Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 - Commentary on Ministerial and Other Responses [2017] AUSStaCSBSD 89 (22 March 2017)

• Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017
• Retrospective application (Schedule 3)47
• Reversal of evidential burden of proof (Schedule 4)48
• Retrospective application (Schedule 9)50

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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 It will then be withdrawn from 1 July 2018; • introduce a new child care subsidy; • reduce from 26 weeks to six weeks the proportional payments of pensions with unlimited portability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
Bill Status	Before Senate
Scrutiny principle	Standing Order 24(1)(a)(i)

2.180 The committee dealt with this bill in Scrutiny Digest No. 2 of 2017. The Minister for Social Services responded to the committee's comments in a letter dated 2 March 2017 and the Minister for Education and Training responded in a letter dated 7 March 2017. Set out below are extracts from the committee's initial scrutiny of the bill and the Ministers' responses followed by the committee's comments on the responses. A copy of the letters is at Appendix 1.

Retrospective application (Schedule 3)^[47]

Initial scrutiny – extract

2.181 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.

2.182 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.

2.183 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.

Minister for Social Services' response

2.184 The Minister advised:

The schedule relates to the Family Tax Benefit Part A and Family Tax Benefit Part B end of year supplements. Supplement payments related to 2016-17 are not paid until after 1 July 2017. Supplement payments made after 1 July 2017 will be reduced slightly with a further reduction the following year before being completely phased out in 2018-19. This will let families know in advance that the supplements are being removed and allow them time to adjust to the changes. Additionally, from 1 July 2018 the maximum standard fortnightly rate for Family Tax Benefit Part A will be increased by $20.02. This ensures that families will have more timely assistance to help meet their day to day living expenses.

Committee comment

2.185 The committee thanks the Minister for Social Services for this response. The committee notes the Minister's advice that the relevant payments are not paid until after 1 July 2017 and so will not be reduced until after that date.

2.186 The committee requests that the key information provided by the Minister be included in the explanatory memorandum, noting the importance of these documents as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).

2.187 In light of the information provided, the committee makes no further comment on this matter.

Reversal of evidential burden of proof (Schedule 4)^[48]

Initial scrutiny – extract

2.188 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.

2.189 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.

2.190 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.

2.191 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]

Minister for Education and Training's response

2.192 The Minister advised:

I acknowledge the Committee's concerns in relation to the offence-specific defence established by proposed new section 201A of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act), as inserted by item 205 of Part 1 of Schedule 4 to the Bill, and your request for advice as to why an apparent 'reverse evidential burden' is being placed on a provider in this instance.
A brief explanation of the circumstances in which section 201A will operate may assist. Before section 201A applies, providers need to have received a notice of a fee reduction decision (the notice) under proposed section 67CE of the Administration Act. The notice is to contain matters outlined in proposed section 67CD, which relate to the Secretary making entitlement determinations for individuals in respect of Child Care Subsidy (CCS) or Additional Child Care Subsidy (ACCS) payments. Where the Secretary has made a determination that an individual is entitled to be paid an amount of CCS or ACCS, the notice will communicate this fact to the provider and include the exact amount of the individual's entitlement (the fee reduction amount).
The giving of the notice to providers setting out the individual's entitlement and amount of entitlement is a requirement of the Secretary under proposed subsection 67CE(4). Further, it is a requirement for such a notice to contain a statement that tells the provider whether the fee reduction amount has been paid directly to the individual under subsection 67EC(2). It is this type of notice that subsection 201A(2) refers to. Importantly, section 67CE notices will always state whether an amount has been paid directly to an individual because subsection 67CE(6) mandates this. This means the service will always be aware that the requirement to pass on or remit under subsection 201A(1) does not apply in respect of amounts paid directly to an individual, and the Secretary will always know, having issued the notice, that the exception applies prior to any decision to prosecute.
Note 2 to subsection 201A(2) does of course alert the reader to the operation of section 13.3 of the Criminal Code Act 1995 (the Criminal Code Act), and that it is a standard drafting practice of the Office of Parliamentary Counsel to include such a note where there is an offence-specific defence, as per the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers. It is also important to note that section 13.3 of the Criminal Code Act would still operate in the absence of this note. However, for the section 201 A offence to apply, in practice, I do not consider subsection 13.3(3) of the Criminal Code Act will ever become enlivened, so as to place a reverse evidential burden on the provider. This is because the Secretary will always have access to the notice given to the service, and the contents of that notice will be a critical factor informing the Secretary's decision as to whether or not to prosecute. Where the notice given to the provider contains a statement that the individual has been paid the fee reduction amount directly under subsections 67CE(4) and (6), the Secretary will not prosecute as the section 201A(1) requirements to pass on or remit the fee reduction amount are clearly stated not to apply to the provider in that situation.
Therefore, the provider will not be required to adduce or point to this notice as evidence in the course of any prosecution, as no prosecution will commence. In any event, if there ever was to be a prosecution under section 201A, the Commonwealth would ensure, as a model litigant, that evidence sufficient to discharge the burden is adduced by the prosecution (being a copy of the subsection 67CE notice), effectively relieving the provider of the evidentiary burden, as referred to in subsection 13.3(4) of the Criminal Code Act.
In summary, if there is a notice containing the statement, no prosecution will commence and therefore the question of the service bearing the evidential burden of producing this notice is unlikely to ever be raised.

Committee comment

2.193 The committee thanks the Minister for Education and Training for this response. The committee notes that proposed subsection 201A(2) provides that the requirement in subsection (1) (to pass on a fee reduction or remit a fee once given a notice) will not apply in relation to a notice which includes a statement that the Secretary has decided to pay the fee reduction amount directly to an individual. The committee notes the Minister's advice that the Secretary will always know, having issued the notice, that the exception applies prior to any decision to prosecute and the Secretary will consider this when deciding whether or not to prosecute. The committee also notes the Minister's advice that the provider will not be required to adduce or point to this notice as evidence, as no prosecution will commence and, even if it were to commence, the Commonwealth would ensure, as a model litigant, that evidence sufficient to discharge the burden is adduced by the prosecution.

2.194 The committee welcomes the Minister's advice that no prosecution would likely take place in circumstances where the Secretary has included a relevant statement in the notice. However, the committee notes that, as the provision is currently drafted, a reverse evidential burden is placed on the defendant in circumstances where it is not appropriate to reverse the burden of proof. The committee also notes that while it welcomes the Minister's advice that the Commonwealth would act as a model litigant, it considers that the model litigant rules are generally not intended to cover the handling of criminal prosecutions, and are not relevant to determining the appropriateness of reversing the burden of proof.

2.195 The committee considers it would be more appropriate for the offence provision to be drafted so that a reverse evidential burden was not placed on the defendant, particularly given it appears there is no basis for, and no intention that, the burden be reversed in this instance.

2.196 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of reversing the evidential burden on proof in these circumstances.

Retrospective application (Schedule 9)^[50]

Initial scrutiny – extract

2.197 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.

2.198 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.

Minister for Social Services' response

2.199 The Minister advised:

On 3 May 2016, I announced that the Turnbull Government would ensure the Commonwealth was able to meet future National Disability Insurance Scheme (NDIS) costs through the deposit of $2.1 billion of 2016-17 Budget savings into the NDIS Savings Fund Special Account once it was established. Savings measures committed to the Savings Fund included closing carbon tax compensation for new welfare recipients from 20 September 2016 (see christianporter.dss.gov.au/media-releases/real-money-for-a-real-commitment-to-the-ndis).
Schedule 9 of the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 seeks to implement that 2016-17 Budget measure as closely as possible by making 20 September 2016 the test date for determining which income support recipients will no longer be able to access the Energy Supplement from the commencement date of 20 September 2017 onwards. If the test date were moved forward from 20 September 2016 to 20 September 2017, the savings sought under Schedule 9 would be significantly reduced and less funds would be deposited into the NDIS Special Account.
The intention of the 2016-17 Budget measure as originally announced was that the test date and commencement date of that measure were to be the same date. However, a number of factors caused the original commencement date of 20 September 2016 to be shifted ahead to 20 September 2017. These include:

• the timing of the election and consequential change to the Parliamentary sitting schedule;

• difficulties in the passage of Schedule 21 of the Budget Savings Omnibus Bill 2016, as initially introduced into Parliament on 31 August 2016; and

• constraints on commencement dates because of the need for the Department of Human Services to schedule and test systems changes.

Notwithstanding the delay to the commencement date, Schedule 9 does not remove or seek to recover any previously paid or accrued entitlement to the Energy Supplement from any income support recipient and therefore does not have a retrospective effect.
The measure in Schedule 9 does not have a retrospective effect.
As my second reading speech indicates, the energy supplement was introduced on 20 March 2013 as part of the Household Assistance Package to compensate people for the introduction of the carbon tax-a tax which no longer exists. The carbon tax was repealed from 1 July 2014. The Government does not consider that it is reasonable to continue to compensate people, in the form of a carbon tax compensation payment, for a tax that no longer exists, particularly people who only started receiving income support after the carbon tax was abolished.

Committee comment

2.200 The committee thanks the Minister for Social Services for this response. The committee notes the Minister's advice regarding why the dates of 19 September 2016 and 20 September 2017 were chosen in relation to closing ongoing access to this payment. The committee also notes the Minister's advice that Schedule 9 does not remove or seek to recover any previously accrued entitlement to the Energy Supplement and therefore does not have a retrospective effect.

2.201 The committee notes that the payment will continue to be paid to all current recipients until the amendments in Schedule 9 (if passed) commence prospectively on 20 September 2017. On that basis, the committee makes no further comment on this matter.

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[47] Item 2 (commencement) provision.

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