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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SERVICES LEGISLATION AMENDMENT (SEASONAL WORKER
INCENTIVES FOR JOBSEEKERS) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Christian Porter MP)
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SOCIAL SERVICES LEGISLATION AMENDMENT (SEASONAL WORKER
INCENTIVES FOR JOBSEEKERS) BILL 2017
Outline
This 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. This change will be trialed for 2 years, commencing 1 July 2017.
Financial Impact Statement
This measure has an estimated impact on the underlying cash balance over the
forward estimates (2016-17 to 2019-20) of -$27.5 million.
STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
explanatory memorandum.
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SOCIAL SERVICES LEGISLATION AMENDMENT (SEASONAL WORKER
INCENTIVES FOR JOBSEEKERS) BILL 2017
NOTES ON CLAUSES
Clause 1 sets out how the new Act is to be cited - that is, as the Social Services
Legislation Amendment (Seasonal Worker Incentives for Jobseekers) Act 2017.
Clause 2 provides a table setting out the commencement date of the various
sections in, and Schedule to, the new Act.
Clause 3 provides that legislation that is specified in a Schedule is amended or
repealed as set out in that Schedule.
Schedule 1 - Amendments
Summary
This Schedule makes amendments to provide a social security income test incentive
aimed at increasing the number of job seekers who undertake specified seasonal
horticultural work, such as fruit picking. These changes will be trialed for 2 years,
commencing 1 July 2017.
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. Eligible job seekers who
participate in the second year of the trial will have access to the $5,000 income test
concession for up to 12 months from when they enter the trial. Hence the repeal
provisions in Part 3 take effect on 1 July 2020.
Newstart allowance (NSA) and youth allowance jobseeker (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.
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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 2014
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 1986
to ensure that the new seasonal horticultural work income exemption also applies to
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 are to the Social Security Act 1991 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.
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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.
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.
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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
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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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 (SEASONAL WORKER
INCENTIVES FOR JOBSEEKERS) BILL 2017
Schedule 1 - 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 Schedule
Amendments are made to 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.
[Circulated by the authority of the Minister for Social Services,
the Hon Christian Porter MP]
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