House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Social Services, the Hon Kevin Andrews MP)

Schedule 3 - Disability support pension

Summary

This Schedule introduces changes in relation to disability support pension, from the day after Royal Assent, to review disability support pension recipients under age 35 against revised impairment tables, and apply program of support requirements.

Background

The Family Assistance and Other Legislation Amendment Act 2011 introduced the requirement that people who made a claim (or are taken to have made a claim) for disability support pension on or after 3 September 2011, and who do not have a severe impairment, must have actively participated in a program of support.

This Schedule extends the requirement to actively participate in a program of support to certain disability support pension recipients who made a claim (or are taken to have made a claim) for disability support pension before 3 September 2011 and whose pension start date was after 2007. These recipients will need to provide evidence that they have actively engaged in activities designed to build their work capacity, including training, work-related activities and activities aimed at addressing non-vocational barriers impacting on work capacity (for example, substance dependence) through active participation in a program of support.

The requirement to have actively participated in a program of support will apply to a person for whom certain conditions are met - notably, that the person is under 35 at the time a notice is given in relation to review of their qualification, and that the Secretary is satisfied as a result of the review that the person does not have a severe impairment and is able to work for at least eight hours a week.

This Schedule also introduces a requirement that, for the Secretary to be satisfied a person has actively participated in a program of support, the person must undertake a program of support that was wholly or partly funded by the Commonwealth.

The amendments made by this Schedule commence on the day after Royal Assent.

Explanation of the changes

Part 1 - Participation by certain persons reviewed on or after the day after Royal Assent

Disability support pension provides income support to people who, because of an ongoing physical, intellectual or psychiatric impairment, are prevented from working or from being re-trained for work. The qualification for disability support pension requires, amongst other things, that a person has a continuing inability to work because of an impairment.

Long-term dependence on disability support pension is not the best outcome for people who have skills and capacity to participate in the labour market or who are able to build such skills with appropriate assistance. This measure extends the requirement to actively participate in a program of support to certain people receiving disability support pension who have not had the opportunity to actively participate in such a program.

Presently, a person who claims disability support pension is considered to have a continuing inability to work because of an impairment if the Secretary is satisfied that, where they do not have a severe impairment, they have actively participated in a program of support, that the impairment is of itself sufficient to prevent the person from doing any work independently of a program of support within the next two years, and either: (i) the impairment is of itself sufficient to prevent the person from undertaking a training activity during the next two years; or (ii) if the impairment does not prevent the person from undertaking a training activity - such activity is unlikely (because of the impairment) to enable the person to do any work independently of a program of support within the next two years.

The requirement to have actively participated in a program of support will apply to a person for whom certain conditions are met - notably, that the person is under 35 at the time a notice is given in relation to review of their qualification, and that the Secretary is satisfied as a result of the review that the person does not have a severe impairment and is able to work for at least eight hours a week. The review will reassess a person's level of impairment under the current Impairment Tables and also their work capacity. People who have been granted the pension due to a severe and manifest disability will not be subject to this measure.

If the abovementioned review determines that a person has a severe impairment, they will not be required to actively participate in a program of support. A person has a severe impairment if the person's impairment has been assessed under the Impairment Tables and been assigned an impairment rating of 20 points or more, of which 20 points or more have been assigned under a single Impairment Table.

Likewise, if the review determines that a person cannot work for at least eight hours a week on wages that are at or above the relevant minimum wage, they will not be required to actively participate in a program of support.

The intent of this measure is, where appropriate, to require a person receiving disability support pension to demonstrate that they have undertaken and actively participated in a program of support.

Amendments to the Social Security Act 1991

Item 4 inserts a new definition reviewed 2008-2011 DSP starter into subsection 94(5) for the purposes of the amendments made by this Schedule.

A person will be a reviewed 2008-2011 DSP starter if:

(a)

the person made (or is taken to have made) a claim for disability support pension before 3 September 2011;

(b)

a determination granting the claim took effect after 2007;

(c)

on or after 1 July 2014 the person was given a notice in relation to assessing the person's qualification for that pension;

(d)

when the notice was given, the person was under 35 years of age;

(e)

before the notice was given, either:

(i)

there was a record that the Secretary was satisfied that the person was able to do work for at least 8 hours per week; or

(ii)

there was no record that the Secretary had considered whether the person was able to do work described in subparagraph (i);

(f)

after the notice was given, the Secretary decided not to determine that the disability support pension for the person is to be cancelled;

(g)

as a result of the assessment involving the notice, the Secretary is satisfied that the person:

(h)

does not have a severe impairment;

(i)

is able to work for at least 8 hours per week; and

(j)

the person does not have a dependent child under six years of age.

Of note is that paragraph (a) of the new definition operates to exclude people who claimed disability support pension after 3 September 2011 from the new provisions. This is because people who claimed disability support pension on or after 3 September 2011 are already required to actively participate in a program of support due to amendments introduced by the Family Assistance and Other Legislation Amendment Act 2011.

Paragraph (e) of the new definition refers to the record kept of the Secretary's decision about the person's qualification for disability support pension before any notice as described in paragraph (c) is given to the person for the purpose of reviewing their qualification.

Paragraph (f) of the new definition refers to a decision by the Secretary after a notice is given as described in paragraph (c) in relation to assessing the person's qualification. That is, following review of that person's qualification. A person will only satisfy paragraph (f) if the person continues to be qualified for disability support pension.

Item 1 adds the words 'or is a reviewed 2008-2011 DSP starter' at the end of subparagraph 94(1)(da)(i). This insertion means that a person who is a reviewed 2008-2011 DSP starter is required to meet any participation requirements that apply to the person under section 94, where existing subparagraphs 94(1)(da)(ii) and (iii) also apply in relation to the person.

Item 2 adds to paragraph 94(2)(aa), following '(3B)', the words 'or the person is a reviewed 2008-2011 DSP starter who has had an opportunity to participate in a program of support'. This amendment means that, for the Secretary to be satisfied that a reviewed 2008-2011 DSP starter has a continuing inability to work, the person must show they have actively participated in a program of support within the meaning of subsection 94(3C).

The qualification that paragraph 94(2)(aa) applies in relation to a reviewed 2008-2011 DSP starter 'who has had an opportunity to participate in a program of support' ensures that a reviewed 2008-2011 DSP starter who has not yet had this opportunity (for example, by being referred to an appropriate employment assistance service provider) will not cease to be qualified for disability support pension by reason only of not having actively participated in a program of support within the meaning of subsection 94(3C) upon becoming a reviewed 2008-2011 DSP starter.

Subsection 94(3C) provides that a person has actively participated in a program of support if the person has satisfied the requirements specified in a legislative instrument made by the Minister for the purposes of that subsection. This means that, to be satisfied that a person who is a reviewed 2008-2011 DSP starter who has had the opportunity to participate in a program of support has done so, the Secretary must have regard to whether the person has satisfied the requirements of a legislative instrument made under subsection 94(3C).

Item 3 inserts a new paragraph (c) into subsection 94(3A). Presently, under subsection 94(3A), if a person is receiving disability support pension and the person is issued with a notice in relation to reviewing the person's qualification, they are not required to have actively participated in a program of support as stipulated in paragraph 94(2)(aa). The new paragraph (c) means that this exemption will not apply to a person who meets the definition of 'reviewed 2008-2011 DSP starter' in subsection 94(5). The effect of the new paragraph (c) is therefore that paragraph 94(2)(aa) applies to a reviewed 2008-2011 DSP starter.

Item 5 inserts a new subsection 96(3). Section 96 allows for the continuation of a person's qualification for disability support pension if the person obtains paid work of at least 15 hours but less than 30 hours a week.

New subsection 96(3) specifies that section 96 will not apply where, in the period beginning when the person becomes a reviewed 2008-2011 DSP starter and ending when the person's qualification is first reviewed after that occurrence, the person would, if not for subsection 96(2), cease to be qualified because the person obtains paid work that is for at least 15 hours but less than 30 hours per week.

Item 6 sets out provisions which provide for the application of the amendments made by Division 1 of this Schedule as follows:

•

Sections 94 and 96 of the Social Security Act, as amended, apply for the purposes of determining a person's qualification for disability support pension in respect of days occurring on or after the commencement of Division 1 of this Schedule.

•

Section 94 of the Social Security Act, as amended, applies whether a person claimed disability support pension before, on or after 3 September 2011. Section 94 operates in this way despite item 12 of Schedule 3 to the Family Assistance and Other Legislation Amendment Act 2011, which introduced paragraph 94(2)(aa) and subsections 94(3A) to (3E) and provided for these amendments to the Social Security Act to apply to a person who claimed disability support pension on or after 3 September 2011.

Part 2 - Commonwealth-funded program of support

It is proposed that only programmes wholly or partly funded by the Commonwealth, including Disability Employment Services, Job Services Australia and Australian Disability Enterprises, will be programs of support for the purposes of active participation in a program of support under paragraph 94(2)(aa). Generally, non-government programmes do not provide a comprehensive tailored plan for the participant, taking into account the person's disability, designed to prepare or re-train them for work. This reinforces the principle that people with mild to moderate disability should participate in a comprehensive tailored program of support to try to build their capacity to work.

Item 7 inserts in paragraph 94(2)(aa), following '(3C)', the words 'and the program of support was wholly or partly funded by the Commonwealth'. This addition limits the definition in subsection 94(5) of program of support for the purposes of paragraph 94(2)(aa) to being one that was wholly or partly funded by the Commonwealth.

Item 8 is a saving provision, which provides that, despite the amendment made by item 7, a person is qualified for disability support pension if, before the commencement of this Part, they started a program of support that was not wholly or partly funded by the Commonwealth and would qualify if the program had been wholly or partly funded by the Commonwealth.