Bills Digest no. 105 2011–12

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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Luke Buckmaster
Social Policy Section
9 February 2012

Contents
Purpose
Schedule 1—Income management
Schedule 2—School attendance plans

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Date introduced:  23 November 2011
House:  House of Representatives
Portfolio:  Families, Housing, Community Services and Indigenous Affairs
Commencement:  Sections 1–3 on the day of Royal Assent; Schedule 2 on the later of 1 July 2012 and the day of Royal Assent; and Schedule 1 on the later of 1 July 2012 and the 28th day of the Royal Assent.       

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose

The Social Security Legislation Amendment Bill 2011 (the Bill) amends the social security law to make several changes to current arrangements relating to income management. These changes will:

• allow income management to be triggered by referrals by state and territory agencies which will enable the introduction of a new form of income management, under which Northern Territory agencies will be able to refer people for income management for alcohol related problems
• facilitate the introduction of the new targeted ‘place-based’ form of income management and
• provide for income management to continue for people subject to the program, despite a change of residence.

The Bill also amends the exemption for acceptable absences from school for people subject to the disengaged youth and long term welfare recipient ‘triggers’ for income management.

The Bill also amends the provisions in the social security law that underpin the Australian Government’s School Enrolment and Attendance Measure (SEAM) so that a parent in receipt of income support who does not meet certain compliance arrangements may have their payment suspended.

The Bill is part of a suite of legislation which amends aspects of the Northern Territory Emergency Response (NTER), known as Stronger Futures for the Northern Territory.[1] The other Bills are the Stronger Futures in the Northern Territory (Consequential and Transitional Provisions) Bill 2011 and the Stronger Futures in the Northern Territory Bill 2011.[2] The relevant Bills Digests contain background information on the package that may assist in understanding aspects of this Bill.

Committee consideration

The Bill, along with the Stronger Futures in the Northern Territory (Consequential and Transitional Provisions) Bill 2011 and the Stronger Futures in the Northern Territory Bill 2011 has been referred to the Senate Community Affairs Legislation Committee for inquiry and report by 29 February 2012.[3]

Schedule 1—Income management

Background

‘Income management’ (also known as ‘welfare quarantining’) is the term used by the Australian Government to refer to arrangements whereby a percentage of the income support and family payments of certain people is set aside to be spent only on ‘priority goods and services’.^[4] While the total amount owing to a person subject to income management is not reduced, that person loses the discretion to spend a percentage of their welfare income on things other than those deemed to be priorities by the Government—such as food, clothing, health items and basic household products.^[5]

Under income management, welfare payments of those persons who are subject to the scheme are directly reduced and the remaining amount is diverted into a special account. Funds in this account may only be spent on those priority items listed above. In particular, the funds may not be expended to purchase alcohol (including home brewing products), tobacco, pornography, gambling products or gambling services.

Income management can be compulsory or voluntary, depending upon the circumstances of the relevant individual and the laws applying in a particular area. Those persons currently subject to income management include:

• certain categories of welfare recipient in the Northern Territory deemed to be ‘individuals at risk’
• welfare recipients in the Northern Territory and Western Australia whom a child protection officer has referred to Centrelink to have their income managed and
• [6], has ordered should be subject to income management for engaging in dysfunctional behaviour.

According to the Government, income management is ‘a key tool in supporting disengaged youth, long-term welfare payment recipients and people assessed as vulnerable, and is aimed at encouraging engagement, participation and responsibility’.^[7]

Compulsory income management has been highly controversial. It has attracted support from some who see it as necessary for addressing the behavioural aspects of social disadvantage. It has also been strongly criticised by others on a range of grounds, including that it has been largely focused on Indigenous people, is paternalist and stigmatising, lacks an adequate evidence base and interferes with the right of people to make their own decisions about how they spend their money.

Much of the controversy in relation to the veracity of evidence to support arguments for or against compulsory income management, stems from the fact that there are substantial difficulties associated with evaluating its effectiveness. For a start, there are very few studies available that seek to directly evaluate the effectiveness of income management. Further, there is a range of methodological problems, including the difficulties associated with separating the impact of income management from other policy interventions and factors, the absence of adequate baseline data and the overreliance on qualitative over quantitative data. As such, thus far the evidence provided for or against income management, or any other individual inputs of the NTER, has, at best, only ever partially clarified particular aspects of a complex situation.

Income management triggered by state and territory agency referral

On 14 November 2011, the Government announced that it would:

... strengthen efforts to tackle alcohol abuse with a new income management measure.

Under this measure, Northern Territory authorities will be able to refer people for income management for alcohol related problems, on a similar basis to the way this currently occurs under the child protection measure.[8]

The state or territory referral measure was announced as part of the Government’s Stronger Futures in the Northern Territory (Stronger Futures) package, a set of changes to the Northern Territory Emergency Response following consultations in Northern Territory communities and town camps, and at public meetings in major towns. Stronger Futures also includes measures for addressing alcohol abuse including strengthened arrangements for local alcohol management plans. The state or territory referral measure is intended to complement these other Stronger Futures alcohol measures.

The state or territory referral measure will be established through the creation of a new form of income management in the Social Security (Administration) Act 1999 (SSA Act). The new measure will allow referrals for income management from a recognised state and territory authority by inserting references to a ‘recognised state or territory’ into Part 3B of the SSA Act: items 2–4 of Part 1 of Schedule 1 to the Bill.

According to the Explanatory Memorandum, the new form of income management is intended to be used to accept referrals from the Northern Territory Alcohol and Other Drug Tribunal.[9] However, this is not specified in the legislation. Rather, new section 123TGAB provides that the Minister may, by legislative instrument, determine that a specified state or territory is a ‘recognised state or territory’ for the purposes of Part 3B of the SSA Act and new section 123TGAA further gives the Minister a broad power to determine, by legislative instrument, that a specified department, body or agency of a state or territory is a ‘recognised state/territory authority’. The power to make the referral will then lie with an officer or employee of the recognised state/territory authority: new paragraph 123UFAA(1)(b).

The Northern Territory Alcohol and other Drug Tribunal was established in July 2011 as part of the Territory’s Enough is Enough Alcohol Reforms. The reforms include such measures as bans on alcohol purchasing by problem drinkers and treatment orders. This is facilitated by police-issued Banning and Treatment (BAT) notices. Police may issue problem drinkers with a BAT notice if they have been involved in alcohol-related criminal or anti-social behaviour, or high range or repeat drink driving offences.

The BAT notice can:

• ban problem drinkers from purchasing, possessing and consuming alcohol anywhere in the territory for up to 12 months and/or
• also recommend the person undertake appropriate rehabilitation treatment for their alcohol problem.

The Northern Territory Alcohol and other Drug Tribunal has three main roles:

• reviewing (BAT) notices
• receiving completed Alcohol Intervention Certificates, which may lead to a reduction of the length of a ban imposed by a BAT notice and
• making orders for people assessed as misusing a substance, including orders to undertake treatment and rehabilitation, Banning Alcohol and Drugs and Treatment (BADT) orders.

While not specified in the Explanatory Memorandum or the Minister’s second reading speech, it is likely that the state or territory referral income management measure would be an additional option available to the Tribunal for making orders for people assessed as misusing a substance. The purpose of the income management measure would be to reduce the proportion of income available for expenditure on alcohol.[10]

As with the child protection form of income management, welfare recipients subject to the new income management triggered by state and territory agency referral will have 70 per cent of their payments quarantined: new paragraph 123XPAA(3)(a). However, the Minister will have the power to set alternative amounts to be income managed (not exceeding 100 per cent) by legislative instrument: new paragraph 123XPAA(3)(b).

The Explanatory Memorandum does not include any information on matters such as how the new measure will operate or the numbers of people to whom it is likely to apply. As can be seen from the table below, as at 24 June 20011 there were 17 443 people subject to income management in the Northern Territory.

Table 1: Payment recipients subject to income management in the Northern Territory – 24 June 2011

Measure	Indigenous	Non-Indigenous*	Total	%
Vulnerable Welfare Payment recipient measure			229	1.3
Parenting/Participation Measure	11106	1660	12766	73.2
Disengaged Youth Measure	3720	484	4204	24.1
Long Term Welfare Payment Recipient Measure	7386	1176	8562	49.1
Voluntary Income Management	4336	56	4392	25.2
Child Protection Measure			37	0.2
Northern Territory Emergency Response			19	0.1
Total	15718	1725	17443	100.0

* Includes those who chose not to disclose whether or not they were from an Aboriginal or Torres Strait Islander background.

Source: FaHCSIA, Income management summary - 24 June 2011, tabled document, Senate Community Affairs Legislation Committee, Supplementary Estimates 2011-12.

Comment

One of the main criticisms of income management in the Northern Territory has related to the way in which it is applied to particular categories of welfare recipient—not just those whose personal behaviour may be seen to indicate that management of their welfare payments might be necessary. This criticism has been made by Cape York Indigenous leader, Noel Pearson, a person who is generally supportive of the concept of income management.[11]

One of the arguments made by such critics is that income management should be more clearly targeted at those failing to meet certain obligations to their children and the community. The state or territory referral measure (along with the child protection category introduced in late 2010), introduces a more targeted approach to income management in the Northern Territory.

Nevertheless, it seems unlikely that the more targeted approaches will ultimately represent more than a small percentage of the overall numbers of people subject to income management. (As can be seen from the table, only 0.2 per cent of income managed people in the Northern Territory are subject to the child protection category.) Further, some of those to whom the new state or territory referral income management measure is likely to apply, will already be subject to an existing category of income management.

Enabling targeted place-based income management

In the 2011-12 Budget, the Government announced that from 1 July 2012 it would introduce income management in five new locations in New South Wales, Queensland, Victoria and South Australia. Place based income management will apply in the following locations:

• Bankstown, New South Wales
• Logan, Queensland
• Rockhampton, Queensland
• Playford, South Australia and
• Greater Shepparton, Victoria.

This new model of place-based income management will apply to:

• parents who are referred by state or territory child protection authorities—this will apply ‘in cases where it is considered to be a useful tool in addressing child neglect and building life skills’ and
• people assessed by Centrelink Social Workers as being vulnerable to financial crisis—for example ‘people referred to a Centrelink Social Worker by public housing authorities because they are at risk of homelessness due to rental arrears’.[12]

As with the other forms of income management, people in place-based areas may volunteer to have their income managed.

Under the voluntary and vulnerable income management components, 50 per cent of a person’s welfare payments will be income managed, while 70 per cent will be income managed under the child protection component. People subject to the place-based approach will have access to new support services aimed at improving financial literacy and budgeting.

Part 2 of Schedule 1 of the Bill makes minor amendments to Part 3 B of the SSA Act that enable the new place-based income management to be introduced without necessarily applying other measures currently linked to the vulnerable welfare recipient measure.

Currently, the vulnerable welfare recipient measure is linked to the disengaged youth and long-term welfare recipient income management measures because each has an eligibility criterion that a person’s usual pace of residence is within ‘a declared income management area’ as required in existing paragraphs 123UCA(1)(b), 123UCB(1)(c) and 123UCC(1)(c) respectively. In order to introduce the vulnerable welfare recipient measure in the place-based areas, these areas would need to become declared income management areas. However, doing this would mean that the disengaged youth and long-term welfare recipient income management measures would also be introduced (as they are, in the only area currently designated a declared an income management area, the Northern Territory).

The place-based measure is specifically designed to introduce only the child protection and vulnerable welfare recipient forms of income management. The amendments in Part 2 of Schedule 1 to the Bill ensure this can happen by ‘decoupling’ the income management measures currently linked by a shared definition of ‘declared income management area’. This is done by repealing paragraphs 123UCA(b), 123UCB(1)(c) and 123UCC(1)(c) and substituting new paragraphs requiring that the person’s usual place of residence is within a state, a territory or an area specified in an instrument. In the case of vulnerable welfare payment recipients, new subsection 123UCA(3) the Minister may, by legislative instrument specify a state, territory or area for the purposes of section 123ACA of the SSA Act. In the case of vulnerable disengaged youth, new subsection 123UCB(4) the Minister may, by legislative instrument specify a state, territory or area for the purposes of section 123ACA of the SSA Act. In the case of long term welfare payment recipients, the Minister’s power to make the legislative instrument will be contained in new subsection 123UCC(4) of the SSA Act.

Comment

These amendments will allow the Government to activate the vulnerable welfare payments, disengaged youth and long-term welfare recipient measures separately. In the case of the new place-based approach, it will require a legislative instrument relating to the place-based areas. It is also likely to require new legislative instruments to ensure that the vulnerable welfare payments, disengaged youth and long-term welfare recipient measures remain in force in the Northern Territory.

The place-based approach is focused on certain behavioural triggers, rather than applied in blanket fashion to all in a particular category of welfare recipient. As with the new state or territory referrals income management measure, this may, in part, address the concerns of those who have been critical of income management on the grounds that it has been applied in an arbitrary fashion.

Broadly, these amendments highlight the way in which, as Government income management policies have evolved over time, the legislation behind the various schemes has increased in complexity. It seems likely that at some point further amendments will be required to simplify legislation and policy intent in relation to income management.

Continuing income management despite change of residence

The Part 2, Schedule 1 amendments to the SSA Act also ensure that income management arrangements for affected individuals will continue even if they change their place of residence to one that is not subject to income management. According to the Explanatory Memorandum, this change is necessary because:

 ... having become subject to income management, it may not be to the person’s benefit for income management to end upon their moving to reside outside the declared area. The current provisions may also create an incentive for people to move in order to avoid income management.[13]

This change is achieved by adding new subsections 123UCA(2), 123UCB(3) and 123UCC(3) respectively to the provisions in the Act relating to the vulnerable welfare recipient, disengaged youth and long-term welfare recipient measures. The new subsections provide that income management will continue provided the other elements of income management qualification are maintained. Item 31 repeals the requirement in subparagraph 123UO(3)(b)(ii) that the Secretary terminate a voluntary income management agreement upon the person’s usual place of residence ceasing to be within a declared income management area.

Exemptions for acceptable absences from school

Items 28–30 of Part 2 of Schedule 1 to the Bill makes minor amendments to the SSA Act to clarify the types of school absence which would allow a person to be exempt from income management.

At present, subsection 123UGD(1) of the SSA Act provides that a person is an ‘exempt welfare payment recipient’ at a particular time if the person has one or more dependent children, and, amongst other things, in relation to each dependent child who is a school age child—‘the child has had no more than five unexplained absences in each of the two school terms ending immediately before that time’.  Unfortunately, the term unexplained absence is not defined. To clarify the position, item 28 repeals and substitutes subparagraph 123UGD(1)(b)(i) so that ‘the child has had no more than five absences for reasons that are not satisfactory to a person responsible for the operation of the school’.

In addition, new subparagraph 123UGD(1)(b)(ia) allows for the possibility that while a child may have had more than five absences for reasons that are not satisfactory to a person responsible for the operation of the school, their parent(s) are taking reasonable steps to ensure the child attends and hence may be exempt from income management. This is intended to provide some leeway in situations where for example a teenage child has unsatisfactory attendance despite the best effort(s) of the parents.

Schedule 2—School attendance plans

This schedule amends the provisions in the SSA Act relating to the School Enrolment and Attendance Measure (SEAM).[14] This program uses possible suspension of income support to ensure that children are enrolled in school and attend school regularly. SEAM therefore differs from income management in that welfare payments are suspended, rather than quarantined for expenditure on goods and services deemed to be ‘priority needs’. SEAM trials have been underway in six Northern Territory communities (including 14 schools) since January 2009 and in selected Queensland locations (including 30 schools) since October 2009.[15]

In November 2011, the Government announced that it would seek to extend SEAM to a number of other communities in the Northern Territory, as well as make changes that better align it with existing Northern Territory Government efforts.[16] Under the changes, a parent may be required to attend a compulsory conference to discuss their child’s attendance at school, enter into a school attendance plan and comply with the plan. In the event that the compliance arrangements are not met, a parent’s welfare payments may be suspended.

The changes are to be achieved through the insertion of a new Division 3A into Part 3C of the SSA Act. The new division enables the Secretary or person responsible for the operation of a school to:

• [17] that requires the person to attend a school conference to discuss the attendance of their child, to enter into a school attendance plan[18] at the conference and to comply with the plan: new section 124NB and
• give compliance notices where a person fails to attend a conference, fails to enter a plan or fails to comply with a plan: new section 124ND. The compliance notice would require a person to attend a conference, enter a plan or comply with a plan (depending on the reason for giving the notice).

Failure to comply with a compliance notice will lead to the suspension of a person’s welfare payments: new subsection 124NE(1). Further, if the requisite compliance notice has been given and if the payment has been suspended under this section for a total period of 13 weeks or more (which need not be consecutive), the Secretary may cancel the payment: new section 124NF.

The Bill does not specify a length of time for the suspension. Exemptions from suspension will be possible if there are ‘special circumstances’ that justify the failure to comply with the compliance notice: new subsection 124NE(2). According to the Explanatory Memorandum, examples of special circumstances may include significant sickness or natural disaster.[19]

The suspension of welfare payments sanction will not apply if the person had already been fined under a state or territory law in relation to the failure of the person’s child to attend school and the Secretary determines that suspension should not apply : new subsection 124NE(3). Circumstances that the Secretary might consider in making this determination would include the length of time since the fine was imposed, whether the fine had been paid, the history of school attendance by the person’s child, the parent’s compliance with their attendance plan and their ongoing efforts to ensure their child goes back to school.[20]

The circumstances under which suspended payments may become payable again are detailed in new section 124NG. These circumstances include that the Secretary is satisfied that the person has entered into an appropriate plan for improved school attendance or there are special circumstances that justify the person being unable to enter into such a plan.

Comment

The Government says that the changes in this schedule are intended to enable the SEAM program to be integrated with the Northern Territory Government’s Every Child Every Day school attendance initiative.[21] It is not clear from the Explanatory Memorandum precisely what sort of integration is envisaged or how this is intended to occur. If anything, the amendments appear to foreshadow some degree of overlap or duplication with existing Northern Territory Government processes, given that non-compliance with a compliance notice may result in suspension of a payment unless a Northern Territory Government fine has already been imposed.

The Government’s decision to extend SEAM to additional communities and add school attendance plans to its operation has been heavily criticised by some commentators and Indigenous community leaders. The main criticism has been that there is insufficient evidence in support of the policy—for example, evidence that school absentees are disproportionately the dependents of welfare beneficiaries or that such measures will ensure school attendance.[22] Critics such as Australian Greens Senator, Rachel Siewert have also argued that the focus of a program such as SEAM should be on ‘positive’ measures, rather than punitive measures such as suspension of welfare payments:

It was made clear in Senate Estimates that the positive and more consistent results from SEAM are delivered through case management and personalised involvement with families, rather than any measures that punish parents.

The positive investments contribute to improving school attendance. More teachers, better training, bilingual education, community involvement, better parental engagement with schools, action to address children’s hearing health and more investment in case management—all these policies would deliver better outcomes than SEAM is able to.[23]

On 2 February 2012, the Government released a 2010 evaluation report of SEAM which indicated that at the time of the evaluation, the program had produced some positive outcomes. These included that:

• SEAM was successful in ensuring that all children of school-age involved in the trial were enrolled in school or an alternative education program in 2010
• in both the Northern Territory and Queensland, from 2009 to 2010, children participating in the SEAM trial improved their attendance rates more than other children in the same schools and
• overall attendance by SEAM students increased from 74.4 per cent to 79.9 per cent in the NT and from 84.7 per cent to 88.7 per cent in QLD.[24]

It is worth noting that the evaluation found that income support suspensions were not responsible for improved attendance:

Despite data being limited, preliminary results suggest income support suspensions had no impact on improving school attendance. It appears that the issuing of attendance notices and the potential threat of suspension has had the most impact on school attendance.[25]

This is not necessarily an argument against the amendments in this schedule (introduction of school attendance plans with suspension of payments for non-compliance). As noted above, the evaluation found that the threat of suspension of payments had some impact on attendance. Further, the introduction of school attendance plans could strengthen the SEAM program by developing a set of concrete actions that the family would commit to undertake.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

For copyright reasons some linked items are only available to members of Parliament. 

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