Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 [2017] AUSStaCSBSD 47 (15 February 2017)

• Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017
• Retrospective application (Schedule 3)36
• Delegation of legislative power—Henry VIII clause (Schedule 4)37
• Strict liability offences (Schedule 4)42
• Reverse evidential burden (Schedule 4)48
• Incorporation of material as in force from time to time (Schedule 4)50
• Delegation of legislative power—Henry VIII clause (Schedule 4)54
• Retrospective application (Schedule 9)59

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Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017

Purpose	This bill seeks to amend Acts relating to family assistance, social security, paid parental leave, veterans' entitlements, military rehabilitation and compensation and farm household support to: • increase the family tax benefit Part A standard fortnightly rate by $20.02 for each FTB child in the family aged up to 19; • from 1 July 2017 remove the entitlement to Family Tax Benefit Part B for single parent families who are not single parents aged 60 or more or grandparents or great-grandparents, from 1 January of the calendar year their youngest child turns 17; • phase out the family tax benefit Part A supplement for families with an adjusted taxable income of $80,000 a year or less by reducing it to $602.25 a year from 1 July 2016, and to $302.95 a year from 1 July 2017. It will then be withdrawn from 1 July 2018; • introduce a new child care subsidy; • reduce from 26 weeks to six weeks the proportional payments of pensions with unlimited portability outside Australia. After six weeks, payment will be adjusted according to the length of the pensioner's Australian working life residence; • cease pensioner education supplement from the first 1 January or 1 July after the day the Act receives Royal Assent; • cease the education entry payment from the first 1 January or 1 July after the Act receives Royal Assent; • implement the following changes to Australian Government payments: - maintain at level for three years from 1 July of the first financial year beginning on or after the day the bill receives Royal Assent the income free areas for all working age allowances (other than student payments) and for parenting payment single; and - maintain at level for three years from 1 January of the first calendar year beginning on or after the day the bill receives Royal Assent the income free areas and other means test thresholds for student payments, including the student income bank limits; • cease from 20 September the energy supplement payment to recipients who were not receiving a welfare payment on 19 September 2016 and close the energy supplement to new welfare recipients from 20 September 2017; • cease payment of pension supplement after six weeks temporary absence overseas and immediately for permanent departures; • enable the Secretary to require income stream providers to transfer a dataset to the Department of Human Services on a regular basis; • provide a social security income test incentive aimed at increasing the number of job seekers who undertake specified seasonal horticultural work; • extend and simplify the ordinary waiting period for working age payments; • provide for young unemployed people aged 22 to 24 to claim youth allowance instead of newstart allowance or sickness allowance until they turn 25 years of age; • introduce a four-week waiting period, for job ready young people who are looking for work, to receive income support payments; • require job seekers who do not have significant barriers to obtaining employment to complete pre-benefit activities during their four-week income support waiting period in order to receive payments; • introduce revised arrangements for the Paid Parental Leave scheme; and • remove the employer paymaster role in administering the Paid Parental Leave scheme
Portfolio	Social Services
Introduced	House of Representatives on 8 February 2017

1.53 The committee commented on the measures in Schedule 4 to this bill when it considered the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016.^[34] The committee also commented on the measures in Schedule 13 to the bill when it considered the Social Services Legislation Amendment (Youth Employment) Bill 2016.^[35] The committee takes this opportunity to restate these comments below with some modifications and to make some further comments on this bill.

Retrospective application (Schedule 3)^[36]

1.54 Item 2 of the bill sets out the commencement provisions for each part of the bill. It provides that Schedule 3, Part 1 commences on 1 July 2016. The explanatory memorandum notes that the Schedule will phase out the Family Tax Benefit Part A supplement for families earning a certain amount from 1 July 2016. No explanation is provided in the explanatory memorandum as to why these provisions are to apply retrospectively, and no information is given as to the effect this retrospective application will have on individuals.

1.55 It is a basic principle of the rule of law that, in general, laws should only operate prospectively (not retrospectively). This is because people should be able to guide their actions on the basis of fair notice about the legal rules and requirements that will apply to them.

1.56 The committee therefore requests the Minister's advice as to why Part 1 of Schedule 3 is intended to commence retrospectively from 1 July 2016 and what effect this will have on individuals.

Pending the Minister's reply, the committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.

Delegation of legislative power—Henry VIII clause (Schedule 4)^[37]

1.57 The explanatory memorandum^[38] states that proposed section 199G may be characterised as a Henry VIII clause because it appears to 'provide a broad modification power of principal legislation'. The explanatory memorandum states that it is 'intended to operate in a purely beneficial way to deal with any anomalies that may arise where an approval is taken to be backdated in time'. Nevertheless, the proposed section itself does not appear to include a limitation which ensures that it is only used beneficially.

1.58 As the explanatory memorandum accompanying the version of this bill introduced in the previous Parliament did not include a justification for this approach, the committee sought the Minister's advice as to the rationale for the proposed approach and sought the Minister's advice as to whether this provision could be drafted to ensure that the provisions are only used beneficially (i.e. in the manner described in the explanatory materials).

1.59 The Minister responded to the committee in a letter received on 24 March 2016:

The Committee asked for the rationale for the proposed sections of the Bill which provide broad powers of modification of the principal legislation.
The Secretary may approve a provider for the purposes of the family assistance law under section 194B of the A New Tax System (Family Assistance) (Administration) Act 1999 (the FAA Act). Under subsection 194B(5) an approval can take effect on a date prior to the date of the approval decision, but no earlier than the date of the application. This means that there may be cases where an applicant is taken to have been approved in the time prior to notification of the approval decision. This in turn may mean that providers are retrospectively required to meet obligations by timeframes that have already passed and they could possibly be in a position where they are in breach of those requirements (such as the requirement to submit attendance reports under new section 204B). Similarly, it is possible that suspensions of services could be revoked with retrospective effect, again retrospectively requiring providers to meet obligations in the past.
In view of this, proposed section 199G gives Ministerial power to make rules which modify the FAA Act, so that it operates without anomalous or unfair consequences for providers where their approval takes effect during a past period. Such modifications would be beneficial for providers as they would ensure providers are not unfairly exposed to obligations in the past that they are unable to meet. One such possible modification, for example, would be to extend the time in which attendance reports under section 204B are required to be provided where providers are taken to have been approved in a past period.
Although it may be possible to include limiting words to ensure the provisions are only used beneficially, amendments of this nature could be equivocal and possibly confusing due to difficulties in defining what a 'benefit' is in the context of lifting obligations relating to backdated approvals. I note that any rules made in accordance with section 199G will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments, which means that Parliament will be able to disallow any rules that are considered non-beneficial or otherwise unfair.^[39]

1.60 The committee thanked the Minister for this response and for including further explanatory information in relation to these provisions in the explanatory memorandum accompanying the previous bill^[40] and which are now contained in the explanatory memorandum accompanying this bill.^[41]

1.61 However, the committee remains concerned about the breadth of the power in section 199G which allows rules (delegated legislation) to override the operation of the primary legislation. While the committee notes that the intention is for modifications to be beneficial, the suggestion that including limiting words to ensure the provisions are only used beneficially 'could be equivocal and possibly confusing', is not a compelling justification for a provision that allows delegated legislation to modify the operation of primary legislation.

1.62 The committee draws the breadth and nature of this power to the attention of Senators and, noting that any rules made in accordance with section 199G will be subject to disallowance, leaves to the Senate as a whole the appropriateness of the scope of this delegation of legislative power.

1.63 The committee also draws this matter to the attention of the Regulations and Ordinances Committee for information.

The committee draws Senators' attention to the provision, as it may be considered to delegate legislative powers inappropriately, in breach of principle 1(a)(iv) of the committee's terms of reference.

Strict liability offences (Schedule 4)^[42]

1.64 Item 205 proposes inserting a new Part 8A, which contains a number of strict liability offences. The explanatory memorandum provides a justification for why these offences impose strict liability.^[43] This explanation for the application of strict liability appears to be consistent with the Guide to Framing Commonwealth Offences.^[44] However, there are five proposed offence provisions^[45] that impose penalties above 60 penalties units (which is the maximum amount for strict liability offences set out in the Guide to Framing Commonwealth Offences). The explanatory memorandum states that higher penalties have been set in relation to these provisions 'because non-compliance with these obligations is increasing and there is growing concern about child care provider compliance'.^[46] However, it remains the case that in order to be consistent with the principles outlined in the Guide to Framing Commonwealth Offences, strict liability offences should be applied only where the penalty does not include imprisonment and the fine does not exceed 60 penalty units for an individual.^[47]

1.65 The committee therefore draws this matter to the attention of Senators and leaves to the Senate as a whole the appropriateness of providing for strict liability offences with penalties above 60 penalty units.

The committee draws Senators' attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.

Reverse evidential burden (Schedule 4)^[48]

1.66 Proposed section 201A requires a provider to whom a notice is given of a fee reduction decision to pass on the fee reduction amount within 14 days. Subsection (3) makes it an offence to fail to comply with this requirement. Subsection (2) provides an exception (an offence-specific defence) to this stating that this does not apply to a notice that includes a statement to the effect that the Secretary has decided to pay the fee reduction amount directly to the individual.

1.67 Subsection 13.3(3) of the Criminal Code Act 1995 provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.

1.68 While the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified.

1.69 As neither the statement of compatibility nor the explanatory memorandum address this issue, the committee requests the Minister's advice as to why it is proposed to use an offence-specific defence (which reverses the evidential burden of proof) in this instance. The committee's consideration of the appropriateness of provisions which reverse the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences.^[49]

Incorporation of material as in force from time to time (Schedule 4)^[50]

1.70 Items 230 and 231 of Schedule 4 seek to amend section 4 of the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act) by specifying that, despite subsection 14(2) of the Legislation Act 2003, a determination made for subsection (1) may make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.

1.71 At a general level, the committee will have scrutiny concerns where provisions in a bill allow the incorporation of legislative provisions by reference to other documents because such an approach:

• raises the prospect of changes being made to the law in the absence of parliamentary scrutiny;

• can create uncertainty in the law; and

• means that those obliged to obey the law may have inadequate access to its terms (in particular, the committee will be concerned where relevant information, including standards, accounting principles or industry databases, is not publicly available or is available only if a fee is paid).

1.72 However, in this instance the explanatory memorandum^[51] contains a comprehensive explanation for the proposed approach which addresses these scrutiny concerns:

The departure from the general position reflected in section 14 of the Legislation Act 2003 is intended to ensure that future versions of the instruments that set out vaccination and immunisation details and schedules (including the Australian Immunisation Handbook) can continue to be meaningfully referred to. The Australian Immunisation Handbook is approved by the National Health and Medical Research Council to provide clinical advice on vaccination. As the Handbook is updated regularly to take account of scientific evidence as it becomes available (and is currently in its 10^th edition of publication) it is important to ensure that any reference in a legislative instrument made under section 4 is a reference to the current and up to date edition. The Handbook is publicly, readily and freely available to access from the National Health and Medical Research Council website, through the Australian Government Department of Health, for those seeking to access the content of the law. It is understood that updates to the Handbook are also regularly notified on the National Health and Medical Research Council's homepage.

1.73 The committee thanks the Minister for including this comprehensive justification in the explanatory memorandum and in light of this explanation makes no further comment.

1.74 The committee also takes this opportunity to highlight the expectations of the Senate Standing Committee on Regulations and Ordinances that delegated legislation which applies, adopts or incorporates any matter contained in an instrument or other writing should:

• clearly state the manner in which the documents are incorporated—that is, whether the material is being incorporated as in force or existing from time to time or as in force or existing at the commencement of the legislative instrument. This enables persons interested in or affected by the instrument to understand its operation without the need to rely on specialist legal knowledge or advice, or consult extrinsic material;^[52] and

• contain a description of the documents and indicate how they may be obtained.^[53]

In light of the detailed explanation in the explanatory memorandum the committee makes no further comment on these provisions.

Delegation of legislative power—Henry VIII clause (Schedule 4)^[54]

1.75 Item 261 of Schedule 4 gives the Minister a broad power to make rules (delegated legislation) dealing with transitional issues, including allowing the Minister to modify the effect of principal legislation. The explanatory memorandum^[55] indicates that the power is intended to only be exercised beneficially but, as with the proposed section 199G above (see paragraphs [1.57] to [1.63]), there is no legislative provision requiring this approach.

1.76 When the committee considered the version of this bill introduced in the previous Parliament, the committee also sought the Minister's advice as to whether this provision could be drafted to ensure that the provisions are only used beneficially (i.e. in the manner described in the explanatory materials).

1.77 The Minister responded to the committee in a letter received on 24 March 2016:

I intend that this power will be used in a beneficial way to ensure a smooth transition into the new system, including to ensure that: provider approvals happen seamlessly and without unintended or unfair consequences for child care services with existing approval under family assistance law; payment arrangements for individuals transitioning to the new Child Care Subsidy can operate without unexpected complications; and the public purse is appropriately protected by ensuring that outstanding debt or compliance matters on transition can still be dealt with under the new system. I consider that the power to make transitional rules needs to be worded as broadly as possible to ensure that any unforeseen and unintended consequences of repealing and amending legislation can be remedied promptly and flexibly by legislative instrument.
I consider this broad power is justified and proportionate given it can only operate for a limited period of two years, and any rules made would be subject to further parliamentary scrutiny through the process of disallowance of legislative instruments. Any rules that attempt to broadly modify the Act other than to assist transition would be beyond power and ineffective.^[56]

1.78 The committee thanked the Minister for this response and for including further explanatory information in relation to these provisions in the explanatory memorandum accompanying the previous version of this bill^[57] and which are now contained in the explanatory memorandum accompanying this bill.^[58]

1.79 The committee notes the justification provided for giving the Minister the power to make rules (delegated legislation) dealing with transitional issues that modifies the effect of principal legislation, in particular that the disallowance process will apply and that the operation of the provision will be limited to two years. In light of this information, the committee leaves to the Senate as a whole the appropriateness of the scope of this delegation of legislative power.

1.80 The committee also draws this matter to the attention of the Regulations and Ordinances Committee for information.

The committee draws Senators' attention to the provision, as it may be considered to delegate legislative powers inappropriately, in breach of principle 1(a)(iv) of the committee's terms of reference.

Retrospective application (Schedule 9)^[59]

1.81 Schedule 9 closes the payment of the Energy Supplement (ES) to new welfare recipients from 20 September 2017. However, people who received the ES on 19 September 2016 retain access to the supplement for so long as they have continuous entitlement to their ES-attracting payment on and after that date. However, people who start, or who do not have continuous entitlement, to receive their ES-attracting payment between 20 September 2016 and 19 September 2017 are treated differently. The explanatory memorandum is silent on why the provisions apply differently from 19 September 2016 onwards.

1.82 The committee requests the Minister's advice as to:

• why the date of 19 September 2016 is used to determine that some welfare recipients of Energy Supplement will be treated differently to others;

• whether the proposed amendments may be considered to apply with retrospective effect from that date; and

• if this has a retrospective effect, whether this may cause any welfare recipient disadvantage, and any justification for so doing.

Pending the Minister's reply, the committee draws Senators' attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.

Delegation of legislative power (Schedule 13)^[60]

1.83 Proposed subsection 19DA(5) empowers the Secretary to prescribe, by legislative instrument, circumstances for the purpose of determining whether a person is experiencing a personal financial crisis and for the purpose of waiving the ordinary waiting period for receipt of certain welfare payments. There is no legislative guidance in the primary legislation as to what type of circumstances may be prescribed.

1.84 The statement of compatibility suggests that the use of a legislative instrument provides the Secretary 'with the flexibility to refine policy settings to ensure that the rules operate efficiently and fairly without unintended consequences'. As such, the provision is said to allow the Secretary to 'consider other unforeseeable or extreme circumstances...where it would be appropriate for a person to have immediate access to income support'.^[61]

1.85 While the committee remains concerned as a matter of general principle about the delegation of legislative power in such circumstances, in light of the explanation provided and the fact that the legislative instrument will be subject to disallowance the committee draws the provision to the attention of Senators and leaves to the Senate as a whole the appropriateness of this proposed approach.

1.86 The committee also draws this matter to the attention of the Regulations and Ordinances Committee for information.

The committee draws Senators' attention to the provision, as it may be considered to delegate legislative powers inappropriately, in breach of principle 1(a)(iv) of the committee's terms of reference.

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[34] See Senate Standing Committee for the Scrutiny of Bills, Alert Digest 7 of 2016, pp 60–70.

[35] See Senate Standing Committee for the Scrutiny of Bills, Alert Digest 6 of 2016, pp 33–34.

[36] Item 2 (commencement) provision.

[37] Schedule 1, item 205, proposed section 199G.

[38] Explanatory memorandum, p. 84.

[39] See response as set out in Senate Standing Committee for the Scrutiny of Bills, Fifth Report of 2016, pp 366-367.

[40] The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. See the committee's comments at: Senate Standing Committee for the Scrutiny of Bills, Alert Digest 7 of 2016, pp 60–70.

[41] See explanatory memorandum p. 84.

[42] Schedule 4, item 205, new Part 8A, various provisions.

[43] See pp 84‑-85 of the explanatory memorandum.

[44] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 22-25.

[45] See item 205, proposed sections 201A, 201C and 202C (80 penalty units) and proposed sections 204B and 204C (70 penalty units).

[46] Explanatory memorandum, p. 85.

[47] See pp 23–24.

[48] Schedule 4, item 205, proposed subsection 201A.

[49] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50–52.

[50] Schedule 4, items 230 and 231, section 4 of the A New Tax System (Family Assistance) Act 1999.

[51] Explanatory memorandum, p. 95.

[52] See also section 14 of the Legislation Act 2003.

[53] See paragraph 15J(2)(c) of the Legislation Act 2003.

[54] Schedule 4, item 261.

[55] Explanatory memorandum, p. 99.

[56] See response as set out in Senate Standing Committee for the Scrutiny of Bills, Fifth Report of 2016, pp 368.

[57] The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. See the committee's comments at: Senate Standing Committee for the Scrutiny of Bills, Alert Digest 7 of 2016, pp 60–70.

[58] Explanatory memorandum, p. 99.

[59] Schedule 9, item 4, proposed section 22; items 67, 76, 89 and 91, 94 and 95.

[60] Schedule 13, item 5, proposed subsection 19DA(5).

[61] Statement of compatibility, p. 239.