Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SERVICES LEGISLATION AMENDMENT
(OMNIBUS SAVINGS AND CHILD CARE REFORM) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Christian Porter MP)
Contents
Outline........................................................................................................................................ 3
Financial Impact Statement........................................................................................................ 6
Schedule 1 - Payment rates ..................................................................................................... 10
Schedule 2 - Family tax benefit Part B rate ............................................................................ 14
Schedule 3 - Family tax benefit supplements.......................................................................... 17
Schedule 4 - Jobs for families child care package .................................................................. 21
Schedule 5 - Proportional payment of pensions outside Australia........................................ 100
Schedule 6 - Pensioner education supplement ...................................................................... 102
Schedule 7 - Education entry payment .................................................................................. 107
Schedule 8 - Indexation ......................................................................................................... 111
Schedule 9 - Closing energy supplement to new welfare recipients ..................................... 113
Schedule 10 - Stopping the payment of the pension supplement after six weeks overseas .. 131
Schedule 11 - Automation of income stream review processes ............................................ 136
Schedule 12 - Seasonal horticultural work income exemption ............................................. 139
Schedule 13 - Ordinary Waiting Periods............................................................................... 143
Schedule 14 - Age requirements for various Commonwealth payments .............................. 150
Schedule 15 - Income support waiting periods ..................................................................... 157
Schedule 16 - Other waiting period amendments ................................................................. 165
Schedule 17 - Adjustment for primary carer pay and other amendments.............................. 173
Schedule 18 - Removal of parental leave pay mandatory employer role.............................. 199
STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS .................................... 206
Schedule 1 - Payment rates ............................................................................................... 206
Schedule 2 - Family tax benefit Part B rate ...................................................................... 208
Schedule 3 - Family tax benefit supplements.................................................................... 211
Schedule 4 - Jobs for families child care package ............................................................ 213
Schedule 5 - Proportional payment of pensions outside Australia.................................... 222
Schedule 6 - Pensioner education supplement .................................................................. 224
Schedule 7 - Education entry payment .............................................................................. 227
Schedule 8 - Indexation ..................................................................................................... 230
Schedule 9 - Closing Energy Supplement to New Welfare Recipients ............................ 231
Schedule 10 - Stopping the payment of pension supplement after six weeks overseas .... 233
Schedule 11 - Automation of income stream review process ........................................... 235
Schedule 12 - Seasonal horticultural work income exemption ......................................... 237
Schedule 13 - Ordinary waiting periods ............................................................................ 238
Schedule 14 - Age requirements for various Commonwealth payments .......................... 244
1
Schedule 15 - Income support waiting periods ................................................................. 247
Schedule 16 - Other waiting period amendments ............................................................. 253
Schedule 17 - Adjustment for primary carer pay and other amendments ......................... 260
Schedule 18 - Removal of parental leave pay mandatory employer role.......................... 267
2
SOCIAL SERVICES LEGISLATION AMENDMENT
(OMNIBUS AND CHILD CARE REFORM) BILL 2017
Outline
This bill contains the following Schedules:
1. Payment rates
The family tax benefit Part A standard fortnightly rate will be increased by $20.02 for
each FTB child in the family aged up to 19. An equivalent rate increase, of around
$19.37 per fortnight, will apply to youth allowance and disability support pension
recipients aged under 18 and living at home. These increases will apply from
1 July 2018.
2. Family tax benefits Part B rate
From 1 July 2017, the Bill will introduce a reform to family tax benefit Part B that
removes entitlement to FTB Part B for single parent families who are not single
parents aged 60 or more or grandparents or great-grandparents, from 1 January of
the calendar year their youngest child turns 17.
3. Family tax benefit supplements
This Schedule will phase out the family tax benefit Part A supplement for families
with an adjusted taxable income of $80,000 a year or less by reducing it to $602.25 a
year from 1 July 2016, and to $302.95 a year from 1 July 2017. It will then be
withdrawn from 1 July 2018. The family tax benefit Part A supplement has already
been withdrawn for families with an adjusted taxable income over $80,000 a year
under the Budget Savings (Omnibus) Act 2016.
The family tax benefit Part B supplement will also be phased out. It will be reduced
to $302.95 a year from 1 July 2016, and to $153.30 a year from 1 July 2017. It will
then be withdrawn from 1 July 2018.
4. Jobs for Families Child Care Package
The purpose of Schedule 4 is to introduce key aspects of the Jobs for Families Child
Care Package, as announced in the 2015-16 and 2016-17 Budget. The Schedule
will, through the introduction of a new Child Care Subsidy and other enhancements,
deliver a simpler, more affordable, more flexible and more accessible child care
system for families.
5. Proportional payments of pensions outside Australia
This Schedule reduces from 26 weeks to six weeks the period during which age
pension, and a small number of other payments with unlimited portability, can be
paid outside Australia at the basic means-tested rate.
3
After six weeks, payment will be adjusted according to the length of the pensioner's
Australian working life residence.
6. Pensioner education supplement
This Schedule ceases pensioner education supplement from the first 1 January or 1
July after the day the Act receives Royal Assent.
7. Education entry payment
This measure ceases the education entry payment from the first 1 January or 1 July
after the Act receives Royal Assent.
8. Indexation
This Schedule implements the following changes to Australian Government
payments:
maintain at level for three years from 1 July of the first financial year beginning
on or after the day this Act receives Royal Assent the income free areas for all
working age allowances (other than student payments) and for parenting
payment single; and
maintain at level for three years from 1 January of the first calendar year
beginning on or after the day this Act receives Royal Assent the income free
areas and other means test thresholds for student payments, including the
student income bank limits.
9. Close the energy supplement to new welfare recipients
This Schedule ceases, from 20 September 2017, payment of the energy supplement
to recipients who were not receiving a welfare payment on 19 September 2016 and
closes the energy supplement to new welfare recipients from 20 September 2017.
10. Stopping the payment of pension supplement after six weeks overseas
This Schedule will stop the payment of pension supplement after six weeks
temporary absence overseas and immediately for permanent departures.
11. Automation of income stream review processes
This Schedule will allow for the automation of the regular income stream review
process by enabling the Secretary to require income stream providers to transfer a
dataset to the Department of Human Services (DHS) on a regular basis.
4
12. Seasonal horticultural work income exemption
Schedule 12 to the Bill provides a social security income test incentive aimed at
increasing the number of job seekers who undertake specified seasonal horticultural
work, such as fruit picking.
13. Ordinary waiting periods
This Schedule makes amendments to extend and simplify the ordinary waiting period
for working age payments.
14. Age requirements for various Commonwealth payments
This Schedule provides that young unemployed people aged 22 to 24 would no
longer be eligible for newstart allowance or sickness allowance until they turn 25
years of age and would, instead, be able to claim and qualify for youth allowance.
To enable this, youth allowance for all types of people who can satisfy the activity
test, will be available to people who have not yet reached 25.
15. Income support waiting periods
This Schedule introduces a four-week waiting period, for job ready young people
who are looking for work, to receive income support payments. During this four-
week period, job seekers under 25 years of age who have been classified as job
ready (Stream A) by the Job Seeker Classification Instrument will also be required to
complete assigned activities, through a new program, RapidConnect Plus, that will
help them prepare for and find work.
16. Other waiting period amendments (Rapid Activation of young job
seekers)
This Schedule implements the Rapid Activation of young job seekers 2015-16
Budget measure.
17. Adjustments for Primary Carer Pay
This and the following Schedule introduce the revised arrangements for the Paid
Parental Leave scheme announced in the 2015-16 Mid-Year Economic and Fiscal
Outlook and previously introduced in the Fairer Paid Parental Leave Bill 2016, which
will now be withdrawn. The measure is changed in that the maximum PPL period for
which a person may be paid parental leave pay is increased from the current 18
weeks to 20 weeks. The measure will commence on the first 1 January, 1 April, 1
July or 1 October that is 9 months after the date the Act receives royal assent, with
an earliest commencement date of 1 January 2018.
18. Employer Opt-In (PPL)
Schedule 18 removes the employer paymaster role in administering the Paid
Parental Leave scheme.
5
Financial Impact Statement
The measures in this Bill have the following estimated impact on the fiscal balance
over the forward estimates 2016-17 to 2019-20 ($ million):
Schedule Title Indicative Financials
1 Payment rates -2,373.5
2 Family tax benefits Part B rate 440.6
3 Family tax benefit supplements 4,653.0
Jobs for Families Child Care
4 Package - measures requiring -1,290.9
legislation*
Proportional payments of
5 213.9
pensions outside Australia
Pensioner education
6 201.0
supplement
7 Education entry payment 42.3
8 Indexation 69.0
Close the energy supplement to
9 933.4
new welfare recipients
Stopping the payment of
10 pension supplement after six 123.6
weeks overseas
Automation of income stream
11 38.1
review processes
Seasonal horticultural work
12 -27.5
income exemption
13 Ordinary waiting periods 189.4
Age requirements for various
14 431.3
Commonwealth payments
15 Income support waiting periods 169.5
Other waiting period
16 amendments (Rapid Activation -0.8
of young job seekers)
Adjustments for Primary Carer
17
Pay 491.2
18 Employer Opt-In (PPL)
*Including measures not requiring legislation, the Jobs for Families Child Care
Package totals -$1,663.5.
6
STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
The statements of compatibility with human rights appear at the end of this
explanatory memorandum.
REGULATION IMPACT STATEMENT
The Regulation Impact Statement for the Jobs for Families Child Care Package,
including measures proposed to be given effect to by Schedule 4 of this Bill, appears
at the end of this Explanatory Memorandum (Attachment A).
Where appropriate, the Regulation Impact Statement for the remaining Schedules is
incorporated in the respective chapters.
7
SOCIAL SERVICES LEGISLATION AMENDMENT
(OMNIBUS AND CHILDCARE REFORM) BILL 2016
Abbreviations used in this explanatory memorandum
ACCS means Additional Child Care Subsidy;
ATI means adjusted taxable income;
the Budget Savings (Omnibus) Act means the Budget Savings (Omnibus)
Act 2016;
CCB means Child Care Benefit;
CCR means Child Care Rebate;
CCS means Child Care Subsidy;
Family Assistance Act means the A New Tax System (Family Assistance)
Act 1999;
Family Assistance Administration Act means the A New Tax System
(Family Assistance) (Administration) Act 1999;
Family assistance law means the Family Assistance Act and the Family
Assistance Administration Act;
Farm Household Support Act means the Farm Household Support Act 2014
FTB means Family Tax Benefit;
JETCCFA means Jobs, Education and Training Child Care Fee Assistance;
the Military Rehabilitation and Compensation Act means the Military
Rehabilitation and Compensation Act 2004.
National Law means the Education and Care Services National Law Act
2010 (Vic) (and equivalent legislation in other State and Territory
jurisdictions);
Social Security Act means the Social Security Act 1991
Social Security Administration Act means the Social Security
(Administration) Act 1999
TFN means Tax File Number.
8
Veterans' Entitlements Act means the Veterans' Entitlements Act 1986
9
Schedule 1 - Payment Rates
Schedule 1 - Payment rates
Summary
The family tax benefit Part A standard fortnightly rate will be increased by $20.02 for
each FTB child in the family aged up to 19. An equivalent rate increase, of around
$19.37 per fortnight, will apply to certain youth allowance and disability support
pension recipients aged under 18. These increases will apply from 1 July 2018.
Background
The standard FTB child rate for an individual whose family tax benefit is calculated
under method 1 is set out in clause 7 of Schedule 1 to the Family Assistance Act.
There are two different FTB child rates, depending on whether the FTB child is under
13 or has reached 13 years of age. These FTB child rates are referred to as
'FTB child rate (A1)' for the purposes of indexation under Schedule 4 to the Family
Assistance Act.
From 1 July 2018, these rates will be increased by $521.95 a year (equivalent to
$20.02 per fortnight). The increase will be applied to these FTB child rates after they
have been indexed on 1 July 2018 in accordance with the usual rules.
Youth allowance is calculated under the Youth Allowance Rate Calculator in
section 1067G of the Social Security Act. The tables in points 1067G-B2 and
1067G-B3 set out a person's maximum basic rate, depending on their situation and
whether or not they are independent.
From 1 July 2018, the maximum basic rate of youth allowance for a person who is:
not independent, lives at home and is not yet 18 years of age;
independent, an accommodated independent person and not yet 18 years of
age; or
independent, in supported state care and not yet 18 years old;
will be aligned to the method 1 FTB child rate applicable to an FTB child who has
reached 13 years of age.
Aligning these two rates of payment will avoid confusion for families, and make sure
there is no financial incentive for an FTB child to leave full-time secondary study to
claim youth allowance.
Disability support pension is calculated under Pension Rate Calculator D in
section 1066A of the Social Security Act for people who are under 21 years of age,
who are not blind and who do not have dependent children. Pension Rate
Calculator E provides for the calculation of the rate of disability support pension for a
person who is under 21 years of age and is permanently blind.
From 1 July 2018, the maximum basic rate of disability support pension for a person
10
Schedule 1 - Payment Rates
who is not a member of a couple, under 18, not independent and not living away
from the person's parental home because of a medical condition of the person, will
also be aligned to the method 1 FTB child rate applicable to an FTB child who has
reached 13 years of age.
Explanation of the changes
Part 1 - Family tax benefit
Amendments to the Family Assistance Act
Schedule 4 provides for the indexation of specified rates and amounts. These
include the FTB child rates set out in clause 7 of Schedule 1 which are referred to in
Schedule 4 as 'FTB child rate (A1)'. These are annual amounts.
Item 1 inserts a new clause 7 into Schedule 4, which, in effect, increases each
annual amount of FTB child rate (A1) by $521.95. The increase would occur on
1 July 2018, after the amounts have been indexed under Schedule 4 in accordance
with the current rules. The note at the end of new clause 7 addresses a technical
issue.
Item 2 is an application provision which ensures that the new increased amounts are
used to calculate the rate of family tax benefit for days on and after commencement
(being 1 July 2018).
Part 2 - Youth allowance and disability support pension
Amendments to the Social Security Act
The rate of disability support pension for a person who is under 21, not blind and has
no dependent children is worked out using Pension Rate Calculator D at the end of
section 1066A. The maximum basic rates table is in point 1066A-B1. Item 1 in the
table at the end of point 1066A-B1 specifies the maximum basic rate (both annual
and fortnightly) for a person who is not a member of a couple, who is under 18,
not independent and not living away from the person's parental home because of a
medical condition.
Item 3 omits the annual amount in column 3 of item 1 and substitutes a reference to
the annual linked rate. This concept is then defined in new point 1066A-B2
(inserted by item 6) by reference to column 2 or item 2 of the table in clause 7 of
Schedule 1 to the Family Assistance Act (being the FTB child rate applicable to an
FTB child who has reached 13 years of age).
Item 4 omits the fortnightly amount in column 4 of item 1 and substitutes a reference
to the fortnightly linked rate. This concept is then defined in new point 1066A-B3
(inserted by item 6) through a formula that converts the annual rate in column 3
(the annual linked rate) into a fortnightly rate.
Item 5 makes a consequential amendment to note 4 at the end of point 1066A-B1.
11
Schedule 1 - Payment Rates
Items 7 to 10 make similar amendments to Pension Rate Calculator E at the end of
section 1066B to link the maximum basic rate of disability support pension, for a
blind person who is otherwise in the same situation as described above, to the FTB
child rate applicable to an FTB child who has reached 13 years of age.
Youth allowance is calculated under the Youth Allowance Rate Calculator in
section 1067G.
The table in point 1067-B2 lists maximum basic rates of youth allowance for the
various categories of people who are not independent. Item 1 of this table provides
the maximum basic rate for a person who lives at home and is not yet 18 years old.
Item 11 omits the fortnightly amount in column 3 of item 1 and substitutes a
reference to the linked rate. This concept is then defined in new point 1067G-B2A
(inserted by item 13) by reference to the FTB child rate for an FTB child who has
reached 13 years of age (the annual amount in column 2 of item 2 of the table in
clause 7 of Schedule 1 to the Family Assistance Act) and provides a formula to
convert the relevant FTB child rate to a fortnightly amount.
Item 12 makes a consequential amendment to the note at the end of
point 1067G-B2.
The table in point 1067-B3 lists maximum basic rates of youth allowance for the
various categories of people who are independent and not long-term income support
students. Item 1 of this table provides the maximum basic rate for a person who is
an accommodated independent person and not yet 18 years of age. Item 3 of this
table provides the maximum basic rate for a person who is in supported state care
and not yet 18 years old.
Item 14 omits the fortnightly amounts in table items 1 and 3 in column 3 and
replaces the amounts with references to the linked rate. This concept is then
defined in new point 1067G-B3AAA (inserted by item 16) by reference to the
FTB child rate for an FTB child who has reached 13 years of age (the annual amount
in column 2 of item 2 of the table in clause 7 of Schedule 1 to the Family Assistance
Act), which also provides a formula to convert the relevant FTB child rate to a
fortnightly amount.
Item 15 makes a consequential amendment to the note at the end of
point 1067G-B3.
The amendments described above directly link certain youth allowance and disability
support pension maximum basic rates for under 18 year-olds to the FTB child rate
for an FTB child who has reached 13 years of age. As the relevant FTB child rate is
indexed on 1 July of each year, the linked youth allowance and disability support
pension rates will also be increased.
The amounts that have been omitted by the amendments described above would
have been subject to indexation or adjustment under the Social Security Act.
Items 17 to 21 make consequential amendments to remove references to these
amounts from the relevant indexation and adjustment provisions.
12
Schedule 1 - Payment Rates
Item 22 is an application provision, which ensures that the new linked amounts are
used in working out the rate of youth allowance and disability support pension for
days on and after commencement (being 1 July 2018).
13
Schedule 1 - Payment Rates
Schedule 2 - Family tax benefit Part B rate
Summary
From 1 July 2017, this Schedule will introduce a reform to family tax benefit Part B
that removes entitlement to FTB Part B for single parent families who are not single
parents aged 60 or more or grandparents or great-grandparents, from 1 January of
the calendar year their youngest child turns 17.
Background
Under the current rules, an individual's standard rate of family tax benefit Part B is
worked out using the table in clause 30 of Schedule 1 to the Family Assistance Act.
There are two different rates, depending on whether the individual's youngest FTB
child is under five years of age or five years and over. An FTB child who has turned
16 is disregarded for the purposes of family tax benefit Part B unless they are a
senior secondary school child (as defined in section 22B of the Family Assistance
Act) and the calendar year in which the child turned 18 has not ended.
From 1 July 2017, amendments made by this Schedule introduce a new rate
structure for family tax benefit Part B.
Under the new structure, single parents who are not aged 60 or more or
grandparents or great-grandparents will be able to access family tax benefit Part B
for an FTB child who is a senior secondary school child until the end of the calendar
year in which the child turns 16 (rather than until the end of the calendar year in
which the child turns 18 which is the current rule).
Explanation of the changes
Amendments to the Family Assistance Act
Subclause 29(3) of Schedule 1 to the Family Assistance Act currently disregards an
FTB child who has turned 16 for the purposes of family tax benefit Part B rate unless
the child is a senior secondary school child. Section 22B of the Family Assistance
Act defines a senior secondary school child.
Item 1 amends section 22B to provide new definitions of senior secondary school
child for the purposes of subclause 29(3).
New subparagraph 22B(1)(a)(ia) defines a senior secondary school child for the
purposes of subclause 29(3) insofar as it relates to determining a standard Part B
rate for a single parent aged at least 60 years, a grandparent or a great-grandparent
with a youngest child aged at least 13 years. In this situation, the child must be aged
16 or 17, or 18 where the calendar year in which the child turns 18 has not ended.
This definition will also be relevant in working out the rest of the individual's Part B
rate (for example, energy supplement) by operation of new subclause 29(4),
as inserted by item 6. Item 4 inserts a related note at the end of subsection 22B(1).
14
Schedule 1 - Payment Rates
New subparagraph 22B(1)(a)(ib) defines senior secondary school child for the
purposes of subclause 29(3) insofar as it relates to any other provision in Part 4 of
Schedule 1 (which provides the rules for calculating an individual's Part B rate).
Items 2 and 3 make other necessary consequential amendments to section 22B.
Clause 30 of Schedule 1 sets out the standard rates for family tax benefit Part B,
depending on the individual's family situation (that is, whether the individual's
youngest FTB child is under five years of age or is aged five or over). Item 7 repeals
the table in clause 30 and inserts a new table.
Under the new table, there will be two standard rates for Part B and four family
situations.
The first rate will apply where the individual's youngest FTB child is aged less than
five years of age. This is item 1 in the new standard rates table in clause 30. This
rate will be the equivalent of the current standard rate (Part B) that applies where the
youngest FTB child is aged under five years, as it would have been indexed on 1
July 2017 under the 'old' rules. New subclause 30(2) has this effect.
The second rate will apply where the individual's youngest FTB child is aged at least
five years but less than 13 years of age. This is item 2 in the new standard rates
table in clause 30. This rate will be the equivalent of the current standard rate
(Part B) that applies where the youngest FTB child is aged five or over, as it would
have been indexed on 1 July 2017 under the 'old' rules. New subclause 30(3) has
this effect.
This rate will also apply where the individual's youngest child is at least 13 years of
age and the individual is not a member of a couple and is aged 60 or more or is a
grandparent or great-grandparent of that youngest child (item 3) and where the
individual's youngest FTB child is aged at least 13 years but less than 17 years of
age and item 3 of the new rates table does not apply (item 4 refers).
New subclauses 30(4) and (5) then define a grandparent or great-grandparent to
take account of biological, adoptive, step and relationship child-parent relationships.
The new amounts in the table in clause 30 will apply from 1 July 2017, and these
amounts will be indexed for the first time on 1 July 2018 in accordance with the usual
rules (subitem 11(2) refers).
Item 10 inserts a new subclause 3(2A) into Schedule 4 of the Family Assistance Act
which makes it clear that the new amounts will not be indexed on 1 July 2017. A new
heading is also inserted.
Item 5 makes a consequential amendment to subclause 29(3), which is required
because of the insertion of the new table in clause 30.
Item 8 makes a minor consequential amendment to clause 2 of Schedule 4 to the
Family Assistance Act.
15
Schedule 1 - Payment Rates
Item 9 makes a minor consequential change to the indexation provisions (base
quarter).
Item 11 is an application provision. It provides that the amendments made by this
Schedule apply in working out the rate of family tax benefit for days on or after
commencement (that is, 1 July 2017). It also provides that the first indexation of the
new amounts in the table in subclause 30(1) of Schedule 1 is to be on 1 July 2018
16
Schedule 3 - Family tax benefit supplements
Schedule 3 - Family tax benefit supplements
Summary
This Schedule will phase out the family tax benefit Part A supplement for families
with an adjusted taxable income of $80,000 a year or less by reducing it to $602.25 a
year from 1 July 2016, and to $302.95 a year from 1 July 2017. It will then be
withdrawn from 1 July 2018. The family tax benefit Part A supplement has already
been withdrawn for families with an adjusted taxable income over $80,000 a year
under the Budget Savings (Omnibus) Act 2016.
The family tax benefit Part B supplement will also be phased out. It will be reduced
to $302.95 a year from 1 July 2016, and to $153.30 a year from 1 July 2017. It will
then be withdrawn from 1 July 2018.
Background
Starting in 2016-17, the end-of-year family tax benefit Part A and family tax benefit
Part B supplements will be phased out. These amounts will not be available from
1 July 2018.
The family tax benefit Part A and Part B supplements are components of the rate of
family tax benefit, and are added into the rate after the end of the relevant income
year when certain conditions are satisfied and FTB is reconciled. This means that
an individual's supplements for any given income year cannot be paid until after the
end of that income year. Therefore, while the supplements are being reduced in the
2016-17 income year, there is no practical effect on payment of the supplement until
after 1 July 2017.
Explanation of the changes
Part 1 - Amendments commencing 1 July 2016
Amendments to the Family Assistance Act
For 2016-17, the end-of-year family tax benefit Part A and family tax benefit Part B
supplements will be reduced.
Clause 31A of Schedule 1 to the Family Assistance Act provides for the calculation
of the FTB Part B supplement (referred to in clause 31A as the FTB (B) gross
supplement amount). Item 1 repeals subclauses 31A(2) and (3) and substitutes a
new subclause 31A(2), which resets the FTB (B) gross supplement amount to
$302.95.
Clause 38A of Schedule 1 provides for the calculation of the family tax benefit Part A
supplement (referred to in clause 38A as the FTB gross supplement amount),
which is a per-child amount. Item 2 repeals subclauses 38A(3) and (4)
and substitutes a new subclause 38A(3), which resets the FTB gross supplement
amount to $602.25.
17
Schedule 3 - Family tax benefit supplements
The FTB gross supplement amount and the FTB (B) gross supplement amount are
usually indexed in accordance with movements in the CPI on 1 July each year
(although indexation of these amounts is currently paused under clause 3(8) of
Schedule 4 to the Family Assistance Act). The amendments made by items 3 and 4
ensure that these amounts are no longer subject to indexation.
Item 5 repeals a spent indexation provision.
Item 6 is an application provision. It provides that the amendments made by Part 1
of this Schedule apply in working out the rate of family tax benefit for days on or after
commencement (1 July 2016).
Part 2 - Amendments commencing 1 July 2017
Amendments to the Family Assistance Act
For 2017-18, the end-of-year family tax benefit Part A and family tax benefit Part B
supplements will be further reduced.
Item 7 repeals subclause 31A(2) of Schedule 1 and substitutes a new
subclause 31A(2), which resets the FTB (B) gross supplement amount to $153.30.
Item 8 repeals subclause 38A(3) and substitutes a new subclause 38A(3), which
resets the FTB gross supplement amount to $302.95.
Item 9 is an application provision. It provides that the amendments made by Part 2
of this Schedule apply in working out the rate of family tax benefit for days on or after
commencement (1 July 2017).
Part 3 - Amendments commencing 1 July 2018
Amendments to the Family Assistance Act
From 1 July 2018, the end-of-year family tax benefit Part A and family tax benefit
Part B supplements will no longer be available.
Division 2A of Part 4 of Schedule 1 to the Family Assistance Act provides for the rate
of the family tax benefit Part B supplement. Item 21 repeals this Division.
Division 2A of Part 5 of Schedule 1 to the Family Assistance Act provides for the rate
of the family tax benefit Part A supplement. Item 22 repeals this Division.
The method statements in clauses 3 and 25 of Schedule 1 set out the steps to be
taken in working out an individual's Part A rate where method 1 and method 2 apply
respectively. Items 14 and 17 remove the paragraphs in these method statements
which provide for the family tax benefit Part A supplement to be included in the rate.
18
Schedule 3 - Family tax benefit supplements
Clauses 29 and 29A of Schedule 1 provide rules for calculating an individual's Part B
rate. Items 18 to 20 amend these clauses to remove paragraphs which provide for
the family tax benefit Part B supplement to be included in the rate.
An individual's supplement amount (defined by reference to the family tax benefit
Part A supplement) is relevant in working out an individual's maintenance income
ceiling for certain purposes. The relevant provisions are clauses 24N and 24R of
Schedule 1 to the Family Assistance Act. Items 15 and 16 make consequential
amendments to these provisions to reflect the repeal of the family tax benefit Part A
supplement.
Under the current rules, payment of the family tax benefit Part A supplement is linked
to the health check and immunisation requirements through sections 61A and 61B of
the Family Assistance Act. Item 13 repeals these sections, while items 10 to 12
make other necessary consequential amendments.
Amendments to the Family Assistance Administration Act
Section 32A of the Family Assistance Administration Act currently ensures that the
family tax benefit supplements are disregarded in calculating an individual's rate of
family tax benefit unless and until the relevant family tax benefit reconciliation
conditions are satisfied. Section 105A then requires that the Secretary review an
individual's rate under section 105 where the family tax benefit reconciliation
conditions are satisfied so as to include the supplements in the rate. As a
consequence of the repeal of the family tax benefit supplements, item 23 repeals
section 32A, while item 26 repeals section 105A.
However, the family tax benefit reconciliation conditions are also relevant for other
purposes (such as the maintenance income test) and are therefore retained.
Item 24 makes some technical adjustments to the wording of section 32B so that the
family tax benefit reconciliation conditions can continue to operate.
Item 25 makes a consequential amendment to the definition of adjusted Part A rate
in subsection 35D(4) to remove a reference to the repealed clause 38A of
Schedule 1 to the Family Assistance Act.
Items 27 to 34 make consequential amendments to various review provisions, which
refer to provisions that are being repealed.
Item 35 is an application provision. It provides that the amendments made by Part 3
of this Schedule apply in working out the rate of family tax benefit for days on or after
commencement (1 July 2018).
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Schedule 3 - Family tax benefit supplements
Part 4 - Other amendments
Amendment to the Social Services Legislation Amendment (Family Assistance
Alignment and Other Measures) Act 2016
Item 36 makes a technical amendment to the commencement table in the Social
Services Legislation Amendment (Family Assistance Alignment and Other
Measures) Act 2016 so that amendments in that Act that are contingent upon
passage of amendments to phase out the family tax benefit Part A and B
supplements commence on 1 July 2018. This is the date from which the family tax
benefit supplements will not be available (Part 3 of this Schedule refers).
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Schedule 4 - Jobs for families child care package
Overview of the Schedule
The purpose of this Schedule is to introduce key aspects of the Jobs for Families
Child Care Package, as announced in the 2015-16 Budget.
In the 2016-17 Budget, it was announced that the commencement of the main
amendments in the Schedule would be delayed until July 2018.
The Schedule will, through the introduction of a new Child Care Subsidy (CCS), and
enhancements to the operating requirements of approved child care providers,
deliver a simpler, more affordable, more flexible and more accessible child care
system for families. The new measures improve access to quality early education
and care, support parents as they balance work and family responsibilities, and
enable greater engagement with the workforce.
Recognising the needs of vulnerable and disadvantaged families, and the benefits
that quality child care and a positive early learning environment can have on
children's early development, this Schedule also introduces the Additional Child Care
Subsidy (ACCS). ACCS will provide improved and targeted support to those families
who require it most, such as: families with children at risk of serious abuse or neglect
(though "ACCS (child wellbeing)"); families experiencing temporary financial
hardship (through "ACCS (temporary financial hardship)"); families on income
support transitioning to work (through "ACCS (temporary financial hardship)"); and
grandparent carers on income support (through "ACCS (grandparent)").
The Schedule comprises four Parts.
Part 1--Main Amendments
Amendments to the A New Tax System (Family Assistance) Act 1999 will improve
the affordability, accessibility and flexibility of child care for families, particularly
through:
Establishing eligibility criteria, and the payment calculation process, for a new
simpler child care subsidy, the CCS. The CCS will replace the current poorly
targeted child care payments (including Child Care Benefit (CCB) and Child
Care Rebate (CCR)) with the objective of supporting parents who want to
work or work more.
Establishing eligibility for ACCS elements of the Child Care Safety Net which
will improve accessibility to child care for disadvantaged or vulnerable
families.
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Amendments to the A New Tax System (Family Assistance) (Administration)
Act 1999 set out further payment and claim rules, as well as rules dealing with:
reconciliation of payments following a financial year; debt recovery; compliance
powers and other machinery provisions.
Part 2--Consequential amendments
This Part contains provisions to ensure that related legislation such as the A New
Tax System (Goods and Services Tax) Act 1999, the Fringe Benefits Assessment
Act 1986 and the Income Tax Assessment Act 1997 align with the changes to family
assistance law through minor consequential amendments.
Part 3--Other amendments
This Part contains amendments that commence on Royal Assent (Division 1) or from
1 July 2017 (Division 2). Among other matters, the Part enables the Secretary to
treat certain new applications for approval as not having been made and to reassess
whether existing operators and their services continue to meet conditions of the
approval at any time from Royal Assent. Part 3 also closes enrolment advance
payments and allows for their recovery from 1 July 2017.
Part 4--Application, saving and transitional amendments
This Part contains provisions relating to: the cessation of eligibility for CCB and CCR
and the transition to the CCS and ACCS payment system; the saving of certain laws
in relation to CCB and CCR (to ensure, for example, that debts and reviews can
continue to be dealt with); and transitional provisions to enable existing claimants
and recipients to be eligible for CCS and for existing approved services to transition
to the CCS system from 2 July 2018.
Part 1--Main Amendments
Summary
Part 1 contains the main amendments of this Schedule, which are effective to:
cease CCB and CCR;
introduce, from 2 July 2018, a new CCS, which is subject to both an income
and activity test;
introduce various rates of ACCS that are available to individuals (and in one
case, child care providers) in various circumstances; and
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make other amendments to deal with CCS and ACCS claims, reviews of
decisions, provider approvals and compliance obligations of approved
providers of child care services.
Background
Prior to the amendments proposed by this Part, the Family Assistance Act provided
the eligibility criteria and method for calculating rates for the CCB and the CCR. The
Family Assistance Administration Act provides for procedural matters relating to
these payments, such as making claims, determinations of entitlement, how payment
is made, recovery of overpayments and review of decisions. It also provides for a
process for operators of child care services to be approved so that individuals can be
eligible for child care payments for care they provide and places obligations on
approved child care services, including to accurately report enrolments and
attendance of children for a session of care.
In the 2015-16 Budget, the Australian Government announced a package of
measures to simplify and strengthen the child care system and to ensure greater
incentives for parents to work. This included replacing existing child care payments
with a new payment, the CCS.
The Child Care Safety Net will provide additional targeted assistance to genuinely
disadvantaged or vulnerable families. One of the components of the Child Care
Safety Net is ACCS, which provides additional assistance:
in relation to children at risk of serious abuse or neglect (through the
ACCS (child wellbeing) payment);
to individuals experiencing temporary financial hardship;
to individuals on income support who are transitioning to work; and
grandparent carers on income support.
This Part amends the Family Assistance Act and the Family Assistance
Administration Act to replace CCB and CCR with CCS and ACCS. It also replaces
the current approval process for child care services with a more streamlined process
that more clearly distinguishes between the approved provider and the services they
operate, consistent with the approach taken in the National Law.
The amendments made by this Part commence on 2 July 2018 (noting that other
Parts of this Schedule commence earlier).
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Explanation of the changes
Amendments to the Family Assistance Act
Definitions
Items 1, 3, 10, 12, 16, 19, 21, 25 and 26 repeal definitions relating to CCB and CCR
that are not needed for CCS and ACCS.
Items 2, 4, 7, 9, 13, 15, 18, 20 and 22 insert new definitions of key terms, which will
be used in provisions relating to CCS and ACCS.
Items 5, 6, 17, 24 and 26 amend various definitions by substituting references to
CCB and CCR with references to CCS and ACCS.
Item 6 removes reference to subsections 24(4) and (6) from the definition of "FTB
child" for child care purposes.
The previous reference to subsections 24(4) and (6) in the definition of FTB child for
child care purposes was intended to ensure that an individual's maximum period of
eligibility for CCB when an individual is absent from Australia aligned with an
individual's maximum period of eligibility for FTB. This outcome is now achieved
through a new provision proposed for the Family Assistance Act (section 85EE
inserted by item 40), which specifies a maximum period of eligibility for CCS or
ACCS during an individual's absence from Australia (generally 6 weeks).
The definition of the term "FTB child" for child care purposes otherwise has the same
meaning as for FTB purposes, including by aligning with the meaning in section 22 of
the Family Assistance Act.
Item 8 substitutes the definition of "lower income threshold" to refer to subclause
3(4) of Schedule 2 of the Family Assistance Act and item 23 substitutes the
definition of "upper income threshold" to also refer to that subclause. The new
definitions reflect the income thresholds applicable to CCS, which are different from
the income thresholds that applied to CCB. The lower income threshold is the ATI
point below which an individual is able to receive 85 per cent of the hourly fee cap
(or of the fee charged where is it lower than the hourly fee cap) through CCS--that
percentage tapers to 20 per cent at the upper income threshold. There are also
amendments at items 20 and 22 to refer to the intermediate thresholds "second
income threshold" and "third income threshold" which are the income levels at which
the applicable percentage of CCS tapers from 85 per cent to 50 per cent and from 50
per cent to 20 percent, as described in more detail below in relation to proposed new
clause 3 of Schedule 2 to the Family Assistance Act.
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Items 11, 28 and 29 amend the definition of "paid work" that applies for FTB
purposes. References to paid work in CCB provisions were excluded from the scope
of the definition. The amendments remove references to CCB provisions that are
repealed, and make clear that the definition of "paid work" for CCS purposes is
contained in paragraph 12(2)(a) of Schedule 2 to the Family Assistance Act.
Item 14 makes a consequential amendment to the definition of "receiving". This
paragraph modifies the concept of receiving under the Social Security Act 1991 for
provisions in the Family Assistance Act that use the term "receiving" in relation to a
social security payment. The amendment removes references to CCB provisions
that are repealed, and adds reference to new section 85CJ, which refers to social
security payments (for ACCS (grandparent)).
Reference to new section 85CK, which also refers to social security payments, has
not been included in the definition at paragraph (b) because the modification of the
definition of "receive" for social security purposes is not intended to apply to the
receipt of the income support payments required for eligibility of ACCS (transition to
work)--for ACCS (transition to work), receipt will have the same meaning as in the
social security law. The modification deems an individual to be receiving a social
security payment for a period of 12 weeks from when their rate reduces to nil due to
employment income. If the modification was applied in section 85CK individuals
would have access to two 12 week transition payments (that is, noting the effect of
subsection 85CK(2)) when they start earning employment income, which is not
intended.
Item 27 substitutes subsection 3AA(1) to remove references to CCB provisions that
are repealed and to add in references to CCS provisions.
Immunisation rules
Item 30 substitutes the reference to CCB in subsection 6(1) with a reference to
individual eligibility to CCS in paragraph (a), and provider eligibility to ACCS (child
wellbeing) in paragraph (b). This is so the immunisation requirements in section 6 of
the Family Assistance Act apply for the purposes of determining an individual's
eligibility for CCS, and providers' eligibility for ACCS (child wellbeing).
Various interpretative provisions
Item 31 substitutes the reference to CCB in subsection 8(1) with a reference to CCS.
Section 8 of the Family Assistance Act allows the Secretary to determine that an
individual who is not an Australian resident is taken to be an Australian resident for
CCS purposes, in cases of hardship or other special circumstances.
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For CCB, a determination under section 8 was required to comply with guidelines
determined by the Minister by legislative instrument. Item 32 makes amendments
so any new guidelines can be contained in the Minister's rules (which are intended to
be made as a single compilation), rather than in a separate legislative instrument.
Item 33 repeals sections 10 through to 18 (noting that sections 11 to 18 are no
longer required as they relate purely to CCB and CCR) and substitutes a new
section 10 for CCS purposes.
New section 10 reflects repealed sections 10 and 11, with some modifications to
address an anomaly that existed in repealed section 10 and to clarify the intended
effect of the section.
The basic rule in new subsection 10(1) is that, for family assistance purposes, an
approved child care service does not provide a session of care to a child unless the
child is enrolled for care by the service and the child physically attends the service.
Subsections (2), (3) and (4) specify circumstances in which a child is taken to have
attended a session of care, even where they do not physically attend. There is also
a power for the Minister to specify rules to ensure that there are certain days on
which a child is definitely not to have been taken to have attended during a physical
absence (paragraphs (2)(iv) and (3)(iv)).
Under new paragraph 10(1)(a) an approved child care service is taken to have
provided a session of care to a child if the child attends part of the session of care.
This provision is intended to ensure that where a parent picks their child up early, for
example, but still pays for an entire session of care, they are able to access fee
assistance in relation to their out of pocket expenses for the whole session of care.
New subsections 10(2) and (3) allow a child to be taken to have attended a session
of care in certain circumstances--that is, these provisions allow for certain
absences. Subsection 10(2) deals with when a session of care is taken to have
been provided for up to 42 days in a single financial year (the initial 42 absences)
and subsections 10(3) and (4) deal with the circumstances in which, following the
initial 42 absences, it is still possible for a child to be taken to have attended a
session of care (such as due to illness). The initial 42 absences limit applies per
child. On the day the child does not attend, if CCS or ACCS would not have been
paid even if the child had attended (for example, because the fortnightly limit of
hours had already been reached), the day does not count towards the initial 42
absences limit.
Both subsections 10(2) and (3) require the session of care to occur on a day that is
after the day the child first attended a session of care provided by the service and
before the day the service permanently ceased providing care to the child. This
means the child must have physically attended a session of care at the service
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before subsection 10(2) or 10(3) can be relied on, and absence days under
subsection 10(2) or 10(3) will not be available on and after the day the service
permanently ceased providing care to the child. Subsection 10(5) clarifies that a
service permanently ceases to provide care to a child on the day the child last
physically attends a session of care provided by the service.
Repealed section 11 is no longer relevant as occasional care is not a distinct service
type for CCS. Repealed section 12 is no longer relevant as there will not be
registered carers for CCS.
Repealed section 13 allowed the Secretary to specify a day that would otherwise not
be a school holiday as a school holiday for the purposes of the definition of school
holiday session. The repeal of section 13 is consequential to the repeal of the
definition of "school holiday session" by item 19.
Repealed section 17A provided activity requirements for CCB. The activity
requirements for CCS will be in Part 5 of Schedule 2 of the Family Assistance Act.
Repealed section 18 was only used in relation to the schooling percentage in the
CCB rate calculator. This definition is no longer required as there is no schooling
percentage for CCS.
Eligibility and rate of family assistance
Item 34 amends the heading of Part 3 and item 38 amends the heading of Part 4.
These amendments are consequential to the structural changes made by items 35,
39 and 40.
Item 35 repeals Divisions 4 and 5 of Part 3, which provide eligibility criteria for CCB
and CCR. Item 39 repeals Divisions 4 and 4A of Part 4, which provide for the rate of
CCB and CCR. New Part 4A inserted by item 40 provides for eligibility for and the
rate of CCS and ACCS. This structural change places eligibility and rate provisions
for CCS and ACCS closer together and is intended to simplify the layout of the child
care provisions in the family assistance law.
Items 36 and 37 replace CCB and CCR references in subsection 57GI (note 2) and
section 57GQ with references to CCS and ACCS. The effect of this is that Division 7
of Part 3 of the Family Assistance Act, which provides for loss of family assistance
on security grounds, does not apply to CCS and ACCS.
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New Part 4A - Child care subsidy
Item 40 inserts new Part 4A into the Family Assistance Act. This Part deals with
eligibility for and how to calculate the rate of CCS and ACCS. A simplified outline of
the Part is provided in section 85AA.
Section 85AB provides, without limitation, a statement of the Constitutional basis for
provisions in the family assistance law that deal with child care payments.
Eligibility for CCS
Section 85BA provides when an individual is eligible for CCS for a session of care
provided to a child by an approved child care service.
The definition in section 10 of the Family Assistance Act (as amended by item 33) is
relevant for determining whether a session of care is "provided" to the child (which
can include a day of absence because of that provision).
If the session of care is provided, all the following requirements must be met at the
time the session is provided for the individual to be eligible for CCS for the session:
(i) the child is an FTB child, or regular care child, of the individual, or the
individual's partner;
(ii) the child is 13 years of age or under and does not yet attend secondary
school (that is, the child is not yet at school or attends primary school), or
where the child does not meet this criteria, the child is included in a class
determined by the Minister under rules made for subsection 85BA(2);
(iii) the child meets immunisation requirements (set out in section 6 of the
Family Assistance Act);
(iv) the individual, or the individual's partner, meet the residency requirements
(in new section 85BB).
These key eligibility criteria (as set out in subparagraphs 85BA(1)(i) to (iv)) are the
criteria that the Secretary will assess at the time that an individual makes a claim for
CCS. However further eligibility criteria also apply in relation to particular sessions of
care as below.
In addition, the individual, or the individual's partner, must have incurred a liability to
pay for the session of care under a written arrangement with the provider of the
service, and the session of care must satisfy all the following requirements:
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(i) it is provided in Australia;
(ii) it is not part of a compulsory education programme in the State or
Territory where the care is provided;
(iii) it is not provided in circumstances prescribed in the Minister's rules
(for example, where family day care is provided in a "child-swapping"
arrangement).
Subsection 85BA(2) allows the Minister to make rules to ensure that an individual
can be eligible for CCS in relation to certain prescribed children who are over 13 or
at secondary school. Children prescribed by such rules may face specific
accessibility issues, or be in circumstances of vulnerability, such as due to disability
or in other circumstances where fee assistance for child care is necessary.
Note that new Division 5 in Part 4A provides some limitations on eligibility. An
individual is only eligible for CCS for a session of care provided to a child if the
individual, the child and the session of care meet all the eligibility requirements
described above, and Division 5 does not prevent the individual being eligible.
"FTB child" and "regular care child" are terms defined for FTB that also apply for
CCS purposes (see definitions in s 3(1)).
The immunisation requirements are in section 6 of the Family Assistance Act. They
are the same as the immunisation requirements that apply for FTB.
The residency requirements are in section 85BB. These are the same as the
residency requirements that apply to CCB.
Eligibility for ACCS (child wellbeing)
Subsection 85CA(1) provides when an individual is eligible for ACCS (child
wellbeing) for a session of care provided to a child by an approved child care
service. ACCS (child wellbeing) provides a short term, higher rate of assistance than
CCS in order to reduce the possibility of the cost of child care being a barrier to
children at risk of serious abuse or neglect, from either entering or remaining
engaged with, child care.
For individuals, CCS eligibility is a pre-requisite to ACCS eligibility. This means the
individual must be eligible for CCS for the session of care and meet additional
criteria to be eligible for ACCS (child wellbeing) for the session of care.
The additional criteria for ACCS (child wellbeing) is that a certificate given by the
approved provider of the service (under section 85CB), or a determination made by
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the Secretary (under section 85CE), must be in effect in relation to the child for the
week in which the session of care is provided certifying or determining that the child
is at risk of serious abuse or neglect.
Even if these requirements are met, the limitations in Division 5 may prevent the
individual being eligible for ACCS (child wellbeing).
Subsection 85CA(2) sets out when the approved provider of an approved child care
service is eligible for ACCS (child wellbeing) for a session of care provided to a child.
An approved provider can only be eligible for ACCS (child wellbeing) for a session of
care if the provider cannot identify an individual who is eligible for CCS for the
session of care--this is intended to ensure that provider eligibility is a last resort
measure.
Other requirements which apply for an approved provider to be eligible for ACCS
(child wellbeing) reflect those which apply to individuals:
the child must be 13 or under and not yet attending secondary school
(that is, the child must not yet be at school or be attending primary school)
at the time the session of care is provided, or, where the child does not
meet this criteria, the child is included in a class determined by the
Minister under rules made for subsection 85CA(2);
the child must meet immunisation requirements at the time the session of
care is provided;
the session of care must meet CCS eligibility criteria (the care must be
provided in Australia, but not as part of a State/Territory compulsory
education program and not be provided in circumstances prescribed in the
Minister's rules);
a certificate or a determination, certifying or determining that the child is or
was at risk of serious abuse or neglect, must be in effect in relation to the
child for the week in which the session of care is provided; and
the provider must not be prevented from being eligible under Division 5.
Note, importantly, the requirement for the child to meet immunisation requirements at
the time the session of care is provided will also apply for provider eligibility to
ensure that the "No Jab No Pay" measure, as recently enacted, applies to cases
where a provider is eligible for ACCS (child wellbeing) in its own right.
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Subsection 85CA(4) enables the Minister's rules to prescribe circumstances in
which a child is, or is not taken to be, at risk of serious abuse or neglect.
The power to prescribe these circumstances has been delegated to the Minister to
ensure that there is ability for the law to adapt to changes in the understanding and
definition of "abuse" and "neglect" into the future. The rules will specify the criteria
which must be met in order to certify/determine a child to be at risk of serious abuse
or neglect, and provide guidance to providers to ensure that "child wellbeing"
assistance is targeted to those children who are genuinely at risk of serious abuse or
neglect. The rules are intended to be made after having regard to criteria used by
each State and Territory in relation to vulnerable children.
Section 85CB provides when the approved provider of an approved child care
service can issue a certificate, what it must contain and when it takes effect.
An approved provider can only give a certificate if it considers that a child is at risk of
serious abuse or neglect in accordance with the Minister's rules made for
subsection 85CA(4).
The certificate must:
be given in a form and manner approved by the Secretary;
contain the information, and be accompanied by the documents, required by
the Secretary;
specify the day it takes effect and the weeks for which it has effect;
identify the child and the service to whom it relates; and
include any other matters prescribed by the Secretary's rules.
The day the certificate takes effect must be a Monday that is no earlier than 28 days
before the day it is given (to ensure that certificates are given relatively soon after a
child is actually in circumstances of risk). Each week for which the certificate has
effect must include at least one day when the child is at risk of serious abuse or
neglect.
For each child, certificates given by the approved provider in relation to a particular
service cannot be in effect for more than 6 weeks in any 12 month period.
The approved provider is not able to give a certificate if it would result in more than
50 per cent of the children cared for by the service on any one day (within the first
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week that the certificate would have effect) having a certificate or a Secretary
determination for ACCS (child wellbeing) in effect. A different percentage can be
specified in the Secretary's rules, and in appropriate circumstances the Secretary
can determine a different percentage for a particular service. Subsection (6), which
clarifies that a determination of a different percentage under paragraph (4)(c) is not a
legislative instrument, is merely declaratory and included to assist readers. It is not
an exemption from the Legislation Act 2003.
Subsection (5) enables the Minister's rules to specify other circumstances when a
certificate given by a provider is not effective. This rule making power could be used
to address cases of inappropriate giving of certificates, or if the Minister decides it is
appropriate to limit providers to applying to the Secretary for a determination under
section 85CE.
Certificates issued by approved providers will include "protected Information" as
defined by section 3 of the Family Assistance Administration Act and, as such, that
information will be protected by safeguards offered by those secrecy rules, including
though exposing a person who misuses that information to an offence (e.g. sections
162 through to 168 of the Family Assistance Administration Act).
If an approved provider considers a child to be at risk of serious abuse or neglect
and is unable to give an effective certificate, the provider may apply under
section 85CE for a determination by the Secretary that the child is at risk of serious
abuse or neglect.
Section 85CC requires an approved provider to cancel a certificate they have given
if they no longer consider the child to be at risk during a week for which the
certificate has effect. However, if any of the weeks for which the certificate has
effect is a week for which the time for updating or withdrawing a report under
subsection 204B(6) has expired, the provider cannot cancel the certificate under this
section. Instead, the Secretary will need to take action to cancel or vary the
certificate under section 85CD. The time limit on provider cancellation of certificates
is intended to restrain the extent to which providers can backdate information on
which ACCS entitlement is based without intervention by the Secretary.
Under subsection 85CC(4), where the provider then issues a replacement certificate
on the basis that it now has the correct information to certify that a child was at risk
of serious abuse or neglect, the provider is able to backdate the replacement
certificate to take effect more than 28 days before the replacement certificate is
given but no earlier than the day the original certificate took effect. This has the
intention of not disadvantaging the provider by modifying the general rule of how far
back in time a certificate can take effect.
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Section 85CD allows the Secretary to vary or cancel a certificate given by an
approved provider if the Secretary is not satisfied the child to whom the certificate
relates is at risk of serious abuse or neglect during a week for which the certificate
has effect. Notice of the variation or cancellation must be given to the approved
provider and the variation or cancellation takes effect from the day specified in
notice. In exercising this power, the Secretary may rely on any source of information
available to the Secretary, including, but not limited to, information approved
providers are required to provide under section 67FC of the Family Assistance
Administration Act.
The power to cancel or vary certificates will be delegated to officers with appropriate
seniority.
Section 85CE provides that the Secretary may make a determination that a child is
at risk of serious abuse or neglect on application by an approved provider.
An approved provider can apply for a determination in respect of a child if the
provider considers the child is or was at risk of serious abuse or neglect at the time
care was provided and the provider is unable to give a certificate under
section 85CB. The application must be in the form and manner approved by the
Secretary. It must also contain the information and be accompanied by the
documents required by the Secretary. The provider must have also given notice to
the relevant State or Territory body that they consider the child to be at risk of
serious abuse or neglect prior to seeking a determination by the Secretary.
The Secretary must make a decision on the application within 28 days of receiving
the application, and is required to give notice of the decision in accordance with
subsection 27A(1) of the Administrative Appeals Tribunal 1975 (the AAT Act). The
rationale for the inclusion of a 28 day timeframe is to ensure a timely response to
applications.
Subsection (4) states that if the Secretary does not make a decision, the application
is taken to be refused and the Secretary is not required to give notice of the deemed
refusal. Although, the Secretary will make every effort to deal with applications in a
timely manner, this provision is included to provide certainty to applicants about the
status of their application in the unlikely event that the Secretary does not meet the
obligation in subsection (3), such as due to the application becoming lost in the mail,
or where it is not processed due to administrative oversight. In such circumstances,
where the Secretary has neither made a determination nor refused the application,
the application is taken to be refused so that there is a clear and effective outcome
for an applicant. Despite subsection 27A(1) of the AAT Act providing that a person
who makes a reviewable decision must take reasonable steps to give to an affected
person a written notice of the decision and of their review rights, it would not be
appropriate to do so in this circumstance. This is because of the practical reality that
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any deemed refusals are likely to occur without the Secretary's actual and active
knowledge. In situations where a deemed refusal has occurred, the applicant will
have full access to review rights (both merits review through internal review and
subsequently through the Administrative Appeals Tribunal, and judicial review). For
example, the applicant may contact the Department to ask about the progress of
their application, and the Secretary would be able to initiate an own motion review of
the refusal decision. Alternatively, the person may make a formal application for an
internal review of the refusal decision. In addition, there will also be nothing to
prevent an applicant whose application is deemed to be refused from making a new
application.
If the Secretary decides to determine the child to be at risk of serious abuse or
neglect, the determination must specify the date it takes effect, which must be a
Monday not more than 28 days before the date the application was made. The
determination must also specify the weeks for which it is in effect. While a
determination is in effect under this section, if the Secretary is satisfied the child will
continue to be at risk of serious abuse or neglect after the determination ceases to
have effect, the Secretary can make another determination to take effect
immediately after the current determination ceases. Each determination cannot be
in effect for more than 13 weeks. Notice of the determination must be given to any
person affected by the determination.
Subsection (7) clarifies that a determination under this section is not a legislative
instrument. It is merely declaratory and included to assist readers. It is not an
exemption from the Legislation Act 2003.
If the Secretary refuses an application under this section, the Secretary must give
the provider and any other affected person notice of the decision. The refusal is a
reviewable decision.
Section 85CF allows the Secretary to vary or revoke a determination if the Secretary
is no longer satisfied the child to whom the determination relates is at risk of serious
abuse or neglect for a week when the determination has effect. The variation or
revocation takes effect from the day specified in the notice of revocation or variation.
The Secretary must give the provider and any other affected person notice of the
decision.
Eligibility for ACCS (temporary financial hardship)
Subsection 85CG(1) provides for when an individual is eligible for ACCS (temporary
financial hardship) for a session of care provided to a child by an approved child care
service. ACCS (temporary financial hardship) provides a higher hourly rate of
assistance than CCS in order to reduce the possibility that children, who are already
engaged in mainstream child care, do not reduce or withdraw from child care due to
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the costs involved, only because an exceptional circumstance or event has
compromised a family's short-term financial situation.
CCS eligibility is a prerequisite to ACCS eligibility. This means the individual must
be eligible for CCS for the session of care and meet additional criteria to be eligible
for ACCS (temporary financial hardship) for the session of care.
The additional requirement for ACCS (temporary financial hardship) is that a
determination of temporary financial hardship must be in effect in relation to the child
when the session of care is provided.
Even if these requirements are met, the limitations in Division 5 may prevent the
individual being eligible for ACCS (temporary financial hardship).
Subsection 85CG(2) enables the Minister's rules to prescribe circumstances in
which an individual is taken to be experiencing temporary financial hardship. The
power to prescribe these circumstances has been delegated to the Minister to
ensure there is an ability for the law to adapt to unforeseen circumstances (such as
certain natural disasters).
Section 85CH provides that the Secretary may make a determination of temporary
financial hardship in relation to a child on application by an individual.
The Secretary may make such a determination on his or her own initiative, including
on a class basis, or in response to applications.
Where an individual makes an application for a determination under this section, the
application must be in a form and manner approved by the Secretary. It must
contain the information, and be accompanied by the documents, required by the
Secretary. The Secretary must make a decision on the application within 28 days of
receiving the application.
If the Secretary makes a temporary financial hardship determination, it must take
effect on a Monday not more than 28 days before the date the application was made,
or 28 days before the determination where there was no application, and must be in
effect for a whole number of weeks. The number of weeks the determination is in
effect cannot exceed 13, reflecting that this assistance is intended to be short-term in
nature. A state of temporary financial hardship cannot be determined in relation to
more than 13 weeks for a particular reason.
Subsection (8) clarifies that a determination under this section is not a legislative
instrument. It is merely declaratory and included to assist readers. It is not an
exemption from the Legislation Act 2003.
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If the Secretary refuses an application under this section, the Secretary must give
the individual and any other affected person notice of the decision. The refusal is a
reviewable decision.
If the Secretary does not to make a decision within 28 days of receiving the
application, the Secretary is deemed to have refused the application under
subsection 85CH(5). This provision has been included for the same reasons as
described above in relation to deemed refusals under subsection 85CE(4). It is not
intended to be relied on in the vast majority of circumstances and is included simply
to ensure that the status of an application, in the unusual circumstance where it has
not been dealt with in time, is clear. The Secretary will make every effort to deal with
applications in a timely fashion. A deemed refusal is reviewable, but the Secretary is
not required to give notice of the deemed refusal in view of the fact that deemed
refusals are likely to occur where the Secretary is not aware of the application.
Where an application is deemed to be refused under subsection 85CH(5), there is no
restriction to an individual making a new application.
Section 85CI allows the Secretary to vary or revoke a temporary financial hardship
determination if the Secretary is no longer satisfied the individual concerned is or
was experiencing temporary financial hardship for a week when the determination
has effect. The variation or revocation takes effect from the day specified in the
notice of variation or revocation. The Secretary must give the notice to the individual
concerned and any other affected person.
Eligibility for ACCS (grandparent)
Section 85CJ provides for when an individual is eligible for ACCS (grandparent) for
a session of care provided to a child by an approved child care service. ACCS
(grandparent) provides a higher hourly rate of assistance than CCS for eligible
grandparents in order to reduce the possibility of the cost of mainstream child care
being a barrier to a child in their care from either entering or remaining engaged with,
child care.
CCS eligibility is a pre-requisite to ACCS eligibility. This means a grandparent (or
great-grandparent) must be eligible for CCS for the session of care and meet
additional criteria to be eligible for ACCS (grandparent) for the session of care.
The additional criteria for ACCS (grandparent) include that: the individual or their
partner is a grandparent or great-grandparent of the child; at the start of the CCS
fortnight in which the session of care is provided, they are the primary carer for their
grandchild (that is, they must be responsible for 65% or greater of the child's care);
and the individual or their partner is receiving an income support payment as listed in
paragraph 85CJ(1)(d). Note that the term "receive" for this purpose is defined in
section 3 of the Family Assistance Act and has a specific meaning by reference to
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the social security law (generally to include periods of an income support rate above
nil).
Subsection (3) requires adoptive and step parent relationships to be treated as
biological relationships when determining whether an individual is a grandparent or
great-grandparent of a child. Subsection (4) defines the terms adoptive parent and
step-parent used in subsection (3).
Even if these requirements are met, the limitations in Division 5 may prevent the
individual being eligible for ACCS (grandparent).
Eligibility for ACCS (transition to work)
Section 85CK provides when an individual is eligible for ACCS (transition to work)
for a session of care provided to a child by an approved child care service. ACCS
(transition to work) provides a higher rate of assistance than CCS and is intended to
support families to meet the costs of child care where an eligible parent is
undertaking approved work, training or study activities that will support an increased
workforce engagement.
CCS eligibility is a pre-requisite to ACCS eligibility. This means the individual must
be eligible for CCS for the session of care and meet additional criteria to be eligible
for ACCS (transition to work) for the session of care.
The additional requirements for ACCS (transition to work) include that, at the start of
the CCS fortnight in which the session of care is provided, the individual is receiving
a transition to work payment (as set out in subsection (3)) and meets any other
requirements specified in the Minister's rules. It is intended to be open to Minister's
rules to set out other eligibility matters including, for example, an income test or to
clarify the relationship between subsection 85CK(2) eligibility with eligibility under
subsection 85CK(1). It would be open to rules to state that eligibility under
subsection (2) only follows directly from a period of eligibility under subsection (1),
for instance.
Except where the transition to work payment is a payment prescribed in the
Minister's rules, the individual is required to also have an employment pathway plan
or a participation plan in effect at the start of the CCS fortnight in which the session
of care is provided.
When the individual stops receiving a transition to work payment, the individual
continues to be eligible for ACCS (transition to work) for all sessions of care for
which the individual is eligible for CCS that are provided in the period of 12 weeks
from the start of the CCS fortnight after the CCS fortnight in which the individual
stops receiving the transition to work payment.
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Even if these requirements are met, the limitations in Division 5 may prevent the
individual being eligible for ACCS (transition to work).
Eligibility in substitution for a deceased person
Section 85DA applies when an individual dies in circumstances where an amount of
CCS or ACCS for which the individual was eligible has not been paid. In those
circumstances, another individual can become eligible in substitution for the
individual who has died, if the other individual makes a claim in accordance with Part
3A of the Family Assistance Administration Act, and the Secretary considers the
other individual ought to be eligible for the unpaid amount. Only unpaid amounts
relating to sessions of care provided after the start of the income year before the
income year in which the individual died can be paid in substitution to another
individual.
Example: if David dies on 31 July 2019 (i.e. in the 2019-20 income year), only
unpaid amounts relating to sessions of care provided on or after 1 July 2018 can be
paid in substitution to Yasmin, and only if she meets the requirements under section
85DA and claim rules in new Part 3A of the Family Assistance Administration Act.
Because most amounts will have already been paid to David for the 2018-19 income
year, Yasmin can only be paid any further owing amounts (including any amount that
might be owing as part of the reconciliation process for the 2018-19 income year).
Limitations on eligibility for CCS and ACCS
Section 85EA prevents more than one individual being eligible for CCS for the same
session of care (for instance, two parents of the same child). A reason why more
than one individual can become eligible relates to the eligibility criterion in paragraph
85BA(1)(b) which allows either an individual, or the individual's partner to incur a
liability for child care fees for eligibility of the individual. If more than one individual
meets the eligibility criteria for CCS for a session of care, the individual determined in
writing by the Secretary under subsection 85EA(2) will be the eligible individual. This
section reflects repealed section 48, which applied for CCB. Note that the Secretary
will still have the power to make determinations even if the Minister chooses not to
make rules.
As eligibility for CCS is a pre-requisite for an individual to be eligible for ACCS, this
section also prevents more than one individual being eligible for ACCS for the same
session of care.
Subsection (3) clarifies that a determination under subsection (2) is not a legislative
instrument. It is merely declaratory and included to assist readers. It is not an
exemption from the Legislation Act 2003.
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Section 85EB prevents an individual being eligible for more than one type of ACCS
for the same session of care.
The section establishes the following order of hierarchy:
1. ACCS (child wellbeing);
2. ACCS (grandparent);
3. ACCS (temporary financial hardship);
4. ACCS (transition to work).
Note that ACCS (transition to work) does not need to be listed in the operative
provisions in the legislation, as only the ACCS types that can take priority over
another need to be listed to produce the hierarchy set out above.
Where an individual is eligible for more than one type of ACCS for a session of care,
the type of ACCS higher up in the hierarchy takes precedence.
Example: if Odetta is eligible for ACCS (child wellbeing) and also eligible for ACCS
(temporary financial hardship) for a session of care, she is taken to be eligible for
ACCS (child wellbeing) and not eligible for ACCS (temporary financial hardship) for
that session of care.
Section 85EC prevents more than one individual being eligible in substitution for the
same unpaid amount under section 85DA when an individual dies.
Section 85ED prevents CCS and ACCS eligibility for a session of care provided to a
child who is under the care of a person (other than a foster parent) under a State or
Territory child welfare law. The purpose of this is to ensure that the Commonwealth
does not financially support care that is financed by another level of government.
It also prevents CCS and ACCS eligibility for a session of care provided to a child
who is a member of a class prescribed by the Minister's rules. This section reflects
repealed section 49, which applied for CCB. The rules will allow the Minister to
prescribe "State/Territory welfare laws" for the purposes of this provision, however, if
rules are not made, any State or Territory law that relates to the welfare of children
will be taken to be a "State/Territory welfare law" for the purposes of subsection (1).
Section 85EE limits the period for which an individual can be eligible for CCS or
ACCS while they are overseas and details the circumstances in which the Secretary
may extend the period. This mirrors the effect of recent amendments to the
portability period for family tax benefit and reduces, from 56 weeks to six weeks, the
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period during which CCS payments can be paid to an individual who is outside
Australia in relation to sessions of care provided during their absence.
The effect of an individual not returning to Australia by the end of the portability
period is that the individual ceases to become eligible for CCS for any sessions of
care that were provided after the portability period ended. The short return rules will
continue to apply such that the portability period will not be reset if, where an
individual returns to Australia after the end of their portability period, remains in
Australia for less than six weeks and then leaves again. In other words, if the
individual returns to Australia after the end of the six week period and then leaves
Australia again less than six weeks later, the individual will not be eligible for CCS
during the length of that subsequent absence (even if that absence is less than six
weeks) as it is effectively treated as a continuation of the initial absence (see
subsection 85EE(2)).
Where the individual returns after six weeks, or such longer period as extended, the
Secretary may make a determination under new subsection 67CC(2) of the Family
Assistance Administration Act that the individual's eligibility for future CCS payments
has ceased. In this case, the individual would be required to make a new claim for
CCS. If the Secretary does not make a determination under subsection 67CC(2) of
the Family Assistance Administration Act, the Secretary may require the individual to
again confirm necessary details that were provided at the time of claim, using the
power to require more information from the individual about present and future
eligibility in section 67FI of the Family Assistance Administration Act.
The capacity for the Secretary to extend the portability period will remain under
subsections 85EE(3) to (6) (although modified, to take account of the reduced
portability period). This maintains the capacity to extend the six week portability in
certain circumstances (for example, where an individual cannot return to Australia
because they have been hospitalised or in the case of an individual who is deployed
overseas as a member of the Defence Force).
Division 6--Amount of CCS and ACCS
Section 85FA requires an individual's amount of CCS for a week to be worked out
under Part 1 of Schedule 2 of the Family Assistance Act (which contains a detailed
rate calculator).
Sections 85FB and 85FC require an individual's amount of ACCS for a week to be
worked out under Part 2 of Schedule 2 for sessions of care for which the individual is
eligible for ACCS (child wellbeing), ACCS (temporary financial hardship) or ACCS
(grandparent) and Part 3 of Schedule 2 for sessions of care for which the individual
is eligible for ACCS (transition to work).
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Section 85FD requires a provider's amount of ACCS (child wellbeing) for a week for
a child to be worked out under Part 4 of Schedule 2.
Division 7--Miscellaneous
Section 85GA provides legislative authority for Commonwealth grants for purposes
related to child care, where the expenditure is consistent with the constitutional
heads of power listed in paragraph (1)(b).
This provision is intended to ensure that future child care funding programmes will
have requisite legislative authority in view of the High Court of Australia's decision in
Williams v Commonwealth of Australia (2012) 248 CLR 156.
Section 85GB enables the Minister to make the Minister's rules and enables the
Secretary to make the Secretary's rules by legislative instrument (including, in
particular, in relation to provisions that expressly empower "rules" to be made by the
Minister or the Secretary).
New Schedule 2 - Amounts of CCS and ACCS
Item 41 repeals and substitutes Schedule 2 of the Family Assistance Act. Repealed
Schedule 2 contained the rate calculator for CCB. New Schedule 2 is the rate
calculator for CCS and ACCS.
Calculations are based on weeks in a CCS fortnight, to accommodate the activity
test which applies to activity or circumstances across a fortnight (but payments can
be made weekly).
A CCS fortnight is defined in subsection 3(1) of the Family Assistance Act as the
two week period beginning on Monday 2 July 2018 and each subsequent two week
period. CCS fortnights are fixed for everyone, with the first CCS fortnight being
2 July 2018 to 15 July 2018.
For CCS and ACCS, a week is defined in subsection 3(1) of the Family Assistance
Act to always commence on a Monday to ensure consistency in payment
administration and attendance reporting. The term "week" was defined in the same
way for CCB purposes.
Part 1--Amount of CCS
Clause 1 contains a method statement for calculating an individual's amount of CCS
for a week for sessions of care provided by an approved child care service to a child.
The rate is calculated per week per child per service.
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This means that if the child is attending two services, there will be two applications of
the rate calculator, one for sessions of care provided by the first service and one for
sessions of care provided by the second service. It is open to the Secretary to
calculate amounts in the order in which the services submit attendance reports under
section 204B of the Family Assistance Administration Act, unless an "election" as
referred to in clause 4, applies to allow another approach to calculation in
accordance with the election.
The method statement contains the following steps:
1. work out the individual's activity test result in relation to the child for the CCS
fortnight in which the week occurs;
2. if the annual cap applies, work out whether the annual cap has been reached;
3. identify all sessions of care provided by the service in the week to the child for
which the individual is eligible for CCS;
4. work out the hourly rate of CCS for each session of care;
5. work out the activity-tested amount of CCS for the sessions of care;
6. if the annual cap applies, adjust the activity-tested amount for the annual cap.
Each step is explained in more detail below.
Step 1:
The activity test result is the maximum number of hours of CCS the individual and
their partner (if any) can be paid in a CCS fortnight for a child. This will usually
depend on the amount of activity the individual and their partner (if any) engage in
during the CCS fortnight. There are some exceptions explained below under "Part 5
- Activity Test". If the activity test result is zero, the individual's CCS amount for the
week is nil, and the other steps in the method statement need not be applied. If the
activity test result is more than zero, the calculation proceeds to step 2.
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Step 2:
The annual cap ($10,000, as indexed) is the maximum amount of CCS an individual
and their partner can receive for a child for CCS fortnights starting in the income year
if their combined adjusted taxable income (ATI) for the income year is greater than
the annual cap threshold (see subclauses 1(2) and (3)). For the 2018-19 income
year the annual cap threshold is $185,710. The threshold, like the cap itself, is
subject to annual indexation.
If the combined ATI is at or below the annual cap threshold, there is no annual cap
and the calculation proceeds to step 3.
If the annual cap applies (i.e. combined ATI is greater than the annual cap
threshold), the calculation only proceeds to step 3 if the annual cap has not already
been reached in the income year. If the annual cap for the income year has been
reached, the individual's CCS amount for the week is nil, and the other steps in the
method statement are not applied.
Step 3:
The relevant sessions of care are identified by applying the eligibility criteria in
section 85BA to each session of care provided to the child by the service.
Step 4:
The hourly rate for each session of care identified in step 3 is determined by
applying clause 2. The hourly rate is the applicable percentage multiplied by the
lower of the hourly session fee and the CCS hourly rate cap.
The applicable percentage is worked out under clause 3 based on the combined
ATI of the individual and the individual's partner in the income year in which the CCS
fortnight starts. If the combined ATI is at or below the lower income threshold
(initially set at $65,710 prior to indexation), the applicable percentage is 85%. If the
combined ATI is above the lower income threshold but below the second income
threshold (of $170,710), the applicable percentage tapers from 85% to 50%, using
the formula at subclause (2). If the combined ATI is at or above the second income
threshold (of $170,710), but below the third income threshold (of $250,000) the
applicable percentage is 50%. If the combined ATI is above the third income
threshold (of $250,000) and below the upper income threshold (of $340,000), the
applicable percentage is calculated using the formula in subclause 3(3), which tapers
the applicable percentage down from 50% to 20%. Finally, if the combined ATI is
equal to or above the upper income threshold (of $340,000), the applicable
percentage is 20%. The effect of the formulas at subclauses (2) and (3) is to reduce
the applicable percentage at a rate of 1 percentage point for every $3000 to ensure a
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consistent and graduated taper. Subclause (4) defines the various thresholds by
reference to a dollar figure above the lower income threshold of $65,710. This
means that the indexation of the lower income threshold against the consumer price
index will result in the higher threshold points shifting by the same amount.
For weekly payment decisions prior to a reconciliation process, the applicable
percentage will be based on an estimate of ATI.
The hourly session fee is defined in subclause 2(2) as the amount the individual or
the individual's partner is liable to pay for the session of care, divided by the number
of hours in the session, and reduced by the hourly rate of any other subsidy from
which the individual benefits in respect of the session (e.g. subsidy provided by a
State or Territory).
The CCS hourly rate cap depends on the type of service providing the session of
care (see subclause 2(3)). The CCS hourly rate caps are:
$11.55 for care provided by a centre-based day care service;
$10.70 for care provided by a family day care service;
$10.10 for care provided by an outside school hours care service;
the rate prescribed by the Minister's rules for care provided by a service type
prescribed in the Minister's rules.
Note that these amounts are subject to indexation, as dealt with in Schedule 4, Part
4, item 254, to this Bill.
The ability to prescribe service types in the Minister's rules provides flexibility to add
more service types in the future (including to adapt to changes in the child care
sector) without amendments to the family assistance law.
Step 5:
To determine the activity tested amount under clause 4, for each session of care
identified in step 3, the hourly rate is multiplied by the number of hours in the session
of care that is counted for CCS purposes and the results for all sessions of care
identified in step 3 are added together.
The number of hours in a session of care that is counted for CCS purposes is the
lowest of the following amounts:
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the number of hours in the session of care;
the balance of the activity test result worked out under subclause 4(2);
if the Secretary is satisfied it is appropriate to have regard to an election under
subclause 4(3), the number determined in accordance with the election.
The balance of the activity test result, in relation to a particular session of care, is the
activity test result worked out in step 1 reduced by:
the number of hours (if any) in the CCS fortnight for which the individual is
entitled to be paid CCS or ACCS in respect of the child;
if the individual is a member of a couple on each day in the CCS fortnight, the
number of hours (if any) in the CCS fortnight for which the individual's partner
is entitled to be paid CCS or ACCS in respect of the child; and
the number of hours in any earlier sessions of care identified in step 3.
This clause ensures that the number of hours for which the individual and their
partner are paid do not exceed the activity test result.
The election made under subclause 4(3) is intended to apply where a child attends
more than one service. The election enables individuals to nominate the proportion
of their subsidy that should be paid to each service. An election must be made in a
form and manner approved by the Secretary.
Step 6:
If the annual cap applies to the individual, and the activity tested amount when
added to the "total previous CCS" (as set out in subclause (3)) exceeds the annual
cap, the activity tested amount is adjusted so the activity tested amount, when added
to the total previous CCS, equals the annual cap. This essentially ensures that an
individual who is subject to the annual cap is only paid CCS up to that cap. The total
previous CCS is the sum of the amount of CCS the individual is entitled to receive for
the child for CCS fortnights starting in the income year and the amount of CCS the
individual's partner is entitled to receive for the child for CCS fortnights starting in the
income year.
In determining whether the annual cap is reached in Steps 2 and 6, if the individual
becomes a member of a couple or separates during the income year in which the
CCS fortnight starts, entitlement of the individual's partner is not taken into account.
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Part 2--Amount of ACCS (child wellbeing), ACCS (temporary financial hardship) or
ACCS (grandparent) for an individual
Clause 5 sets out the method for calculating an individual's amount of ACCS (child
wellbeing), ACCS (temporary financial hardship) or ACCS (grandparent) for a week
for sessions of care provided by an approved child care service to a child. The rate
is calculated per week per child per service.
The method requires applying the CCS rate calculator in Part 1 with some
modifications:
references to CCS in Part 1 are read as reference to the relevant type of
ACCS, except in subclause 4(2);
parts of the CCS rate calculator relating to the annual cap are not applied as
the annual cap does not apply to amounts of ACCS;
the hourly rate is worked out under clause 6 instead of clause 2.
These modifications mean that in applying the method statement, the relevant
eligibility criteria in section 85CA, 85CG or 85CJ are used to identify the relevant
sessions of care in step 3 of the method statement.
In calculating the hourly rate under clause 6 there are two differences compared to
clause 2:
100% is used instead of the applicable percentage;
the ACCS hourly rate cap, which is 120% of the CCS hourly rate cap, is used
instead of the CCS hourly rate cap.
Paragraph 6(2)(b) enables the ACCS hourly rate cap to be increased in the
Secretary's rules.
In exceptional circumstances the Secretary can specify a higher ACCS hourly rate
cap for a particular individual in a determination under paragraph 6(2)(c).
Subclause 6(3) clarifies that a determination under paragraph (2)(c) is not a
legislative instrument. It is merely declaratory and included to assist readers. It is
not an exemption from the Legislation Act 2003.
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Part 3--Amount of ACCS (transition to work)
Clause 7 sets out the method for calculating an individual's amount of ACCS
(transition to work) for a week for sessions of care provided by an approved child
care service to a child. The rate is calculated per week per child per service.
The method requires applying the CCS rate calculator in Part 1 with some
modifications:
references to CCS in Part 1 are read as reference to ACCS (transition to
work), except in subclause 4(2);
parts of the CCS rate calculator relating to the annual cap are not applied as
the annual cap does not apply to amounts of ACCS;
95% is used instead of the applicable percentage to work out the hourly rate.
These modifications mean that in applying the method statement, the eligibility
criteria in section 85CK is used to identify the relevant sessions of care in step 3 of
the method statement.
Part 4--Amount of ACCS (child wellbeing) for an approved provider
Clause 8 sets out the method statement for calculating an approved provider's
amount of ACCS (child wellbeing) (where a provider is eligible for a child) for a week
for sessions of care provided by an approved child care service of the provider to a
child at risk of serious abuse or neglect.
The method statement contains the following steps:
1. work out the provider's deemed activity test result in relation to the child and
the service for the CCS fortnight in which the week occurs;
2. identify all sessions of care provided by the service in the week to the child for
which the provider is eligible for ACCS (child wellbeing);
3. work out the hourly rate of ACCS for each session of care;
4. work out the activity-tested amount of CCS for the sessions of care.
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Step 1:
The deemed activity test result is the maximum number of hours of ACCS the
provider can be paid in a CCS fortnight for sessions of care provided by the service
to the child. This will usually be 100.
Step 2:
The relevant sessions of care are identified by applying the eligibility criteria in
subsection 85CA(2) to each session of care provided to the child by the service.
Step 3:
The hourly rate for each session of care identified in step 2 is determined by
applying clause 9. The hourly rate is 100% of the lower of the hourly session fee
and the ACCS hourly rate cap.
The hourly session fee is defined in subclause 9(2) as the amount the provider
would ordinarily charge an individual for the session of care, divided by the number
of hours in the session, and reduced by the hourly rate of any other subsidy (for
example, a subsidy provided by a State or Territory).
The ACCS hourly rate cap is defined in subclause 6(2).
Step 4:
To determine the activity tested amount under clause 10, for each session of care
identified in step 2, the hourly rate is multiplied by the number of hours in the session
of care that is counted for ACCS purposes and the results for all sessions of care
identified in step 2 are added together.
The number of hours in a session of care that is counted for ACCS purposes is the
lower of the number of hours in the session of care and the balance of the deemed
activity test result worked out under subclause 10(2).
The balance of the deemed activity test result, in relation to a particular session of
care, is the deemed activity test result worked out in step 1 reduced by:
the number of hours (if any) in the CCS fortnight for which the provider is
entitled to be paid ACCS in respect of the child;
the number of hours in any earlier sessions of care identified in step 2.
This clause ensures that the number of hours for which the provider is paid do not
exceed the deemed activity test result.
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Step 5:
This step ensures that the amount of ACCS (child wellbeing) for the provider for the
relevant week (to which the rate calculator is being applied) for sessions of care
identified at step 2 is the activity tested amount.
Part 5--Activity test
Division 1--Individual's activity test result
The activity test result for an individual is worked out using subclause 11(1). The
activity test result is the maximum number of hours for which CCS or ACCS can be
paid to the individual and their partner for a child in a CCS fortnight.
If the individual is not a member of a couple, for the purposes of working out an
amount of CCS or ACCS, the individual's activity test result is the highest of:
the result specified in item 1 of the table below for the amount;
any other result specified in any other table item for the amount that applies.
If the individual is a member of a couple, the individual's activity test result is the
lower of the result worked out using the table for the individual and the result worked
out using the table for the individual's partner.
Item Result for:
Amount of CCS Amount of ACCS Amount of ACCS
other than ACCS (transition to work)
(transition to work)
1 Recognised activity 100 Recognised activity
result (clause 12) result (clause 12)
2 Low income result
(clause 13)
3 Minister's rules result Minister's rules result Minister's rules result
(clause 14) (clause 14) (clause 14)
4 child wellbeing result child wellbeing result
(clause 15) (clause 15)
5 Exceptional Exceptional Exceptional
circumstances result circumstances result circumstances result
In exceptional circumstances, subclause 11(2) enables the Secretary to specify an
individual's activity test result in a determination.
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Subclause 11(4) clarifies that a determination under subclause (2) is not a
legislative instrument. It is merely declaratory and included to assist readers. It is not
an exemption from the Legislation Act 2003.
Subclause 11(5) deals with the situation where an individual's activity test result
changes during a CCS fortnight because they are eligible for CCS or ACCS
(transition to work) in one week of the fortnight and ACCS (child wellbeing) or ACCS
(temporary financial hardship) in the other week of the fortnight. In this case, the
higher activity test result that applies for ACCS (child wellbeing) or ACCS (temporary
financial hardship) is maintained for the whole CCS fortnight.
The recognised activity test (clause 12) result is determined based on the activity
engaged in by the individual in the CCS fortnight as follows:
Hours of activity Result
fewer than 8 0
at least 8 and no more than 16 36
more than 16 and no more than 48 72
more than 48 100
A note to clause 12 explains that the number of hours of recognised activity for an
individual to be counted towards the recognised activity result may be affected by
Minister's rules made for subclause (4) or a Secretary's determination made for
subclause (5).
Recognised activity is defined in clause 12 to include paid work, a training course,
an approved course of education or study or another activity as prescribed by
Minister's rules or a Secretary's determination. Further notes clarify that "paid work"
takes its ordinary meaning, whilst "approved course of education or study" has the
meaning given to it by subsection 541B(5) of the Social Security Act 1991 and
subsection 3(1) of the Family Assistance Act. However, the Minister's rules (or a
Secretary's determination) can also extend the definition of "recognised activity" in
prescribed circumstances. For example, for paragraph 12(2)(d) or (e), unpaid work
experience may be prescribed or determined as a recognised activity. It is intended
that Minister's rules (or a Secretary's determination) (under subclauses 12(4) or (5))
may also provide for time limitations, for instance, by setting out that a certain kind of
activity is only recognised for the activity test for the first 3 months during which an
individual engages in that activity.
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Associated activities
For subclause 12(3) (or subclause 12(5)), the Minister's rules (or Secretary's
determination) can also prescribe activities that are taken to be "associated
activities" for the purpose of describing when an individual is taken to be engaged in
recognised activity under clause 12. For example, the Minister's rules (or
Secretary's determination) may prescribe that periods of paid leave granted under
the terms and conditions of an individual's employment are taken to be included in
the recognised activity of paid work. The Minister's rules (or Secretary's
determination) may also provide that an individual enrolled in an approved course of
education or study is taken to continue to engage in the course during a break
between semesters of the course. The note clarifies that activities are taken to be
associated if they are prescribed to be so by the rules or determination, even if they
are not associated in the ordinary sense of that word.
Subclause (4) specifies that the Minister's rules (or Secretary's determination) can
also prescribe how to work out a number of hours of recognised activity of that kind
that is taken to be counted towards the activity in that fortnight (which may be more
or less than the actual number of activities during which the individual engaged in the
activity during the fortnight). In other words, the rules may prescribe a formula or
method for how to take into account hours to work out the individual's activity test
result. The instruments may also prescribe a maximum number of hours, which can
either be attached to the prescribed method or stand alone, in respect of an activity
in subclause 12(2). The intention of these provisions is to allow for the flexibility for
the following possibilities to be covered:
activities prescribed for subclause 3(1) for which something different from a
1:1 relationship is to apply to the hours engaged in for the purposes of the
activity test; or
maintaining the capacity to fix a maximum number of hours in any particular
fortnight for certain kinds of activity.
The Minister's rules under clause 12 (in paragraph 12(2)(d), (3) and (4)) are
expressed broadly to allow sufficient flexibility to provide beneficial treatment to
individuals who are engaging in kinds of activity that would not ordinarily be regarded
as one of the recognised activities listed in paragraphs 12(2)(a) to (c). By providing
the capacity for the Minister's rules to deem other activities as "associated activities"
to a "recognised activity" for the purposes of working out an individual's activity test
result, the rules can capture a broad spectrum of activities that individual's may be
engaged in or taken to be engaged in, to ensure adequate child care fee assistance
is available to parents. Any Minister's rules made in accordance with clause 12 will
be subject to further parliamentary scrutiny through the disallowance process for
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legislative instruments, which means that Parliament will be able to disallow any
rules that are considered non-beneficial or otherwise unfair.
Subclause (5) simply states the the Secretary may make a written determination
(the Secretary's determinations referred to above) for an individual, which can cover
all matters that the Minister's rules may cover for subclauses (3) and (4). This is to
ensure that the Secretary can make decisions on a case by case basis where an
individual is not covered by the Minister's rules which will have general application.
A person affected by a Secretary's determination made under this provision will have
full access to review rights (both merits review through internal review and
subsequently through the Administrative Appeals Tribunal, and judicial review).
Subclause (6) is merely declaratory and included to assist readers. It is not an
exemption from the Legislation Act 2003.
Any changes in the individual's circumstances during the CCS fortnight are
disregarded for the purpose of determining this result (and are applied to the next
CCS fortnight, should those circumstances apply) under subclause 12(7). This
provision ensures that, should an individual's routine activity pattern be affected on
an ongoing basis part way through a fortnight, the individual's activity test for the
whole fortnight can be taken to be based on their circumstances at the beginning of
the fortnight.
The low income result under clause 13 applies to an individual if the individual's
estimate ATI for the income year in which the CCS fortnight starts is equal to or
below the lower income threshold. This result allows the individual to receive up to
24 hours of CCS in a CCS fortnight for each child. It gives effect to a measure of the
Child Care Safety Net by allowing assistance to low income families that do not meet
the CCS activity test.
Clause 14 provides for the Minister's rules result. It enables the Minister to
prescribe in Minister's rules a result, or a method for working out a result, by
reference to the circumstances of the individual, the individual's partner or the child.
This power could be exercised to effectively grant certain individuals an exemption
from activity test requirements, or a certain result in particular circumstances that are
not necessarily associated with their actual level of activity (in contrast to the rules
that are able to made under clause 12).
Rules under this clause could be made to deal with shift workers or others with
irregular activity who may need to obtain a child care place to cover their busiest
fortnights. In this case, the rules could say that an individual's activity test result is
determined by their most active fortnight within a particular three month period, for
instance.
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Clause 15 applies to an individual for a CCS fortnight in relation to a particular child
if the individual is eligible for CCS for a session of care provided to the child in the
CCS fortnight and on the first day of the CCS fortnight it has been less than 18
months since an extended "child wellbeing" period for the child ended.
An extended "child wellbeing" period is a continuous period of at least 6 months
during which a certificate or determination was in effect in relation to the child due to
the child being at risk of serious abuse or neglect.
If the "child wellbeing" result in clause 15 applies, the individual's activity test result
will be 100, unless a higher result applies to the individual under another clause.
Division 2--Provider's deemed activity test result
The deemed activity test result for a provider, in relation to a particular child and
service, is worked out using clause 16 and will be 100, unless a higher result applies
under the Minister's rules.
In exceptional circumstances, the Secretary can specify a higher deemed activity
test result for the provider in a determination under paragraph (1)(c). This might
occur in cases of particular need or vulnerability.
Subclause (3) clarifies that a determination under paragraph (1)(c) is not a legislative
instrument. It is merely declaratory and included to assist readers. It is not an
exemption from the Legislation Act 2003.
Amendments to Schedule 3--Adjusted taxable income
Items 42, 43 and 44 amend Schedule 3 of the Family Assistance Act to replace
references to CCB with references to CCS and to restrict the rule in subclause 3(1)
to FTB and schoolkids bonus, in view of new clause 3AA for CCS.
Item 45 amends Schedule 3 of the Family Assistance Act to confirm that there is a
different way to work out the adjusted taxable income (ATI) for members of a couple
for CCS purposes. That different way is set out in new clause 3AA (adjusted
taxable income of members of a couple - child care subsidy). This establishes a
method for the Secretary to calculate an individual's adjusted taxable income, to
work out an individual's rate of child care assistance (through an applicable
percentage of their fees) where the individual is, or was, a member of a couple
during an income year. Where the individual has the same partner (a "TFN
determination person)") for the whole income year, the individual's ATI is taken to
include that TFN determination person's adjusted taxable income for that year.
However, new paragraph 3AA(2)(b) deals specifically with individuals who have a
partner for only some of an income year (for example, where they cease to become
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a member of a couple, or subsequently re-partner and become a member of a new
couple, or enter into a partnership for the first time). For these individuals, the
provision sets out a proportionality principle whereby, in addition to the individual's
ATI, the partner's ATI is added only in proportion to the period of time of the
partnership. This is an attempt to only add to an individual's ATI the amount that a
new or former partner notionally contributed to the relationship. A note clarifies that,
where the individual has re-partnered, and therefore there are a number of different
TFN determination persons during an income year, the individual's adjusted taxable
income for that year is taken to include the sum of the amounts worked out under
paragraph (b) for each such person.
Example: Nigel is an individual eligible for CCS. At the start of the income year he
is partnered with Mabel and Nigel estimates that his and Mabel's adjusted taxable
income (ATI) combined will be $130,000, based on estimates of annual income of
approximately $65,000 each. Four months into the income year, Nigel and Mabel
separate, and Nigel's income reduces to $65,000. However, another four months
passes and Nigel re-partners with Norma, whose estimated ATI for the year is
$60,000. Using new paragraph 3AA(2)(b), the Secretary would work out Nigel's ATI
by applying the proportionality principle in including both Mabel and Norma's
estimated ATI relative to the number of weeks in the income year each of them was a
member of a couple with Nigel and by adding the amounts together to work out a
single ATI amount that applied across the year. That is, the following calculation
would be undertaken at the end of the income year:
Nigel's ATI - $65,000.00;
Mabel's ATI (for period of partnership) - $65,000.00 (divided by 3 as Mabel
only partnered with Nigel for Mondays in first third of the income year) =
$21,666.67;
Norma's ATI (for period of partnership) - $60,000.00 (divided by 3 as
Norma only partnered with Nigel for Mondays in the final third of the income
year) = $20,000.00.
Nigel's final ATI result at the end of the income year will be his ATI of:
$65,000 + $21,666.67 + $20,000 = $106,666.67
(assuming that there are exactly a third of all Mondays in each four month period in
the particular income year).
This provision is intended to operate along with, rather than as an exception to,
existing clause 3A, which can still apply on its terms.
An ATI result affected by clause 3AA is also affected by other clauses in Schedule 3,
including in relation to fringe benefits and other amounts that can be added towards
ATI calculation.
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Amendments to Schedule 4 of the Family Assistance Act--Indexation and
adjustment of amounts
Items 47 and 48 repeal items in Schedule 4 of the Family Assistance Act relating to
CCB and CCR and substitute new items to provide for indexation of the lower
income threshold for CCS, the CCS hourly rate caps and the annual cap for CCS.
Because the other thresholds in clause 3 of Schedule 2 of the Family Assistance Act
are defined as the lower income threshold plus certain fixed dollar amounts, each
time the lower income threshold is indexed, the other income thresholds will increase
by the same amount as the lower income threshold.
Note that the first indexation of these amounts is dealt with by item 254 of Part 4 of
this Schedule (which effectively requires first indexation to occur on 1 July 2018,
prior to commencement to keep pace with the Consumer Price Index).
Items 46 and 49 make minor consequential amendments dealing with the cessation
of CCB and CCR.
Amendments to the Family Assistance Administration Act
Definitions
Items 50 to 84 amend section 3 of the Family Assistance Administration Act, which
contains the definitions for terms used in that Act. A number of items repeal
definitions of terms that were required for CCB and CCR, but are no longer relevant
to CCS. Other items replace definitions with new definitions that are adapted to the
new CCS and ACCS system.
Item 85 inserts new section 4A. Subsection (1) sets out the meaning of "large
centre-based day care provider", which is a kind of provider that is subject to
additional approval rules, including a financial viability test. This replaces the
definition of "large long day care centre operator" in existing section 3. In broad
terms, a provider is a large centre-based day care provider if the provider alone, or
jointly with other related providers, operates or proposes to operate, 25 or more
approved child care services that are centre-based day care services. Subsection
(2) allows the Minister to prescribe in the Minister's rules, a number other than 25 for
the purposes of subsection (1). This will allow the law to adapt to business practices
in the child care sector. Subsection (3) provides for when 2 or more providers are
considered to be "related providers" for the purposes of paragraph (1)(c).
Items 86 to 90 amend various provisions in Part 3, by repealing the provisions
relating to the payment of CCB and CCR in Division 4 and 4AA of Part 3, and
making consequential amendments to section 66. These amendments are intended
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to ensure that Part 3 of the Family Assistance Administration Act is now solely about
payment of kinds of family assistance other than CCS and ACCS (such as FTB).
Provisions relating to the payment of CCS and ACCS will be contained in new
Part 3A, as inserted by item 92.
Part 3A--Payment of Child Care Subsidy and Additional Child Care Subsidy
Section 67AA contains a simplified outline of new Part 3A, which is self-explanatory.
Note that the new payment rules attempt to simplify many of the complications of the
former CCB payment system, including by removing the long and complex stream of
"determination" and "variation" rules that followed a decision about an individual's
"conditional eligibility" to CCB by fee reduction (for example, former sections 50 to
51E of the Family Assistance Administration Act). Many of the old child care
payment rules in Part 3 were unnecessarily complicated.
Section 67AB sets out a summary of the kinds of child care payments an individual
and a provider can become entitled to under new Part 3A (following their eligibility
being determined in accordance with the rules described above in the Family
Assistance Act).
Division 2--Making Claims
Division 2 of new Part 3A provides for rules in relation to making claims.
Section 67BA contains a simplified outline.
An individual must make a claim for CCS in order to become entitled to be paid CCS
or ACCS (section 67BB). Only an individual can make a claim for CCS (section
67BC). The two kinds of claims that an individual may make are CCS by fee
reduction, and CCS in substitution for an individual who has died (section 67BD).
Some kinds of ACCS payments, however, will require an additional application.
Section 67BE provides that a claim is effective if the claim meets the requirements
set out in paragraphs (a) to (h). Notably, in relation to claims for CCS in substitution
for an individual who has died, paragraph (f) specifies that the claim must be made
before the end of the income year after the income year in which the individual has
died. Paragraph (g) allows the Secretary to prescribe further requirements for claims
in the Secretary's rules.
One of the requirements that must be met for a claim to be effective is the bank
account requirements as set out in section 67BG. The bank account requirements
are met for the purposes of a claim if:
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the individual provides details of a bank account into which amounts of CCS
or ACCS can be paid; or
the individual makes a statement that she or he will provide details of such a
bank account within 28 days after the claim is made; or
the Secretary is satisfied that it is appropriate to exempt the individual from
the bank account requirements for the purposes of a claim.
Other requirements that must be met for a claim to be effective include the TFN
requirements as set out in section 67BH. The provision of tax file numbers is
important to enable identification of claimants and for the reconciliation process that
follows an individual meeting the reconciliation conditions in section 103A following
the end of a financial year. Subsection (1) provides the tax file number requirement
is met for the purposes of a claim if, in relation to each TFN claim person (as defined
in subsection 3(1)), one of the following statements is made:
a statement stating their TFN; or
a statement that they have authorised the Tax Commissioner to tell the
Secretary what their TFN is; or
a statement that they have applied for a TFN.
Subsection 67BH(3) provides that if the Secretary makes a determination that she
is satisfied that the claimant cannot obtain the TFN from a TFN claim person who is
their current or ex-partner, the TFN requirements do not apply in relation to that TFN
claim person. Subsection (4) makes clear that this determination is not a legislative
instrument (which is intended to be declaratory rather than an exemption from the
Legislation Act 2003).
The TFN requirements for the purposes of a claim for CCS in substitution for an
individual who has died are set out in section 67BI, which mirrors section 67BH.
The main difference being that the TFN requirements must be met in relation to each
TFN substitution person, which is defined in subsection 3(1) to mean the deceased
individual and any partner of the deceased individual during the period in respect of
which the payment is claimed.
Section 67BF makes clear that a claim that is not in effect is taken not to have been
made.
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Division 3--Determinations
Section 67CA sets out a simplified outline for this Division, which crucially deals with
eligibility and entitlement decisions for payments.
While an individual or approved provider may be eligible for CCS or ACCS,
section 67CB makes clear that an individual or an approved provider can only be
entitled to be paid CCS or ACCS if the Secretary makes a determination to that
effect under this new Division. In general, eligibility is about who can be paid and
entitlement is about how much.
Note that subsection 67CB(4) is important because it ensures that entitlement is
lost with respect to an income year (the relevant income year) where an individual
fails to meet the reconciliation conditions. There are two deadlines:
by the end of the first income year after the relevant year, if the reconciliation
conditions are not met, the individual loses entitlement for the relevant income
year (this can be reversed if the reconciliation conditions are met during the
next income year--before the "second deadline");
if the reconciliation conditions are still not met by the end of the second
income year after the relevant income year, their non-entitlement remains and
the individual loses eligibility for CCS (because of paragraph 67CC(2)(b)).
Section 67CC provides for the determination of an individual's eligibility for CCS by
fee reduction.
If an individual makes an effective claim, the Secretary must determine:
if the Secretary is satisfied at the time of making the determination that the
FTB child, age, immunisation and residency requirements are met--that the
individual is eligible for CCS by fee reduction, and
if the Secretary is not so satisfied--that the individual is not eligible for CCS
by fee reduction for the child.
The Secretary may determine that an individual is not eligible for CCS by fee
reduction for the child concerned, if:
the Secretary is satisfied that the individual's eligibility has ceased
permanently (for example, where all their children have grown up or where the
individual has lost their residency status) or is not reasonably likely to become
eligible again (for example, where the individual ceases to be eligible under
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section 85EE of the Family Assistance Act for sessions of care during a
period of absence from Australia exceeding 6 weeks and the Secretary
considers that they may not return or may not require child care assistance on
their return);
an individual has had no entitlement to CCS or ACCS for at least 52
consecutive weeks (for example, this would apply where the individual has not
met the CCS reconciliation conditions by the second deadline under
subsection 103C, because in this case section 105E would require 52 weeks
of no-entitlement decisions following from the "first deadline"); or
the child ceased to meet the immunisation requirements in section 6 of the
Family Assistance Act more than 63 days ago.
Where the Secretary has made a determination under subsection 67CC(2)
(cessation of eligibility), the individual will be notified under section 67CE and be
provided with details, including the date of effect of the determination, and whether a
new claim must be made under section 67BE for the individual to once again
become eligible for CCS.
The Secretary may also revoke a determination of eligibility upon request by the
individual under subsection (3).
Subsection (4) provides for when a determination of eligibility comes into effect,
which must be the first Monday of a CCS fortnight, no earlier than 28 days before the
date of claim.
Example: Rhys has met the eligibility requirements in subsection 85BA(1) since the
beginning of 2018. He makes a claim for CCS on Tuesday 7 August 2018. Tuesday
10 July 2018 is the 28th day before the day the claim was made. A CCS fortnight is
defined in subsection 3(1) of the Family Assistance Act to mean the period of two
weeks beginning on Monday 2 July 2018 or each subsequent period of two weeks.
The determination that Rhys is eligible for CCS by fee reduction will take effect on
Monday 23 July 2018, which is the first day the Secretary is satisfied that the
eligibility requirements are met, that is also the first Monday of a CCS fortnight that is
within 28 days from the date of claim.
Subsections (5) and (6) apply on their terms and set out when certain determinations
under this section have effect from.
Section 67CD provides for determinations of an individual's entitlement to be paid
CCS or ACCS.
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Preconditions for making determinations
Subsection (1) provides for when the Secretary is to make a determination of
entitlement under this section. Each determination of entitlement is made in relation
to an individual, for a week, in relation to sessions of care provided to a child, by an
approved child care service.
Example: Greta has two children, Uditha and Jo, each attending two different child
care services in a week--in this case, the Secretary would make four entitlement
determinations for Greta for that week.
The Secretary is only able to make an entitlement determination if, and once, all of
the following conditions are satisfied:
the approved provider of the service has given the Secretary a report under
section 204B (commonly known as attendance reports); or
if the approved provider of the service has not given the Secretary a report
under section 204B (because of subsection 204B(3))--the Secretary has
corrected the report under section 204C; and
if the individual's claim was made less than 28 days ago--the bank account
requirements in section 67BG are met for the purposes of an entitlement
determination; and
if the individual's claim was made less than 28 days ago--the tax file number
requirements in 67BH are met for the purposes of a determination under this
Division for the individual; and
if the Secretary has given the individual a notice under subsection 67CD(11)
in relation to the child's enrolment for those sessions--the individual has
complied with the notice.
The clarifying note at the end of this provision emphasises the requirement for the
provider to have given an accurate and complete report under section 204B, for the
Secretary to be satisfied that this precondition has been met. Where the Secretary
has a reasonable basis to believe that a report purporting to be given under section
204B is not accurate and complete, a determination of no entitlement will be made in
respect of the sessions of care for that week. However, the Secretary may still make
an entitlement determination where, despite the provider failing to comply with the
obligation to submit a report under section 204B (because of subsection 204B(3)),
the Secretary has exercised their power under section 204C to correct the report. It
is possible that responses to a subsection 67CD(11) notice, where one is given, may
supply relevant information to the Secretary to correct a report where appropriate.
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Paragraphs (c) and (d) ensure that, where an individual still has time to meet the
bank account and tax file number requirements (both of which need to be met in 28
days from the date of claim), the Secretary must hold off making entitlement
determinations until these requirements are met.
Entitlement to be paid CCS
Subsection 67CD(2) sets out the conditions that must be met for a determination to
be made that an individual is entitled to be paid CCS, and the amount of that
entitlement.
These conditions are intended to ensure that an individual can only be paid an
amount of CCS in relation to one or more sessions of care in a week if:
they meet the eligibility criteria for CCS in relation to those sessions of care
(subject to the "immunisation grace period" referred to in subsection (9));
they meet information requirements for the week (they: have provided bank
account details unless exempt; have provided TFN unless exempt; have not
failed to comply with certain types of information requests; and have not failed
to lodge tax return in time);
they have not been determined to be entitled to be paid ACCS for those
sessions of care.
In addition, if an individual meets the above conditions but the amount of CCS to
which the individual will become entitled for the sessions of care is nil, the Secretary
must determine in writing that the individual is not entitled to CCS.
Entitlement to be paid ACCS (child wellbeing) or ACCS (temporary financial
hardship)
Subsection 67CD(3) sets out the conditions that must be met in order for a
determination to be made that the individual is entitled to be paid ACCS (child
wellbeing) or ACCS (temporary financial hardship), and the amount of that
entitlement.
These conditions are intended to ensure that an individual can only be paid either of
these two categories of ACCS for one or more sessions of care in a week if: the
individual meets the eligibility criteria for ACCS (child wellbeing) or ACCS (temporary
financial hardship) in relation to those sessions of care; no provider has been
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determined to be eligible for ACCS (child wellbeing) for those sessions of care; and
the individual meets the information requirements for the week.
Entitlement to be paid ACCS (grandparent)
Subsection 67CD(4) sets out the conditions that must be met for a determination to
be made that an individual is entitled to be paid ACCS (grandparent), and the
amount of that entitlement.
These conditions are intended to ensure that an individual can only be paid ACCS
(grandparent) for one or more sessions of care in the week if the individual: has
applied to the Secretary for ACCS (grandparent); meets the eligibility requirements
for ACCS (grandparent); has not been determined to be entitled to be paid ACCS
(child wellbeing) for those sessions of care; and meets the information requirements
for the week. Determinations of entitlement cannot be made for a week if the CCS
fortnight that includes the week starts earlier than 28 days before the individual made
the application for ACCS (grandparent).
Entitlement to be paid ACCS (transition to work)
Subsection 67CD(6) sets out the conditions that must be met for a determination to
be made that an individual is entitled to be paid ACCS (transition to work), and the
amount of that entitlement.
These conditions are intended to ensure that an individual can only be paid ACCS
(transition to work) for one or more sessions of care in the week if the individual: has
applied to the Secretary for that payment; meets the eligibility requirements; has not
been determined to be entitled to be paid ACCS (child wellbeing) or ACCS
(temporary financial hardship); and meets the information requirements.
Determinations of entitlement can be made for a week in a CCS fortnight that starts
after the date of application.
Subsection 67CD(7) ensures that such determinations can only relate to whole
CCS fortnights following an application under paragraph 6(a).
No entitlement to be paid CCS or ACCS
Subsection 67CD(8) provides that if the Secretary is not satisfied that an individual
meets the conditions of entitlement for either CCS, ACCS (child wellbeing), ACCS
(temporary financial hardship), ACCS (grandparent), or ACCS (transition to work),
for one or more sessions of care in a week, the Secretary must determine that the
individual is not entitled to be paid CCS or ACCS for those sessions. Determinations
under this provision can be made, on Secretary initiated review, in certain cases
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where an individual has not met the CCS reconciliation conditions under section
103A.
Immunisation grace period
Subsection 67CD(9) defines the concept of an "immunisation grace period". Even if
a child ceases to meet immunisation requirements and therefore the individual is no
longer eligible for CCS or ACCS, the Secretary must still determine that the
individual is entitled to CCS or ACCS if the individual would be eligible to CCS or
ACCS except the session falls in an immunisation grace period. The following
example illustrates the application of the immunisation grace period.
Example: Amanda ceased to meet immunisation requirements on 1 July 2019 and
starts to meet immunisation requirements again on 1 October 2019. Her father Jeff
meets all other eligibility and entitlement requirements for CCS during this period.
1 September 2019 would be the 63rd day after the day Amanda ceased to meet the
immunisation requirements. Subsection (9) means that the days following 1 July
2019 up to 1 September 2019 would fall within the immunisation grace period. In
accordance with paragraphs (2)(a) and (9)(b) of section 67CD, Amanda's father Jeff
would be determined to be entitled to CCS for sessions of care up to the end of the
week beginning on 26 August 2019. Jeff would be determined not to be entitled to
CCS from the week beginning 2 September 2019.
Subsection 67CD(11) is about notices requiring information about enrolments.
Where the Secretary has issued a notice to an individual in relation to the child's
enrolment for sessions of care, compliance by the individual with a notice is a
precondition to the Secretary making a determination of entitlement for the individual
under paragraph 67CD(1)(e).
The notice may be issued either in respect to information provided by the approved
provider under an initial enrolment notice given under section 200A, or through an
update to an enrolment notice given under section 200D. The idea behind these
notices is to make sure that future attendance reporting under section 204B is
consistent with the Secretary's understanding of basic enrolment details (such as
usual care days and fees). The notice will require individuals to verify certain
information given by the provider under either section 200A or section 200D about a
child's enrolment. This information is expected to reflect terms in a "complying
written arrangement" between the provider and the individual, which should set out
basic information about days of attendance and agreed fees.
Therefore, where an individual is asked to comply with a notice, they will simply be
confirming whether enrolment details provided to the Secretary by a provider match
with the parent's understanding of their arrangement. It is intended that this
provision will provide the Secretary with an additional source of information to
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confirm an individual's present and ongoing entitlement, and calculate the correct
amount of entitlement, to ensure payment integrity and accuracy. Where the
individual does not comply with a notice under subsection (11), the Secretary cannot
make a determination of entitlement, and this will stall the making of the payment for
the period during which the individual does not verify the information by complying
with the notice (all preconditions in subsection 67CD(1) will not be met). Where
compliance with a subsection 67CD(11) notice results in the Secretary doubting the
accuracy of an attendance report provided under section 204B, the Secretary may
request the approved provider to correct the attendance report under section 204C
(or the Secretary could correct the report themselves under section 204C). If the
correction is made, the Secretary will then be able to make a section 67CD
determination (if other preconditions in subsection 67CD(1) are met).
Section 67CE and section 67CG provides for when the Secretary must give notice
of determinations under Subdivision B and C, both to individuals and to approved
providers. In particular, subsection 67CE(6) provides that, where the Secretary has
decided to make a fee reduction payment directly to the individual under
subsection 67EC(2), the provider will be notified to that effect. The obligation to
pass on fee reductions in section 201A does not apply to the amount which the
provider is notified has been paid directly to the individual.
Section 67CF provides for determinations of an individual's entitlement to be paid
CCS or ACCS in substitution for individual who has died.
Section 67CH provides for determinations of a provider's entitlement to be paid
ACCS (child wellbeing).
Determinations of entitlement for approved providers are made under this section in
relation to sessions of care provided during a week to a child, by an approved
service of the provider. The intention is that the Secretary must only make such a
determination when all of the following conditions are met:
(a) either a certificate in relation to risk of serious abuse or neglect, or a
determination in relation to risk of serious abuse or neglect, is in effect;
(b) the provider has given the Secretary a section 204B report (an attendance
report);
(c) the provider has given the Secretary a declaration that the provider has not
been able to identify an eligible individual after making reasonable
endeavours.
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If the Secretary is satisfied that the provider is eligible for ACCS (child wellbeing)
under subsection 85CA(2) of the Family Assistance Act for sessions of care provided
to the child in the week, the Secretary must determine that the provider is entitled to
be paid ACCS (child wellbeing) and the amount of the entitlement. Conversely, if the
Secretary is not satisfied that the provider is eligible, the Secretary must determine
that the provider is not eligible.
Section 67CI requires the Secretary to give written notice of determinations made
under section 67CH.
Division 4--Estimates of ATI
Section 67DA is a simplified outline of this Division which is self-explanatory.
Section 67DB provides that where the actual ATI of an individual is not known at the
time of making an entitlement determination, the Secretary has the power to make
entitlement determinations on the basis of the most recent estimate that exists on the
first Monday of the CCS fortnight.
This can be either:
(a) a reasonable estimate given to the Secretary by the claimants;
(b) the indexed estimate;
(c) the indexed actual income; or
(d) the estimate the claimant is taken to have given the Secretary in an election
made under subsection (3).
Subsections (3) and (4) allow a claimant to make an election in relation to the
estimate adjusted taxable income that is to be used in entitlement determinations
that would result in an applicable percentage of between 20% and 50%. By making
an election, a claimant is taken to have given the Secretary an estimate adjusted
taxable income of an amount between the third income threshold ($250,000) and the
upper income threshold ($340,000). Incorrect elections can be effectively remedied
at reconciliation when ATI is known and this may result in further payments being
made or debts.
Subsection (5) provides that if none of the estimates referred to in subsection (2)
exists on the first Monday of the CCS fortnight, the Secretary must make a
determination that the individual is not entitled to be paid CCS or ACCS for that
fortnight.
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New sections 67DC (indexed estimates), 67DD (indexed actual incomes) and 67DE
(indexed estimates and indexed actual incomes for members of couples) replace
existing sections 55AA, 55AB and 55AC in the current Family Assistance
Administration Act. The difference between the old and new provisions are
consequential to the new machinery provisions supporting the administration of CCS
and ACCS payments.
Division 5--Payments
Section 67EA is a simplified outline of this Division which is self-explanatory.
New section 67EB replaces existing section 219Q. It provides that if the Secretary
makes a determination of entitlement for an individual or an approved provider, the
Secretary must pay the amount of the determination, less the withholding amount, to
the bank account of the provider. However, the Secretary may instead pay the
amount directly to the individual under section 67EC.
If the Secretary increases the amount of CCS or ACCS upon review of a
determination of entitlement, the Secretary must pay an amount equal to the
increase, less the withholding amount, to the bank account of the provider.
The withholding amount for a payment of CCS is 10% of the payment, unless the
Minister's rules prescribe a different percentage. The Minister may exercise this
power after monitoring whether the 10% is adapted and proportionate to managing
debts for most individuals. There is no withholding amount for a payment of ACCS.
The Secretary also has the ability to make a determination to specify a different
percentage of withholding for an individual. The Secretary may make such a
determination if she is satisfied that the percentage is appropriate to avoid the
individual incurring a debt, or to reduce the potential size of the debt. Subsection (5)
makes it clear that such a determination (as distinct from the Minister's rules which
will apply as a matter of general application) is not a legislative instrument--this is
just declaratory of the law and is not an exception to the Legislation Act 2003.
Subsection 67EC(1) requires the Secretary to pay directly to an individual, an
amount that would have otherwise been paid to an approved provider under
section 67EB as a result of a fee reduction decision made, but for the child no
longer being enrolled at the service. It is intended that this provision will enable the
Secretary to make a direct payment to an individual in respect of a session of care
provided at the time the child was still enrolled, but after the child ceases to be
enrolled. The reason why the Secretary is required to make the payment to the
individual in this circumstance, as opposed to the provider under section 67EB, is
due to the fact it may no longer be practicable for the provider to pass on the fee
reduction in accordance with its obligation to do so under section 201A as the child
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is no longer enrolled. Note that payment could still effectively be made to the
provider in discharge of any of an individual's outstanding fee liability under
paragraphs 67EC(1)(b) and 67EC(5)(b).
Subsection 67EC(2) provides the Secretary with a discretion to make payments
directly to individuals following a fee reduction decision being made, where
appropriate, despite the child still being enrolled at the service. Where the Secretary
has made a decision to pay the individual directly under this provision, the individual
and approved provider will be notified of this decision under section 67CE. The
notice to the provider will state that the payment has been made directly to the
individual under subsection 67EC(2) and will have the effect that the obligation
upon the provider to pass on the fee reduction amount under section 201A does not
apply in respect of the amount paid directly to the individual (see subsection
67CE(6)).
The broad nature of the power in this provision, to pay an individual directly, is
considered reasonable given that CCS is an individual's entitlement and it simply
operates to allow a more direct method of providing that entitlement to an individual,
including where it is not appropriate, for any reason, to pay the amount to a child
care provider to pass on as a fee reduction (such as in cases of suspected provider
non-compliance). In a case where the individual is paid directly, the provider will still,
of course, be able to recover fees from individuals under their fee arrangements,
established at enrolment.
Subsection 67EC(3) provides the Secretary with a discretion to pay directly to an
individual fee reduction amounts which have not already been passed on by the
provider, either because the provider has remitted the amount to the Secretary in
accordance with paragraph 201A(1)(b) or has failed to remit the amount and incurred
a debt to the Commonwealth under section 71D.
Subsection 67EC(4) requires the Secretary to pay directly to an individual, the
difference between the total amount of CCS or ACCS the individual is entitled to be
paid for sessions of care provided by a child care service in CCS fortnights starting in
an income year, and the amount the provider was required to pass on to the
individual under section 201A for those sessions.
Subsection 67EC(5) sets out how amounts are to be paid if a decision to pay
individuals directly is made under this section. It allows for amounts to be paid to
discharge an obligation of an individual and allows, in cases where subsection
67EC(1) applies (because the enrolment has ceased), for the Secretary to make a
payment to a provider if the individual still owes them child care fees.
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Subsection 67EC(6) provides the Secretary with a discretion to defer paying the
above amounts until after the individual meets the CCS reconciliation conditions in
section 103A.
Section 67ED, provides for the payment of CCS or ACCS in substitution for an
individual who has died.
Section 67EE deals with payments to providers who are eligible in their own right to
ACCS (child wellbeing), stating that payments are to be paid to a bank account held
by the provider (rather than by "passing on" the amount to any individual).
Division 6--Giving Information
Section 67FA is a simplified outline of this Division which is self-explanatory.
Section 67FB replaces existing section 56C which provides for the requirement for
individuals to notify the Secretary of change of circumstances relevant to individuals
CCS or ACCS eligibility and entitlement such as any change in activity or income.
Section 67FC replaces existing section 56D which provides for the requirement for
approved providers to notify the Secretary of change of circumstances relevant to
whether a child remains at risk of abuse or neglect. Contravention of this provision
carries an offence of 60 penalty units.
Section 67FD, which gives the Secretary the power to approve a manner of notifying
changes of circumstances, replaces existing section 57 with minor consequential
modifications.
Section 67FE (request for bank account details), section 67FF (request for tax file
number etc. in claim forms), section 67FG (request for tax file number etc. of TFN
determination persons), and section 67FH (request for information about care
provided) replace existing sections 57A, 57B, 57D and 57G with minor consequential
modifications.
Section 67FI is a new provision that gives the Secretary the power to request
information from individuals in relation to present or future entitlement for CCS or
ACCS. The Secretary may do so by giving a written notice to an individual,
specifying the information that is requested, and the time in which the information
must be provided. This power reflects the fact that some CCS claimants may cease
to be eligible or entitled for payment in relation to sessions of care for various
reasons after their initial claim and allows the Secretary to ask for current
information. This power exists alongside existing coercive information powers in the
Family Assistance Administration Act.
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Division 7--Payment protection and garnishee orders
Section 67GA is a simplified outline of this Division which is self-explanatory.
Section 67GB stands alongside existing section 66 (which now deals with only
family assistance other than child care payments) and is consistent with the policy
that, except for the limited exceptions specified, a family assistance payment is
inalienable and is absolutely protected from sale, assignment, charge, execution,
bankruptcy or other types of alienation.
Section 67GC is related to the inalienability provision set out in section 67GB and
clarifies that if a garnishee order comes into effect in relation to a bank account into
which payments listed in subsection 66(1) are credited, the garnishee order is not
effective in relation to the "saved amount", calculated according to the formula
specified.
Part 4--Overpayments and debt recovery
Item 93 makes amendments to clarify that amounts of family assistance are taken to
be "paid" to a person where the amount is applied against certain liabilities or debts,
or is set off against another amount (section 68). Section 69 clarifies that
references to amounts paid to approved providers are taken to apply in relation to
providers who are no longer approved (or approved in respect of a particular
service).
Items 94 and 95 are minor technical amendments.
Items 96 and 97 insert new provisions that raise debts of CCS or ACCS. Amounts
are debts due to the Commonwealth where:
an amount of CCS or ACCS is paid to an individual or provider who is not
entitled to it at all for one or sessions of care (section 71B);
an overpayment of CCS or ACCS is received (section 71C) by an eligible
individual or provider;
a provider fails to pass on an amount of CCS to an eligible individual or does
not remit the amount to the Secretary if required (section 71D);
because of an individual's false or misleading statement, a provider would
incur a debt where they have made themselves eligible for ACCS (child
wellbeing) in respect of a child (section 71E)--in this case the individual
incurs the debt rather than the provider;
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because of a provider's false or misleading statement or contravention an
individual would incur a debt (section 71F)--in this case the provider incurs
the debt rather than individual; and
a provider's approval is suspended or cancelled and fee reduction payments
or business continuity payments are subsequently made (sections 71G
and 71H).
Items 98 and 99 make amendments consequential to the introduction of "approved
providers" to a provision dealing with methods of debt recovery. The intention is that
the listed methods of recovery for individuals and providers will be common, but will
only operate to the extent legally possible. It may be, for example, that some
methods are not legally available in respect of partnerships or unincorporated
providers, notwithstanding sections 230A and 230B.
Items 100 to 108, 110, 111 and 113 are technical amendments consequential upon
the introduction of CCS and ACCS.
Item 109 deals with the time for recovering certain CCS debts. This provision is
intended to be practical and gives the Secretary the discretion to not pursue recovery
where it is possible that an individual may belatedly meet CCS reconciliation
conditions (generally, by lodging their tax return) and thereby resume entitlement for
a former income year after having lost entitlement because of subsection 105E(2).
Item 112 inserts a new kind of debt that can be written off into section 95. Under
new subsection (4B), the Secretary may write off a debt that arises in circumstances
where the reconciliation conditions are not met (generally because a tax return has
not been lodged) if the reason why the reconciliation conditions were not met was
because an individual's former partner had not lodged a tax return at the time the
individual and the partner separated (where the separation occurred as specified in
paragraph (a)).
Part 5--Review of decisions
Item 114 inserts new Division 1A, which deals with preliminary matters in relation to
child care decisions and sets out important rules for the CCS reconciliation process.
Section 103 defines "child care decision". A child care decision includes an original
determination made by the Secretary under Division 3 of Part 3A (determinations of
eligibility and determinations of entitlement to CCS or ACCS) as well as an internal
review decision by the Secretary or a review decision by the AAT of a determination
under Division 3 of Part 3A. The intention is to ensure that the same outcome (for
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example, as relevant for limitations on arrears) will be achieved for original decisions
and in relation to reviews.
Section 103A sets out when an individual is considered to have met the "CCS
reconciliation conditions", which relate to tax assessments becoming available for
the individual and anyone who was a partner of the individual in the income year
(unless the individual or partner is not required to lodge a tax return because of their
low income, for example). Subsection (4) ensures that, where a relationship has
ended during the year, individuals with former partners are not disadvantaged during
the end-of-year reconciliation process where their former partners do not lodge their
tax return and this would result in unfairness for the individual. This provision allows
the Secretary to treat an individual's former partner as having lodged their tax return
so that the individual can be taken to have met the reconciliation conditions in these
circumstances.
Sections 103B and 103C define the "first deadline" and "second deadline" for the
purposes of provisions relating to meeting the CCS reconciliation conditions. The
deadlines are the end of the first and second whole income years following the
income year that is subject to reconciliation.
Item 115 makes amendments to section 104 to list some limited exceptions to the
default rule that decisions under the family assistance law are reviewable on internal
review by the Secretary. The exceptions relate to events that cannot or should not
be reversed, including a decision to pay a fee reduction amount (review may instead
be sought in relation to the entitlement determination) or decisions to issue
compliance notices (reviews may instead be sought in relation to a non-compliance
decision).
Paragraph 104(d) provides funding agreement decisions made under section 85GA
are not reviewable by the Administrative Appeals Tribunal (AAT) to ensure certainty
to contractors. In accordance with the Administrative Review Council's (the Council)
publication "What decisions should be subject to merit review?" (which, as at August
2016, could be viewed on the Council's website: http://www.arc.ag.gov.au), such
decisions are not generally considered appropriate for merits review given they will
relate to the allocation of a finite resource, drawn from Annual Appropriations, and
only a proportion of claims for a share of the resource can be met. Furthermore, if
these decisions, in relation to funding agreements, were open for review, any
outcome overturning the original decision made would likely affect the interests of a
contracted party who was successful after a competitive grants round. One-off
payments may also be made to certain service providers in accordance with section
85GA, for instance, under the Community Child Care Fund, and such decisions
should also be excluded from merits review for the following reasons considered by
the Council to outweigh the benefits of review in these circumstances: review would
only promote competition among community groups, no effective remedy could be
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provided without reducing funding to other service providers, and to avoid delays in
effectively channelling funds into service provision. Finally, as acknowledged by the
Council:
" ... such decisions by the Government to allocate funding to programmes as a
whole are not suitable for review, as they are budgetary decisions of a policy
nature, rather than decisions immediately affecting any particular person's
interests. Those decisions are subject to parliamentary scrutiny ... "
This provision would also align the treatment of contracts made pursuant to items
listed in the Financial Framework (Supplementary Powers) Regulations 1997, for
which decisions under section 32B of the Financial Framework (Supplementary
Powers) Act 1997 are also not subject to AAT review.
Item 116 inserts new section 105C which ensures that certain information is not
taken into account on review where the information was provided to the Secretary
unreasonably late (after the 28 day period as referred in paragraph (c)) following a
notification obligation in respect to that information. This provision attempts to
encourage the prompt notification of information that might increase the amount of
CCS or ACCS that a person might be entitled to. The limitation does not apply
where the new information is the adjusted taxable income of the individual.
Section 105D ensures that a person's entitlement for CCS or ACCS cannot be
increased on review for a week that falls in the income year immediately before the
income year in which the decision on review is made. This provision is intended to
discourage unreasonably late requests for review. Subsection (2) ensures that an
exception applies where the review is conducted because the reconciliation
conditions are met (generally, following a person's tax assessment becoming
available and their adjusted taxable income becoming known).
Section 105E obliges the Secretary to conduct an own motion review once the
reconciliation conditions for an individual are met (usually where a person's tax
assessment becomes available after they lodge a tax return). This provision enables
the Secretary to review the entitlement determinations made throughout the year
based on income estimates, and substitute with the correct amount of entitlement
based on information about the person's adjusted taxable income as determined by
the Commissioner of Taxation following a tax assessment being made.
Subsections 105E(2) and (3) notably deal with consequences for missing the "first
deadline" and the "second deadline", and require the Secretary to make no
entitlement decisions where the first deadline is missed and only allow for
entitlement to resume if, and once, the reconciliation conditions are met by the
"second deadline".
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Items 117 to 122 are minor technical amendments.
Item 123 inserts new section 106A, which sets out circumstances in which the
Secretary is required to give notice of review decisions about eligibility or entitlement
to CCS or ACCS to an individual and a provider affected by the decision. In
particular, the provision clarifies that if the review decision is a fee reduction
decision, and the Secretary has decided to pay the fee reduction amount directly to
the individual under subsection 67EC(2), the notice provided must include a
statement to this effect.
Section 106B acknowledges the possibility that a Secretary may initiate an own
motion review after a person has applied to the AAT for review of the same original
decision. If this occurs, this provision requires the Secretary to give the AAT written
notice of the Secretary's review decision so that the AAT can take it into account.
Items 124 and 125 make consequential amendments to section 107 to maintain the
existing law about the date of effect of certain internal review decisions with respect
to family tax benefit.
Item 126 adds new section 107A into the Family Assistance Administration Act to
address the date of effect of a review decision made under section 105 to vary, or
set aside and substitute a new determination about eligibility for CCS. The provision
ensures that the date of effect of favourable decisions in respect of CCS eligibility
(made on review under section 105) cannot be earlier than the beginning of the
income year before the income year during which the review decision was made.
Items 127 to 132 make amendments to section 108 of the Family Assistance
Administration Act, which is a provision that deals with decisions that may and may
not be reviewed under section 109A (which relates to applicant initiated reviews).
These amendments:
remove references to decisions about CCB from the list of exceptions to the
default rule that all decisions are reviewable on request (because they are no
longer relevant);
insert new exceptions in relation to decisions that cannot or should not be
reviewed (including funding agreement decisions, decisions to pay an amount
through a provider to pass on a fee reduction, decisions to give non-
compliance notices or decisions to publish non-compliance information);
make other minor amendments consequential upon the introduction of CCS
and ACCS; and
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ensure that an applicant may only initiate a review of a decision about an
individual's entitlement based on the individual's income and activity levels
after a person's tax assessment becomes available following an income year
(where a tax return is required to be lodged).
Items 133 and 134 (as well as the minor amendments made by items 135 and 136)
alter section 109A of the Family Assistance Administration Act (the provision under
which persons can apply for internal review) to ensure that requests for review of
Part 8 decisions about the approval of providers can only be made by providers.
Requests in relation to other decisions can be made by a person that is "affected" by
those decisions, which is a broader standing rule. However, for decisions under Part
8, standing is limited reduce possibly numerous and identical applications from
individuals who may be affected by a provider approval decision, leaving it to the
provider themselves to apply for review. Another reason for limiting standing to
providers is because any review of a Part 8 decision would only take into account
information relating to the child care provider. An individual's loss of access to a
child care service that attracts CCS due to the provider's loss of approval would not
be a relevant consideration in a review of any decisions under Part 8. Note that this
provision will not limit an individual's right to apply to a court in relation to a question
of law, including under the Administrative Decisions (Judicial Review) Act 1977,
where they have standing under that Act.
Items 137, 138 and 139 make technical amendments to a provision that deals with
providing notice of applicant initiated review decisions, to make references to CCS
and ACCS and to remove references to repealed provisions relevant to CCB. There
are also new obligations in this provision to provide notification to "providers". In
particular, the provision clarifies that if the review decision is a fee reduction
decision, and the Secretary has decided to pay the fee reduction amount directly to
the individual under subsection 67EC(2), the notice provided must include a
statement to this effect.
Item 140 amends section 109D to require that applications for review of decisions
under section 109A must be made no later than 13 weeks after the applicant is
notified of the decision (if the decision is in relation to CCS or ACCS). Otherwise,
the application can be made 52 weeks after notification, which is the existing rule.
This provision is intended to encourage prompt requests for review in relation to child
care decisions. Items 141 to 147 are related technical amendments.
Item 148 provides a longer period in which internal reviews can be requested where
the decision on review is made because a person's ATI has become known because
the person's tax assessment has become available or where the Taxation
Commissioner has reviewed a decision under taxation law about the taxable income
of an individual.
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Items 149 and 150 make minor technical amendments.
Item 151 replaces section 109DA to provide for a time limit on applications by
providers for internal review in relation to decisions made about provider approval.
New section 109DB ensures that new section 105C (which limits information that
can be taken into account in a decision on review) also applies where the review
occurs because of a request under section 109A. New section 109DC operates
similarly with respect to time limits on increases (by ensuring that section 105D also
applies where the review occurs because of a request under section 109A). New
section 109EA (as inserted by item 152) operates similarly, by ensuring that
section 107A (which limits the date of effect of review decisions to no earlier than the
first day of the income year before a review decision was made) also applies where
the review occurs because of a request under section 109A in relation to
determinations of eligibility or entitlement for CCS or ACCS.
Items 153 to 156 make a series of technical amendments to section 109G (which is
about payments pending the outcome of a review process) consequential upon the
introduction of CCS and ACCS.
Items 157 to 163 make a number of technical amendments to section 111, which
deals with applications to the AAT for "first review". Some limited exceptions to
review at the AAT are inserted through these items where review is inappropriate or
would be ineffective to yield a remedy (such as in relation to "form and manner"
requirements for notices or forms). Item 163 is important because it ensures that
review of decisions relevant to a person's income changes or activity cannot be
made at "AAT first review" until after a reconciliation process has occurred following
an income year (that is, generally once a person's tax assessment becomes
available). This provision also recognises that, once reconciliation conditions are
met, the Secretary will conduct an internal review to take account of known ATI and
activity.
Item 166 makes amendments to section 111A, which deals with time limits on
applications for "AAT first review". Generally a person has 13 weeks to request such
review after notification of a decision, however new subsection (2A) provides for a
longer period where the decision is made following reconciliation conditions being
met (generally, because a person's tax assessment has become available, where
the person is required to lodge a tax return). Items 164, 165 and 167 make related
technical amendments.
Items 168 to 172 make minor technical amendments.
Item 173 makes amendments to section 124 to ensure that complex calculations
required to give effect to the AAT's decision on first review are performed by the
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Secretary on the AAT's direction, because the Secretary has access to the computer
system that calculates child care payments.
Item 174 inserts new section 125A to deal with the date of effect of certain AAT first
review decisions relating to CCS and ACCS. The new provision limits the date of
effect for favourable decisions (in respect of eligibility or entitlement to CCS or
ACCS) to no earlier than the first day of the income year prior to the income year in
which the application for review was made.
Item 175 amends section 128 of the Family Assistance Administration Act, which
deals with "AAT second review". The amendments adding subsections (3) and (4)
ensure that the same rules that apply to limitations on first review (as dealt with by
subsections 111(2A) and (2B)) apply to second review. Like for amendments to
section 111, these provisions ensure that decisions relevant to a person's income
changes or activity cannot be reviewed at "AAT second review" until after a
reconciliation process has occurred following an income year (that is, generally once
a person's tax assessment becomes available). New subsection 128(5) gives
applicants more time to lodge an application for "AAT second review" where the
application is made because an individual meets the reconciliation conditions
(generally because their tax assessment has become available) or where the
Taxation Commissioner has reviewed a decision under taxation law about the
taxable income of an individual.
Item 176 inserts new sections 134A and 134B which ensure that sections 124 and
125C (about ensuring that the Secretary makes complex calculations to give effect to
AAT decisions and about date of effect of CCS and ACCS decisions) apply at AAT
second review in the same way that they do at AAT first review.
Item 177 inserts new section 136 which outlines the requirements for the Secretary
to notify relevant providers of certain AAT decisions that impact an individual's
eligibility or entitlement to CCS or ACCS.
Item 178 inserts new section 137A which limits how far back in time favourable
changes affecting individuals and providers can take effect, where information is not
provided promptly. This provision is intended to encourage the prompt provision of
information in response to the Secretary's information gathering powers, and the
prompt notification of change in circumstances that would affect eligibility or
entitlement.
New section 137B ensures that favourable decisions made on first or second review
by the AAT do not have effect prior to the income year before the income year in
which an application is made. This provision gives people a reasonable chance to
request review, but ensures that applicants have an incentive to apply for AAT
relatively reasonably promptly. An exception applies where the application for
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review is made because the reconciliation conditions are met (generally because a
person's tax assessment is made available) or where the Commissioner of Taxation
reviews a tax decision with respect to an individual's taxable income.
Items 179 and 180 (and item 181, as a consequence) amend section 138 to limit
standing for decisions about the approval of providers to providers rather than other
persons who may be affected by an approval decision. Standing is limited to reduce
vexatious and possibly numerous applications from individuals who may be affected
by a provider approval decision, leaving it to the provider themselves to apply for
review. Note that this provision will not limit an individual's right to apply to a court in
relation to a question of law, including under the Administrative Decisions (Judicial
Review) Act 1977 where an individual has standing under that Act.
Item 182 repeals a Division that is no longer required because of the cessation of
CCR.
Part 6--Provisions relating to information
Item 183 makes amendments to the compulsory information gathering power in
section 154 of the Family Assistance Administration Act that are consequential upon
the introduction of CCS and ACCS.
Items 184 to 187 make technical amendments to an information gathering power
consequential upon the cessation of CCB and the introduction of CCS and ACCS.
Item 188 inserts new section 157A which empowers the Secretary to obtain records
kept by approved providers about whether a child is at serious risk of abuse or
neglect.
Item 189 amends subsection 158(3) to allow the Secretary to specify, in a notice
given under Division 1 of Part 6 of the Family Assistance Administration Act, a period
shorter than 14 days in which the information is to be provided where a shorter
period is reasonable to ensure the effective administration of the family assistance
law. A shorter period may be imposed where urgent provision of information is
required to mitigate risk to children in care or to limit debts.
Item 190 also amends section 158 to require notices to specify a time and place for
a person to appear where relevant and that the time for appearing must be at least
14 days, unless a shorter period is reasonable to ensure the effective administration
of the family assistance law. A shorter period may be imposed where urgent
provision of information is required to mitigate risk to children in care or to limit debts.
Item 191 adds to the list of legislative schemes that protected information can be
disclosed for the purposes of, by adding the National Law of a State or Territory
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jurisdiction. This amendment will authorise the flow of child care information
between the Commonwealth and States and Territories for the limited purposes of
child care payments and child care quality under Commonwealth and State/Territory
legislation.
Item 192 is a minor technical amendment.
Item 193 is a consequential amendment required because of the cessation of CCB.
Items 194 and 195 amend section 172 to ensure that references to claims for family
assistance in this provision include certain applications in relation to ACCS.
Item 196 makes a consequential amendment to paragraph 173(1)(d), required
because of the cessation of CCB and CCR.
Items 197, 198, 199 are minor technical amendments.
Item 200 clarifies that the reference to a person for the offence in section 175
includes a provider or an individual who obtains a fee reduction amount.
Item 201 consolidates offences that had applied to CCB and CCR into a single
provision that operates in respect of payments obtained by fraud.
Items 202, 203 and 204 are minor consequential amendments required because of
the cessation of CCB and because of the introduction of CCS and ACCS.
Part 8--Approvals
Item 205 repeals and substitutes Part 8 of the Family Assistance Administration Act.
New Part 8 provides for approval of providers of child care services in respect of
particular services. The Part attempts to draw consistencies in terminology between
the family assistance law and the Education and Care Services National Law Act
2010 (Vic) and equivalent legislation in other State jurisdictions (the National Law),
which refers to "providers" as distinct from "services".
New Part 8 aims to streamline the approval process by tailoring the approval criteria
to take into account matters relevant to the provider's suitability to administer child
care payments on behalf of the Commonwealth. The approval process is also
streamlined by consideration of a smaller set of service specific criteria when a
provider seeks to add new service(s) to their approval.
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Division 1--Provider approval
Section 194A sets out the requirements for an application for approval.
Subsection (1) limits the types of entities that can apply for approval. An application
for approval can be made by an individual, body corporate, partnership, or other
entity or body prescribed by the Minister's rules.
Subsection (2) provides the form, manner and content requirements for applications.
Subsection (3) clarifies that applications that do not comply with the form and
substance requirements in subsection 194A(2) are taken not to have been made and
also allows the Minister's rules to prescribe circumstances in which an application is
taken not to be made. This rule making power is intended to be used to limit
applications to address excessive growth within a particular child care service type
specifically where there are concerns about proven or alleged non-compliance with
family assistance law.
Section 194B deals with when the Secretary may approve a provider (essentially
where an applicant can satisfactorily demonstrate that they can meet the eligibility
criteria in sections 194C and 194D) and when the Secretary can approve the
provider in respect of services it operates. A provider must operate, or propose to
operate, at least one approved service, otherwise the provider cannot be approved.
There are also administrative provisions in this section dealing with notification of
approval and the circumstances in which the Secretary must refuse to approve a
provider as a provider in respect of a service it operates. By default, an approval will
take effect on a Monday, unless the Secretary has determined it is more appropriate
for the approval to take effect on another day.
Sections 194C and 194D set out the provider and service eligibility rules. For a
provider to meet the eligibility rules, they will need to: hold any approvals or licences
required under the National Law or other State or Territory laws that relate to child
care; demonstrate that they, and any person with management or control of the
provider, are fit and proper persons (as defined in section 194E); where they are a
large centre-based day care provider, demonstrate that they are financially viable
and are likely to remain as such; and meet any other criteria specified by the
Minister.
The service eligibility rules refer to kinds of care that the service must not provide
and refers to criteria that also apply to providers. Paragraph 194D(f) is notable for
setting out factors that the Secretary must weigh up and be satisfied of regarding the
appropriateness of the approval, including: any conditions that have already been
imposed on the provider's approval; whether there is a history of non-compliance
with laws; whether there is a poor record of administering CCS, ACCS, CCR or CCB
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payments or other funding provided by the Commonwealth or States or Territories;
the perceived capacity of staff to use the electronic child care payment system; and
other matters prescribed in rules or that are considered relevant in a particular case
(that are not set out in rules).
Section 194E lists the fit and proper person considerations that the Secretary must
have regard to for the purposes of the provider and service eligibility rules. Notably,
subsection (2) is intended to ensure that references to a "relevant person" in any of
the factors listed in subsection (1) includes another person or body in respect of
which the person is or has ever been a person with management or control. This
provision is intended to ensure that the Secretary is able to take into account a
person's previous record of management or control of other entities in having regard
to the factors in subsection (1). The fit and proper person considerations cover
requirements which apply to applications for approval for the purposes of the family
assistance law, and as ongoing conditions for continued approval, including ensuring
that findings of guilt can be considered (as well as convictions). The Secretary's
capacity to require disclosure of such matters is subject to the application of Part
VIIC of the Crimes Act 1914, which is about spent convictions and pardons.
Section 194F provides a definition of "person with management or control" for the
purposes of the fit and proper person considerations in the provider and service
eligibility rules. In particular, paragraph (b) ensures that even if a person does not
have the legal authority or responsibility for the planning, direction or control of the
activities of a body, but has a significant influence over the planning, direction or
control of the activities of the body, that person would be considered a "person with
management or control" of the body. For example, a parent company who has a
significant influence over the activities of a subsidiary would be considered a "person
with management or control", even where the parent company has no legal authority
to direct the activities of the subsidiary.
Section 194G provides a definition of "approved child care service" and clarifies that
a service is not approved during a period of suspension (although a service could be
taken to be approved during a period of suspension if a suspension is revoked with
backdated effect or on review).
Section 194H puts beyond doubt that any obligation or permission imposed or
conferred under the family assistance law on an approved child care service is taken
to be imposed or conferred on the approved provider that is approved with respect to
that service. This provision reflects the fact that, under the family assistance law, an
approved child care service is effectively the business operations of an approved
provider, who is the controlling legal entity or body.
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Division 2--Conditions for continued approval
Section 195A sets out the conditions for continued approval of an approved provider
that relate to ongoing compliance with eligibility rules, the family assistance law and
other laws of the Commonwealth or States and Territories that apply to the provider
(including the National Law).
Section 195B states that it is a condition of continued approval that, where a service
(with respect to which they are approved) has been allocated places, the service is
to fill no more places than those allocated. This provision has no effect in respect to
services where places have not been allocated.
Section 195C outlines, as a condition of continued approval, the minimum period
that an approved child care service must operate (that is, provide child care) per
year. The provision enables rules to be made to prescribe alternative periods to the
default periods listed in subsection (2) and empowers the Secretary to determine
shorter periods in "special circumstances", which are intended to be very unusual
circumstances in which it would be unfair or inappropriate for the provider to provide
care for the minimum period.
Section 195D ensures that details of the working with children cards that staff are
required to hold who work in an approved child care service are provided to the
Secretary so that the Secretary can be satisfied that the staff have been subject to
the requisite checks to work with children.
Section 195E allows the Minister to prescribe further conditions of continued
approval by legislative instrument. This power is intended to ensure that additional
conditions of continued approval may be imposed in the future, to deal with
unforeseen changes affecting the child care sector.
Section 195F gives the Secretary the ability to impose specific conditions in relation
to a particular provider or service (for example, where these are required because of
the particular characteristics of the provider or service). Such conditions might
include restrictions on a provider from operating in a particular geographical location,
or a requirement in relation to particular alterations to the facilities provided at an
approved service.
Subsection 195F(4) clarifies that notices of conditions imposed by the Secretary are
not legislative instruments. This provision is included simply to assist readers, as
any such notice is not a legislative instrument within the meaning of section 5 of the
Legislation Act 2003.
Section 195G empowers the Secretary to assess, at any time, a provider's
compliance with the conditions for its continued approval, including whether the
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provider eligibility continues to satisfy the provider eligibility rules and whether the
provider and persons with management control of the provider are fit and proper
persons to be involved in the administration of CCS and ACCS.
Section 195H sets out the consequences that follow a breach of a condition of
continued approval, otherwise known as "sanctions" that the Secretary can impose.
Provisions in this section: list the sanctions that can be imposed (subsection (1));
empower the Minister to set out rules that the Secretary must have regard to in
applying sanctions to approved providers (subsection (2)); and the processes
involved to impose a sanction and following the imposition of a sanction.
Division 3--Adding or removing services
Section 196A enables approved providers to apply to add or remove services from
their approval. Subsection (3) clarifies that applications that do not comply with the
form and substance requirements in subsection 196A(2) are taken not to have been
made and allows the Minister to prescribe other circumstances in respect of which
applications are taken not to have been made as referred to in subsection 194A(3).
Sections 196B and 196C empowers the Secretary to vary the provider's approval
by adding or removing a service to the provider's approval. It also sets out the
administrative steps the Secretary may take in response to an application under
section 196B.
Division 4--Suspension, variation and cancellation of approval
Section 197A provides the Secretary the power to immediately suspend the
approval of an approved provider, or a service in which a provider is approved in
respect of, in the circumstances listed in subsection (1). For example where there
are immediate threats to the health and safety of a child. There are also provisions in
this section outlining the administrative steps that the Secretary is to follow.
Section 197B allows the Secretary to suspend the approval of an approved
provider, or a service in respect of which they are approved, if the provider has been
given numerous infringement notices (10 within 12 months, or just 5 in 12 months,
where the infringement penalty has not been paid in accordance with the notices).
Note that infringement notices are given for non-compliance.
Section 197C allows providers to request that the Secretary cancel their approval
and provides for administrative steps following such a request. Providers may wish
to do this where they want to remain operating as a child care service without CCS
approval.
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Sections 197D and 197E allow the Secretary to cancel a provider's approval or vary
an approval (so that the provider is not approved in respect of service) if the
Secretary becomes aware that the approval should not have been made because
the factors in section 194B were not satisfied at the time the provider/service was
approved.
Sections 197F and 197G allow the Secretary to cancel approvals (of providers or
services) where services have not operated for 3 months (unless the exceptions in
(1)(b) apply). This provision ensures that providers who, and services that, stop
operating can be removed from the CCS payment system.
Sections 197H and 197J require the Secretary to cancel or vary the approval of a
provider where the provider ceases to operate its services.
Section 197K ensures the Secretary can cancel a provider's approval where they
are no longer approved in respect of any services.
Division 5--Allocation of child care places
Section 198A allows the Minister to prescribe rules dealing with the matters listed
with respect to the allocation of child care places. If a condition of a service's
approval is that they are subject to these rules, section 198B provides that the
Secretary must allocate places in accordance with them and allows approved
providers to apply for additional places.
Section 198C empowers the Secretary to reduce the number of places allocated
where the number allocated exceeds the number of places actually provided or able
to be provided under a State or Territory law because of licensing restrictions.
Division 6--Miscellaneous
Division 6 is the final Division in Part 8 and deals with a number of miscellaneous
matters including the procedure for imposing sanctions (section 199A) and a power
to publicise action taken on providers or individuals (section 199B).
Section 199C is an obligation imposed on approved providers to notify the Secretary
of matters affecting the original approval and whether it should continue to be
approved. The obligation is punishable by an offence carrying a penalty of 80
penalty units or through a civil penalty of 60 penalty units. This offence is not one of
strict liability and therefore the prosecution would need to establish relevant fault
elements.
Section 199D applies alongside the obligation to provide notices of reviewable
decisions under section 27A of the Administrative Appeals Tribunal Act 1975 and
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requires the Secretary to notify of review rights in notices of decisions under Part 8 of
the Family Assistance Administration Act.
Section 199E empowers the Secretary to notify individuals whose eligibility for CCS
or ACCS may be affected by an approved provider's non-compliance with a
condition of continued approval or by a cancellation, suspension or variation of an
approved provider's approval, were the Secretary to take such action. There are
requirements in this provision for the form and content of such notices.
Section 199F allows the Minister to specify providers who are exempt from meeting
certain approval criteria in order to become, or remain, approved. It is intended that
the Minister would specify providers who are in difficult or unusual circumstances
and who should nevertheless be able to provide child care with respect to which an
individual can remain eligible for CCS or ACCS. This provision could be used for
services formally funded under the Budget Based Funding model.
Section 199G, while appearing to provide a broad modification power of principal
legislation (sometimes referred to as a "Henry VIII clause"), is intended to operate in
a purely beneficial way to deal with any anomalies that may arise where an approval
is taken to be backdated in time. Where approvals are made with an effective date
in the past, providers may be unable to meet certain requirements (such as the
requirement to provide reports under section 204B) within the time specified in
legislation. This provision gives Ministerial power to make rules which modify the
principal legislation, so that it operates without anomalous or unfair consequences
for providers where their approval takes effect for a past period. Such modifications
would be beneficial for providers as they would ensure providers are not
retrospectively and unfairly exposed to obligations in the past that they are unable to
meet. This provision provides flexibility to ensure that anomalous timing rules and
other matters, consequent upon backdated approvals, can be dealt with in a
reasonable, sensible and beneficial manner. Any rules made in accordance with this
provision will be subject to further parliamentary scrutiny through the disallowance
process for legislative instruments, which means that Parliament is able to disallow
any rules that are considered non-beneficial or otherwise unfair.
Part 8A--Provider requirements and other matters
New Part 8A of the Family Assistance Administration Act sets out a number of
obligations that are imposed on approved providers. A number of provisions in the
new Part 8A include the application of strict liability offences on providers that fail to
comply with particular obligations. The new sections that include strict liability
offences are: 200A, 200D, 201A, 201C, 201D, 201E, 202A, 202B, 202C, 202D,
204B, 204C, 204F, and 2014K. The offences set out in these provisions, as part of a
wider compliance regime, are aimed at deterring inappropriate practices and
penalising those providers that continue to disregard their obligations under the
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family assistance law. Civil penalty provisions on their own may not be a sufficient
deterrent or penalty as providers may choose not to pay these penalties and
continue to operate. In some cases, civil penalties are not sufficient in their penalty
amounts as it may be more profitable for providers to inappropriately submit
attendance reports and pay the financial penalties.
The nature of these obligations is such that it is extremely difficult to prove an
intention element, and the punishment of these offences not involving fault is likely to
significantly enhance the effectiveness of the compliance regime.
The integrity of the subsidy system relies on child care services engaging in a range
of important administrative and business practices to ensure that the financial benefit
of child care subsidy payments are passed onto families, including by appropriate
record keeping, invoicing practices and reporting attendance and enrolment of
children.
The imposition of strict liability offences in relation to the contravention of obligations
offers the ability for criminal prosecution only where a contravention is considered to
be sufficiently serious to pursue in this manner. Strict liability offences are only
proposed in relation to contraventions that would have a significant impact on the
payment integrity of the new child care regime.
None of the strict liability offences introduced in the new Part 8A, as listed above, are
punishable by imprisonment under the terms of the family assistance law. These
offences are punishable by penalties not exceeding 60 penalty units for an individual,
with the exception of 201A, 201C and 202C which are punishable by a penalty not
exceeding 80 penalty units for an individual, and 204B and 204C, which are
punishable by a fine not exceeding 70 penalty units for an individual. The five
provisions containing strict liability offences punishable by over 60 penalty units
relate to certain matters that may impact on the ability of families to access child
care. The penalty units have been increased (as compared to penalties that apply
prior to the amendments to the family assistance law made by this Schedule)
because non-compliance with these obligations is increasing and there is growing
concern about child care provider compliance.
Division 1--Requirements in relation to enrolments and relevant arrangements
Section 200A requires approved providers to provide the Secretary notification of
the enrolment of a child within the timeframe specified in paragraphs (3)(c) or (d).
Subsection (2) deals with notification requirements in cases where a child is enrolled
prior to an approval being given or during a period of suspension of approval.
Subsection 200A(3) requires providers to report on care provided to children
whether or not the children are enrolled at a service under a complying written
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arrangement for the purposes of CCS eligibility. This requirement retains current
arrangements and will assist the Secretary make payments should individuals
become eligible after reports are provided and will otherwise assist the
administration of the child care payments system and related early childhood
programmes. A "relevant arrangement" is defined as being an arrangement, other
than a complying written arrangement, entered into by the provider and an individual
for the service to provide care to a child.
Due to the central importance of notifying enrolments to the CCS and ACCS
payment system, subsections (4) and (5) provide for an offence of strict liability for
failure to notify and a civil penalty. It is not intended that the offence would be
prosecuted in respect of honest or reasonable mistakes. There is also a civil penalty
and an option to issue infringement notices for less serious breaches of the
obligation.
For the purposes of the notification obligation in subsections 200A(1) and (2),
section 200B sets out when a child is taken to be enrolled. Importantly, (unless
subsection (4) applies because the child it at serious risk of abuse or neglect) a child
is only enrolled where the individual and the provider of the service enter into a
complying written arrangement that complies with the requirements in the
Secretary's rules referred to in subsection (3). An arrangement can only be varied in
writing in accordance with section 200C.
Section 200D imposes obligations on approved providers to notify the Secretary
when a "complying written arrangement" or other "relevant arrangement" is varied in
a way that results in the information that was notified about the enrolment to become
incorrect (or in other circumstances prescribed by the Minister's rules), where other
information becomes available that should have been provided or where the
information affects the currency of the enrolment or the arrangement. Due to the
importance of the integrity of the payment system and the Secretary being updated
on enrolment arrangements and changes, contravention on subsection (1) is
punishable by an offence of strict liability, or through a civil penalty. It is not intended
that the offence would be prosecuted in respect of honest or reasonable mistakes.
Division 2--Requirements in relation to CCS and ACCS by fee reduction
Division 2 sets out obligations of approved providers that relate to ensuring that CCS
and ACCS operate by passing on fee reductions to individuals (except for ACCS in
respect to which a provider is eligible).
Section 201A requires providers, after they have received a notice of a fee reduction
decision for an individual, to pass on the fee reduction or to remit the amount
received to the Secretary where they cannot. A provider may pass on a fee
reduction amount by reducing the fee that they charge the individual. Due to the
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central importance of passing on fee reductions of CCS and ACCS, provisions in this
section provide for an offence of strict liability for failure to notify as well as a civil
penalty. It is not intended that the offence would be prosecuted in respect of honest
or reasonable mistakes. Subsection 201A(2) exempts a provider from complying
with this obligation where the notice of the fee reduction decision to the provider
states that the Secretary has decided to pay the individual directly under subsection
67EC(6).
Subsection 201A(5) is a practical provision that allows for fee reductions to be
passed on to the individual otherwise than reducing fees (for instance by providing a
refund of fees already charged). This provision is intended to deal with cases where
certain decisions are backdated, such as a decision to approve a provider with
backdated effect or where a suspension is revoked or overturned on review. Where
the individual receives the benefit of the fee reduction from the provider, the provider
is taken to have passed on the amount, and the individual is taken to have been paid
an amount of CCS or ACCS.
Section 201B is a provision that obliges approved providers to ensure that they
recover, from individuals, the difference between a fee reduction (made available
through CCS or ACCS) and the actual fee charged to the individuals, where there is
a difference. The CCS payment is designed with a concept of co-contribution to the
cost of child care. This provision intends to address an issue that has arisen with
CCB where some child care services did not actually pursue the difference between
fee reductions and actual fee charged to the individual. The fees the provider
charges the individual are reported through to the current computer system and
these fees and hours of child care provided form the basis for the calculation of fee
reductions. Failure to satisfy this obligation carries both criminal and civil penalties
as specified.
Section 201C imposes an obligation on approved providers to charge an individual
who is eligible for ACCS no more in child care fees than they would charge an
individual who is eligible for CCS for the same session of care. This provision is
important to ensure that providers do not raise their fees in expectation of passing
higher fee reductions onto individuals by way of ACCS. An offence of strict liability
applies in cases where it is clear that services are establishing a pricing structure
that is different for individuals who are eligible for CCS as opposed to ACCS to
ensure that providers do not take advantage of situations where individuals are
eligible for the ACCS rate (such as because of their low income, or where a child is
at serious risk of abuse or neglect). Although there is a strict liability offence, it is
intended that action to prosecute the offence would only be taken in serious or
repealed cases.
Section 201D imposes an obligation on providers to give written statements in
relation to a statement period (usually a CCS fortnight, or other otherwise
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prescribed) to an individual containing details about the session fees and other
matters set out in subsection (3). Due to the importance of this provision to the
payment system of CCS and ACCS, provisions in this section provide for an offence
of strict liability and a civil penalty, however it is intended that action to prosecute the
offence would only be taken in serious or repealed cases. A similar obligation
applies where, as a result of a review, a determination about an individual's
entitlement is set aside or varied (section 201E).
Division 3--Requirements in relation to records
Section 202A imposes on obligation to make written records where an approved
provider (who would not otherwise have a record) becomes aware of an event that
relates to or impacts on eligibility for CCS or ACCS, compliance with conditions for
continued approval or other prescribed matters. Although a penalty of strict liability
applies, the fact that the offence is only made out where the provider becomes
aware of relevant events imports a knowledge element into the offence. It is not
intended that the offence would be prosecuted in respect of honest or reasonable
mistakes. There is also a civil penalty and an option to issue infringement notices for
less serious breaches of the obligation. A similar obligation applies in relation to
keeping records (section 202B) for the period specified in subsection 202B(2).
Section 202C imposes an obligation to make and keep records that evidence the
matters certified in a certificate of risk of serious abuse or neglect (or its
cancellation). A strict liability offence applies, however it is not intended that the
offence would be prosecuted in respect of honest or reasonable mistakes. There is
also a civil penalty and an option to issue infringement notices for less serious
breaches of the obligation.
Section 202D imposes an obligation to keep the Secretary informed about the
location of records following cancellation or suspension of approval (or a provider or
in respect of a service). As for other provisions in this Division, a strict liability
offence applies, however it is not intended that the offence would be prosecuted in
respect of honest or reasonable mistakes. There is also a civil penalty and an option
to issue infringement notices for less serious breaches of the obligation.
Division 4--Requirements relating to large centre-based day care providers
This Division imposes obligations that only apply in relation to "large centre-based
day care providers" as defined in section 4A of the Family Assistance Act.
Section 203A allows the Secretary to require financial information for the current
financial year and up to four previous financial years, where the information is
relevant to determining the financial viability of the provider, but only where the
provider is reasonably capable of providing it. Subsection (4) exempts persons
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registered under the Australian Charities and Not-for-profits Commission Act 2012
who have provided financial information under that Act. Subsection (5) puts beyond
doubt that the disclosure of any personal information under this provision is taken to
be authorised by law for privacy purposes. Section 203B sets out who notices may
be given to.
Section 203C empowers the Secretary to engage an auditor if she is concerned
about information received under section 203A. An auditor engaged must provide a
report that conforms with the requirements set out in section 203D.
Division 5--Requirement in relation to information and reports
Section 204A sets out a requirement for providers to notify the Secretary at least 42
days before their intention to stop operating a child care service, or to provide further
information about the cessation on request. An offence and a civil penalty applies
for breach of this obligation.
Section 204B is a very important requirement that obliges approved providers to
provide materially accurate reports about sessions of care provided to a child who is
enrolled with the service, or is provided with care by the service under a "relevant
arrangement". These reports are used to help calculate CCS and ACCS entitlement
amounts. There are content, form and manner requirements set out in subsections
(2) and (3) for these reports. The provider must give attendance notices to the
Secretary relating to all children for whom care is provided, including both enrolled
children (for whom complying written arrangements exist) and others for whom
relevant arrangements exist. The requirement to report care provided to all children
replicates the requirement contained in its predecessor provision (see old section
219N of the Family Assistance Administration Act). As reports under this provision
are essential to payments of CCS and ACCS, a strict liability offence applies,
however it is not intended that action would be taken to prosecute the offence where
there is an honest or reasonable excuse--only serious or repeated offences would
be subject to prosecution. A civil penalty also applies and the Secretary would be
able to issue infringement notices under the Regulatory Powers (Standard
Provisions) Act 2014 for contravention of the requirements in this provision. This
section imposes an obligation on approved providers, and compliance with this is
therefore a condition of continued approval. There is limited scope (subsection (6))
for providers to update reports and this must be done promptly.
Section 204C allows the Secretary to give a notice to a provider instructing them to
withdraw, update or vary a report where the Secretary reasonably considers that a
detail is inaccurate. If a provider does not respond to a notice within the time
required, the contravention is an offence as well as being subject to a civil penalty.
As for section 204B, because reports are essential to payments of CCS and ACCS,
a strict liability offence applies, however it is not intended that action would be taken
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to prosecute the offence where there is an honest or reasonable excuse--only
serious or repeated offences would be subject to prosecution.
Section 204D empowers the Secretary to give an approved provider a written notice
requiring the provider to give the Secretary information the Secretary needs in order
to determine whether to reduce the number of child care places allocated to the
service (where the service is the subject of allocation of places). Failure to comply
with the notice exposes a provider to the civil penalty outlined in subsection (5).
Section 204E imposes a requirement to comply with a notice to provide information
about children who are enrolled. An offence and a civil penalty apply to
contraventions.
Section 204F imposes a requirement for approved providers to provide information
about matters prescribed by the Minister's rules, commonly referred to as notifiable
events. An offence and a civil penalty apply to contraventions.
Section 204G allows the Minister to prescribe rules that impose requirements about
monitoring or investigating whether an approved service is providing care to a child
where there is no eligibility for a session of care or to a child who is of a class in
respect of whom no one is eligible (under subparagraph 85BA(1)(c)(iii) and
paragraph 85ED(1)(b) of the Family Assistance Act). Such children might be subject
to "child-swapping" measures and the requirements could relate to the provision of
information about this practice.
Section 204H sets out provisions that must be complied with notwithstanding a
provider's cancellation or suspension of approval. This provision has the effect that
any penalty or offence contained in the listed provisions can still apply on
contravention.
Section 204J clarifies, to avoid any doubt, that the collection, use or disclosure of
personal information for the purposes of determining the financial viability of a large
centre-based day care provider is authorised by law for privacy purposes.
Section 204K requires approved providers to inform an appropriate State/Territory
body that, within six weeks after it has given a certificate certifying, or applied for a
determination determining, that the provider considers the relevant child is or was at
risk of serious abuse or neglect. The purpose of this provision is to ensure that State
or Territory government agencies responsible for the welfare of children are informed
and able to respond to the welfare risks that such children may be facing.
Division 6--Business continuity payments
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This Division sets out provisions that allow for payments of CCS and ACCS to be
made where there are good reasons why approved providers are unable to provide
section 204B reports (for instance, where the computer system that facilitates such
reporting is down).
Items 203 and 204 make minor technical amendments consequential upon the
introduction of CCS and ACCS by this Bill.
Part 8C--Regulatory powers
This Part triggers the monitoring provisions under Part 2 of the Regulatory Powers
(Standard Provisions) Act 2014. Prior to amendments to the child care provisions in
the family assistance law proposed by this Schedule, the family assistance law
contained its own monitoring powers and processes. The purpose for triggering the
Regulatory Powers Act 2014 is to ensure that monitoring is brought into line with the
consistent approach embodied by that Act (subject to modifications where these are
necessary in the child care payment context). The triggering of the Regulatory
Powers (Standard Provisions) Act 2014 by provisions in this Schedule is not
intended to expand the Commonwealth's regulatory powers with respect to child
care matters.
Division 1--Monitoring powers
Section 219UA sets out: which provisions in the family assistance law are subject to
monitoring under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014;
what information is subject to monitoring; and which provisions are "related
provisions" for the purposes of Part 2 of the Regulatory Powers (Standard
Provisions) Act 2014. Subsection (4) sets out matters that are required to be
specified when triggering Part 2 of the Regulatory Powers (Standard Provisions)
Act 2014 and specifies who or what the following matters are: authorised applicant;
authorised person; issuing officer; relevant chief executive; and relevant court.
Section 219UB sets out "listed child care information provisions" for the purposes of
section 219UA (these provisions are subject to monitoring under Part 2 of the
Regulatory Powers (Standard Provisions) Act 2014).
Section 219UC modifies the Regulatory Powers (Standard Provisions) Act 2014 to
ensure that entry of premises for the purposes of monitoring where either an
occupier or a person who apparently represents the occupier provides consent for
entry. This is important in the child care context because it is likely that educators or
staff working for an occupier may provide consent on behalf of an occupier when an
authorised officer seeks entry for monitoring purposes.
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Section 219UD empowers the Secretary to appoint authorised persons for the
purposes of the monitoring powers in the Regulatory Powers (Standard Provisions)
Act 2014. It is intended that persons appointed under this provision will be APS
employees under the Public Service Act 1999.
Division 2--Civil penalties
Section 219VA ensures that the civil penalty provisions in the family assistance law
are enforceable under Part 4 of the Regulatory Powers (Standard Provisions) Act
2014. This ensures that orders can be obtained in the Federal Court or Federal
Circuit Court under that Act to enforce the penalties.
Section 219VB imposes a requirement for persons to assist with applications for
civil penalty orders, but only where the Secretary suspects or believes that the
person can provide relevant information. This provision is not intended to displace
the privilege in respect of self-incrimination and is intended to only be relied on in
limited cases where it is clear that a person's assistance will assist to obtain an
order.
Division 3--Infringement notices
Section 219WA provides that civil penalty provisions are subject to the infringement
notice provisions in Part 5 of the Regulatory Powers (Standard Provisions) Act 2014.
Infringement officers are appointed under subsection (3) and will be APS employees
of the Department responsible for administering the Act (currently the Department of
Education and Training).
Subsection (6) operates as a modification of the provision in the Regulatory Powers
(Standard Provisions) Act 2014 that ensures that infringement notices can only be
issued with respect to a single contravention and ensures that a single notice can
cover multiple contraventions. This provision is required because of the related
contraventions that are possible under the family assistance law and enables
providers and the Secretary to outline related contraventions that might occur in
relation to multiple children (for example, multiple contraventions of the notice
requirement in section 204B) or in relation to related behaviour in a single notice. It
is not intended to rely on single notices in relation to behaviour that is, or
contraventions that are, unrelated.
Division 4--General rules about offences and civil penalty provisions
Section 219XA clarifies that the physical elements required to prove an offence are
as set out in the provision that provides for the contravention.
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Section 219XB is an interpretative provision that applies where one provision states
that a person commits an offence or is liable to a civil penalty where they contravene
another provision. Subsection (2) makes clear that a reference to the contravention
relates to both provisions.
Items 209 and 210 make minor consequential amendment to the delegation
provision in the family assistance law, including by listing important powers that
should be exercised by the Secretary personally and cannot be delegated.
Item 211 replaces the provision that deals with notice requirements by referring to
"providers", which is a new concept introduced by this Schedule.
Items 212, 213 and 214 are minor and technical amendments consequential upon
the introduction of CCS and ACCS.
Item 215 inserts new section 230A into the Family Assistance Administration Act to
deal with the application of the family assistance law to providers that are
partnerships and therefore not legal entities or persons in their own right. This
provision essentially ensures that the obligations and permissions of the provider
rest with the partners. New section 230B is a similar provision that ensures that the
obligations and permissions of other unincorporated providers rest with each
member of the entity or body's governing body.
Items 216, 217 and 218 further clarify the effect of the family assistance law in
respect of partnerships and unincorporated bodies, which are both entity types that
are not uncommon for child care providers.
Items 219 and 220 amend and limit the standing appropriation in section 233 of the
Family Assistance Administration Act to ensure that additional funds required to pay
full rates of ACCS are drawn through Annual Appropriation Acts, rather than through
the standing appropriation in the family assistance law. Generally item 1 and 2
operate to essentially require the calculation of a notional CCS amount that the
individual would be entitled to if they were not entitled to ACCS--this amount is
drawn through the standing appropriation--and require the remaining amount to
meet the entire ACCS entitlement to be drawn elsewhere. A payment of an amount
under a funding agreement entered into under section 85GA, is also drawn through
Annual Appropriation Acts rather than through the standing appropriation.
Item 221 is a minor technical amendment.
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Part 2--Consequential amendments
Items 222 and 223 make an amendment to the A New Tax System (Goods and
Services Tax) Act 1999 which is consequential on the removal of "registered care" as
a kind of Commonwealth supported child care by Part 1 of this Schedule.
Items 224 and 225 make some minor consequential amendments to the Early Years
Quality Fund Special Account Act 2013 consequential upon the new terminology of
"approved provider" and "large centre-based day care provider" introduced by Part 1
of this Schedule.
Item 226 makes a minor consequential amendment to the Fringe Benefits Tax
Assessment Act 1986. The previous references to an array of care types for the
purposes of "exempt residual benefits" is replaced by the simpler term "approved
child care service", as introduced by Part 1 of this Schedule.
Items 227, 228 and 229 make amendments to the Income Tax Assessment Act
1997 that are consequential upon the cessation of CCB and CCR and the
introduction of CCS and ACCS by Part 1 of this Schedule. The overall approach to
the tax treatment of child care payments, however, remains unchanged.
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Part 3--Other amendments
Division 1--Amendments commencing day after Royal Assent
Items 230 and 231 amend section 4 of the Family Assistance Act by specifying that,
despite subsection 14(2) of the Legislation Act 2003, a determination made for
subsection (1) may make provision in relation to a matter by applying, adopting or
incorporating any matter contained in an instrument or other writing as in force or
existing from time to time. The departure from the general position reflected in
section 14 of the Legislation Act 2003 is intended to ensure that future versions of
the instruments that set out vaccination and immunisation details and schedules
(including the Australian Immunisation Handbook) can continue to be meaningfully
referred to. The Australian Immunisation Handbook is approved by the National
Health and Medical Research Council to provide clinical advice on vaccination. As
the Handbook is updated regularly to take account of scientific evidence as it
becomes available (and is currently in its 10th edition of publication) it is important to
ensure that any reference in a legislative instrument made under section 4 is a
reference to the current and up to date edition. The Handbook is publicly, readily
and freely available to access from the National Health and Medical Research
Council website, through the Australian Government Department of Health, for those
seeking to access the content of the law. It is understood that updates to the
Handbook are also regularly notified on the National Health and Medical Research
Council's homepage.
Items 232, 233, 234 and 235 introduce amendments to section 194 and section
199 of the Family Assistance Administration Act that allow the Minister to, firstly,
prescribe circumstances in which applications (made commencement day from
Royal Assent) for approval of a child care service are taken to not have been made.
This rule making power could be used to limit applications to address excessive
growth within a particular child care service type, specifically where there are
concerns about proven or alleged non-compliance with family assistance law. It
could also be exercised to establish a short "moratorium" on new applications in the
lead up to transition to the new CCS regime. The second amendment to section 199
allows the Secretary to reassess whether a child care service continues to meet the
conditions of continued approval. Where a service has been identified as no longer
meeting their conditions of continued approval, the service's approval may be
cancelled. This provision ensures that sanction action in relation to non-compliant
existing services can occur in the lead up to the new CCS system. This provision
also aligns with the ability of the Secretary, following the commencement of Part 1 of
this Schedule, to review the approval of approved providers.
Items 236 and 237 simplify a provision in the A New Tax System (Goods and
Services Tax) Act 1999 that deals with the GST treatment of child care that is funded
by the Commonwealth. The provision allows the Minister to determine certain kinds
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of child care for this purpose to enable new child care funding programmes to be
treated in a consistent way for GST purposes.
Division 2--Amendments commencing 1 July 2017
Items 238 and 239 shorten the period in which CCB service approvals are able to
be backdated from the date of application. A change is made from 6 to 3 months.
This provision is transitional in nature and is designed to ensure that lengthy
backdated approvals are not possible in the lead up to the new CCS system.
Items 240 to 249 make amendments related to the cessation of enrolment
advances. These amendments ensure that no new enrolment advances are payable
in relation to enrolments that post-date 1 July 2017. The amendment will also
ensure that, from 1 July 2017, enrolment advances can begin to be recovered where
they were paid in relation to enrolments that occurred more than four years ago.
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Part 4--Application, saving and transitional provisions
Division 1--Introduction
Item 250 sets out definitions for some terms specifically for the purposes of the
application, savings and transitional provisions in Part 4 of this Schedule. Notably,
the "commencement day" is the day that Part 1 of Schedule 4 commences and the
"pre-commencement period" is taken to be (approximately) the six month period
leading up to that day.
Division 2--Child care subsidy and Additional Child Care Subsidy
Item 251 is essentially an application provision which puts beyond doubt that a
person is only able to be eligible for (and therefore be paid) CCS or ACCS for a
session of care provided on or after commencement day, and not before.
Item 252 is a provision that ensures that individuals who had been in receipt of CCB
by fee reduction, or who had claimed CCB prior to commencement day, are taken to
have made a claim for CCS after commencement day. This provision aims to
ensure a smooth transition into the new CCS system for existing CCB
recipients/claimants by ensuring that they do not need to make a new claim for
assistance with their child care. However it is intended that the Secretary will require
individuals, through her information gathering powers, to provide information that
they will be eligible.
Item 253 is another provision that aims to ensure a smooth transition to the new
CCS system by allowing amounts of CCS to be paid promptly after commencement
day. Under this provision, individuals can make early claims for CCS, and the
Secretary, through her delegates, can exercise certain powers and functions in
anticipation of making CCS and ACCS payments. A provision at the end of the item
clarifies that these powers and functions can only be exercised subject to the
application provision in item 251, about how a person can only be eligible for CCS
and ACCS after commencement day.
Item 254 ensures that the effective first indexation day for certain new CCS amounts
that are subject to indexation is 1 July 2018. This means that relevant dollar
amounts referred to in the provision will be deemed to have been indexed from
commencement in line with consumer price index movement.
Item 255 ensures that the new requirement for arrangements (contracts with child
care providers) to be in writing will apply to arrangements that are already in force on
commencement day. This means, among other things, that any verbal contracts for
the provision of child care need to be set out in writing for a person to be eligible and
entitled to CCS following commencement day.
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Division 3--Child care benefit and Child Care Rebate
Item 256 puts beyond doubt that from commencement day onwards, eligibility (and
therefore entitlement) for CCB and CCR is no longer possible in relation to child care
that occurs from that day onwards.
Item 257 saves the operation of legislation and instruments, as they were prior to
amendments made by Part 1 of this Schedule, to ensure that eligibility and
entitlement for CCB or CCR can still be determined and reviewed in respect of child
care that occurred prior to commencement day.
Division 4--Providers of child care services
Item 258 ensures continuity for operators of child care services prior to
commencement day. Under this provision operators are taken to be "providers"
under the new CCS system on and from commencement day.
The provision also provides the Secretary the power to determine that an approved
child care service is a service of a type listed in subitem 9(2). The Secretary's
determination will be a legislative instrument where it is expressed to apply in
relation to a class of approved child care services.
Where the Secretary's determination relates to a particular approved child care
service, it will not be a legislative instrument for the purposes of the
Legislation Act 2003.
The provisions are beneficial in nature as they support existing operators to
transition into the new CCS approval regime without having to make a new
application for approval, as well as to assist continuity of business. Where a class
determination is made, it will be subject to further parliamentary scrutiny through the
disallowance process for legislative instruments.
Where a determination is made in relation to a particular service, the determination
itself is not amenable to merits review, given its purpose is to efficiently and
effectively transition currently approved services into the new system. However,
there is nothing to prevent a provider who wishes to hold CCS approval for a service
or services from making a new application for approval under section 194B of the
Family Assistance Administration Act. The primary consequences of being deemed
a certain service type relate to the kinds of conditions of continued approval which
apply to that service type (see Part 8 of the Family Assistance Administration Act),
as well as the hourly rate cap that will apply to sessions of care provided by that
service (see table in subclause 2(3) of Schedule 2 of the Family Assistance Act).
Once transitioned, the obligations set out under the family assistance law, will apply
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without any differentiation between transitioned services, and services approved
under the new CCS regime. Merits review will continue to be available in respect of
any further decisions made under the family assistance law which affect the provider
as a consequence of their transition.
Item 259 saves the previous effect of the family assistance law to ensure that:
liability for debts under the old law continues; new debts can arise under the old debt
rules in relation to CCB and CCR payments; debts can be recovered under the
recovery powers in the family assistance law as amended by Part 1 of this Schedule;
and old decisions are still reviewable.
Division 5--Miscellaneous
Item 260 is declaratory and clarifies that the amendment of the delegation power in
the family assistance law does not affect a delegation (or power exercised in reliance
on one) previously in effect.
Item 261 gives the Minister a power to make rules dealing with transitional issues.
This power is worded broadly in order to ensure that any unforeseen and unintended
consequences of repealing and amending legislation can be remedied promptly and
flexibly by legislative instrument. Although the power is broad and allows the
Minister to modify the effect of principal legislation, the power is intended to be
limited to ensuring the smooth transition into the new CCS and ACCS system and
the framing of this power means that any rules that attempt to modify the principal
legislation other than to assist transition would be beyond power and ineffective.
The power is intended to be relied on to ensure beneficial outcomes for providers,
services and individuals who may otherwise be affected by unanticipated scenarios
that arise at transition. The power to modify principal legislation is also limited to a
two year period from commencement in light of the expectation that no further
transitional issues will arise after that time. Any rules made under this power will be
subject to further parliamentary scrutiny through the disallowance process for
legislative instruments, which means that Parliament is able to disallow any rules
that are considered non-beneficial or otherwise unfair. In addition, to avoid doubt,
there is no ability to convict a person of an offence, or impose a pecuniary penalty, in
relation to conduct which took place prior to registration of the rules, where the
conduct would not have been unlawful but for any retrospective effect of rules made
under this provision.
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Schedule 5 - Proportional payment of pensions outside Australia
Schedule 5 - Proportional payment of pensions outside Australia
Summary
On the first 1 January, 1 April, 1 July or 1 October after Royal Assent, this Schedule
reduces the point at which the Age Pension and a small number of other payments
are adjusted to reflect a person's Australian working life residence from 26 weeks to
six weeks overseas. The measure does not affect the length of time a person can
receive portability period, which continues to be unlimited.
Background
This Schedule affects the rate of pension paid to age pension recipients and a
limited number of disability support pension, wife pension and widow B pension
recipients who have unlimited portability.
The amendments will reduce from 26 weeks to six weeks the period of absence from
Australia after which a pension recipient's payment is proportionalised. After
six weeks, payment will be adjusted according to the length of the pensioner's
Australian working life residence.
To retain their basic means-tested rate while overseas, a person needs 35 years'
working life residence in Australia. Working life residence is calculated based upon
the period beginning when the person turns 16 and ending when the person reaches
pension age (point 1221-B1 of the Social Security Act). If a person's period of
Australian working life residence is less than 35 years, their individual rate of pension
after six weeks will be adjusted according to their years of working life residence.
The measure will reinforce and strengthen the residence-based nature of Australia's
social security system. After a six-week absence, payment will be based on the
length of time a person has resided in Australia during their working life.
The measure does not affect the length of the portability period, which continues to
be unlimited. However, the rate received after a six-week absence may change.
The amendments will commence on the first 1 January, 1 April, 1 July or 1 October
after Royal Assent, but will only apply to absences starting on or after
commencement. Pensioners who are overseas on the commencement date will
continue to be allowed the full 26-week period of absence before their payment is
potentially reduced.
Explanation of the changes
Amendments to the Social Security Act
Items 2, 3 and 4 amend sections 1220A (Proportionality - age pension rate),
1220B (Proportionality - disability support pension rate for a severely disabled
person) and 1221 (Proportionality - wife pension and widow B pension rate for
entitled persons). These three sections each substitute a proportionalised rate of
pension based upon a person's Australian working life residence after 26 weeks.
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Schedule 5 - Proportional payment of pensions outside Australia
In each case, the provision is amended to substitute reference to six weeks for the
current reference to 26 weeks.
Item 1 makes a consequential amendment to a note at subsection 1214(1), to refer
to six weeks instead of 26 weeks.
Item 5 provides that the amendments made by this Schedule apply in relation to
periods of absence from Australia starting on or after the commencement of this
item.
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Schedule 6 - Pensioner education supplement
Schedule 6 - Pensioner education supplement
Summary
This Schedule ceases pensioner education supplement from the first 1 January or 1
July after the day the Act receives Royal Assent.
Background
In broad terms, the pensioner education supplement assists people receiving certain
income support payments with the ongoing costs of full-time or part-time study. This
Schedule repeals provisions that provide for pensioner education supplement, and
makes related consequential changes.
The pensioner education supplement was introduced to assist long-term income
support recipients improve their skills and training to be more competitive in the
labour market. The pensioner education supplement is $62.40 per fortnight or $31.20
per fortnight depending on the person's study load.
Since the introduction of the pensioner education supplement, several policies have
been introduced which provide more appropriate and targeted channels of support to
improve income support recipient's employment prospects through study or training.
This includes through the HECS-HELP, FEE-HELP and VET Student Loans tuition
loan programs and through the Employment Fund, which provides financial
assistance to job seekers registered with an employment services provider to
engage in study or training.
Additionally, income support payments, particularly youth allowance (student),
austudy and ABSTUDY, are specifically targeted towards people undertaking
education and training, taking into account their circumstances and needs. These
student payments will continue and will not be affected by the removal of the
pensioner education supplement.
Ceasing the pensioner education supplement will also help to simplify the income
support system by reducing the number of payment supplements.
Explanation of the changes
Part 1 - Main amendments
Amendments to the Social Security Act
Part 2.24A of the Social Security Act provides for the payment of pensioner
education supplement. Item 17 repeals Part 2.24A.
Consequential amendments are made as set out below.
Item 1 omits 'a pensioner education supplement,' from subsection 7(6).
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Item 2 repeals subparagraph (l)(v) of the definition of compensation affected
payment in subsection 17(1).
Item 3 omits 'or supplement,' from paragraph (l) of the definition of compensation
affected payment in subsection 17(1).
Item 4 repeals and substitutes paragraph (m) of the definition of compensation
affected payment in subsection 17(1) to reflect the repeal of
subparagraph 1061ZAAA(1)(b)(iv) by item 19.
Item 5 repeals the note at the end of the definition of approved course of
education or study in subsection 19AB(2).
Item 6 repeals and substitutes the definition of independent in subsection 23(1).
Item 7 repeals paragraph (cb) of the definition of newly arrived resident's waiting
period in subsection 23(1).
Item 8 omits ', a double orphan pension or a pensioner education supplement',
and substitutes 'or a double orphan pension' in paragraph (a) of the definition of
payday in subsection 23(1).
Item 9 omits the word ', supplement' from paragraph (a) of the definition of payday
in subsection 23(1).
Item 10 repeals paragraph 23(4AA)(c).
Item 11 omits 'paragraph 1061PB(1)(b)', and substitutes 'subsection 541B(5)',
in paragraphs 23(10F)(c) and (d).
Item 12 repeals section 119.
Item 13 repeals subsection 503AA(1).
Item 14 omits '(2)' from subsection 503AA(2). This is consequential to item 13.
Item 15 omits ', 569A(b) or 1061PB(1)(b)', and substitutes 'or 569A(b)'
in subparagraph 569H(7)(g)(iii).
Item 16 repeals subsection 1049(1).
Item 18 adds 'and' to the end of subparagraph 1061ZAAA(1)(b)(iii). This is
consequential to item 19.
Item 19 repeals subparagraph 1061ZAAA(1)(b)(iv).
Item 20 omits ', a mobility allowance or a pensioner education supplement',
and substitutes 'or a mobility allowance', in section 1158.
Amendments to the Social Security Administration Act
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Schedule 6 - Pensioner education supplement
Item 21 omits 'allowance; or', and substitutes 'allowance.', in paragraph (i) of the
definition of supplementary payment in subsection 15(5). This is consequential to
item 22.
Item 22 repeals paragraph (j) of the definition of supplementary payment in
subsection 15(5).
Item 23 repeals subsection 50(3).
Item 24 repeals paragraph 52(1)(h).
Item 25 omits ', austudy payment or pensioner education supplement',
and substitutes 'or austudy payment', wherever occurring in paragraphs 55(4A)(a)
and (b).
Items 26 and 27 repeal paragraphs (i) and (o) of the definition of category I welfare
payment and paragraphs (d) and (i) of the definition of category Q welfare
payment respectively in section 123TC.
Item 28 repeals subparagraphs (a)(xiv) and (xxiii) of the definition of restrictable
payment in subsection 124PD(1).Item 29 repeals paragraph (i) of the definition of
social security periodic payment in subclause 1(1) of Schedule 1.
Item 30 repeals clauses 30 to 32 of Schedule 2.
Part 2 - Other amendments
Consequential amendments are also made to the Acts set out below.
Amendments to the Family Assistance Act
Item 31 omits the reference to paragraph 17(1)(c) in subparagraph 14(1A)(b)(i).
This is consequential to item 32.
Item 32 repeals paragraph 17(1)(c).
Amendment to the Farm Household Support Act
Item 33 repeals paragraph 94(i).
Amendments to the Income Tax Assessment Act 1997
Item 34 repeals item 22A.1 in the table contained in section 52-10.
Item 35 repeals item 22A in the table contained in section 52-40.
Part 3 - Application and saving provisions
Subitem 36(1) provides that, despite the amendments to the definition of
compensation affected payment in subsection 17(1) of the Social Security Act
made by Part 1 of this Schedule, Parts 3.6A and 3.14 of the Social Security Act
continue to apply as if those amendments had not been made.
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Subitem 36(2) provides that, despite the amendments made by items 12, 13, 14
and 16 of this Schedule, sections 119, 503AA and 1049 of the Social Security Act,
as in force immediately before the commencement of this item, will continue to apply
on and after the commencement of the items in relation to working out whether an
approved program of work supplement or language, literacy and numeracy
supplement are payable in respect of a fortnight beginning before that
commencement.
Subitem 36(3) provides that, despite the amendment made by item 17 of this
Schedule, Part 2.24A of the Social Security Act, as in force immediately before the
commencement of this item, will continue to apply on and after the commencement
in relation to days occurring before the commencement.
Subitem 36(4) provides that, despite the amendments made by items 18 and 19 of
this Schedule, paragraph 1061ZAAA(1)(b) of the Social Security Act, as in force
immediately before the commencement of this item, continues to apply on and after
that commencement in relation to a relevant period that began before that
commencement.
Subitem 36(5) provides that, despite the amendment made by item 20 of this
Schedule, section 1158 of the Social Security Act, as in force immediately before the
commencement of this item, continues to apply on and after that commencement in
relation to days occurring before that commencement.
Subitem 36(6) provides that, despite the amendments made by items 23 and 25 of
this Schedule, subsections 50(3) and 55(4A) of the Social Security Administration
Act, as in force immediately before the commencement of this item, continue to
apply on and after that commencement in relation to the payment of fares allowance
on or after that commencement, to the extent that payment of fares allowance is
being made because of the receipt of pensioner education supplement.
Subitem 36(7) provides that, despite the amendment made by item 24 of this
Schedule, paragraph 52(1)(h) of the Social Security Administration Act, as in force
immediately before the commencement of this item, continues to apply on and after
that commencement in relation to the payment of pensioner education supplement
on or after that commencement.
Subitem 36(8) provides that, despite the amendments made by items 26 to 28,
Parts 3B and 3D of the Social Security Administration Act continue to apply in
relation to a payment of pensioner education supplement or an ABSTUDY payment
that includes an amount identified as pensioner education supplement that was
made before, on or after commencement.
Subitem 36(9) provides that, despite the amendments made by items 31 and 32 of
this Schedule, subparagraph 14(1A)(b)(i) and paragraph 17(1)(c) of the Family
Assistance Act, as in force immediately before the commencement of this item,
continue to apply on and after that commencement in relation to working out whether
an individual satisfies the work/training/study test or has recognised study
commitments before, on or after that commencement.
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Schedule 6 - Pensioner education supplement
Subitem 36(10) provides that, despite the amendment made by item 34 of this
Schedule, item 22A.1 of the table in section 52-10 of the Income Tax Assessment
Act 1997, as in force immediately before the commencement of this item, continues
to apply on and after that commencement in relation to a payment of pensioner
education supplement before, on or after that commencement.
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Schedule 7 - Education entry payment
Schedule 7 - Education entry payment
Summary
This Schedule ceases the education entry payment from the first 1 January or 1 July
after the Act receives Royal Assent.
Background
In broad terms, the education entry payment assists with education expenses, and is
paid once a year to eligible recipients. This Schedule repeals provisions that provide
for education entry payment, and makes related consequential changes.
The education entry payment is an annual lump sum payment of $208 per year and
was introduced in 1993 to assist long-term income support recipients improve or
re-build their skills and training to be more competitive in the labour market.
Since the introduction of the education entry payment several policies have been
introduced which provide more appropriate and targeted channels of support to
improve income support recipient's employment prospects through study or training.
This includes through the HECS-HELP, FEE-HELP and VET Student Loans tuition
loan programs and through the Employment Fund, which provides financial
assistance to job seekers registered with an employment services provider to
engage in study or training.
Additionally, income support payments, particularly youth allowance (student),
austudy and ABSTUDY, are specifically targeted towards people undertaking
education and training, taking into account their circumstances and needs. These
student payments will continue and will not be affected by the removal of the
education entry payment.
Ceasing the education entry payment will also help to simplify the income support
system by reducing the number of payment supplements.
Explanation of the changes
Part 1 - Main amendments
Amendments to the Social Security Act
Part 2.13A of the Social Security Act provides for the payment of education entry
payment. Item 3 repeals Part 2.13A.
Consequential amendments are made as set out below.
Item 1 repeals subparagraph (l)(iv) of the definition of compensation affected
payment in subsection 17(1).
Item 2 omits 'allowance, payment', and substitutes 'allowance,' in paragraph (l) of
the definition of compensation affected payment in subsection 17(1).
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Schedule 7 - Education entry payment
Item 4 repeals table item 7 in subsection 1222(2).
Item 5 omits 'or an education entry payment supplement' in
paragraph 1223ABAAB(1)(a).
Item 6 omits 'benefit; and', and substitutes 'benefit.' in paragraph 1223ABAAB(2)(e).
This is consequential to item 7.
Item 7 repeals paragraph 1223ABAAB(2)(h).
Item 8 repeals section 1224B.
Amendments to the Social Security Administration Act
The paragraphs set out below refer to the education entry payment. Amendments
are made to remove these references.
Item 9 repeals paragraph (c) of the definition of supplementary payment in
subsection 15(5).
Item 10 repeals paragraph (d) of the definition of lump sum benefit in
subsection 47(1).
Item 11 repeals paragraph (c) of the definition of household stimulus payment in
section 123TC.
Amendments to the Veterans' Entitlements Act
Part VIIAA of the Veterans' Entitlements Act provides for the payment of education
entry payment. Item 19 repeals Part VIIAA.
Consequential amendments are made as set out below.
Item 12 omits the words 'age; or' and substitutes 'age.' in paragraph (c) of the
definition of compensation affected pension in subsection 5NB(1).
Item 13 repeals paragraph (f) of the definition of compensation affected pension in
subsection 5NB(1).
Item 14 omits the words 'pensions, supplements and payments', and substitutes
'pensions and supplements' in subsection 59M(1).
Item 15 omits the word 'supplement;' and substitutes 'supplement.' in
paragraph 59M(1)(f). This is consequential to item 16.
Item 16 repeals paragraph 59M(1)(i).
Item 17 omits the words 'pensions, supplements, allowances and payments',
and substitutes 'pensions and supplements' in note 2 to subsection 59M(1).
Item 18 omits the words 'supplement or payment' and substitutes 'or supplement'
in subsections 59M(2), (3) and (4).
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Schedule 7 - Education entry payment
Part 2 - Other amendments
Consequential amendments are made to various Acts, as set out below.
Amendment to the Farm Household Support Act
Item 20 repeals paragraph 94(e).
Amendments to the Income Tax Assessment Act 1936
Item 21 omits 'or education entry payment' in subparagraph 160AAAA(2)(c)(i).
Item 22 omits 'or education entry payment' in subparagraph 160AAAB(2)(c)(i).
Amendments to the Income Tax Assessment Act 1997
Item 23 omits the 'education entry payment supplement under the Social Security
Act 1991' in the table item headed 'social security or like payments' in section 11-15.
Item 24 omits 'purposes;', and substitutes 'purposes.' in paragraph 51-35(e). This is
consequential to item 25.
Item 25 repeals paragraph 51-35(f).
Item 26 repeals and substitutes section 51-40.
Item 27 repeals paragraph 52-10(1)(za).
Item 28 repeals subsection 52-10(1J).
Item 29 repeals section 55-10.
Amendment to the Taxation Administration Act 1953
Item 30 omits ', 55-5 or 55-10', and substitutes 'or 55-5' in paragraph 12-110(1)(c) of
Schedule 1.
Part 3 - Application and saving provisions
Subitem 31(1) provides that, despite amendments to the definition of
compensation affected payment in subsection 17(1) of the Social Security Act
made by Part 1 of this Schedule, Parts 3.6A and 3.14 of the Act continue to apply as
if the amendments had not been made.
Subitem 31(2) provides that, despite the amendment made by item 3 of this
Schedule, Part 2.13A the Social Security Act, as in force immediately before the
commencement of this item, continues to apply on and after that commencement in
relation to a claim for the education entry payment made by a person before that
commencement, where the person was qualified for that payment before that
commencement.
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Schedule 7 - Education entry payment
Subitem 31(3) provides that, despite amendments made by items 5 to 8 of this
Schedule, sections 1223ABAAB and 1224B of the Social Security Act, as in force
immediately before the commencement of this item, continue to apply on and after
that commencement in relation to payments of education entry payment supplement
or education entry payment made before, on or after that commencement.
Subitem 31(4) provides that, despite the amendments of the definition of
compensation affected pension in subsection 5NB(1) of the Veterans'
Entitlements Act made by Part 1, Part IIIC of the Veterans' Entitlements Act
continues to apply as if those amendments had not been made.
Subitem 31(5) provides that, despite the amendment made by item 19, Part VIIAA of
the Veterans' Entitlements Act, as in force immediately before the commencement of
this item, continues to apply on and after that commencement in relation to a claim
for the education entry payment made by a person before that commencement,
where the person was qualified for that payment before that commencement.
Subitem 31(6) provides that, despite the amendments made by items 14 and 15 of
this Schedule, paragraphs 160AAAA(2)(c)(i) and 160AAAB(2)(c)(i) of the Income
Tax Assessment Act 1936, as in force immediately before the commencement of this
item, continue to apply on and after that commencement in relation to payments of
education entry payment made before, on or after that commencement.
Subitem 31(7) provides that, despite the amendments made by items 25, 26 and 29
of this Schedule, paragraph 51-35(f) and sections 51-40 and 55-10 of the
Income Tax Assessment Act 1997, as in force immediately before the
commencement of this item, continue to apply on and after that commencement in
relation to payments of education entry payment made before, on or after that
commencement.
Subitem 31(8) provides that, despite the amendment made by item 28 of this
Schedule, subsection 52-10(1J) of the Income Tax Assessment Act 1997, as in force
immediately before the commencement of this item, continue to apply on and after
that commencement in relation to payments of education entry payment supplement
made before that commencement.
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Schedule 8 - Indexation
Schedule 8 - Indexation
Summary
This Schedule implements the following changes to Australian Government
payments:
maintain at level for three years from 1 July of the first financial year beginning
on or after the day this Act receives Royal Assent the income free areas for all
working age allowances (other than student payments) and for parenting
payment single; and
maintain at level for three years from 1 January of the first calendar year
beginning on or after the day this Act receives Royal Assent the income free
areas and other means test thresholds for student payments, including the
student income bank limits.
Background
Under the current rules, income free areas and means test thresholds are indexed
annually in line with movements in the Consumer Price Index. Indexation occurs
either on 1 July or 1 January, depending on the payment involved.
This Schedule pauses for three years the indexation that occurs on 1 July each year
of various income thresholds that apply to certain social security benefits and
allowances (other than student payments) and the income test free area for
parenting payment single. Under this measure, these amounts will not be indexed
on 1 July for three years following Royal Assent.
Similarly, the usual 1 January indexation of the income free areas and other means
test thresholds for student payments will be paused for three years. These amounts
will not be indexed on 1 January for three years following Royal Assent.
When indexation recommences, it will apply to the (paused) thresholds and there will
be no catch-up in respect of indexation that would otherwise have occurred during
the three-year pause.
Explanation of the changes
Amendments to the Social Security Act
Item 1 relates to the benefits and allowances 'payment free area' (defined in
item 20AAA of the table in section 1190 of the Social Security Act). Current
subsection 1192(4AB) provides that the first indexation of amounts to which
item 14AAA of the CPI Indexation Table in subsection 1191(1) relates is to take
place on 1 July 2015. This item inserts new subsection 1192(4AC), providing that
amounts under this table item are not to be indexed on 1 July of the first financial
year on or after Royal Assent and on 1 July of the next 2 financial years.
Item 2 adds further subsections to section 1192.
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Schedule 8 - Indexation
New subsection 1192(5AAA) affects indexation provided for by item 14 in the CPI
Indexation Table in subsection 1191(1). Item 14 deals with the pension free area
(which is an abbreviation for the ordinary income free area for social security pension
- see item 20 of the table in subsection 1190(1)). To the extent the pension free
area relates to the Pension PP (Single) Rate calculator in point 1068A-E14,
new subsection 1192(5AAA) provides it is not to be indexed on 1 July of the first
financial year on or after Royal Assent and on 1 July of the next 2 financial years.
New subsection 1192(5AAB) affects indexation provided for by items 14AA (the
youth allowance and austudy ordinary income free area), 14AB (the youth allowance
and austudy range reduction boundary), 15 (the student income bank balance limit)
and 24 (the youth allowance (non-independent) assets value limit) of the
CPI Indexation Table in subsection 1191(1). The amounts under these items are not
to be indexed on 1 January of the first calendar year on or after Royal Assent and on
1 July of the next 2 calendar years.
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Schedule 9 - Closing energy supplement to new welfare recipients
Schedule 9 - Closing energy supplement to new welfare recipients
Summary
Schedule 9 will close the energy supplement to new welfare recipients from
20 September 2017.
Background
Schedule 9 amends the Social Security Act 1991, Farm Household Support Act
2014, Veterans' Entitlements Act 1986, Military Rehabilitation and Compensation Act
2004 and Budget Savings (Omnibus) Act 2016.
The amendments made to these Acts prevent new recipients of welfare payments
being paid the energy supplement from 20 September 2017. The amendments
ensure that welfare recipients who are paid the energy supplement with their
payment prior to 20 September 2016 who satisfy the requirements set out in
Schedule 9 will continue to receive the energy supplement with their payment from
20 September 2017 onwards.
For payment recipients who first receive the energy supplement on or after 20
September 2016, the energy supplement can only be paid to them until 19
September 2017 and this is subject to the person satisfying the current legislative
criteria for receiving the supplement. From 20 September 2017 onwards they can no
longer receive the energy supplement.
The amendments made by Schedule 9 commence on 20 September 2017.
Explanation of the changes
Part 1 - Energy supplement under the social security law
Amendments to the Social Security Act
Item 1 repeals the formula in subsection 17(8) and substitutes a new formula that
does not contain an energy supplement component. The formula in subsection 17(8)
is used to determine the income cut-out amount for the purposes of working out
the number of weeks in a person's lump sum preclusion period under subsection
1170(4).
Item 2 repeals the definition of energy supplement component from subsection
17(8). This definition is no longer required as a result of the amendments made by
item 1.
Item 3 is an application provision that provides that the amendments made to
subsection 17(8) by this Part only apply in relation to lump sum preclusion periods
beginning on or after the commencement of this item.
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Schedule 9 - Closing energy supplement to new welfare recipients
Item 4 inserts new section 22. Section 22 sets out when a person becomes a
transitional energy supplement person. While a person remains a transitional
energy supplement person they will continue to receive energy supplement after the
commencement of this Schedule.
New subsection 22(1) provides that a person becomes a transitional energy
supplement person on 19 September 2016 if on that day:
(a) the person was receiving an income support payment where energy supplement
was used to work out the rate of that payment; or
(b) energy supplement was payable to the person under section 1061UA; or
(c) subsection 62B(2) of the Veterans' Entitlements Act applied in relation to the
person; or
(d) energy supplement was payable to the person under section 118PA of the
Veterans' Entitlements Act; or
(e) under the scheme referred to in section 117 of the Veterans' Entitlements Act,
the Commonwealth was liable to pay the person energy supplement for the
person's clean energy underlying payment; or
(f) subsection 238A(1) of the Military Rehabilitation and Compensation Act applied
in relation to the person; or
(g) under the scheme referred to in section 258 of the Military Rehabilitation and
Compensation Act, the Commonwealth was liable to pay the person energy
supplement for the person's clean energy underlying payment; or
(h) the person was receiving a payment under the ABSTUDY scheme (also known
as the Aboriginal Study Assistance Scheme) that included an amount identified
as living allowance and the person qualified for an energy supplement under that
scheme.
New paragraph 22(1)(a) applies to a person receiving farm household allowance
under the Farm Household Support Act where energy supplement is used to work
out the rate of that allowance. Subsection 91(3) of the Farm Household Support Act
treats a reference in the Social Security Act to an income support payment as
including a reference to farm household allowance under the Farm Household
Support Act.
Paragraph 22(1)(a) will also be applicable to certain persons in receipt of a Defence
Force Income Support Allowance (DFISA). DFISA is payable to those persons in
receipt of a social security or benefit that is reduced, including to nil, because of the
inclusion of disability pension paid to the person under the Veterans' Entitlements
Act as income in the assessment of that pension or benefit.
Those people in the circumstances where the social security or benefit is reduced to
nil are commonly referred to as DFISA-only recipients. Under paragraph 23(1D)(f) of
the Social Security Act they will be taken to be receiving the particular pension or
benefit for which they qualify and they remain subject to the obligations associated
with that pension or benefit.
It should also be noted that income support payment, as defined in section 23 of the
Social Security Act, includes a service pension under the Veterans' Entitlements
Act.
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Schedule 9 - Closing energy supplement to new welfare recipients
New subsection 22(2) provides that a person ceases to be a transitional energy
supplement person on a day on or after 20 September 2016 (and can never again
become a transitional energy supplement person) if none of paragraphs 22(1)(a) to
(h) apply to the person on that day.
A note to subsection 22(2) alerts the reader that subsections 22(3) to (7) set out
certain situations in which a person will be taken to be receiving a payment on a day
and therefore subsection 22(2) will not apply to the person on that day.
New subsection 22(3) applies to treat a person as receiving an income support
payment for new paragraph 22(1)(a) if, before 19 September 2016, the person
receives a rate of a social security payment that is greater than nil (where energy
supplement was used to work out that rate) and the person's rate of payment goes to
nil on a day on or after 19 September 2016 (where energy supplement was used to
work out that rate).
The person must, on the day before the person's rate goes to nil, have been
receiving a social security payment at a rate greater than nil and energy supplement
must have been used to work out that rate. Further, the person must remain
qualified for their social security payment while their rate of payment is nil and their
payment is not cancelled.
For subsection 22(3) to apply a person must remain on a nil rate of the same
payment. Otherwise, subsection 22(3) will cease to apply and the person will no
longer be receiving an income support payment for new paragraph 22(1)(a).
New subsection 22(4) applies to treat a person as receiving an income support
payment despite the person's payment being suspended on a day on or after 19
September 2016.
The person must, before 19 September 2016, be receiving a social security payment
at a rate greater than nil and energy supplement must have been used to work out
that rate.
The person must, on the day before the suspension took effect have been receiving
a social security payment at a rate greater than nil and energy supplement must
have been used to work out that rate. Further, the person must remain continuously
qualified for their social security payment while suspended.
When a person's suspension ends with the person being restored to a positive rate
of payment, the person will again be able to have the energy supplement added to
their rate of payment if all other requirements regarding the payment of the energy
supplement have been met.
For subsection 22(4) to apply a person must return to the same payment they were
receiving before the suspension began.
New subsection 22(5) applies to treat a person as receiving an income support
payment under paragraph 22(1)(a) if, on 19 September 2016 a person is absent from
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Schedule 9 - Closing energy supplement to new welfare recipients
Australia and is receiving an income support payment at a rate greater than nil on
that day. If the person returns to Australia after an absence of greater than six weeks
and their income support payment is payable to the person on the day before the
person returns, paragraph 22(1)(a) will apply to each day that occurs in the period
beginning on 19 September 2016 and ending at the end of the day before the person
returns to Australia.
New subsection 22(6) applies to treat a person as receiving an income support
payment under paragraph 22(1)(a) if, on 19 September 2016 the person was
receiving an income support payment at a rate greater than nil, energy supplement
was used to work out the rate of the payment and the person leaves Australia on a
day on or after 20 September 2016
To satisfy subsection 22(6) the person must, before leaving Australia, have been
receiving the income support payment at a rate greater than nil and energy
supplement must have been used to work out the rate of the payment. Additionally,
the person must return to Australia, where the period of the absence has exceeded 6
weeks and the person's income support payment must be payable to the person on
the day before the person returns to Australia.
If the above criteria have been met, subsection 22(6) will apply to treat a person as
receiving an income support payment under paragraph 22(1)(a) for each day that
occurs in the period beginning on the day after the end of the 6 week period of
absence and ending at the end of the day before the person returns to Australia.
New subsection 22(7) applies to treat a person as receiving an income support
payment under paragraph 22(1)(a) if the person makes a claim for a seniors health
card under the Social Security Administration Act or the Veterans' Entitlements Act
and the claim is made:
(a) within the 6 week period mentioned in subsection 1061U(4) or (8) of the Social
Security Act, in circumstances where paragraphs 1061U(4)(a) to (d) or (8)(a) to
(d) apply; or
(b) within the 6 week period mentioned in subsection 118P(1C) or (1G) of the
Veterans' Entitlements Act, in circumstances where paragraphs 118P(1C)(a) to
(d) or (1G)(a) to (d) of that Act apply.
Subsections 1061U(4) and (8) of the Social Security Act and subsections 118P(1C)
and (1G) of the Veterans' Entitlements Act give certain income support payment
recipients a six week period from the date of the cancellation of their payment in
which to claim a seniors health card. If the claim is made within the six week period
the person can qualify for the energy supplement if a seniors health card is granted
to the person.
A person's claim for a seniors health card under the Social Security Act or Veterans'
Entitlements Act must be granted under one of these Acts for subsection 22(7) to
apply.
If a person meets the requirements in new subsection 22(7) they will be treated as
receiving an income support payment for the period:
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Schedule 9 - Closing energy supplement to new welfare recipients
(a) beginning on the cessation day mentioned in subsection 1061U(4)(c) or (8)(c) of
the Social Security Act or paragraph 118P(1C)(c) or (1G)(c) of the Veterans'
Entitlements Act; and
(b) ending at the end of the day before the person becomes the holder of the seniors
health card.
Item 5 Inserts a definition of transitional energy supplement person into
subsection 23(1) that refers to new section 22.
Item 6 repeals section 915 and substitutes a new section 915. New subsection
915(1) provides that quarterly energy supplement is payable to a person for each
day for which an election by the person under subsection 915A(1) is in force in
relation to a social security payment the person is receiving.
A note to this subsection alerts the reader that section 918 (multiple qualification
exclusions) may affect the person's qualification for quarterly energy supplement.
Subsection 915(2) then ensures that a social security payment recipient who
continues to have energy supplement used to work out the rate of their payment will
continue to have their energy supplement paid quarterly if the person has made or
makes an election under subsection 1061VA(1) to have their minimum pension
supplement amount paid quarterly.
A note to this subsection alerts the reader that section 918 (multiple qualification
exclusions) may affect the person's qualification for quarterly energy supplement.
Item 7 amends paragraph 915A(1)(a) to insert the words "(the main payment)" after
"a social security payment".
Item 8 amends the note in subsection 915A(1) to replace the word 'would' with
'may'. This is a consequence of the repeal and substitution of section 915 made by
item 6.
Item 9 repeals subsection 915A(3) and substitutes a new subsection 915A(3) which
provides that an election to receive energy supplement quarterly under Division 2 of
Part 2.18A of the Social Security Act ceases to be in force if, disregarding the
election, energy supplement would cease to be used to work out the rate of a social
security payment of the person.
Item 10 is an application and savings provision for the repeal and substitution of
section 915 made by item 6 and the repeal and substitution of subsection 915A(3)
made by item 9.
Sub-item (1) provides that the repeal and substitution of section 915 made by this
Part applies in relation to working out whether quarterly energy supplement is
payable to a person for a day on or after the commencement of this item.
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Schedule 9 - Closing energy supplement to new welfare recipients
Sub-item (2) provides that the repeal and substitution of section 915 made by this
Part does not affect the validity of an election made under subsection 915A(1) or
1061VA(1) before the commencement of this item.
Sub-item (3) provides that subsection 915A(3), as substituted by this Part, applies on
and after the commencement of this item in relation to elections made before, on or
after that commencement.
Items 11 to 34, 36 to 39, 41 to 44, 46 to 52 and 54 to 55 amend the rate calculators
for the following social security payments:
section 1064 (Rate of age, disability support, wife pensions and carer
payment (people who are not blind));
section 1065 (Rate of age and disability support pension (blind people));
section 1066 (Rate of bereavement allowance and widow B pension);
section 1066A (Rate of disability support pension (people under 21 who are
not blind));
section 1066B (Rate of disability support pension (people under 21 who are
blind))
section 1067G (Rate of youth allowance);
section 1067L (Rate of austudy payment);
section 1068 (Rate of widow allowance, Newstart allowance (18 or over)
sickness allowance (18 or over) partner allowance, and mature age allowance
under Part 2.12B);
section 1068A (Rate of parenting payment--pension PP (single)); and
section 1068B (Rate of parenting payment--PP (partnered)).
The amendments made by these items apply so that the step in the method
statement for the rate calculator that adds an amount of energy supplement to the
rate of the person's social security payment does not apply in relation to a person on
a day on or after the commencement of these items unless the person is a
transitional energy supplement person on that day.
If a person is a not a transitional energy supplement person in accordance with new
section 22 (inserted by item 4 of this Part) on a day on or after the commencement of
these items, the person's rate of social security payment will not include an amount
of energy supplement.
Various notes in the rate calculators mentioned above have also been added or
amended as a result of the changes made to limit the payment of the energy
supplement to certain individuals.
Items 35, 40, 45 and 53 amend the partner income free area provisions in the rate
calculators for the following social security benefits:
section 1067G (Rate of youth allowance)
section 1067L (Rate of austudy payment)
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Schedule 9 - Closing energy supplement to new welfare recipients
section 1068 (Rate of widow allowance, Newstart allowance (18 or over)
sickness allowance (18 or over) partner allowance, and mature age allowance
under Part 2.12B); and
section 1068B (Rate of parenting payment--PP (partnered)).
The partner income free area is the amount of income a recipient's partner can
receive before the recipient's rate of benefit is reduced. The partner income free area
for a person varies depending on their partner's age and whether their partner also
receives a social security benefit.
The effect of items 35, 40, 45 and 53 is to include an amount of energy supplement
into the calculation of a person's partner income free area where the person
continues to have an amount of energy supplement added to their rate of social
security benefit.
If the person does not have an amount of energy supplement added to their rate of
payment then energy supplement won't be taken into account in determining the
partner income free area if the person's partner is not a social security benefit
recipient.
If the person does not have an amount of energy supplement added to their rate of
payment and the person's partner is a social security benefit recipient then the
energy supplement will only be taken into account in determining the partner income
free area where the person's partner has an amount of energy supplement added to
their rate of payment.
An example of how these items apply can be found in the amendments made to the
youth allowance calculator by item 35. This item inserts new points 1067G-H26C
and 1067G-H26D into the youth allowance rate calculator in section 1067G.
Point 1067G-H26C provides that where a person does not have an amount of
energy supplement added to their rate of youth allowance and the person's partner is
not receiving a social security benefit, an amount of energy supplement will not be
included when calculating the person's partner income free area.
Point 1067G-H26D provides that where a person has an amount of energy
supplement added to their rate of youth allowance, an amount energy supplement
will be included when calculating the person's partner income free area. This applies
regardless of whether the person's partner receives a social security benefit and
regardless of whether the person's partner receives a social security benefit that
includes an amount of energy supplement.
Item 56 repeals point 1071A-2A of the Social Security Act and substitutes a new
point 1071A-2A. The intended effect of this item is to disregard step 1B of the
method statement in point 1068-A1 of the Social Security Act when calculating a
person's allowable income for the purposes of the health care card income test in
section 1071A of the Social Security Act. Step 1B would otherwise add an amount of
energy supplement to the calculation when determining a person's allowable income.
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Item 57 is an application provision for the repeal and substitution of point 1071A-2A
of the Social Security Act made by item 56 of this Part. The repeal and substitution of
point 1071A-2A made by item 56 applies in relation to working out if a person is
qualified for a health care card on a day on or after the commencement of this item
(whether or not the person held such a card immediately before that
commencement).
Part 2 - Energy Supplement under the Farm Household Support Act
Amendments to the Farm Household Support Act
Item 58 adds a note at the end of section 58 of the Farm Household Support Act that
explains that energy supplement is not payable to certain persons due to point 1068-
A2 of the Social Security Act, added by item 42 of this Schedule.
Item 59 amends the note at the end of section 58 of the Farm Household Support
Act by renumbering this note as 'Note 2'.
Item 60 adds a note at the end of section 62 of the Farm Household Support Act that
explains that energy supplement is not payable to certain persons due to point
1067G-A2 of the Social Security Act, added by item 32 of this Schedule.
Item 61 amends the note at the end of section 62 of the Farm Household Support
Act by renumbering this note as 'Note 2'.
Part 3 - Energy supplement under the Veterans' Entitlements Act
Amendments to the Veterans' Entitlements Act
Item 62 repeals and replaces the formula in paragraph 59Q(7)(b) with a new formula
that does not contain an energy supplement component. The formula in paragraph
59Q(7)(b) is used to determine the lump sum preclusion period for the purposes of
section 59Q. Where a person has received lump sum compensation the person's
pension will not be payable during the lump sum preclusion period.
Item 63 repeals the definition of point SCH6-BB3 amount from paragraph
59Q(7)(b). This definition is no longer required as a result of the amendments made
by Item 62.
Item 64 is an application provision that provides that the amendments made to
paragraph 59Q(7)(b) by this Part only apply in relation to lump sum preclusion
periods beginning on or after the commencement of this item.
Items 65 to 67 amend section 62A. Section 62A provides for the payment of energy
supplement to the recipients of a disability pension under Parts II or IV of the
Veterans' Entitlements Act.
Subsection 62A(1) provides the requirements to be met for a person to be eligible for
energy supplement for a day:
(a) the person receives disability pension for the day; and
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Schedule 9 - Closing energy supplement to new welfare recipients
(b) the person's rate of disability pension for the day is greater than nil; and
(c) the person is residing in Australia; and
(d) either the person is in Australia or is temporarily absent for a period not
exceeding 6 weeks.
Item 65 is a technical amendment to the Note to subsection 62A(1) to renumber it as
"Note 1" as a consequence of the amendment made by Item 66 which inserts "Note
2".
Item 66 inserts "Note 2" to subsection 62A(1). The Note refers the reader to the
effect that the insertion of subsection 62A(4) (by Item 67) has in limiting the
circumstances when subsection 62A(1) (eligibility for energy supplement) will
continue to be applicable.
Item 67 inserts new subsections 62A(4) to (6).
New subsection 62A(4) provides that on or after the commencement of the
amendment a person will only be eligible for energy supplement if the person is a
transitional energy supplement person (as defined under new subsection 62A(5))
on that day.
The Note to new subsection 62A(4) states that a person must also satisfy the
requirements set out in paragraphs 62A(1)(a) to (d) to be eligible for energy
supplement.
New subsection 62A(5) defines for the purposes of section 62A that a person is a
transitional energy supplement person on 19 September 2016 if:
(a) paragraphs 62A(1)(a) to (d) are applicable to the person; or
(b) energy supplement was payable under subsection 83A(1) of the Military
Rehabilitation and Compensation Act because the person was eligible for
compensation for permanent impairment under that Act; or
(c) energy supplement was payable under subsection 209A(1) of the Military
Rehabilitation and Compensation Act because the person was in receipt of or
would have been eligible for the receipt of Special Rate Disability Pension
under that Act.
The effect of new subsections 62A(4) and (5) is to prevent new recipients of disability
pension, granted from after 19 September 2016, from being paid the energy
supplement from 20 September 2017. The amendments also ensure the
"grandfathering" of existing disability pensioners who are paid the energy
supplement with their disability pension on 19 September 2016.
The amendments also provide for the "grandfathering" for the purposes of section
62A of those persons who received energy supplement under section 83A or under
section 209A of the Military Rehabilitation and Compensation Act because on 19
September 2016 they were either eligible for compensation for permanent
impairment or were receiving or eligible to receive the Special Rate Disability
Pension.
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New subsection 62A(6) provides for the circumstances in which a person will cease
to be a transitional energy supplement person. On a day on or after
20 September 2016, if none of the paragraphs 62A(5)(a) to (c) apply to a person, the
person will cease to be a transitional energy supplement person and can never again
become a transitional energy supplement person.
The effect of subsection 62A(6) is to make it clear that a person will lose eligibility for
the energy supplement on or after 20 September 2016 if any of the circumstances
referred to in paragraphs 62A(5)(a) to (c) are no longer applicable to the person.
Subsection 62A(6) also makes it clear that there are no circumstances in which a
person who ceases to be a transitional energy supplement person can regain the
status of being a transitional energy supplement person.
Items 68 to 70 amend section 62B. Section 62B provides for the payment of energy
supplement for recipients of war widow/ war widower pension.
Subsection 62B(1) provides the requirements to be met for a person to be eligible for
energy supplement for a day:
(a) the person receives war widow or war widower pension for the day; and
(b) the person's rate of that pension for the day is greater than nil; and
(c) the person is residing in Australia; and
(d) either the person is in Australia or is temporarily absent for a period not
exceeding 6 weeks.
Item 68 is a technical amendment to the Note to subsection 62B(1) to renumber it as
"Note 1" as a consequence of the amendment made by Item 69 which inserts "Note
2".
Item 69 inserts "Note 2" to subsection 62B(1). The Note refers the reader to the
effect that the insertion of subsection 62B(4) (by Item 70) has in limiting the
circumstances when subsection 62B(1) (eligibility for energy supplement) will
continue to be applicable.
Item 70 inserts new subsection 62B(4).
New subsection 62B(4) provides that on or after the commencement of the
amendment a person will only be eligible for energy supplement if the person is a
transitional energy supplement person (within the meaning of section 22 of the
Social Security Act) on that day.
New section 22 of the Social Security Act is inserted by Item 4 of this Schedule.
The Note to new subsection 62B(4) states that a person in receipt of a war widow/
widower pension must also satisfy the requirements set out in paragraphs 62B(1)(a)
to (d) to be eligible for energy supplement.
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The effect of new subsection 62B(4) is to prevent new recipients of war widow/ war
widower pension, granted from after 19 September 2016, from being paid the energy
supplement from 20 September 2017. The amendments also ensure the
"grandfathering" of existing war widow/ war widower pensioners who are paid the
energy supplement with their pension on 19 September 2016.
The amendments also provide for the "grandfathering" for the purposes of
section 62B of all those persons (including war widow/ war widower pensioners) who
on 19 September 2016 were eligible to receive energy supplement because they
satisfied one of the conditions referred to in section 22 of the Social Security Act (as
inserted by Item 4 of this Schedule).
Item 71 inserts a new Note 3 to subsection 62D(1). Section 62D provides a person
receiving disability or war widow or war widower's pension with the option to receive
their energy supplement on a quarterly basis.
New Note 3 refers the reader to the limitations set out in new subsections 62A(4)
and 62B(4).
Item 72 amends subsection 62E(1) by inserting the words "but only if energy
supplement is used to work out the rate of that service pension on that day".
Subsection 62E(1) provides that a quarterly energy supplement for service pension
is payable to a person, as a separate payment, for as long as the person elects to
receive quarterly pension supplement.
The additional words will make it clear that energy supplement will continue to be
payable as a quarterly payment only to those persons still eligible to receive the
payment as a transitional energy supplement person.
Items 73 and 74 amend subsection 62E(6). Subsection 62E(6) provides for an
exception to a reduction of quarterly pension supplement under subclause 4(5) of
Schedule 6 of the Veterans' Entitlements Act.
Clause 4 of Schedule 6 is applicable for income tax purposes and sets out the order
in which deductions are made to a person's rate of service pension or income
support supplement for the purposes of the income and assets tests and
compensation recovery.
Subclause 4(5) of Schedule 6 provides that where a person's rate of service pension
is to be reduced as described in subclause 4(1) and the person has elected to
receive quarterly pension supplement, a person's quarterly energy supplement is
reduced to the same extent (if any) that the component of the main rate that would
correspond to the person's energy supplement would be reduced under subclause
(1) were the election not in force.
Paragraph 62E(6)(a) is repealed and substituted by Item 73. Repealed paragraph
62E(6)(a) referred to an election by the person under subsection 60A(1) as being in
force on a particular day. New paragraph 62E(6)(a) refers to quarterly pension
supplement for service pension being payable to a person for a day.
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Item 74 is a minor amendment to paragraph 62E(6)(c) to identify a reference to
"paragraph 4(5)(a)" as being located in "Schedule 6" of the Veterans' Entitlements
Act.
Item 75 is an application provision which provides that the amendments to section
62E made by Items 73 and 74 are to apply in working out whether quarterly energy
supplement is payable to a person for a day on or after the commencement of the
amendment.
Item 76 inserts new subsections 118P(2A), (2B) and (2C). Section 118P sets out
the eligibility criteria for the payment of the energy supplement under Part VIIAD of
the Veterans' Entitlements Act to holders of a seniors health card or a gold card.
Subsection 118P(2) specifies that a person is eligible for the energy supplement if:
(a) the person is the holder of a gold card; and
(b) the person has reached qualifying age; and
(c) the person is in Australia, or is temporarily absent from Australia for a period
not exceeding 6 weeks; and
(d) the person is not receiving any of the following payments:
service pension;
income support supplement;
a social security pension or benefit; or
energy supplement under Part 2.25B of the Social Security Act.
New subsection 118P(2A) provides that subject to new subsection (2C), subsection
118P(2) will continue to apply to a person on or after the commencement of
subsection 118P(2A) if on 19 September 2016 energy supplement was payable to
the person under section 118PA.
The Note to new subsection 118P(2A) states that subsection 118P(2) will only
continue to apply to a person who satisfies the requirements set out in
paragraphs 118P(2)(a) to (d).
The effect of new subsection 118P(2A) is (subject to new subsection 118P(2C) -
discussed below) to prevent new gold card holders, granted from after 19 September
2016, from being paid the energy supplement from 20 September 2017. The
amendments also ensure the "grandfathering" of existing gold card holders who are
paid the energy supplement on 19 September 2016.
New subsection 118P(2B) provides subject to subsection (2C) that if:
(a) energy supplement was payable to the person under section 118PA of the
Veterans' Entitlements Act on 19 September 2016; and
(b) energy supplement ceases to be payable under that section on or after 20
September 2016;
then subsection 118P(2) will not apply, and never again apply to the person from:
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(c) if the cessation occurred before the commencement of subsection 118P(2B) -
the day the subsection commences; or
(d) if the cessation occurred on or after the commencement of subsection
118P(2B) - the day that the cessation occurred.
The effect of subsection 118P(2B) is to determine the date on which a person who
has lost eligibility under section 118PA for the energy supplement on or after
20 September 2016 will cease to be eligible under subsection 118P(2) for the energy
supplement.
New subsection 118P(2C) provides that if:
(a) on 19 September 2016, a person was receiving an income support payment
(within the meaning of the Social Security Act) where energy supplement was
used to work out the amount of that payment; and
(b) on a day (the cessation day) on or after the commencement of subsection
118P(2C), the person ceases to be in receipt of any income support payment
(as defined by the Social Security Act); and
(c) on the day before the cessation day, the person was receiving an income
support payment (as defined by the Social Security Act) where energy
supplement was used to work out the amount of that payment; and
(d) the person is the holder of a gold card on the cessation day;
the person can become eligible for energy supplement under subsection 118P(2)
because they hold a gold card.
New subsection 118P(2C) allows a person who is paid the energy supplement with
their income support payment on or after the commencement of the subsection to
move to being eligible for energy supplement as the holder of a gold card on
cessation of the income support payment.
Item 77 is a minor amendment to the Note to subclause 4(1) of Schedule 6 (Rate
Calculator) of the Veterans' Entitlements Act.
Clause 4 of Schedule 6 is applicable for income tax purposes and sets out the order
in which deductions are made to a person's rate of service pension or income
support supplement for the purposes of the income and assets tests and
compensation recovery.
The amendment replaces the reference to a person having made an election under
subsection 60A(1) to receive quarterly pension supplement with a reference to
quarterly pension supplement being "payable to the person".
Items 78 to 80 amend subclause 4(5) of Schedule 6 (Rate Calculator) of the
Veterans' Entitlements Act. Subclause 4(5) provides that where a person's rate of
service pension is to be reduced as described in subclause 4(1) and the person has
elected to receive quarterly pension supplement, a person's quarterly energy
supplement is reduced to the same extent (if any) that the component of the main
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rate that would correspond to the person's energy supplement would be reduced
under subclause (1) were the election not in force.
Item 78 repeals and substitutes paragraph 4(5)(b) .Paragraph 45(5)(b) had referred
to the circumstances in which a person had elected under subsection 60A(1) to
receive payments of quarterly energy supplement. New paragraph 45(5)(b) states
that quarterly energy supplement for service pension is payable to the person.
Items 79 and 80 are minor amendments to subclause 4(5) to replace the reference
to an election to receive quarterly energy supplement not being in force with a
reference to "were quarterly energy supplement for service pension not payable to
the person" and to repeal and substitute the Note.
The replacement Note refers the reader to subsection 62E(6) as setting out the
circumstances when the reduction in the instalment of the person's quarterly energy
supplement will not occur.
Items 81 to 84 make amendments to method statement 1 (service pension, not
blind, not war widow/ war widower - pensioner) in subpoint SCH6-A1(2) and method
statement 2 (service pension, blind, not war widow/ war widower - pensioner) in
subpoint SCH6- A1(3) of Schedule 6 (Rate Calculator) of the Veterans' Entitlements
Act
Items 81 and 83 insert notes to Steps 1B and 2B respectively of method statements
1 and 2 to refer to the circumstances in which the steps will not be applicable as set
out in new point SCH6-A10 (inserted by Item 85). The notes also include the
reference to the effect of section 65A which provides that an energy supplement may
not be payable if the person is in receipt of energy supplement because they are
eligible for another payment. That reference had been included in the notes to Step
4 of the method statements which are to be repealed by Items 82 and 84 of this
Part.
Items 82 and 84 repeal the notes to Step 4 of method statements 1 and 2.
Item 85 inserts new point SCH6-A10 which is applicable to steps 1B and 2B
respectively of method statements 1 and 2 of the rate calculator. Those steps which
add an amount of energy supplement to the rate of the person's service pension will
not be applicable in relation to a person on a day on or after commencement of the
Item unless the person is a transitional energy supplement person on that day.
If a person is a not a transitional energy supplement person (within the meaning
of new section 22 of the Social Security Act (inserted by Item 4 of this Schedule) on
a day on or after commencement of these items, the rate of the person's service
pension will not include an amount of energy supplement.
Items 86 and 87 are a technical amendment to renumber the Note to point SCH6-
BB1 of Schedule 6 (Rate Calculator) and to insert new Note 2. Note 2 refers the
reader to new point SCH6-A10 (inserted by Item 85 of this Part).
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Part 4 - Energy supplement under the Military Rehabilitation and
Compensation Act
Amendments to the Military Rehabilitation and Compensation Act
Items 88 and 89 amend section 83A. Section 83A provides for the payment of
energy supplement where the person is eligible for compensation for permanent
impairment under the Military Rehabilitation and Compensation Act.
The Note to subsection 83A(1) is amended by Item 88 to include a reference to new
subsection 83A(4) as setting out the applicable circumstances where a limitation will
be imposed on subsection 83A(1). The amended note retains the reference to the
effect of section 424L which provides that an energy supplement may not be payable
if the person is in receipt of energy supplement because they are eligible for another
payment.
New subsections 83A(4), (5) and (6) are inserted by Item 89.
New subsection 83A(4) provides that on or after the commencement of the
amendment a person will only be eligible for energy supplement under subsection
83A(1) if the person is a transitional energy supplement person (as defined in
new subsection 83A(5) on that day.
The Note to new subsection 83A(4) states that a person must also satisfy the
requirements set out in paragraphs 83A(1)(a), (b) and (c) to be eligible for energy
supplement.
New subsection 83A(5) defines for the purposes of section 83A that a person
becomes a transitional energy supplement person on 19 September 2016 if:
(a) paragraphs 83A(1)(a), (b) and (c) are applicable to the person; or
(b) energy supplement was payable under subsection 209A(1) of the Military
Rehabilitation and Compensation Act because the person was in receipt of or
would have been eligible for the receipt of Special Rate Disability Pension
under that Act; or
(c) energy supplement was payable under subsection 62A(2) of the Veterans'
Entitlements Act because the person was in receipt of a disability pension
under that Act
The effect of new subsections 83A(4) and (5) is to prevent new recipients of
compensation for permanent impairment pension, granted from after 19 September
2016, from being paid the energy supplement after 20 September 2017. The
amendments also ensure the "grandfathering" of existing recipients of compensation
who are paid the energy supplement with their compensation on 19 September
2016.
The amendments also provide for the "grandfathering" for the purposes of section
83A of those persons who received energy supplement under section 209A of the
Military Rehabilitation and Compensation Act because on 19 September 2016 they
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were either eligible to receive the Special Rate Disability Pension or under the
Veterans' Entitlements Act because they were receiving disability pension.
New subsection 83A(6) provides for the circumstances in which a person will cease
to be a transitional energy supplement person. On a day on or after
20 September 2016, if none of the paragraphs 83A(5)(a) to (c) apply to a person, the
person will cease to be a transitional energy supplement person and can never
again become a transitional energy supplement person.
The effect of subsection 83A(6) is to make it clear that a person will lose eligibility for
the energy supplement on or after 20 September 2016 if any of the circumstances
referred to in paragraphs 83A(5)(a) to (c) are no longer applicable to the person.
Subsection 83A(6) also makes it clear that there are no circumstances in which a
person who ceases to be a transitional energy supplement person can regain the
status of being a transitional energy supplement person.
Items 90 and 91 amend section 209A. Section 209A provides for the payment of
energy supplement where the person is eligible for a Special Rate Disability Pension
under the Military Rehabilitation and Compensation Act.
The Note to subsection 209A(1) is amended by Item 90 to include a reference to
new subsection 209A(3) as setting out the applicable circumstances where a
limitation will be imposed on subsection 209A(1). The amended note retains the
reference to the effect of section 424L which provides that an energy supplement
may not be payable if the person is in receipt of energy supplement because they
are eligible for another payment.
New subsections 209A(3), (4) and (5) are inserted by Item 91.
New subsection 209A(3) provides that on or after the commencement of the
amendment a person will only be eligible for energy supplement under subsection
209A(1) if the person is a transitional energy supplement person (as defined in
new subsection 209A(4)) on that day.
The Note to new subsection 209A(3) states that a will be a transitional energy
supplement person if he or she satisfies the requirements set out in paragraphs
209A(1)(a), (b) and (c).
New subsection 209A(4) defines for the purposes of section 209A that a person
becomes a transitional energy supplement person on 19 September 2016 if:
(a) paragraphs 209A(1)(a), (b) and (c) are applicable to the person; or
(b) energy supplement was payable under subsection 83A(1) of the Military
Rehabilitation and Compensation Act because the person was eligible for
compensation for permanent impairment under that Act; or
(c) energy supplement was payable under subsection 62A(2) of the Veterans'
Entitlements Act because the person was in receipt of a disability pension
under that Act
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The effect of new subsections 209A(3) and (4) is to prevent new recipients of Special
Rate Disability Pension, granted from after 19 September 2016, from being paid the
energy supplement from 20 September 2017. The amendments also ensure the
"grandfathering" of existing recipients of Special Rate Disability pension who are paid
the energy supplement with their pension on 19 September 2016.
The amendments also provide for the "grandfathering" for the purposes of section
209A of those persons who received energy supplement under section 83A because
on 19 September 2016 they were eligible for compensation for permanent
impairment or under the Veterans' Entitlements Act because they were receiving
disability pension.
New subsection 209A(5) provides for the circumstances in which a person will cease
to be a transitional energy supplement person. On a day on or after 20 September
2016, if none of the paragraphs 209A(4)(a) to (c) apply to a person, the person will
cease to be a transitional energy supplement person and can never again become a
transitional energy supplement person.
The effect of subsection 209A(5) is to make it clear that a person will lose eligibility
for the energy supplement on or after 20 September 2016 if any of the
circumstances referred to in paragraphs 209A(4)(a) to (c) are no longer applicable to
the person. Subsection 209A(5) also makes it clear that there are no circumstances
in which a person who ceases to be a transitional energy supplement person can
regain the status of being a transitional energy supplement person.
Items 92 and 93 amend section 238A. Section 238A provides for the payment of
energy supplement where the person is eligible for compensation as a wholly
dependent partner of a deceased member under the Military Rehabilitation and
Compensation Act.
The Note to subsection 238A(1) is amended by Item 92 to include a reference to
new subsection 238A(4) as setting out the applicable circumstances where a
limitation will be imposed on subsection 238A(1). The amended note retains the
reference to the effect of section 424L which provides that an energy supplement
may not be payable if the person is in receipt of energy supplement because they
are eligible for another payment.
New subsection 238A(4) is inserted by Item 93.
New subsection 238A(4) provides that on or after the commencement of the
amendment a person will only be eligible for energy supplement under subsection
238A(1) if the person is a transitional energy supplement person (within the
meaning of section 22 of the Social Security Act) on that day.
The Note to new subsection 238A(4) states that a will be a transitional energy
supplement person if he or she satisfies the requirements set out in paragraphs
238A(1)(a), (b) and (c).
The effect of new subsection 238AB(4) is to prevent new recipients of compensation
for a wholly dependent partner, granted from after 19 September 2016, from being
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paid the energy supplement after 20 September 2017. The amendments also
ensure the "grandfathering" of existing compensation recipients who are paid the
energy supplement with their compensation on 19 September 2016.
The amendments also provide for the "grandfathering" for the purposes of section
238A all those persons who on 19 September 2016 were eligible to receive energy
supplement because they satisfied one of the conditions referred to in section 22 of
the Social Security Act (as inserted by Item 4 of this Schedule) or were receiving war
widow/ war widower pensions under the Veterans' Entitlements Act.
Part 5 - Other amendments
Amendments to the Budget Savings (Omnibus) Act
Item 94 amends item 38 of Schedule 21 to the Budget Savings (Omnibus) Act to add
new paragraph 38(i). The effect of this item is to ensure that a person who satisfies
paragraphs (a) to (f) of item 38 is then taken to be a transitional energy supplement
person for the purposes of new paragraph 22(1)(a) of the Social Security Act for the
period beginning on 19 September 2016 and ending at the end of the day before the
person became the holder of the seniors health card referred to in item 38 of
Schedule 21 to the Budget Savings (Omnibus) Act.
Item 95 amends item 107 of Schedule 21 to the Budget Savings (Omnibus) Act to
add new paragraph 107(i). The effect of this item is to ensure that a person who
satisfies paragraphs (a) to (f) of item 107 is then taken to be a transitional energy
supplement person for the purposes of new paragraph 22(1)(a) of the Social Security
Act for the period beginning on 19 September 2016 and ending at the end of the day
before the person became the holder of the seniors health card referred to in item
107 of Schedule 21 to the Budget Savings (Omnibus) Act.
Amendments to the Veterans' Entitlements Act
Item 96 amends paragraph 118P(4)(d) to ensure that those persons who are eligible
for an energy supplement because they hold a gold card will be subject to the same
portability rules as the holders of a seniors health card.
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Schedule 10 - Stopping the payment of the pension supplement after six
weeks overseas
Summary
This Schedule will stop the payment of pension supplement after six weeks
temporary absence overseas and immediately for permanent departures.
Background
This Schedule amends the Social Security Act and the Veterans' Entitlements Act.
The pension supplement combined the former telephone allowance, utilities
allowance, pharmaceutical allowance and Goods and Services Tax (GST)
supplement into a single payment. Currently, the pension supplement is payable at
the full domestic rate to Australian residents for the first six weeks of a temporary
absence overseas.
Currently the pension supplement basic amount remains payable where a recipient
permanently departs Australia or after six weeks temporary absence overseas. The
pension supplement basic amount is equivalent to the former GST supplement and
was originally paid to offset the cost increases associated with the introduction of the
GST in Australia. Pensioners who leave Australia permanently or who are
temporarily absent from Australia for more than six weeks are unlikely to be
impacted by the Australian GST and it is therefore not appropriate to continue to pay
them the pension supplement basic amount.
The amendments made by this Schedule will stop the payment of pension
supplement basic amount after six weeks overseas and stop the payment of pension
supplement basic amount immediately for permanent departures from Australia. The
amendments made in this Schedule apply prospectively to all pension recipients
overseas before, on or after commencement of the Schedule.
The amendments made by this Schedule commence on 1 July 2017. However, if the
Act receives Royal Assent after 1 July 2017, this Schedule will commence on the
next 1 October, 1 January, 1 April or 1 July after Royal Assent.
REGULATION IMPACT STATEMENT
The Office of Best Practice Regulation (OBPR) advised that the change appears to
affect only the level of financial assistance paid and does not appear to have
regulatory impact on business, community organisations or individuals.
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Explanation of the changes
Amendments to the Social Security Act
Item 1 amends the definition of pension supplement amount in subsection 23(1) of
the Act to clarify that there may be no amount added under the pension supplement
Module (if there is such a module) of the Rate Calculator when working out the rate
of the person's social security payment.
Items 2, 7, 12, and 17 amend the method statements in points 1064-A1, 1065-A1,
1066-A1 and 1068A-A1 respectively to clarify that there may be no amount of
pension supplement worked out in accordance with Modules 1064-BA, 1065-BA,
1066-BA and 1068A-BA.
Items 3, 8 and 13 repeal and replace current points 1064-BA1 and 1064-BA2, 1065-
BA1 and 1065-BA2 and 1066-BA1 and 1066-BA2, respectively. These points have
been redrafted in Module 1064-BA, 1065-BA and 1066-BA to clarify that a pension
supplement is only to be added to the person's maximum basic rate where the
person is residing in Australia and the person is either, in Australia or temporarily
absent for a continuous period of up to 6 weeks.
Items 4. 5, 9, 10, 11, 14, 15, 16 19, 20 and 21 are technical amendments.
Items 6, 11 and 16 repeal points 1064-BA5, 1065-BA5 and 1066BA5. These points
currently provide that where a recipient is not in Australia or is temporarily absent
from Australia for a period exceeding 6 weeks, the person's pension supplement
amount is the pension supplement basic rate. Repealing these points gives effect to
the policy that the payment of pension supplement should stop immediately for
permanent departures from Australia or after six weeks of temporary absence from
Australia.
Item 18 repeals and replaces current points 1068A-BA1 and 1068A-BA2.
These points have been redrafted in Module 1068A-BA to clarify that a pension
supplement is only to be added to the person's maximum basic rate where the
person is residing in Australia, has reached pension age and the person is either, in
Australia or temporarily absent for a continuous period of up to 6 weeks. If the
person has not reached pension age, and is either in Australia or temporarily absent
for a continuous period of up to 6 weeks, the person's pension supplement amount is
the pension supplement basic rate.
Item 22 clarifies that point 1068A-BA5 applies to persons who have not reached
pension age.
Item 23 inserts new section 1216A to clarify that where portability of a payment
exists or is extended under Division 2 of Part 4.2 of Chapter 4 of the Act, the rate of
payment must still be determined by reference to the rate calculators in Chapter 3.
The amendment includes a note to refer the reader to the rate calculators in Chapter
3. This provision applies is relation to all ancillary payments.
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Example A recipient of disability support pension (who is not severely
impaired or terminally ill) undertakes ten weeks of study overseas for the
purpose of their Australian course of education. They have a right to continue
to be paid disability support pension for the duration of their overseas study.
However, their rate of payment must still be determined in accordance with
the rate calculators in Chapter 3. This means that after six weeks overseas,
the recipient will no longer be paid the pension supplement.
Items 24 and 25 repeal and replace the method statements in subclauses 147(3)
and 147(4) of Schedule 1A to clarify that the pension supplement basic amount will
no longer be payable outside Australia indefinitely.
Item 26 is an application provision which provides that the amendments made to the
Social Security Act by this Schedule apply in relation to permanent or temporary
absences from Australia, whether the absence commenced before, on or after
commencement. This means that payment of the pension supplement basic amount
will cease immediately for recipients that are permanently overseas and that have
been temporarily overseas for a period exceeding six weeks on commencement.
Amendments to the Veterans' Entitlements Act
Item 27 amends the definition of pension supplement amount in subsection 5Q(1) of
the Veterans' Entitlements Act to clarify that there may be no amount added under
pension supplement Module of the Rate Calculator when working out the rate of the
person's income support payment.
Item 28 inserts new paragraph 58K(1A) of the Veterans' Entitlements Act.
Subsection 58K(1) refers to the general portability of the various service pensions
and income support supplement and states that once granted, eligibility for the
payments will not be affected by the fact that the person has left Australia.
New subsection 58K(1A) refers to the impact of the proposed amendments on the
payment of the basic pension supplement and provides that the reference in
subsection 58K(1) to the right of a person to continue to be paid a service pension or
income support supplement is not a reference to the fact that the rate of the payment
cannot be impacted by an absence from Australia.
The Note to new subsection 58K(1A) refers the reader to the rate of pension or
supplement as being that which was worked out under the Rate Calculator.
Items 29 and 30 repeal and substitute the method statements located in subclauses
31(3) and 31(4) of Schedule 5 of the Veterans' Entitlements Act to clarify that the
pension supplement basic amount will no longer be payable outside Australia
indefinitely.
Clause 31 of Schedule 5 provides for the payment of a transitional rate of service
pension to a person who would have been adversely affected by the amendments
made by the Veterans' Affairs and Other Legislation Amendment (Pension Reform)
Act 2009 (the Pension Reform Act).
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Subclause 31(3) determines the transitional rate of service pension for a person who
is not a member of a couple, or is otherwise paid at a single rate of pension because
they are a member of an illness separated couple or a member of a respite care
couple in the circumstances where the transitional rate is not determined under
subclause 31(1) because the person is not residing in Australia or because the
person has been absent from Australia for a period of more than 6 weeks.
The repealed method statement in subclause 31(3) had provided for the calculation
of the transitional rate by reference to the maximum basic rate of service pension
payable if the amendments made by the Pension Reform Act had not been made;
and the pension supplement that would be payable to the person had the
amendments not been made.
The substituted method statement has been revised to remove the reference to
amount of the pension supplement that would have been payable if the Pension
Reform Act had not been enacted.
Subclause 31(4) determines the transitional rate of service pension for a person who
is a member of a couple, but who is not a member of an illness separated couple or
respite care couple in the circumstances where the transitional rate is not determined
under subclause 31(2) because the person is not residing in Australia or because the
person has been absent from Australia for a period of more than 6 weeks.
The repealed method statement in subclause 31(4) had provided for the calculation
of the transitional rate by reference to the maximum basic rate of service pension
payable if the amendments made by the Pension Reform Act had not been made;
and the pension supplement that would be payable to the person had the
amendments not been made.
The substituted method statement has been revised to remove the reference to
amount of the pension supplement that would have been payable if the Pension
Reform Act had not been enacted.
Items 31, 32 and 33 amend steps 1A, 2A and 1A respectively of the method
statements in subpoints SCH6-A1(2), SCH6-A1(3) and SCH6-A1(6) of the Veterans'
Entitlements Act to clarify that there may be no amount of pension supplement
included in the rate of service pension or income support supplement as worked out
in accordance with Module BA in Schedule 6 of the Veterans' Entitlements Act.
Item 34 repeals and replaces points SCH6-BA1 and SCH6-BA2. These points have
been redrafted in Module BA to clarify that a pension supplement is only to be added
to the person's maximum basic rate of service pension or income support
supplement where the person is residing in Australia and the person is either, in
Australia or temporarily absent for a continuous period of up to 6 weeks.
Items 35 and 36 are technical amendments that reflect the impact of the changes.
The amendments repeal and replace the headings to points SCH6-BA3 and SCH6-
BA4. The current headings "Residents in Australia etc.-no election in force" and
"Residents in Australia- election in force" are replaced respectively with the new
headings "Amount if no election in force" and "Amount if election in force".
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Schedule 10 - Stopping the payment of the pension supplement after six weeks overseas
Item 37 repeals point SCH6-BA5. The point currently provide that where a recipient
is not in Australia or is temporarily absent from Australia for a period exceeding 6
weeks, the person's pension supplement amount is the pension supplement basic
amount. The repeal of the point gives effect to the policy that the payment of
pension supplement should stop after 6 weeks of temporary absence from Australia.
Item 38 is an application provision. It provides that the amendments to the Veterans'
Entitlements Act made by Items 27 to 37 of this Schedule apply in relation to
permanent or temporary absences from Australia, whether the absence commenced
before, on or after the commencement of the amendments. This means that
payment of the pension supplement basic amount will cease immediately for
recipients who on commencement are permanently overseas or who have been
temporarily overseas for a period exceeding six weeks.
135
Schedule 11 - Automation of income stream review processes
Schedule 11 - Automation of income stream review processes
Summary
This Schedule will allow for the automation of the regular income stream review
process by enabling the Secretary to require income stream providers to transfer a
dataset to the Department of Human Services (DHS) on a regular basis.
Background
This Schedule amends the Social Security (Administration) Act.
Currently, under social security legislation, the Secretary can require that income
support recipients with an income stream provide updated information about their
income stream on a regular basis. Currently, the Secretary (or DHS as delegate)
does not have the legislative authority to require income stream providers to provide
income stream information for all income support recipients. These amendments
empower DHS to give a notice requiring the provision of income stream information
by providers.
The amendments made by this Schedule are expected to create cost savings by
reducing regulatory and compliance costs, and improving the efficiency of DHS'
service delivery. It is also expected that the amendments will improve the accuracy
of income support payments and reduce customer debts that arise when a customer
fails to inform DHS of changes to their income streams, or when they do not inform
DHS that they have commenced receiving an income stream payment.
Once the amendment commences, DHS will coordinate a staged implementation in
consultation with income stream providers.
The amendments made by this Schedule commence on the day after this Act
receives the Royal Assent.
Explanation of the changes
Amendments to the Social Security (Administration) Act
Item 1 inserts new paragraph 195(2)(ja). Section 195 sets out when the Secretary
may require a person to give information about a class of persons to the Department
for various purposes. Subsection 195(2) sets out the types of information that the
Secretary may require about each person in the class of persons. Currently
subsection 195(2) does not specifically list information in relation to income stream
payments.
New paragraph 195(2)(ja) provides that the Secretary may require the following
information:
(ja) in relation to an income stream received by the person:
(i) the type of income stream; and
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Schedule 11 - Automation of income stream review processes
(ii) a unique identifier allocated to the income stream (also known as
a product reference number); and
(iii) the date on which the income stream was purchased; and
(iv) the purchase price; and
(v) the commencement day; and
(vi) the date of the first payment under the income stream; and
(vii) the relevant number; and
(viii) the account balance of the income stream as at the date of the
notice; and
(ix) the account balance of the income stream on 1 July of the
financial year in which the notice is given; and
(x) for every payment made under the income stream in the 52
weeks before the date of the notice--the gross amount of the
payment, the date on which it was paid and, if the payment is
paid as a lump sum, the period to which the payment relates;
and
(xi) for every payment to be made under the income stream in the 52
weeks after the date of the notice--the gross amount of the
payment and the date on which it is to be paid; and
(xii) the date on which, rate at which and way in which the income
stream is indexed; and
(xiii) the residual capital value; and
(xiv) if there is a reversionary beneficiary to which the income stream
reverts on the death of the person - the name of the reversionary
beneficiary and the percentage of the income stream that the
reversionary beneficiary will receive; and
(xv) if the income stream was purchased before 20 September
2007--whether the income stream satisfies section 9A, 9B or
9BA of the 1991 Act, as those sections applied immediately
before that date; and
(xvi) if the income stream was purchased on or after 20 September
2007--whether the income stream was purchased with funds
resulting from the commutation of an asset-test exempt income
stream and whether it is eligible to retain its asset-test exempt
income stream status; and
(xvii) if the income stream is commuted--the date of commutation and
the commuted amount; and
(xviii) if the income stream is a defined benefit income stream--the
deductible amount for the year in which the notice is given and
the method used to work out the tax free components of that
deductible amount; and
(xix) if payments made under the income stream represent an amount
for a child of the person--the number of children for which
payment is made and the amount of each payment made under
the income stream for each child; and
(xx) any other information required by the Minister in an instrument
made under subsection (3A).
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Schedule 11 - Automation of income stream review processes
New paragraph 195(2)(ja) allows DHS to obtain an agreed dataset from income
stream providers
Item 2 inserts new subsections 195(3A) and 195(3B) and provides that the Minister
may specify further information required to be given in relation to an income stream,
by way of legislative instrument. This allows for new income stream products, where
such products are not yet available and have not been contemplated in the drafting
of these amendments, to be included in the income stream review process.
Subsection 195(3B) provides that before making an instrument under subsection
(3A), the Minister must consult the Information Commissioner in relation to matters
relating to the privacy functions of the instrument. The Minister must also have
regard to any submissions made by the Information Commissioner because of the
consultation.
REGULATION IMPACT STATEMENT
Policy objective
This schedule will automate the regular income stream review process by requiring
income stream providers to electronically transfer a dataset to the Department of
Human Services (DHS) on a regular basis.
The amendments made by this schedule are expected to create cost savings by
reducing regulatory and compliance costs and improving the efficiency of DHS'
service delivery. It is also expected that the amendments will improve the accuracy
of income support payments and reduce customer debts that arise when a customer
fails to inform DHS of changes to their income streams, or when they do not inform
DHS that they have commenced receiving an income stream payment.
Once the amendment commences, DHS will implement coordinate a staged
implementation in consultation with income stream providers.
Regulatory impacts associated with this proposal
The amendments are minor in machinery and have small regulatory change. The
Office of Best Practice Regulation approval ID for this regulatory impact statement is
20629.
Regulatory costs/savings associated with this proposal
The amendments have significant regulatory savings (preliminary estimate of over
$19 million) for recipients and providers although some providers will experience an
initial increase to the regulatory burden in order to transition to the new process. The
ongoing burden will be significantly reduced for recipients in a reduced time, effort
and cost to comply with the departmental requirements and reduced interaction with
their financial planners and the Department.
138
Schedule 12 - Seasonal horticultural work income exemption
Schedule 12 - Seasonal horticultural work income exemption
Summary
Schedule 12 to the Bill provides a social security income test incentive aimed at
increasing the number of job seekers who undertake specified seasonal horticultural
work, such as fruit picking.
Background
The income test incentive is part of a package of incentives that will commence from
1 July 2017 as a trial for two years. The number of job seekers who will be able to
participate in the trial will be capped at 7,600.
The income test incentive will provide an additional financial reward to eligible job
seekers who participate in the trial. Participants will be able to earn up to $5,000
from specified horticultural seasonal work during the 12 months after they join the
trial without it being assessed under the social security income test.
Eligible job seekers will be able to access the $5,000 income test incentive in each of
the 2017-18 and 2018-19 financial years. If they participate in the second year of the
trial, any unused balance from the first year will expire.
NSA and YA(o) recipients who have been receiving those payments continuously for
at least three months will be eligible to participate in the trial. A period during which a
person did not receive NSA or YA(o) because of employment income (known as an
employment income nil rate period) will count towards the period of three months
continuous receipt.
Only qualifying seasonal horticultural work will be eligible for the concession. The
Employment Secretary may determine by way of a legislative instrument
what constitutes qualifying seasonal horticultural work.
Under the current rules, a person must be unemployed or treated as unemployed
and satisfy the activity test in order to qualify for NSA. For YA(o) a person must
satisfy the activity test but cannot be taken to satisfy the activity test if they are in full-
time paid work of at least 35 hours per week. The effect of these provisions is that a
person undertaking substantial work, including full-time work, will not normally be
considered qualified for NSA or YA(o).
The intention is that a person undertaking substantial hours (including full-time
hours) of eligible seasonal horticultural work will continue to be qualified for NSA or
YA(o) for as long as they are accessing their $5,000 seasonal work income
exemption. Amendments are made to achieve this outcome. After this time (from the
first instalment period after the $5000 is depleted), the requirement to be
unemployed and satisfying the activity test will apply in accordance with the current
rules.
A consequential amendment is also made to the Farm Household Support Act to
ensure that the new seasonal horticultural work income exemption does not apply in
relation to the operation of the Farm Household Support Act.
A further consequential amendment is made to the Veterans' Entitlements Act to
ensure that the new seasonal horticultural work income exemption also applies to
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Schedule 12 - Seasonal horticultural work income exemption
Veterans' Affairs income support payments received by partners of eligible
jobseekers.
The package of incentives includes a payment of seasonal work living away and
travel allowance in the amount of $300 for eligible job seekers participating in the
trial who undertake specified seasonal horticultural work that is more than 120km
from their home. This payment will be administered by employment services
providers contracted with the Department of Employment. Amendments are made to
ensure that any payment of the seasonal work living away and travel allowance will
not be included as income for the purposes of the Social Security Act or Veterans'
Entitlements Act.
Employment service providers will receive a Provider Seasonal Work Incentive
Payment of $100 a week for up to 6 weeks a year for each eligible job seeker that
they successfully refer to a seasonal job as part of the trial.
All legislative references in this Schedule to the Explanatory Memorandum are to the
Social Security Act unless otherwise specified.
Explanation of the changes
Part 1 - Main Amendments
Social Security Act 1991
Section 8 contains income test definitions. Note 3 at the end of the definition of
ordinary income refers to other provisions that affect a person's ordinary income.
Item 1 introduces a reference to new section 1073K in this note.
Item 2 inserts paragraph 8(8)(sa). Subsection 8(8) provides a list of exclusions to
income. This item includes a payment of seasonal work living away and travel
allowance in the list.
Section 541 sets out the requirements of the activity test for YA. Item 3 inserts new
subsection 541(3A), which creates an exception to paragraph 541(3)(b) which sets
out when a person cannot be taken to satisfy the activity test. This item provides that
a person can engage in full-time paid work and be taken to satisfy the activity test if
the full time paid work is qualifying seasonal horticultural work within the meaning of
subsection 1073K(6), and the income received by the person from that work is being
disregarded for the purposes of subsection 1073K(2) (i.e. the first $5,000 earned
undertaking such work). In relation to NSA payments, the existing section 595, which
sets out when a person may be treated as unemployed, can apply to recipients
undertaking qualifying seasonal horticultural work where the income from that work
is being disregarded for the purposes of subsection 1073K(2).
Item 4 inserts new paragraph (aa) to Note 2 of subsection 1067G-H1 to inform the
reader that the seasonal horticultural work income exemption affects the application
of the YA income test in 1067G-H1.
Item 5 amends Note 3 of subsection 1068-G1 to inform the reader that the seasonal
horticultural work income exemption affects the application of the NSA ordinary
income test in 1068-G1.
Item 6 amends Note 2 in section 1072 to insert a reference to new section 1073K
(seasonal horticultural work income exemption) in relation to provisions that affect
the amount of a person's ordinary income.
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Schedule 12 - Seasonal horticultural work income exemption
New Provisions - seasonal horticultural work income exemption
Item 7 inserts new Division 1AC (Seasonal horticultural work income exemption) and
new section 1073K (Seasonal horticultural work income exemption).
New subsection 1073K(1) sets out when the new section will apply. It will apply to a
person if the Secretary is satisfied that on a day in the 2017-18 or the 2018-19
financial year, the person is placed in qualifying horticultural work under the
Seasonal Horticultural Work program ("the program"). A note at the end of this
provision refers the reader to new subsection 1073K(6) for a definition of qualifying
seasonal horticultural work.
New subsection 1073K(2) provides that the first $5,000 of any ordinary income
earned, derived or received by the person from undertaking work under the program
and during the period commencing on the first day of the person's instalment period
that includes the placement day and application day will be disregarded for the
purposes of working out the rate of a qualifying payment for the person. A note at the
end of this provision refers the reader to new subsection 1073K(5) for a definition of
qualifying payment.
New subsection 1073K(3) provides that if an amount is disregarded in relation to a
person under subsection 1073K(2), that amount is also disregarded in relation to the
person's partner for the purposes of the Social Security Act.
New subsection 1073K(4) provides that this section applies to a person only once in
relation to each of the 2017-18 or 2018-19 financial years (the first time that the
person qualifies under subsection 1073(1)). This prevents a person from accessing
the exemption in this section more than once during the trial.
Qualifying payments
New subsection 1073K(5) sets out the definition of qualifying payment for the
purposes of this section. Both NSA and YA(o) are qualifying payments.
Qualifying seasonal horticultural work
Subsection 1073K(6) defines qualifying seasonal horticultural work as seasonal
work of a kind determined in an instrument under subsection 1073K(7). A note at the
end of this provision alerts readers to section 16A for the definition of seasonal
work, which includes fruit picking.
Subsection 1073K(7) provides that the Secretary may determine kinds of seasonal
work for the purpose of subsection (6), by way of legislative instrument.
Part 2 - Other Amendments
Farm Household Support Act 2014
Item 8 amends section 94, which provides a list of certain provisions of the Social
Security Act 1991 that do not apply in relation to the operation of this Act. This item
inserts paragraph 94(ma), which references section 1073K of the Social Security Act
1991 and provides that the seasonal horticultural work income exemption does not
apply in relation to the operation of this Act.
Veterans' Entitlements Act 1986
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Schedule 12 - Seasonal horticultural work income exemption
Item 9 amends subsection 5H(8), which provides a list of certain amounts that are
not income in relation to a person for the purposes of this Act. This item inserts
paragraph 5H(8)(hf), which references section 1073K of the Social Security Act 1991
and provides that an amount of ordinary income that is subject to the seasonal
horticultural work income exemption is not income for the purposes of this Act, and
paragraph 5H(8)(hg), which provides that an amount of seasonal work living away
and travel allowance is not income for the purposes of this Act.
Part 3 - Repeals
Items 10 to 18 repeal all amendments made in parts 1 and 2 of this Schedule. As
the program is running on a 2 year trial basis, all amendments will need to be
repealed to allow for the trial to conclude.
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Schedule 13 - Ordinary Waiting Periods
Schedule 13 - Ordinary Waiting Periods
Summary
This Schedule makes amendments to extend and simplify the ordinary waiting period
for working age payments.
Background
Currently, a person who is qualified for newstart allowance or sickness allowance
under the Social Security Act must, subject to some exceptions, serve an ordinary
waiting period of seven days before either of those allowances is payable.
The exceptions include where the Secretary is satisfied that the person is in severe
financial hardship. Depending on the circumstances, an ordinary waiting period may
be served concurrently with other waiting periods and preclusion periods.
This Schedule creates a new ordinary waiting period for parenting payment, and for
youth allowance for a person who is not undertaking full-time study and is not a new
apprentice (in this Schedule, referred to as youth allowance (other)).
This Schedule also provides that the current exemption on the basis of severe
financial hardship will only apply if the person is also experiencing a personal
financial crisis. A person will be taken to be experiencing a personal financial crisis if
they have been subjected to domestic violence, incurred unavoidable or reasonable
expenditure or in the circumstances prescribed by the Secretary in a legislative
instrument.
The Schedule further clarifies that an ordinary waiting period is to be served after
certain other relevant waiting periods or preclusion periods have ended.
The amendments made by this Schedule commence on the first 1 January or 1 July
to occur after the Royal Assent.
Explanation of the changes
Part 1 - Main amendments
Amendments to the Social Security Act
Items 1 and 2 amend the definition of unavoidable and reasonable expenditure
so the definition can apply for the purpose of whether a person is experiencing a
personal financial crisis. Item 5 inserts a new section 19DA to provide for when a
person is experiencing a personal financial crisis. This is relevant for whether a
person has an exemption from the ordinary waiting period. Under new
subsection 19DA(3), a person is experiencing a personal financial crisis if the person
is in severe financial hardship because the person has incurred unavoidable or
reasonable expenditure.
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Schedule 13 - Ordinary Waiting Periods
Current subsection 19C(4) provides for the meaning of unavoidable or reasonable
expenditure in relation to a person who is serving a liquid assets test waiting period,
is subject to a seasonal work preclusion period, or a person to whom an income
maintenance period applies.
Items 1 and 2 amend subsection 19C(4) to provide that, in relation to working out
whether a person is subject to an ordinary waiting period, unavoidable or reasonable
expenditure includes, but is not limited to, the reasonable costs of living, under
subsection 19C(6) and (7) that the person has incurred in the four-week period
before the person's claim for the relevant payment, if the person is qualified for the
payment on the day of claim.
Current subsection 19C(5) provides that the reasonable costs of living of a person
include, but are not limited to, the following costs:
food costs;
rent or mortgage payments;
regular medical expenses;
rates, water and sewerage payments;
gas, electricity and telephone bills;
costs of petrol for the person's vehicle;
public transport costs; and
any other cost that the Secretary determines is a reasonable cost of living in
relation to a person.
Items 3 and 4 amend subsections 19C(6) and (7) to provide for the maximum
amount of the reasonable costs of living that are taken to have been incurred for the
purpose of subsection 19C(4). The amount of reasonable costs of living cannot
exceed the amount of newstart allowance, youth allowance (other), sickness
allowance or parenting payment (as the case may be) that would have been payable
in the four-week period before the person's claim for that payment if the payment
was payable, or in the case of a person who is a member of a couple, twice the
amount of the payment that would have been payable in that period.
Item 5 inserts a new definition of experiencing a personal financial crisis.
There is currently an exemption to the ordinary waiting period for newstart allowance
and sickness allowance for a person who is in severe financial hardship.
Section 19C generally provides that a person is in severe financial hardship if the
value of the person's liquid assets is less than the fortnightly amount at the maximum
payment rate of the relevant social security payment. Other items in this Schedule
replace this exemption with a new concept of experiencing a personal financial crisis.
A person will still need to be in severe financial hardship in order to be experiencing
a personal financial crisis. However, the exemption will now apply only if, in addition
to being in severe financial hardship, subsection 19DA(2), (3) or (4) applies to the
person. Those subsections will apply if the person:
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Schedule 13 - Ordinary Waiting Periods
has been subjected to domestic violence in the four-week period before the
person makes a claim for a relevant payment, if the person is qualified for the
payment on the day of claim (subsection (2));
is in severe financial hardship because the person has incurred unavoidable
or reasonable expenditure in the four-week period before the person makes a
claim for a relevant payment, if the person is qualified for the payment on the
day of claim. Items 1 and 2 amend the definition of unavoidable and
reasonable expenditure in section 19C so that it can apply for the purpose of
determining whether a person has an exemption from an ordinary waiting
period (subsection (3)); or
satisfies circumstances prescribed in a legislative instrument made by the
Secretary (subsection (4)). Subsection 19DA(5) provides the Secretary with
the power to prescribe circumstances for this purpose.
Subsection 19DA(6) clarifies that a person will not be taken to satisfy the
circumstances in subsections 19DA(2), (3) or (4) unless he or she can produce
evidence that demonstrates a reasonable possibility that he or she satisfies the
circumstances. It is expected that a person will meet this evidence requirement by
complying with the current evidentiary requirements of the Department of Human
Services. It will not always be necessary for a person to provide written evidence.
For example, a person may provide confirmation from a social worker that they have
experienced domestic violence and this will likely satisfy the 'evidence requirement'
in subsection 19DA(6).
Item 6 is consequential to the amendments made by item 5.
Items 7 and 8 amend the definitions of ordinary waiting period and waiting period
in subsection 23(1) to refer to the new ordinary waiting periods for parenting
payment and youth allowance (other). The definition of waiting period is also
amended to refer to a newly arrived resident's waiting period. This is a waiting
period that may currently apply under the Social Security Act but which has been
inadvertently omitted from the definition of waiting period.
Item 9 amends subsection 23(10) to clarify when a person is taken to have served
an ordinary waiting period.
Current subsection 23(10) refers to the ordinary waiting periods for newstart
allowance and sickness allowance. The amendments made by this item replace the
references to 'newstart allowance' and 'sickness allowance' with references to 'social
security benefit' and 'social security pension' to cover all of the payments to which an
ordinary waiting period may apply.
Items 10 and 12 provide for a new ordinary waiting period for parenting payment
and youth allowance (other), and provide for the duration of those waiting periods.
New subsection 549CA(1) makes it clear that the new ordinary waiting period
provisions for youth allowance apply only in relation to a person who is qualified for
youth allowance (other) and not in relation to a person who is qualified for youth
allowance on the basis of being a student or new apprentice.
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Schedule 13 - Ordinary Waiting Periods
Under new subsections 500WA(1) and 549CA(2), a person will be subject to the
ordinary waiting period for parenting payment and youth allowance (other) unless:
the person was receiving an income support payment at some time in the
13 weeks immediately before the person made a claim for parenting payment
or youth allowance (other); or
the Secretary is satisfied that the person is experiencing a personal financial
crisis (as defined in new section 19DA, inserted by item 5); or
in relation to youth allowance (other), immediately before the person was
qualified for that payment, the person was qualified for youth allowance on the
basis of being a student or new apprentice. This means that a person
transitioning from youth allowance on the basis of being a student or new
apprentice to youth allowance (other) will not serve an ordinary waiting period.
Further, subsections 500WA(2) and 549CA(3) provide that an ordinary waiting period
will not apply if the person is undertaking an activity specified in a legislative
instrument. These provisions replicate a current exemption to the ordinary waiting
period for newstart allowance and sickness allowance. The legislative instrument
made for the purpose of those current provisions (the Social Security (Exemptions
from Non-payment and Waiting Periods - Activities) Specification 2015 specifies the
following activities:
an activity undertaken by a person as part of Stream C employment services
provided to the person;
a rehabilitation programme; and
an activity undertaken by a person as part of the Remote Jobs and
Communities Programme (subsequently renamed the Community
Development Programme) in certain circumstances.
Subsections 500WA(3) and 549CA(4) allow the Secretary to specify these activities
in a legislative instrument.
Subsections 500WB(1) and 549CB(1) provide that, subject to subsections (2) and (4)
of those provisions, the ordinary waiting period is a period of seven days that starts
on the day that parenting payment or youth allowance (other), as applicable, would
have been payable but for the ordinary waiting period.
Subsection 500WB(2) provides for the start of an ordinary waiting period for
parenting payment where the person is subject to a seasonal work preclusion period,
a lump sum preclusion period or an income maintenance period, where the rate of
parenting payment payable would be nil on the start day. Subsection 549CB(2)
provides for the start of an ordinary waiting period for youth allowance (other) where
a person is subject to one or more these preclusion periods, but also where the
person is subject to a liquid assets test waiting period or a newly arrived resident's
waiting period.
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Schedule 13 - Ordinary Waiting Periods
If a person is subject to one or more of the other waiting periods or preclusion
periods, then the ordinary waiting period starts on the day after all the other waiting
periods and preclusion periods have ended. The effect of this is that the ordinary
waiting period cannot be served concurrently with other relevant waiting periods and
preclusion periods.
Subsections 500WB(3) and 549CB(3) provide for circumstances in which a person is
subject to an income maintenance period where the person's rate of parenting
payment or youth allowance (other) is nil on the person's start day, but where the
rate of payment subsequently would become payable at a rate greater than nil during
the income maintenance period. In these circumstances, the effect of
subsections 500WC(3) and 549CB(3) is that the income maintenance period is taken
to have ended for the purpose of the ordinary waiting period provisions when the
payment would have become payable at a rate greater than nil. This means that the
person will serve the ordinary waiting period when their rate of parenting payment or
youth allowance (other) would have become payable at a rate greater than nil.
Subsections 500WB(4) and 549CB(4) provide for the start of an ordinary waiting
period for parenting payment or youth allowance (other) where:
a person is subject to an ordinary waiting period (the first ordinary waiting
period) for any payment; and
during the first ordinary waiting period, the person ceases to be qualified for
the payment to which the first ordinary waiting period relates; and
during the first ordinary waiting period, the person claims another payment
which has an ordinary waiting period (the second ordinary waiting period).
In these circumstances, the second ordinary waiting period starts on the day that the
first ordinary waiting period starts.
Item 11 inserts a reference to an ordinary waiting period in section 549.
Section 549 provides that a youth allowance is not payable to a person who is
subject to a waiting period. Certain waiting periods are specified for the purpose of
that provision, and it is appropriate to include a reference to an ordinary waiting
period, given one of the effects of this Schedule is to create an ordinary waiting
period for youth allowance (other).
Items 13, 14 and 15 make consequential amendments to section 549F.
Section 549F makes it clear that a youth allowance is not payable until both the
waiting periods mentioned in Subdivision C of Division 2 of Part 2.11 of the Social
Security Act have ended. As this Schedule inserts a new ordinary waiting period for
youth allowance (other), section 549F will now make it clear that a youth allowance
is not payable until all of the waiting periods in Subdivision C, including an ordinary
waiting period, have ended.
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Schedule 13 - Ordinary Waiting Periods
Items 16 and 21 amend paragraphs 620(1)(a) and 693(a). Current sections 620
and 693 provide for the ordinary waiting period for newstart allowance and sickness
allowance. Paragraphs 620(1)(a) and 693(a) provide that a person is not subject to
an ordinary waiting period for newstart allowance and sickness allowance if the
person has received an income support payment in a 13-week period. The effect of
these items is to make it clear that this 13-week period is the period before the
person's start day, disregarding clause 5 of Schedule 2 to the Social Security
Administration Act. This will generally be the 13 weeks before the person made a
claim for newstart allowance or sickness allowance.
Items 17 and 22 are consequential to the amendments made by items 19 and 24.
Items 18 and 23 amend paragraphs 620(1)(g) and 693(f), the effect of which is that
an ordinary waiting period for newstart allowance and sickness allowance will not
apply if the person is experiencing a personal financial crisis, as defined in new
section 19DA (inserted by item 5 of this Schedule).
Items 19 and 24 insert new notes that are consequential to the amendments made
by this Schedule.
Items 20 and 25 substitute sections 621 and 694 with new provisions that provide
for the duration of the ordinary waiting period for newstart allowance and sickness
allowance.
The effect of subsections 621(1) and 694(1) is that, subject to subsections (3) and
(5) of those provisions, the ordinary waiting period is a period of seven days starting
on the day that newstart allowance or sickness allowance, as applicable, would have
been payable but for the ordinary waiting period.
Subsections 621(2) and 694(2) provide for the start of an ordinary waiting period for
newstart allowance and sickness allowance where the person is disqualified for
those payments because of the liquid assets test. In these circumstances,
the ordinary waiting period is the period of seven days that starts after the end of the
liquid assets test waiting period.
Subsections 621(3) and 694(3) provide for the start of an ordinary waiting period for
newstart allowance and sickness allowance where the person is subject to a newly
arrived resident's waiting period, a seasonal work preclusion period, a lump sum
preclusion period or an income maintenance period where the rate of newstart
allowance or sickness allowance payable would be nil on the start day. If a person is
subject to one or more of the other waiting periods or preclusion periods, then the
ordinary waiting period starts on the day after all the other waiting periods and
preclusion periods have ended. The effect of this is that the ordinary waiting period
cannot be served concurrently with other relevant waiting periods and preclusion
periods.
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Schedule 13 - Ordinary Waiting Periods
Subsections 621(4) and 694(4) provide for circumstances in which a person is
subject to an income maintenance period where the person's rate of newstart
allowance or sickness allowance is nil on the person's start day, but where the rate
of payment subsequently would become payable at a rate greater than nil during the
income maintenance period. In these circumstances, the effect of
subsections 621(4) and 694(4) is that the income maintenance period is taken to
have ended for the purpose of the ordinary waiting period provisions when the
payment would have become payable at a rate greater than nil. This means that the
person will serve the ordinary waiting period when their rate of newstart allowance or
sickness allowance would have become payable at a rate greater than nil.
Subsections 621(5) and 694(5) provide for the start of an ordinary waiting period for
newstart allowance and sickness allowance where:
a person is subject to an ordinary waiting period (the first ordinary waiting
period) for any payment; and
during the first ordinary waiting period, the person ceases to be qualified for
the payment to which the first ordinary waiting period relates; and
during the first ordinary waiting period, the person claims another payment
which has an ordinary waiting period (the second ordinary waiting period).
In these circumstances, the second ordinary waiting period starts on the day that the
first ordinary waiting period starts.
Item 26 provides that the amendments made by this Schedule apply in relation to a
claim for a social security payment that is made on or after the commencement of
this Schedule.
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Schedule 14 - Age requirements for various Commonwealth payments
Schedule 14 - Age requirements for various Commonwealth payments
Summary
This Schedule provides that young unemployed people aged 22 to 24 would no
longer be eligible for newstart allowance or sickness allowance until they turn 25
years of age and would, instead, be able to claim and qualify for youth allowance.
To enable this, youth allowance for all types of people who can satisfy the activity
test, will be available to people who have not yet reached 25. Youth disability
supplement will also be available to all youth allowance recipients who have not yet
reached 25. The amendments include a grandfathering arrangement to allow
existing newstart allowance recipients who are 22, 23 or 24 leading up to
commencement (or people undergoing certain waiting periods or suspension
periods) to remain in receipt of newstart allowance. Similar savings rules are
provided for sickness allowance.
This Schedule also makes consequential amendments to the Farm Household
Support Act to align rates at which farm household allowance is paid to farmers and
their partners, with newstart allowance and youth allowance rates.
Background
The key aim of this measure is to provide incentives to young unemployed people to
obtain the relevant education and training to increase employability. Changes to
labour markets presage the need for a highly educated and skilled workforce and
this measure is designed to encourage young people to adequately skill themselves
and move off unemployment benefits. The proposal is driven by the current high
youth unemployment rate.
Presently, unemployed youth aged 22 to 24 are able to qualify for newstart
allowance or sickness allowance rather than youth allowance. People in this age
bracket may perceive an advantage by remaining in receipt of newstart allowance
and a disincentive to pursue full-time study or employment, given the higher rate of
newstart allowance and sickness allowance as compared to youth allowance. This
measure removes this disincentive by placing all under 25 year olds on the same
payment levels whether unemployed or studying full-time. The broad financial
incentives provided for further education in lieu of working, applying to those on
youth allowance (student) payments are not diminished, since youth allowance
(student) attracts more generous income testing compared to youth allowance
(other). In addition, a facility is provided to youth allowance (student) recipients to
accumulate a student income bank of $10,000 without affecting payments.
While youth allowance is paid at lower rates to newstart allowance, the payment has
a larger income free area compared to newstart allowance, providing greater
flexibility to earn while on payment.
The amendments made by this Schedule commence on the first
1 January or 1 July to occur after the Royal Assent.
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Schedule 14 - Age requirements for various Commonwealth payments
Explanation of the changes
Item 1 replaces the reference to age 22 in paragraphs 19C(8)(b) and (c) of the
Social Security Act with a reference to age 25. This amendment is consequential on
the age adjustments proposed to be made by the Bill to youth allowance and
newstart allowance qualification rules. Section 19C deals with definitions for a
number of terms related to when a person is in severe financial hardship. The
concept of severe financial hardship is relevant to a number of provisions in the
Social Security Act, including those dealing with advance payments, ordinary waiting
periods, special employment advances, certain rules dealing with seasonal workers
and others. The specific amendments to paragraphs 19C(8)(b) and (c) will ensure
that the reference to 'maximum payment rate' in subsections 19C(2) and (3) will
mean that the age thresholds relevant to determining a person's maximum payment
rate will be interpreted in line with the new qualification age thresholds for youth
allowance and newstart allowance as proposed by this Schedule to the Bill.
Item 2 replaces the reference to age 22 in paragraphs 38K(2)(a) and (b) with a
reference to age 25. Section 38K sets out an income test for a person's social
security pension if green army allowance is payable to the person's partner.
Subsection 38K(1) provides that if the amount of the partner's green army allowance
exceeds the threshold applicable under subsection 38K(2), the part of the green
army allowance that exceeds that threshold is ordinary income of the person's
partner. Current subsection 38K(2) provides a different threshold where a person's
partner is aged under 22 compared to where the person's partner is aged 22 or over.
There is a higher threshold for a person aged over 22 years compared with a person
aged under 22 years. This item will change the age references in subsection 38K(2)
to 25 years.
Item 3 is the key amendment that will lift the qualification age for youth allowance to
25 for people who are not a full-time student. Under section 543 of the Social
Security Act, a person is of youth allowance age if the person has attained the
'minimum age for youth allowance' and has not yet attained the 'maximum age for
youth allowance' as set out under section 543B. Prior to these amendments,
the maximum age for youth allowance under section 543B was set at different ages
(either 22 or 25) for people not undertaking full-time study, people undertaking
full-time study and people who are 'new apprentices'. This amendment proposes to
set the maximum age of youth allowance at 25 for all people previously dealt with by
subsection 543B(1). Note that subsection 543B(2) will still provide that people in
receipt of youth allowance at the time they turn 25 remain below the maximum age
for youth allowance if they continue full-time study or remain as a new apprentice
after they turn 25. The amendments made by this item will operate subject to the
application rules set out in item 15.
Items 4 and 5 propose to make changes to the basic qualification rules for newstart
allowance, amending references to age 22 to age 25. These amendments will
ensure that a person is only qualified for youth allowance during a period where they
have not reached the age of 25. These amendments will operate subject to the
application rules set out in item 16.
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Schedule 14 - Age requirements for various Commonwealth payments
Item 6 proposes to amend the age at which a person can qualify for sickness
allowance, by changing the reference to 22 years to 25 years in paragraph 666(1)(e)
of the Social Security Act. This will mean that, from commencement, a person will
no longer be able to qualify for sickness allowance if they have not yet turned 25
years old. This amendment will operate subject to the application rules set out in
item 17.
Item 7 proposes to amend the age at which a person is able to have an amount by
way of youth disability supplement to be added to their rate of youth allowance under
the youth allowance rate calculator. Prior to these amendments, a person can only
receive an amount by way of youth disability supplement if they have not turned 22.
These amendments will allow a person to receive youth disability supplement up to
the age of 25 to align with the adjustment to the maximum age for youth allowance
made by item 3.
Items 8, 9, 10 and 11 propose to make changes to the rules around how to
determine the 'partner income free area for a person' for the purposes of the youth
allowance, austudy payment, benefit rate calculator B (including for newstart
allowance) and parenting payment (partnered) rate calculators. Prior to these
amendments, the partner income free area was determined by reference to the
amount of income of a partner beyond which youth allowance or newstart allowance
would not be payable to the partner if the partner were qualified for youth allowance
or newstart allowance. Whether the calculation is conducted by reference to youth
allowance or newstart allowance depends on the age of the partner: whether they
have reached 22 years of age or not. The amendments propose to change
references to 22 to 25 for relevant 'partner income free area' provisions such that the
'partner income free area for a person' will be calculated by reference to the income
test for youth allowance for partners who are not yet 25 and by reference to the
income test for newstart allowance for partners who have already turned 25.
Item 12 is an amendment consequential upon the changes to youth disability
supplement proposed by item 7. Item 12 addresses the description of youth
disability supplement in the indexation table at section 1190 of the Social Security
Act to refer to youth disability supplement as payable to a recipient of youth
allowance who is under 25 (rather than under 22). This item in the indexation table
operates to make clear which amount is subject to the indexation rules in Part 3.16
of the Social Security Act.
Item 13 is an application provision to clarify that the amendments made to the
'severe financial hardship' definitions in item 1 will apply for days on or after the
commencement date.
Item 14 is an application provision to clarify that the amendment made by item 2 to
the income test for a person's social security pension where green army allowance is
payable to the person's applies in relation to instalment periods ending on or after
the commencement date.
Item 15 is an application provision that sets out how various amendments proposed
by this Schedule will affect different people.
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Schedule 14 - Age requirements for various Commonwealth payments
Subitem 15(1) sets out the default rule ('default' in the sense that it operates subject
to subitems 15(2) and (3)) that the amendments made by item 3 to the 'maximum
age for youth allowance' apply for the purposes of working out whether a person
qualifies for youth allowance for days from commencement date and onwards.
Subitem 15(2) provides that, if a person was aged 22, 23 or 24 on the day before
the amendments to adjust the 'maximum age of youth allowance' commence and is,
at that time, receiving newstart allowance (or is undergoing a period of suspension),
the amendment to the maximum age of youth allowance does not apply to the
person until their newstart allowance is cancelled. This provision will operate to
ensure, along with subitem 16(2), that existing people in receipt of newstart
allowance (or subject to a period of suspension) will remain in receipt of newstart
allowance in spite of the amendments proposed to the ages at which a person can
qualify for youth allowance and newstart allowance as proposed by this Schedule to
the Bill.
Subitem 15(3) is an application provision that will apply to a person where a claim
for newstart allowance was granted before the commencement of item 3 in
circumstances where the start day is worked out as being on a day after the
commencement date. If this provision applies to a person, the amendments made
by item 3 (to adjust the 'maximum age of youth allowance') will not apply to that
person until their newstart allowance is cancelled.
Subitem 15(4) is an application provision that deals with when the changes to youth
disability supplement (as paid as an amount by way of youth allowance) proposed by
item 7 will apply to a person. The subitem states that the amendment made by
item 7 will apply from the commencement date onwards.
Item 16 deals with various circumstances around how the amendments made by
items 4 and 5 (to raise the lower age qualification limits for newstart allowance)
apply, depending upon a person's particular case as follows.
Subitem 16(1) sets out the default rule (to operate subject to the more specific rules
in the remainder of item 16) that the amendments made by items 4 and 5 apply for
working out whether a person is qualified for newstart allowance from days
extending from the commencement date onwards.
Subitem 16(2) provides that if, immediately before the amendments made by this
Schedule commence, the person was aged 22, 23 or 24 and was receiving newstart
allowance (or subject to a period of suspension), the amendments made by items 4
and 5 (to raise the lower qualification age for newstart allowance from 22 to 25) do
not affect the person from the commencement date until their newstart allowance is
cancelled. This provision will mean that existing recipients of newstart allowance, at
the time this Schedule commences, will be able to remain in receipt of newstart
allowance.
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Schedule 14 - Age requirements for various Commonwealth payments
Subitem 16(3) operates to ensure that claims for newstart allowance made by
people aged 22, 23 or 24 that have been made but not determined by the Secretary
at the time immediately before the commencement date can still be granted on the
basis that the lower age limit for qualification for newstart allowance is not affected
by the amendments proposed by items 4 and 5. This means that 22, 23 and 24 year
old people who have a claim pending (that is, made but not determined) on the
commencement date can still be granted newstart allowance on the basis of the
claim as if the lower age limit for qualification remains 22, from the commencement
date until the person's payment (if granted as a result of the claim) is cancelled.
Subitem 16(4) deals with the application of the amendments proposed by items 4
and 5 to people aged 22, 23 or 24 who have claimed newstart allowance prior to the
time this Schedule commences and who are undergoing a liquid assets test waiting
period, in relation to that claim, on the commencement date. For such people,
the amendments made by items 4 and 5 do not apply from the commencement date
in relation to their claim and subsequent qualification for and payment of newstart
allowance as a result of that claim. Once any payment as a result of that claim is
cancelled, the person will no longer be subject to this application provision and will
not be able to qualify for newstart allowance again until they turn 25.
Subitem 16(5) ensures that people serving an income maintenance period on the
commencement date in relation to newstart allowance are not affected by the
amendments proposed by items 3 and 4 from the commencement date until their
payment is cancelled. This provision will operate as a beneficial rule for people who
are 22, 23 and 24 in these circumstances, as they will able to resume payment on
newstart allowance following their income maintenance period, notwithstanding the
proposal to raise the age of qualification for newstart allowance to 25.
Subitem 16(6) is an application provision that will apply to a person where a claim
for newstart allowance was granted before the commencement of items 4 and 5 in
circumstances where the start day is worked out as being on a day after the
commencement date. If this provision applies to a person, the amendments made
by items 3 and 4 (to raise the lower age for qualification for newstart allowance) will
not apply to that person until their newstart allowance is cancelled. This will operate
beneficially for such people aged 22, 23 or 24 at the time of commencement, as
people of these ages will still be able to receive newstart allowance, notwithstanding
the amendments to the qualification age for newstart allowance proposed by this
Schedule.
Subitems 17(1) and (2) provide that item 6, which amends the lower qualification
age for sickness allowance from 22 to 25, applies for working out a person's
qualification for sickness allowance from the commencement date onwards, unless
the person is 22, 23 or 24 on the commencement date and is in receipt of sickness
allowance or is undergoing a period of suspension in relation to their sickness
allowance: such people can remain in receipt (or have their sickness allowance
payment resumed after a period of suspension) following the commencement date
until their payment is cancelled.
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Schedule 14 - Age requirements for various Commonwealth payments
Subitems 17(3) to 17(6) are modelled on the application provisions for newstart
allowance at subitems 16(3) to 16(6), and operate as described in more detail above
in relation to newstart allowance in circumstances where, for people aged 22, 23 and
24: a claim is made but not determined; the person is serving a liquid assets test
waiting period; the person is serving an income maintenance period; or a claim is
granted but the person's start day is after the commencement date.
Item 18 provides that the amendments made by items 8, 9, 10 and 11 (which make
changes to the rules around how to determine the 'partner income free area' for a
person) apply in relation to working out that rates of social security payments for a
person for days following the commencement date onwards.
Amendments to the Farm Household Support Act
Items 19, 20, 21 and 22 replace a number of references in the Farm Household
Support Act to a person who has 'turned 22' to references to a person who has
'turned 25'. The changes are consequential upon the changes to the qualification
ages for youth allowance and newstart allowance proposed by items 3, 4 and 5 of
this Schedule to the Bill. Prior to these amendments, farm household allowance was
paid either at youth allowance rates or newstart allowance rates, depending upon
whether a person had turned 22. These amendments will ensure payment rates of
farm household allowance remain aligned with payment rates of youth allowance
and newstart allowance for people of the same age.
Similarly, items 23, 24 and 25 replace a number of references in the Farm
Household Support Act to a person who has 'not turned 22' to references to a person
who has 'not turned 25'. These amendments will also ensure payment rates of farm
household allowance remain aligned with payment rates of youth allowance and
newstart allowance for people of the same age.
Item 26 makes amendments to the table in section 93 of the Farm Household
Support Act that deals with reading certain references in the Social Security Act for
the purposes of the Farm Household Support Act. The amendments to items 1
and 2 in the table will ensure that, from commencement, references to newstart
allowance and youth allowance in the Social Security Act are to be read as including
references to people who have and have not turned 25 respectively (subject to the
other rules in Division 2 of Part 5 of the Household Support Act). The amendments
to items 15 and 16 in the table will ensure that, from commencement, references to
the newly arrived resident's waiting period for newstart allowance and youth
allowance are to be read as references to a newly arrived resident's waiting period
(within the meaning of the Farm Household Support Act) for people who have and
have not turned 25 respectively.
The amendments made by item 27 are various application rules which determine
how certain people are affected by the amendments made by items 21, 22, 24 and
24 from the commencement date.
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Schedule 14 - Age requirements for various Commonwealth payments
Subitem 27(1) sets out a default rule (that is, one that is subject to subitems 27(2)
and (3)) for how various substantive provisions made by this Schedule apply
(excluding amendments made to headings and the outline at section 7 of the Farm
Household Support Act). Subitem (1) states that amendments made by items 21,
22, 24 and 25, to change references to age 22 to age 25 throughout the Farm
Household Support Act apply for working out the rate of a person's farm household
allowance from the commencement date and days following.
Subitem 27(2) ensures that people in receipt of farm household allowance on the
commencement date (or for whom payment is suspended) and who are aged 22, 23
or 24 are not affected by amendments to change references to age 22 to age 25
made by items 21 and 22. This is a beneficial rule which will ensure that such
people will be able to be paid farm household allowance at the newstart allowance
rate (under benefit rate calculator B of the Social Security Act) notwithstanding
amendments made to Subdivision A of Division 8 of the Farm Household Support
Act. Note that equivalent amendments are not required in relation to the
amendments made by items 24 and 25 as these items change references to people
who 'have not turned 22' to references to people who 'have not turned 25', the
rationale being that people who have not turned 22 on commencement will also have
not turned 25. People will only remain able to benefit from this application provision
until their payment is cancelled.
Subitem 27(3) is a similar rule that deals with people who are aged 22, 23 or 24 on
commencement whose claim has been granted prior to the commencement date for
a start date on or after the commencement date. Such people are also not affected
by the amendments made by items 21 and 22 and can therefore receive farm
household allowance at the newstart allowance rate (under benefit rate calculator B
of the Social Security Act) notwithstanding amendments made to Subdivision A of
Division 8 of the Farm Household Support Act. People will only remain able to
benefit from this application provision until their payment is cancelled.
Subitem 27(4) ensure that the amendments proposed for changing the reference
from 22 to 25 in items 1 and 16 of the table in subsection 93(1) of the Farm
Household Support Act do not apply during the period that the application provisions
described above (and particularly subitems 27(2) and (3)) do not apply. Aligned in
this way to the period for which the application provisions dealing with items 21 and
22 operate for a person, this subitem also ensures that people aged 22, 23 and 24
on commencement who are in receipt of farm household allowance, subject to a
period of suspension, or for whom a claim has been determined but whose start date
follows the commencement date, can benefit from their payment being calculated at
the at the newstart allowance rate (under benefit rate calculator B of the Social
Security Act) until their farm household allowance is cancelled.
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Schedule 15 - Income support waiting periods
Schedule 15 - Income support waiting periods
Summary
This measure introduces a four-week waiting period, for job ready young people who
are looking for work, to receive income support payments. During this four-week
period, job seekers under 25 years of age who have been classified as job ready
(Stream A) by the Job Seeker Classification Instrument will also be required to
complete assigned activities, through a new program, RapidConnect Plus, that will
help them prepare for and find work.
Background
This measure aims to encourage greater participation in work and other activities
and make the welfare system fairer and more sustainable, to ensure a productive
Australian workforce for the future. The measure establishes firm expectations for
young job seekers. It provides an incentive for affected persons to be self-sufficient,
or to undertake further relevant education or training to increase employability before
relying on the taxpayer for support.
Subject to some exceptions, the amendments made by this Schedule will apply to a
person aged under 25 years who is a new claimant for youth allowance (other) and,
in certain circumstances, special benefit. Such a person will be subject to a four-
week waiting period, as well as any other waiting periods that may apply, before the
social security benefit becomes payable.
A person will not be subject to the new waiting period if they are subject to an
exemption. This Schedule sets out a number of exemptions for a person who is not
yet job ready and allows the Minister to specify further exemptions in a legislative
instrument.
The amendments made by this Schedule commence immediately after the
commencement of Schedules 13 and 14, that are due to commence on the first
1 January or 1 July after Royal Assent.
Explanation of the changes
Part 1 - Main amendments
Amendments to the Social Security Act
Item 1 inserts a new definition of income support waiting period into
subsection 23(1). This Schedule provides for a new youth allowance income support
waiting period under new section 549CAA and a new special benefit income support
waiting period under new section 739AA.
Items 2 and 3 amend the definition of waiting period in subsection 23(1) to refer to
the new income support waiting period for youth allowance and special benefit.
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Schedule 15 - Income support waiting periods
Item 4 is a technical amendment to remove a redundant reference to section 732 in
paragraph (ka) of the definition of waiting period. Section 732 no longer provides
for a waiting period.
Item 5 amends subsection 549(2) to provide for an income support waiting period
under section 549CAA (as inserted by item 6). Section 549 provides that youth
allowance is not payable if a person is subject to certain waiting periods.
Item 6 inserts new sections 549CAA and 549CAB to provide for a new income
support waiting period for youth allowance and exemptions from that waiting period.
Persons subject to the income support waiting period
Subsection 549CAA(1) provides that a person is subject to an income support
waiting period if the person who is qualified for youth allowance is neither
undertaking full-time study nor a new apprentice.
As a result of amendments made by Schedule 2 to this Bill, the maximum age at
which a person is qualified for youth allowance will be increased to 24 years.
As such, the youth allowance income support waiting period will apply to a person
who is under the age of 25 years.
Subsection 549CAA(2) provides that a person is not subject to an income support
waiting period if:
the person was qualified for another income support payment (other than
youth allowance or special benefit) on the day before the person qualified for
youth allowance (other). This means that a person who 'transfers' from most
other social security payments to youth allowance (other) will not be subject to
the income support waiting period;
an exemption in section 549CAB (inserted by this item) applies to the person
on the person's start day (worked out disregarding clause 5 of Schedule 2 to
the Social Security Administration Act). The general rule is that the start day
is the day of the person's claim for a social security payment, if the person is
qualified for the payment on that day;
the person has served a four-week income support waiting period for youth
allowance or special benefit in the previous six months.
Length of the income support waiting period
Subsection 549CAA(3) provides that an income support waiting period starts on the
person's start day (worked out disregarding clause 5 of Schedule 2 to the Social
Security Administration Act) for youth allowance. This means that, in most
circumstances, a youth allowance income support waiting period will start on the day
the person makes a claim for youth allowance, if the person is qualified for youth
allowance on that day.
The income support waiting period will start even if the person is subject to other
waiting periods and exclusion periods. That is, the income support waiting period
will be served concurrently with any other waiting periods and exclusion periods, with
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Schedule 15 - Income support waiting periods
the exception of the ordinary waiting period which will start after the income support
waiting period has ended (see item 7 of this Schedule).
Subsection 549CAA(4) provides that the income support waiting period ends on the
earliest of the following:
four weeks after it started;
when the person turns 25 years of age;
when section 549CAB applies to the person. Section 549CAB (inserted by
this item) provides for exemptions to the income support waiting period;
if the person was serving an income support waiting period for special benefit
when the person claims and qualifies for youth allowance (other), when the
income support waiting period for special benefit would have ended.
Special rules for transitioning between youth allowances
Subsection 549CAA(5) modifies rules in section 549CAA where a person becomes
qualified for youth allowance (other) immediately after they were qualified for youth
allowance on the basis of being a student or new apprentice. In particular, one of
the effects of subsection 549CAA(5) is that a person may be required to serve an
income support waiting period if the person became qualified for youth allowance
(other) on the day after the person was qualified for youth allowance on the basis of
being a student or new apprentice.
Subsection 549CAA(6) provides for the end of an income support waiting period
where a person was previously subject to that waiting period because they were
qualified for youth allowance (other) and they then become qualified for youth
allowance on the basis of being a student or new apprentice. In these
circumstances, the waiting period will end when the person becomes qualified for
youth allowance on the basis of being a student or new apprentice.
Special rule relating to employment services or disability employment services
Subsection 549CAA(7) creates a special rule relating to employment services or
disability employment services.
A person may be assessed under the Job Seeker Classification Instrument (JSCI)
as requiring a level of employment services on the basis that they are 'job ready'
(Stream A of jobactive). Such a person may be subject to an income support waiting
period. However, it is possible that the initial assessment may not have been made
on the basis of all of the information that applies to the person. In some
circumstances, a person may be 'reassessed' under the JSCI and found to require
employment services or disability employment services of a class determined under
proposed paragraph 549CAB(2)(a). A person who is assessed as requiring such
employment services or disability employment services is exempt from the income
support waiting period.
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Schedule 15 - Income support waiting periods
Subsection 549CAA(7) provides that, in certain circumstances, a person who is
reassessed as requiring employment services or disability employment services of a
class determined under proposed paragraph 549CAB(2)(a) is taken not to have been
subject to an income support waiting period. The circumstances are where the
Secretary is satisfied that the person should have been assessed as requiring that
level of employment services or disability employment services on the person's start
day for youth allowance or special benefit. That is, where the Secretary is satisfied
that, as a matter of fact, on the person's start day, the person required employment
services on the basis that the person was not job ready. In these circumstances, the
person will be entitled to 'back payment' for the waiting period that had been served
before the reassessment.
A person will not be entitled to 'back payment' where the initial JSCI assessment
was, as a matter of fact, accurate for the person's circumstances at the time,
but where the person's circumstances change such that they are subsequently
assessed to require employment services or disability employment services of a
class determined under proposed paragraph 549CAB(2)(a). Such a person would,
however, be exempt from the remainder of the income support waiting period that
would have applied to the person.
Exemptions
New section 549CAB provides for exemptions from the income support waiting
period. A person is exempt from an income support waiting period if the person:
is a parent of an FTB child. The effect of this is that a parent who has
35 per cent care of a child will be exempt from an income support waiting
period;
is the principal carer of a child;
is in State care or ceased to be in State care during the previous 12 months.
Subsection 549CAB(3) provides that a person is in State care if:
o the person is in the guardianship, care or custody of a court, a Minister,
or a Department, of the Commonwealth, a State, or a Territory; or
o there is a current direction from such a court, Minister or Department
placing the person in the guardianship, care or custody of someone
who is not the person's parent;
is not required to satisfy the activity test for 15 days or more on the basis that
the person has:
o a temporary incapacity exemption;
o a pre-natal exemption or post-natal exemption;
o a domestic violence or other special family circumstances exemption;
o a disabled child or other family circumstances exemption;
o a training camp exemption; or
o a special circumstances exemption.
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Schedule 15 - Income support waiting periods
requires employment services or disability employment services of a class
determined by the Minister in a legislative instrument.
Paragraph 549CAB(2)(a) provides that the Minister may determine classes of
employment services or disability employment services for this purpose. It is
intended that the legislative instrument would determine classes of
employment services or disability employment services which mean that the
person is not 'job ready'. This means that only a person who is 'job ready' will
be subject to the income support waiting period;
is covered by an exemption determined by the Minister by legislative
instrument. Paragraph 549CAB(2)(b) provides that the Minister may
determine exemptions for this purpose.
Item 7 amends new subsection 549CB(2) (as inserted by Schedule 1 to this Bill)
to provide that an ordinary waiting period for youth allowance starts after the income
support waiting period ends. This will ensure that the new income support waiting
period is treated in the same way as other waiting periods and exclusion periods.
An ordinary waiting period will start after all waiting periods and exclusion periods
have ended.
Item 8 inserts a new paragraph into a special benefit qualification provision.
A person is generally qualified for special benefit only if other social security benefits
or social security pensions are not payable to the person. However, under current
provisions, a person is not qualified for special benefit if youth allowance is not
payable to the person because of certain non-payment periods or preclusion periods.
The effect of this item is that a person will not be qualified for special benefit if youth
allowance is not payable to the person because of an income support waiting period.
It would undermine the integrity of income support waiting periods if a person was
able to qualify for, and be paid, special benefit while they are subject to an income
support waiting period for youth allowance.
Item 9 inserts new sections 739AA and 739AB to provide for a new income support
waiting period for special benefit and exemptions from that waiting period.
Persons subject to the income support waiting period
Subsection 739AA(1) provides that a person is subject to an income support waiting
period if:
the person is qualified for a special benefit; and
the person is an Australian resident or the holder of a visa determined by the
Minister in a legislative instrument. Subsection 739AA(5) provides that the
Minister may determine classes of visas; and
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Schedule 15 - Income support waiting periods
on the person's start day (worked out disregarding clause 5 of Schedule 2 to
the Social Security Administration Act) for the special benefit, the person has
attained the minimum age for youth allowance but less than 25 years of age.
The general rule is that the start day is the day of the person's claim for a
social security payment, if the person is qualified for the payment on that day.
Subsection 543A(1) provides that, subject to some exceptions, a person has
attained the minimum age for youth allowance if the person is at least 16
years old, or is 15 years old and is independent.
Subsection 739AA(2) provides that a person is not subject to an income support
waiting period if:
the person was qualified for another income support payment on the day
before the person qualified for special benefit. This means that a person who
'transfers' from another social security payment to special benefit will not be
subject to the income support waiting period;
an exemption in section 739AB (inserted by this item) applies to the person;
and
the person has served a four-week income support waiting period for youth
allowance or special benefit in the previous six months.
Length of the income support waiting period
Subsection 739AA(3) provides that an income support waiting period starts on the
person's start day (worked out disregarding clause 5 of Schedule 2 to the Social
Security Administration Act) for special benefit. This means that, in most
circumstances, a special benefit income support waiting period will start on the day
the person makes a claim for special benefit.
The special benefit income support waiting period will start even if the person is
subject to other waiting periods and exclusion periods. That is, the income support
waiting period will be served concurrently with any other waiting periods and
exclusion periods.
Subsection 739AA(4) provides that the income support waiting period ends on the
earliest of the following:
four weeks after it started;
when the person turns 25 years of age;
when the person becomes subject to an exemption under section 739AB.
Exemptions
New section 739AB provides that a person is exempt from an income support
waiting period if the person:
is a parent of an FTB child. The effect of this is that a parent who has 35 per
cent care of a child will be exempt from an income support waiting period;
is a principal carer of a child;
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is in State care or ceased to be in State care during the previous 12 months.
Subsection 739AB(3) provides that a person is in State care if:
o the person is in the guardianship, care or custody of a court, a Minister,
or a Department, of the Commonwealth, a State, or a Territory; or
o there is a current direction from such a court, Minister or Department
placing the person in the guardianship, care or custody of someone
who is not the person's parent;
is not required to satisfy the activity test for 15 days or more on the basis that:
o the person has been subjected to domestic violence;
o has responsibility for the care of a child;
o special circumstances beyond the person's control exist;
o a pre-natal exemption or post-natal exemption applies to the person;
o the person was granted a visa during the previous 13 weeks that is
included in a class of visas granted for temporary protection,
humanitarian or safe haven purposes; or
o the person is temporarily incapacitated for work;
is taken to satisfy the activity test for 15 days or more on the basis that the
person would be qualified for carer payment in certain circumstances;
a special circumstances exemption;
requires employment services or disability employment services of a class
determined by the Minister in a legislative instrument. Paragraph 739AB(2)(a)
provides that the Minister may determine classes of employment services or
disability employment services for this purpose. It is intended that the
legislative instrument would determine classes of employment services or
disability employment services which mean that the person is not 'job ready'.
This means that only a person who is 'job ready' will be subject to the income
support waiting period;
is covered by an exemption determined by the Minister by legislative
instrument. Paragraph 739AB(2)(b) provides that the Minister may determine
exemptions for this purpose.
Special rule relating to employment services or disability employment services
Subsection 739AA(6) creates a special rule relating to employment services or
disability employment services.
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A person may be assessed under the Job Seeker Classification Instrument (JSCI)
as requiring a level of employment services on the basis that they are 'job ready'
(Stream A of jobactive). Such a person may be subject to an income support waiting
period. However, it is possible that the initial assessment may not have been made
on the basis of all of the information that applies to the person. In some
circumstances, a person may be 'reassessed' under the JSCI and found to require
employment services or disability employment services of a class determined under
proposed paragraph 739AB(2)(a). A person who is assessed as requiring such
employment services or disability employment services is exempt from the income
support waiting period.
Subsection 739AA(6) provides that, in certain circumstances, a person who is
reassessed as requiring employment services or disability employment services of a
class determined under proposed paragraph 739AA(2)(a) is taken not to have been
subject to an income support waiting period. The circumstances are where the
Secretary is satisfied that the person should have been assessed as requiring that
level of employment services or disability employment services on the person's start
day for youth allowance or special benefit. That is, where the Secretary is satisfied
that, as a matter of fact, on the person's start day, the person required employment
services on the basis that the person was not job ready. In these circumstances, the
person will be entitled to 'back payment' for the waiting period that had been served
before the reassessment.
A person will not be entitled to 'back payment' where the initial JSCI assessment
was, as a matter of fact, accurate for the person's circumstances at the time,
but where the person's circumstances change such that they are subsequently
assessed to require employment services or disability employment services of a
class determined under proposed paragraph 739AA(2)(a). Such a person would,
however, be exempt from the remainder of the income support waiting period that
would have applied to the person.
Item 10 provides the application provision for this Schedule.
Subitem 10(1) provides that the amendments made by this Schedule apply in
relation to a claim for a social security payment made on or after the commencement
of the Schedule.
Subitem 10(2) provides a specific application provision for a person transitioning
between youth allowances. Where a person made a claim for youth allowance
before commencement and became qualified for that payment on the basis of being
a student or new apprentice, but becomes qualified for youth allowance (other) after
commencement, then the new income support waiting period starts on the day the
person became qualified for youth allowance (other).
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Schedule 16 - Other waiting period amendments
Schedule 16 - Other waiting period amendments
This Schedule implements the Rapid Activation of young job seekers 2015-16
Budget measure.
Background
This Schedule builds on measures in Schedule 15 to this Bill, which will introduce a
four-week income support waiting period for some job seekers under 25. This
Schedule is aimed at ensuring that those job seekers will be part of a new
programme, RapidConnect Plus. RapidConnect Plus will require job seekers who do
not have significant barriers to obtaining employment to complete pre-benefit
activities during their four-week income support waiting period in order to receive
payments.
Under RapidConnect Plus, pre-benefit activities can include attending an interview
with a jobactive provider, preparing a résumé, completing a job seeker profile,
entering into and complying with a Job Plan and undertaking adequate job searches.
Employment Pathway Plan will remain the legislative term for a Job Plan.
The number of job searches required would take into account the job seeker's
capacity and/or the state of the job seeker's local labour market. Most pre-benefit
activities would be included in the job seeker's Job Plan, which is negotiated
between the job seeker and their jobactive provider and is designed to assist young
job seekers who are job ready to prepare for and find work as soon as possible.
The Schedule will also provide that a special benefit claimant can be required to
enter into a Job Plan if they contact the Department about a claim or the Department
is contacted on their behalf. This amendment aligns the time at which a special
benefit claimant can be required to enter into a Job Plan with that of claimants for
newstart allowance and youth allowance.
It will be provided that, if a job seeker has a reasonable excuse for not complying
with their pre-benefit activities, the Employment Secretary must not make a
determination that income support is not payable. This is consistent with other
provisions in the social security law under which a job seeker is not to be denied a
benefit for non-compliance when there is a reasonable excuse for that
non-compliance. A job seeker who has a reasonable excuse for not complying with
their pre-benefit activities will be treated in the same way as a job seeker who
complies with their pre-benefit activities.
The amendments made by this Schedule commence immediately after the
commencement of Schedule 15, which is due to commence on the first 1 July or
1 January after Royal Assent.
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Explanation of the changes
Amendments to the Social Security Act
Item 1 inserts new subsection 549CAA(2A), which provides when certain
exemptions from the income support waiting period will not apply to claimants for
youth allowance (other).
Item 6 of Schedule 3 to this Bill inserts a new section 549CAA, which provides for a
four-week income support waiting period for claimants for youth allowance who are
not full-time students or new apprentices. New subsection 549CAA(2) will set out
exemptions where a job seeker is not subject to an income support waiting period.
Specifically, paragraph 549CAA(2)(c) will provide that a job seeker is not subject to
an income support waiting period if, in the prior six months, the job seeker had
already served an income support waiting period for youth allowance (other)
or special benefit.
New subsection 549CAA(2A) provides that the exemption to the income support
waiting period under paragraph 549CAA(2)(c) will not apply if the Employment
Secretary makes a determination under new subsection 549CAC(1) that youth
allowance (other) is not payable because the person has not completed their
pre-benefit activities. Specifically, new paragraph 549CAA(2A)(a) provided that the
exemption in new paragraph 549CAA(2)(c) will not apply where the Employment
Secretary makes a determination under new subsection 549CAC(1) in relation to a
claimant for youth allowance (other). New paragraph 549CAA(2A)(b) provides that
the exemption in new paragraph 549CAA(2)(c) will not apply where the Employment
Secretary makes a determination under new subsection 739AC(1) in relation to
special benefit.
The effect of new section 549CAA(2A) will be that, where the Secretary has
determined that income support is not payable to a job seeker because they have
not complied with their pre-benefit activities (and they have no reasonable excuse for
not complying) and the job seeker then makes a further claim for income support,
even if that claim is within six months of their original claim, that job seeker will be
subject to a further income support waiting period.
New subsection 549CAA(2A) gives effect to the policy intent of RapidConnect Plus,
which is that a job seeker who does not comply with their pre-benefit activities in an
income support waiting period must, in the usual course, serve another full income
support waiting period and comply with their pre-benefit activities in that period if
they wish to receive income support. Where, under other provisions of the social
security law, another waiting period applies, such as the ordinary waiting period,
income support is not paid until the person has also served that waiting period.
Item 2 inserts a new section 549CAC, which provides for the Employment Secretary
to determine that youth allowance is not payable at the end of the income support
waiting period if a job seeker fails to comply with their pre-benefit activities during the
income support waiting period.
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Completion of pre-benefit activities
Subsection 549CAC(1) provides that, if the Employment Secretary is satisfied that a
job seeker who claims youth allowance (other) failed to comply with a requirement
under Subdivision E of Division 1 during the income support waiting period,
the Employment Secretary must determine that youth allowance is not payable to
that job seeker. A determination by the Employment Secretary will mean that
income support will not become payable at the end of the income support waiting
period.
Subdivision E of Division 1 contains legislative requirements for youth allowance
Employment Pathway Plans. Subsection 544(1) relevantly provides that a job
seeker who claims youth allowance must enter into an Employment Pathway Plan
when required by the Secretary to do so, must comply with the plan and must be
prepared to enter into another plan if required. Subsection 544A(4) relevantly
provides that the Secretary may require the job seeker to attend a place to negotiate
the plan. These legislative provisions allow the Secretary to require a job seeker to
undertake certain activities which, in the case of a job seeker who is subject to the
income support waiting period, can be required to be undertaken during that period.
Reasonable excuse
Subsection 549CAC(2) provides that the Secretary must not make a determination
that youth allowance is not payable at the end of the income support waiting period
where the Secretary is satisfied that the job seeker has a reasonable excuse for not
complying with their pre-benefit activities during the income support waiting period.
Subsection 549CAC(3) provides that the Employment Secretary must, by legislative
instrument, determine matters that the Employment Secretary must take into account
in deciding whether a person has a reasonable excuse for not complying with their
pre-benefit activities. There are currently two instruments under the social security
law that set out the matters the Secretary must take into account in deciding whether
a person has a reasonable excuse. They are the Social Security (Reasonable
Excuse-Participation Payment Obligations) (DEEWR) Determination 2009 (No.1)
and the Social Security (Reasonable Excuse--Participation Payment Obligations)
(FaHCSIA) Determination 2009 (No.1). The matters in the two instruments are
identical. It is intended to combine these two instruments into a new, single
instrument and that this instrument will also apply to a decision by the Employment
Secretary as to whether a person has a reasonable excuse for the purposes of the
determination discussed above.
Subsection 549CAC(4) provides that the Employment Secretary is not limited by the
matters set out in the legislative instrument in deciding whether a person has a
reasonable excuse.
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Timing of the determination
Subsection 549CAC(5) provides that the Employment Secretary's determination
under subsection 549CAC(1) that the job seeker failed to complete their pre-benefit
activities can be made before or after the end of the income support waiting period,
but takes effect at the end of the period. In practice, jobactive providers will advise
the Department of Human Services once the job seeker has completed all of their
pre-benefit activities, which can be at any time during the four-week waiting period.
Any determination that a person has not complied with their pre-benefit activities
would typically be made at the end of the income support waiting period.
Allowing the Employment Secretary's determination to take effect at the end of the
income support waiting period means that a job seeker who has not fully complied
with their pre-benefit activities in an income support waiting period can be given a
further chance to comply during that period. It is intended that job seekers be given
the maximum opportunity to comply with their pre-benefit activities in the relevant
income support waiting period.
Non-payability and further claim
Subsection 549CAC(6) provides that, if the Secretary determines that youth
allowance is not payable to a job seeker at the end of an income support waiting
period because the job seeker did not comply with their pre-benefit activities during
that income support waiting period, the job seeker will be required to make a
subsequent claim for youth allowance if they wish to continue to receive income
support. Subsection 549CAC(7) provides that any subsequent claim cannot be
made until after the end of the relevant income support waiting period.
Subsection 549CAC(8) provides that any determination made by the Employment
Secretary is to be disregarded in determining any further claim for youth allowance.
This would mean that a job seeker cannot be paid youth allowance from the date of
their first claim where a subsequent claim for youth allowance has been granted.
Subsection 549CAC(9) is a technical amendment that would enable the Employment
Secretary to make a fresh determination under subsection 549CAC(1) in relation to a
subsequent waiting period.
Subsections 549CAC(6), (7), (8) and (9) give effect to the policy intent of
RapidConnect Plus, which is that a job seeker who does not comply with their
pre-benefit activities in a four-week income support waiting period must make a fresh
claim for youth allowance, serve another full income support waiting period and
comply with their pre-benefit activities in that period if they wish to receive income
support.
Item 3 repeals subsection 731L(1) and substitutes a new subsection.
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Currently under the Social Security Act, a claimant for newstart allowance or youth
allowance can be required to attend an interview and enter into a Job Plan if they
contact the Department of Human Services about a claim or the Department is
contacted on their behalf. However a special benefit claimant can only be required
to enter into a Job Plan once they have actually made a claim or are in receipt of
payments. This item amends subsection 731L(1), and provides that a special benefit
claimant can be required to enter into a Job Plan if they contact the Department
about a claim or the Department is contacted on their behalf.
This amendment aligns the time at which a special benefit claimant can be required
to enter into a Job Plan with that of a claimant for newstart allowance or youth
allowance. The amendment is necessary to ensure that claimants for youth
allowance (other) and special benefit are subject to the same rules regarding the
time at which they can be required to enter into a Job Plan and for RapidConnect
Plus, complete pre-benefit activities.
Item 4 is in similar terms to item 1 of this Schedule, and would insert new
subsection 739AA(2A), which provides when certain exemptions from the income
support waiting period will not apply to special benefit claimants.
Item 9 of Schedule 3 to this Bill inserts a new section 739AA, which provides for an
income support waiting period for claimants for special benefit claimants.
New subsection 739AA(2) sets out exemptions where a job seeker is not subject to
an income support waiting period. Specifically, paragraph 739AA(2)(c) provides that
a job seeker is not subject to an income support waiting period if, in the prior six
months, the job seeker had already served an income support waiting period for
youth allowance (other) or special benefit.
New subsection 739AA(2A) provides that the exemption to the income support
waiting period under paragraph 739AA(2)(c) will not apply if the Employment
Secretary makes a determination under new subsection 739AC(1) that income
support is not payable to a special benefit claimant because they have not
completed their pre-benefit activities. Specifically, new paragraph 739AA(2A)(a)
provides that the exemption in new paragraph 739AA(2)(c) will not apply where the
Employment Secretary makes a determination under new subsection 739AC(1)
in relation to a special benefit claimant. New paragraph 739AA(2A)(b) provides that
the exemption in the new paragraph 739AA(2)(c) will not apply where the
Employment Secretary makes a determination under new subsection 549CAC(1)
in relation to a claimant for youth allowance (other).
The effect of new subsection 739AA(2A) will be that, where the Secretary has
determined that income support is not payable to a job seeker because they have
not complied with their pre-benefit activities (and they have no reasonable excuse for
not complying) and the job seeker then makes a further claim for income support,
even if that claim is within six months of their original claim, that job seeker will be
subject to a further income support waiting period.
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The insertion of new subsection 739AA(2A) gives effect to the policy intent of
RapidConnect Plus, which is that a job seeker who does not comply with their
pre-benefit activities in an income support waiting period must, in the usual course,
serve another full income support waiting period and comply with their pre-benefit
activities in that period if they wish to receive income support. Where, under other
provisions of the social security law, another waiting period applies, such as the
ordinary waiting period, income support is not paid until the person has also served
that waiting period.
Item 5 is in similar terms to item 2 of this Schedule, and inserts a new
section 739AC, which provides for the Employment Secretary to determine that
special benefit is not payable at the end of the income support waiting period if a job
seeker fails to comply with their pre-benefit activities during the income support
waiting period.
Completion of pre-benefit activities
Subsection 739AC(1) provides that, if the Employment Secretary is satisfied that a
special benefit claimant failed to comply with a requirement under
paragraph 729(2B)(b), (c), (d) or (e) of the Social Security Act, during the income
support waiting period, the Employment Secretary must determine that special
benefit is not payable to that job seeker. A determination by the Employment
Secretary will mean that income support will not become payable at the end of the
income support waiting period.
Paragraphs 729(2B)(b), (c), (d) and (e) of the Social Security Act contain legislative
requirements for special benefit Employment Pathway Plans.
Paragraphs 729(2B)(b) and (c) respectively provide that a special benefit claimant
must be prepared to enter into an Employment Pathway Plan, and must be prepared
to enter into another such plan if required. Paragraph 729(2B)(d) requires the
special benefit claimant to enter into the plan when required by the Secretary.
Paragraph 729(2B)(e) provides that, where a special benefit claimant enters into a
plan, the special benefit claimant must comply with the plan. These legislative
provisions allow the Secretary to require a job seeker to undertake certain activities
which, in the case of a job seeker who is subject to the income support waiting
period, can be required to be undertaken during that period.
Reasonable excuse
Subsection 739AC(2) provides that the Secretary must not make a determination
that special benefit is not payable at the end of the income support waiting period
where the Secretary is satisfied that the job seeker has a reasonable excuse for not
complying with their pre-benefit activities during the income support waiting period.
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Subsection 739AC(3) provides that the Employment Secretary must, by legislative
instrument, determine matters that the Employment Secretary must take into account
in deciding whether a person has a reasonable excuse for not complying with their
pre-benefit activities. As discussed in item 2 of this Schedule, there are currently two
instruments under the social security law that set out the matters the Secretary must
take into account in deciding whether a person has a reasonable excuse. They are
the Social Security (Reasonable Excuse-Participation Payment Obligations)
DEEWR) Determination 2009 (No.1) and the Social Security (Reasonable Excuse--
Participation Payment Obligations) (FaHCSIA) Determination 2009 (No.1). As the
matters in the two instruments are identical, it is intended to combine these two
instruments into a new single instrument. It is intended that this instrument will also
apply to a decision by the Employment Secretary as to whether a person has a
reasonable excuse for the purposes of the determination discussed above.
Subsection 739AC(4) provides that the Employment Secretary is not limited by the
matters set out in the legislative instrument in deciding whether a person has a
reasonable excuse.
Timing of the determination
Subsection 739AC(5) would provide that the Employment Secretary's determination
under subsection 739AC(1) that the job seeker failed to complete their pre-benefit
activities can be made before or after the end of the income support waiting period
but takes effect at the end of the period. In practice jobactive providers will advise
the Department of Human Services once the job seeker has completed all of their
pre-benefit activities, which can be at any time during the four week waiting period.
Any determination that a person has not complied with their pre-benefit activities
would typically be made at the end of the income support waiting period.
Allowing the Employment Secretary's determination to take effect at the end of the
income support waiting period means that a job seeker who has not fully complied
with their pre-benefit activities in an income support waiting period can be given a
further chance to comply during that period. It is intended that job seekers be given
the maximum opportunity to comply with their pre-benefit activities in the relevant
income support waiting period.
Non-payability and further claim
Subsection 739AC(6) provides that, if the Secretary determines that special benefit
is not payable to a job seeker at the end of an income support waiting period
because the job seeker did not comply with their pre-benefit activities during that
income support waiting period, the job seeker will be required to make a subsequent
claim for special benefit if they wish to continue to receive income support.
Subsection 739AC(7) would provide that any subsequent claim cannot be made until
after the end of the relevant income support waiting period.
Subsection 739AC(8) provides that any determination made by the Employment
Secretary is to be disregarded in determining any further claim for special benefit.
This means that a job seeker cannot be paid special benefit from the date of their
first claim where a subsequent claim for special benefit has been granted.
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Subsection 739AC(9) is a technical amendment that will enable the Employment
Secretary to make a fresh determination under subsection 739AC(1) in relation to a
subsequent waiting period.
Subsections 739AC(6), (7), (8) and (9) give effect to the policy intent of
RapidConnect Plus, which is that a job seeker who does not comply with their
pre-benefit activities in an income support waiting period must make a fresh claim for
special benefit, serve another full waiting period and comply with their pre-benefit
activities in that period if they wish to receive income support.
Item 6 provides the application and saving provisions for this Schedule.
Sub-item 6(1) provides that the amendments made by this Schedule apply in relation
to an income support waiting period that commences after this Schedule.
Sub-item 6(2) provides that the amendment to section 731L does not affect any
requirements made by the Secretary under subsection 731L(1) prior to the
commencement of item 6. That is, any requirement made by the Secretary of a
special benefit claimant or recipient prior to the commencement of item 6 will
continue to apply.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Summary
This Schedule ensures that Government-provided parental leave pay is more fairly
targeted to ensure eligible working parents have access to a base level of financial
support on the birth or adoption of their child. Parents will no longer receive both
employer-provided paid primary carer leave (such as maternity leave pay) and the
full amount of parental leave pay under the Government-provided PPL scheme.
However, to offset the reduction in support this may represent for some recipients of
parental leave pay, the maximum PPL period is increased from 18 to 20 weeks.
Parents who are entitled to receive employer-provided paid primary carer leave
totalling at least 20 weeks at the National Minimum Wage will not receive any
parental leave pay under the PPL scheme.
Parents who are entitled to receive employer-provided paid primary carer leave
totalling less than 20 weeks, will continue to receive some parental leave pay under
the PPL scheme, but the amount will be reduced by length of the employer-provided
paid primary carer leave they receive. However, where parents' employer-provided
paid primary carer leave payments (other than lump sum payments) are paid at a
rate below National Minimum Wage, a Government-provided parental leave pay
supplement will be paid valued at the difference between their primary carer pay and
the rate of the National Minimum Wage.
These changes will commence from the first 1 January, 1 April, 1 July or 1 October
that is 9 months after the date the Act receives royal assent, with an earliest
commencement date of 1 January 2018.
Background
Currently under the Paid Parental Leave Act, the PPL scheme provides working
parents and adoptive parents, with access to up to 18 weeks parental leave pay at
the National Minimum Wage, while they stay at home to look after their baby or
adopted child.
Payments under the current PPL scheme are made irrespective of whether an
individual receives employer-provided paid primary carer leave and regardless of the
amount of such payments.
Parental leave pay, under the PPL scheme, is paid over an 18-week period at the
National Minimum Wage. To offset the fact some parents will be entitled to less
parental leave pay as a result of these amendments, the maximum PPL period will
be increased to 20 weeks.
Parents who lodge a claim before the birth of a child, or a child entering their care,
currently receive an initial eligibility determination stating whether they will be eligible
for parental leave pay. Under these amendments, a person must inform the
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Secretary (or delegate) of any primary carer pay they are entitled to from their
employer. The PPL period of a person is then proportionately reduced by the length
of the paid primary carer leave period they are entitled to from their employer. If a
person receives 20 weeks or more paid primary carer leave that is valued at equal to
or more than the National Minimum Wage, the person will not be entitled to receive
parental leave pay from the Government. If the person's paid primary carer leave is
paid at a rate less than the National Minimum Wage, the person will be entitled to a
lump sum supplement of paid parental leave representing the difference between
their paid leave (up to 20 weeks) and the National Minimum Wage for that period.
The purpose of these changes is to provide fairer parental leave pay by creating a
base level of paid parental leave entitlement for all eligible working parents.
Primary claimants will no longer be able to access parental leave pay at the same
time as they are taking employer-provided paid primary carer leave. This change is
consistent with the above change, to better target the Paid Parental Leave scheme
and ensure working parents have access to at least 20 weeks of paid time off work
to care for their child.
Provision is made for a primary claimant to nominate a start day 28 days before the
day they make their claim for parental leave pay or verify their child's birth, to provide
greater flexibility for parents to make their claim after the birth of their child but
without delaying their receipt of parental leave pay.
This Schedule will commence on the first 1 January, 1 April, 1 July or 1 October that
occurs 9 months after the Bill receives Royal Assent, with an earliest
commencement date of 1 January 2018.
Explanation of the changes
Part 1 - Amendments
Amendments to the Paid Parental Leave Act
Items 1 and 2 amend section 4, which sets out the Guide to the Act. The second
and third paragraphs under the heading Overview are omitted and replaced with
three new paragraphs to state that parental leave pay is paid to a person for a
particular period, or as a lump sum supplement. Where parental leave pay is for a
period, that period is called the PPL period. The full PPL period will be 20 weeks.
However, a person may not be eligible for the full 20 weeks if they are not eligible for
the entire period or they receive primary carer pay from their employer.
Parental leave pay may be paid as a lump sum supplement because the person
received employer-provided primary carer pay for up to 20 weeks at less than the
National Minimum Wage.
Parental leave pay is paid in instalments, at the National Minimum Wage for each
week during a person's PPL period or, in the case of a lump sum supplement,
one instalment. Payment can be made either by the Secretary or the person's
employer.
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The last paragraph under the heading Chapter 2 - When parental leave pay is
payable to a person is omitted and replaced with a paragraph stating that there are
three types of claims: a primary claim, a secondary claim and a tertiary claim.
The claims relate to one another. However, a secondary and tertiary claim cannot
be made without a primary claim. Often, only a primary claim is made.
Item 3 amends section 6 by inserting a signpost to the definition of adjustment for
paid PC leave at section 11J inserted by item 17 below.
Item 4 amends section 6 by repealing the definition of initial eligibility
determination and replacing it with a signpost to the definition of initial eligibility
determination at section 115BL, which relates to dad and partner pay.
Item 5 amends section 6 to amend the definition of maximum PPL period end day.
This is a technical amendment to signpost the definition of maximum PPL period
end day at section 11B, inserted by item 17 below.
Item 6 amends section 6 to amend the definition of maximum PPL period start
day. This is a technical amendment to signpost the definition of maximum PPL
period start day at section 11A, inserted by item 17 below.
Item 7 amends section 6 to include a signpost to the definitions of maximum
supplement period and supplement period at section 11H, inserted by item 17
below, paid PC leave, paid PC leave period, PC pay, and primary carer pay at
section 11F, inserted by item 17 below, paid PC leave reduction number at
section 11D, inserted by item 17 below, PC leave and primary carer leave at
section 11E, inserted by item 17 below, provisional entitlement determination at
section 26 and parental leave pay supplement at section 11G, inserted by item 17
below.
Item 8 amends section 7, which is the Guide to Part 2-1 of the Act, to specify that
parental leave pay can be paid under the Act as a lump sum supplement as well as
for a particular period. It also specifies that a person's PPL period may be for a
lesser period than 20 weeks, not only in cases where the person is not eligible for
the full 20-week period, but also in cases where the person is entitled to primary
carer pay in respect of the child.
Items 9, 10, 11, 12 and 13 are minor amendments to sections 8, 9 and 10 to delete
the following phrases: 'for a period' at sections 9 and 10, 'or that period' at section 8
and 'during the period' at section 9. These amendments reflect the fact parental
leave pay may not necessarily be payable for a period if it is paid as a lump sum
supplement.
Items 14 and 15 are minor amendments to subsections 11(1) and (3) respectively to
include the respective headings PPL period and Maximum PPL period.
Item 16 repeals subsections 11(4) and 11(5) because new sections 11A and 11B,
inserted by item 17 below, will give the meanings of maximum PPL period start
day and maximum PPL period end day.
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Item 17 inserts new sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H and 11J.
New section 11A - The maximum PPL period start day for a child
New section 11A defines the maximum PPL period start day for a child.
Subsection 11A(1) provides that the maximum PPL start day for a child is the latest
of: the day the child was born; the nominated start date; where a primary claimant
has a paid primary carer leave period and the nominated start date is during that
period, the first day after the end of that period; 28 days before the primary claimant
made an effective claim for parental leave pay for the child; or 28 days before the
day on which the primary claimant verified the child's birth. This new definition has
the effect of allowing a claimant to backdate their PPL period start day by 28 days
before the date of an effective claim or verification of the child's birth and prevents a
primary claimant's PPL period commencing during a period of paid primary carer
leave for the child.
The more generous backdating provisions will provide more parents with the
flexibility to backdate their claim to a date before they lodged their claim. Currently,
a person can only backdate a claim if they fulfil all claim requirements within 28 days
of birth. If a person lodged a claim after this time, currently they cannot backdate
their claim, and, if the person has already returned to work, they will be ineligible for
parental leave pay, despite potentially having had a period off work after the birth.
The new provision addresses this issue.
Subsections 11A(2) and (3) provide that the Secretary can make a determination,
specifying an earlier start day if satisfied that there are exceptional circumstances for
doing so, but cannot specify a day before the child's date of birth.
New section 11B - The maximum PPL period end day for a child
New section 11B gives the meaning of maximum PPL period end day.
Subsection 11B(1) defines the maximum PPL period end day as the earlier of the
day that is 139 days after the maximum PPL period start day (which is 20 weeks
from and including that start day), or the day before the child's first birthday.
Subsection 11B(2) provides that, where the primary claimant has a paid primary
carer leave reduction number, the maximum PPL period end day is in accordance
with paragraph 11B(2)(a) the earlier day resulting from the reduction in the number
of PC leave days in section 11D, that is the adjustment for paid PC leave worked out
in accordance with section 11J.
This provision has the effect of substituting an earlier maximum PPL period end day,
calculated with reference to the number of week days in the paid PC leave period the
person is entitled to. The number of weekdays in the person's paid PC leave period
(worked out under section 11D) is subtracted from the maximum PPL period.
Example:
Jo is entitled to eight weeks of paid primary carer leave at $1,000 per week.
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Jo's baby is born on 11 July 2018.
Jo started her paid primary carer leave on 27 June 2018, and ends her paid
primary carer leave on 21 August 2018. Jo's paid PC reduction number is
40 week days (calculated in accordance with section 11D).
Jo's maximum PPL period start day is her nominated start date of
22 August 2018.
Jo's maximum PPL period end day is the 140th calendar day of the PPL
period (this is the number of calendar days in a 20 week period), reduced by
40 week days (determined in accordance with section 11J), which is the 60th
week day in the PPL period which is 13 November 2018.
If the person's maximum PPL period start day is before the first day of a person's
paid primary carer leave, paragraph 11B(2)(b) applies. This provision provides that
the maximum PPL period end day is the earlier of the day before the first day of the
paid primary carer leave period or the day determined by paragraph 11B(2)(a).
This provision has the effect that, where a person elects to commence their PPL
period prior to taking their employer-provided paid primary carer leave, their PPL
period will end prior to the commencement of their paid primary carer leave. This
provision and new section 11A, inserted by item 17, have the effect that a primary
claimant cannot receive Government-funded parental leave pay and employer
provided primary carer pay at the same time.
Example:
Emma is entitled to six weeks of paid primary carer leave at $1,000 per week.
Emma's baby is born on 4 July 2018.
Emma plans to start her paid primary carer leave on 1 August 2018, and end
her paid primary carer leave on 11 September 2018.
Emma's maximum PPL period start day is her nominated start date of
4 July 2018, before she starts her paid primary carer leave.
Emma's maximum PPL period end day is the day before the first day of the
paid primary carer leave period, which is 31 July 2018.
Subsection 11B(3) provides that the Secretary has a discretion to make a
determination under subsection 11B(4) that a different day is the person's maximum
PPL period end day in respect of claim made by a secondary claimant.
Subsection 11B(4) provides that the day determined by the Secretary must be later
than a day determined under paragraph 11B(2)(b), and not later than a day worked
out under paragraph 11B(2)(a). The effect of this is that the Secretary can determine
that a secondary claimant will have a later maximum PPL period end day where their
maximum PPL period is shortened by a period of paid primary carer pay of the
primary claimant. However, the determination of a later day cannot result in the
secondary claimant having a maximum PPL period of more than 139 days
(20 weeks) minus any adjustment calculated in accordance with new section 11J.
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New section 11C - No PPL period etc. if excessive paid PC leave reduction number
Section 11C provides that, where the primary claimant has a paid PC leave
reduction number that is equal to or exceeds the number of week days in the
maximum PPL period, there is no PPL period.
New section 11D - Paid PC leave reduction number for a child
Subsection 11D(1) provides that a primary claimant will have a paid PC leave
reduction number if they have a paid primary carer leave period.
Subsection 11D(2) calculates the paid PC leave reduction number. First,
the number of days in the paid PC leave period is divided by seven. Then, if the
result is not a whole number and is greater than one, round it down to the nearest
whole number. If the result is not a whole number and is between one and zero,
round it up to one. Next, multiply the result by five.
The purpose of the new section 11D is determine the number of week days in the
person's PC leave period, to the nearest week, by which their maximum PPL period
will be reduced.
Example:
Jo is entitled to eight weeks of paid primary carer leave.
Jo started her paid primary carer leave on 27 June 2018, and ends her paid
primary carer leave on 21 August 2018. The number of calendar days in this
period is 56.
Fifty-six divided by seven equals eight (paragraph 11D(2)(a)).
Eight multiplied by five equals 40 (paragraph 11D(2)(c)).
Jo's paid PC leave reduction number is 40 weekdays.
Example:
Angela is entitled to four days of paid primary carer leave.
Four divided by seven equals 0.57 (paragraph 11D(2)(a)).
As 0.57 is not a whole number and is between one and zero, it is rounded up
to one (subparagraph 11D(2)(b)(ii)).
One multiplied by five equals five (paragraph 11D(2)(c)).
Angela's paid PC leave reduction is five weekdays.
Example:
Leesa is entitled to 26 days (3.7 weeks) of paid primary carer leave.
Twenty-six divided by seven equals 3.7.
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As 3.7 is not a whole number and is greater than one, it is rounded down to
three (subparagraph 11D(2)(b)(i)).
Three multiplied by five equals 15.
Leesa's paid PC reduction is 15 weekdays.
New section 11E - Primary carer leave (or PC leave)
Subsection 11E(1) defines primary carer leave (or PC leave) as leave an employee
is entitled to take under the terms and conditions of their employment:
because the employee is expecting to give birth to a child; or
to allow the employee to be the primary carer for a child who has not turned
one; or
to allow the employee to be the primary carer for a child who has been
entrusted to the care of the employee within the last 12 months as part of a
process for the adoption of the child; or
to allow the employee to care for an adopted child; or
where the employee would have been entitled to such leave but for the fact
the child is stillborn or died.
This is intended to include any enforceable entitlement that is part of the employee's
terms or conditions of employment, including entitlements that arise in an enterprise
agreement, modern award or workplace policy (incorporated by reference or
impliedly in a contract of employment), entitlements that are implied by action,
and entitlements from other sources.
Subsection 11E(2) provides that primary carer leave does not include personal or
carer's leave, annual leave, long service leave or bereavement leave, or leave
purchased by the employee in accordance with the terms and conditions of their
employment. It also does not include leave where the main purpose is to support the
primary carer of the child and not to provide care directly for the child itself;
or develop initial bonds with a child, such as a newborn or newly-adopted child (such
as some forms of paternity leave).
To avoid doubt, subsection 11E(3) makes it clear that paragraph 11E(2)(c) does not
apply to leave the main purpose of which is to allow an employee to be the primary
carer for a child.
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New section 11F - Primary carer pay, paid PC leave and paid PC leave period for
a child
Subsection 11F(1) defines primary carer pay (or PC pay) as an amount that a
person is entitled to be paid by their employer under the terms and conditions of their
employment whilst on primary carer leave as defined by new section 11E. Where a
person receives primary carer pay during primary carer leave, that leave is defined
as paid PC leave. The paid PC leave period for a child is defined as the length of
the paid PC leave, rounded down so that any part of that period that does not
represent a whole day of the employer's entitlement to PC leave is not included.
This is not intended to affect employees whose entitlement to PC leave is based on
part-time working arrangements.
Subsection 11F(2) provides that subsection 11F(1) is subject to subsections 11F(3)
to (11).
Subsection 11F(3) provides that the PPL rules may prescribe classes of payment
provided by an employer that are or are not to be taken to be primary carer pay.
Subsection 11F(4) and 11F(5) apply where, under the terms and conditions of a
person's employment, the amount of primary carer pay they receive is calculated
based on the amount of Government-funded parental leave pay they receive.
The effect of the provisions is that it is deemed that the person will receive an
amount of primary carer pay that is calculated on the basis of them receiving
Government-funded parental leave pay that is not adjusted for the purpose of
primary carer pay.
Subsection 11F(4) provides that subsection 11F(5) applies where the amount of an
employee's primary carer pay is calculated based on the amount of
Government-funded parental leave pay they receive. Subsection 11F(5) provides
that the amount of primary carer pay received for each day of this type is treated as
the amount that it would be disregarding subsection 11B(3), inserted by item 17.
Example:
Linda is entitled to 20 weeks of paid primary carer leave, paid at the difference
between the amount of Government-provided parental leave pay she receives
and her usual salary.
Linda's usual salary is $1,000 per week - that is, $200 per day (assuming a
five day work week).
Linda's PPL entitlement, disregarding any adjustment for paid primary carer
leave, is 20 weeks (100 week days) at $131.40 per day.
Subsection 11F(7) treats Linda's employer's contribution as Linda's primary
carer pay. That is, $200 minus $131.40, which results in $68.60 per day
being Linda's primary carer pay.
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A note alerts the reader to a transitional provision which maintains current
arrangements for such cases where the child is born or entrusted to the care of a
person during the 3-year period starting on the commencement of this section. This
will allow time for parents with such arrangements to renegotiate the arrangements
prior to the deeming effect applying.
Subsections 11F(6) provides that subsection 11F(7) applies where a person is on
primary carer leave and that period contains one or more days where primary carer
pay is not payable to them by their employer, and where the employee ordinarily
works on that day or days and would otherwise have been entitled to pay, but for the
period of primary carer leave, if they had worked.
Subsection 11F(7) provides that, in the circumstances prescribed by
subsection 11F(6), the paid primary carer leave period for a child is the shortest
period that starts on the first day of the paid primary carer leave and contains the
number of week days that primary carer pay is payable.
The effect of this is that, where a person's paid primary carer leave is not taken in a
continuous period, only the paid leave periods are considered for the purpose of
calculating their entitlement to paid parental leave.
Subsection 11F(8) provides that, if primary carer pay for a child is payable as a lump
sum, but the amount of that lump sum does not depend on the length of leave taken,
then the paid primary carer leave period will be taken to contain the number of week
days equal to that lump sum divided by the daily National Minimum Wage amount
applicable for the first day of that paid primary carer leave.
Example:
Mary is entitled to a lump sum payment from her employer, valued at $7,000,
paid to her because she is expecting a child.
Mary's child is born on 11 July 2018.
Mary's primary carer pay entitlement has a paid primary carer leave period
that starts on 9 July 2018 and ends on 30 September 2018, containing 60
week days.
That is, $7,000 divided by $116 (assumed to be the daily National Minimum
Wage rate in application on 9 July 2018 for the purpose of this example only),
which is 60.3448 days, rounded down to 60 week days.
Subsection 11F(9) provides that subsection 11F(10) applies when a person chooses
to take their PC leave entitlement at a lower percentage over a longer period (such
as half pay). Subsection 11F(10) provides that, in the circumstances prescribed at
subsection 11F(9), the paid PC leave period is the period the person would be
entitled to at full pay.
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Example:
Angela is entitled to a 12-week paid PC leave entitlement at her full wage.
Angela elects to take this entitlement at half pay, therefore receiving
50 per cent of her usual wage over a 24-week period. Angela's PC leave
period is 12 weeks.
Subsection 11F(11) provides that, where a person has more than one entitlement to
primary carer leave, the PPL rules may specify: how to determine the amount of
primary carer pay; the paid primary carer leave; and the paid primary carer pay
period.
Specifying how to treat people who have multiple primary carer leave entitlements in
the PPL rules will provide the flexibility necessary to deal with these unusual and
varying circumstances as they become known.
New section 11G - Parental leave pay supplement for a child
Paragraph 11G(1)(a) provides that a person is entitled to parental leave pay
supplement if the person has a supplement period for the child.
Paragraph 11G(1)(b) provides that, if a person has returned to work, the claim for the
parental leave pay supplement must be made within 28 days of returning to work.
Subsection 11G(2) provides that the amount of a person's parental leave pay
supplement for a paid PC leave period is the amount by which the person's primary
carer pay during the supplement period falls short of the National Minimum Wage for
the supplement period. This is calculated by multiplying the daily National Minimum
Wage on the last day of the period with the number of week days in the supplement
period. The amount of primary carer pay the person received in the supplement
period is subtracted from the National Minimum Wage. The shortfall will be the
amount of parental leave supplement the person receives.
Example
Michelle is entitled to 6 weeks of paid primary carer leave at $400 per week.
Michelle's paid primary carer leave is between 2 July 2018 and 12 August
2018.
Michelle's child was born on 15 July 2018.
Michelle's maximum supplement period starts on first day of her paid primary
carer leave and ends 30 week days later on 10 August 2018 (worked out
under section 11H).
The amount of Michelle's paid primary carer pay for a day is $80 ($400
divided by 5).
$116 minus $80 ($116 is assumed to be the daily National Minimum Wage
rate applying for the purpose of this example only), is $36.
$36 is the daily PC pay shortfall entitlement.
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Subsection 11G(3) provides that, for the purposes of the Paid Parental Leave Act
and any other law of the Commonwealth, parental leave pay supplement is treated
as parental leave pay, and any parental leave pay supplement that is payable is an
instalment of parental leave pay.
Paragraph 11G(4) is a technical amendment to clarify that any reference to paid
parental leave in Division 2 of Part 2 of the Paid Parental Leave Act also includes a
reference to parental leave pay supplement.
Paragraph 11G(5) provides that subsection 11G(4) does not apply to section 11 of
the Paid Parental Leave Act.
New section 11H - Supplement period and maximum supplement period for a
child
Subsection 11H(1) defines the supplement period as the period specified in a
determination under: section 13 in accordance with subsection 13(3B); or section
14 in accordance with subsection 14(3B) or 14(6D); or section 15 in accordance with
subsection 15(1B) or 15(5D); or section 16 in accordance with subsection 16(4D).
Subsection 11H(2) provides that the supplement period must be the same as or
within the maximum supplement period for the child.
Subsection 11H(3) provides that the maximum supplement period is the shortest
period that starts on the first day of the person's paid primary carer leave and: for a
primary claimant, contains the number of week days in their adjustment for paid
primary carer pay determined by subsection 11J(1); and, for a secondary claimant,
contains the number of week days determined by subsection 11J(2).
Example:
Rebecca is entitled to four weeks of primary carer pay at $500 per week.
Rebecca starts her paid primary carer leave period on 2 July 2018 and
finishes on 29 July 2018.
Rebecca's child was born on 15 July 2018.
Rebecca's nominated PPL start date is 30 July 2018.
There are 80 weekdays in Rebecca's maximum PPL period (worked out
under subsection 11B(2)).
There are 100 weekdays in Rebecca's maximum PPL period for her child.
100 days minus 80 days is 20 days. 20 days is Rebecca's maximum
supplement period.
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Subsection 11H(4) provides that a person does not have a maximum supplement
period for a child if the person's paid primary carer leave for the child is payable
wholly as a lump sum. This subsection has the effect that the person does not have
a supplement period for the child.
Where parents' employer-provided paid primary carer leave is paid wholly as a lump
sum, there will be no Government-provided parental leave pay supplement payable.
The primary carer leave payments will be calculated as a daily amount at a rate
approximating that of the national minimum wage, and if that amount is less than a
20 week period, the parent will receive parental leave pay at the national minimum
wage rate for the remaining days or weeks of the period
New section 11J - Adjustment for paid PC leave for a child
Subsection 11J(1) provides that the adjustment for paid primary carer leave for a
primary claimant is the number of week days calculated by subtracting the number of
week days in a person's maximum PPL period (adjusted to take into account a
person's paid PC leave) from the number of week days in a person's maximum PPL
period for the child calculated in accordance with subsection 11B(1) (which has not
been adjusted to take into account a person's paid PC leave).
Subsection 11J(2) and 11J(3) provide for the calculation of the number of week days
in the adjustment for paid primary carer leave for a secondary claimant. That
number is determined by calculating the number of week days that would be
determined under subsection 11J(1) as if the secondary claimant were the primary
claimant. However, subsection 11J(3) provides that there is a cap of 100 minus the
number of week days in the primary claimant's supplement period, minus the
number of week days in the primary claimant's PPL period. If the number worked
out under subsection 11J(1) exceeds the cap, then the number of week days in the
secondary claimant's maximum supplement period will be set at the cap.
This is to ensure that the PPL period for the primary claimant and maximum
supplement periods for the primary claimant and the secondary claimant do not
exceed 100 week days (or 20 weeks) when combined.
Example:
Mim is entitled to ten weeks of paid primary carer leave at $600 per week.
Mim's maximum supplement period under subsection 11J(1) contains
50 week days - that is, 100 week days (the unadjusted maximum PPL
period) minus 50 week days (the adjusted maximum PPL period after
applying paragraph 11B(2)(a)).
Mim is transferring her whole PPL entitlement to her husband Todd,
a secondary claimant.
Todd is entitled to 12 weeks of paid primary carer leave at $400 per week.
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Under subsection 11J(2), the number of week days in Todd's maximum
supplement period is the number of week days that would be worked out
under subsection 11J(1) if Todd were the primary claimant.
The number of week days under paragraph 11J(1)(a), worked out by applying
paragraph 11B(2)(a) on the assumption that Todd is the primary claimant, is
40 days. That result is achieved by subtracting 60 days (the number of week
days in Todd's 12 week paid primary carer leave entitlement) from 100 days
(the number of week days in the 20-week unadjusted maximum PPL period).
The number of week days in paragraph 11J(1)(b) is the maximum PPL period
calculated by subsection 11B(1) - that is, 100 days.
Therefore, the result of subsection 11J(1) is 100 days minus 40 days, which is
60 days.
Subsection 11J(2) further provides that, if this result of section 11J(1),
as worked out for Todd, exceeds 50 days (that is, the result of 100 week days
minus the number of week days in Mim's maximum supplement period, which
is 50 days), then reduce the number of week days in Todd's maximum
supplement period by the difference.
Therefore, as the difference between 60 days and 50 days is 10 days, Todd's
maximum supplement period is reduced from 60 days, to 50 days.
Subsection 11J(4) provides for the calculation of the maximum supplement period
where section 11C applies and there is no PPL period. Paragraph 11J(4)(a)
disregards subsection 11C(2) (that there is no PPL period). Instead, under
paragraph 11J(4)(b), it is assumed that the number of week days in the maximum
PPL period for the child is zero. This has the effect that, where a person has no PPL
period as their paid PC leave period is 20 weeks or longer, but the person's PC pay
is less than the National Minimum Wage, the person will still have a top-up PPL
period calculated in accordance with section 11G.
Example:
Jill is entitled to 22 weeks of paid primary carer leave at $300 per week.
Jill starts her paid primary carer leave period on 2 July 2018 and finishes on 2
December 2018.
Jill's child was born on 15 July 2018 and her nominated PPL start date is
1 August 2018.
As Jill has 110 week days in her primary carer leave period, which exceeds
the 100 week days in the maximum PPL period end day prescribed at
subsection 11B(1), section 11C applies, as Jill has a maximum adjustment for
paid primary carer leave and therefore no PPL period.
To work out Jill's maximum supplement period, subsection 11J(4) provides
that subsection 11J(1) should be worked out as if the number of week days in
the maximum PPL period for the child is zero.
Therefore, subsection 11J(1) takes the maximum PPL period for the child
(worked out according to subsection 11B(1), which is 100 week days
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(20 weeks), and subtracts zero days from it, resulting in a maximum
supplement period of 100 week days.
Example:
Jo is entitled to eight weeks of paid primary carer leave at $1,000 per week.
Jo's baby is born on 11 July 2018.
Jo started her paid primary carer leave on 25 June 2018, and ends her paid
primary carer leave on 19 August 2018.
Jo's maximum PPL period start day is her nominated start date of
20 August 2018.
Jo's adjustment for primary carer pay is the number of week days in the paid
primary carer leave period. The number of weekdays between 25 June 2018
and 17 August 2018 is 40.
Jo's maximum PPL period end day (worked out under paragraph 11B(1)(a)) is
the 140th calendar day of the PPL period, reduced by 40 weeks days, which
is the 60th week day in the PPL period, which is 9 November 2018.
Item 18 amends section 12, which sets out a Guide to Part 2-2, by repealing the
paragraph relating to Division 5 and substituting a new paragraph relating to
provisional entitlement determinations. Those determinations can be made by the
Secretary before a payability determination if the person satisfies or will satisfy
certain requirements for a payability determination.
Item 19 repeals and substitutes subsections 13(2) and 13(3), regarding
determinations on a claim made by a primary claimant for parental leave pay.
Paragraph 13(2)(a) provides that the Secretary must determine that parental leave
pay is payable where the primary claimant has a PPL period and the primary
claimant meets the eligibility criteria from the day the child is born until the last day of
their PPL period.
Paragraph 13(2)(b) provides that the Secretary must determine that parental leave
pay is payable where the primary claimant has a supplement period and the primary
claimant meets the eligibility criteria from the day the child is born until the last day of
the supplement period.
Subsection 13(3), requires the Secretary to state in a determination for parental
leave pay that the primary claimant's PPL period starts on the child's maximum PPL
period start day and ends on the day worked out under subsection 13(3A).
Subsection 13(3A) provides that the Secretary must be satisfied that the primary
claimant is or will be eligible for parental leave pay on each day in the PPL period
that starts on the child's maximum PPL period start day and ends on a day in that
maximum PPL period. If the primary claimant is or will be eligible for every day in
the maximum PPL period, then the end day is the last day of that period.
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Subsection 13(3B) requires the Secretary to state in a determination for parental
leave pay that a primary claimant's supplement period starts on the first day of the
maximum supplement period for the child and ends on the day worked out under
subsection 13(3C).
Subsection 13(3C) provides that the Secretary must be satisfied that the primary
claimant is or will be eligible on each day in the supplement period. The first day in
the supplement period is either: where the first day of the maximum supplement
period is before the birth of the child, the day the child was born; or otherwise the
first day in the maximum supplement period. The last day in the period is a day in
the maximum supplement period. If the primary claimant is or will be eligible for
every day in the maximum supplement period, then the end day is the last day of
that period.
Item 20 repeals and substitutes subsections 14(2) and 14(3), regarding
determinations on claims made at the same time by primary and secondary
claimants, where both claimants are sharing parental leave pay. Paragraph 14(2)(a)
provides that the Secretary must determine that parental leave pay is payable where
the primary claimant has a PPL period and the primary claimant meets the eligibility
criteria from the day the child is born until the last day of their PPL period.
Paragraph 14(2)(b) provides that the Secretary must determine that parental leave
pay is payable where the primary claimant has a supplement period and the primary
claimant meets the eligibility criteria from the day the child is born until the last day of
the supplement period.
Subsection 14(3), requires the Secretary to specify in a determination for parental
leave pay that the primary claimant's PPL period starts on the child's maximum PPL
period start day and ends on the day worked out under subsection 14(3A).
Subsection 14(3A) provides that the Secretary must be satisfied that the primary
claimant is or will be eligible for parental leave pay on each day in the PPL period
that starts on the child's maximum PPL period start day and ends on a day in that
maximum PPL period. If the Secretary is satisfied the primary claimant will be
eligible for the entire maximum PPL period, then the end day is the last day of that
period.
Subsection 14(3B) requires the Secretary to specify in a determination for parental
leave pay that a primary claimant's supplement period starts on the first day of the
maximum supplement period for the child and ends on the day worked out under
subsection 14(3C).
Subsection 14(3C) provides that, if the Secretary is satisfied that the primary
claimant is or will be eligible on each day in the supplement period that starts:
where the first day of the maximum supplement period is before the birth of the child,
the day the child was born; or otherwise the first day in the maximum supplement
period, and ends on a day in the maximum supplement period. If the Secretary is
satisfied the primary claimant will be eligible for the entire maximum supplement
period, then the end day is the last day of that period.
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Item 21 repeals and substitutes subsections 14(5) and 14(6), regarding
determinations on claims made at the same time by primary and secondary
claimants, where both claimants are sharing parental leave pay. Subsection 14(5)
provides that the Secretary must determine that parental leave pay is payable to a
secondary claimant if the Secretary is satisfied that a determination has been made
for a primary claimant and subsection 14(5A) applies.
Paragraph 14(5A)(a) provides that parental leave pay is payable where the
secondary claimant has a PPL period and was or will be eligible for parental leave
pay in that period.
Paragraph 14(5A)(b) provides that parental leave pay is payable where the
secondary claimant has a supplement period and was or will be eligible for parental
leave pay on each day in that period commencing on or after the child is born.
Subsection 14(6) provides that the Secretary must specify the secondary claimant's
PPL period in the determination. That period starts on the first day after the primary
claimant's PPL period ends and ends on the day worked out under
subsection 14(6A).
Subsection 14(6A) provides that the secondary claimant's PPL period starts on the
day worked out under subparagraph 14(6)(a), which is the first day after the primary
claimant's PPL period ends. If the secondary claimant does not have any paid
primary carer leave, subparagraph 14(6A)(b)(i) applies and the secondary claimant's
PPL period will end on the last day that the secondary claimant was or will be eligible
in the maximum PPL period for a child. If the secondary claimant does have paid
primary carer leave, paragraph 14(6A)(b)(ii) applies and the PPL period will end on
the last day that they are continuously eligible in the maximum PPL period for a child
that is followed by the number of days in the secondary claimant's adjustment for
paid primary carer leave. This adjustment is made to the secondary claimant's PPL
period in order to account for any paid primary carer leave that the secondary
claimant is entitled to.
Subsection 14(6B) provides that subparagraph 14(6A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made the claim in exceptional circumstances. The effect of this
is that the secondary claimant's period will not be reduced by a period of paid
primary carer leave the secondary claimant takes.
Subsection 14(6C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 14(6A)(b)(ii) is before the PPL period start day mentioned in
paragraph 14(6A)(a), the secondary claimant does not have a PPL period.
Subsection 14(6D) provides that the Secretary must specify the secondary
claimant's supplement period, which is determined in accordance with the PPL rules.
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Specifying how to determine the supplement period for secondary claimants in the
PPL rules will provide the flexibility necessary to deal with unusual and varying
circumstances, and avoid a significant level of complexity in the primary legislation.
Item 22 inserts after section 15(1) new subsections 15(1A), 15(1B) and 15(1C).
Section 15 applies to determinations on claims made at the same time by primary
and secondary claimants, where the secondary claimant is to receive all the parental
leave pay. The primary claimant may be entitled to a lump sum supplement of
parental leave pay in these circumstances.
Subsection 15(1A) provides that the Secretary must determine that parental leave
pay is payable to the primary claimant where the primary claimant has a supplement
period and the primary claimant meets the eligibility criteria from the day the child is
born until the last day of the primary claimant's supplement period.
Subsection 15(1B) requires the Secretary to state in a determination for parental
leave pay that a primary claimant's supplement period starts on the first day of the
maximum supplement period for the child and ends on the day worked out under
subsection 15(1C).
Subsection 15(1C) provides that, if the Secretary is satisfied that the primary
claimant is or will be eligible on each day in the supplement period, starting either:
where the first day of the maximum supplement period is before the birth of the child,
the day the child was born; or otherwise the first day in the maximum supplement
period, until a day in the maximum supplement period, then the end day is that day.
If the Secretary is satisfied the primary claimant will be eligible for the entire
maximum supplement period, then the end day is the last day of that period.
Item 23 is a minor amendment to subsection 15(2) to state that the Secretary must
determine that PPL is not payable to a primary claimant only if the Secretary is not
satisfied that the person meets the requirements of subsection 15(1A), inserted by
item 22 above, and is eligible for a supplementary amount.
Item 24 is a minor amendment to subsection 15(3) deleting the phrase 'for the
secondary claimant's PPL period'.
Item 25 is a technical amendment and repeals and replaces paragraph 15(3)(b),
which required that the secondary claimant be eligible for parental leave pay on each
day in their PPL period. This requirement has been moved to new
subsection 15(3A).
Item 26 inserts new subsection 15(3A).
Paragraph 15(3A)(a) provides that parental leave pay is payable where the
secondary claimant has a PPL period and was or will be eligible for parental leave
pay on each day in that period.
Paragraph 15(3A)(b) provides that parental leave pay is payable where the
secondary claimant has a supplement period and was or will be eligible for parental
leave pay on each day in that period commencing on or after the child is born.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Item 27 repeals paragraph 15(5)(b) and replaces it with a reference to new
subsection 15(5A).
Item 28 inserts a new subsections 15(5A), 15(5B), 15(5C) and 15(5D). These
provisions relate to the calculation of the length of a secondary claimant's PPL
period.
Subsection 15(5A) provides that, if the Secretary is satisfied that the secondary
claimant was or will be eligible for each day in the period that starts on the child's
maximum PPL period start day, the period ends on the day worked out under
paragraph 15(5A)(b). If the secondary claimant does not have any paid primary
carer leave, subparagraph 15(5A)(b)(i) applies and the secondary claimant's PPL
period will end on the last day that they are continuously eligible in the maximum
PPL period for the child. If the secondary claimant does have paid primary carer
leave, subparagraph 15(5A)(b)(ii) applies and the PPL period will end on the last day
that the secondary claimant is eligible in the maximum PPL period for a child that is
followed by the number of days in the secondary claimant's adjustment for paid
primary carer leave.
This adjustment is made to the secondary claimant's PPL period in order to account
for any paid primary carer leave that the secondary claimant is entitled to.
Subsection 15(5B) provides that subparagraph 15(5A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made the claim in exceptional circumstances. The effect of this
is that the secondary claimant's PPL period will not be reduced by a period of paid
primary carer leave the secondary claimant takes.
Subsection 15(5C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 15(5A)(b)(ii) is before the PPL period start day mentioned in
paragraph 15(5A)(a), the secondary claimant does not have a PPL period.
Subsection 15(5D) provides that the Secretary must specify the secondary
claimant's supplement period, which is determined in accordance with the PPL rules.
Specifying how to determine the supplement period for secondary claimants in the
PPL rules will provide the flexibility necessary to deal with unusual and varying
circumstances, and avoid a significant level of complexity in the primary legislation.
Item 29 repeals subsection 16(3), regarding determinations on secondary claims
made after an effective primary claim, and replaces it with new subsections 16(3)
and 16(3A).
Substituted subsection 16(3) provides that, for parental leave pay to be payable to
the secondary claimant, the Secretary must be satisfied that a determination under
section 13 that parental leave pay is payable to the primary claimant was or will be in
force on the day before the start of the secondary claimant's PPL period and that
subsection 16(3A) applies.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Paragraph 16(3A)(a) provides that parental leave pay is payable where the
secondary claimant has a PPL period and was or will be eligible for parental leave
pay in that period.
Paragraph 16(3A)(b) provides that parental leave pay is payable where the
secondary claimant has a supplement period and was or will be eligible for parental
leave pay on each day in that period commencing on or after the child is born.
Item 30 repeals paragraph 16(4)(b), and replaces it with a reference to working out
the end day under new subsection 16(4A).
Item 31 inserts a new subsections 16(4A), 16(4B), 16(4C) and 16(4D). These
provisions relate to the calculation of the length of a secondary claimant's PPL
period.
Subsection 16(4A) provides for the working out of the end day by reference to the
period for which the secondary claimant is eligible, starting on the day worked out
under subparagraph 16(4)(a), which is the first day after the primary claimant's PPL
period ends. If the secondary claimant does not have any paid primary carer leave,
subparagraph 16(4A)(b)(i) applies and the secondary claimant's PPL period will end
on the last day that they are continuously eligible in the maximum PPL period for the
child. If the secondary claimant does have paid primary carer leave,
subparagraph 16(4A)(b)(ii) applies and the PPL period will end on the last day that
they are continuously eligible in the maximum PPL period for the child that is
followed by the number of days in the secondary claimant's adjustment for paid
primary carer leave. This adjustment is made to the secondary claimant's PPL
period in order to account for any paid primary carer leave that the secondary
claimant is entitled to.
Subsection 16(4B) provides that subparagraph 16(4A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made the claim in exceptional circumstances. The effect of this
is that the secondary claimant's period will not be reduced by a period of paid
primary carer leave the secondary claimant is entitled to.
Subsection 16(4C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 16(4A)(b)(ii) is before the PPL period start day mentioned in
paragraph 16(4A)(a), the secondary claimant does not have a PPL period.
Subsection 16(4D) provides that the Secretary must specify the secondary
claimant's supplement period, which is determined in accordance with the PPL rules.
Specifying how to determine the supplement period for secondary claimants in the
PPL rules will provide the flexibility necessary to deal with unusual and varying
circumstances, and avoid a significant level of complexity in the primary legislation.
Item 32 repeals paragraph 17(3)(b), and replaces determining an end day with a
reference to the day worked out under new subsection 17(3A).
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Schedule 17 - Adjustment for primary carer pay and other amendments
Item 33 inserts a new subsections 17(3A), 17(3B) and 17(3C). These provisions
relate to the calculation of the length of a tertiary claimant's PPL period.
Subsection 17(3A) provides for the day that the tertiary claimant's PPL period ends.
If the secondary claimant does not have any paid primary carer leave,
subparagraph 17(3A)(b)(i) applies and the tertiary claimant's PPL period will end on
the last day that they are continuously eligible in the maximum PPL period for a
child. If the secondary claimant does have paid primary carer leave,
subparagraph 17(3A)(b)(ii) applies and the tertiary claimant's PPL period will end on
the last day that they are continuously eligible in the maximum PPL period for a child
that is followed by the number of days in the secondary claimant's adjustment for
paid primary carer leave. This adjustment is made to the tertiary claimant's PPL
period in order to account for any paid primary carer leave that the secondary
claimant is entitled to.
Subsection 17(3B) provides that subparagraph 17(3A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made their claim in exceptional circumstances. The effect of this
is that the tertiary claimant's period will not be reduced by a period of paid primary
carer leave the secondary claimant is entitled to.
Subsection 17(3C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 17(3A)(b)(ii) is before the PPL period start day mentioned in
paragraph 17(3A)(a), the tertiary claimant does not have a PPL period.
Item 34 repeals paragraph 24(b) and substitutes new paragraphs 24(b), (ba)
and (bb). Paragraph 24(b) provides that, if parental leave pay is payable, the notice
of payability determination must state the claimant's PPL period (if any), and the
amount of parental leave pay payable to the claimant for the child. It also provides
that, where parental leave pay supplement is payable for the child, the notice must
state the claimant's supplement period for the child and the amount of parental leave
pay supplement that is payable to the claimant for the child. Where the claimant is
not the primary claimant, it provides that the notice must also state the primary
claimant's PPL period.
Paragraph 24(ba) provides that, where the primary claimant has a paid primary carer
leave period for the child, the notice of determination must include the paid primary
carer leave period and the amount, if any, of primary carer pay the claimant is
entitled to.
Paragraph 24(bb) provides that, if the claimant is a secondary claimant, the notice of
determination must include the paid primary carer leave period, and, if the primary
claimant had a paid primary carer leave period, that period.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Item 35 inserts new section 24A, which allows the Secretary to vary a payability
determination. It will be necessary to vary a claimant's payability determination due
to a change in circumstance, such as a change to the length of paid primary carer
leave or the amount of primary carer pay a claimant is entitled to. Subsection 24A(1)
provides that a person's PPL period, supplement period or the amount of parental
leave pay supplement may be varied. Subsection 24A(2) states that a payability
determination may be varied on the initiative of the Secretary, or at the request of a
claimant made within one year of the PPL period ending, and in a manner approved
by the Secretary. A variation comes into force on the day it is made, in accordance
with subsection 24A(3).
Subsection 24A(4) provides that the provisions in Division 2 of Part 2-1 and in
Part 2-2 that require matters to be satisfied in order for a payability determination to
be made apply to a variation in the same way that they apply to a payability
determination.
Subsection 24A(5) provides that anything that is required to be specified in a
payability determination must also be specified in a variation to that determination.
Subsection 24A(6) provides that the notice of variation must comply with section 24,
giving notice of the things required by that section, as amended by item 34 above.
Where a payability determination has been varied, section 272 of the Paid Parental
Leave Act will apply in relation to allow a review body to determine events to have
happened, or not to have happened.
A note alerts the reader to the fact that the Secretary may have to give notice of the
variation to the person's employer under section 114.
Item 36 repeals and substitutes paragraph 25(1)(c) to allow person to request that
the Secretary revoke a PPL determination where the PPL period has already started,
provided the request is made in a manner approved by the Secretary. This is to
allow a person to stop receiving PPL and claim the new born-supplement add-on via
the family tax benefit system (see A New Tax System (Family Assistance) Act 1999).
Item 37 repeals Division 5 of Part 2-2, which provides for initial eligibility
determinations about parental leave pay, and substitutes a new Division 5 -
Provisional entitlement determinations about parental leave pay.
This amendment means parents, who lodge a claim before the birth of a child or a
child entering their care, will receive a provisional entitlement determination instead
of an initial eligibility determination. This change is to reflect the fact that the notice
will include a person's PPL period and the amount of parental leave pay they will
receive, which is information not linked to a person's eligibility. The change in the
Division's name better reflects the information the notice contains.
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Schedule 17 - Adjustment for primary carer pay and other amendments
New subsection 26(1) provides that the Secretary may make a provisional
entitlement determination for a primary claimant if the Secretary is satisfied the
person meets the work test, income test, Australian residency test, requirements in
Division 2 of Part 2-1, including having a PPL period, and provisions in Part 2-2
relating to making a payability determination.
New subsection 26(2) provides that the Secretary may make a provisional
entitlement determination for a secondary claimant if the Secretary is satisfied the
person meets (or will meet) the work test, income test, Australian residency test,
requirements in Division 2 of Part 2-1, including having a PPL period, and provisions
in Part 2-2 relating to making a payability determination.
New section 26A provides that, where the Secretary has made a provisional
entitlement determination that a person is provisionally entitled to parental leave pay,
the Secretary is not prevented from later making a different payability determination,
including that parental leave pay is not payable.
New section 27 provides that, when the Secretary makes a provisional entitlement
determination, the Secretary may act on the assumption that the then known state of
affairs will remain unchanged. This would include that the National Minimum Wage
will remain unchanged.
New section 28 provides that a provisional entitlement determination comes into
force on the day it is made.
New section 29 sets out the matters to be specified in a notice of provisional
entitlement determination. The provisions in Division 2 of Part 2-1 and in Part 2-2
requiring matters to be specified in a payability determination apply to a provisional
entitlement determination in the same way that they apply to a payability
determination, and section 24 also applies. Amongst other matters, the notice must
state the person's PPL period, the amount of parental leave pay they will receive,
and the amount of primary carer pay that they notified the Secretary they are entitled
to. In the case of a secondary claimant, it would also include the primary claimant's
PPL period and the number of week days in the primary claimant's paid primary
carer leave period.
Item 38 repeals paragraph 31(4B)(b) and substitutes a new paragraph 31(4B)(b)
which combines the person's DAPP period, any paid PC leave period for the child
and the reference period for the person's claim for parental leave pay for the child in
the calculation of days exceeding 140. This is to ensure that a person will not be
eligible for parental leave pay for more than 20 weeks' combined DAPP, parental
leave pay and PC pay for a child.
Item 39 is a technical amendment to subsection 33(2), which omits the reference to
'an initial eligibility determination' and substituting 'a provisional entitlement
determination'. This reflects the changes made by item 37.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Item 40 inserts a new subsection 33(2A) to allow the PPL work test period to be
moved to an earlier period in circumstances where a woman has to cease work prior
to the birth of her child due to a hazard in her workplace that poses a risk to her
pregnancy and prevents her from continuing to work in her previous position. This is
to provide for women to whom another safe job could not be provided. For example,
boxers and jockeys often work on contracts and do not have employers who can
provide them with alternative safe work. The new subsection applies if a primary
claimant is pregnant with the child or is the birth mother of the child, she performs
paid work of a kind before the child is born, and ceases performing that work on a
particular day because of hazards connected with the work that pose a risk to the
pregnancy. The PPL rules may specify extra requirements relating to ceasing that
type of work which must also be satisfied. In this case, if the primary claimant could
not satisfy the work test that would ordinarily apply because she ceased work,
the work test period becomes the 392 days immediately before the day on which she
ceased work because of the hazards.
Items 41 and 42 amend section 36 to extend the period of a 'permissible break' from
eight weeks (56 days) to 12 weeks (84 days). This is to account for people in some
professions, such as casual teaching, who may have a longer break between two
work days, preventing them from accessing parental leave pay despite having a long
work history.
Item 43 is a technical amendment to note 2 to subsection 57(1), omitting the
reference to subsection 11(4) and substituting a reference to subsection 11A(1).
This reflects the changes made by items 16 and 17.
Item 44 amends section 62, being the Guide to Part 3-1 to state that parental leave
pay is payable in instalments for instalment periods, except lump sum supplements,
if the instalment periods overlap a person's PPL period.
Item 45 repeals and substitutes subsections 63(3) and (4) to provide that an
instalment of parental leave pay is payable to a person if one or more days of an
instalment period for the person fall within the person's PPL period, or parental leave
pay supplement is payable to that person. A supplement related instalment
becomes payable on:
the payday for the instalment for the person; or
as soon as practicable after the earlier of the last day of the person's paid PC
leave period and the last day of the person's supplement period.
Items 46 and 47 are technical amendments to deal with the insertion of a new debt
recovery provision at section 190A by item 61. They amend sections 66 and 70
respectively to provide that an instalment may be deducted in accordance with
section 190A.
Item 48 is a technical amendment to subsection 76(3) to delete the phrase 'for the
person's PPL period'. This amendment is required as not all PPL funding amounts
will relate to a person's PPL period.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Items 49 and 50 amend section 87, regarding the payment of arrears. Item 49
repeals the heading and substitutes a new heading, 'Payment of arrears - extending
PPL period after review or variation'. Item 50 omits the words 'after review',
and substitutes 'after review or variation'. The amendments mean that, where a
determination has been varied in accordance with new section 24A, any instalments
relating to arrears must be paid as soon as practicable.
Items 51 and 52 amend section 92, regarding the effect of extending the PPL period
after review. Item 51 repeals the heading and substitutes a new heading, 'Effect of
extending PPL period after review or variation'. Item 52 amends paragraph 92(b)
so it applies where a determination is reviewed or varied. The amendments mean
that, where a determination has been varied in accordance with section 24A to
extend the PPL period, the Secretary is required to pay the instalments.
Items 53 and 55 are technical amendments to paragraphs 101(1)(a) and 117(1)(a)
to reflect the amendments to Division 5 of Part 2-2 (see Item 37). The reference to
'an initial eligibility determination'' is substituted with 'a provisional entitlement
determination', and the reference to 'initially eligible for' is substituted with
'provisionally entitled to'.
Item 54 amends paragraph 115CB(7)(b) to insert a reference to 'paid PC leave
period'. This is to ensure that a person will not be eligible for dad and partner pay
(DAPP) for more than 20 weeks' combined DAPP, parental leave pay and PC pay.
Example
Lucy transfers 15 weeks' parental leave pay to her husband Kevin. Kevin also has 4
weeks' paid paternity leave from his employer. Kevin subsequently claims 2 weeks'
DAPP.
The combined total of paid parental leave, employer-provided primary carer leave
and claimed period for DAPP results in 21 weeks, exceeding the 20 week cap by
1 week. Kevin can receive DAPP for the first week, but is not eligible for the second
week.
Item 56 amends paragraph 117(1)(b) to allow the Secretary to require a person to
give information, or produce a document, that is relevant to determining the amount
of parental leave pay a person is entitled to.
Item 57 amends paragraph 124(2)(a) to allow the Secretary to use a person's tax file
number to detect cases where incorrect amounts of parental leave pay have been
paid, otherwise than by instalment.
Item 58 inserts new paragraphs 125(1)(c), (d), (e) and (f) to impose an obligation on
a person who has made an effective claim for parental leave pay to notify the
Secretary of a change in the amount of primary carer pay they are entitled to for the
child, or if they become entitled to primary carer pay, or there is a change in their
paid primary carer leave period, or they become entitled to a paid primary carer
leave period.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Item 59 repeals and replaces sections 166 and 167. These sections provide when
an overpayment of an instalment of parental leave pay paid by an employer to an
employee or by the Secretary to a person is a debt to the Commonwealth. Item 59
amends these provisions so that in all cases, a debt to the Commonwealth will arise
upon an excess amount being paid to the employee or person. This is different from
the current situation, where in some instances a debt will only arise at the end of the
employee or person's PPL period. This amendment is necessary in order for the
new debt recovery provision in section 190A, inserted by item 59 below, to be
effective. That provision provides for the recovery of debts arising under the Act
from future instalments of parental leave pay payable to the debtor.
Note 1 alerts the reader that instalments may stop being payable with retrospective
effect if the payability determination is set aside or varied after the instalments are
paid.
Note 2 alerts the reader that, if no amounts are payable to, or in relation to, a person
for a child as instalments (for example, if a payability determination that parental
leave pay is payable to the person for the child has not been made, or has been set
aside), the amount of the excess is the total amount mentioned in paragraph (a).
Note 3 alerts the reader that this section may apply to overpayments by way of
instalments or amounts that are mistakenly paid. For example, an overpayment or
mistaken payment may arise due to administrative error, the setting aside or
variation of a payability determination or payments following a stay order under
subsection 41(2) of the AAT Act.
Item 60 is a technical amendment to section 182 to provide that a debt that arises
under the Act may be recovered from an instalment payable to the debtor in
accordance with section 190A, inserted by item 61 below.
Item 61 inserts a new section 190A which is a new debt recovery provision
providing for the Secretary to deduct an amount from an instalment that is payable to
a claimant to repay a debt that owed by that claimant to the Commonwealth under
the Act. The Secretary may determine the amount to be deducted from each
instalment, including an amount which would reduce the instalment to zero if the
debtor has consented. Each instalment is to be reduced by the amount determined
by the Secretary until the sum of those amounts, and any amounts of the debt
recovered under another provision of this Act or under another Act, equals the debt.
The Secretary may vary the amount to be deducted from an instalment.
Item 62 makes consequential amendments to sections 193 and 197, which provide
for circumstances in which a debt arising under the Act can be waived or written off.
These amendments mean that a debt cannot generally be waived or written off if that
debt is recoverable by a deduction from future instalments of PPL under
section 190A.
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Schedule 17 - Adjustment for primary carer pay and other amendments
Item 63 amends subsection 272(1) so the provision applies where a payability
determination is varied. This means, in circumstances where a payability
determination is varied as a result of new information, a review body can determine
that an event did not happen that would have happened if the original determination
had been different, or that an event did happen that would not have happened if the
original determination had been different.
Part 2 - Application
Item 64 provides that the amendments made apply to a claim for parental leave pay
for a child where the child is born, or becomes entrusted to the care of a person
(see section 275 of the Paid Parental Leave Act) on or after the commencement of
the Schedule 1 amendments.
Item 65 provides for transitional arrangements for persons who receive employer
top-up pay. The provision applies to persons whose child was born, or entrusted to
their care during the three year period starting from the commencement of the
Schedule 1 amendments. (For example, if the Schedule 1 amendments commence
on 1 January 2018, the grandfathering period will be between 1 January 2018 and
31 December 2020.) At subsection 11F(5), inserted by item 17, the reference to
'treat the amount of PC pay for that period as being the amount that it would be
disregarding subsection 11B(2)' should be replaced with 'disregard the amount of
that PC pay for that period'.
The effect of this is that, for people who have children born or entrusted into their
care during the three year grandfathering period who receive employer top-up pay,
the amount received from their employer will be disregarded when calculating their
parental leave pay entitlement. Employer top-up pay is an arrangement whereby the
amount a person receives in Government funded parental leave pay is topped up by
their employer to an agreed amount. From the commencement of the Schedule 1
amendments, these amounts will be taken into account when calculating a person's
entitlement to Government funded parental leave pay.
This three-year grandfathering period will ensure employers and employees who
negotiated workplace entitlements based on paid parental leave entitlements in
place at a particular point in time have an opportunity to renegotiate the terms of
employment if necessary.
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Schedule 18 - Employer opt-in
Schedule 18 - Removal of parental leave pay mandatory employer role
Summary
To ease administrative burdens on business, the Paid Parental Leave Act will be
amended to remove the requirement for employers to provide Government-funded
parental leave pay to their eligible long-term employees.
From the first 1 January, 1 April, 1 July or 1 October to occur 9 months after this Act
receives Royal Assent, with an earliest commencement date of 1 January 2018,
employees will be paid directly by the Department of Human Services, unless an
employer opts in to provide parental leave pay to its employees and an employee
agrees to their employer paying them.
Background
Currently under the Paid Parental Leave Act, in the majority of cases, employers are
required to provide parental leave pay to their eligible long-term employees.
The Secretary of the Department of Human Services (as a delegate of the Secretary
of Social Services) must make an employer determination that a person's employer
is to pay the person's instalments of parental leave pay, if the Secretary is satisfied
that certain conditions are met.
However, an employer determination can be made, despite not all of the conditions
being satisfied, if an employer has made an election to 'opt-in' to pay instalments of
parental leave pay to the employee and the employee consents to the employer
paying the instalments. If an employer determination is in force for an employer and
their employee, the employer must pay instalments of parental leave pay to their
employee.
In their feedback to the Paid Parental Leave review, employer and industry groups
generally did not support the employer role, particularly in relation to small business.
These stakeholders considered the employer role places an unnecessary
administrative burden on business, and any benefits to employers in terms of
employee retention were outweighed by the administrative burden imposed.
From the first 1 January, 1 April, 1 July or 1 October to occur 9 months after this Act
receives Royal Assent, with an earliest commencement date of 1 January 2018,
payments of parental leave pay will be made by the Department of Human Services,
unless an employer opts in to manage the payment of parental leave pay to their
employees, and their employee agrees to the employer paying them. This will go
some way towards easing the administrative burden on business.
The amendments will only require an employer to provide instalments of parental
leave pay to a person if an employer determination is in force for the employer and
the employee. An employer determination can only be made if the employer has
made an election to pay instalments, that election applies to the parental leave pay
claimant, and certain other conditions are met, including that the employee agrees to
their employer paying them. Parental leave pay funding amounts will then be
transferred to the employer from the Department of Human Services for payment to
the employee, consistent with current arrangements.
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Schedule 18 - Employer opt-in
If an employer determination is made for a particular employer and employee,
but the employer no longer wishes to pay parental leave pay for that particular
employee, the employer can decline the paymaster role. If this happens,
the Department of Human Services will pay the employee.
To reflect the non-mandatory nature of this role, employers who do not respond to a
notice of an employer determination will no longer be potentially subject to a
compliance notice. Review of an employer determination is no longer required
because the employer can simply decline the paymaster role.
The amendments made by this Schedule commence on the first 1 January, 1 April,
1 July or 1 October to occur 9 months after this Act receives Royal Assent, with an
earliest commencement date of 1 January 2018.
Explanation of the changes
Part 1 - Amendments
Amendments to the Paid Parental Leave Act
Employer election to pay parental leave pay
The main amendments to give employers the right to elect to pay parental leave pay
to their employees relate to removing the obligation on the Secretary to make an
employer determination if certain conditions are met. This obligation is in
section 101. Subsection 101(1) provides that the Secretary must make an employer
determination if various criteria are met. Instead, in place of an obligation to make a
determination if instalments are likely to be paid for at least 40 consecutive PPL days
and the employee has been with the employer for at least 12 months, item 17
substitutes new paragraphs 101(1)(b) and (c), requiring that the employer has made
an election under section 109 to pay instalments and that election applies to the
person (the PPL claimant), and that the person has consented in their claim to their
employer paying instalments to the person.
As a consequence of removing reference to the length of time for which a person
has been with an employer from section 101, subsection 278(2), which guides
assessing the duration of employment, is repealed by item 50. Item 49 adjusts the
structure of section 278 as a consequence of this repeal.
If more than one employer of the person has made an election to pay parental leave
pay, the claimant may nominate the employer who would pay instalments to the
person. Item 19 amends paragraph 101(1)(f) to substitute reference to amended
paragraphs (b) to (d), which will now contain the criteria for making the
determination.
Item 20 repeals subsection 101(2), which becomes redundant as the result of
introducing into subsection 101(1) an employer election as a criterion for making an
employer determination.
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Schedule 18 - Employer opt-in
Provision is already made for an employer to elect to pay parental leave pay to their
employee in section 109. To reflect the fact this will now be the only means of an
employer becoming obliged to pay parental leave pay to their employee, various
criteria currently guiding whether a compulsory employer determination can be made
are inserted into section 109. Item 31 inserts into subsection 109(1) the requirement
that the employer have an ABN before being able to elect to pay. Item 18 removes
this requirement from section 101 by repealing paragraph 101(1)(e).
Item 32 expands paragraph 109(2)(b) by requiring an employer's bank account
information to be provided in the election notice given by the employer, including
account number, BSB, account name and the name of the financial institution. This
information was previously required to be provided in the employer's compulsory
acceptance notice under section 104 in response to notice of the making of the
employer determination. Item 22 repeals subsection 104(2) to remove this aspect of
an acceptance notice, and repeals subsection 104(5), which becomes redundant as
a result of the expanded election notice. Item 5 makes a consequential amendment
to the definition of bank account information in section 6, to refer to
paragraph 109(2)(b).
Section 299 extends the Act to persons who are in a relationship that is similar to
that of employer and employee. Subsection 299(1) currently gives the Secretary
capacity to make employer determinations in circumstances provided by the PPL
rules. Item 51 amends this to substitute provision for a person to make an election
under section 109 to pay instalments to another person if both persons are in a
relationship that is similar to the relationship between an employer and an employee.
Items 1 to 3 consequentially amend section 4, which sets out a Guide to the Act,
to reflect the changed role of employers. Item 16 consequentially amends
section 100, which sets out a Guide to Part 3-5 - Employer determinations, to reflect
the voluntary nature of the role.
Accepting the employer paymaster role
If an employer determination is made, the employer will retain the right to accept or
refuse the obligation to pay instalments to the person. Item 21 repeals and
substitutes section 103, replacing the former obligation on an employer to accept the
obligation or seek review. New section 103 will allow an employer a period of
14 days (or such longer period allowed by the Secretary) after receiving notice under
section 102 of the making of an employer determination, to accept or not accept the
obligation. The employer may either give the Secretary an acceptance notice
complying with existing section 104, or give a non-acceptance notice, either orally or
in writing, declaring that the employer does not accept the employer's obligation to
pay instalments to the person. A definition of non-acceptance notice is inserted
into section 6 by item 7, referring to new paragraph 103(1)(b). A consequential
amendment is made to the definition of acceptance notice by item 4 to refer to new
paragraph 103(1)(a).
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Schedule 18 - Employer opt-in
If the employer does not accept the obligation, the Secretary must revoke the
employer determination. Section 108 stipulates when the Secretary is required to
revoke the employer determination, by setting out matters of which the Secretary
must be satisfied. Item 28 inserts new item 1A into the table following
subsection 108(1), providing that, if the Secretary is satisfied that the employer has
given a non-acceptance notice for the person under paragraph 103(1)(b),
the employer determination is revoked with effect on the day of the revocation.
Item 29 amends table item 2 of section 108 to provide for revocation of the employer
determination if an employer does not respond to notice of the determination within
the period for response.
An employer's failure to accept an employer paymaster role under existing
section 103 could result in compliance activity by the Secretary. This will not result
from new section 103 as substituted by item 21. As a consequence, table items in
section 146 defining civil penalty provisions referring to section 103 are no longer
correct. Item 33 consequentially repeals table item 10 referring to section 103.
As a further consequence, a compliance notice will not be given in reliance upon
new section 103. Section 157, which deals with giving a compliance notice,
is amended by item 34 to omit reference to section 103.
Review of employer determinations
Because acceptance of this role is now voluntary, there is no need for the capacity to
seek review of a decision to make an employer determination. Section 207, which
gives the right to internal review of such decision, is repealed by item 39. Similarly,
section 223 sets out decisions which may be reviewed by the Administrative Appeals
Tribunal. Item 45 removes reference to an employer determination decision from
section 223. Item 6 repeals the definition of employer determination decision
from section 6.
Section 93 provides for the effect of an employer determination coming into force
after review, which becomes redundant as a result of the repeal by item 39. Item 15
repeals section 93. Consequentially, item 9 removes redundant references to
section 93 from a note to subsection 64(1). Item 11 repeals subsection 84(3),
dealing with the payment of an instalment following review of the employer
determination. A consequential amendment is made by item 8 to the definition of
transfer day in section 6, omitting reference to subsection 84(3). Items 12 and 13
omit reference to review of an employer determination from the heading to
section 85 and paragraph 85(1)(a), dealing with payment of arrears following review.
Item 14 makes a consequential amendment to subsection 85(3) to reflect the
changed structure of section 85. Item 10 makes a consequential amendment to
section 83, to omit reference to the Secretary paying instalments because an
employer determination is being reviewed.
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Schedule 18 - Employer opt-in
Similarly, section 105 relates to giving bank account and other information after
review. Item 23 repeals section 105. Item 27 consequentially amends section 107,
relating to when an employer determination comes into force, to repeal
subsection 107(3), relating to an employer determination which has been reviewed.
Items 24 to 26 make consequential amendments to the structure of section 107 to
reflect the effect of item 27.
Item 30 deals with giving notice of the revocation of an employer determination to
the AAT under subsection 108(6) when an application has been made for review of
the determination, by repealing subsection 108(6).
An employer's failure to provide bank details following review could result in
compliance activity by the Secretary. This will not result from section 105 as a result
of its repeal by item 23. As a consequence, table items in section 146 defining civil
penalty provisions referring to section 105 are no longer correct. Item 33
consequentially repeals table item 11, which refers to section 105.
As a further consequence, a compliance notice will not be given in reliance upon
section 105. Section 157, which deals with giving a compliance notice, is amended
by item 34 to omit reference to section 105.
References to internal review of a decision to make an employer determination are
removed from notes to section 203 by items 36 and 37. Items 38, 40, 41 and 42
remove reference to an application for review under section 207 of an employer
determination decision from sections 205, 209, 210, and 212 as a consequence of
item 39. Item 43 is a consequential amendment to the structure of section 212.
Similarly, references of the right to AAT review of a decision to make an employer
determination are removed by items 46, 47 and 48 from section 224 relating to
applications for review, and by item 45 from section 223, relating to review of
employer decisions.
Item 35 amends section 202, which sets out a Guide to Part 5-1 - Internal review of
decisions, to reflect the fact that the only remaining employer review decision is an
employer funding amount decision. Similarly, item 44 amends section 213, which
sets out a Guide to Part 5-2 - AAT first review of certain decisions, to remove
reference to employer determination decisions.
Part 2 - Contingent Amendments
Division 1--Amendments if the Regulatory Powers (Standardisation Reform)
Act 2017 does not commence before this Act
Items 52 and 53 amend subsection 159(1), which deals with giving infringement
notices by the Secretary. An infringement notice will not be given in reliance upon
new section 103 or the repealed section 105. Subsection 159(1) is consequently
amended and paragraphs 159(1)(b) and (c) are repealed by item 53 to omit
reference to sections 103 and 105.
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Schedule 18 - Employer opt-in
The amendments made by this Division commence on the first 1 January, 1 April,
1 July or 1 October to occur 9 months after this Act receives Royal Assent, giving an
earliest commencement date of 1 January 2018.
However, the amendments do not commence if Schedule 11 to the Regulatory
Powers (Standardisation Reform) Act 2017 commences at or before the start of the
first 1 January, 1 April, 1 July or 1 October to occur 9 months after Royal Assent
Division 2--Amendments if the Regulatory Powers (Standardisation Reform)
Act 2017 commences before this Act
Item 54 has the same effect as item 53 above by repealing paragraphs 159(1)(b)
and (c).
The amendments made by this Division commence on the first 1 January, 1 April,
1 July or 1 October to occur 9 months after this Act receives Royal Assent.
However, the amendments will not commence if Schedule 11 to the Regulatory
Powers (Standardisation Reform) Act 2017 does not commence at or before the start
of the first 1 January, 1 April, 1 July or 1 October occurring 9 months after Royal
Assent.
Division 3--Amendments contingent on the Regulatory Powers
(Standardisation Reform) Act 2017
Item 55 has the same effect as items 53 and 54 above by repealing paragraphs
159(1)(b) and (c).
The amendments made by this Division commence immediately after the
commencement of Schedule 11 to the Regulatory Powers (Standardisation Reform)
Act 2017.
However, the amendments will not commence if Schedule 11 to the Regulatory
Powers (Standardisation Reform) Act 2017 commences at or before the
commencement of the provisions set out in Part 1 of this Schedule.
Part 3 - Application and transitional provisions
Item 56 provides that the amendments made by Parts 1 and 2 of this Schedule apply
in relation to an employer determination that is made on or after the commencement
of this Schedule in relation to a claim for parental leave pay that is made before, on
or after that commencement.
Item 57 is a transitional provision relating to elections made before commencement.
This item provides that an election under section 109 of the Paid Parental Leave Act
that is in force immediately before the commencement of this Schedule ceases to be
in force at that commencement.
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Schedule 18 - Employer opt-in
Item 58 is a transitional provision relating to revoking employer determinations made
before commencement.
Subitem 58(1) provides that this item applies if:
an employer determination was made before the commencement of this
Schedule for a person and the person's employer;
the determination had not been revoked before that commencement; and
the person's PPL period had not started before that commencement.
Subitem 58(2) provides that the Secretary must revoke any determination captured
under subitem 58(1).
Subitem 58(3) provides that the Paid Parental Leave Act applies as if a revocation
under subitem 58(2) were made under subsection 108(1) of that Act.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SOCIAL SERVICES LEGISLATION AMENDMENT
(OMNIBUS SAVINGS AND CHILD CARE REFORM) BILL 2017
Schedule 1 - Payment rates
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
The Schedule will deliver more timely assistance to provide better help to families
(including income support families) with day-to-day living expenses, and help support
children to grow up healthy and participate in educational opportunities,
in preparation for becoming self-reliant adults.
From 1 July 2018:
Family tax benefit Part A fortnightly rates will increase by $20.02 for each
FTB child in the family aged up to 19.
An equivalent rate increase, of around $19.37 per fortnight, will apply to youth
allowance recipients aged under 18 and living at home.
Aligning these two rates of payment will avoid confusion for families, and make
sure there is no financial incentive for an FTB child to leave full-time secondary
study to claim youth allowance.
The rate increases will also flow through to certain other payment rates for young
people - the under-18 rates of disability support pension, special benefit and
ABSTUDY.
Human rights implications
The Schedule engages the following human rights:
Right to social security
The Schedule is consistent with supporting the right to social security.
From 1 July 2018, the Schedule will provide families receiving the standard
FTB Part rates a rate increase of $20.02 per fortnight. An equivalent rate increase,
of around $19.37 per fortnight, will apply to youth allowance recipients aged
under 18 and living at home. This rate increase will also flow on to other payment
rates that are the same payment rate as the under 18 at home youth allowance
maximum basic rate.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Conclusion
The amendments in the Schedule are compatible with human rights because they do
not limit access to social security or family payments.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Schedule 2 - Family tax benefit Part B rate
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule makes amendments to the A New Tax System (Family Assistance)
Act 1999.
From 1 July 2017, the Schedule will introduce a reform to family tax benefit Part B
that removes entitlement to FTB Part B for single parent families who are not single
parents aged 60 or more or grandparents or great-grandparents, from 1 January of
the calendar year their youngest child turns 17.
These reforms will improve the sustainability of the family payments system over the
long term, while continuing to provide assistance to families in need.
Human rights implications
These amendments engage the following human rights:
Right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
recognises the right of everyone to social security, while article 11 recognises the
right to an adequate standard of living for an individual and their family, including
adequate food, clothing and housing, and the continuous improvement of living
conditions.
Rights of the child
Article 26 of the Convention on the Rights of the Child requires countries to
recognise the right of the child to benefit from social security. Benefits should take
into account the resources and the circumstances of the child and persons having
responsibility for the maintenance of the child.
The objective of family payment reform is to ensure that the family payments system
remains sustainable in the long term. The United Nations Committee on Economic,
Cultural and Social Rights recognises that a social security scheme should be
sustainable, and that the conditions for benefits must be reasonable and
proportionate.
To the extent that removing entitlement to FTB Part B for some families with older
children limits the right to social security, this is reasonable and proportionate.
The Australian Government supports low and middle income families with dependent
children and young people through the payment of FTB and youth support
payments. FTB Part A and youth support payments are per-child payments that
have the primary objective to ensure all children and young people have access to a
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
basic acceptable standard of living. A family's rate of assistance is determined by
family income. FTB Part B provides additional assistance to families with one main
income, to recognise the role of parents and other carers as carers and members of
the workforce.
The changes in this Bill will not affect an individual's right to FTB Part A or youth
support payments. The vast majority (99 per cent1) of families who currently receive
FTB Part B also receive FTB Part A. The one per cent of families who receive FTB
Part B only, primarily have income above the FTB Part A income -cut-out. All
eligible families will continue to receive FTB Part A and / or youth support payments
on a per child basis, and will benefit from the $20 fortnightly increase to these
payments from 1 July 2018.
FTB Part B is one of a number of social security payments available to families with
dependent children and young people to assist with the cost of living. Changes in
one area of the social security system are often introduced alongside other changes
in order to offset or lessen individual impacts while providing targeted assistance to a
particular cohort. As such, it is important to recognise that the changes in FTB Part B
do not occur in isolation.
These changes will pay for the Jobs for Families package, which introduces
sweeping reforms of the child care system. These investments will help families by
enabling and encouraging greater workforce participation. The Jobs for Families
package will encourage parents to re-engage or increase their workforce
participation, which will in turn improve social outcomes for families and their
children. Individuals with low incomes will continue to receive ongoing assistance
through various Australian Government payments, which will assist them in
maintaining an adequate standard of living.
The changes to the FTB Part B rates are structured around the age of the youngest
child in a family and build on the payment's current workforce participation focus.
This reflects the changing financial demands and levels of capacity a family has to
work as their children grow older and become more independent.
This Bill retains the current maximum standard rates for more than 1 million FTB Part
B families who have a youngest child aged under 17.
For families with older children, FTB Part B will be better targeted. This targeting is
proportionate, and avoids undue economic hardship by encouraging parents with
reduced care requirements to move into the workforce or increase their workforce
participation. Where a youngest child has reached the age of 17, the Government
considers it reasonable to expect single parents (aged under 60 or who are not
grandparents) to engage in the workforce, or to increase their workforce
participation.
Single parents aged at least 60 years of age and grandparents and great-
grandparents will continue to access FTB Part B at the current rate until the end of
the calendar year their youngest child turns 18, recognising that these families may
have less capacity to engage in the workforce.
1
DHS COGNOS Instalment Package - December 2015
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
The changes will ensure the family payments system is sustainable and support is
retained to assist with the direct costs of raising dependent children. Therefore, the
changes are aimed at achieving a legitimate objective, there is a rational connection
between the limitations of the rights to social security and an adequate standard of
living and the objective, and the limitations are reasonable and proportionate
measures for the achievement of the objective.
Conclusion
These amendments are compatible with human rights because they advance the
protection of human rights and, to the extent that these changes limit access to
family payments, these limitations are reasonable and proportionate and families are
otherwise provided for.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Schedule 3 - Family tax benefit supplements
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
The Schedule will phase out the family tax benefit Part A and Part B supplements by
reducing them each year from 1 July 2016. These supplements will then be
withdrawn from 1 July 2018. The family tax benefit Part A and B supplements are
components of the rate of family tax benefit, and are added into the rate after the end
of the relevant income year when certain conditions are satisfied.
Human rights implications
These amendments are likely to engage the following human rights:
Right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
recognises the right of everyone to social security, while article 11 recognises the
right to an adequate standard of living for an individual and their family, including
adequate food, clothing and housing, and the continuous improvement of living
conditions.
Rights of the child
Article 26 of the Convention on the Rights of the Child requires countries to
recognise the right of the child to benefit from social security. Benefits should take
into account the resources and the circumstances of the child and persons having
responsibility for the maintenance of the child.
The objective of the family payment reform package is to ensure that the family
payments system remains sustainable in the long-term. The United Nations
Committee on Economic, Cultural and Social Rights has stated that a social security
scheme should be sustainable and that the conditions for benefits must be
reasonable, proportionate and transparent.
To the extent that phasing out the FTB supplements limits the right to social security,
this is reasonable and proportionate.
Under current rules families who receive FTB Part A or FTB Part B are entitled to an
end of year supplement; however, recipients of youth income support payments are
not. Schedule 1 of the Bill aligns the fortnightly payment rates for FTB Part A (for
FTB children aged 13 to 19), youth allowance, disability support pension and
ABSTUDY through a one-off increase to maximum fortnightly rates, while
Schedule 3, by phasing out of supplements, ensures that the package of government
assistance for families with dependent young people will, for the first time be, the
same.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Schedule 1 and 3 contribute towards improving the adequacy of fortnightly
assistance, while simplifying government payments for families with children by
phasing out the end of year supplement. This is consistent with the
recommendations of the McClure review, which highlighted the unworkability of a
system that maintains 20 main payment types with in excess of 50 supplement
categories. The changes are some of the initial steps in the move towards simplifying
the social security system, which will improve customer accessibility over time.
The redistribution of money from a lump sum amount to a higher fortnightly payment
will assist families more effectively, providing greater financial capacity to meet the
day to day costs for themselves and their children.
Schedule 3 also recognises that the Government's investment in service delivery
reform will enhance the accuracy of income reporting.
Under current rules, families who wish to receive FTB by fortnightly instalment need
to provide estimated annual income to receive their entitlement. A family's
entitlement to FTB is reconciled after an entitlement year when their actual income is
known, and their entitlement to the end of year supplement is assessed. Families
may be reconciled with a top-up, debt or have nil change (they have already
received the correct amount of FTB).
The FTB supplements were announced in 2004 (when there was a budget surplus of
over $13 billion) in response to high levels of reconciliation debt experienced by the
FTB population. This debt was often due to family's not being able to accurately
predict changes in income or changes in circumstances such as a return to work.
The changes will ensure the family payments system is sustainable and support is
retained to assist with the direct costs of raising dependent children. The changes
aim to achieve a legitimate objective, there is a rational connection between the
limitations of the rights to social security and an adequate standard of living and the
objective, and the limitations are reasonable and proportionate measures for the
achievement of the objective.
Conclusion
These amendments are compatible with human rights because they do not limit or
preclude people from gaining or maintaining access to social security in Australia
and, to the extent that these changes limit access to family payments, these
limitations are reasonable and proportionate.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Schedule 4 - Jobs for families child care package
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule will introduce key aspects of the Jobs for Families Child Care
Package that was announced in the 2015-16 Budget. The objective of the Jobs for
Families Child Care Package is to improve access to quality education and child
care, support parents as they balance work and family responsibilities, and enable
greater engagement with the workforce.
Measures in the Schedule seek to complement and enhance existing
Commonwealth funded child care programmes, and the State and Territory quality
regime established through the Education and Care Services National Law Act 2010
(Vic) (the "National Law") (as applied in other State and Territory jurisdictions and
which relates to the monitoring of the quality of child care services). The Schedule
therefore reflects an increasing recognition of the importance of cooperation between
the various levels of government.
The Schedule proposes to introduce the Child Care Subsidy (CCS), a single, means-
tested subsidy that will replace current child care payments and be better targeted to
provide more assistance to low and middle income families. The CCS will be
supplemented by the Additional Child Care Subsidy (ACCS), in recognition that extra
support is needed for some disadvantaged and vulnerable children and the
significant benefits that quality child care and early learning can have on children's
early development. The ACCS will provide support for families with children at risk
of serious abuse or neglect (through "ACCS (child wellbeing)"), families experiencing
temporary financial hardship (through "ACCS (temporary financial hardship)");
families on income support transitioning to work (through "ACCS (transition to
work)"); and grandparent carers on income support (through "ACCS (grandparent)").
The Schedule sets out the following matters relating to the new child care payments
regime:
the cessation of Child Care Benefit (CCB) and Child Care Rebate (CCR);
the introduction, from 2 July 2018, of a new Child Care Subsidy (CCS), which
is subject to both an income and activity test;
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
the introduction of various rates of Additional Child Care Subsidy (ACCS) that
are available to individuals and child care providers in various circumstances;
other amendments to deal with CCS and ACCS claims, reviews of decisions,
provider approvals and compliance obligations of approved providers of child
care services.
In doing so, the Schedule engages with the following treaties and Articles contained
within:
International Covenant on Economic, Social and Cultural Rights (ICESCR)
- Articles 6 and 9;
Convention of the Rights of the Child (CRC) - Articles 2, 3, 6, 14, 18, 19,
27 and 36;
International Covenant on Civil and Political Rights (ICCPR) - Articles 26,
14 and 17; and
Convention on the Elimination of all Forms of Discrimination Against
Women (CEDAW) - Articles 10 and 11.
Human rights implications
The right to work
Article 6 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) requires that State Parties recognise the right to work, including through
developing policies and techniques to achieve steady economic, social and cultural
development and full and productive employment. This right goes to the core
objective of the Schedule, to help parents who want to work, or who want to work
more. It is estimated that the Package will encourage more than 230,000 families to
increase their involvement in paid employment.
The rights of parents and children
Article 3 of the Convention of the Rights of the Child (CRC) recognises that in all
actions concerning children, the best interests of the child shall be a primary
consideration. The Schedule establishes a new CCS that provides a higher rate of
assistance to low and middle income families compared to the current child care
assistance, and the supplementary ACCS that will increase the access of children to
quality child care. Early childhood education and care plays a vital role in the
development of Australian children and their preparation for school. Access to early
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childhood education and care is also one of the most effective early intervention
strategies to break the cycle of poverty and intergenerational welfare dependence.
Additionally, ACCS payments will ensure vulnerable children have access to the
benefits of child care.
Article 18 of the CRC mandates that State Parties shall use their best efforts to
ensure recognition of the principle that both parents have common responsibilities
for the upbringing and development of the child, and to provide appropriate
assistance, in particular to ensure that children of working parents have the right to
benefit from child care services and facilities for which they are eligible. This
Schedule will support the introduction of a simpler, more affordable, more flexible
and more accessible child care system.
Article 19 of the CRC requires that appropriate measures are taken to protect the
child from all forms of physical or mental violence, injury or abuse, neglect or
negligent treatment, maltreatment or exploitation. The ACCS (child wellbeing)
payment, in particular, is designed to address the barriers faced by children and
individuals in certain vulnerable situations, in being able to access quality child care.
Article 19 also requires that measures be taken to identify, report, refer, investigate,
treat and follow-up any instances of abuse. Under the reforms proposed by the
Schedule, if an individual or child care provider is eligible for the ACCS (child
wellbeing) payment (where the child has been identified as at risk of serious abuse
or neglect), the provider must make relevant State or Territory authorities aware of
the child's circumstances. This information sharing is also considered a justifiable
limitation on the right to privacy, as it furthers the rights of children under the CRC.
The Schedule also furthers Article 3(3) of the CRC, relating to the requirement of
State Parties to ensure child care providers conform to standards relating to the
number and suitability of staff and competent supervision, by implementing
mechanisms that allow for the collection and sharing of information with the States
and Territories who are responsible for monitoring the quality of care and safety of
children in care. Further, the collection of enrolment information and information
about attending a session of care from approved child care providers will provide the
Commonwealth with meaningful data for the purposes of research and policy
development to ensure the child care payments scheme is properly targeted and
meeting its objectives. In doing so, the Schedule engages with Article 18(2) of the
CRC by facilitating improved, evidence based assistance to parents in raising
children, and supporting the development of institutions, facilities and services for the
care of children. Such measures would be directed to monitoring and improving all
child care in Australia, and not just child care subsidised by the Commonwealth. To
the extent that these measures may limit the right to privacy, they are reasonable
and proportionate to assist the Australian Government to meet its requirements
under the CRC and other treaties that deal with the rights of parents and children.
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The right to an adequate standard of living
Article 27 of the CRC requires that State Parties recognise the right of every child to
a standard of living adequate for the child's physical, mental, spiritual, moral and
social development. The Schedule advances this right through the CCS and the
ACCS which will address barriers to accessing child care to ensure all children,
regardless of parental income, have access to an adequate amount of child care to
aid socialisation and development.
The right to social security
Article 9 of the ICESCR recognises the right of everyone to social security. Under the
Schedule all families who meet basic eligibility criteria will be eligible for some fee
assistance through the CCS, so long as they also meet an activity test. Additionally,
children at risk of serious abuse or neglect, families experiencing temporary financial
hardship and families transitioning from income support to work will be eligible for
further support through ACCS payments that will ensure all children have access to
adequate child care, regardless of circumstances.
Recent amendments to section 24 of the Family Assistance Act restricted the
maximum period of eligibility for family assistance payments (including CCB) from 56
weeks to six weeks (the "portability period") for individuals who travel overseas. This
position is maintained for CCS purposes through a new provision in the Schedule
which relates specifically to CCS (see section 85EE as proposed for the Family
Assistance Act). As is currently the case for CCB, the Secretary is given the
discretion to extend the six week period under section 85EE of the Family
Assistance Act for individuals who are members of the Australian Defence Force or
Australian Federal Police and who are deployed overseas, assisted by the Medical
Treatment Overseas Program, or unable to return to Australia for a specified reason
(such as a serious accident, or natural disaster). To the extent that a limited
portability period provides a limitation on the right to social security, it is reasonable
and proportionate given that individuals will still be able to access child care
payments for a reasonable period of time while overseas (for up to six weeks, or
longer in specified circumstances). The six week time period will generally align with
the maximum six week portability period allowed for most other family payments and
working age income support payments for a person who is overseas. Furthermore,
the discretion to extend the six week period for up to three years provides a
safeguard to avoid harsh consequences for individuals who may not be in a position
to return within the six week period due to their particular circumstances.
The right to be free from discrimination
Through the measures in the Schedule which seek to make child care simpler, more
affordable and more flexible, the Schedule also seeks to alleviate some of the
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current pressures experienced by families, some of which have a negative
disproportionate impact on women in particular. Articles 10 and 11 of the
Convention on the Elimination of all Forms of Discrimination Against Women
(CEDAW) mandates State Parties to take all appropriate measures to eliminate
discrimination against women in the field of education and employment, by providing,
amongst other things, the same conditions for career advancement and vocational
guidance. There are several ways in which the Schedule engages with this
important right. Through the broadly expressed activity test requirements associated
with CCS eligibility, women who are engaged in paid work, an approved course of
training or study, or volunteering will receive a number of subsidised hours of child
care. There is also the ability to prescribe additional activities as recognised
activities or associated activities. Individual circumstances may also be considered
on a case by case basis to accommodate the greatest flexibility possible for eligible
individuals, including women. This is intended to allow for some activities, which
may not be conventionally regarded as an activity (e.g. being on leave from work, or
in a semester break), to be counted as recognised activity for the purpose of
receiving CCS. In addition, there are several types of supplementary ACCS which
are designed to assist individuals, and could support women in particular, to receive
subsidies to support their workforce participation, such as the ability to receive
payments when transitioning to work.
Article 26 of the International Covenant on Civil and Political Rights (ICCPR) and
Article 2 of the CRC requires that persons are equal before the law and that the law
shall provide equal and effective protection against discrimination on any grounds.
The Schedule sets out a range of eligibility criteria for the CCS and the ACCS in
relation to age of the child, residency requirements, immunisation status of children
and for grandparents.
Using a child's age as a criterion to determine eligibility is considered legitimate
differential treatment as those children 13 and under are particularly vulnerable and
require close care and supervision on a constant basis, compared with older
children. The child care payments system is obviously also administered within a
broader policy context that includes other forms of financial assistance to school
children. In addition, in exceptional circumstances and where access to child care is
in the best interests of a child, the Schedule includes provision for the Minister to
make rules to enable children aged over 13 to access CCS and ACCS.
Using residency requirements as a criterion to determine eligibility is a proportionate
limitation on the right to be free from discrimination, because it is important for the
Secretary to reconcile payments against residents' tax assessment information,
noting also that residency requirements are not applied to children at risk of serious
abuse or neglect, in relation to whom a provider can be eligible for ACCS regardless
of the child's residency status.
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Using immunisation status as a criterion to determine eligibility is legitimate
differential treatment as Article 14 of the CRC allows for limitations on one's freedom
to beliefs when it is necessary to protect public health and safety in a facility
responsible for the care or protection of children. The immunisation eligibility
criterion is a necessary limitation to encourage parents to better protect children from
diseases. The exemption on medical grounds constitutes a safeguard to protect the
individual safety of the child.
The ACCS (grandparents) payment is considered legitimate differential treatment as
it is a special measure intended to further support a group who are already
vulnerable and in receipt of income support. This payment is also an early
intervention strategy to break the cycle of poverty and intergenerational welfare
dependence by providing disadvantaged families with adequate access to child care.
The right to be presumed innocent
Article 14 of the ICCPR requires that in the determination of any criminal charge,
everyone shall be entitled to a set of minimum guarantees and that anyone convicted
will have the right to review and compensation if the conviction is not upheld. Under
the Schedule there are both civil penalties and criminal penalties. These penalties
are part of a multi-pronged approach to further deter fraud and ensure the integrity of
payments, and also protect children from harm, in line with obligations under Article
19 of the CRC.
Article 14 of the ICCPR also requires that anyone charged with a criminal offence
shall have the right to be presumed innocent until proved guilty according to the law.
Under the Schedule there are strict liability offences that apply to factual scenarios.
These offences are proportionate to the value of maintaining adequate safeguards in
relation to the large sums of public money involved in administering the child care
payments system. It is considered reasonable in these cases to impose strict liability
offences to ensure the integrity of payments. It is intended that prosecution action
will only be taken in relation to strict liability offences in serious or repeated cases.
The right to privacy
Article 17 of the ICCPR and Article 16 of the CRC requires that no one shall be
subject to arbitrary or unlawful interference with privacy. Under the Schedule, as
part of administering the CCS and the ACCS and for the enhancement of the child
care system overall, information will be collected and stored on a new IT system that
will be built to meet legislative requirements. This information collection and storage
will be subject to the Privacy Act 1988 as well as the existing and stringent secrecy
provisions in the family assistance law.
Under the Schedule, if a child care provider is suspected of breaching obligations
that are subject to monitoring powers, the Secretary may deem it necessary to visit
the facility without advising the operator beforehand of its intention to do so.
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However, the provider retains their right to refuse to allow entry (such a refusal can
only be overcome through the issue of a warrant). This limitation of the providers'
and clients' right to privacy is in response to the Australian National Audit Office
finding that the Government is losing an estimated $700 million a year on misleading
or fraudulent child care practices. Given the scale of the breaches this interference
is not considered arbitrary, but a reasonable and proportionate response to protect
Government expenditure and uphold the integrity of payments.
The right to privacy, the right to be presumed innocent and the triggering of Parts of
the Regulatory Powers (Standard Provisions) Act 2014
The Schedule proposes amendments to the Family Assistance Administration Act
that would trigger Parts 2, 4 and 5 of the Regulatory Powers (Standard Provisions)
Act 2014 (Regulatory Powers Act), which deal with monitoring, civil penalties and
infringement notices (see new Part 8C). Those Parts are triggered in relation to a
number of obligations of approved child care providers associated with their approval
(and have no bearing on the enforcement of obligations of parents and other
individual CCS payment recipients). Prior to amendments proposed by the
Schedule, child care provisions in the family assistance law contained a codified set
of monitoring provisions as well as its own civil penalty and infringement notice
regime (as set out in current Part 8C of the Administration Act).
The main purpose of these amendments in the Schedule is to follow whole of
Government policy and trigger the standard suite of provisions of the Regulatory
Powers Act in relation to monitoring powers, as well as processes for enforcement of
civil penalties and infringement notices.
The repealed provisions of the Family Assistance Administration Act which deal with
these matters adopted approaches that were unique to the family assistance law and
created unnecessary regulatory complexity as they differed from the standard
approach adopted in the Regulatory Powers Act in key ways including by:
establishing only a personal right of the Minister to apply for a civil penalty order;
establishing infringement notice formalities, which included only a limited power for
their withdrawal; and ambiguity about methods of their enforcement.
These amendments are important to adopt a more streamlined and consistent
approach with other Commonwealth legislative schemes and to simplify the family
assistance law itself, which, as a result of the proposed amendments, will contain a
simpler Part 8C.
In triggering the Regulatory Powers Act, the intention is to also establish consistency
from a human rights perspective with a whole of Government approach to civil
enforcement mechanisms.
Monitoring provisions
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Part 2 of the Regulatory Powers Act creates a framework for monitoring whether
provisions have been complied with. It includes powers of entry and powers to seek
production of documents and information. Certain provisions in the Schedule are
subject to the monitoring provisions set out in Part 2 of the Regulatory Powers Act.
These include all civil penalty provisions, certain conditions for continued approval of
an approved provider, and provisions requiring compliance by the giving of specific
types of information (to the extent the requirement is placed on an approved
provider, rather than a parent or other CCS payment recipient or eligible individual).
In addition, related provisions which are subject to the monitoring provisions include
certain offence provisions (as listed in proposed section 219UA of the Administration
Act).
As a result of triggering the monitoring framework in the Regulatory Powers Act, only
"authorised officers" (who are authorised under the framework established in Part 2
of the Regulatory Powers Act) will be able to enter premises, by consent or, with a
judicially issued warrant. Authorised persons will be able to exercise related powers,
such as powers to ask questions and secure evidence. The amendments in the
Schedule make a small modification to the operation of the Regulatory Powers Act
by ensuring that consent for entry can be provided by either the occupier of premises
or a person apparently representing the occupier. This modification is intended to
address the business reality that many child care services are operated by staff and
employees of a provider or operator who may invite authorised persons onto
premises, without necessarily being an "occupier" for the purposes of Part 2 of the
Regulatory Powers Act.
Triggering the monitoring provisions in the Regulatory Powers Act engages the
protection against arbitrary or unlawful interference with privacy. Article 17 of the
ICCPR prohibits arbitrary or unlawful interference with an individual's privacy, family,
home or correspondence, and protects a person's honour and reputation from
unlawful attacks. The right to privacy can be limited to achieve a legitimate objective
where the limitations are lawful and not arbitrary. In order for an interference with
the right to privacy to be permissible, the interference must be authorised by law, be
for a reason consistent with the ICCPR and be reasonable in the circumstances.
The United Nations Human Rights Committee has interpreted the requirement of
"reasonableness" as implying that any interference with privacy must be
proportionate to a legitimate end and be necessary in the circumstances.
To the extent that the triggering of the monitoring provisions may limit the right to
privacy, this limitation is provided by law. The power to secure things in the exercise
of monitoring powers is necessary to enable collection of evidence of contraventions
of provider obligations under the family assistance law. The exercise of the power is
constrained and not arbitrary because the powers are focussed on ensuring
compliance with obligations that approved providers have accepted as part of their
approval as a child care service.
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Monitoring important provider obligations also ensures the safety of children cared
for by child care services and their best interests, consistently with Article 3 of the
CRC.
The monitoring powers are also intended to be subject to the implied privilege
against self-incrimination at common law.
Civil penalties and infringement notices
Proposed Divisions 2 and 3 of Part 8C of the Family Assistance Administration Act
state that all "civil penalty provisions" are subject to Parts 4 and 5 of the Regulatory
Powers Act.
As noted, triggering Parts 4 and Part 5 of the Regulatory Powers Act ensures that
civil penalty orders and processes for issuing infringements are dealt with under a
consistent whole of Government framework.
Civil penalties and infringement notices mean that the Secretary has the capacity to
enforce provider obligations by pursuing financial penalties rather than through
prosecuting criminal offences. Most of the civil penalty provisions proposed by the
Schedule contain "parallel" offence provisions, which means that there is a civil
enforcement option open and that criminal enforcement can be reserved for serious
cases.
Triggering of the civil penalty and infringement provisions in the Regulatory Powers
Act is compatible with the right to liberty and security of the person and freedom from
subjection to arbitrary arrest or detention, as set out in article 9 of the ICCPR.
Establishing a strong civil enforcement regime also ensures that considerations
relating to the safety of children cared for by child care services and their best
interests, underpin actions taken by agencies, consistently with Article 3 of the CRC.
Conclusion
This Schedule is compatible with human rights. The current system is complex and
difficult for families to navigate. It is inflexible and does not effectively meet families'
workforce participation needs. Measures in the Schedule are compatible with and
advance human rights under the ICCPR, the CEDAW, the CRC and the ICESCR
which will ultimately enable parents who wish to work, or to work more, by providing
a simpler, more affordable, more flexible and more accessible child care system. As
described above, to the extent that the proposed Schedule may limit some rights,
those limitations are reasonable, necessary and proportionate.
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Schedule 5 - Proportional payment of pensions outside Australia
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
From the first 1 January, 1 April, 1 July or 1 October after Royal Assent, this
Schedule reduces from 26 weeks to six weeks the period during which age pension,
and a small number of other payments with unlimited portability, can be paid outside
Australia at the basic means-tested rate. After six weeks, payment will be adjusted
according to the length of the pensioner's Australian working life residence.
The measure affects the rate of pension paid to age pension recipients and a limited
number of disability support pension, wife pension and widow B pension recipients
who have unlimited portability.
Human rights implications
This measure has considered the human rights implications, particularly with
reference to the right to social security contained within article 9 of the International
Covenant on Economic, Social and Cultural Rights (ICESCR). It is concluded that
the measure does not place limitations on human rights.
The measure is not stopping a person from receiving a social security payment
where they meet domestic eligibility and qualification requirements.
Pensioners, who have been granted indefinite portability, will remain eligible for the
pension (both within Australia and overseas). The proposal only affects the length of
time before pensioners receive a proportional rate of pension according to their
Australian working life residence.
Right to freedom of movement
The measure engages the right to freedom of movement, which is contained in
articles 12 and 13 of the International Covenant on Civil and Political Rights.
Pensioners will remain able to move freely, whether within Australia or overseas.
People who travel after the implementation date will receive their basic means-tested
pension for six weeks after leaving Australia. After six weeks' absence from
Australia, they will receive a proportional rate of pension according to their years of
working life residence in Australia.
Any impact on a pensioner's freedom of movement is reasonable and consistent with
the policy objectives.
Right to social security
The measure engages the right to social security contained in article 9 of the
ICESCR.
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The right to social security requires that a system be established under domestic
law, and that public authorities must take responsibility for the effective
administration of the system. The social security scheme must provide a minimum
essential level of benefits to all individuals and families that will enable them to cover
essential living costs.
The change to the rate of pension a pensioner can receive after being outside
Australia for more than six weeks does not affect their ability to access social
security within Australia. The measure ensures that social security is appropriately
targeted. The measure affects those pension recipients, with indefinite portability of
their payment, who would generally have spent part of their working life in another
country, from which they should be able to receive a pension for their years of
contributions or residence in that country.
Conclusion
These amendments are compatible with human rights. To the extent that they may
limit a person's access to social security or freedom of movement, the limitation is
reasonable and proportionate.
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Schedule 6 - Pensioner education supplement
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
In broad terms, the pensioner education supplement (PES) assists students with the
ongoing costs of full-time or part-time study. This Schedule repeals provisions that
provide for PES, and makes related consequential changes.
The Government remains committed to providing incentives for income support
recipients to improve their employment prospects through study or training. More
appropriate channels of Government-funded study and training assistance for
income support recipients are available through employment services providers and
the HECS-HELP, FEE HELP and VET Student Loans tuition loan programs.
Human rights implications
The Schedule engages the following human rights:
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.
The amendments in this Schedule remove the PES. PES is an additional
fortnightly supplement of $62.40 for students who are undertaking at least
50 per cent of a full-time study load, or $31.20 for students with a study load
below 50 per cent.
PES is available to certain recipients of social security payments and payments
under the Veterans' Entitlements Act 1986 who are undertaking qualifying study
to assist with the ongoing costs associated with study. Qualifying study includes
secondary courses, tertiary courses, open learning, Certificate courses, Bachelor
degrees, Advanced Certificate courses, Graduate Certificate courses, Graduate
Diplomas and Degrees, Master qualifying courses or Approved Masters by
coursework programs.
The removal of PES does not limit or affect access to the right to social security.
PES is not a primary social security payment to meet the regular cost of living
but rather a supplement designed to assist with some of the costs associated
with study, paid on top of a recipient's primary payment. An individual's
entitlement to primary social security payments, and other benefits, will not be
affected by the cessation of PES.
To the extent that the removal of PES reduces a recipient's overall support, this
is proportionate to achieving the legitimate objective of ensuring the long-term
sustainability of the social security system by improving the Commonwealth's
fiscal position and simplifying the structure of the system.
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Right to education
Article 13 of the ICESCR recognises the right of everyone to education.
The removal of PES, to a small extent, impacts on an individual's ability to
participate in education, particularly if they have a low income. However,
its impact on individuals is minor ($31.20 or $62.40 per fortnight depending on
study load), and it does not affect a person's entitlement to other ongoing
payments and programmes designed to support individuals to engage in
education. This measure is aimed at achieving the legitimate objective of
ensuring the long-term sustainability of the social security system by recognising
the broader and more appropriate education supports available.
In addition to student payments, such as austudy, youth allowance (student) and
ABSTUDY, the Australian Government provides other programs to assist tertiary
students with the cost of their fees:
Students who are enrolling in a Commonwealth Supported Place for a
university level qualification (that is, undergraduate level) can access a HECS-
HELP loan to pay their student contribution amount. Students accessing this
loan are required to pay their debt through the tax system when they earn
above the minimum threshold for compulsory repayment.
Eligible students who are enrolling in a higher-level vocational education and
training (VET) qualification are able to access VET Student Loans, a loan
scheme which assists eligible students, enrolled in diploma-level and above
courses at an approved VET provider, to pay their tuition fees.
FEE-HELP is a loan scheme that assists eligible fee paying students in
non-Commonwealth Support Places (for example, post-graduate level
courses at university) pay all or part of their tuition fees.
Eligible students who access any of the above loans can borrow up to the
specified loan limit to pay their fees and do not have to repay the loan until
their income meets the minimum repayment threshold.
Job seekers registered with an employment services provider may also receive
assistance to engage in study or training, including financial assistance, through
the Employment Fund. Employment services providers may use the
Employment Fund to help job seekers with:
employment-related training, and associated books and equipment;
literacy, language or numeracy assistance where places in other government
funded programmes are unavailable; or
pre-vocational or preparatory support such as pre-apprenticeship training or
pre-tertiary courses where it is not covered by other Government-funded
programme.
Consequently, the removal of PES is reasonable in that access to other
payments and support mechanisms to allow individuals to undertake study
remains.
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Conclusion
The Schedule is compatible with human rights because it does not limit the basic
right to social security and any impact on the right to education is balanced with
other financial support for students. The measure is a reasonable, proportionate
and necessary response to achieve the objective of ensuring the long-term
sustainability of the social security system by improving the Commonwealth's
fiscal position and simplifying the structure of the system.
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Schedule 7 - Education entry payment
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
In broad terms, the education entry payment (EdEP) assists with education
expenses, and is paid once a year to eligible recipients. This Schedule repeals
provisions that provide for EdEP, and makes related consequential changes.
The Government remains committed to providing incentives for income support
recipients to improve their employment prospects through study or training. More
appropriate channels of Government-funded study and training assistance for
income support recipients are available through employment services providers and
the HECS-HELP, FEE HELP and VET Student Loans tuition loan programs.
Human rights implications
The Schedule engages the following human rights:
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.
The amendments in this Schedule remove the EdEP. EdEP is an additional
annual supplement of $208 paid to recipients of newstart allowance, partner
allowance, widow allowance, widow B pension, wife pension, parenting payment
(single and partnered), disability support pension, carer payment, special benefit
partner service pension and invalidity service pension. EdEP is specifically
targeted to assist with the up-front costs of education and training for those who
are enrolling or commencing in an approved course of study.
The removal of EdEP does not limit or affect access to the right to social
security. EdEP is not an ongoing primary social security payment to meet the
regular cost of living but rather a supplement designed to assist individuals meet
the up-front costs of education/training on an annual basis, paid on top of a
recipient's primary payment. An individual's entitlement to primary social
security or Veterans' Affairs payments, and other benefits, will not be affected by
the cessation of EdEP.
To the extent that the removal of EdEP reduces a recipient's overall support, this
is proportionate to achieving the legitimate objective of ensuring the long-term
sustainability of the social security system by improving the Commonwealth's
fiscal position and simplifying the structure of the system.
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Right to education
Article 13 of the ICESCR recognises the right of everyone to education.
The removal of EdEP, to a small extent, impacts on an individual's ability to
participate in education, particularly if they have a low income. However,
its impact on individuals is minor ($208 per annum), and it does not affect a
person's entitlement to other ongoing payments or programs designed to support
individuals to engage in education. This measure is aimed at achieving the
legitimate objective of ensuring the long-term sustainability of the social security
system by recognising the broader and more appropriate education supports
available.
In addition to student payments, such as austudy, youth allowance (student) and
ABSTUDY, the Australian Government provides other programs to assist tertiary
students with the cost of their fees:
Students who are enrolling in a Commonwealth Supported Place for a
university level qualification (that is, undergraduate level) can access a
HECS-HELP loan to pay their student contribution amount. Students
accessing this loan are required to pay their debt through the tax system when
they earn above the minimum threshold for compulsory repayment.
Eligible students who are enrolling in a higher-level vocational education and
training (VET) qualification are able to access VET Student Loans, a loan
scheme which assists eligible students, enrolled in diploma-level and above
courses at an approved VET provider, to pay their tuition fees.
FEE-HELP is a loan scheme that assists eligible fee paying students in
non-Commonwealth Support Places (for example, post-graduate level
courses at university) pay all or part of their tuition fees.
Eligible students who access any of the above loans can borrow up to the
specified loan limit to pay their fees and do not have to repay the loan until
their income meets the minimum repayment threshold.
Job seekers registered with an employment services provider may also receive
assistance to engage in study or training, including financial assistance, through
the Employment Fund. Employment services providers can use the Employment
Fund to job seekers with:
employment related training, and associated books and equipment;
literacy, language or numeracy assistance where places in other
government-funded programmes are unavailable; or
pre-vocational or preparatory support such as pre-apprenticeship training or
pre-tertiary courses where it is not covered by other government-funded
programme.
Consequently, the removal of EdEP is reasonable in that access to other
payments and support mechanisms to allow individuals to undertake study
remains.
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Conclusion
The Schedule is compatible with human rights because it does not limit the basic
right to social security any impact on the right to education is balanced with other
financial support for students. The measure is a reasonable, proportionate and
necessary response to achieve the legitimate objective of ensuring the long-term
sustainability of the social security system by improving the Commonwealth's
fiscal position and simplifying the structure of the system.
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Schedule 8 - Indexation
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule implements the following changes to Australian Government
payments:
maintain at level for three years from 1 July following Royal Assent the
income free areas for all working age allowances (other than student
payments) and for parenting payment single; and
maintain at level for three years from 1 January following Royal Assent the
income free areas and other means test thresholds for student payments,
including the student income bank limits.
Human rights implications
The Schedule engages the following human rights:
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.
The Schedule has no effect on the right to social security.
The changes to the value of income test free areas and thresholds for certain
Australian Government payments assist in targeting payments according to need.
Payments will not be reduced unless customers' circumstances change, such as
their income increasing in value.
Conclusion
The amendments in the Schedule are compatible with human rights because they do
not limit access to social security.
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Schedule 9 - Closing Energy Supplement to New Welfare
Recipients
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
This Schedule closes payment of the Energy Supplement (ES) to new welfare
recipients from 20 September 2017. People who receive the ES on 19 September
2016 retain access to it for so long as they have continuous entitlement to their ES-
attracting payment on and after that date. People who start, or who do not have
continuous entitlement, to receive their Energy Supplement-attracting payment
between 20 September 2016 and 19 September 2017 will have their payment
increased by the amount of the ES but only for those days that both fall within that
period and for which they are entitled to it.
The ES (which was originally called the Clean Energy Supplement) was introduced
on 20 March 2013 to compensate people for the introduction of the carbon tax. As
the carbon tax was repealed from 1 July 2014, there is no longer a need to provide
this compensation.
Human rights implications
The Schedule engages the following human 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 of
living conditions in Article 11 of the International Covenant on Economic,
Social and Cultural Rights; and
The rights of the child in Article 26 of the Convention on the Rights of the
Child.
The right of everyone to social security and an adequate standard of living
The legitimate objective of removing the ES from eligible payments to new recipients
is to contribute to the ongoing sustainability of social security, and in doing so,
contribute to funding of the National Disability Insurance Scheme (NDIS). Funding
the NDIS is essential to support a better life for hundreds of thousands of Australians
with a significant and permanent disability and their families and carers. The pursuit
of this objective promotes human rights by supporting the Convention on the Rights
of Persons with Disabilities.
The engagement of this Schedule with the right of everyone to social security is
reasonable because the Household Assistance Package, which includes the ES,
was brought in to provide compensation for the carbon tax which no longer exists.
Closing the ES does not affect the range of payments that previously attracted it in
any other way, maintaining the general integrity of social security.
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Further, the grandfathering provisions in the Schedule mean that no one on a
payment that attracts the ES continuously from 19 September 2016 will be in a
worse position financially as they will retain the ES as part of their payment.
This option to include these grandfathering provisions was the least restrictive
alternative out of those originally proposed.
The rights of the child
To the extent that ceasing the ES limits the rights of the child to social security, this
is reasonable and proportionate. This Schedule does not impact how the Australian
Government supports low and middle income families with dependent children and
young people through the payment of family tax benefit and student and youth
payments.
Student payments, such Youth Allowance (student) and ABSTUDY provide
assistance to young people to undertake education and training, while Youth
Allowance (other) provides assistance for unemployed young people.
Conclusion
This Schedule is compatible with human rights because to the extent that it may limit
human rights, those limitations are reasonable, necessary and proportionate and
people are otherwise provided for.
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Schedule 10 - Stopping the payment of pension supplement after
six weeks overseas
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule reduces the period that the Basic Amount of the Pension Supplement
will be payable outside of Australia from indefinitely to six weeks for a temporary
absence from Australia or immediately if the recipient has permanently departed
Australia. The measure will commence from 1 July 2017 if the Act receives Royal
Assent before that date or from the first 1 January, 1 April, 1 July or 1 October after
the Bill receives Royal Ascent after 1 July 2017. It will apply to both recipients
already overseas and recipients departing Australia after this date.
From the commencement date, recipients of the Basic Amount of the Pension
Supplement currently overseas permanently will no longer receive the Pension
Supplement. Recipients who are currently overseas temporarily will be subject to the
six week rule. The Pension Supplement is a payment designed to assist income
support recipients with the cost of living in Australia. The Basic Amount of the
Pension Supplement is equivalent to the former GST Supplement.
Human rights implications
This measure has considered the human rights implications, particularly with
reference to the right to social security contained within article 9 of the International
Covenant on Economic, Social and Cultural Rights (ICESCR). It is concluded that
this measure does not place limitations on human rights.
This measure is not stopping a person from receiving a social security payment
where they meet domestic eligibility and qualification requirements, nor is it stopping
a person from moving freely within Australia or overseas (Article 12 and 13 of the
International Covenant on Civil and Political Rights).
Right to social security
This measure engages the right to social security contained in article 9 of the
ICESCR.
The right to social security requires that a system be established under domestic
law, and that public authorities must take responsibility for the effective
administration of the system. The social security system must provide a minimum
essential level of benefits to all individuals and families who meet the eligibility and
qualification requirements.
The change to the rate a recipient can receive after being outside Australia for more
than six weeks does not affect their ability to access social security within Australia.
This measure ensures that social security is appropriately targeted and that those
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outside Australia for any longer than a short absence are not inappropriately
renumerated.
Right to freedom of movement
This measure engages the right to freedom of movement, which is contained in
articles 12 and 13 of the International Covenant on Civil and Political Rights.
Pensioners will remain able to move freely, whether within Australia or overseas.
This Schedule reduces the period that the Basic Amount of the Pension Supplement
will be payable outside of Australia from indefinitely to six weeks for a temporary
absence from Australia or immediately if the recipient has permanently departed
Australia. This measure does not change the portability rules of social security
payments.
Conclusion
It is concluded that the measure does not place limitations on human rights. This
Schedule does not limit right to social security payments or freedom of movement.
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Schedule 11 - Automation of income stream review process
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of Schedule
This schedule will automate the regular income stream review process by requiring
income stream providers to electronically transfer an agreed dataset to the
Department of Human Services (DHS) on a regular basis.
The amendments made by this schedule are expected to create cost savings by
reducing regulatory and compliance costs and improving the efficiency of DHS'
service delivery. It is also expected that the amendments will improve the accuracy
of income support payments and reduce customer debts that arise when a customer
fails to inform DHS of changes in the amount of income received from income
streams, or when they do not inform DHS that they have commenced receiving an
income stream payment.
Human rights implications
The Schedule engages the following human 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 of
living conditions in Article 11 of the International Covenant on Economic,
Social and Cultural Rights.
The schedule will assist to improve the accuracy of income support payments to
people with income streams, and as a result reduce social security debts. It will also
reduce regulatory burdens for recipients and the industry.
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. Reasonableness in this context
incorporates notions of proportionality to the end sought and necessity in the
circumstances. The measure will automate the current income stream review
process by requiring income stream providers to electronically transfer a dataset to
the Department of Human Services on a regular basis, instead of the information
being sought via the income support recipient. The information will be solely for the
purpose of administering social security payments and reduce regulatory costs for all
parties.
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Conclusion
The amendments in the Schedule are compatible with human rights because they do
not limit access to social security.
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Schedule 12 - Seasonal horticultural work income exemption
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of Schedule
This amendment will provide two incentives aimed at increasing the number of job
seekers who undertake specified horticultural seasonal work, such as fruit picking.
The incentives will commence from 1 July 2017 and be trialled for 2 years. The
incentives are:
NSA and YA(o) recipients who have been receiving those payments continuously for
at least three months will have access to a Seasonal Horticultural Work Income
Exemption under which they will be able to earn up to $5,000 without it being
assessed under the social security income test. Qualification rules will be relaxed so
that recipients will continue to qualify for NSA and YA(o) while undertaking eligible
horticultural seasonal work.
Human rights implications
The amendments are consistent with supporting the right to social security.
The incentive that provides an additional financial reward to job seekers who
undertake seasonal work by way of a $5,000 social security income test concession
is entirely beneficial. It will not affect a person's right to social security. Payment
qualification rules will be relaxed so that recipients will continue to qualify for NSA
and YA(o) while undertaking eligible horticultural seasonal work. Job seekers who
undertake full-time seasonal work will not be required to fulfil other participation
requirements (such as looking for work etc.) while undertaking eligible seasonal work
and will not have to report to jobactive providers.
Conclusion
The amendments in the Schedule are compatible with human rights because they do
not limit access to social security.
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Schedule 13 - Ordinary waiting periods
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule amends the Social Security Act 1991 to extend and simplify the
application of the ordinary waiting period. The ordinary waiting period is a one-week
waiting period that currently applies to new claimants of newstart allowance and
sickness allowance. These new claimants must serve the waiting period before they
start payment, unless they are exempt or the waiting period is waived. The ordinary
waiting period reflects the general principle that people should support themselves
before seeking Government assistance and has existed since the first iteration of
these payments commenced in 1945.
The amendments in this Schedule seek to better promote self-support and
discourage a culture of automatic entitlement to income support by ensuring that the
waiting period is applied consistently and effectively across similar working age
payments.
Extend the ordinary waiting period to youth allowance (other) and parenting payment
This Schedule will extend the application of the ordinary waiting period to new
claimants of youth allowance (other) and parenting payment. Claimants of these
payments will be required to serve the one week ordinary waiting period before those
payments are payable, unless exempt or the waiting period is waived. The ordinary
waiting period will also continue to apply to new claimants of newstart allowance and
sickness allowance. This means that the rules governing when payment
commences will be more consistent across similar working age payment types. This
limitation is reasonable as it ensures more consistent access to similar working age
payments while maintaining the longstanding principle of self-support. Claimants
without the means to support themselves will have access to exemptions and
waivers.
Introducing additional evidentiary requirements to 'severe financial hardship' waiver
Under existing legislation, claimants can have their ordinary waiting period waived if
the Secretary is satisfied that they are in 'severe financial hardship'. A person is in
'severe financial hardship' if the value of their liquid assets is less than their
fortnightly rate of payment if they are single, or less than double their fortnightly
payment if they are partnered.
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This Schedule will tighten these waiver provisions by introducing an additional
requirement, in addition to severe financial hardship, that the person be experiencing
a 'personal financial crisis' and provide supporting evidence in order to have the
ordinary waiting period waived. The tightening of the severe financial hardship
waiver also acts as a discouragement for people to spend their resources on
non-essential items in order to obtain income support payments. These limitations
are reasonable as they ensure claimants use their own resources first, while still
enabling those who are in hardship due to extenuating circumstances to access
payments immediately.
A person may be taken to be experiencing a personal financial crisis if they have
been subjected to domestic violence or incurred unavoidable or reasonable
expenditure. Further, as the individual circumstances of people are many and
sometimes complex, it is not possible to envisage or legislate specifically in the
primary legislation to cover all circumstances. The use of legislative instruments
provides the Secretary or the Minister with the flexibility to refine policy settings to
ensure that the rules operate efficiently and fairly without unintended consequences.
The measure in this Schedule allows the Secretary (under the current Administrative
Arrangements Order, this means the Secretary of the Department of Social Services)
to prescribe, by legislative instrument, the circumstances which constitute a
'personal financial crisis' for the purposes of waiving the ordinary waiting period,
in addition to the circumstances set out in this Schedule.
This provision provides the Secretary with the flexibility to consider other
unforeseeable or extreme circumstances which may be identified in the future where
it would be appropriate for a person to have immediate access to income support.
Using an instrument will enable this to occur in a timely manner without having to
amend the primary legislation. This power can only be used beneficially and any
instrument made by the Secretary would be subject to Parliamentary scrutiny and
disallowance.
Other existing exemptions from the ordinary waiting period will also continue to be
available to claimants of the above payments who are:
reclaiming within 13 weeks of last receiving an income support payment; or
participating in certain employment services designed for vulnerable job
seekers with multiple barriers to work.
Removing the concurrent application of the waiting period
Currently, depending on individual circumstances, claimants may be able to serve
the ordinary waiting period concurrently with certain other waiting periods or periods
of reduced or non-payment. This may result in some claimants being treated more
beneficially than others.
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The Government acknowledges the increasing costs of the welfare system and
seeks to ensure that working age people first use their own resources before relying
on Government assistance. Exclusion periods, such as the income maintenance
period and liquid assets test waiting period, apply to certain working age income
support payments to enforce self-support for a period which is based on the person's
level of resources.
The amendments in this Schedule will remove the ability for claimants to serve the
ordinary waiting period concurrently with other waiting periods. This means the
ordinary waiting period will be served following the end of any other waiting periods,
including the liquid assets test waiting period, income maintenance period, seasonal
work preclusion period and newly arrived resident's waiting period.
The changes to the concurrency rules in this measure ensure that income support
payments are directed towards those in need.
Human rights implications
Right to social security
This Schedule engages the rights to social security contained in article 9 of the
International Covenant on Economic, Social and Cultural Rights (ICESCR).
The right to social security requires that a system be established under domestic
law, and that public authorities must take responsibility for the effective
administration of the system. The social security scheme must provide a minimum
essential level of benefits to all individuals and families that will enable them to cover
essential living costs.
The United Nations Committee on Economic, Cultural and Social Rights
(the Committee) has stated that a social security scheme should be sustainable and
that the conditions for benefits must be reasonable, proportionate and transparent
(see General Comment No.19).
Article 4 of ICESCR provides that countries may limit the rights such as to social
security in a way determined by law only in so far as this may be compatible with the
nature of the rights contained within the ICESCR and solely for the purpose of
promoting the general welfare in a democratic society. Such a limitation must be
proportionate to the objective to be achieved.
A central principle underpinning Australia's social security system is that support
should be targeted to those in the community most in need in order to keep the
system sustainable and fair. The amendments in this Schedule do not affect
eligibility for social security pensions or benefits, rather they affect the rules
governing when those eligible for certain payments can start receiving their
entitlements. The amendments focus on promoting self-support by requiring people
to meet their own living costs for a short period where they are able. New claimants
who need immediate financial assistance will still be able to access exemptions and
waivers provided they meet the relevant eligibility criteria. In this way, the
amendments help to ensure that immediate access to working age payments is
targeted to those most in need.
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To the extent that the changes in this Schedule may limit the right to social security,
those limitations are reasonable and proportionate to the policy objective of ensuring
a sustainable and well-targeted payment system.
Right to an adequate standard of living, including food, water and housing
This Schedule engages the right to an adequate standard of living, including food,
water and housing, contained in article 11 of the ICESCR. The right to an adequate
standard of living, including food, water and housing provides that everyone is
entitled to adequate food, clothing and housing and to the continuous improvement
of living conditions.
To the extent that there is an impact on a person's right to an adequate standard of
living, including food, water and housing, by virtue of this Schedule, the impact is
limited. The ordinary waiting period is a period of one week only during which those
claimants with the means to support themselves are expected to do so. Those who
are unable to accommodate their own living costs for that one week period because
they are in severe financial hardship and have experienced a personal financial crisis
will be able to have the waiting period waived.
Therefore, this Schedule is compatible with the right to an adequate standard of
living as the potential limitations on this right are proportionate to the policy objective
of encouraging self-support while providing a safety net as eligible people can be
exempted from serving the ordinary waiting period or can have the ordinary waiting
period waived.
Right to equality and non-discrimination
To avoid doubt, this Schedule is compatible with the right to equality and
non-discrimination contained in articles 2 and 26 of the International Covenant on
Civil and Political Rights (ICCPR).
Article 2(1) of the ICCPR obligates each State party to respect and ensure to all
persons within its territory and subject to its jurisdiction the rights recognised in the
Covenant without distinction of any kind, such as race, colour, sex, language,
religion, political or other opinion, national or social origin, property, birth or other
status (see CCPR General Comment No. 18).
Article 26 not only entitles all persons to equality before the law as well as equal
protection of the law, but also prohibits any discrimination under the law and
guarantees to all persons equal and effective protection against discrimination on
any ground such as race, colour, sex, language, religion, political or other opinion,
national or social origin, property, birth or other status (see CCPR General Comment
No. 18).
It is important to note, however, that not all differential treatment will be considered
discriminatory. The Committee has provided the following commentary on when
differential treatment will be considered discriminatory:
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Differential treatment based on prohibited grounds will be viewed as
discriminatory unless the justification for differentiation is reasonable and
objective. This will include an assessment as to whether the aim and
effects of the measures or omissions are legitimate, compatible with the
nature of the Covenant rights and solely for the purpose of promoting the
general welfare in a democratic society. In addition, there must be a
clear and reasonable relationship of proportionality between the aim
sought to be realised and the measures or omissions and their effects. A
failure to remove differential treatment on the basis of a lack of available
resources is not an objective and reasonable justification unless every
effort has been made to use all resources that are at the State party's
disposition in an effort to address and eliminate the discrimination, as a
matter of priority (CESCR, General Comment No. 20).
This Schedule will extend and simplify the application of the ordinary waiting
period. There will be no differential treatment on the basis of race, colour, sex,
language, religion, political or other opinion, national or social origin, property or birth
as the ordinary waiting period will apply equally to claimants of affected working age
income support payments.
As more than 90 per cent of parenting payment recipients are women, the changes
may more significantly impact on women in that regard. However, the changes are
reasonable and proportionate to achieving the legitimate objective of providing
consistency across similar working age payments by ensuring that all new claimants
meet their own living costs for a short period before receiving Government
assistance, where they are able.
The application of the ordinary waiting period to youth allowance (other) and
parenting payment, in addition to newstart allowance and sickness allowance, will
ensure that the waiting period is applied consistently to working age payments which
have a similar purpose. While the ordinary waiting period is not being extended to all
social security payments, this will not be a limitation on the right to equality and non-
discrimination as the differential treatment is for a reasonable and objective purpose.
The above working age payments are generally intended to be shorter-term
payments which provide support while also offering incentives to return to work.
Claimants of these payments are also more likely to be able to support themselves
for a time before needing income support as they may have transitioned from
employment or had other means of support. In contrast, pension payments, such as
age pension and disability support pension, provide longer-term support and are
designed to acknowledge ongoing barriers that make it difficult for claimants to
support themselves through paid employment. Additionally, claimants of student
payments generally have up-front expenses associated with their study which may
substantially reduce any means of self-support.
It is therefore reasonable and objective to apply an ordinary waiting period with
respect to the above mentioned types of working age payments to ensure that
claimants of these payments support themselves where they are able before calling
on the Government for income support. Claimants will be able to access exemptions
and waivers to receive assistance sooner, if they are eligible.
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For these reasons, this Schedule is compatible with the right of equality and
non-discrimination.
Conclusion
This Schedule is compatible with human rights. To the extent that it may have
limited adverse impact on a person's right to social security, an adequate standard of
living and equality and non-discrimination, the limitation is reasonable, proportionate
to the policy objective and for legitimate reasons.
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Schedule 14 - Age requirements for various Commonwealth
payments
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This measure proposes that young unemployed people aged 22 to 24 would no
longer be eligible for newstart allowance or sickness allowance until they turn 25
years of age and would, instead, be able to claim and qualify for youth allowance.
To enable this, youth allowance for all types of persons who can satisfy the activity
test, will be available to persons who have not yet reached 25. Youth disability
supplement will also be available to all youth allowance recipients who have not yet
reached 25. The amendments include safeguards to ensure that existing newstart
allowance recipients on commencement of the measure who are 22, 23 or 24
(or persons undergoing certain waiting periods or suspension periods) can remain in
receipt of newstart allowance. Similar savings rules are provided for sickness
allowance.
The measure also proposes to make consequential amendments to the Farm
Household Support Act 2014 to align rates at which farm household allowance is
paid, to farmers and their partners, with newstart allowance and youth allowance
rates.
Human rights implications
The measure engages the following human rights:
Right to social security
The measure engages article 9 of the International Covenant on Economic, Social
and Cultural Rights (ICESCR), which recognises the right of everyone to social
security.
The proposed measure broadly aligns the income support arrangements for all
young people aged under 25 years, with the objective of ensuring the social security
system supports and encourages young people in their transition from study to work.
The measure aims to provide rational incentives for young unemployed Australians
to acquire the required skills to obtain gainful employment by encouraging study,
particularly for young people who have been unsuccessful in gaining work.
Incentives are provided to persons aged 22, 23 or 24 who, as a result of this
measure, will no longer be able to qualify for newstart allowance. This is achieved
through the availability of a larger income free threshold compared to newstart
allowance, for those being paid for any work while in study or training.
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This measure also removes the incentive for young unemployed Australians to forgo
study in favour of moving to newstart allowance, which is paid at a higher rate than
youth allowance. This limitation is a reasonable and proportionate measure for the
achievement of that objective. The use of savings provisions for recipients already in
receipt of newstart allowance or sickness allowance immediately before
commencement (or others undergoing certain waiting periods or suspension
periods), ensures 22, 23 and 24 year olds already qualified for newstart allowance
and sickness allowance will not be affected by the amendments following
commencement until their payment is cancelled. The measure will also not modify
the age at which a person is regarded as 'independent' (currently 22 years) for youth
allowance. This will mean that persons above that age will continue to not be
subject to parental means testing.
Right to education
This measure engages article 13 of the ICESCR, which recognises the right of
everyone to education.
The proposed measure enhances and incentivises the acquiring of education and
skills for young people. It is designed to activate young unemployed youth (age 22
to 24) who are currently not in education or working. Enabling this cohort to qualify
for youth allowance rather than newstart allowance provides an incentive to obtain
the required training to place them in a position of improved employability. Youth
allowance has a higher income free threshold compared to newstart allowance,
enabling a greater scope to earn while learning or training.
Rights of persons with disabilities
This measure engages article 28 of the Convention of the Rights of Persons with
Disabilities, which recognises the right to an adequate standard of living and social
protection for those with disability. The proposal recognises the special
requirements of income support recipients with disability by raising the age of
qualification for the youth disability supplement (as paid as a component of youth
allowance) to 24 years.
Right to equality and non-discrimination
This measure engages the right to equality and non-discrimination contained in
articles 2 and 26 of the International Covenant on Civil and Political Rights (ICCPR).
The measure is aimed at achieving consistency across payments, as well as
encouraging young people to undertake or participate in education or training to
better ensure that they are able to achieve long term sustainable employment
outcomes.
Since 1998, there have been two different maximum ages for youth allowance - one
for full-time students and one for young unemployed people. Once a young person
passes the maximum age for youth allowance as a job seeker (currently 21) they
transition to newstart allowance, which is paid at a higher rate of payment.
For full-time students, however, the maximum age of eligibility for youth allowance is
24 years, with those aged 25 years or older eligible instead of austudy.
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Evidence suggests that education and training can play a significant role in
improving a person's chances of finding and maintaining employment, particularly for
young people. However, the higher rates of newstart allowance and sickness
allowance can act as an incentive for young people to stay on these payments
instead of pursuing full-time study or employment, or to give up study in order to
receive these payments. This measure achieves the dual objective of removing this
perverse incentive and achieving consistent eligibility criteria, by placing all under 25
year olds on the same payment level, whether they are unemployed or studying full-
time.
Australia's social security system is designed to be highly targeted and to provide for
different payments, rates and other settings that reflect the needs and circumstances
of different cohorts. For this reason, age-based eligibility criteria are already part of
a number of social security payments, including Youth Allowance as outlined above.
To the extent that this measure may limit the right to non-discrimination by affecting
only a particular age group, this is reasonable and proportionate to the objective of
ensuring that payment rates are aligned for young people aged under 25 with similar
needs and circumstances, irrespective of whether they are studying or looking for
work.
Conclusion
This measure is compatible with human rights because it generally advances human
rights including the opportunity for education and gainful employment. To the extent
that it may have any adverse impact on human rights, that impact is reasonable and
proportionate, and is for legitimate reasons.
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Schedule 15 - Income support waiting periods
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule implements an income support measure that forms part of the
broader Growing Jobs and Small Businesses package announced in the 2015
Budget. This measure aims to encourage greater participation in work through
establishing firm expectations for young job seekers. It provides an incentive for
affected persons to become self-reliant before relying on the taxpayer for support.
Waiting periods
The amendments made by this Schedule will apply to a job seeker if they are:
placed in stream A of the Employment Services 2015 model following
assessment using the Job Seeker Classification Instrument (JSCI); and
aged under 25 years; and
a new claimant for youth allowance (other) and, in certain circumstances,
special benefit. Special benefit recipients will not be required to serve another
waiting period if they transfer to youth allowance (other).
Such persons will be subject to an income support waiting period before the social
security benefit becomes payable.
This measure does not apply to full-time students or new apprentices.
Interaction with other waiting periods
The income support waiting period will be served prior to the one week ordinary
waiting period. Other waiting periods, such as the income maintenance period, liquid
assets test waiting period, or seasonal work preclusion period, will be served
concurrently with the income support waiting period, if they apply.
Exemptions
Exemptions from the income support waiting period will be made for:
job seekers in Streams B or C with a jobactive provider
Disability Employment Services participants
parents with 35 per cent or more care of a child, and
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young people in State care, or who have left State care within the past
12 months
people with an activity test exemption of 15 days or more - this will include
pregnant women in the six weeks before birth, and people testing their
eligibility for disability support pension, as well as victims of domestic violence
and people in special circumstances.
The Minister will also be able to determine other categories of exemption via a
legislative instrument.
Activity test and participation requirements
Job seekers will be required to comply with pre-benefit activities as part of 'Rapid
Connect Plus' (a separate Budget measure led by the Employment portfolio) during
the income support waiting period. These activities will include meeting with a
jobactive provider, agreeing to a Job Plan, developing an up-to-date resume,
creating a job seeker profile on the JobSearch website, and providing evidence of
satisfactory job search with a total of 20 job applications (with flexibility for job
seekers in poor labour markets).
Failure to complete these activities within 28 days from the date of application for
income support will result in the lapse of a job seeker's application for income
support. The job seeker will be required to re-apply, and subsequently comply with
the Rapid Connect Plus activity requirements over the course of a further four weeks
before any payment is made.
Job seekers will be eligible to participate in Work for the Dole as required by their
jobactive provider, with Stream A job seekers commencing Work for the Dole six
months after application for income support. Stream B and C job seekers will
commence Work for the Dole after 12 months. Job seekers will participate in Work
for the Dole for six months out of every 12 months thereafter.
Emergency relief
Around $8.1 million in additional funding will be available to Emergency Relief
providers to provide assistance for those impacted by the measure.
Special benefit
Inclusion of certain special benefit applicants is designed to prevent applicants who
would otherwise apply for youth allowance (other), applying and qualifying for special
benefit in order to avoid serving an income support waiting period. Failure to include
special benefit in the measure would provide a loophole which would effectively
defeat the purpose of the measure.
Human rights implications
This measure engages the following human rights:
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Right to work
Article 6 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises the right to work. This includes the right to the opportunity to
gain a living by work which the person freely chooses or accepts, and is considered
an inherent part of human dignity2.
This measure provides incentives for young unemployed Australians to either
acquire employment or the required skills to obtain gainful employment. As such,
this Schedule encourages affected persons to enter the workforce, or undertake
further study to enhance their employment prospects, rather than relying on the
social security system. This measure therefore seeks to ensure that more job
seekers experience the benefits of employment - for example, greater social and
economic inclusion.
Right to social security
Article 9 of the ICESCR recognises the right of everyone to social security.
The right to social security requires that a system be established under domestic
law, and that public authorities must take responsibility for the effective
administration of the system. The social security scheme must provide a minimum
essential level of benefits to all individuals and families that will enable them to cover
essential living costs.
Unemployment rates for young people have increased significantly since the global
financial crisis. As at June 2016, the youth unemployment rate was 13.1 per cent,
compared with an average total unemployment rate of 5.7 percent. The 2014 report
by the National Centre for Vocational Education Research, How young people are
faring in the transition from school to work, indicates that in 2012 more than a quarter
of 21 year olds were either not engaged or fully engaged in employment, education
or training. This measure seeks to address youth unemployment by establishing firm
expectations for young people to accept jobs or move into education and training
rather than relying on income support in the first instance.
The measure acknowledges the particular needs of vulnerable job seekers as well
as those who have been assessed as having significant barriers to work. To this
end, the following vulnerable and/or less job ready young job seekers will be exempt
from the measure: those who have 35 per cent or more care of a child; those who
have more significant barriers to employment and are placed in Streams B or C with
a jobactive provider; those who are in or have recently left state care; who have a
temporary activity test exemption; or whose disability qualifies them for Disability
Employment Services. The minister will also have the discretion, via a disallowable
instrument, to provide further exemptions from the measure for other classes of
people identified as vulnerable. Young people who are initially assessed as 'job
ready' (in Stream A of jobactive) but subsequently reassessed on the basis of new
information as requiring Stream B or C may receive back payment for any period of
the waiting period served while they were in Stream A. This will ensure that they
receive support for that period.
2
Committee on Economic, Social and Cultural Rights, General Comment 18, paragraphs 1 and 2.
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The specific targeting of this measure to young people who are job ready without
significant barriers to prevent them finding work will mitigate the risk of limiting a
person's right to social security.
Evidence also suggests that measures such as this one are most effective if
supported by an appropriate level of employment services, targeted at job seeker
deficits. Job seekers subject to a four week waiting period will continue to be
supported by the full range of programmes and assistance currently available under
jobactive to enable them to find employment. Job seekers will also be required to
participate in rapid activation activities designed to enhance their chances of moving
into work as quickly as possible. This measure also continues to provide access to
social security for those young people who elect to undertake full-time study or
training to further their employment prospects, with no waiting period applied for
access to student income support payments. Therefore the right to social security is
not removed and the limitation on immediate access to unemployment benefits is
reasonable and proportionate to the objective of having young people either earning
or learning as the targeted cohort are those who are job ready and this group will
continue to have access to broader supports to help them find and maintain a job.
The savings made by this measure will ensure that the broader social security
system is focussed on those who need it most, helping to promote general welfare in
a democratic society (consistent with article 4 of the ICESCR).
This measure will help to maintain the integrity of the social security system and
ensure finite resources are equitably allocated among genuine job seekers. To the
extent that this measure may limit the right to social security, the impact is
reasonable and proportionate for the reasons outlined above.
Right to an adequate standard of living
Article 11 of the ICESCR recognises the right of everyone to an adequate standard
of living and to the continuous improvement of living conditions.
The limitations imposed on the social security system by this measure, in focusing
on young persons, acknowledges that young persons often have access to family
support to enjoy an adequate standard of living. Income support data (as at
June 2016) shows that a majority of young jobseekers are receiving support from
their parents, with 54 percent of youth allowance (other) recipients considered to be
dependent on their parents for the purposes of calculating their rate of payment.
This indicates that a large proportion of affected recipients will have access to
external support in order to maintain an adequate standard of living.
To assist claimants experiencing hardship, the measure includes additional funding
for Emergency Relief providers to provide basic material aid to young people during
the four week waiting period. This assistance is not intended to provide assistance
to all young people affected by this measure. It is also not meant to meet affected
individuals' living costs during the waiting period. Assistance will vary according to
the needs and circumstances of the person.
In encouraging young persons to work or undertake further study, the measure also
acknowledges that the best way for a person to enjoy an adequate standard of living
is through entering the workforce. There is a connection between the limitation and
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the objective. The limitation of immediate access to unemployment benefits supports
that objective as the measure is targeted to those young people who are job ready
and able to support themselves through work.
Currently, claimants of social security payments may be subject to a range of waiting
and exclusion periods which operate on the basis that claimants should draw on their
own resources before drawing from taxpayer funded financial support. This
additional income support waiting period will be served concurrently with any other
applicable waiting periods (except the ordinary waiting period).
The limitation of the availability of income support is reasonable and proportionate as
the measure is targeted at those who are job ready and able to be self-supporting
through work and a large proportion of the targeted cohort will have access to
parental support and additional Emergency Relief funding will be available for those
in need.
Rights of persons with disabilities
Article 28 of the Convention on the Rights of Persons with Disabilities deals with the
adequate standard of living and social protection issues of those having a disability.
This measure recognises the special requirements of certain income support
recipients in such a situation by exempting job seekers with disability who qualify for
Disability Employment Services.
Right to equality and non-discrimination Article 2(2) of the ICESCR requires States
Parties to implement the rights contained within the ICESCR without discrimination
of any kind. Although this measure differentiates between those aged under 25 and
those aged 25 and over, this differential treatment is designed to address the
particular barriers that young people under 25 face compared with the general
population. Young unemployed people under 25 years have a significantly higher
rate of unemployment compared to the general population, with a large number in
the cohort also facing increased risk of social exclusion due to disengagement from
work and education. The targeting of this measure to those under 25 is specifically
aimed at addressing the risks for this particular cohort by providing incentives for
these young job seekers to pursue work or further education or training, which
evidence suggests will reduce their chances of becoming long-term unemployed.
Additionally, the measure is designed so that those subjected to a waiting period are
young enough to reasonably draw on family support to assist them during the waiting
period. Around 40 percent of young people on unemployment payments under 25
years of age are still living in the parental home compared to around seven percent
of those aged 25. This shows that the cohort targeted by this measure is more likely
to be drawing on family support and have secure housing than their older
counterparts and therefore may be less likely to face hardship while serving a waiting
period.
Additional funding for Emergency Relief providers acts as a further contingency plan
for those young people who need it.
To the extent that this measure may limit the right to equality and non-discrimination
by affecting only a particular age group, this is reasonable and proportionate in the
context of factors particular to this group such as higher youth unemployment rates,
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high rates of youth disengagement from employment, education and training, and
increased access to parental support.
Conclusion
This Schedule is compatible with human rights. To the extent that it limits rights, the
limitation is reasonable, proportionate to the policy objective and for legitimate
reasons.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Schedule 16 - Other waiting period amendments
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule implements the Rapid Activation for job ready job seekers aged under
25 years 2015 Budget measure, which aims to encourage greater participation in the
workforce by young job seekers. A job seeker who is subject to the new income
support waiting period (that is, 'job ready' job seekers under the age of 25) will not be
paid income support from the end of the waiting period if they do not complete
certain pre-benefit activities during that period. The job seeker will need to re-apply
if they wish to receive income support and a further income support waiting period
may commence.
This Schedule also provides that a job seeker who is a nominated visa holder can be
required to attend an interview and enter into an employment pathway plan if they
contact the Department about a claim for special benefit or the Department is
contacted on their behalf.
The amendments are outlined in further detail below.
Non-compliance with pre-benefit activities amendments
Job seekers affected by the amendments
The amendments made by this Schedule will only apply to those job seekers who
are:
aged under 25 years; and
a claimant for youth allowance who is not a full-time student or a new
apprentice (ie youth allowance (other)); or
a claimant for special benefit who is the holder of a class of visa nominated by
the Minister for Social Services; and
who are subject to the income support waiting period that will be established
by Schedule 3 to this Bill.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Schedule 3 to this Bill exempts certain classes of persons from the four week income
support waiting period. That Schedule would also allow the Minister for Social
Services, by legislative instrument, to exempt from the income support waiting period
persons assessed as requiring employment services or disability employment
services of a class determined by the Minister. It is intended that the legislative
instrument would determine classes of employment services or disability services
which would mean that the person is not 'job ready'. Specifically, it is intended that
those persons who are assessed as eligible for Streams B or C under jobactive or
assessed as requiring disability employment services (it is intended that all persons
receiving disability employment services will be exempt) will not be subject to the
four week income support waiting period. These persons, and persons who are
otherwise exempt from the four-week income support waiting period, will not be
affected by the amendments made by this Schedule as it only applies to persons
subject to the income support waiting period.
Pre-benefit activities
The pre-benefit activities required of a job seeker will be to meet with a jobactive
provider and agree to and comply with a Job Plan. The Job Plan will include
activities for the job seeker such as developing an up-to-date résumé, creating a job
seeker profile on the Job Search website and undertaking adequate job search.
These pre-benefit activities will be tailored to each job seeker's circumstances and
the amount of job search will be adjusted for job seekers in poor labour markets.
As the pre-benefit activities will only apply to those job seekers who have no
significant barriers to employment, there is no legitimate reason to expect that a job
seeker would not be able to complete the activities during the income support waiting
period.
Effect of non-compliance with pre-benefit activities
This Schedule provides that if a job seeker fails to comply with their pre-benefit
activities during the income support waiting period and does not have a reasonable
excuse, the Employment Secretary can determine that the job seeker's income
support is not payable after the income support waiting period. The Schedule also
provides that the job seeker will need to re-apply if they wish to receive income
support, in which case they may need to complete their pre-benefit activities over the
course of a further four weeks.
The effect of the Schedule is that income support is not payable after an income
support waiting period if the job seeker does not complete their pre-benefit activities
and does not have a reasonable excuse for not doing so (see below).
Reasonable excuse
There will be situations where a job seeker is not able to complete their pre-benefit
activities due to no fault of their own. The measure recognises this and the
Schedule provides that a job seeker can satisfy the Employment Secretary that they
have a reasonable excuse for not completing their pre-benefit activities. Where a
reasonable excuse is established the job seeker's income support is payable to them
after the end of the income support waiting period.
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Job seekers who have a reasonable excuse for not completing their pre-benefit
activities will be treated in exactly the same manner as those job seekers who
complete their pre-benefit activities.
The Schedule also provides that the Employment Secretary must, by legislative
instrument, determine matters that the Employment Secretary must take into account
in deciding whether a person has a reasonable excuse for not completing their
pre-benefit activities. There are currently two instruments under the social security
law that set out the matters the Secretary must take into account in deciding whether
a person has a reasonable excuse. They are the Social Security (Reasonable
Excuse-Participation Payment Obligations) DEEWR) Determination 2009 (No.1)
and the Social Security (Reasonable Excuse--Participation Payment Obligations)
(FaHCSIA) Determination 2009 (No.1). The matters in the two instruments are
identical. It is intended to combine these two instruments into a new, single
instrument and that this instrument will also apply to a decision by the Employment
Secretary as to whether a person has a reasonable excuse for the purposes of the
determination discussed above.
Requirement for certain special benefit claimants to enter into an employment
pathway plan when they contact the Department about a claim
Currently, a claimant for newstart allowance or youth allowance can be required to
attend an interview and enter into a Job Plan if they contact the Department of
Human Services about a claim or the Department is contacted on their behalf.
However, a special benefit claimant can only be required to enter into a Job Plan
once they have actually made a claim or are in receipt of payments.
This Schedule provides that the Secretary can also require a person who is a
nominated visa holder to enter into a Job Plan if they contact the Department of
Human Services about a claim or the Department is contacted on their behalf. This
amendment aligns the time at which a special benefit claimant can be required to
enter into a Job Plan with that of a claimant for newstart allowance or youth
allowance. The amendment is necessary to ensure that claimants for youth
allowance and special benefit are subject to the same rules regarding the time at
which they can be required to enter into a Job Plan, and where they are subject to
the income support waiting period required to complete pre-benefit activities.
Human rights implications
This Schedule engages the following human 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 of the ICESCR; and
• the right to work in article 6 of the ICESCR.
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Non-compliance with pre-benefit activities amendments
Right to social security and the right to an adequate standard of living
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 (as required by Article 2 of the ICESCR), 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.
Article 11 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 4 of the ICESCR provides that countries may only subject economic, social
and cultural rights to such limitations 'as are determined by law only in so far as this
may be compatible with the nature of these rights and solely for the purpose of
promoting the general welfare in a democratic society'. The Committee on
Economic, Social and Cultural Rights has stated that such limitations must be
proportional and the least restrictive alternative where several types of limitations are
available, and even where such limitations are permitted, they should be of limited
duration and subject to review.
This measure is only aimed at young persons who have been identified as 'job
ready' i.e. those who do not have a significant barrier to finding employment. By only
requiring those job seekers identified as 'job ready' to complete pre-benefit activities,
the measure acknowledges the particular needs of those job seekers who are not job
ready and other exempt job seekers. Job seekers who are not job ready will be
exempt from the income support waiting period under the proposed legislative
instrument under Schedule 3 to this Bill and will not be required to undertake
pre-benefit activities.
The intention of the amendments is to encourage young job seekers who are job
ready to make a genuine effort to find work by creating an incentive to undertake
their pre-benefit activities during the income support waiting period. The longer a job
seeker does not complete their pre-benefit activities the longer their income support
might be delayed, whereas undertaking those activities during the period will result in
payment of income support after the end of the period. It is appropriate that a young
job seeker who is job ready and who has claimed income support should actively
undertake their pre-benefit activities during their income support waiting period.
The right to social security is not removed by requiring job ready job seekers to
complete pre-benefit activities during their income support waiting period.
The measure encourages a job seeker who has no significant barriers to obtaining
employment to undertake activities that will assist them to obtain employment as
soon as they can.
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The measure does not limit a job seeker's right to social security if they complete
their pre-benefit activities during their income support waiting period, because
income support will be payable to them after that period if they do not find
employment in the meantime. Similarly, if a job seeker does not complete their
pre-benefit activities and has a reasonable excuse for not doing so, income support
will be payable to them. However, if a job seeker does not comply with their
pre-benefit activities and they do not have a reasonable excuse, they can be
required to serve a further income support waiting period if they wish to receive
income support.
To the extent that this measure may limit the right to social security, the impact is
reasonable and proportionate to the policy objective of having young people who
have no significant barriers to employment, undertaking activities that will increase
their employment prospects.
Encouraging young job seekers who have no significant barriers to employment to
undertake activities that will assist them to obtain work can influence a job seeker's
adequate standard of living3. The completion of pre-benefit activities improves the
job seeker's employability and their chances of finding and obtaining employment.
Moving a jobseeker off the social security system into the workforce improves the
jobseeker's standard of living, and helps maintain both the integrity and sustainability
of the social security system by ensuring that finite resources are allocated to those
in most need.
To the extent that the amendments would have an impact on the right to an
adequate standard of living, that impact is limited. The amendments would not in
themselves result in any non-payment of a job seeker's social security payment
where the job seeker complies with their pre-benefit activities during the relevant
income support waiting period or where they have a reasonable excuse.
The amendments would only have an impact on those job seekers who choose not
to complete their pre-benefit activities during an income support waiting period, as
these job seekers will not receive income support after the waiting period. Those job
seekers would need to re-apply for income support and potentially be subject to a
further income support waiting period. The impact on these job seekers is
reasonable and proportionate because, although these job seekers have no
significant barriers to obtaining employment, they have chosen not to engage with
the specialist employment services that are available to them and to do the activities
that will put them in a better position to obtain employment.
For the reasons above to the extent that the amendments may limit the right to social
security or the right to an adequate standard of living, the impact is necessary and
proportionate to the legitimate policy objective of encouraging greater work-force
participation and self-support for young job seekers who have no significant barriers
to employment.
3
The Statement of Compatibility with Human Rights to the Social Services Bill notes on page 12 that the limitations
imposed on the social security system by establishing the income support waiting period for job seekers under 25 and who
are job ready acknowledges that young people often have access to family support to enjoy an adequate standard of living.
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Right to work
Article 6 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises the right to work. This includes the right to the opportunity to
gain a living by work which the job seeker freely chooses or accepts and is
considered an inherent part of human dignity4.
The measure promotes the right to work by encouraging young unemployed
Australians under 25 who have been assessed as job ready to engage their right to
work by undertaking pre-benefit activities that are necessary to obtaining gainful
employment. Compliance by a job seeker with their pre-benefit activities places
them in an optimum position to seek and obtain gainful employment more quickly.
As such, this measure seeks to ensure that more young job seekers engage their
right to work and experience the benefits of employment sooner than might
otherwise be the case.
Requirement for certain special benefit claimants to enter into a Job Plan when
they contact the Department about a claim
Right to social security and the right to an adequate standard of living
The measure is aimed at persons who claim special benefit. The social security law
currently provides that persons who claim special benefit can be required to enter
into a Job Plan once they have made a formal claim for the benefit or are receiving
payments. The effect of the measure is that these persons can be required to enter
into a Job Plan earlier, that is, the time at which they first contact the Department of
Human Services about their benefit.
The existing provisions of the social security law, that a person who claims special
benefit must, unless they have an exemption from activity test requirements, comply
with the requirements in the Job Plan in order to receive income support, are not
affected by this measure.
The amendment is necessary to ensure that persons who claim special benefit and
who are subject to the four-week income support waiting period can be required to
undertake pre-benefit activities at the same time as a person who claims youth
allowance.
The right to social security and the right to an adequate standard of living are not
removed or limited by requiring a person who claims special benefit to enter into a
Job Plan at an earlier point in time.
4
Committee on Economic, Social and Cultural Rights, General Comment 18, paragraphs 1 and 2.
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Right to work
The measure promotes the right to work. The social security law currently provides
that special benefit claimants can be required to enter into a Job Plan once they
have made a claim for or are receiving payments and that they must comply with
their Job Plan in order to continue to receive income support. Entering into a Job
Plan is central to helping a job seeker find a job. The pre-benefit activities that will
be required, such as preparing a résumé and undertaking adequate job search,
enable a job seeker to realise their right to work. The measure will mean that a
special benefit claimant will realise their right to work earlier than would have been
the case and as such promotes the right to work.
Conclusion
This Schedule is compatible with human rights. To the extent that it limits rights,
the limitation is reasonable, proportionate to the policy objective and for legitimate
reasons.
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Schedule 17 - Adjustment for primary carer pay and other
amendments
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
The Paid Parental Leave Act 2010 provides for the Paid Parental Leave scheme,
a Government-funded payment that complements the entitlement to unpaid leave
under the National Employment Standards in the Fair Work Act 2009. The Paid
Parental Leave scheme currently consists of Parental Leave Pay, an 18 weeks
payment at the rate of the National Minimum Wage for eligible primary carers (mostly
birth mothers) of newborn and recently adopted children, and Dad and Partner Pay,
a two-week payment at the rate of the National Minimum Wage for eligible fathers or
partners caring for newborn or recently adopted children.
The Paid Parental Leave scheme was implemented with the objective of providing
financial support to primary carers (mainly birth mothers) of newborn and adopted
children, in order to:
allow those carers to take time off work to care for the child after the child's
birth or adoption;
enhance the health and development of birth mothers and children;
encourage women to continue to participate in the workforce;
promote equality between men and women, and the balance between work
and family life.
Currently, eligible primary carers can receive employer-provided primary carer pay5
and government-funded Parental Leave Pay. Under the amendments to the Paid
Parental Leave scheme, the maximum PPL period is increased from 18 to 20 weeks
to offset the fact primary carers will no longer receive both their employer-provided
primary carer pay and the full 20 weeks of government-funded Parental Leave Pay.
Similarly, persons will no longer receive Parental Leave Pay or Dad and Partner Pay
if the total days of the person's PPL period, any paid PC leave period or reference
period exceed 140.
5
Primary carer pay is an employer payment under the terms of an employee's employment payable because the
employee is expecting to give birth, or to be the primary carer for a child who has not yet turned one or who has
been adopted by the employee or entrusted to their care as part of an adoption process.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Eligible primary carers without access to employer-provided primary carer pay will
continue to be eligible for the full 20 weeks of Parental Leave Pay at the rate of the
National Minimum Wage, and eligible primary carers who receive less than 20 weeks
of employer-provided primary carer pay will be entitled to the residual amount of
weeks of Government-provided Parental Leave Pay. Additionally, eligible primary
carers whose employer-provided primary carer pay is paid at less than the National
Minimum Wage for their period of paid leave (for example, because they work
part-time) will receive a supplement for this period to ensure they receive the full
National Minimum Wage rate.
This will ensure that the Paid Parental Leave scheme continues to support parents
who would not otherwise have access to paid parental leave from their employer,
while enabling Government resources to be refocused on other complementary
measures to support working parents, including increased childcare support.
Eligible fathers and partners will continue to be eligible to receive two weeks of
Dad and Partner Pay and any employer-provided paid paternity leave, where the
total paid leave periods do not exceed 140 days.
This Schedule also makes amendments to the Parental Leave Pay work test to
modify the current rules for pregnant women in dangerous occupations and extend
the permissible break for employees who have a long work history but have breaks
between work that are greater than the currently permitted eight weeks.
Under the current Paid Parental Leave scheme rules, a person will meet the work
test where they have:
worked for at least 10 months of the 13 months prior to the birth or adoption of
their child;
worked for at least 330 hours in that 10 month period with no more than an
eight week gap between two working days.
The amendments in this Schedule will allow the work test period for a pregnant
woman in an unsafe job to be moved from the 13 months period prior to the birth of
their child to the 13 month period before the pregnant woman had to cease work due
to the hazards connected with her employment and the subsequent risk to her
pregnancy.
Further amendments in this Schedule provide for the permissible break in the Paid
Parental Leave Parental Leave Pay work test to be extended from eight weeks to
12 weeks between two working days. Currently, some people's access to
government funded Parental Leave Pay is limited because they have breaks
between employment of longer than eight weeks despite having a long term
established work pattern. This amendment addresses that issue.
The Schedule also makes amendments to the current suite of debt collection options
to allow for a Parental Leave Pay debt to be deducted from ongoing instalments of
government-funded Parental Leave Pay. This will mean that, where a debt is
created as a result of a variation in Parental Leave Pay entitlement, that debt can be
collected from remaining Parental Leave Pay instalments. This amendment will
create administrative efficiencies and will ensure that customers receive their correct
entitlements in a more streamlined manner.
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Human rights implications
The changes to the debt provisions included in this Schedule do not impact on
entitlement to Parental Leave Pay - they are designed to create administrative
efficiencies for the payment of the correct amount of Parental Leave Pay. This
change does not engage any human rights.
The other amendments to the Paid Parental Leave scheme under this Schedule are
likely to engage the following human rights:
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises 'the right of everyone to social security, including social
insurance'. That right requires a country to, within its maximum available resources,
provide a minimum essential level of benefits to all individuals and families that will
enable them to acquire at least essential health care, basic shelter and housing,
water and sanitation, foodstuffs, and the most basic forms of education.
Access to social security is required when a person has no other income and has
insufficient means to support themselves and their dependants. The amendments to
the Paid Parental Leave scheme will continue to ensure that all eligible working
parents receive appropriate financial assistance - at least 20 weeks of payment at
least at the rate of the National Minimum Wage from their employer, the Government
or a combination of both - to take time off work at the birth or adoption of their child.
Eligible parents who do not have access to employer-provided primary carer pay will
continue to be financially supported under the amendments to the Paid Parental
Leave scheme, fulfilling Australia's obligations to the right to social security.
Analysis of data from the Paid Parental Leave evaluation6 indicates that 53 per cent
of new parents will not be affected by this measure and therefore will not have their
right to social security limited in any way. Of the remaining parents, the number of
weeks of Government-provided Parental Leave Pay will be reduced in accordance
with the number of weeks of primary carer pay that they receive from their employer.
While this will result in a reduction in the support that they receive through the Paid
Parental Leave scheme, it does not mean that these parents will have insufficient
means to support themselves and their dependants. These new parents will have at
least the same amount of paid parental leave as those new parents who are
supported through the Paid Parental Leave scheme alone.
6
The analysis of the impact of the measure on Parental Leave Pay claimants used Paid Parental Leave
evaluation survey data that was undertaken as part of the overall Paid Parental Leave evaluation. The analysis
was based on responses from a two wave survey of over 4,000 mothers who had a baby in October or November
2011. Surveys were undertaken when the babies were about 7 months old and again when the babies were 13
months old. The impact assessment factored in incomes changes (i.e. incomes were increased to 2014-15
values). The estimates of numbers affected were derived by extrapolating information from Paid Parental Leave
evaluation survey data to the Paid Parental Leave population as a whole. The Paid Parental Leave evaluation
survey data was sample data that was nationally representative of Paid Parental Leave eligible mothers.
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The Paid Parental Leave scheme is just one of a significant package of financial
measures provided by the Australian Government to families, including low and
middle-income families, to assist with the costs of raising children. Other forms of
financial assistance available to eligible parents include Family Tax Benefit,
Parenting Payment, and childcare assistance.
Given this, and given the crucial objective to create savings to allow expenditure in
other key areas of benefit to families, this is a reasonable, necessary and
proportionate change.
Also, under this Schedule, the current work test rules will be amended to take into
account the circumstances of pregnant employees who are unable to continue in
their jobs because the nature of their employment presents a risk to their pregnancy
and there are no safe job alternatives available. Moving the work test period to the
13 months immediately before the pregnant woman ceased her work will enable her
to demonstrate her genuine attachment to the workforce and thereby extend access
to Government-funded Parental Leave Pay.
Additionally, the extension of the permissible break from eight weeks to 12 weeks
between two working days will extend access to the Paid Parental Leave scheme to
parents who systematically have breaks of more than eight weeks at the end of the
year but who have a long work history. Casual teachers and contract workers, in
particular, will benefit from this change.
These amendments to the work test and permissible break will enable more working
parents to be eligible for Government-funded Parental Leave Pay and, as a result,
promote the right to social security for parents in these situations.
Right to work and the right to maternity leave
Article 7 of the ICESCR sets out the right to just and favourable conditions of work,
including:
remuneration that provides all workers, as a minimum, with fair wages and
equal remuneration for work of equal value without distinction of any kind;
safe and healthy working conditions;
equal opportunity to be promoted in employment to an appropriate higher
level, subject to no considerations other than those of seniority and
competence; and
rest, leisure and reasonable limitation of working hours and periodic holidays
with pay, as well as remuneration for public holidays.
The UN Committee on Economic, Social and Cultural Rights has commented that
Article 7 of the ICESCR requires States Parties to take steps to 'reduce the
constraints faced by men and women in reconciling professional and family
responsibilities by promoting adequate policies for childcare and care of dependent
family members.'
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The right to maternity leave is contained within Article 11(2)(b) of the Convention on
the Elimination of All Forms of Discrimination Against Women (CEDAW) and
Article 10(2) of the ICESCR. Article 11(2)(b) of the CEDAW requires States Parties
'to introduce maternity leave with pay or with comparable social benefits without loss
of former employment, seniority or social allowances'. Article 10(2) of the ICESCR
states that, 'Special protection should be accorded to mothers during a reasonable
period before and after childbirth. During such a period working mothers should be
accorded paid leave or leave with adequate social security benefits.'
The amendment to the Paid Parental Leave scheme is compatible with the right of
parents to take time away from the workplace following the birth or adoption of their
child. The amendment will guarantee eligible working mothers receive a minimum
entitlement to paid maternity leave, equivalent to 20 weeks of payment at the rate of
the National Minimum Wage, to support them to take time off work after the birth or
adoption of their child. Eligible fathers or partners will continue to be eligible to
receive two weeks of Dad and Partner Pay at the rate of the National Minimum
Wage in addition to any employer-provided paid paternity leave, where the total paid
leave periods do not exceed 140 days.
The amendments do not interfere with the existing rights under the Fair Work Act
2009, including access to 12 months of unpaid parental leave, noting that Australia
has a reservation in relation to Article 11(2)(b) of the Convention on the Elimination
of All Forms of Discrimination Against Women.
The evaluation of the Paid Parental Leave scheme found that, following the
introduction of the Parental Leave Pay, higher income mothers did not significantly
change the amount of leave they took after the birth or adoption of their child. In
contrast, mothers who were on lower incomes, self-employed or casually employed
significantly extended the time they took off work after the birth of their child.7
Further analysis undertaken using the Paid Parental Leave evaluation survey data
shows that mothers with higher incomes were more likely to have access to
employer-provided primary carer pay. The analysis also shows that mothers who
were on lower incomes, self-employed or casually employed were less likely to have
access to employer-provided primary carer pay.
There is a substantial concern in the community and in Government that access to
affordable quality child care is a barrier to participation for many women. Increasing
workforce participation and, through this, opportunity, is a priority approach for all
working age people. As the safety net already provided by the scheme will remain in
place for women most in need, the measure is considered reasonable and
proportionate because it will contribute savings to be redirected to deliver other
measures considered in the community to be more effective ways of increasing
participation opportunity - and therefore the progressive realisation of rights.
As identified in the 2015 Intergenerational Report, increasing workforce participation
is a core priority for maintaining and improving standards of living.
7
Paid Parental Leave Evaluation, final report, pages 4-5, available at: https://www.dss.gov.au/our-
responsibilities/families-and-children/programmes-services/paid-parental-leave-scheme/paid-parental-leave-
evaluation-phase-4-report
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The modification of the work test takes into account the circumstances of pregnant
employees who are unable to continue in their job because the nature of their
employment presents a risk to their pregnancy and there are no safe job alternatives
available. This change to the work test ensures that mothers in these situations now
have access to Government-funded Parental Leave Pay so long as they meet all
other relevant eligibility criteria.
Similarly, the extension of the permissible break from eight weeks to 12 weeks
between jobs ensures that primary carers who previously failed the work test
because they exceeded the allowed eight weeks now have access to government
funded parental pay so long as they meet all other relevant eligibility criteria.
These amendments will enable more working parents to be eligible for Government-
funded Parental Leave Pay and as a result, promote the right to paid maternity
leave.
Right to health
Under Article 24(2)(d) of the Convention of the Rights of the Child (CRC), there is a
requirement that States Parties 'ensure appropriate pre-natal and post-natal health
care for mothers'. Article 10(2) of the ICESCR states that 'working mothers should
be accorded paid leave or leave with adequate social security benefits for a
reasonable period before and after childbirth'.
The amendments to the Paid Parental Leave scheme will continue to ensure that all
eligible working mothers receive appropriate financial assistance, equivalent to
20 weeks of payment at the rate of the National Minimum Wage, to take time off
work at the birth or adoption of their child for maternal recovery and to bond with
their child. Mothers may also be eligible for other Australian Government financial
assistance, including Family Tax Benefit, Parenting Payment, and childcare
assistance.
The modification of the Paid Parental Leave work test rules for pregnant employees
in unsafe jobs will ensure that mothers in these situations do not have to continue
working in these jobs to meet the work test for Government-funded Parental Leave
Pay. Under this amendment, pregnant mothers who are required to cease work due
to the hazardous nature of their work will now have access to Government funded
Parental Leave Pay so long as they meet all other relevant eligibility criteria.
This change promotes the pre-natal health of the unborn child and mother by
enabling a person to cease work when there are hazards in the workplace that pose
a risk to the pregnancy and there is no alternative safe job available and still be able
to satisfy the work test for Parental Leave Pay. The amendment will also promote
the post natal health of mothers in these circumstances by extending access to
Government-funded Parental Leave Pay which will enable them to take time out of
the workforce to care for their child and recover from the birth.
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The extension of the permissible break to 12 weeks will also ensure that claimants
who would previously have failed to meet the work test despite having a long work
history will now have access to appropriate financial assistance to take time off work
at the birth or adoption of their child for maternal recovery and to bond with their
child. This amendment, therefore, promotes the health of the mother and new child.
Rights to equality and non-discrimination
Article 3 of the ICESCR seeks to ensure the right of both men and women to the
enjoyment of all economic, social, and cultural rights set forth within the convention.
The amendments to the Paid Parental Leave scheme will ensure all eligible
working mothers are afforded the same right to paid maternity leave equivalent to
at least 20 weeks of payment at the rate of the National Minimum Wage.
Mothers who have access to employer-provided primary carer pay of at least 20
weeks at least at the National Minimum Wage will not be eligible for the
Government-provided Parental Leave Pay. On the other hand, eligible working
mothers who may not be in a strong position to bargain for access to employer-
provided primary carer pay, or who do not currently have a collective or individual
agreement with their employer to provide paid primary carer leave, will continue to
be able to receive the full 20 week entitlement to Government-funded Parental
Leave Pay. Eligible working mothers whose employer-provided primary carer pay
is less than the full 20 weeks of Government-funded Parental Leave Pay will
receive the residual amount in Government-funded Parental Leave Pay. The
amendment particularly promotes the right to equality for the last two groups of
working parents.
The changes detailed in the Fairer Paid Parental Leave Bill 2016 do not interfere
with the existing rights and protections under the Fair Work Act 2009, including
access to 12 months of unpaid parental leave. The continuation of the Paid
Parental Leave scheme remains a clear reminder that it is appropriate and
desirable to take time out from the workplace to care for a newborn or newly adopted
child.
Evening out the access to paid maternity leave is considered reasonable and
proportionate as it contributes savings to other measures that are beneficial to
women. Targeting expenditure remains an essential part of balancing the
distribution of available resources with the most effective measures for
addressing barriers and creating opportunity.
Conclusion
This Schedule is compatible with human rights and, to the extent that it may limit
certain human rights, those limitations are reasonable, necessary and proportionate.
It does not disturb the existing safety net, focuses support on those working women
who need it most, while assisting the Government to increase investment from within
available resources in measures such as better childcare support to more effectively
advance the relevant rights.
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Schedule 18 - Removal of parental leave pay mandatory employer
role
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule makes amendments to the employer role in the Paid Parental Leave
Act 2010. The amendments will remove the requirement for employers to provide
Government-funded Parental Leave Pay to their eligible long-term employees. From
the first 1 January, 1 April, 1 July or 1 October to occur 9 months after this Act
receives Royal Assent, with an earliest commencement date of 1 January 2018
employees will be paid directly by the Department of Human Services, unless an
employer opts in to provide Parental Leave Pay to its employees and an employee
agrees for their employer to pay them.
Human rights implications
The amendments to the Paid Parental Leave scheme under Schedule 18 are likely
to engage the following human rights:
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises the right of everyone to social security. This right requires
a social security system to be established and that States Parties must, within
their maximum available resources, 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.
Payments under the Paid Parental Leave scheme engage the right to social
security, and the amendments to the employer paymaster role under this Bill do
not limit the essential level of benefits required as part of that right.
Payments under the Paid Parental Leave scheme are currently considered to
provide an adequate social security benefit. The amendments in this Schedule do
not affect eligibility for Parental Leave Pay or the entitlement to paid or unpaid leave
from employment before or after the birth of the child. The amendments also do not
affect the rate of pay, which is consistent regardless of whether an employee's
Parental Leave Pay is paid by their employer or by the Department of Human
Services.
Under the amendments, in place of the current mandatory requirement that
employers pass on Parental Leave Pay to their long-term employees, employers and
employees would need to agree to this payment arrangement. Similarly, there will
still be capacity to make salary sacrifice deductions against Parental Leave Pay
payments where employers and employees agree.
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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
The ability to make deductions for salary sacrificing is unique to Parental Leave Pay
amongst all government payments, given the Parental Leave Pay employer
paymaster role. This policy allows employers to apply the same treatment to
Parental Leave Pay payments they administer on behalf of the Government as for
the payment of salary and wages, if they so wish and can afford to do so. The ability
for an employee to reduce the tax liability for their Parental Leave Pay payment
through salary sacrificing is not guaranteed even under current arrangements.
Therefore, there is no limitation to the right to social security as these amendments
do not limit this essential level of benefit or limit access to the scheme, and allow the
continuation of salary sacrifice arrangements where the employer opts in and
agrees.
Right to work and maternity leave
Article 7 of the ICESCR recognises the right of everyone to the enjoyment of just and
favourable conditions of work. This Article seeks to ensure fair and equal wages and
remuneration, safe and healthy working conditions, equal opportunity for promotion
in the workplace, and adequate access to rest, leisure, and periodic paid leave.
Article 10(2) of the ICESCR further states that, 'Special protection should be
accorded to mothers during a reasonable period before and after childbirth. During
such a period working mothers should be accorded paid leave or leave with
adequate social security benefit.'
In addition, Article 11 (2)(b) of the Convention to Eliminate All Forms of
Discrimination Against Women (CEDAW) requires States Parties 'to introduce
maternity leave with pay or with comparable social benefits without loss of former
employment, seniority or social allowances.'
Payments under the Paid Parental Leave scheme do not engage the right to just and
favourable conditions at work as they are a Government payment which is provided
on the basis of past labour force participation in addition to other non-work related
eligibility criteria. Access to Parental Leave Pay is not a condition of employment
and receipt of Parental Leave Pay through an employer does not ensure the
continuation of salary sacrifice deductions.
Despite the Paid Parental Leave scheme not engaging the right to just and
favourable conditions at work, access to the scheme encourages the continuing
participation of women in the labour force (either as an employee or in another
capacity such as self-employment). Generally, a working parent cannot work during
the Paid Parental Leave period if they wish to remain eligible for payment, however
limited participation is allowed through the use of 'keeping-in-touch' days.
The changes to the mandatory employer paymaster role do not limit the existing right
to access 12 months of unpaid parental leave, nor will the measure affect other
standards or protections contained within the Fair Work Act 2009.
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Right to equality and non-discrimination
Article 2 of the ICESCR recognises the right to non-discrimination based on race,
colour, sex, language, religion, political or other opinion, national or social origin,
property, birth or other status. Article 3 seeks to ensure the right of both men and
women to the enjoyment of all economic, social, and cultural rights set forth within
the convention.
As outlined above, the amendments do not limit the right to social security. As the
enjoyment of the right to social security is not limited by the amendments, this Bill
also does not limit the rights to equality and non-discrimination.
Conclusion
This Schedule is compatible with human rights as it promotes the protection of
human rights.
[Circulated by the authority of the Minister for Social Services,
the Hon Christian Porter MP]
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