Explanatory Memorandum
(Circulated by the authority of the Minister for Emergency Management, the Hon Mark Dreyfus QC MP)Schedule 1 - Disaster Recovery Allowance
Part 1 - Main Amendments
Social Security Act 1991
Item 1
4. This item inserts the definition of the new term 'Disaster Recovery Allowance'.
Item 2
5. This item inserts the definition of the new term 'Part 2.23B major disaster'.
6. This term will be defined by written ministerial determination under the new section 36A. A determination which defines an event as a Part 2.23B major disaster will trigger the availability of the Allowance in relation to that event.
7. The AGDRP is also activated by a written ministerial determination in relation to a disaster. To ensure that the AGDRP and the Allowance can be made available independently of the other, determinations to activate the AGDRP will continue to define the term 'major disaster' while determinations to activate the Allowance will define the term 'Part 2.23B major disaster'.
Item 3
8. This item creates the new section 36A.
Section 36A - Part 2.23B major disaster
9. The new section 36A will provide that the Minister can make a determination that an event is a 'Part 2.23B major disaster'. A determination which defines an event as a Part 2.23B major disaster will trigger the availability of the Allowance in relation to that event.
10. The new section 36A will provide that before making a determination, the Minister must be satisfied that the event is a disaster that has had such a significant impact on individuals that a government response in the form of income support is required and that the event was of national significance. In reaching this decision, the Minister must have regard to the extent to which the nature or extent of the disaster is unusual, and the number of workplaces that are disrupted.
11. The new subsections 36A(3) and (4) will provide that determinations can be made in relation to both natural and non-natural disasters, but only those occurring within Australia.
12. New subsection 36A(5) will provide that in addition to stating that the event is a Part 2.23B major disaster, a determination made under the new section 36A must specify one or more areas affected by the event, or specify one or more industries in one or more areas affected by the event. These affected areas and industries will form part of the eligibility criteria for the Allowance. This will allow the payment to either be focused on a particularly impacted industry, or made more generally available across an affected area.
13. Subsection 36A(6) is included to assist readers and is merely declaratory of the law. A determination made under new section 36A will not be a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 because the determination will be administrative in character, not legislative.
14. Although decisions under section 36A will be administrative, item 8 of this Bill will amend the Administration Act to provide that they will not be subject to review by the Social Security Appeals Tribunal. This is consistent with the current approach to the decision made under section 36 to make the AGDRP available, and is required to ensure that the Minister can offer assistance to people impacted by a disaster in a responsive and efficient manner, without the potential uncertainty or delay of review. Decisions made by the Minister under section 36A will be high level policy decisions made as part of an overall government strategy for aiding the community in recovering from a major disaster. The exemption is consistent with the purpose of the Tribunal to provide individuals with a review process for decisions by the Department of Human Services (Centrelink) which affect their personal claim for a social security payment.
Items 4 and 5
15. These items amend section 1061JJ to ensure that receipt of the Allowance cannot entitle an individual to the Crisis Payment. This reflects the purpose of the Crisis Payment to support long-term recipients of social security support.
Item 6
16. This item inserts the new Part 2.23B. This Part will provide the eligibility criteria, payment rates and other matters applicable to the Allowance
Section 1061KA - Qualification for Disaster Recovery Allowance
17. The new section 1061KA will provide the eligibility criteria for the Allowance.
The new paragraph 1061KA(1)(a) will provide that the Allowance will only be granted to individuals who are at least 16 years old. This requirement is intentionally modelled on the definition of 'dependent child' provided in section 5 of the SS Act.
18. The new subsection 1061KA(2) will provide that where a person is under 22 years old they will not be eligible if:
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- they are wholly or substantially dependent on another person (other than their partner);
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- they are not a parent; and
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- their income for that financial year will be under $6,403.
19. The new paragraph 1061KA(1)(b) will provide that the Allowance will only be granted to Australian residents or holders of a visa of a class determined for the purposes of subparagraph 729(2)(f)(v). This will ensure that the Allowance is consistent with other social security payments.
20. The new paragraphs 1061KA(1)(g) and (h) will provide that the Allowance will not be granted to persons who are already receiving a social security entitlement or another payment that the Minister determines under the new subsection 1061KA(5). The AGDRP is not defined as a 'social security entitlement', so individuals may be able to claim both the AGDRP and the Allowance. The Minister's power to determine new payments which exclude the Allowance is required to allow for future changes or additions to the social security law.
21. The new paragraph 1061KA(1)(f) will provide that the Allowance will only be granted to a person who has, or will, suffer a loss of income as a direct result of an event that the Minister has determined under section 36A to be a Part 2.23B major disaster.
22. The new paragraph 1061KA(1)(j) will provide that an individual will only be granted if their payment rate, as calculated under the new section 1061KC, would be greater than nil at the time the claim was determined.
23. The new subsection 1061KA(3) will provide that where the Minister's determination under the new section 36A sets out both one or more affected industries and one or more affected areas, the Allowance will only be granted to a person who earns, derives or receives income from one of those industries and does so by working in one of those areas.
24. The new subsection 1061KA(4) will provide that where the Minister's determination under the new section 36A only sets out one or more affected areas, the Allowance will only be granted to a person who earns, derives or receives income from one of those areas and does so through working in one of those areas, or to a person who resides in one of those areas.
25. The Minister will have the power under new subsection 1061KA(6) to prescribe additional eligibility criteria for the Allowance via written determination. This will allow for the varied impact of disasters, ensuring the Minister can tailor the availability of the Allowance to address any unanticipated characteristics of an event's impact.
26. The new subsection 1061KA(7) will provide that determinations made under section 1061KA will be legislative instruments, but section 42 of the Legislative Instruments Act 2003 will not apply, meaning that the determinations will not be subject to disallowance. The reason for this exemption is to ensure that the Minister can offer assistance to people impacted by a disaster in a responsive and efficient manner, without the uncertainty of a potential disallowance.
Section 1061KB - Disaster Recovery Allowance not payable if assurance of support in force
27. The new section 1061KB will provide that the Allowance will not be payable to a person who is the subject of an assurance of support. The term 'assurance of support' has an established meaning within the SS Act and the Migration Regulations.
28. The intention of this restriction is to prevent the Allowance being made available to persons whose residency in Australia was conditional on an assurance of income from another person and who are able to draw on income support from that person.
Section 1061KC - Rate of Disaster Recovery Allowance
29. The new section 1061KC will set out how the rate of payment for the Allowance will be calculated.
30. The new subsection 1061KC(1) will provide that the Allowance is paid at a daily rate, which is calculated by dividing the fortnightly rate by 14. This subsection allows the Allowance to be administered under the provisions in the Administration Act for a 'social security periodic payment'.
31. The new subsection 1061KC(2) will require the Minister to specify, by legislative instrument, a method for calculating the fortnightly rate of the Allowance. The rate calculation process will be placed in a legislative instrument to ensure that it can be more easily adapted and adjusted to future disaster events and tailored to the recovery needs of affected communities.
32. An instrument made under section 1061KC(2) could, for example, provide for the Allowance to be income threshold tested and set out a rate reduction rules based on individuals' post-disaster income. This could be used to ensure that recipients were encouraged to return to work when possible.
33. The new subsection 1061KC(3) will provide that the fortnightly rate for the Allowance can be nil. New paragraph 1061KA(1)(j) will provide that to qualify for the Allowance a person's initial rate must be greater than nil. New subsection 1061KC(3) allows a person's rate for subsequent fortnights to be nil. This might occur where a recipient has found intermittent or insecure post-disaster employment.
34. The new subsection 1061KC(4) will provide that the maximum fortnightly rate for a person under 22 years old will be the maximum basic rate of Youth Allowance that would be payable to the person. These amounts can be found in Table BA in section 1067G-B2 and Table BB in section 1067G-B3 of the SS Act. Section 1191 (item 3A) provides that they are subject to Consumer Price Index based increases annually on 1 January. The maximum basic rate for Youth Allowance does not include supplements such as Pharmaceutical Allowance or Rent Assistance.
35. The new subsection 1061KC(5) will provide that the maximum fortnightly rate for a person at least 22 years old will be the maximum basic rate of the Newstart Allowance that would be payable to the person. These amounts can be found in Table B in section 1068-B1 of the SS Act. Section 1191 (item 2) provides that they are subject to Consumer Price Index based increases biannually on 20 March and 20 September. The maximum basic rate for the Newstart Allowance does not include supplements such as Pharmaceutical Allowance or Rent Assistance.
Section 1061KD - Period that Disaster Recovery Allowance is payable
36. The new section 1061KD will provide that the Allowance is payable for 13 weeks.
Section 1061KE - Non-receipt of social security payment
37. The new section 1061KE provides that receipt of the Allowance does not entitle the recipient to other benefits under social security law that are available on the basis of receiving a social security payment. This reflects the Allowance's role as a short-term income support payment and that most recipients of the Allowance would be expected to return to their pre-disaster income within a short period of time.
Social Security (Administration) Act 1999
Item 7
Section 27AA - Time Limit for claims for Disaster Recovery Allowance
38. This item creates the new section 27AA. The new section 27AA will provide that a person can claim the Allowance in relation to an event for up to 6 months after the event was determined to be a Part 2.23B major disaster.
39. The new subsection 27AA(2) will provide that claims will still be accepted more than 6 months after the determination where there are special circumstances that prevented the person being able to lodge the claim within the prescribed time limit, and the claim is made within a reasonable period having regard to the circumstances affecting the person. Given the nature of the payment, being affected by the disaster that has been determined would be unlikely to be enough, by itself, to justify a late claim as these circumstances would also apply to all other claimants.
Item 8
40. This item will insert a new subsection into section 31(1A). This amendment creates an exception to the requirement in section 29 that persons must be an Australian resident to claim a social security payment. This will allow the Allowance to be claimed by holders of a visa determined for the purposes of subparagraph 729(2)(f)(v) of the SS Act.
Item 9
41. This item will amend paragraph 144(d) to provide that a decision made under section 36A of the SS Act will not be subject to review by the Social Security Appeals Tribunal.
42. This is consistent with the current approach to the decision made under section 36 to make the AGDRP available. It is required to ensure that the Minister can offer assistance to people impacted by a disaster in a responsive and efficient manner, without the potential uncertainty or delay of review. Decisions made by the Minister under section 36A will be high level policy decisions made as part of an overall government strategy for aiding the community in recovering from a major disaster. The exemption is consistent with the purpose of the Tribunal to provide individuals with a review process for decisions by the Department of Human Services (Centrelink) which affect their personal claim for a social security payment.
Item 10
43. This item inserts a new subparagraph into subclause 1(1) of Schedule 1. This has the effect that the Allowance will be a 'social security periodic payment' for the purposes of social security law and will be administered under the provisions in the Administration Act for this type of payment.
Part 2 - Other Amendments
Income Tax Assessment Act 1936
Item 11
44. This item will amend subsection 160AAA(1) to add payments made under Part 2.23B to the list of payments which are 'rebatable benefits'. This amendment will have the effect that the Allowance, which will be considered taxable income, will be subject to the Beneficiary Tax Off-Set scheme.