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2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY LEGISLATION AMENDMENT (JOB SEEKER
COMPLIANCE) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment Participation and Childcare)
SOCIAL SECURITY LEGISLATION AMENDMENT (JOB SEEKER
COMPLIANCE) BILL 2011
GENERAL OUTLINE
This Bill implements the Government's election commitment to introduce tougher
rules for job seekers, which was announced on 11 August 2010 as part of the
"Modernising Australia's Welfare System" policy statement.
The amendments in this Bill will enhance the current job seeker compliance
framework by providing additional incentives for job seekers to engage with their
employment services providers and to participate fully in activities designed to
improve their employment prospects.
This Bill will introduce suspension of payment for job seekers following an initial
failure to attend an appointment or, in some circumstances, an activity such as
training or Work for the Dole. As soon as the job seeker agrees to attend this
appointment, their payment will be restored with full back payment. All job seekers
will be required to attend a rescheduled appointment, regardless of their reason for
missing the first appointment. If the job seeker attends the rescheduled appointment,
they will not be penalised.
If the job seeker does not attend the rescheduled appointment, payment will again be
suspended but this time, if they do not have a reasonable excuse for missing the
appointment, they will incur a reconnection failure and lose payment for each day
from the second missed appointment until they do attend a rescheduled appointment.
That is, there will be no back payment for this period.
The reconnection penalty will be deducted from the payment for the period in which
the job seeker was notified of the failure. This will ensure that the impact of the
penalty is more immediate and will provide a more direct deterrent than under current
legislation, which requires that the penalty amount be deducted from a later
instalment period.
Reasonable excuse provisions will also be tightened so that, even if a job seeker has a
reasonable excuse on the day for not attending an appointment or activity, it will not
be accepted if they could have given advance notice that they couldn't attend but
didn't do so.
FINANCIAL IMPACT STATEMENT
Departmental expenses associated with this Bill are to be absorbed.
Year Expense ($ million)
2011-12 $0.0
2012-13 $0.0
TOTAL: $0.0
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SOCIAL SECURITY LEGISLATION AMENDMENT (JOB SEEKER
COMPLIANCE) BILL 2011
For ease of description, this Explanatory Memorandum uses the following terms:
`Bill' means this Bill, i.e. the Social Security Legislation Amendment (Job Seeker
Compliance) Bill 2011.
`Administration Act' means the Social Security (Administration) Act 1999
Clause 1 - Short title
This clause provides for the Bill, when it is enacted, to be cited as the Social Security
Legislation Amendment (Job Seeker Compliance) Act 2011.
Clause 2 - Commencement
This clause inserts a three column table setting out commencement information for
various provisions of the Bill. Each provision of the Bill specified in column 1 of the
table commences (or is taken to have commenced) in accordance with column 2 of the
table and any other statement in column 2 has effect according to its terms.
The table has the effect of providing for clauses 1 to 3 and any other provisions of the
Bill not otherwise covered by the table to commence on Royal Assent; and for
Schedule 1 to commence the later of: the day after Royal Assent; and 1 July 2011.
A note makes it clear that these commencement times will not be amended by any
later amendments of the Bill.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to the Bill is
amended or repealed as set out in applicable items of the Schedule concerned, and any
other item in a Schedule to the Bill has effect according to its terms.
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Schedule 1 -Amendments
Social Security (Administration) Act 1999
Item 1 - At the end of section 42A
This item inserts a new dot point into the table in section 42A.
Section 42A contains a simplified outline of the items in Division 3A of Part 3 of the
Administration Act, that relates to compliance with obligations in relation to
participation payments. This Item will clarify that the Secretary may determine that a
participation payment is not payable to a person for certain failures.
This item is consequential to the amendments being made Item 14.
Item 2 - At the end of subsection 42C(4) (before the note)
This item inserts new paragraph (c) to the end of paragraph 42C(4) (circumstances in
which the Secretary may not determine that a person commits a no show no pay
failure). The new paragraph (c) will provide that the Secretary must not determine that
a person commits a no show no pay failure on a day if the day is in a reconnection
failure period for the person.
Currently, as a matter of policy, Centrelink does not determine no show no pay
failures for days in a person's reconnection failure period, and the current no show no
pay penalty amount for a failure on such a day is set by the Social Security
(Administration) (Penalty Amount) Determination 2009 (No. 1) at nil. However, the
amendment made by Item 2 will confirm the policy in the Act.
Items 4 and 18 - Paragraph 42E(2)(a); note to subsection 63(7)
Section 42E provides for when the Secretary may determine that a person commits a
connection failure. The connection failures are listed in subsection 42E(2) and, at
paragraph (a), includes where the person fails to comply with a requirement that was
notified to the person under subsection 63(2) or (4), and the notice did not inform the
person of the effect of section 64, which concerns the consequences of failing to
comply with a requirement.
As part of the `Tougher Rules for Job Seekers' policy, where a person fails to comply
with a mandatory requirement to attend an appointment or activity, their payment may
be suspended and a connection failure may be applied. Notices imposing mandatory
requirements on people will provide warning of the consequences of failure to
comply. Hence, a notice issued under subsection 63(2) or (4) of the Administration
Act imposing a requirement on a person to attend an appointment etc. will contain a
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warning that failure to comply with it could result in payment suspension (under
section 64) and could also constitute a connection failure (under section 42E).
Therefore, there is a need to amend paragraph 42E(2)(a) to ensure that failure to
comply with a notice issued under section 63 that warns of payment suspension
(under section 64) can also constitute a connection failure.
As a further consequence, Item 18 deletes the note under subsection 63(7) that
stipulated that failure to comply with a section 63 notice that did not contain a
warning of suspension under section 64 could result in a connection failure.
Item 6 - Section 42G
Item 6 repeals and replaces section 42G (reconnection requirements).
Section 42G currently provides that if the Secretary determines that a person commits
a connection failure, then the Secretary may require the person to comply with a
requirement (a reconnection requirement).
The new subsection 42G will expand the circumstances in which the Secretary will be
able to issue reconnection requirements. Paragraph (a) replicates the current section
42G, but the Secretary no longer needs to find a connection failure (including that the
person did not have a reasonable excuse for the failure) before issuing a reconnection
requirement. Instead, so long as the Secretary considers that a person has failed to
participate in an activity or attend an appointment mandated by their employment
pathway plan (EPP), or has failed to comply with a requirement under a section 63
notice - whether or not the person has a reasonable excuse for the failure - the
Secretary can issue the person with a reconnection requirement.
In the case that the Secretary has suspended a person's payment for a failure to
comply with a requirement in the person's EPP, the Secretary must issue the person
with a reconnection requirement (s 42G(e)), as the usual way in which such a
suspension will be lifted will be by the person telling the Secretary that they intend to
comply with the reconnection requirement (see Item 14).
Item 8 - Subsection 42H(5)
This item will remove the words `provided that the penalty amount may not be
deducted until at least the instalment after the first instalment made following
notification to the person of the reconnection failure' from subsection 42H(5).
Section 42H deals with reconnection failures. A reconnection failure will occur where
a person fails to comply with a reconnection requirement without a reasonable excuse
and will result in the imposition of a penalty amount.
Currently, subsection 42H(5) provides that the Secretary must include in a
determination under this section the instalment period in which a penalty amount for
the reconnection failure is to be deducted from the person's instalment of a
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participation payment; however, the penalty amount may not be deducted until at least
the instalment after the first instalment made following notification to the person of
the reconnection failure.
The result is that a penalty amount for a reconnection failure will typically not be
deducted until at least 15 days after the reconnection failure, and frequently much
longer. This means that the deduction is so far removed from the failure that it has lost
its impact as a sanction, and penalised job seekers are confused as to why their
payment is lower than it would normally be.
This amendment will allow for any loss of payment as a result of a reconnection
failure to be deducted from a person's income support payment immediately. The
intention of this amendment is to ensure that the impact of the loss of payment is more
immediate and therefore provides a stronger and more direct deterrent for the
reconnection failure.
Items 9, 10 and 11 - Section 42J
Section 42J empowers the Secretary to issue further reconnection requirements.
Currently, the Secretary is only able to do so if she finds that a person has committed
a reconnection failure without a reasonable excuse or has failed to comply with an
earlier further reconnection failure. Insofar as the Secretary can give a person a further
reconnection requirement for failure to comply with an earlier further reconnection
requirement, the Secretary can do so even if the person has reasonable excuse for the
failure (current subsection 42J(2)).
The amendments to section 42J made by Items 9, 10 and 11 modify the basis on
which the Secretary can give a person a further reconnection requirement. As for the
amendments made to section 42G by Item 6, the principle is that a further
reconnection requirement can be issued to a person merely because the person has
failed to do something they were required to do, irrespective of whether the person
has a reasonable excuse. So, in proposed section 42J, the Secretary will be able to
issue a further reconnection requirement to a person who has failed to comply with a
reconnection requirement or earlier further reconnection requirement, and will not
have to consider whether the person has a reasonable excuse for the failure.
Thus, the Secretary can impose a further reconnection requirement on a person
without having to apply a reconnection failure, which is currently required. The
Secretary will still be required to determine whether a reconnection failure should be
applied and a reconnection penalty amount deducted from the person's payment, and
reasonable excuse will be relevant to this question.
Items 12 and 13 - Section 42K
Section 42K lists what the Secretary must notify a person about when imposing a
reconnection requirement or further reconnection requirement on the person, and
when that notice must be given.
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Items 12 and 13 amend section 42K to achieve two purposes. First, since the
consequence of a person failing to comply with a reconnection requirement or further
reconnection requirement can be either or both payment suspension (under new
section 42SA) and deduction of a reconnection penalty amount (under existing section
42L), subsection 42K(1) is amended it provide that a reconnection or further
reconnection requirement must be accompanied by notice of both potential
consequences.
Second, current subsection 42K(2) provides that the reconnection or further
reconnection requirement cannot occur before the day on which notice of the
requirement is given to the person. Item 13 removes the words `the day' from
subsection 42K(2). The effect of this amendment is that the notification will not need
to occur before the day the requirement occurs. Instead, notice of a requirement will
only need to occur before the requirement must be complied with. This will allow
greater flexibility as to when the notice can be issued requiring a person to comply
with a reconnection requirement or further reconnection requirement as the
notification of the requirement and the requirement will be able to occur on the same
day. This is particularly beneficial in remote areas, where a job seeker may only be in
town to see Centrelink and their employment services provider every few weeks,
allowing Centrelink to give the job seeker a reconnection requirement that requires
them to attend an appointment with the provider on the same day.
Item 14 - After subdivision E of Division 3A of Part 3
This item inserts new subdivision EA, consisting of section 42SA. The new section
establishes a key component of the new compliance regime for job seekers, that of
payment suspension for failure to attend an appointment or activity.
New subsection 42SA(1) allows the Secretary to determine that a participation
payment is not payable to a person if:
· the person fails to participate, on a day, in an activity that the person is required to
undertake by an employment pathway plan that is in force in relation to the person
(new paragraph 42SA(1)(a)); or
· the person fails to attend an appointment that the person is required to attend by an
employment pathway plan that is in force in relation to the person (new paragraph
42SA(1)(b)); or
· the person fails to comply with a reconnection requirement or a further
reconnection requirement (new paragraph 42SA(1)(c)).
There are two notes at the end of this section. Note 1 provides that if new paragraph
42SA(1)(a) or 42SA(1)(b) apply, a reconnection requirement must be imposed for that
failure (see section 42G). Note 2 clarifies that the participation payment may not be
payable to the person, as per section 64, if the person fails to comply with a notice
under section 63.
New subsection 42SA(2) provides for the period for which the participation payment
is not payable where new subsection (1) applies. A participation payment is not
payable from the day on which the person first commits the failure referred to in
subsection (1). Where the Secretary decides that the person's payment is not payable
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under subsection (1), the Secretary will give the person a reconnection requirement
(see new section 42G). Typically, a person's period of non-payability will end when
the person notifies the Secretary of their intention to comply with the reconnection
requirement (new paragraph 42SA(2)(a)). However, the Secretary can end the period
of non-payability on an earlier day (including the day on which it started) if satisfied
that another day is more appropriate.
New subsection 42SA(3) provides that, if the period of non-payability ends under
subsection (2), then (subject to the social security law), the payment becomes payable
to the person for that same period. In effect, the person becomes entitled to back-pay
for the period that their payment was suspended. Note, however, that the entitlement
to payment for the period is subject to the rest of the social security law - which
means that the payment may not be payable for another reason (for example, because
the person ceased to qualify for the payment, or earned income sufficient to reduce
their rate of payment to nil). It is intended that, in order to remain eligible to receive
back payment during the period of non-payability the person should continue to meet
all qualification criteria during that period, including meeting any applicable activity
test or participation requirements.
Items 3, 5, 7, and 15 - Job seekers to given prior notice of reasonable excuse
Item 15 inserts new section 42UA. The purpose of this item is to motivate job seekers
to give prior notice of any excuse they may have not to attend a mandatory
appointment, contact or activity.
The effect of the section is to provide that, when the Secretary is determining whether
a job seeker has a reasonable excuse for any of the failures mentioned in new
subsection (1), an excuse cannot be a reasonable excuse unless the job seeker has
notified a specified person (`contact person') of that excuse prior to the appointment,
contact or activity to which the failure relates. That is, in order to avail him- or herself
of a reasonable excuse for failing to attend an appointment, make a contact, or attend
an activity on a particular day, a job seeker must tell the relevant contact person of
their excuse before the appointment, contact or activity, as the case may be. The
contact person will be specified in the notice given to the job seeker, or EPP signed by
the job seeker, that imposes the requirement to attend the appointment, make contact,
or participate in the relevant activity.
Note that the Secretary can still consider a person's excuse to be a reasonable excuse
in the absence of prior notice of the excuse being given by the person, if the Secretary
is satisfied that there were special circumstances in which it was not reasonable for
the person to give prior notification.
Items 3, 5 and 7 simply amend notes to other provisions in Division 3A of Part 3
(subsection 42C(4), 42E(4) and 42H(3) respectively) to point out to readers that, when
considering reasonable excuse under those provisions, regard should be had to the
effect of new section 42UA.
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Item 16 - After section 42Y
This item inserts new section 42YA that provides that no subdivision of Division 3
limits any other subdivision in Division 3. This is a technical amendment that is
intended to clarify that simply because one subdivision of provides for something
(say, the issue of a notice, or the imposition of a sanction), no implication can be
drawn that another subdivision is limited in providing for that or something similar. In
particular, suspension of payment under subdivision EA can be done whether or not
reconnection failures are found and reconnection penalty amounts deducted, and vice-
versa.
Item 17 - Subdivision G of Division 3A of Part 3
This item repeals Subdivision G of Division 3A of Part 3, i.e. section 42ZA. This
subdivision is being repealed as the review mentioned in this subdivision has been
completed, and the report of that review tabled and published, and the subdivision is
therefore no longer required.
For further information, see Independent Review of the Job Seeker Compliance
Framework at:
http://www.deewr.gov.au/Employment/ComplianceReview/Pages/ComplianceReview
.aspx
Item 19 - Paragraph 64(1)(e)
This item inserts the words `except if the person is receiving, or has made a claim for,
a participation payment' into paragraph 64(1)(e).
Subsection 64(1) provides that a payment that a person is receiving or has claimed is
not payable where the circumstances listed in that subsection exist. This includes, at
paragraph 64(1)(e) the circumstance where the Secretary is not satisfied that the
person has a reasonable excuse for not complying with the requirement.
The effect of this amendment is to enable the Secretary to decide that a person's
participation payment is not payable for failure to comply with a requirement imposed
under a section 63 notice without first having to consider whether the person had a
reasonable excuse for that failure. This amendment is tied to the introduction of the
new section 42SA, that enables the Secretary to decide that a person's participation
payment is not payable for the failures listed in new subsection 42SA(1), irrespective
of reasonable excuse.
As for new section 42SA, where the Secretary determines that a person's payment is
not payable under section 64, the Secretary will issue the person with a reconnection
requirement (under the new section 42G), and will resume payment and provide back-
pay (under subsection 63(4)) when the person tells the Secretary that he or she intends
to comply with the requirement.
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Item 20 - Application
This item inserts application provisions for the amendments contained in this bill.
Subitem (1) provides that the amendments made by Items 2 and 8 apply in relation
determinations made on or after the commencement of those items. The effect of this
provision is to:
· prevent, from commencement, no show no pay failures being determined
during reconnection failure periods, even if the no show no pay failure, or
reconnection failure period, or both, occurred prior to commencement; and
· enable, from commencement, reconnection failure penalty amounts to be
deducted from a person's instalment of participation payment as soon as
possible, even if the reconnection failure or the determination of failure
occurred before commencement.
Subitem (2) provides that the amendment made by Item 4 applies in relation to
notifications made on or after the commencement of that item. The effect of this
provision is prevent connection failures being determined, after commencement, for
failure to comply with section 63 notices issued before commencements that informed
the person of the effect of section 64 (i.e. suspension of payment).
Subitem (3) provides that reconnection requirements given under section 42G as in
force prior to commencement have effect on and after commencement as if they had
been given under the new section 42G. That is, reconnection requirements issued
before commencement are "saved" despite the repeal and re-making of section 42G
by Item 6, and are dealt with under the new provisions as if they were issued under
the new section 42G.
Subitem (4) provides that paragraphs 42G(b), (c) and (d) of the Social Security
(Administration) Act 1999, as amended by this Act, apply in relation to failures that
are first committed on or after the commencement of this item (whether the
requirements arose before, on or after that commencement). The effect of this
provision is to allow, from commencement, reconnection requirements to be given for
the failures to meet requirements mentioned in paragraphs 42G(b), (c) and (d), even if
the requirements to which the failures relate were given before (or on or after)
commencement.
Subitem (5) provides that the amendments made by Items 9, 14, 15 and 19 apply in
relation to failures that are first committed on or after the commencement of those
items (whether the requirements arose before, on or after that commencement). The
effect of this provision is to:
· enable, from commencement, the giving of further reconnection requirements
for failures to comply with reconnection requirements or earlier further
reconnection requirements that occur on or after commencement, even if the
reconnection or earlier further reconnection requirements to which the failures
relate were given before (or on or after) commencement;
· enable, from commencement, suspension of payment under new section 42SA
or section 64 for failures to comply with relevant requirements that occur on
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or after commencement, even if the relevant requirements to which the failures
relate were given before (or on or after) commencement;
· mandate1, from commencement, prior notification of excuses for failures that
occur on or after commencement even if the relevant requirements to which
the failures relate were given before (or on or after) commencement.
Subitem (6) provides that the amendments made by Items 12 and 13 apply in relation
to requirements imposed under section 42G or 42J of the Social Security
(Administration) Act 1999 on or after the commencement of those items. The effect of
this provision is to require all reconnection and further reconnection requirement
notices given from commencement to comply with the new section 42K. However,
reconnection and further reconnection requirements given before commencement will
remain valid after commencement even if they do not comply with the new section
42K.
1
This is short-hand for ease of understanding. Of course, new section 42UA does not actually mandate
prior notification of excuses. Rather, it provides that an excuse will not be a reasonable excuse unless
prior notification of the excuse is given.
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