Social Security and Veterans' Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Bill 2006

Date introduced: 10 May 2006

House: House of Representatives

Portfolio: Families, Community Services and Indigenous Affairs

Note: The Bill was passed by Parliament on 11 May 2006 and received Royal Assent on 22 May 2006 (Act No. 41 of 2006).

Purpose

To provide for the legislation necessary to give effect to two government initiatives announced in the 2006-07 Budget that provide for extra assistance to older Australians and to carers. These initiatives are:

Background

Schedule 1 – 2006 one-off payments to older Australians

One-off payments to older Australians announced in the 2006-07 Budget

The government initiative to provide a one-off payment of $102.80 to older Australians was announced in the 2006-07 Budget.⁽¹⁾

Proposed one-off payment - qualification

The proposed one-off payment of $102.80 is for a person qualified to receive a government income support payment provided under the Social Security Act 1991 (SSA) and the person is aged over Age Pension age on 9 May 2006. The one-off payment is also to be provided to each person qualified to receive Service Pension⁽²⁾ or Income Support Supplement⁽³⁾ provided under the Veterans’ Entitlements Act 1986 (VEA) provided the person is aged over Service Pension age⁽⁴⁾ on 9 May 2006.

Where a person is on an income support payment and is a member of a couple, and the other couple member is also qualified for an income support payment, they each receive $51.40.

A one-off payment is also proposed to be provided to each self-funded retiree eligible for the Seniors Concession Allowance⁽⁵⁾ on 9 May 2006. Where both members of a couple are eligible for the Seniors Concession Allowance, they each receive $102.80.⁽⁶⁾

There is no information or explanation of the different amounts for these two different groups.

A like one-off payment of $102.80 is also proposed to be provided by 30 June 2006 to each person qualified for Widow Allowance (WA)⁽⁷⁾, Mature Age Allowance (MAA)⁽⁸⁾ or Partner Allowance (PA)⁽⁹⁾ on 9 May 2006.⁽¹⁰⁾

Amount of the one-off payment

Purpose of the one-off payments

The second reading speech to the Bill states that the reason for the one-off payments were:

Estimated cost

The one-off payments is estimated to cost $192.5 million, including $27.7 million through the Department of Veterans’ Affairs portfolio.⁽¹⁵⁾

Schedule 2 – Administrative schemes for 2006 one-off payments to older Australians

Introduction

Schedule 2 proposes to insert into the Social Security Act 1991 (SSA) provisions to empower the Minister to set up an administrative scheme under which one-off payments could be made to older Australians in particular circumstances. The Minister would be able, by way of a legislative instrument,⁽¹⁶⁾ to prescribe who should be paid and how much they should be paid, rather than have this done by way of legislation as is done in Schedule 1 of this Bill. As a legislative instrument, the scheme would be disallowable to the Parliament in the usual way.

Why have the administrative scheme provisions in Schedule 2?

Provisions like those presented in Schedule 2 have been presented in other like one-off payment bills in the past.⁽¹⁷⁾ The Social Security Legislation Amendment (One-off Payments for Carers) Act 2005, contained a Schedule, very much like Schedule 2 in this Bill, empowering the Minister to use a legislative instrument to create an administrative scheme to provide payments to persons the Minister considers missed out but should get the same payment. Schedule 2 ensures the Minister can a one-off payment to ‘deserving cases’ without having recourse to Parliament to authorise the payment.

Schedule 3 – 2006 one-off payments to carers

2006-07 Budget announcement

This government initiative, to provide one-off lump-sum payments to carers was announced in the 2006-07 Budget.⁽¹⁸⁾

Proposed one-off payments

A one-off payment of $1 000 is proposed to be paid to persons qualified to receive the following payments on 9 May 2006:

A one-off $600 payment is also proposed to be paid to persons qualified to receive Carer Allowance on 9 May 2006.

Carers in receipt of both payments (that is Carer Payment and Carer Allowance), will receive both lump-sum payments.⁽²²⁾

Purpose of the one-off payment to carers

In the Budget papers that presented this announcement, the initiative stated that the purpose of the one-off payments was:

Estimated cost

One-off payments to carers is estimated to cost $358 million.⁽²⁴⁾

Carer Payment

Carer Payment used to be called the Carer Pension. There are two types of Carer Payment:

Carer Payment – caring for an adult

A person may qualify for Carer Payment – caring for an adult, if they provide constant care in the home of the person they care for and the person being cared for:

The person (adult) being cared for also needs to:

Carer Payment – caring for a child

A person may qualify for Carer Payment – caring for a child, if they provide constant care in the home of the person being cared for and the person/s being cared for is/are:

Carer Allowance

Carer Allowance has its origins as the Child Disability Allowance and the Domiciliary Nursing Care Benefit. There are two types of Carer Allowance:

Carer Allowance – caring for a child

A person may qualify for Carer Allowance – caring for a child, if they look after a child with a disability or severe medical condition who requires additional care or attention in their own home. The carer must live in the same home as the child being cared for. Both the carer and the child with a disability must also meet residence requirements.

A person can get either:

What a person gets will depend on the severity of the child's disability. Where the child being cared for is assessed as having a disability or severe medical condition who requires a lot of additional care or attention in their own home, the carer may qualify for the CA and will then be automatically qualify for a HCC.

Where the child being cared for does not qualify for Carer Allowance payment but does require at least 14 hours a week more care because of the disability or medical condition than a child without a disability, then the child may qualify for a HCC.

A single rate of Carer Allowance – child may be payable where the combined level of disability of two children in the family meets the qualifying threshold.

Carer Allowance – adult

A person may qualify for Carer Allowance – adult if:

A person can get Carer Allowance for up to two adults if both adults individually qualify. Two carers may share one payment of Carer Allowance, in certain circumstances, if they are together providing care.

Schedule 4 - Administrative scheme for 2006 one-off payments to carers

The comments provided about Schedule 2 above referring to an administrative scheme also apply to Schedule 4 of the Bill. Schedule 4 provides for the one-off payments to carers being provided for in Schedule 3 of the Bill.

Main provisions

Schedule 1 – 2006 one-off payments to older Australians

Part 1

Item 1 proposes to insert new provisions in the SSA for the qualification for and rate of the one-off payment to older Australians. Essentially to qualify for the one-off payment the person needs to:

Item 1 also provides for the rate of the one-off payment. The amount of the one-off payment is generally $102.80. Where the person is on an income support payment and a member of a couple, and the other member of the couple is also on an income support payment and qualified for the one-off payment, they each receive $51.40. Where the person and their partner are both self-funded retirees and qualified for Seniors Concession Allowance, they each receive $102.80.

Item 3 inserts provisions into the SSA to provide for the creation of a debt in respect of the one-off payment, where the one-off payment was obtained by way of false or misleading information. Debts are recoverable under the SSA. As with all debts under the SSA, any subsequent prosecution action under either the SSA or any other Act is a matter for the Department of Public Prosecutions.

Item 7 inserts similar provisions into the VEA to the provisions inserted into the SSA in Item 1. The one-off payment is to be provided to persons on a Service Pension or Income Support Supplement and who are aged over Service Pension age on 9 May 2006. The amount of the one-off payment is $102.80 to a person but where a person is a partner of another person who is also entitled to the one-off payment under the VEA or the SSA, the payment is $51.40 each. Item 7 also contains provisions about the creation of a debt, consistent with the provisions in Item 3.

Part 2

Item 8 amends the Income Tax Assessment Act 1936 (ITAA 1936) so that the amount of the one-off payment is not income for a dependant, where another person is claiming that person as a dependent (dependant spouse) for tax deduction purposes.

Items 9 to 14 amend the Income Tax Assessment Act 1997 (ITAA 1997), so that the amount of the one-off payment is not taxable income.

Item 15 amends the SSA so that the one-off payment is not treated as income under the SSA. Likewise Item 16 amends the VEA so that the one-off payment is not treated as income under the VEA.

Schedule 2 – Administrative schemes for 2006 one-off payments to older Australians

Item 1 amends the SSA to empower the Minister to establish under the SSA a scheme to make one-off payments to older Australians in specified circumstances. Item 2 does the same to the VEA, empowering the Minister for Veterans’ Affairs. The scheme is described in the Background to this Digest.

Schedule 3 – 2006 one-off payments to carers

Part 1

Item 1 inserts provisions into the SSA to provide for the one-off payment of $1 000 to a person qualified for Carer Payment on 9 May 2006. Item 1 also inserts provisions into the SSA to provide the one-off payment of $1 000 to a person on Wife Pension (that is Wife Pension - Age Pension or Wife Pension - Disability Support Pension) and the person was also qualified for a Carer Allowance on 9 May 2006.

Item 1 also contains provisions to amend the SSA to provide for the one-off payment of $1 000 to a person on partner service pension and also in receipt of Carer Allowance under the SSA on 9 May 2006. Also, Item 1 contains provisions for the SSA to provide for the one-off $1 000 payment to person qualified to receive Carer Service Pension.⁽²⁵⁾ Persons on Carer Service Pension are those who were ‘saved’ and kept on Carer Service Pension, when the Carer Service Pension was removed from the VEA in 1997. Thereafter, only the Carer Pension payable under the SSA has been available for full-time carers.

Item 2 inserts provisions for the payment of the $600 one-off payment to persons qualified for the Carer Allowance on 9 May 2006. Where payment of Carer Allowance is split between two carers, the proportion of the Carer Allowance paid to each person is to also apply to the proportion of the $600 one-off payment paid to each carer. Split Carer Allowance payment can apply where separated parents are providing care for a qualifying child with a disability.

Item 3 sets out further requirements to qualify for the one-off payment, being that the person lodged a claim on or before 9 May 2006 and their start date of payment does not cover 9 May 2006, solely by virtue of the Carer Allowance 12 week backdating of claim provisions.

Items 4 to 6 refer to the overpayment provisions for the one-off $600 payments, being the same that apply to the $1 000 payments. That is, where the one off payment was obtained by way of false or misleading statement or information, an overpayment can arise and become a recoverable debt.

Part 2

Items 10 and 11 in Part 2 amend the Income Tax Assessment Act 1936 (ITAA 1936), so that the amount of the one-off payment is not income for a dependant, where another person is claiming that person as a dependent (dependant spouse) for tax deduction purposes.

Item 12 amends the ITAA 1936 so that any payment made under an administrative scheme empowered by the amendments in Schedule 4 of the Bill are also not income for a dependant, where another person is claiming that person as a dependent (dependant spouse) for tax deduction purposes.

Items 14 to 16 amend the Income Tax Assessment Act 1997 (ITAA 1997), so that the amount of the one-off payment is not taxable income.

Item 16 amends the SSA so that the one-off payment is not treated as income under the SSA. Likewise Item 17 amends the VEA so that the one-off payment is not treated as income under the VEA.

Schedule 4 - Administrative scheme for 2006 one-off payments to carers

Item 1 amends the SSA to empower the Minister to establish under the SSA a scheme to make one-off payments to carers in specified circumstances, as for Schedule 2.

Concluding comments

The one-off lump-sum payments provided to older aged Australians and to carers are beneficial.

Endnotes

1. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, p. 218, Canberra, 9 May 2006.
   http://www.budget.gov.au/2006-07/bp2/html/index.htm
2. Service Pension is payable to a ‘veteran’ who is a male and aged 60 or more or a female aged above the qualifying age – see below. For males or females, Service Pension is only payable to a veteran with qualifying war service. Service Pension is paid at the same rate as Age Pension with the same income and assets tests. The qualifying age for Service Pension is 5 years earlier than for Age Pension, recognising the extra stresses and strains of war service.
   

   Date of Birth	Qualify at
   1 January 1948 to 30 June 1949	58
   1 July 1949 to 31 December 1950	8.5
   1 January 1951 to 30 June 1952	59
   1 July 1952 to 31 December 1953	59.5
   1 January 1954 and later	60

3. Income Support Supplement is payable to a person qualified to receive a war widows/ers pension under the Veterans’ Entitlements Act 1986 and whose income or assets are less than the disqualifying limits for the income and assets tests for the age and service pension.
4. Service Pension is payable to a ‘veteran’ who is a male and aged 60 or more or a female aged above the qualifying age – see below, op. cit.
5. A person is eligible for the Seniors Concession Allowance (SCA) of $103.00 paid once every 6 months on 1 July and 1 December of each year. To be eligible for the SCA, the person needs to qualify for a Commonwealth Seniors Health Care Card (CSHCC). Persons are qualified for the CSHCC if they are over age pension or service pension age, not in receipt of an age or service pension and have annual taxable income of less than $50 000 if single or $80 000 if partnered (combined).
   http://www.centrelink.gov.au/internet/internet.nsf/payments/seniors_concession.htm
6. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, p. 218, op. cit.
7. A person may get Widow Allowance if they are a woman who:
   • was born on or before 1 July 1955 and is not a member of a couple,
   • has become widowed, divorced or separated (including separated de facto) since turning 40,
   • has no recent workforce experience - that is hasn’t worked at least 20 hours a week for 13 weeks or more in the last year,
   • is an Australian resident, in Australia and not subject to the two year newly arrived residents waiting period,
   • satisfies one of the qualifying residence rules for Widow Allowance, and
   • has income and assets below a certain amount.
   A person cannot claim Widow Allowance from 1 July 2005, unless they were born on or before 1 July 1955.
   http://www.centrelink.gov.au/internet/internet.nsf/payments/qual_how_wid.htm
8. A person may qualify for Mature Age Allowance if they:
   • are 60 years of age or over but less than Age Pension age, and
   • have no recent workforce experience (recent workforce experience means work of at least 20 hours a week for a total of 13 weeks or more in the 12 months before claiming), and
   • have received an income support payment for at least nine months and are on Newstart Allowance when you claim, or
   • have received a payment of a social security pension from Centrelink or a Veterans' Affairs Service Pension, or a Widow, Partner, Sickness or Parenting payment at any time within the 13 weeks immediately before claiming, or
   • have previously received Mature Age Allowance, and
   • meet residence requirements.
   Thare are no more new grants of Mature Age Allowance from 20 September 2003.
   http://www.centrelink.gov.au/internet/internet.nsf/payments/qual_how_maa.htm
9. A person may qualify for Partner Allowance if they:
   • were born on or before 1 July 1955,
   • are the partner of a person aged at least 21 who is getting Newstart Allowance, Special Benefit, Rehabilitation Allowance, Age Pension, Disability Support Pension, Mature Age Allowance, a Veterans' Affairs Service Pension, ABSTUDY or an Austudy Payment,
   • do not qualify for Parenting Payment, (that is, have no dependent children they can claim Parenting Payment for),
   • are not engaged in industrial action,
   • are not serving a Newstart Allowance, Youth Allowance or Austudy payment waiting period,
   • are not serving a penalty non-payment period,
   • have no recent workforce experience (employment of at least 20 hours per week for a total of 13 weeks or more in the previous 12 months), and
   • meet residence requirements.
   There are no more new grants of Partner Allowance from 20 September 2003.
   http://www.centrelink.gov.au/internet/internet.nsf/payments/partner.htm
10. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, pp. 171–172, Canberra, 9 May 2006.
    http://www.aph.gov.au/budget/2006-07/bp2/html/index.htm
11. Utilities Allowance (UA) is a non-taxable payment of $25.70 per member of a couple and $51.40 for single people (or members of a couple separated by illness). It is paid every six months to qualified income support payment recipients on 20 March and 20 September of each year. UA is not subject to a separate income test or to a separate assets test. UA is payable to a person on a government income support payment and aged over Age Pension age such as:
    • Austudy
    • Age Pension
    • Disability Support Pension
    • Carer Payment
    • Wife Pension
    • Widow B Pension
    • Parenting Payment (Single)
    • Special Benefit
    • Widow Allowance
    • Bereavement Allowance
    • Partner Allowance
    • Parenting Payment (Partnered)
    UA is also paid to persons on a government income support payment provided under the Veterans’ Entitlements Act 1986 (VEA) and aged over Service Pension age. The income support payments provided under the VEA that a person over Service Pension age can be paid and therefore qualify for UA are:
    • Service Pension
    • Partner Service Pension
    • Invalidity Service Pension
    • Income Support Supplement
    http://www.centrelink.gov.au/internet/internet.nsf/payments/utilities_allowance.htm
12. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, p. 218, op. cit.
13. Centrelink Guide to payments, Seniors Concession Allowance – how much Seniors Concession Allowance do I get?, http://www.centrelink.gov.au/internet/internet.nsf/payments/pay_how_seniors.htm
14. The Hon. Mr Mal Brough, MP, Minister for Families, Community Services and Indigenous Affairs, ‘Second reading speech: Social Security and Veterans' Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Bill 2006’, House of Representatives, Debates, 10 May 2006, p. 98. http://www.aph.gov.au/hansard/reps/dailys/dr100506.pdf
15. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, p. 218, op. cit.
16. Moira Coombs, Acts Interpretation Amendment (Legislative Instruments) Bill 2005,
    Bills Digest No. 11, 2005-06, Parliamentary Library, Canberra, 8 August 2005. http://www.aph.gov.au/library/pubs/bd/2005-06/06bd011.pdf
17. Dale Daniels, Social Security Legislation Amendment (One-off Payments for Carers) Bill 2005, Bills Digest No. 4,3 2005-06, Parliamentary Library, Canberra, 9 September 2005. http://www.aph.gov.au/library/pubs/bd/2005-06/06bd043.pdf
    Ian Ireland, Family and Community Services Legislation Amendment (One-off Payment to the Aged) Bill 2001, Bills Digest No. 134,. 2000-01, Parliamentary Library, Canberra, 24 May 2001. http://www.aph.gov.au/library/pubs/bd/2000-01/01BD134.htm
18. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, p. 209, Canberra, 9 May 2006.
    http://www.aph.gov.au/budget/2006-07/bp2/html/index.htm
19. Wife Pension can be paid to the female partner of an age pensioner or a disability support pensioner. New grants of Wife Pension stopped on 1 July 1995.
20. Partner Service Pension can be paid to a person who is:
    • legally married to and living with a veteran, or
    • living in a marriage-like relationship with a veteran;
    and
    • the veteran is receiving an age service pension or an invalidity service pension; or
    • would be receiving one of these pensions if the pension were payable; or
    • the veteran is registered as a member of the pension bonus scheme.
    A person may also be eligible if they are a member of a couple where the veteran has rendered qualifying service and the person is qualified for an age pension.
    Partner service pension may be paid to former partners who are legally married but separated from a veteran. Former partners are eligible if:
    • they are at least 50 years of age; or
    • they have dependent children, and
    • the veteran is receiving or is eligible to receive the service pension.
    Partner service pension is not payable where the person is not yet 50 years of age, does not have dependent children and their partner does not receive the T&PI rate of disability pension.
21. Persons on Carer Service Pension are those who were saved when Carer Service Pension was removed from the VEA in 1997. Thereafter, only the CP payable under the SSA has been available for full-time carers.
22. Department of Treasury, 2006-07 Budget papers, Budget Paper No. 2 – Budget Measures 2006-07, p. 209, op. cit.
23. ibid.
24. ibid.
25. Carer Service Pension refers to persons now receiving a Partner Service Pension but who were transferred to the Partner Service Pension, op. cit.