Details of the Financial Framework (Supplementary Powers) Amendment

(Prime Minister and Cabinet Measures No. 4) Regulations 2021

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet Measures No. 4) Regulations 2021.

 

Section 2 - Commencement

 

This section provides that the Regulations commence immediately after the instrument is registered on the Federal Register of Legislation.

 

Section 3 - Authority

 

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.

 

Schedule 1 - Amendments

 

Financial Framework (Supplementary Powers) Regulations 1997

 

Item 1 - Part 4 of Schedule 1AB (at the end of the cell at table item 492, column headed "Objective(s)")

 

Item 1 amends the cell at table item 492 in the column headed "Objective(s)' by adding a new third objective. Table item 492 establishes legislative authority for government spending on the COVID-19 Disaster Payment (the payment). The payment is time-limited financial assistance to eligible persons who are, or were, unable to earn their usual income as a result of a state or territory public health order restricting the movement of persons (also known as a lockdown) in a location in Australia determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot for the purposes of Commonwealth support (a Commonwealth hotspot area), or in another location because they were previously present in a Commonwealth hotspot area.

 

The new third objective of table item 492 provides that financial assistance (the extended payment) may be made available to certain persons who reside or are employed, or resided or were employed, in a state or territory in which there is, or was, a Commonwealth hotspot area, and while not themselves prevented from being able to work in their usual employment are, or were, unable to earn their usual income as a result of the lockdown in a Commonwealth hotspot area. These amendments make the extended payment available to persons in locations that have not been determined to be a Commonwealth hotspot area, and in circumstances where these persons are unable to earn their usual income not because a public health order prevents them from doing so, but because of the effect of the lockdown in a Commonwealth hotspot area on the activities of other persons, leading to a downturn in trade and/or a reduction in working hours for this additional cohort of eligible persons. The amendments will ensure a greater number of vulnerable Australians are able to access financial support during a state or territory lockdown.

 

This level of financial assistance will apply nationally to any state or territory that experiences an extended lockdown following the determination of a location to be a Commonwealth hotspot area, and subject to the relevant jurisdiction reimbursing the Commonwealth for any payments outside of a Commonwealth hotspot area, with the Commonwealth continuing to fund payments to recipients in a Commonwealth hotspot area. New South Wales (NSW) is the first jurisdiction where the extended payment will apply from 18 July 2021, subject to recipients meeting eligibility criteria.

 

The enhanced and expanded Commonwealth support to NSW and other states and territories that experience an extended lockdown, including the extended payment, was jointly announced by the Prime Minister, the Hon Scott Morrison MP, and the Treasurer, the Hon Josh Frydenberg MP, on 13 July 2021. Media statement is available at https://www.pm.gov.au/media/nsw-covid-19-support-package-0.

 

The Department of Home Affairs had responsibility for the payment until 30 June 2021. From 1 July 2021, the responsibility for the payment, including the extended payment, transferred to the National Recovery and Resilience Agency (the NRRA) in the Prime Minister and Cabinet portfolio. Payments to the additional cohort of eligible individuals will continue to be administered by Services Australia.

 

The extended payment is intended to assist certain persons who:

(a)    are Australian citizens, Australian permanent residents or holders of a temporary visa who have the right to work in Australia; and

(b)   are aged 17 years or over; and

(c)    at a particular time, reside or are employed, or resided or were employed, in a state or territory that:

(i)     contains a location that is or was, at the particular time, subject to a state or territory public health order (the hotspot public health order) restricting the movement of persons for a period and determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot for the purposes of Commonwealth support; and

(ii)   at or after the particular time, enters into an agreement with the Commonwealth to reimburse the Commonwealth for the financial assistance; and

(d)   while not themselves prevented from being able to work in their usual employment by the restrictions imposed by a public health order, are or were unable to earn their usual income as a result of the restrictions imposed by the hotspot public health order; and

(e)    other than annual leave, have, or had, no available leave entitlements to cover the period for which the financial assistance is provided; and

(f)    declare that during the period of the restrictions they reside or are employed, or resided or were employed, in the state or territory; and

(g)   declare that, while not themselves prevented from being able to work in their usual employment by the restrictions imposed by a public health order, they are or were unable to earn their usual income as a result of the restrictions imposed by the hotspot public health order; and

(h)   during the period for which the financial assistance is provided are, or were, not otherwise receiving:

(i)     Commonwealth income support payments or payments of a similar nature; or

(ii)   pandemic leave disaster payments; or

(iii) pandemic payments from a state or territory.

 

The rate of the extended payment will be set at $600 per week for individuals who lost 20 hours or more of work per week, and $375 per week for individuals who lost between eight and 20 hours of work.

 

Precise details of the eligibility criteria and commencement dates from which applications for the extended payment can be made, will be published on the Services Australia website (www.servicesaustralia.gov.au). Eligibility criteria will also be updated in the COVID-19 Disaster Payment Guidelines, which will be made available on the GrantConnect website (www.grants.gov.au).

 

From 1 July 2021 until 30 June 2022, the payment, including the extended payment, will be funded through an unlimited special appropriation established in the COVID-19 Disaster Payment (Funding Arrangements) Act 2021. This period reflects the time-limited nature of Commonwealth income support for the COVID-19 pandemic.

 

The extended payment will be administered by Services Australia as a demand driven (eligibility based) grant and paid directly to eligible persons. Claimants will be required to complete and submit a claim via their myGov account. Claims will only be accepted by telephone in limited circumstances. A claim will be assessed by Services Australia against the eligibility criteria before making the payment and claimants will be notified by letter if their claim has been granted or rejected. If the assessment process identifies unintentional errors in an application, the claimant may be contacted to correct or explain the information. Where requested, a claimant may also need to provide evidence of meeting the eligibility criteria for the payment. There will be no written grant agreement for the payment, or associated eligible grant activities. Proof of expenditure of the grant will not be required.

 

Grants will be administered in accordance with the Commonwealth Grants Rules and Guidelines 2017 and the Public Governance, Performance and Accountability Act 2013. Decisions about Commonwealth expenditure in connection with the extended payment will be made by a Services Australia delegate of the Coordinator-General of the NRRA. The aggregated information on the number of claims granted and the total expenditure will be published on GrantConnect. Individual claimants will not be identified.

 

The COVID-19 Disaster Payment (Funding Arrangements) Act 2021 also creates an obligation on the Coordinator-General of the NRRA to include in the NRRA's annual report for the reporting period commencing on 1 July 2021, information that relates to payments made in that period. This information may include:

*         the total amount of payments for the reporting period;

*         the number of payments granted, and the number of applications that were not granted;

*         if payments are required for multiple events in the reporting period - the amount paid and number of claims for each event; and

*         qualitative information to assist with the interpretation of the above mentioned quantitative information.

 

Independent merits review is not considered suitable for decisions made in connection with the extended payment, as such decisions are automatic or mandatory in nature. The eligibility criteria are simple factual matters. Where the applicant is eligible, the decision involves no discretion.

 

Further, the extended payment will be administered in a beneficial way that promotes compliance with health objectives and ensures financial support is available. Declaration is the primary method of a person demonstrating they have met the eligibility criteria.

 

The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 3.8 to 3.11 of the guide, What decisions should be subject to merit review?).

 

Decisions to reject a person's claim for the payment will be subject to review processes within Services Australia at a claimant's request. If a person does not understand the reason(s) for a decision made by Services Australia, they can ask for an explanation of the decision. This explanation will be provided by a Subject Matter Expert (SME). The SME will investigate the decision, correct any identified errors, undertake any re-assessment and contact the customer to explain the decision. All customer consultations will be managed by Services Australia, which may seek input from the NRRA at any point in this process prior to finalising the review. The internal review process in Services Australia provides a robust means of addressing errors that might occur in the decision making process. Given these are beneficial and not complex decisions, the internal review process conducted by Services Australia provides an effective means of efficiently arriving at the preferable decision.

 

The payment will be subject to the oversight by the Commonwealth Ombudsman. The audit process undertaken by the Australian National Audit Office also provides a mechanism to review government spending decisions and report any concerns to the Parliament. Judicial review may also be available under section 39B of the Judiciary Act 1903 and section 75(v) of the Australian Constitution.

 

Administrative accountability for the payment will be achieved by ensuring that:

*         the process of allocating funds is fair;

*         the criteria for funding are made clear; and

*         decisions are made objectively.

 

The new national arrangements have been developed following close cooperation between the Commonwealth and NSW governments to ensure additional support is targeted and rolls out as quickly as possible under a new cost sharing agreement.

 

The NRRA also consulted extensively with Services Australia, which has administrative responsibility for the delivery of the payment and other government disaster related payments to the community.

 

There was a need to implement the extended payment quickly in order to enable financial support to be provided to more vulnerable Australians in a timely manner. Furthermore, the payment, being a benefit paid to individuals, imposes no regulatory burden on businesses, therefore broader consultation was not required in this instance.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers in the Constitution:

*         express incidental power and the executive power (sections 51(xxxix) and 61), including the nationhood aspect.

 

Executive power and express incidental power, including the nationhood aspect

 

The express incidental power in section 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in the Parliament, the executive or the courts by the Constitution. Section 61 of the Constitution supports activities that are peculiarly adapted to the government of a nation and cannot be carried out for the benefit of the nation otherwise than by the Commonwealth.

 

COVID-19 is causing a widespread health emergency of national significance, with widespread impacts on sectors of the economy due to the need for lockdowns to contain the spread of COVID-19. The COVID-19 Disaster Payment will be extended to certain eligible persons who reside or are employed, or resided or were employed, in a state or territory in which there is, or was, a Commonwealth hotspot area, and while not themselves prevented from being able to work in their usual employment are, or were, unable to earn their usual income as a result of the lockdown in a Commonwealth hotspot area.

 

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet Measures No. 4) Regulations 2021

 

This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the legislative instrument

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. The powers in the FF(SP) Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

 

The Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet Measures No. 4) Regulations 2021 (the Regulations) amend table item 492 in Part 4 of Schedule 1AB to the FF(SP) Regulations, which establishes legislative authority for government spending on the COVID-19 Disaster Payment (the payment). The payment is time-limited financial assistance to eligible persons who are, or were, unable to earn their usual income as a result of a state or territory public health order restricting the movement of persons (also known as a lockdown) in a location in Australia determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot for the purposes of Commonwealth support (a Commonwealth hotspot area), or in another location because they were previously present in a Commonwealth hotspot area.

 

The amendments to table item 492 extend the eligibility for the payment (the extended payment) to certain persons who reside or are employed, or resided or were employed, in a state or territory in which there is, or was, a Commonwealth hotspot area, and while not themselves prevented from being able to work in their usual employment are, or were, unable to earn their usual income as a result of the lockdown in a Commonwealth hotspot area. These amendments make the extended payment available to persons in locations that have not been determined to be a Commonwealth hotspot area, and in circumstances where these persons are unable to earn their usual income not because a public health order prevents them from doing so, but because of the effect of the lockdown in a Commonwealth hotspot area on the activities of other persons, leading to a downturn in trade and/or a reduction in working hours for this additional cohort of eligible persons.

 

The amendments will ensure a greater number of vulnerable Australians are able to access financial support during a state or territory lockdown. Other eligibility criteria will continue to apply. The rate of the extended payment will be set at $600 per week for individuals who lost 20 hours or more of work per week, and $375 per week for individuals who lost between eight and 20 hours of work.

 

This level of financial assistance will apply nationally to any state or territory that experiences an extended lockdown following the determination of a location to be a Commonwealth hotspot area, and subject to the relevant jurisdiction reimbursing the Commonwealth for any payments outside of a Commonwealth hotspot area, with the Commonwealth continuing to fund payments to recipients in a Commonwealth hotspot area. New South Wales (NSW) is the first jurisdiction where the extended payment will apply from 18 July 2021, subject to recipients meeting eligibility criteria.

 

Precise details of eligibility criteria and the commencement dates from which applications for the extended payment can be made, will be published on the Services Australia website (www.servicesaustralia.gov.au). Eligibility criteria will also be updated in the COVID-19 Disaster Payment Guidelines, which will be made available on the GrantConnect website (www.grants.gov.au).

 

The Department of Home Affairs had responsibility for the payment until 30 June 2021. From 1 July 2021, the responsibility for the payment, including the extended payment, transferred to the National Recovery and Resilience Agency in the Prime Minister and Cabinet portfolio. Payments to the additional cohort of eligible individuals will continue to be administered by Services Australia.

 

Human rights implications

 

This disallowable legislative instrument engages the following rights:

*         the right to health in Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), read with Article 2; and

*         the right to an adequate standard of living in Article 11 of the ICESCR.

 

Right to health

 

Article 2 of the ICESCR requires the States Parties to take steps to progressively achieve the full realisation of the rights recognised in the ICESCR by all appropriate means.

 

Article 12 of the ICESCR states, in part:

 

1. The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

2. The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for: [ ... ]

(c) The prevention, treatment and control of epidemic, endemic, occupational and other diseases; [ ... ].

 

The extended payment broadens the group of individuals who are able to apply for the payment. The primary aim of the amendments to table item 492 is to ensure individuals who are in a different area to where the impact arose - and who are unable to earn their usual income as a result of the lockdown in a Commonwealth hotspot area, and do not have available paid leave entitlements, other than annual leave - are able to claim the payment. The extended payment promotes public health by ensuring that economic pressure is not a reason for persons to break state or territory public health orders and risk spreading COVID-19 to others.

 

Right to an adequate standard of living

 

Article 11(1) of the ICESCR states:

 

The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. [ ... ]

 

Similarly, the extended payment promotes the right to an adequate standard of living for individuals other than in a Commonwealth hotspot area, and in circumstances where these individuals are unable to earn their usual income not because a public health order prevents them from doing so, but because of the effect of the lockdown in a Commonwealth hotspot area on the activities of other persons, leading to a downturn in trade and/or a reduction in working hours for this additional cohort of eligible individuals. This disallowable legislative instrument will ensure a greater number of vulnerable Australians are able to access financial support during a state or territory lockdown.

 

Conclusion

 

This disallowable legislative instrument is compatible with human rights because it supports and promotes the rights to health and to an adequate standard of living.

 

 

 

 

 

The Hon Paul Fletcher MP

Minister for Communications, Urban Infrastructure, Cities and the Arts

for the Minister for Finance