonable,
necessary and proportionate to achieve this objective because it is specifically
targeted at a group within society that is particularly disadvantaged in the
labour market and vulnerable to long-term unemployment and welfare
dependency.
Youth Bonus wage subsidy
Enabling eligible young people to easily return to income support within a
particular time period if they lose their job through no fault of their own will
promote the right to social security and the right to an adequate standard of
living. It also engages the right to equality and non-discrimination. This aspect
of the Bill will not engage the right to work (although the Youth Bonus wage
subsidy itself will engage the right to work, by encouraging employers to hire
young job seekers).
Right to social security and right to an adequate standard of living
This measure will ensure that eligible young people will be able to have their
social security payments restored without having to make a new claim in
particular circumstances. Eligible young people who lose their job (through no
fault of their own) with an eligible Youth Bonus wage subsidy employer will
have their payments restored if this occurs within 26 weeks of ceasing to be
qualified for income support, or of their income support ceasing to be payable,
because of that employment. This will promote the right to social security and
the right to an adequate standard of living by facilitating faster access to
financial support if they lose paid employment.
3
Department of Employment, December 2014 Labour Market Assistance Outcomes Report:
https://docs.employment.gov.au/node/34835
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Right to equality and non-discrimination
This measure engages the right to equality and non-discrimination because it
involves differential treatment for people under 25 years of age (these are the
only people in respect of whom the Youth Bonus wage subsidy can be paid).
However, as discussed above, differential treatment on the basis of age is
permissible in certain circumstances, where the differential treatment is
reasonable, necessary and proportionate to achieve a legitimate objective.
Differential treatment for the purposes of the Youth Bonus wage subsidy is
legitimate because it would ensure that young people are not disadvantaged if
they take up employment with an employer who is eligible to receive the
Youth Bonus wage subsidy, by enabling them to quickly access income
support if they lose their job through no fault of their own. The proposed
legislative amendments are reasonable, necessary and proportionate to
achieve this legitimate objective because they are specifically targeted at a
group within society that is particularly disadvantaged in the labour market
and vulnerable to long-term unemployment and welfare dependency.
Conclusion
The Bill is compatible with human rights because it promotes the protection of
the right to social security, the right to an adequate standard of living and the
right to work. To the extent that the Bill provides for differential treatment for
young people, the measures taken are reasonable, necessary and
proportionate to achieve a legitimate objective.
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