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2002
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
FAMILY AND COMMUNITY SERVICES LEGISLATION
AMENDMENT (SPECIAL BENEFIT ACTIVITY TEST) BILL
2002
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for
Family and Community Services,
Senator the Hon Amanda
Vanstone)
FAMILY AND COMMUNITY SERVICES LEGISLATION
AMENDMENT (SPECIAL BENEFIT ACTIVITY TEST) BILL 2002
As part of the 2000-2001 Budget, the Government announced a range of measures
addressing the issue of unauthorised arrivals. One such measure, provided for
in this Bill, deals with the extension of activity testing to holders of visas
issued for temporary protection, humanitarian or safe haven
purposes.
From 1 January 2003, holders of specified visas issued for
temporary protection, humanitarian or safe haven purposes will be subject to an
activity test regime that is similar to that which currently operates in
relation to newstart allowees.
Under the new activity test arrangements
for recipients of special benefit, a holder of a temporary protection,
humanitarian or safe haven visa may be required to search for work, to
participate in vocational training and other prescribed activities, and to enter
into a Special Benefit Activity Agreement. The person would also be subject to
compliance testing (for example, fortnightly reporting requirements) and
penalties for non-compliance with the activity test or with the terms of a
Special Benefit Activity Agreement.
Other newstart allowance conditions
relating to industrial action, seasonal work and moving to an area of lower
employment prospects will also apply.
These new activity test
arrangements will apply to holders of visas issued for temporary protection,
humanitarian or safe haven purposes who, from 1 January 2003, apply
for special benefit and are of work-force age or who are receiving special
benefit and reach work-force age after that date. The new conditions will not
apply to temporary protection, humanitarian or safe haven visa holders who are
permanently incapacitated for work. Provisions will also provide for exemptions
from the activity test where a temporary protection, humanitarian or safe haven
visa holder has caring responsibilities, is temporarily incapacitated for work,
or in special circumstances and other prescribed situations, similar to newstart
allowance.
The legislation affected is the Social Security Act 1991
and the Social Security (Administration) Act
1999.
Financial Impact:
Expense
($m)
|
|
2002-03
|
2003-04
|
2004-05
|
2005-06
|
|
Department of Family and Community Services
|
0.2
|
0.4
|
0.5
|
0.1
|
|
Centrelink
|
-0.4
|
-0.3
|
-0.3
|
0.0
|
Date of effect:
Schedule 1 commences on 1 January
2003.
Schedule 2 commences immediately after the commencement of Schedule
5 to the Family and Community Services Legislation Amendment (Australians
Working Together and Other 2001 Budget Measures) Act 2002.
The Bill also makes minor technical amendments as a result of the
enactment of the Youth Allowance Consolidation Act 2000.
The
legislation affected is the A New Tax System (Family
Assistance)(Consequential and Related Measures) Act (No. 2) 1999 and the
Family and Community Services Legislation Amendment (1999 Budget and Other
Measures) Act 1999.
Financial impact: These changes have no financial
implications.
Date of effect:
Item 1 of Schedule
3 is taken to have commenced on 8 July 1999.
Item 2 of Schedule 3 is
taken to have commenced on 6 July 2000.
Item 3 of Schedule 3 is taken to
have commenced on 10 December 1999.
FAMILY AND COMMUNITY SERVICES LEGISLATION
AMENDMENT
(SPECIAL BENEFIT ACTIVITY TEST) BILL 2002
Clause 1 sets out how the Act is to be cited, that is, the
Family and Community Services Legislation Amendment (Special Benefit Activity
Test) Act 2002.
Clause 2 provides a table that sets out the
commencement dates of the various sections in and Schedules to the
Act.
Clause 3 provides that each Act that is specified in a
Schedule is amended or repealed as set out in that Schedule.
For ease of
description, this explanatory memorandum uses the following
abbreviations:
“Social Security Act” means the Social
Security Act 1991; and
“Administration Act” means the
Social Security (Administration) Act 1999.
The social security law is amended by this Bill to require holders of certain
specified visas issued for temporary protection, humanitarian or safe haven
purposes (‘nominated visa holders’) to satisfy the activity test and
other newstart allowance conditions (relating to industrial action, seasonal
work, and moving to an area of lower employment prospects).
Under the
special benefit activity test, nominated visa holders will be required to search
for work, participate in prescribed activities (such as the Work for the Dole
program), and to enter into Special Benefit Activity Agreements. Nominated visa
holders will also be subject to compliance testing (eg fortnightly reporting),
and to penalties for non-compliance with the activity test or with the terms of
a Special Benefit Activity Agreement.
This measure will only apply to the
holders of visas issued for temporary protection, humanitarian or safe haven
purposes who, from 1 January 2003, apply for special benefit and are of
work-force age, or who are receiving special benefit and reach work-force age
after 1 January 2003. The new conditions will not apply to temporary
protection, humanitarian or safe haven visa holders who are permanently
incapacitated for work. Provisions will also provide for exemptions where a
nominated visa holder has caring responsibilities or is temporarily
incapacitated for work, or in special circumstances and other prescribed
situations.
On 20 October 1999, the Government introduced the Temporary Protection Visa
(Subclass 785) for unauthorised arrivals to Australia who are determined to be
refugees. In September 2001, two new visa types were introduced that may
also be issued in respect of unauthorised arrivals– the Secondary Movement
Offshore Entry (Temporary) Visa (Subclass 447) and the Secondary Movement
Relocation (Temporary) Visa (Subclass 451). These visas are all issued for
humanitarian, temporary protection and safe haven purposes.
Under the
social security law, holders of these classes of visas can only access special
benefit and family related payments.
The Bill aims to encourage social
and economic participation by treating nominated visa holders of work-force age
in a similar way to Australian nationals of work-force age by requiring them to
be self-reliant and to fulfil a mutual obligation to the Australian community.
The measure also reinforces community support for the humanitarian immigration
program.
Explanation of changes
Items 1 and 2 of Schedule 1 amend the seasonal work
definitions contained at section 16A of the Social Security Act by
including references to special benefit at paragraphs 16A(3)(b) and
16A(4)(b). These changes ensure that a seasonal work preclusion period will
apply where a person claims special benefit and the person (and/or the
person’s partner) was engaged in seasonal work at any time during the six
months immediately prior to the day on which the person claims special benefit.
New section 745M (inserted by Item 25) would then apply to ensure
that special benefit is not payable to such a person where that
person is a ‘nominated visa holder’ for the duration of the seasonal
work preclusion period.
Item 14 inserts a definition of
‘nominated visa holder’ at subsection 23(1) of the Social Security
Act. This definition provides that a ‘nominated visa holder’ is a
person to whom the special benefit activity test applies.
The new special
benefit rules relating to seasonal work are consistent with the seasonal work
rules applicable to newstart allowance.
Items 3 to 9 amend various
provisions at section 19C of the Social Security Act. Section 19C defines
‘severe financial hardship’ for the purposes of the seasonal work
preclusion period and other waiting periods.
The amendments made by these
Items ensure that the severe financial hardship rules will apply to special
beneficiaries who are subject to a seasonal work preclusion period. Special
beneficiaries who have turned 21 and are subject to a seasonal work preclusion
period will be assessed for severe financial hardship on the same basis as
newstart allowees. Special beneficiaries who have not turned 21 and who are
subject to a seasonal work preclusion period will be assessed for severe
financial hardship on the same basis as youth allowees.
Items 10 to
12 make consequential amendments to the definitions of ‘activity test
breach’, ‘activity test breach rate reduction period’ and
‘activity test non-payment period’ at subsection 23(1) of the Social
Security Act. These amendments take account of the introduction of rate
reduction and non-payment periods for nominated visa holders who breach the
activity test or administrative requirements.
Item 13 amends the
definition of ‘approved program of work supplement‘ at subsection
23(1) of the Social Security Act to include a reference to the supplement
payable under new section 747 to special beneficiaries who are participating in
an approved program of work for unemployment payment (for example, the Work for
the Dole program).
Item 15 makes an amendment to paragraph
542H(3)(a) of the Social Security Act to incorporate a reference to an exemption
from the activity test determined under new subsection 731E(1), inserted by
Item 22. Section 542H of the Social Security Act enables a youth allowee
to be exempt from the activity test in special circumstances. An exemption can
be granted on this basis for a period of not more than 13 weeks. Where there
are a number of activity test exemptions that relate to a continuous period, the
continuous period is not to be more than 13 weeks in total unless the Secretary
determines otherwise.
A situation may occur where a nominated visa holder
has a special circumstances exemption from the special benefit activity test and
subsequently transfers to youth allowance: for example, this could occur where a
nominated visa holder who is under 21 years of age is granted a permanent visa.
In this situation, the intention is that the 13 week limitation in section 542H
of the Social Security Act would include any special circumstances determination
made under the equivalent special benefit provision at new subsection 731E(1),
as inserted by Item 22. Item 15 achieves this outcome by
amending paragraph 542H(3)(a) to refer to a special circumstances determination
made under new section 731E.
Item 17 makes a similar amendment to
subsection 603A(3) of the Social Security Act to take account of transfers to
newstart allowance. In those circumstances, the 13 week limitation at
subsection 603A(3) of the Social Security Act will include any special
circumstances determination made under new section 731E.
Item 16
inserts new subsection 544(3) into the Social Security Act. New
subsection 544(3) deals with the situation where a person transfers from
special benefit to youth allowance and is a party to a Special Benefit Activity
Agreement that ends after the date of the transfer to youth allowance. In this
situation, new subsection 544(3) provides that the existing Special Benefit
Activity Agreement continues in effect as if it were a Youth Allowance Activity
Agreement.
Item 18 inserts a similar provision at new subsection
604(3) of the Social Security Act that applies where a special beneficiary
transfers to newstart allowance and is party to an existing Special Benefit
Activity Agreement that ends after the date of the transfer to newstart
allowance. In this situation, new subsection 604(3) provides that the existing
Special Benefit Activity Agreement continues in effect as it were a Special
Benefit Activity Agreement.
Items 19 and 20 amend the basic
qualification criteria for special benefit set out at section 729 of the Social
Security Act.
Section 729 provides that a person is qualified for special
benefit for a period if the Secretary determines, in accordance with the
criteria set out in subsection 729(2), that special benefit should be granted to
the person for the period. In broad terms, a person may qualify for special
benefit where:
− no other social security payment is available to
the person (except where the person has been disqualified from that other
payment or the payment is not payable in respect of the person under one of the
provisions specified at subsection 727(2));
− the person is unable
to earn a sufficient livelihood for the person and his or her
dependents;
− residence requirements are satisfied;
and
− the person is in Australia throughout the
period.
Nominated visa holders will meet the residence requirements by
virtue of a determination issued by the Minister under
subparagraph 729(2)(f)(v) of the Social Security Act.
The remaining
provisions contained at section 729 elaborate on these basic qualification
criteria.
Items 19 and 20 introduce an additional set of
qualification criteria for nominated visa holders. Item 19 inserts new
paragraph 729(2)(g), which provides that these new criteria only apply to a
person who is the holder of a visa that is in a class of visas determined by the
Minister for the purposes of new subparagraph 729(2)(g). The classes of visa
intended to be covered by the Minister’s determination are those classes
of temporary visa that may be issued for protection, humanitarian, or safe haven
purposes in respect of an unauthorised entry to Australia, including the
‘Temporary Protection Visa’, ‘Temporary Humanitarian Concern
Visa’ and ‘secondary movement visas’. The mechanism of a
determination allows the Minister to take into account the changing names and
terminology that may be applied to these types of visas from time to
time.
Items 19 and 20 further provide that these new criteria only
apply to the holder of a temporary protection, humanitarian or safe haven visa
if that person is not permanently incapacitated for work and is of work-force
age (ie has attained the minimum age for youth allowance in accordance with
subsection 543A(1) of the Social Security Act, but has not attained age
pension age), provided that:
− the person claims special benefit on
or after 1 January 2003; or
− the person is receiving special
benefit immediately before 1 January 2003 and continues to receive special
benefit and reaches work-force age after that date.
New subsection
729(2A), inserted by Item 20, provides that the new criteria will not
affect the qualification for special benefit of holders of a visa issued for
temporary protection, humanitarian or safe haven purposes who were of work-force
age and receiving special benefit immediately before 1 January 2003,
and who continue to receive special benefit continuously after that
date.
The new qualification criteria are set out in new subsection
729(2B).
First, throughout the period of the grant of special benefit, or
for each period within that period, the person must either satisfy the activity
test, or not be required to satisfy the activity test. This provision
acknowledges that the activity test can be applied and monitored on a
fortnightly basis, or, where relevant, applied and monitored through the issue
of notices under section 67 or 68 of the Administration Act.
Second, at
all times (if any), during the period when the person is not a party to a
Special Benefit Activity Agreement, the person must be prepared to enter into
such an Agreement.
Third, at all time during the period when the person
is a party to a Special Benefit Activity Agreement, the person must be prepared
to enter into another Agreement instead of the existing one.
Fourth, if
the person is required to do so by the Secretary, the person must enter into a
Special Benefit Activity Agreement.
Fifth, while a Special Benefit
Activity Agreement is in force, the person must take reasonable steps to comply
with the terms of the Agreement.
New subsection 729(2C) provides the rule
that a person would be considered to be taking reasonable steps to comply with
the terms of a Special Benefit Activity Agreement unless the person has failed
to comply with the terms of the Agreement, and either the main reason for
failing to comply involved a matter that was within the person’s control
or the circumstances that prevented the person from complying were reasonably
foreseeable by the person.
These additional criteria will apply in the
same way as the equivalent qualification rules for newstart allowance at
subsections 593(1) and (2A) of the Social Security Act.
New subsection
729(2D) makes it clear that if a person is granted special benefit for a period
and there is a change in the person’s circumstances such that the person
ceases to be qualified for special benefit at some point within that period,
then special benefit ceases to be payable and payment can be cancelled in
accordance with the relevant rules under the Administration Act before the end
of the grant period. The change in circumstances contemplated by this provision
includes a change of circumstances that a person may be required to notify the
Department of in compliance with a notice issued under the Administration
Act.
Item 21 inserts new section 729AA into the Social Security
Act. This new provision operates where a nominated visa holder claims special
benefit because the person is, or has been, engaged in industrial action and
therefore has lost a source of income. In this situation, new subsection
729AA(1) provides that the requirement in paragraph 729(2)(e) - that the
Secretary is to be satisfied that the person is unable to earn a sufficient
livelihood for the person and the person’s dependents - is not satisfied.
As a result, the person would not qualify for special benefit.
New
subsection 729AA(2) provides that this bar on qualification will not apply
where the conditions in new subsection 729AA(2) are met,
where:
− the person’s unemployment or loss of income was due
to other people being, or having been, engaged in industrial action or in a
series of industrial action; and
− the people or some of the people
were members of a trade union that was involved in the industrial action;
and
− the person was not a member of the relevant trade union
during the period of the industrial action.
New subsection 729AA(3) makes
it clear that the person is not precluded from qualification for special benefit
due to industrial action in relation to a period that occurs after the
industrial action has stopped. The only exception, dealt with at new
subsection 729AA(4), is where the industrial action is in breach of an
order, direction or injunction issued by a State industrial authority (as
defined at section 4 of the Workplace Relations Act 1996), by the
Australian Industrial Relations Commission, or by the Federal Court. Subsection
729AA(4) provides that, in these cases, the bar on qualification continues for 6
weeks after the industrial action has stopped.
The rules in new section
729AA relation to the effect of industrial action on a person’s
qualification for special benefit are consistent with the industrial action
provisions that affect a person’s qualification for newstart
allowance.
Item 22 inserts new Subdivisions AA and AB at Division
1 of Part 2.15 of the Social Security Act.
New Subdivision AA
– Activity test for certain nominated visa holders
New
subdivision AA details the activity test requirements that apply to nominated
visa holders.
New section 731AA – Application of
Subdivision
New section 731AA provides that Subdivision AA
applies to a person who comes within the definition of a nominated visa holder,
as provided for at subsection 23(1) of the Social Security Act (as amended by
Item 14): that is, a person who is the holder of a visa that is in a
class of visas specified by the Minister in a determination made for the
purposes of new subparagraph 729(2)(g)(i), and who is subject to the activity
test.
New section 731A – Activity test
New
section 731A sets out the requirements of the activity test for nominated visa
holders. These requirements are based on the activity test provisions that
apply in relation to newstart allowance.
In order to comply with the
activity test, under new subsection 731A(1), a nominated visa holder will be
required to satisfy the Secretary that, throughout the period of the grant or
for each period within that period, the person is actively seeking and willing
to undertake suitable paid work in Australia. The rules governing the
suitability of work are set out in new section 731B.
New subsection
731A(2) of the Act provides that a nominated visa holder may be required to
apply for a certain number of advertised job vacancies in a specified period.
Where the Secretary notifies the person of a requirement under new
subsection 731A(2), the person will be required to provide a written
statement from each employer confirming that an application has been made,
unless special circumstances make it unreasonable to do so. The relevant rules
are set out in new subsections 731A(4), (5) and (6). New subsection 731A(3)
provides that, if a person fails to comply with a notice issued under new
subsection 731A(3), then for the purposes of new subsection 729(2B), the person
fails to satisfy the activity test in respect of the period specified in the
notice.
New subsection 731A(7) provides that the Secretary may require a
person to undertake or participate in specified activities,
being:
− suitable paid work;
− an approved program of
work for unemployment payment (for example, the ‘Work for the Dole’
program);
− a course of vocational training;
− a
course approved by the Secretary that is likely to improve the person’s
prospects for obtaining suitable paid work, or assist the person in seeking
suitable paid work; or
− if the person lives in an area where there
is no locally accessible labour market and no locally accessible vocational
training, an activity suggested by the person and approved by the
Secretary.
New subsection 731A(7) provides that a nominated visa holder
will satisfy the activity test if, when notified by the Secretary of a
requirement to undertake or participate in an activity specified at subsection
731A(7), the person take reasonable steps to comply with the
requirement.
New subsections 731A(8) and (9) prescribe the circumstances
in which a nominated visa holder cannot be required to participate in, or to
continue to participate in, an approved program of work for unemployment
payment. These are where:
− the person has not turned 18;
or
− the person or the person’s partner has income
(consistent with the newstart allowance activity test regime, a special
beneficiary would not be required to participate in an approved program of work
for unemployment payment where the special beneficiary is receiving a reduced
rate of special benefit under the special benefit income test);
or
− participation in an approved program of work for unemployment
payment would be injurious to the person’s health or safety.
New
subsection 731A(10), (11) and (12) deal with the interaction of the various
components of the activity test and the Special Benefit Activity Agreement
regime.
New subsection 731A(10) provides that, if a person fails to take
reasonable steps to comply with a requirement to undertake or participate in an
activity specified in a notice issued under new subsection 731A(7), the person
cannot satisfy the activity test, even if the person is actively seeking and
willing to undertake suitable paid work in accordance with new subsection
731A(1).
New subsection 731A(11) provides that a person who takes
reasonable steps to comply with a Special Benefit Activity Agreement satisfies
the activity test.
New subsection 731A(12) provides that, if a person
fails to take reasonable steps to comply with a Special Benefit Activity
Agreement, the person cannot satisfy the activity test, even if the person is
actively seeking and willing to undertake suitable paid work in accordance with
new subsection 731A(1).
New subsection 731A(13) defines what is meant by
the phrase ‘taking reasonable steps to comply’ with a notice or
requirement or with the terms of a Special Benefit Activity Agreement for the
purposes of new section 731A. A person satisfies this test unless the person
fails to comply with a notice, requirement or term and:
− the main
reason for failing to comply was within the person’s control;
or
− the circumstances that prevented compliance were reasonably
foreseeable by the person.
New section 731B – Meaning of
unsuitable work for the purposes of the activity test
New section
731B defines the concept of ‘particular paid work that is unsuitable paid
work’ for the purposes of the activity test.
Under new subsection
731B(1), particular paid work is unsuitable if:
− the person lacks
the skills, experience or qualifications needed to perform the work, and
training will not be provided by the employer; or
− the work would
be injurious to the person; or
− the work would constitute a health
or safety risk and would contravene an occupational health and safety law;
or
− the work involves self-employment; or
− the
person would be required to enter into an agreement reducing or abolishing
rights that an industrial award confers on employees engaging in that type of
work; or
− where the work is not covered by an industrial award,
the person would be paid below award rates for comparable work;
or
− commuting to and from the place of employment would be
unreasonably difficult; or
− the work requires the person to move
house; or
− for any other reason the work is unsuitable (for
example, because of the educational, cultural or religious background of the
person).
New subsections 731B(2), (3) and (4) deal with the situation
where a person seeks work in an area where the person does not live and is
offered full-time work in that other area. A person in this situation is
required to accept the offer of work unless the person meets certain specified
conditions, set out at new subsection 731B(2). For example, a person would not
be required to accept such work if the person or the person’s partner is
pregnant, or if the person would suffer severe financial hardship were the
person to accept the offer. These conditions mirror those applicable in respect
of newstart allowance.
New subsection 731B(3) makes it clear that, where
a person is seeking employment through an employment service provider and
indicates to that service provider that he or she is willing to undertake work
outside the area in which his or her home is located, then, for the purposes of
new subsection 731B(2), the person is to be taken to be seeking work in an area
in which the person does not live.
New subsections 731B(5) and (6) deal
with the concept of ‘unreasonably difficult commuting’ for the
purposes of new paragraph 731B(1)(g). New subsection 731B(5) provides
that commuting is not unreasonably difficult if the journey to or from work
normally takes no longer than 90 minutes, or if a substantial number of people
living in the same area as the person regularly make a comparable journey to
their places of work. New subsection 731B(6) makes it clear that the
specific circumstances set out in new subsection 731B(5) do not limit the
Secretary’s discretion to form the opinion that, for the purposes of new
paragraph 731B(1)(g), commuting is not unreasonably difficult.
New
subsection 731B(7) provides that the reference in new paragraph 731B(1)(f)
to ‘remuneration for work’ is a reference to any income derived from
work that is income from personal exertion.
New section 731C
– Certain actions taken to constitute failure to satisfy activity
test
New section 731C specifies two circumstances related to the
activity test in which a person is taken to fail the activity
test:
− where a person refuses or fails, without reasonable excuse,
to attend a job interview (new subsection 731C(1)); and
− where a
person fails, without reasonable excuse, to commence or complete an approved
program of work for unemployment payment, or to comply with the conditions of
such a program (new subsection 731C(2)).
Relief from the activity
test – general comments
There are a number of situations in
which a person who would otherwise be subject to the requirements of the
activity test can be exempted from these requirements. The exemptions provided
for special beneficiaries are based on similar provisions that apply in relation
to the newstart allowance activity test. In addition to these basic exemptions,
there are two further situations where the application of the activity test
would not be appropriate that may arise specifically in relation to special
benefit. In broad terms, these are where a nominated visa holder stays at home
to look after a dependent child, or cares for a disabled person. Similar issues
do not arise in the newstart allowance context because there are other social
security payments available to cater for these situations (for example, carer
payment and parenting payment). However, holders of visas issued for temporary
protection, humanitarian or safe haven purposes cannot access these other
payment types because of the residence requirements that attach to these
payments.
New section 731D – Persons in certain areas can be
taken to comply with activity test
New section 731D provides an
activity test exemption for people in remote areas who are willing and able to
undertake suitable paid work, but in relation to whom it would be unreasonable
to expect compliance with the activity test because of transportation,
communication, cultural or educational issues.
New section 731E
– Relief from activity test – special
circumstances
Under new section 731E, a person is not required to
satisfy the activity test for a period, generally not exceeding 13 weeks, if the
Secretary is satisfied that special circumstances beyond the person’s
control exist and, in those circumstances, it would be unreasonable to expect
the person to comply with the activity test for that period.
New
section 731F – Relief from activity test – pre-natal and
post-natal
New section 731F provides that a pregnant woman is not
required to satisfy the activity test for the period of 6 weeks before the birth
of her child to 6 weeks after the birth.
New section 731G –
Relief from activity test – people engaged in voluntary
work
New section 731G provides an activity test exemption for
certain people who are engaged in voluntary work. For example, the activity
test exemption applies to a person who is over 50 years of age provided that the
person engages in at least 32 hours of full-time, unpaid voluntary work in
a fortnight (or at least 40 hours of unpaid voluntary work in combination with
other suitable paid work). The voluntary work must be undertaken for an
‘approved organisation’ that has been approved by the Secretary for
the purposes of new section 731G.
New section 731H – Relief
from activity test – dependent child
Under the social
security law, parenting payment is available to people who have the care of a
child (provided the relevant conditions for qualification and payability are
satisfied). These customers are not subject to activity
testing.
Temporary protection, humanitarian or safe haven visa holders
cannot access parenting payment because they do not meet the residence
requirement for the payment.
New section 731H addresses this by providing
that a person is taken to satisfy the activity test in respect of a period where
the person has at least one child who:
− is a dependent child of
the person (within the meaning of subsections 5(2), (3) and (6) of the Social
Security Act); and
− has not turned 16; and
− is in
Australia.
For the purposes of this provision, a child can only be the
dependent child of one person at a time. If a child would satisfy the
definition of ‘dependent child’ in relation to more than one person
at the same time, new subsection 731H(3) provides that the Secretary is to
determine in relation to which of these people the child is a dependent child
for the purposes of the activity test exemption at new section
731H.
Relief from activity test – carers
Carer
payment and carer allowance are social security payments available to people who
care for a disabled child or adult. Temporary protection, humanitarian or safe
haven visa holders do not meet the residence requirement for these
payments.
New section 731J addresses this issue. The new provision draws
heavily on the qualification conditions for carer payment and carer allowance
and the hospitalisation rules for these payments (and associated definitions).
The intention is to exempt a nominated visa holder from the activity test where,
but for the residence requirements, the person would have satisfied the basic
elements of qualification for carer payment or carer allowance.
New
section 731K – Temporarily incapacitated person not required to satisfy
activity test
Under new section 731K, a person is not required to
satisfy the activity test if:
− the person has a temporary
incapacity for work because of sickness or accident;
− the person
provides a medical certificate containing specified information;
and
− the Secretary is satisfied that the incapacity was not
brought about with a view to avoiding the activity test.
New subsection
731K(2) provides that ‘work’ for the purposes of new section 731K
means work, whether full-time, part-time, permanent or casual, that is of a kind
that the person could reasonably do and that is for at least 8 hours per week at
award wages or above.
Subdivision AB – Special Benefit
Activity Agreements for persons who are nominated visa
holders
The provisions in new Subdivision AB are based on
provisions in relation to the Newstart Activity Agreements set out at
Subdivision C of Division 1 of Part 2.12 of the Social Security
Act.
New section 731L – Special Benefit Activity Agreements
– requirement to enter
New subsections 731L(1) and (2)
provide that a nominated visa holder who has claimed, or is receiving, special
benefit may be required to enter into a Special Benefit Activity Agreement or a
new Special Benefit Activity Agreement in place of an existing one.
New
subsection 731L(3) provides that such a requirement cannot be made of a person
who is not required to satisfy the activity test under new sections 731E, 731F
or 731K (that is, in special circumstances, for a specified period before and
after the birth of a child, or where the person is temporarily incapacitated for
work).
New subsection 731L(4) provides that where a person is required to
enter into a Special Benefit Activity Agreement, the Secretary must give the
person written notice of the requirement and the places and times at which the
Agreement is to be negotiated.
Finally, new subsection 731L(5) provides
that a Special Benefit Activity Agreement is a written agreement in a form
approved by the Secretary. New subsection 731L(5) also makes it clear that
Special Benefit Activity Agreement is an agreement between the person and the
Secretary.
New section 731M – Special Benefit Activity
Agreement – terms
New subsection 731M(1) provides that the
following activities can be included in a Special Benefit Activity
Agreement:
− job search;
− a vocational training
course;
− training that would help in searching for
work;
− paid work experience;
− measures designed to
eliminate or reduce any disadvantage the person has in the labour
market;
− an approved program of work for unemployment
payment;
− an activity that the Secretary regards as suitable for
the person and that is agreed between the person and the Secretary.
New
subsection 731M(2) provides that the activity of participating in an approved
program of work for unemployment payment cannot be included in a person’s
agreement if the person is under 18, or the person or the person’s partner
has income, or, in the Secretary’s opinion, the work would be injurious to
the person’s health or safety.
New subsection 731M(3) provides that
the Secretary must approve the terms of the Special Benefit Activity
Agreement.
New subsection 731M(4) provides that, in considering whether
to approve the terms of a Special Benefit Activity Agreement, the Secretary must
have regard to the person’s capacity to comply with the proposed terms,
and the person’s needs. New subsection 731M(5) sets out the factors
that the Secretary is to take into account in considering the person’s
capacity to comply with the proposed terms and the person’s
needs.
New subsection 731M(6) provides that a Special Benefit Activity
Agreement may be varied or suspended and reviewed, and may be cancelled if
another agreement is made as the result of a review.
New subsection
731M(7) provides that a person who is a party to a Special Benefit Activity
Agreement is required to notify the Secretary of any impediments to the person
complying with the terms of the agreement.
New section 731N –
Special Benefit Activity Agreement – failure to
negotiate
New section 731N deals with the situation where a
person refuses or fails to negotiate a Special Benefit Activity Agreement or
unreasonably delays entering into an Agreement. If this occurs, new section
731N provides for the Secretary to give the person a notice in writing stating
that the person is being taken to have failed to enter into the Agreement, and,
as a consequence of the notice being given, the person will fail the activity
test. New section 740, inserted by Item 25, provides that special
benefit is not payable to a nominated visa holder who fails the activity
test.
Item 23 inserts new section 736 into the Social Security
Act. New section 736 enables the Secretary to require people who have claimed
special benefit, or who are receiving special benefit, to undertake a course of
vocational training or another course which the person could reasonably
undertake, or to do suitable work. New subsection 736(1) provides that, if
a person fails to take reasonable steps to comply with such a requirement, then
special benefit is not payable to the person for a period determined by the
Secretary.
The requirement in section 736 will not apply to a nominated
visa holder who is subject to the new comprehensive activity test regime
provided for in this Bill.
New section 736 reflects the activity test
components of section 736 as it existed prior to 20 March 2000. From 20 March
2000, the notification provisions of the Social Security Act were standardised
in the Administration Act. It was in this context that original section 736 was
inadvertently repealed. While a limited form of activity testing is available
under the general provisions of the Administration Act, the better approach is
to clearly set out in the Social Security Act the activity requirements that
apply to special beneficiaries who are not nominated visa holders. New section
736 achieves this.
Item 24 makes a consequential amendment to
subsection 737(3) of the Social Security Act. Item 24 modifies
subsection 737(3) so that subsection 737(1) does not prevent special benefit
being payable for any period during which:
− a person is enrolled
in a course that the Secretary has required the person to undertake under new
section 736 (activity requirements for special beneficiaries who are not
nominated visa holders) or under new section 731A (the activity test
applying to nominated visa holders); or
− a person is engaged in a
course that the Secretary has required the person to undertake under a Special
Benefit Activity Agreement; or
− a person has deferred a course of
education.
Item 25 inserts new Subdivisions C to F at Division 1
of Part 2.15 of the Social Security Act. These new subdivisions deal
with the issue of payability of special benefit, and the interaction between
payability and activity breaches and administrative breaches. The rules set out
in these subdivisions are consistent with the payability rules that apply in
relation to newstart allowance.
New Subdivision C – Activity
test breaches
New section 740 – Activity test
penalties for failure to satisfy the activity test
New subsection
740(1) provides that special benefit is not payable to a nominated visa holder
who fails the activity test. New subsection 740(2) provides that, if special
benefit subsequently becomes payable to the person after the time it ceased to
be payable under new subsection 740(1), then the person is subject to an
activity test penalty. The penalty will either be an activity test rate
reduction period or an activity test non-payment period, depending upon how many
activity test breaches the person has had in the preceding 2 years. If the
breach is the person’s first or second activity test breach in that two
year period, then an activity test rate reduction period applies. If the breach
is the person’s third or subsequent activity test breach in that two year
period, then an activity test non-payment period applies.
New subsection
745K provides that a person may be exempted from an activity test penalty period
that would otherwise apply under new subsection 740(1) if the person commences
participation in an approved program of work for unemployment
payment.
New section 741 – Activity test penalties for
failure to enter Special Benefit Activity Agreement
New
subsection 741(1) provides that special benefit is not payable to a nominated
visa holder who fails to enter into a Special Benefit Activity Agreement. New
subsection 741(2) provides that, if special benefit subsequently becomes
payable to the person after the time it ceased to be payable under new
subsection 741(1), then the person is subject to an activity test penalty. The
penalty will either be an activity test rate reduction period or an activity
test non-payment period, depending upon how many activity test breaches the
person has had in the preceding 2 years. If the breach is the person’s
first or second activity test breach in that two year period, then an activity
test rate reduction period applies. If the breach is the person’s third
or subsequent activity test breach in that two year period, then an activity
test non-payment period applies.
New subsection 745K provides that a
person may be exempted from an activity test penalty period that would otherwise
apply under new subsection 741(1) if the person commences participation in an
approved program of work for unemployment payment.
New section 742
– Activity test penalties for failure to comply with Special Benefit
Activity Agreement
New subsection 742(1) provides that special
benefit is not payable to a nominated visa holder who fails to take reasonable
steps to comply with the terms of a Special Benefit Activity Agreement. New
subsection 742(2) provides that, if special benefit subsequently becomes
payable to the person after the time it ceased to be payable under new
subsection 742(1), then the person is subject to an activity test penalty. The
penalty will either be an activity test rate reduction period or an activity
test non-payment period, depending upon how many activity test breaches the
person has had in the preceding 2 years. If the breach is the person’s
first or second activity test breach in that two year period, then an activity
test rate reduction period applies. If the breach is the person’s third
or subsequent activity test breach in that two year period, then an activity
test non-payment period applies.
New subsection 745K provides that a
person may be exempted from an activity test penalty period that would otherwise
apply under new subsection 742(1) if the person commences participation in an
approved program of work for unemployment payment.
New section 743
– Unemployment due to voluntary act
New section 743 deals
with the situation where a nominated visa holder would qualify for special
benefit because the person is unemployed and therefore is unable to earn a
sufficient livelihood for themselves (and any dependents), and the
person’s unemployment is due, either directly or indirectly, to a
voluntary act of the person which the Secretary is not satisfied was a
reasonable act.
Where the Secretary is not satisfied that the voluntary
act of the person was reasonable, new section 743 provides that the person is
subject to an activity test penalty. The penalty will either be an activity
test rate reduction period or an activity test non-payment period, depending
upon how many activity test breaches the person has had in the preceding 2
years. If the breach is the person’s first or second activity test breach
in that two year period, then an activity test rate reduction period applies.
If the breach is the person’s third or subsequent activity test breach in
that two year period, then an activity test non-payment period
applies.
One specific situation to which section 743 may pertain is the
situation where a person has voluntarily given up employment in their country of
origin prior to travelling to Australia or to an offshore location in order to
seek refugee status. In these circumstances, it is not intended that section
743 would operate so as to impose an activity test breach penalty upon that
person. Given the circumstances in which the person surrendered their
employment (ie in order to seek refugee status), the person’s voluntary
act would be sufficiently ‘reasonable’ to satisfy the Secretary for
the purposes of paragraph 743(c), with the effect that section 743 would not
operate to impose an activity test breach penalty upon that
person.
New section 744 – Unemployment due to
misconduct
New section 744 deals with the situation where a
nominated visa holder would qualify for special benefit because the person is
unemployed and therefore is unable to earn a sufficient livelihood for
themselves (and any dependents), and the person’s unemployment is due to
the person’s misconduct as a worker.
In this situation, new section
744 provides that the person is subject to an activity test penalty. The
penalty will either be an activity test rate reduction period or an activity
test non-payment period, depending upon how many activity test breaches the
person has had in the preceding 2 years. If the breach is the person’s
first or second activity test breach in that two year period, then an activity
test rate reduction period applies. If the breach is the person’s third
or subsequent activity test breach in that two year period, then an activity
test non-payment period applies.
New section 745 – Refusal of
job offer
New section 745(1) provides that special benefit is not
payable to a nominated visa holder who has refused or failed, without reasonable
excuse, to accept a suitable offer of employment. New subsection 745(2)
provides that, if special benefit subsequently becomes payable to the person
after the time it ceased to be payable under new subsection 745(1), then the
person is subject to an activity test penalty. The penalty will either be an
activity test rate reduction period or an activity test non-payment period,
depending upon how many activity test breaches the person has had in the
preceding 2 years. If the breach is the person’s first or second activity
test breach in that two year period, then an activity test rate reduction period
applies. If the breach is the person’s third or subsequent activity test
breach in that two year period, then an activity test non-payment period
applies.
New section 745A – Failure to provide information
etc
New section 745A(1) provides that special benefit is not
payable to a nominated visa holder who refuses or fails, without reasonable
excuse, to provide information about the person’s income from remunerative
work, or who knowingly or recklessly provides false or misleading information in
relation the person’s income from remunerative work. New
subsection 745A(2) provides that, if special benefit subsequently becomes
payable to the person after the time it ceased to be payable under new
subsection 745A(1), then the person is subject to an activity test penalty. The
penalty will either be an activity test rate reduction period or an activity
test non-payment period, depending upon how many activity test breaches the
person has had in the preceding 2 years. If the breach is the person’s
first or second activity test breach in that two year period, then an activity
test rate reduction period applies. If the breach is the person’s third
or subsequent activity test breach in that two year period, then an activity
test non-payment period applies.
New section 745B – Activity
test non-payment periods
New section 745B provides that, if an
activity test non-payment period applies to a person under Part 2.15 of the
Social Security Act, then the period applicable to the person is 8
weeks.
New section 745C – Commencement of activity test
non-payment period
New section 745C provide for the commencement
of an activity test non-payment period. The effect of new section 745C is that
an activity test non-payment period will generally commence on the day on which
a person is notified that the person is subject to the non-payment
period.
There are exceptions to this general rule. New subsection
745C(3) provides that, if the person is already subject to a pre-existing
activity test non-payment period at the time the person is notified of an
activity test non-payment period under new subsection 745C(1), the pre-existing
non-payment period ceases to apply when the new non-payment period
commences.
New subsection 745C(4) provides that, if special benefit
ceases to be payable to a person for a reason other than the application of an
activity test non-payment period, and the day on which special benefit ceases to
be payable to the person occurs before the day on which the non-payment period
would have commenced under new subsection 745C(2), then the non-payment period
commences on the day special benefit ceased to be payable to the person (ie from
a date earlier than the date on which the activity test non-payment period is
notified to the person under new subsection 745C(1)).
New section
745D – Application of activity test non-payment period before claims for
special benefit
New section 745D deals with the situation where a
person breaches the activity test prior to claiming special benefit
(specifically because they have become unemployed, either due to their
misconduct or because of an unreasonable voluntary act), and, had the person
been a special beneficiary at the time, the breach would have attracted an
activity test non-payment period.
New subsection 745D(2) provides that,
assuming that the activity test non-payment period commences on the day on which
the breach occurred, if the person claims special benefit after the end of that
period (ie more than 8 weeks after the breach occurred), an activity test
non-payment period will not apply to the person.
However, using the same
assumption, if the person claims special benefit before the end of the
non-payment period (ie less than 8 weeks after the breach occurred), then an
activity test non-payment period applies to the person. New subsection 745D(1)
provides that the activity test non-payment period is taken to have commenced on
the day after the day on which the breach occurred.
New section
745E – Activity test non-payment periods – interaction with activity
test breach rate reduction periods
New section 745E deals with
the situation where a person is subject to both an activity test non-payment
period and an activity test breach rate reduction period, and the periods
overlap.
Where an activity test non-payment period applies to a person
and the person then becomes subject to an activity test rate reduction period,
new subsections 745E(2) and (3) provide that the two breach periods run
concurrently and the non-payment period prevails for any period of
overlap.
New subsection 745E(4) provides that, where an activity test
breach rate reduction period applies to a person and the person then becomes
subject to an activity test non-payment period, the rate reduction period is
taken to end immediately before the commencement of the non-payment
period.
New section 745F – Effect of section 745C and
745D
New section 745F makes it clear that special benefit may
also cease to be payable to a person in circumstances that do not involve the
application of an activity test non-payment period.
New section
745G – Where one event may give rise to both an activity test penalty and
an administrative breach rate reduction period
New section 745G
ensures that, where one event can give rise to both an activity test penalty
period and an administrative breach rate reduction period, the activity test
penalty period will prevail.
An example of such an event would be a
failure to disclose income details in compliance with a requirement under
section 68 of the Administration Act. This event could constitute an activity
test breach under new section 745A and an administrative breach under new
section 745H. In these circumstances, new section 745G would operate with
the effect that only the activity test breach under new section 745A should
be applied to the person.
Subdivision D – Situations where
special benefit not payable to persons who are nominated visa holders
(administrative breaches)
New section 745H –
Administrative breach rate reduction period to apply to certain persons who fail
to comply with notification requirements
New section 745H
provides that special benefit is not payable to a nominated visa holder who
refuses or fails, without reasonable excuse, to comply with a requirement
notified to the person under sections 64, 67, 68 or 192 of the Administration
Act. New paragraph 745H(b) provides that, if special benefit becomes payable to
a person at a later time, then an administrative breach rate reduction period
applies to the person. New Subdivision D of Division 4 of Part 2.15, inserted
by Item 27, deals with administrative breach rate reductions.
The
amendments made to section 63 of the Administration Act by Item 30
provide that an administrative breach rate reduction period may also apply
to a person in respect of a requirement notified to a person under section 63 of
the Administration Act.
New Subdivision E – Participation by
persons who are nominated visa holders in an approved program of work for
unemployment payment
New section 745J –
Definitions
New section 745J defines the terms used in new
section 745K and 745L.
‘Activity test penalty period’ means a
period of non-payment or rate reduction that arises because of a breach under
specified special benefit provisions.
‘Administrative penalty
period’ means a period of rate reduction that arises because the person
has committed an administrative breach under new section 745H of the Social
Security Act or under subsection 63(5) of the Administration
Act.
‘Penalty period’ means an activity test penalty period
or an administrative penalty period.
New section 745K –
Penalty periods cease to apply on start of participation in approved program of
work for unemployment payment
Under new section 745K, a person is
not required to serve the remaining duration of one or more penalty periods that
exist at the time the person commences participation in an approved program of
work for unemployment payment. This concession applies whether or not the
person completes the program.
New section 745L –
Participation in an approved program of work for unemployment payment does not
give rise to employment under certain industrial relations
legislation
New section 745L makes it clear that participation in
an approved program of work for unemployment payment is not to be taken to be
employment for the purposes of the industrial relations legislation specified at
new section 745L.
New Subdivision F – Other situations where
special benefit not payable to persons who are nominated visa
holders
New Subdivision F sets out other circumstances in which
special benefit is not payable to a nominated visa holder. These situations
relate to seasonal workers, and moving to an area of lower employment prospects.
Comparable payability rules apply in relation to newstart
allowance.
New section 745M – Seasonal
workers
New section 745M provides that special benefit is not
payable to a nominated visa holder who is subject to a seasonal work preclusion
period (ie because the person has engaged in seasonal work at any time within
the 6 month period prior to claiming special benefit, or because the
person’s partner has engaged in such an activity). The period of
non-payment is the person’s ‘seasonal work preclusion period’
within the meaning of section 16A of the Social Security Act.
New
subsection 745M(3) provides that the Secretary has a discretion to waive the
whole or a part of a person’s seasonal work preclusion period where the
person is in ‘severe financial hardship’ because the person has
incurred ‘unavoidable or reasonable expenditure’ (within the meaning
of those terms, as defined at section 19C of the Social Security
Act).
New section 745N – Move to area of lower employment
prospects
New section 745N provides that special benefit is not
payable to an nominated visa holder who reduces his or her employment prospects
by moving to a new place of residence without sufficient reason.
New
subsection 745N(2) makes it clear that this rules applies to a person whether or
not they claimed special benefit before or after the date on which they moved to
the new place of residence. However, if a person claims special benefit more
than 26 weeks after moving to the new place of residence, subsection
745N(2) makes it clear that the person will not be subject to a non-payment
period after the expiration of that 26 week period.
‘Sufficient
reason’ is defined at new subsection 745N(4). For example, with reference
to the list of circumstances listed at new subsection 745N(4), a person has
sufficient reason for moving to an area of lower employment prospects if the
move is necessary to alleviate or treat a physical illness suffered by the
person or a family member (new paragraph 745N(4)(c)).
New subsection
745N(1) provides that the period of non-payment is 26 weeks.
New
subsection 745N(3) provides that payment can be reinstated during the 26 week
non-payment period if the person moves back to his or her original place of
residence, or moves to another place that would not have attracted a non-payment
period if the person had moved there initially.
Item 26
incorporates existing section 746 of the Social Security Act as part of a new
subdivision of Division 4 of Part 2.15, “Subdivision A – Basic
determination of special benefit’. This is a minor structural
change.
Item 27 inserts new Subdivisions B to E inclusive at
Division 4 of Part 2.15 of the Social Security Act. These new provisions
determine the rate of special benefit that is payable to a nominated visa
holder.
New Subdivision B – Approved program of work
supplement
New section 747 – Approved program of work
supplement for persons who are nominated visa holders
New section
747 provides for the payment of an ‘approved program of work
supplement’ to nominated visa holders who participate in an approved
program of work for unemployment payment (for example, in the Work for the Dole
program). New section 747 provides that the amount of the supplement is $20.80
per fortnight. The supplement will be paid for each fortnight during which the
nominated visa holder participates in an approved program of work for
unemployment payment unless, during that fortnight, the person ceases to
participate in the program in circumstances that constitute:
− a
failure of the activity test to which the person is subject; or
− a
failure to comply with the terms of a Special Benefit Activity Agreement to
which the person is subject.
The supplement is paid in addition to the
person’s rate of special benefit as determined under section 746 of the
Social Security Act.
New Subdivision C – Activity test breach
reductions in the rate of special benefit for persons who are nominated visa
holders
New section 748 – Activity test breach rate
reduction periods in respect of persons who are nominated visa
holders
New section 748 provides that, if an activity test breach
rate reduction period applies to a person under Part 2.15 of the Social Security
Act, the period applicable to the person is 26 weeks.
New section
749 – Commencement of activity test breach rate reduction periods in
respect of persons who are nominated visa holders
New section 749
provides for the commencement of an activity test breach rate reduction period.
The effect of new section 749 is that an activity test breach rate reduction
period will generally commence on the day on which a person is notified that the
person is subject to the rate reduction period.
There are exceptions to
this general rule. New subsection 749(3) provides that, if the person is
already subject to a pre-existing activity test breach rate reduction period at
the time the person is notified of an activity test breach rate reduction period
under new subsection 749(1), the pre-existing rate reduction period ceases to
apply when the new rate reduction period commences.
New subsection 749(4)
provides that, if special benefit ceases to be payable to a person for a reason
other than the application of an activity test breach rate reduction period, and
the day on which special benefit ceases to be payable to the person occurs
before the day on which the rate reduction period would have commenced under new
subsection 749(2), then the rate reduction period commences on the day special
benefit ceased to be payable to the person (ie from a date earlier than the date
on which the activity test rate reduction period is notified to the person under
new subsection 749(1)).
New section 750 – Application of
activity test breach rate reduction periods before claims for special
benefit
New section 750 deals with the situation where a person
breaches the activity test prior to claiming special benefit (specifically
because they have become unemployed, either due to their misconduct or because
of an unreasonable voluntary act), and, had the person been a special
beneficiary at the time, the breach would have attracted an activity test breach
rate reduction period.
New subsection 750(2) provides that, assuming that
the activity test breach rate reduction period commences on the day on which the
breach occurred, if the person claims special benefit after the end of that
period (ie more than 26 weeks after the breach occurred), an activity test
breach rate reduction will not apply to the person.
However, using the
same assumption, if the person claims special benefit before the end of the
non-payment period (ie less than 26 weeks after the breach occurred), then an
activity test breach rate reduction period applies to the person. New
subsection 750(1) provides that the activity test breach rate reduction
period is taken to have commenced on the day after the day on which the breach
occurred.
New section 751 – Rate of special benefit where
activity test breach rate reduction period applies
New subsection
751(1) provides that, if an activity test breach rate reduction applies to a
person who is qualified for special benefit and to whom special benefit is
payable, then the person’s rate of special benefit is to be worked out in
accordance with the method statement in new section 751.
The first step
is to work out the person’s ‘maximum payment rate’.
If
the person has not turned 21, the maximum payment rate is the amount that would
be the person’s maximum basic rate if the Youth Allowance Rate Calculator
at Part 3.5 of the Social Security Act applied to the person.
If the
person has turned 21, the maximum payment rate is the amount that would be the
person’s maximum basic rate calculated under Table B of Module B of
Benefit Rate Calculator B at Part 3.6 of the Social Security Act.
The
second step is to work out the rate reduction amount in accordance with new
subsection 751(2). New subsection 751(2) provides that, if the activity test
breach is the person’s first breach in the relevant 2 year period (defined
at new subsection 751(3)), then the person’s rate reduction amount is
18% of the person’s maximum payment rate. If the activity test breach is
the person’s second breach in the relevant two year period, then the
person’s rate reduction amount is 24% of the person’s maximum
payment rate.
The third step is to take the reduction amount away from
the rate of special benefit determined by the Secretary under section 746 of the
Social Security Act. The resulting amount is the person’s ‘activity
test breach reduced rate’ of special benefit.
Subdivision D
– Administrative breach rate reductions in the rate of special benefit for
persons who are nominated visa holders
New section 752
– Administrative breach rate reduction periods in respect of persons who
are nominated visa holders
New section 752 provides that, if an
administrative breach rate reduction period applies to a person under Part 2.15
of the Social Security Act, the period applicable to the person is 13
weeks.
New section 753 – Commencement of administrative
breach rate reduction periods in respect of persons who are nominated visa
holders
New section 753 provides for the commencement of an
administrative breach rate reduction period. The effect of new section 753 is
that an administrative breach rate reduction period will generally commence on
the day on which a person is notified that the person is subject to the rate
reduction period.
There are exceptions to this general rule. New
subsection 753(3) provides that, if the person is already subject to a
pre-existing administrative breach rate reduction period at the time the person
is notified of an administrative breach rate reduction period under new
subsection 753(1), the pre-existing rate reduction period ceases to apply when
the new rate reduction period commences.
New subsection 753(4) provides
that, if special benefit ceases to be payable to a person for a reason other
than the application of an administrative breach rate reduction period, and the
day on which special benefit ceases to be payable to the person occurs before
the day on which the rate reduction period would have commenced under new
subsection 753(2), then the rate reduction period commences on the day special
benefit ceased to be payable to the person (ie from a date earlier than the date
on which the administrative breach rate reduction period is notified to the
person under new subsection 753(1)).
New section 754 –
Administrative breach rate reduction periods – interaction with activity
test non-payment periods
New section 754 deals with the situation
where a person is subject to both an administrative breach rate reduction period
and an activity test non-payment period, and the periods overlap.
New
subsection 754(2) makes it clear that, where this occurs, the two periods run
concurrently. New subsection 754(3) makes it clear that the activity test
non-payment period will prevail over the administrative breach rate reduction
period for the duration of the overlap period.
New section 755
– Administrative breach rate reduction periods – interaction with
activity test breach rate reduction periods
New section 755 deals
with the situation where a person is subject to both an administrative breach
rate reduction period and an activity test rate reduction period, and the
periods overlap.
New subsection 755(2) makes it clear that where this
occurs, the two periods run concurrently. New subsection 755(3) makes it clear
that the breach period with the higher percentage rate reduction amount will
apply for the duration of the overlap period.
New section 756
– Effect of sections 754 and 755
New section 756 makes it
clear that special benefit may also cease to be payable to a person in
circumstances that do not involve the application of an administrative breach
rate reduction period.
New section 757 – Administrative
breach rate reduction period not to apply in certain
circumstances
New section 757 provides that an administrative
breach rate reduction period does not apply where:
− a nominated
visa holder receives special benefit; and
− special benefit ceases
to be payable to the person because the person refuses or fails to comply with a
notification requirement under new section 745H or under subsection 63(5) of the
Administration Act; and
− as a result, special benefit is cancelled
or automatically terminated under the provisions of the Administration Act;
and
− the person then reclaims special benefit more than 14 days
after the date of effect of the cancellation or automatic termination
determination.
In this situation, an administrative breach rate reduction
should not apply because the nominated visa holder will already have
‘self-served’ the equivalent of a non-payment period of 2 weeks or
more (comparable to an administrative breach rate reduction period of 13
weeks).
New section 758 – Rate of special benefit where
administrative breach rate reduction applies
New subsection 758
provides that, if an administrative breach rate reduction applies to a person
who is qualified for special benefit and to whom special benefit is payable,
then the person’s rate of special benefit is to be worked out in
accordance with the method statement in new section 758.
The first step
is to work out the person’s ‘maximum payment rate’.
If
the person has not turned 21, the maximum payment rate is the amount that would
be the person’s maximum basic rate if the Youth Allowance Rate Calculator
at Part 3.5 of the Social Security Act applied to the person.
If the
person has turned 21, the maximum payment rate is the amount that would be the
person’s maximum basic rate calculated under Table B of Module B of
Benefit Rate Calculator B at Part 3.6 of the Social Security Act.
The
second step is to work out the rate reduction amount in accordance with new
subsection 758(2). New subsection 758(2) provides that the person’s rate
reduction amount is 16% of the person’s maximum payment rate.
The
third step is to take the reduction amount away from the rate of special benefit
determined by the Secretary under section 746 of the Social Security Act. The
resulting amount is the person’s ‘administrative breach reduced
rate’ of special benefit.
New Subdivision E – Effect of
industrial action on rate of special benefit payable to persons who are
nominated visa holders
New section 579 – Effect of
industrial action on rate of special benefit payable to persons who are
nominated visa holders
New section 759 applies where a nominated
visa holder is receiving special benefit and then engages in industrial action,
or a series of industrial actions, that leads to the person’s
unemployment, or to a drop in the person’s level of income. Where this
occurs, new subsection 759(1) provides that the person’s rate of special
benefit is to be determined as if the person was not engaged in the industrial
action. As a consequence, the person’s rate of special benefit will be
determined having regard to the level of income that the person would have been
receiving but for the industrial action.
New subsection 759(2) provides
that the rule at new subsection 759(1) will not apply where:
− the
person’s employment or loss of income was due to other people being, or
having been , engaged in industrial action or a series of industrial action;
and
− the people or some of the people were members of a trade
union that was involved in the industrial action; and
− the special
beneficiary was not a member of the relevant union during the industrial
action.
New subsection 759(3) makes it clear that, when the industrial
action or series of industrial actions come to an end, the person’s rate
of special benefit would be determined under the normal rules. The only
exception to subsection 759(3) is where the industrial action was in breach of
an order, direction or injunction issued by a State industrial authority (as
defined at section 4 of the Workplace Relations Act 1996), by the
Australian Industrial Relations Commission, or by the Federal Court. In those
circumstances, new subsection 759(4) provides that the person’s rate of
benefit will continue to be determine in accordance with new subsection 759(1)
for a period of six weeks after the industrial action has
stopped.
Amendments to the Social Security (Administration) Act
1999
The Administration Act contains the machinery provisions
that support the provision and administration of social security payments. The
Administration Act deals with issues such as claims, information gathering, the
making of determinations, date of effect rules, and review and appeals
mechanisms. Wherever possible, the Administration Act prescribes common rules
that apply across all social security payment types.
The amendments made
by this Bill to the Administration Act ensure that activity test issues that
arise in relation to special benefit are treated the same way under the
Administration Act as comparable newstart allowance issues.
Customer
notification obligations
Section 63 of the Administration Act enables
the Secretary to require a person to attend an office of the Department, contact
the Department, attend a particular place for a particular purpose, or give
information to the Secretary. If a person refuses or fails to comply with such
a requirement, then the relevant payment ceases to be payable to the
person.
For newstart allowance and youth allowance recipients, a further
consequence follows. Section 63 of the Administration Act provides that, if
newstart allowance or youth allowance becomes payable to the person again at a
later time, then an administrative breach rate reduction period applies to the
person. The rules relating to administrative breach rate reduction periods for
newstart allowance and youth allowance are set out in the relevant payment
modules of the Social Security Act.
Items 28 to 30 amend section
63 of the Administration Act so that section 63 operates in the same way for
special beneficiaries who are nominated visa holders as it does for newstart and
youth allowees. As a result, nominated visa holders can be subject to the
requirements in section 63 and the consequences that flow from a failure or
refusal to comply with those requirements (that is, the imposition of an
administrative breach rate reduction period).
Section 64 of the
Administration Act enables the Secretary to require certain persons to attend an
office of the Department, contact the Department, attend a particular place for
a particular purpose, complete a questionnaire, undergo a medical, psychiatric
or psychological examination, or give information to the Secretary. Section 64
may be applied to a person who is receiving newstart allowance and is exempt
from the activity test because of a temporary incapacity (under Subdivision BA
of Division 1 of Part 2.12 of the Social Security Act).
Item 31
amends section 64 so that it can also be applied to special beneficiaries
who are nominated visa holders, in circumstances where:
− the
activity test does not apply to a nominated visa holder because the person is
permanently incapacitated for work (ie would meet the requirements of sections
94 or 95 of the Social Security Act if the person was an Australian resident);
or
− the nominated visa holder is exempt from the activity test due
to temporary incapacity.
Review and appeals
Part 4 of the
Administration Act contains a number of provisions relating to the. review of
decisions made under the social security law that deal specifically with
decision relating to newstart allowance. The relevant provisions
are:
− section 134 – which provides for the continuation of
newstart allowance payments pending the outcome of internal review of a decision
that a person has failed to agree to the terms of a Newstart Activity
Agreement;
− subsection 140(1) – which provides that the
Social Security Appeals Tribunal (‘the SSAT’) may review decisions
relating to Newstart Activity Agreements to the extent that the decision relates
to the terms of such an Agreement;
− subsection 143(2) –
which deals with application requirements relating to the decisions concerning
the terms of a Newstart Activity Agreement;
− subsection 148(1)
– which provides for the continuation of newstart allowance payments
pending the outcome of an SSAT review of a decision that a person has failed to
agree to the terms of a Newstart Activity Agreement;
− subsection
149(5) – which provides that section 149, which sets out the powers of the
SSAT upon review, does not apply to decisions about the terms of a Newstart
Activity Agreement;
− subsection 150(1) – which sets out the
powers of the SSAT in relation to the review of decisions about the terms of a
Newstart Activity Agreement;
− subsection 151(4) – which
provides that section 151, which sets out, further to section 149, the powers of
the SSAT upon review, does not apply to decisions about the terms of a Newstart
Activity Agreement;
− subsection 152(6) – which provides that
section 152, which provides for the date of effect of an SSAT decision, does not
apply to an decision about the terms of a Newstart Activity Agreement;
and
− subsection 153(1) – which sets the date of effect rules
for an SSAT decision relating to decisions about the terms of a Newstart
Activity Agreement.
Items 32 to 40 amend these provisions or
insert new related provisions to ensure that decisions relating to the terms of
a Special Benefit Activity Agreement are treated in the same way upon review as
decisions relating to the terns of a Newstart Activity
Agreement.
Rules for working out a person’s start
day
Clause 15 of Schedule 2 to the Administration Act specifies a
person’s start day where the person is subject to, amongst other things,
an administrative breach rate reduction period that reduces the person’s
rate of austudy payment, newstart allowance or youth allowance to
nil.
Item 41 amends Clause 15 to ensure that similar rules apply
to special beneficiaries who are subject to an administrative breach rate
reduction period.
Schedule 2 – Contingent amendments of Family and Community Services legislation
This Schedule makes changes to the activity testing regime introduced by
this Bill in respect of nominated visa holders to reflect changes made to the
general activity test regime applying to newstart allowance recipients by the
Family and Community Services Legislation Amendment (Australians Working
Together and Other 2001 Budget Measures) Act 2002 (‘the AWT
Act’).
These changes will take effect immediately following the
commencement of the relevant provisions of the AWT Act. This will ensure that
activity test requirements are applied consistently to both special
beneficiaries and newstart allowees.
These measures involve the extension of flexible participation
requirements to special beneficiaries aged at least 50 years of age, and the
standardisation of terminology in respect of approved programs of work for
unemployment payment.
The Family and Community Services Legislation Amendment (Australians Working
Together and Other 2001 Budget Measures) Bill 2002 (‘the AWT Bill’)
gives effect to the ‘Australians Working Together’ package of
measures announced as part of the 2001 Budget measures, and various other Budget
measures.
The Australians Working Together package includes the extension
of flexible participation requirements for newstart allowance recipients who are
aged at least 50 years of age. The measure involves a more flexible approach to
the application of the activity test, including allowing for any residual amount
of an activity test breach penalty or administrative breach penalty to be waived
where the person ‘rectifies’ the relevant breach before the
expiration of the breach penalty period. This Schedule extends these
concessions to nominated visa holders aged at least 50 years of age who are
subject to the activity test.
The AWT Bill also introduces new
terminology in respect of activity-tested payments under the social security
law. Relevantly, the AWT Bill repeals the definition of an ‘approved
program of work for unemployment payment’ and replaces it with the concept
of an ‘approved program of work for income support payment’. To the
extent that the new special benefit activity test provisions introduced by this
Bill use the terminology of an ‘approved program of work for unemployment
payment’, this Schedule amends those references consistent with the
changes made by the AWT Bill.
Subsection 23(1) of the Social Security Act provides a definition of the
term ‘approved program of work for unemployment payment’. The
notion of an approved program of work for unemployment payment (known
colloquially as the ‘Work for the Dole’ program) appears throughout
the newstart allowance, youth allowance and austudy modules of the Social
Security Act, and will appear in Part 2.15 of the Social Security Act as a
result of the introduction of the activity test for nominated visa holders by
this Bill.
The AWT Bill proposes to repeal this definition of an approved
program of work for unemployment payment and replace it with the concept of an
‘approved program of work for income support payment’. This change
is intended to reflect the extension of the Work for the Dole program to
parenting payment customers through the AWT Bill. Parenting payment is not
regarded as an ‘unemployment payment’, and thus a change of name was
warranted. The AWT Bill will make also consequential amendments to substitute
the phrase ‘approved program of work for income support payment’
throughout the Social Security Act.
To the extent that special benefit is
not appropriately described as an ‘unemployment payment’, Items 1
and 2, 4 to 7 (inclusive) and 9 to 12 (inclusive) make changes to
Part 2.15 of the Social Security Act, as amended by this Bill, to insert
references to an ‘approved program of work for income support
payment’ in place of references to an ‘approved program of work for
unemployment payment’.
The AWT Bill also introduces more flexible
arrangements for newstart allowance claimants and recipients who are aged at
least 50 years of age. The measure involves a more flexible approach to the
application of the activity test in order to help maximise economic and social
participation. The proposed new framework provides the flexibility to
accommodate those with limited prospects of employment in the
short-term.
To the extent that the activity test for nominated visa
holders is intended to reflect the activity test regime that applies to newstart
allowance recipients, Items 3, 8, 13 and 14 of this Schedule makes
changes to Part 2.15 of the Social Security Act, as amended by this Bill, to
provide for flexible participation arrangements for special beneficiaries aged
between 50 years of age and age pension age.
Item 3 amends new
section 731A of the Social Security Act to provide that the Secretary is not to
require a person who is aged over 50 years of age to participate in an approved
program of work for unemployment payment (ie in the Work for the Dole
program).
The social security law provides for a person to incur a
penalty in certain circumstances where a person breaches a requirement of the
social security law. In broad terms, the operation of the legislation
essentially provides that special benefit is not payable if such a breach occurs
and if special benefit subsequently becomes payable, a penalty in the nature of
a rate reduction or a non-payment period will be applied. As part of the
measure introduced by the AWT Bill, it is intended that, for people aged at
least 50 years of age, certain concessions will be made available where a person
incurs a rate reduction period or a non-payment period, but prior to the period
expiring, the person addresses and ‘rectifies’ the breach that gave
rise to the penalty.
Item 8 inserts new subsection 745B(2), which
will apply where special benefit is not payable to a person for one of the
following reasons:
− a failure to enter into a Special Benefit Activity Agreement ;
or
− an unreasonable delay in entering into a Special Benefit
Activity Agreement; or
− a failure to take reasonable steps to
comply with the terms of a Special Benefit Activity Agreement.
New
subsection 745B(2) allows for a concession to be made where special benefit is
not payable to a person in one of the above situations, and the person is at
least 50 years of age when the ‘breach’ occurs, and the Secretary is
satisfied that, not more than 8 weeks after the start of the non-payment period
that applies as a result of the breach, the person has ‘rectified’
the breach. For example, if the relevant breach was that the person had failed
to enter into a Special Benefit Activity Agreement, the Secretary would need to
be satisfied that the person had rectified the breach by entering into a Special
Benefit Activity Agreement.
In these circumstances, new subsection
745B(2) provides that any residual amount of the 8 week non-payment period that
has not been served at the time the breach is rectified is to be
waived.
New subsection 745B(3) recognises that there may be some time
that elapses between the time that a person does start to take reasonable steps
to comply, or to resume compliance, with the terms of a Special Benefit Activity
Agreement (as contemplated by new subparagraph 745B(2)(c)(iii)) and the time
that Centrelink is able to make a determination under new subsection 745B(2).
New subsection 745B(3) allows the waiver of the residual amount of the
non-payment period to be backdated to the date that the person began to take
reasonable steps to comply with the terms of a Special Benefit Activity
Agreement, rather than it taking effect on the date on which Centrelink actually
makes the determination under new subsection 745B(2).
Item 13
inserts new subsection 748(2), which will apply where special benefit is not
payable to a person for one of the following reasons:
− a failure
to enter into a Special Benefit Activity Agreement ; or
− an
unreasonable delay in entering into a Special Benefit Activity Agreement;
or
− a failure to take reasonable steps to comply with the terms of
a Special Benefit Activity Agreement.
New subsection 748(2) allows for a
concession to be made where special benefit is not payable to a person in one of
the above situations, and the person is at least 50 years of age when the
‘breach’ occurs, and the Secretary is satisfied that, not more than
26 weeks after the start of the activity test rate reduction period that applies
as a result of the breach, the person has ‘rectified’ the breach.
For example, if the relevant breach was that the person had failed to enter into
a Special Benefit Activity Agreement, the Secretary would need to be satisfied
that the person had rectified the breach by entering into a Special Benefit
Activity Agreement.
In these circumstances, new subsection 748(2)
provides that any residual amount of the 26 week activity test breach rate
reduction period that has not been served at the time the breach is rectified is
to be waived.
New subsection 748(3) recognises that there may be some
time that elapses between the time that a person does start to take reasonable
steps to comply, or to resume compliance, with the terms of a Special Benefit
Activity Agreement (as contemplated by new subparagraph 748(2)(c)(iii)) and the
time that Centrelink is able to make a determination under new subsection
748(2). New subsection 748(3) allows the waiver of the residual amount of the
activity test breach rate reduction period to be backdated to the date that the
person began to take reasonable steps to comply with the terms of a Special
Benefit Activity Agreement, rather than it taking effect on the date on which
Centrelink actually makes the determination under new
subsection 748(2).
Item 14 inserts new subsection 752(2), which will apply where
special benefit is not payable to a person because of a failure to comply with a
requirement to attend a particular place for a particular purpose in accordance
with a notice issued under paragraph 63(3)(c) of the Administration Act. In
broad terms, new subsection 752(2) provides for the waiver of an amount of an
administrative breach rate reduction period that is applicable because of such a
failure.
New subsection 752(2) allows for a concession to be made where special
benefit is not payable because of such a failure, and the person is at least 50
years of age when the ‘breach’ occurs, and the Secretary is
satisfied that, not more than 13 weeks after the start of the non-payment period
that applies as a result of the breach, the person has ‘rectified’
the breach.
The first situation where a waiver would be applicable is
where the person subsequently attends the specified place for the specified
purpose. Where that occurs within 13 weeks of the start of the administrative
breach rate reduction period, any residual amount of the administrative breach
rate reduction period is to be waived.
The other situation where waiver
would be applicable is where, within 13 weeks of the start of the administrative
breach rate reduction period, the person complies with a new requirement that
has been notified by the Secretary in substitution for the original requirement.
It is recognised that there may be situations where a person who has failed to
comply with the requirement to attend a particular place for a particular
purpose subsequently indicates a willingness to comply with that requirement,
but, for administrative reasons, that intention cannot be immediately
accommodated. Where this occurs, the Secretary will be able to substitute a new
requirement and, if the person complies with that requirement, any residual
amount of the administrative breach rate reduction period is to be
waived.
For example, the original requirement may have been for the
person to attend the office of a Job Network member to negotiate a Special
Benefit Activity Agreement with an employee at that office. The person fails to
comply with that requirement, and consequently incurs an administrative breach
rate reduction period. The person subsequently states that he or she is now
willing to comply with that requirement, but there is no immediate capacity for
the Job Network member to negotiate the Agreement. In these circumstances, new
subsection 752(2) provides that for the Secretary to notify the person (either
orally or in writing) of a new requirement in substitution of the original
requirement. For example, the person might instead be required to attend a
Centrelink office and negotiate an Agreement with a Personal Adviser. If the
person complies with that substituted requirement within the relevant 13 week
period, any residual amount of the administrative breach rate reduction period
is to be waived.
As the amendments made to the special benefit activity testing regime by
this Schedule are intended to reflect the amendments made by the AWT Bill to the
general activity test regime for customers other than special beneficiaries, the
amendments in this Schedule will not commence until immediately following the
commencement of the relevant provisions of the AWT Act. This will ensure that
the activity testing regime is applied consistently across the various affected
payment types.
Schedule 3 – Technical amendment of other legislation
Schedule 3 of the Bill makes a number of minor technical amendments
required as a result of the enactment of the Youth Allowance Consolidation
Act 2000.
Items 1 and 2 amend the A New Tax System (Family Assistance)
(Consequential and Related Measures) Act (No. 2) 1999. Amendments are made
to paragraph 2(4)(a) and to the heading of Part 7 of Schedule 1 of the A New
Tax System (Family Assistance) (Consequential and Related Measures) Act (No. 2)
1999 to insert the correct reference to the Youth Allowance Consolidation
Act 2000 (rather than to the Youth Allowance Consolidation Act 1999, as they
currently erroneous refer).
Item 3 amends paragraph 2(3)(b) of the
Family and Community Services Legislation Amendment (1999 Budget and Other
Measures) Act 1999 so that it also correctly refers to the Youth
Allowance Consolidation Act 2000.