Explanatory Memorandum
(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, Minister for Disability Reform, the Hon Jenny Macklin MP)Schedule 2 - Amendments of other Acts
Summary
This Schedule makes consequential amendments to other Commonwealth Acts to complement the NDIS Act. Further consequential amendments, to the Income Tax Assessment Act 1997 , are included in Schedule 3.
Background
Included in this Schedule are some amendments to the Administrative Appeals Tribunal Act 1975 , which will strengthen the external merits review process for participants in the scheme by establishing a designated National Disability Insurance Scheme Division of the Administrative Appeals Tribunal, and requiring members appointed to the division to have relevant knowledge and experience.
Amendments to the Social Security Act 1991 and the Veterans' Entitlements Act 1986 will ensure that amounts paid under the NDIS in respect of supports funded under a participant's plan do not affect social security entitlements. This is done through amendments ensuring that NDIS amounts (and returns on these amounts) are not counted as income, liquid assets or financial assets (so as to invoke the deeming rules) and are exempt from the assets test.
Further social security amendments ensure that NDIS participants do not receive double funding of mobility assistance through the NDIS and social security systems.
Some amendments made by this Schedule commence on the day after Royal Assent. However, the majority of the amendments commence immediately after Chapter 3 of the NDIS Act commences.
Explanation of the changes
Administrative Appeals Tribunal Act 1975
Item 1 establishes the National Disability Insurance Scheme Division of the Administrative Appeals Tribunal by inserting a new paragraph 19(2)(baaa) into the Administrative Appeals Tribunal Act 1975 (AAT Act).
Item 2 makes a small consequential change to paragraph 19(2)(c) of the AAT Act to take account of the amendment effected by item 1.
Item 3 inserts two new subsections 19(3C) and (3D) into the AAT Act. New subsection 19(3C) provides that the Minister responsible for administering the AAT Act must consult with the Minister responsible for administering the NDIS Act about a proposed assignment of a member to the NDIS Division of the AAT. This accords with the arrangements in subsection 19(3A) of the AAT Act, which require the Minister responsible for administering the AAT Act to consult with the Treasurer in relation to the assignment of a member to the Taxation Appeals Division of the AAT.
New subsection 19(3D) prescribes the qualifications for the assignment of non-presidential members to the NDIS Division, and requires that, for a non-presidential member to be assigned to the division, the Minister responsible for administering the AAT Act must be satisfied that the non-presidential member has training, knowledge or experience relating to a disability, or other relevant knowledge or experience that will assist the non-presidential member in considering matters relating to the NDIS.
Age Discrimination Act 2004
Item 4 inserts a new paragraph 41(1)(fba) into the Age Discrimination Act 2004 (Age Discrimination Act). This amendment will exempt anything done by a person in direct compliance with the NDIS Act from Part 4 of the Age Discrimination Act.
Item 5 inserts a new subsection 41(2C) into the Age Discrimination Act. This amendment will exempt anything done by a person in direct compliance with a regulation, rule or other instrument under the NDIS Act from Part 4 of the Age Discrimination Act.
These exemptions from Part 4 are necessary because there are a number of age-related provisions, including the age 65 limit for entry to the scheme. Discussion under the statement of compatibility with human rights, appearing at the end of this explanatory memorandum, also refers.
Social Security Act 1991
To ensure that amounts paid under the NDIS in respect of supports funded under a participant's plan do not affect social security entitlements, amendments are made to ensure that NDIS amounts (and returns on these amounts) are not counted as income, liquid assets or financial assets (so as to invoke the deeming rules) and are exempt from the assets test.
Subsection 8(8) of the Social Security Act 1991 (Social Security Act) lists amounts that are not considered as income for social security purposes. Item 6 inserts new paragraphs into subsection 8(8) to ensure that an NDIS amount and any return on a person's NDIS amount do not count as income. An NDIS amount is an amount paid under the NDIS in respect of reasonable and necessary supports funded under a participant's plan.
A financial asset is defined in subsection 9(1) of the Social Security Act to include a financial investment which, in turn, includes money that has been deposited into an account with a financial institution. A person who has financial assets is taken to receive ordinary income on those assets in accordance with the deeming rules (which assume that financial assets are earning a certain rate of income). Items 7 and 8 insert a new definition of designated NDIS amount into subsection 9(1) and amend the definition of financial investment . The effect is that an NDIS amount that is deposited into an account with a financial institution and any return on that amount is not a financial asset.
An assets test exempt income stream can be commuted in certain circumstances. Consideration of a person's liquid assets is relevant in determining whether a hardship amount can be commuted from such an income stream. Subsection 9A(7) defines liquid assets as cash and readily realisable assets, and includes amounts deposited with, or lent to, a bank or other financial institution. Items 9 and 10 amend this definition so as to exclude NDIS amounts, plus any return on those amounts, less amounts already spent by the person in accordance with an NDIS plan.
Social security benefits have a liquid assets waiting period that precludes payment for a period if the claimant has liquid assets that exceed a specified amount. A person's liquid assets are defined in section 14A of the Social Security Act as cash and readily realisable assets, and include amounts deposited with, or lent to, a bank or other financial institution. The definition also provides a list of amounts that are excluded from a person's liquid assets. Item 11 adds to this list, ensuring that a person's liquid assets do not include NDIS amounts, plus any return on those amounts, less amounts already spent by the person in accordance with an NDIS plan.
Section 19B contains a similar definition of liquid assets that is relevant in determining whether a person is exempt from the care receiver's assets test for carer payment. Item 12 amends the definition so that a person's liquid assets do not include NDIS amounts, plus any return on those amounts, less amounts already spent by the person in accordance with an NDIS plan.
Item 13 inserts a number of definitions into subsection 23(1) of the Social Security Act. The terms NDIS amount, NDIS participant and NDIS plan are defined by reference to relevant definitions in the NDIS Act.
Item 14 inserts a new section 1038, which would provide that a mobility allowance is not payable to a person under the Social Security Act when that person is a participant in the NDIS and his or her participant's plan contains a statement specifying the reasonable and necessary supports that will be funded under the NDIS.
The purpose of mobility allowance is to help with transport costs for people with disability who are unable to use public transport without substantial assistance. This assistance is tied to the person being engaged in gainful employment, vocational training, job search activities, voluntary work or a vocational rehabilitation program.
The purpose of this amendment is to ensure that NDIS participants do not receive double funding of mobility assistance through the NDIS and social security systems. Under the NDIS Act and NDIS Rules, a person will be able to continue to participate in the NDIS for a period after the person moves out of the launch site. This will be achieved through the residence requirements. The amendment would ensure that those people who continue to be participants and whose plan specifies reasonable and necessary supports would not receive additional support for mobility allowance.
A participant who does not receive funded reasonable and necessary supports would be able to apply for and be paid mobility allowance if he or she qualifies for the allowance and it is payable to them.
Most social security payments are subject to an assets test. Where a person's assets exceed allowable limits, their payment may be reduced or cease to be payable. An asset is defined to mean property or money (section 11 of the Social Security Act refers). However, in calculating the value of a person's assets, certain amounts are disregarded. These are listed in subsection 1118(1).
Item 15 inserts a new paragraph 1118(1)(sb) into the Social Security Act, which applies where a person has received an NDIS amount, and ensures that the amount worked out under new subsection 1118(1AD) (as inserted by item 16 ) is disregarded from the person's assets. The amount of the disregard is the value of the sum of the NDIS amounts received, plus any return on those amounts, less amounts spent in accordance with the NDIS plan.
Item 17 contains an application clause that would, in effect, continue a participant's entitlement to an automatic issue health care card (HCC) in certain circumstances when mobility allowance is no longer payable to them because of their participation in the NDIS.
Under section 1061ZK of the Social Security Act, a person is qualified for an automatic issue HCC if the person is receiving mobility allowance. The purpose of the HCC is to assist social security benefit recipients, low income earners and selected other groups with certain health costs, by allowing access to specified services at a concessional rate. Under the Social Security Act, if a person stops receiving mobility allowance, his or her qualification for an automatic issue HCC also ceases.
This item will preserve the entitlement of an NDIS participant to an automatic issue HCC even though mobility allowance will cease to be payable to the participant because of the amendment proposed at item 14 - that is, when the participant's plan specifies the reasonable and necessary supports to be funded under the NDIS. In these circumstances, subsection 1067ZK(7) of the Social Security Act will continue to apply to a participant as if he or she were receiving mobility allowance on that day. This will ensure that the NDIS participant's automatic issue HCC is preserved until such time as the person ceases to have a plan in effect that specifies the funded reasonable and necessary supports. In such cases, the person may re-apply for mobility allowance and, if granted, regain the benefit of an automatic issue HCC.
Veterans' Entitlements Act 1986
Item 18 amends the index of definitions in section 5 of the Veterans' Entitlements Act 1986 (Veterans' Entitlements Act) to include references to newly defined terms that are inserted into subsection 5Q(1) by item 21.
The amendments to the Veterans' Entitlements Act made by items 19 to 26 mirror the amendments made to equivalent provisions in the Social Security Act.
Item 19 amends the definition of income in subsection 5H(8) of the Veterans' Entitlements Act to exclude an NDIS amount and any return on a person's NDIS amounts.
Items 20 and 21 insert a new definition of designated NDIS amount into subsection 5J(1) and amend the definition of financial investment . The effect is that an NDIS amount that is deposited into an account with a financial institution, and any return on that amount, is not a financial asset.
Items 22 and 23 amend the definition of liquid assets in subsection 5JA(7). The effect is to exclude from the definition NDIS amounts, plus any return on those amounts, less amounts already spent by the person in accordance with an NDIS plan.
Item 24 inserts a number of definitions into subsection 5Q(1). The terms NDIS amount, NDIS participant and NDIS plan are defined by reference to relevant definitions in the NDIS Act.
Items 25 and 26 amend section 52 so that the value of the sum of the NDIS amounts received, plus any return on those amounts, less amounts spent in accordance with the NDIS plan, is disregarded in working out the value of the person's assets.