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2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY LEGISLATION AMENDMENT (CONNECTING PEOPLE WITH JOBS) BILL
2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment Participation and
Childcare the Honourable Kate Ellis MP)
SOCIAL SECURITY legislation amendment (connecting people with jobs) bill
2010
OUTLINE
The Social Security Legislation Amendment (Connecting People with Jobs)
Bill 2010 (the Bill) puts in place the compliance component of the
Government's Connecting People with Jobs proposal, an election commitment
announced by the Prime Minister on 11 August 2010.
The Connecting People with Jobs proposal is an active regional labour
market strategy establishing a trial relocation assistance package aimed at
connecting job seekers with employment opportunities elsewhere in
Australia.
The trial is proposed to run over two years from 1 January 2011 and offer
additional support to up to 2,000 job seekers who have been unemployed for
more than 12 months to relocate to take up an identified on-going full time
job, including an apprenticeship. Reimbursement of up to $6,000 for actual
expenses incurred relocating ($3,000 for relocation to metropolitan areas)
is available. Families with dependent children will have access to an
additional $3,000.
To be eligible to participate in this trial job seekers must come from
areas with unemployment rates higher than the national unemployment rate.
Job seekers who receive relocation assistance and subsequently leave the
position within six months from commencement without reasonable excuse will
not be paid unemployment benefits for 12 weeks (up from the current 8 weeks
for leaving employment voluntarily). Amendments to social security
legislation are required to implement this increased non-payment period.
Employers who employ job seekers who receive relocation assistance will
receive a subsidy of up to $2,500 in recognition of the additional support
and assistance individuals will need in the early stages of their
employment.
FINANCIAL IMPACT
The estimated administered cost of the trial is $14.6 million from 2010-11
to 2012-13 as reflected in costings done under the Charter of Budget
Honesty.
Part of the Employment Pathway Fund (EPF) under Job Services Australia
arrangements has been quarantined for New Enterprise Incentive Scheme
(NEIS) funding based on the forecast flows of job seekers into Job Services
Australia. However, as a result of higher than anticipated job seeker
inflows more funds have been quarantined than necessary to meet NEIS
funding requirements. As a result, $14.6 million of the quarantined NEIS
funds is being reallocated within the EPF to fund the Connecting People
with Jobs trial. This is not a savings measure, rather a reallocation of
existing approved EPF funding. Consequently, the Connecting People with
Jobs trial will have no impact on the Government budget.
|Year |Expense ($ |
| |million) |
|2011-12 |$0.0 |
|2012-13 |$0.0 |
|TOTAL: |$0.0 |
SOCIAL SECURITY LEGISLATION AMENDMENT (CONNECTING PEOPLE WITH JOBS) BILL
2010
NOTES ON CLAUSES
Clause 1 - Short title
Provides for the Act to be cited as the Social Security Legislation
Amendment (Connecting People with Jobs) Act 2010.
Clause 2 - Commencement
Subclause 2(1) inserts a three column table setting out commencement
information for various provisions in the Act. Each provision of the Act
specified in column 1 of the table commences (or is taken to have
commenced) in accordance with column 2 of the table and any other statement
in column 2 has effect according to its terms.
Subclause 2(2) provides that column 3 of the table is for additional
information which may be added to or edited in any published version of the
Act but that information in this column is not part of the Act.
The Bill is intended to commence on 1 January 2011, the day from which
relocation assistance under the Connecting People with Jobs trial will be
made available to eligible job seekers. However, if the Bill has not been
passed by Parliament by 1 January 2011, it will commence the day after it
receives the Royal Assent following passage.
Clause 3 - Schedule(s)
Provides that each Act that is specified in a Schedule is amended or
repealed as set out in the applicable items in the Schedule and that any
other item in a Schedule has effect according to its terms.
Schedule 1 - Amendments
Social Security (Administration) Act 1999
Item 1 - Section 42A
Section 42A of the Social Security (Administration) Act 1999
(Administration Act) sets out a simplified outline of Division 3A of Part 3
of the Act. Item 1 repeals and replaces the dot point in that simplified
outline that relates to unemployment non-payment periods (UNPPs). The new
dot point notes that a UNPP can be either 8 weeks long, or 12 weeks long,
depending on the circumstances.
Item 2 - Subsection 42S(3)
Proposed item 1 repeals and substitutes subsection 42S(3) of the
Administration Act and adds new subsections 42S(3A), (3B) and (3C).
Currently under section 42S of the Administration Act, a person who leaves
employment - whether because they resign, or because they are sacked for
misconduct - is unable to be paid an income support payment (newstart
allowance, parenting payment, youth allowance, and special benefit) for a
period of 8 weeks. Centrelink, as delegate of the Secretary, has the
discretion to reduce or not impose this 8-week UNPP for a number of
reasons, including where the person has a reasonable excuse for their
actions, or is in financial hardship and otherwise is in a class of
particularly vulnerable people.
The new subsection 42S(3) allows for either an 8-week UNPP or a 12-week
UNPP to be imposed on a person if the person becomes unemployed as a result
of the person's voluntary act or misconduct.
The 8-week UNPP will be imposed on a person in most circumstances of
voluntary unemployment or unemployment due to misconduct, consistent with
the current law. However, a 12-week UNPP will be imposed on a person if,
during the period of 6 months ending on the day before the day that the
person becomes unemployed, the person has been paid specified relocation
assistance in relation to the employment to which the voluntary act or
misconduct related. Thus, if a person receives relocation assistance under
the Connecting People with Jobs trial to take up a job, and resigns or is
sacked from that job for misconduct within 6 months of receiving that
assistance, the person will be subject to a 12-week UNPP.
Note that, in order to incur a 12-week UNPP, the relocation
assistance a person receives must be of a kind specified by the
Secretary by legislative instrument under the proposed
subsection 42S(3B). That is, only relocation assistance of a
kind specified will attract 12-week UNPPs; relocation assistance
generally will not.
There is no change being made to the exceptions that allow the Secretary to
decide not to impose, or to reduce the length of, a UNPP - these will be
equally applicable to 12-week UNPPs as to 8-week UNPPs.
Subsection 42S(3A) specifies the initial day upon which a non-payment
period is to commence. These are identical to the current start day under
subsection 42S(3), that is, either the day the person becomes unemployed,
or another day determined by the Secretary in accordance with paragraph
(b).
Subsection 42S(3B) defines the term 'relocation assistance' in relation to
employment to mean a payment made by the Commonwealth to a person to assist
the person to take up the employment, that has been specified by the
Secretary by legislative instrument. In order to give effect to the
Connecting People with Jobs trial, the Secretary will make an instrument
under this subsection specifying payments made under that trial as
'relocation assistance'.
Item 3 - Section 42Y
Proposed paragraph 42S(3A)(b) replaces (and relevantly replicates) existing
paragraph 42S(3)(b). Item 3 amends the relevant reference in section 42Y.
This amendment is consequential to item 2.
Item 4 - Section 110A
This amends a reference in section 110A in which reference is made to the
day after a serious failure period or unemployment non-payment period ends.
A serious failure period or unemployment non-payment period can end under
either subsection 42S(3) or (4). This amendment is a technical amendment.
Item 5 - Application
Inserts an application provision which provides that the amendments made by
items 2 and 3 apply to persons who become unemployed on or after the day on
which the instrument specifying the relocation assistance to which the
measure applies takes effect. Since such an instrument cannot be made
before this Bill receives the Royal Assent, and the Bill commences on the
later of Royal Assent or 1 January 2011, this application provision ensures
that only people who become unemployed on or after the date that the
measure comes into operation can be subject to 12-week UNPPs.