Explanatory Memorandum
(Circulated by the authority of the Minister for Emergency Management, the Hon Mark Dreyfus QC MP)General Outline and Financial Impact Statement
Outline
The Social Security Legislation Amendment (Disaster Recovery Allowance) Bill 2013 (the Bill) will create a new payment, the Disaster Recovery Allowance (the Allowance), a fortnightly income support payment for individuals whose income has been affected by a major disaster.
The Bill will amend the Social Security Act 1991 (the SS Act), the Social Security (Administration) Act 1999 (the Administration Act) and the Income Tax Assessment Act 1936 to implement this change.
These measures will come into effect on 1 October 2013.
The Disaster Recovery Allowance
The Bill will amend the SS Act, the Administration Act and the Income Tax Assessment Act 1936 to create a new payment, the Disaster Recovery Allowance (the Allowance). The Allowance will provide short-term income support to individuals with a demonstrated loss of income following an onshore disaster, whether natural or otherwise. The Allowance will be a taxable, fortnightly payment at a rate based on the maximum applicable Newstart Allowance or Youth Allowance rate. The payment is modelled on ex-gratia payments which were made available on a number of occasions including in 2009 following the Victorian Bushfires, in 2010-11 following the flooding across a number of states and in 2013.
Once a person has qualified for the payment, the Allowance will be paid at a rate between $0 and the maximum applicable rate. Individuals' rates will be calculated under an instrument created by the Minister under the SS Act. The rate calculation process will be placed in a legislative instrument to ensure that it can be adapted and adjusted for future disaster events if required and efficiently tailored to meet the recovery needs of the affected communities.
The Allowance will be made available by the Minister determining under the SS Act that an event is a 'Part 2.23B major disaster', in a similar manner in which the Minister determines that an event is a 'major disaster' for the purpose of providing the Australian Government Disaster Recovery Payment (AGDRP) - a lump sum payment provided to individuals who have been adversely affected by a disaster. The activation of the Allowance and the AGDRP will be entirely separate. Therefore the Minister will be able to make either available without the other, or be able to activate both.
To activate the Allowance for an event the Minister will have to be satisfied that:
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- the event is of national significance; and
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- that the event has had such an impact that a government response in the form of income support is required.
Further, the Minister will be required to consider the extent to which the nature or extent of the disaster is unusual and the number of workplaces that are disrupted. In making a determination which activates the Allowance, the Minister must specify one or more areas affected by the event, or specify one more industries in one or more areas affected by the event. These affected areas or industries will form part of the eligibility criteria, allowing the Minister to tailor the Allowance to effectively and accurately respond to the impact of the disaster.
To be eligible for the Allowance, an individual must be:
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- an Australian resident or the holder of a visa of a class determined in subparagraph 729(2)(f)(v) of the SS Act;
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- who is at least 16 years old and not a dependent child;
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- who is not currently in receipt of another social security entitlement;
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- who has suffered a loss of income as a direct result of the disaster; and
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- whose Allowance rate at the time of claiming the Allowance would be greater than nil.
Where the Minister has only determined one or more affected areas, the individual must reside in, or earn, derive or receive an income from working in, one of those areas. Where the Minister has determined one or more affected industries in one or more affected areas, the individual must have derived their income from one of those industries by working in one of those areas.
Once granted, the Allowance will be paid fortnightly in arrears for 13 weeks or until the individual regains their pre-disaster income level.
By incorporating the Allowance into the social security legislation, the fraud, debt recovery and review processes and protections set out in the SS Act and the Administration Act will apply in the same manner as they do to other social security payments.
Financial impact statement
This Bill proposes the creation of a new payment which will be made to disaster affected individuals.
Implementation costs for these payments have been estimated at $1.7 million over five years. These costs will be absorbed by the administering department.
The unpredictability of major disasters and their impact on Australia means that the cost of the Allowance will not be regular. The Allowance will be treated as a special appropriation which is contingent on a relevant disaster event occurring.