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Senate

Social Services Legislation Amendment (Welfare Reform) Bill 2017

Social Services Legislation Amendment (Welfare Reform) Act 2018

Revised Explanatory Memorandum

(Circulated by the authority of the Minister for Social Services, the Hon Christian Porter MP)

This memorandum takes account of amendments made by the House of Representatives to the bill as introduced.

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

SOCIAL SERVICES LEGISLATION AMENDMENT (WELFARE REFORM) BILL 2017

Schedule 1 - Creation of the Jobseeker payment

Schedule 2 - Cessation of Widow B Pension

Schedule 3 - Cessation of Wife Pension

Schedule 4 - Cessation of Bereavement Payment

Schedule 5 - Cessation of Sickness Allowance

Schedule 6 - Cessation of Widow Allowance

Schedule 7 - Cessation of Partner Allowance

Schedule 8 - Ministers rules (safety net for transitional arrangements)

These Schedules are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedules

Schedules 1-7 introduces provisions for a new Jobseeker Payment and repeals provisions that provide for the following payments:

•: Widow B Pension - a payment for older women who did not qualify for parenting payment , have limited means and have lost the support of a partner through death, separation or divorce. This payment will cease on 20 March 2020.
•: Widow Allowance - a non-activity tested income support payment for women who lose the support of their partner due to being widowed, divorced, or separated, and who have no recent workforce experience. This payment will close to new entrants on 1 January 2018 and cease on 1 January 2022.
•: Partner Allowance - a non-activity tested income support payment for older partners of income support recipients who face barriers to finding employment because of their previous limited participation in the workforce. This payment will cease on 1 January 2022.
•: Sickness Allowance - a short-term income support payment for people who have a temporary incapacity due to illness or injury, and who have a job or study to return to after their recovery.
•: Bereavement Allowance - a non-activity tested, short term payment paid at the pension rate to individuals whose partner has died. This payment will cease on 20 March 2020.
•: Newstart Allowance - a payment that provides financial assistance to people who are unemployed or treated as unemployed. This payment will cease on 20 March 2020.
•: Wife Pension - a payment for female partners of Age Pensioners or Disability Support Pensioners who are not eligible for a pension in their own right.

From 20 March 2020, the new Jobseeker Payment will become the main payment for people of working age, ensuring that people in similar circumstances are treated consistently. Ceasing seven payments and introducing the Jobseeker Payment will drive efficiencies and deliver greater administrative consistency within the welfare system, ensuring its long term sustainability.

Schedule 8 will allow the Minister to make rules by legislative instrument about transitional matters regarding the amendments and repeals made by Schedules 1 to 7. The Minister's rule making power will be subject to limits and safeguards.

Human rights implications

Right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises 'the right of everyone to social security'.

The amendments in these Schedules introduce a new Jobseeker Payment, remove seven income support payments and allow for the making of legislative instruments to manage transitional arrangements to the new payment.

The United Nations Committee on Economic, Social and Cultural Rights (the Committee) has stated that there is 'a strong presumption that retrogressive measures taken in relation to the right to social security are prohibited under the Covenant.' The Committee places a burden on the State party that has introduced deliberately retrogressive measures to 'prove that they have been introduced after the most careful consideration of all alternatives and that they are duly justified...'.

Ceasing the seven income support payments and replacing them with the Jobseeker Payment does not limit or affect most recipients' access to the right to social security. Over 99.9 per cent of recipients will continue to be eligible for income support.

Widow B Pension and Partner Allowance are closed to new entrants and all existing recipients will transition to other income support payments.

Newstart Allowance, Sickness Allowance and Bereavement Allowance eligibility criteria will be incorporated into the Jobseeker Payment, allowing continued access to social security for all recipients of these payments.

Existing Widow Allowance recipients will transition to the Age Pension upon attaining the minimum qualifying age. People who would otherwise have been eligible for Widow Allowance will have access to other social security payments including Newstart Allowance. While Widow Allowance eligibility and payability criteria are broader than other payments (including Jobseeker Payment), this payment no longer reflects social norms such as women's labour force participation. It is only available to women of a certain age and therefore discriminates against men who may be of the same age and experiencing similar hardship. Ceasing this payment is therefore duly justified for the purpose of better aligning the system with the gender equality principle, identified by the Committee as an important principle of the right to social security.

Wife Pension was closed to new entrants on 1 July 1995. Existing recipients will transition to other payments including the Age Pension, Carer Payment and Jobseeker Payment. To ensure that existing recipients do not experience a nominal reduction in their fortnightly rate, Wife Pension recipients who transition to the Jobseeker Payment will be subject to transitional arrangements that would maintain the maximum rate of Wife Pension as at 19 March 2020 and assess recipients under both pension and JobSeeker parameters to determine the higher rate. Nominal rates will not be reduced. This is reasonable and consistent with the objective of transitioning recipients to the Jobseeker Payment.

Some recipients who transition to the Jobseeker Payment will be activity tested as part of their eligibility for payment. While this imposes obligations on recipients who were not previously subject to activity testing, existing exemptions will apply if they are unable to fulfil these obligations. These exemptions will ensure continuing access to the right to social security. Introducing these recipients to activity testing may be seen as a retrogressive measure, but it is for the legitimate objective of ensuring sustainability and consistent treatment in the system and does not restrict the basic right to social security.

Around 200 Wife Pension recipients living overseas will not be eligible for any other social security payment if they choose to remain overseas. While this may be seen as a retrogressive measure, it is reasonably justified by the need to achieve the legitimate objective of ensuring the long-term sustainability of the social security system, by simplifying the structure and ensuring consistent treatment of recipients.

The alternative of maintaining Wife Pension for the 200 recipients is not consistent with the Government's priority to ensure the sustainability of the system through simplification. To ensure that these recipients have time to adjust, the proposal will be implemented in 2020. Importantly, this is not a complete limitation of the recipients' right to social security. At any time before implementation, they can return to Australia where they will be transitioned to an appropriate payment along with other Wife Pension recipients. They can also return to Australia after implementation where they may be eligible for another income support payment. Ceasing Wife Pension may be seen as limiting the right to social security of these recipients. However, it is a permissible limitation with a legitimate objective of ensuring sustainability and consistent treatment in the system. There is a rational connection between ceasing this payment and achieving the objective. Ceasing Wife Pension along with the other six payments will drive efficiencies and deliver greater administrative consistency within the welfare system. It is reasonable, necessary and proportionate and provides the recipients ample time to return to Australia or adjust to their new circumstances.

Right to privacy and reputation

Article 17 of the International Covenant on Civil and Political Rights (ICCPR) provides that 'no one shall be subjected to arbitrary or unlawful interference with their privacy'. The right to privacy can be limited to achieve a legitimate objective where the limitations are lawful and not arbitrary.

As part of administering the Jobseeker Payment, the Department of Human Services will collect and store recipient data. This information collection will be subject to the Privacy Act 1988. The data will be used for the legitimate purpose of improving recipient outcomes and ensuring the sustainability of the income support system. This is a reasonable interference with the right to privacy and is authorised by law.

Conclusion

These Schedules are compatible with human rights because they do not restrict the basic right to social security. To the extent that it may limit this right for overseas recipients, it is a reasonable, proportionate and necessary response to achieve the objective of ensuring the long-term sustainability of the social security system by simplifying its structure. The Schedules also enhance the system's compatibility with the right to social security by ensuring consistent treatment of recipients and removing payments that directly discriminate based on gender.

To the extent that the Schedules limits a person's right to privacy, the limitation is reasonable and proportionate as described above.

Schedule 9 - Relief from activity test for persons aged 55 to 59

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

Job seekers on Newstart Allowance and Special Benefit - Nominated Visa Holders are generally required to satisfy the activity test, which is a requirement to actively look for, and be willing to undertake, any suitable paid work. Currently, such job seekers who are aged 55 or over are taken to satisfy the activity test if they are engaged in at least 30 hours per fortnight of approved unpaid voluntary work, paid work (including self-employment), or a combination of these, unless the Secretary considers that they should not be relieved from meeting the activity test due to the opportunities for employment available to them.

This Schedule would amend the Social Security Act 1991 to remove the ability of Newstart Allowance and certain Special Benefit recipients aged 55 - 59 to be taken to satisfy the activity test by engaging in voluntary work for at least 30 hours per fortnight. The amendments would allow those recipients to be taken to satisfy the activity test if they are engaged, for at least 30 hours per fortnight, in a combination of approved unpaid voluntary work and suitable paid work, at least 15 hours of which must be in suitable paid work.

Human rights implications

This Schedule engages the following rights:

-: the right to social security in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR);
-: the right to an adequate standard of living in article 11 of the ICESCR;
-: the right to equality before the law and non-discrimination in article 2 of the ICESCR, and article 26 of the International Covenant on Civil and Political Rights (ICCPR) and;
-: the right to work in article 6 of the ICESCR.

The right to social security and the right to an adequate standard of living

Article 9 of the ICESCR recognises the right of everyone to social security. Article 11 recognises the right of everyone to an adequate standard of living and the continuous improvement of living conditions.

The amendments would have a limited impact on the right to social security and the right to an adequate standard of living as the amendments would not, in themselves result in any reduction to, or suspension of, a person's social security payment. The activity test will not change. Instead, the level of volunteering permitted in order to be taken to satisfy the activity test will be reduced for those in the 55 - 59 age cohort.

The amendments would therefore only impact those job seekers who volunteer for 30 or more hours per fortnight, or who volunteer for more than 15 hours a fortnight while also undertaking paid work. These people will now have to undertake additional paid work in order to continue to be exempt from the activity test under subsections 603AA(1) and 731G(1), or become subject to the activity test (which will require them to actively look for, and be willing to undertake, any suitable paid work). Affected job seekers will need to meet these additional requirements in order to remain qualified for their Special Benefit or Newstart Allowance, which potentially impacts their right to social security and an adequate standard of living.

However, the amendments align the requirements of affected job seekers with other job seekers aged 55 - 59 who do not engage in at least 30 hours per fortnight of voluntary work, or a combination of more than 15 hours per fortnight of voluntary work, and paid work. The amendments will simply mean that affected job seekers are in the same position as job seekers in their age cohort who do not get relief from the activity test due to their levels of volunteering.

Further, current provisions of the Social Security Act 1991, for example subsection 603AA(3) and subsection 731G(3), already enable job seekers to be excluded from the relief from the activity test offered by s 603AA(1) and 731G(1) (respectively) in certain circumstances. This Schedule would therefore not have a wholly new impact, but would change the circumstances in which relief from the activity test is available.

Necessity for, and reasonableness and proportionality of, the amendments

Under sections 603AA and 731G of the Social Security Act 1991, there is potential for job seekers aged 55 or over to remain indefinitely on income support while engaging in large amounts of volunteer work, while not necessarily improving their prospects of finding suitable paid work.

There is therefore a need to amend the relevant sections to strengthen the employment focus of exemptions to activity test requirements and better connect mature age job seekers with the labour market, while still recognising that volunteering can be a valuable stepping stone into paid work.

This will help ensure these recipients experience greater workforce participation and the associated benefits. With an ageing population, it is important to encourage older people to continue to participate in the paid workforce.

It is important to emphasise that any additional work requirements for affected job seekers would not include work which is unsuitable for the person, such as work that poses a risk to their health and safety, or work that would require the person to move to another place. The amendments only relate to work that is suitable for the person, taking into account their individual circumstances.

The Government is also implementing separate measures aimed at addressing the barriers faced by mature age job seekers. For example, the Government is investing over $100 million to increase the skills and experience of mature age job seekers from 1 July 2018.

Accordingly, while the amendments would have, for the reasons outlined above, a limited impact on the right to social security and the right to an adequate standard of living, they are a reasonable and proportionate means of helping to achieve the objectives of this Schedule.

The right to equality and non-discrimination

Article 2 of the ICESCR and article 26 of the International Covenant on Civil and Political Rights (ICCPR) recognise the right to equality and non-discrimination on, among other grounds: race, sex, colour, language, national origin or 'other status'. Relevantly, age has been considered to constitute 'other status' for the purposes of articles 2 and 26.

The amendments will have an impact on certain job seekers aged 55 - 59. There are situations where there are good reasons for using age-based distinctions in connection with employment measures. Employment measures are developed to address particular labour market or policy issues which can vary across age groups. Targeting particular age groups allows measures to be designed in the most appropriate way to meet the different needs of different groups in the community.

For many years, Parliament has recognised that there may in certain circumstances be valid reasons for differential treatment on the basis of age in connection with employment. For example, the provisions which these amendments would affect, and other provisions in the social security law concerned with encouraging job seekers into the workforce, contain age-based distinctions.

Also, section 41A of the Age Discrimination Act 2004 provides that Commonwealth programmes which aim to increase workforce participation and meet the needs of those of a particular age are not unlawful by reason of that Act.

To the extent that the amendments affect job seekers within the 55 - 59 age bracket, this would not involve any illegitimate age discrimination. As the Australian population ages, the community now expects that those in the 55 - 59 age bracket should continue to actively seek and undertake suitable paid work, including where they also perform voluntary work. Those 60 years of age and over will be unaffected by the amendments.

Further, as noted above, the amendments would simply mean that the affected job seekers would generally be subject to the same activity test requirements as those of job seekers aged 55 - 59 who do not engage in at least 30 hours per fortnight of voluntary work, or at least 15 hours of voluntary work in combination with paid work.

In addition, the amendments would not affect other provisions in the social security law which relate to the circumstances in which particular cohorts of job seekers, such as principal carers of a child or those with a partial capacity to work, may be taken to satisfy the activity test, regardless of their age.

The right to work

Article 6 of the ICESCR recognises the right to work. The amendments made by this Schedule encourage job seekers to engage with their right to work by encouraging them to look for more hours of paid work rather than remaining on income support indefinitely, without being required to look for or undertake suitable paid work.

The amendments are compatible with the protection of just and favourable conditions of employment, as work which provides terms and conditions that are less generous than the applicable statutory conditions continues to be taken to be unsuitable work for the purposes of the activity test (see, for example, paragraph 601(2A)(e) of the Act in relation to Newstart Allowance)

Conclusion

This Schedule is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable and proportionate to legitimate objectives.

Schedule 10 - Start day for some participation payments

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

This Schedule would amend the Social Security (Administration) Act 1999 (Social Security Administration Act) to implement the Work First: Faster Connection to Employment Services 2017 Budget measure, which aims to encourage certain job seekers claiming Newstart Allowance or Youth Allowance (other than new apprentices or full-time students) to connect more quickly with employment service providers.

Under RapidConnect, certain unemployed people claiming income support are assisted to join the workforce by being required to promptly access employment opportunities through an employment services provider. Exemptions to RapidConnect apply (such as where the person is assessed as having multiple barriers to employment).

Currently, a person who claims Newstart Allowance or Youth Allowance (other) and is subject to RapidConnect is required to attend an initial interview with an employment services provider before their income support is payable. The requirement to attend the interview is imposed under section 63 of the Social Security Administration Act. If the person attends the interview as required, the start day for their payment is the day on which the claim is made. In some circumstances, this is the date on which the person first contacted the Department of Human Services in relation to the claim.

If the person fails to attend their initial interview, sections 547AA and 615 of the Social Security Act 1991 (Social Security Act) have the effect that the income support payment is generally not payable until the person meets that requirement. However, if the Secretary determines that section 547AA or section 615 should cease to apply (for example because the person had a reasonable excuse for the failure or because of circumstances beyond the person's control), the income support payment is typically backdated to the date on which the claim for the payment was made.

This Schedule would amend the Social Security Administration Act so that a job seeker's Newstart Allowance or Youth Allowance (other) payment would generally be payable from the date on which the job seeker attends their initial interview with an employment services provider, instead of the date on which the claim for the payment was made.

This Schedule would also amend the Social Security Act so that the ordinary waiting period for job seekers subject to RapidConnect continues to commence on the same day as for people not subject to RapidConnect, as is currently the case under the social security law.

An ordinary waiting period is a 7 day waiting period which certain income support claimants are subject to, and which generally commences on a person's start day. Due to the amendments made by this Schedule, a RapidConnect participant's start day will usually be later than the start day of a Newstart Allowance or Youth Allowance (other) claimant who is not a RapidConnect participant which would result in their ordinary waiting period commencing (and expiring) later than is currently the case.

Therefore the Schedule will also preserve the way a start day is worked out for the purposes of determining:

-

when an ordinary waiting period commences for a RapidConnect participant; and

-

whether a RapidConnect participant is subject to an ordinary waiting period in circumstances where they:

o: received an income support payment in the 13 weeks immediately prior to the person's start day; or
o: are experiencing a personal financial crisis (which may include being subject to domestic violence or severe financial hardship in the 4 weeks immediately prior to the person's start day).

Job seekers affected by the amendments

This Schedule would not affect job seekers who are exempt from RapidConnect (for example), highly disadvantaged job seekers including those with a partial work capacity or who are principal carers of a child) or those referred to the Community Development Program or Disability Employment Services. This Schedule would not affect individuals who make a claim for Youth Allowance who are new apprentices or undertaking full-time study.

Human rights implications

This Schedule engages the following human rights:

•: the right to social security in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR);
•: the right to an adequate standard of living in article 11 of the ICESCR; and
•: the right to work in article 6 of the ICESCR.

Right to social security and the right to an adequate standard of living

Article 9 of the ICESCR recognises the right of everyone to social security. The right to social security requires States to establish a social security system and, to the maximum of their available resources (as required by Article 2 of the ICESCR), ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.

Article 11 of the ICESCR recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions.

Article 4 of the ICESCR provides that countries may only subject economic, social and cultural rights to such limitations 'as are determined by law only in so far as this may be compatible with the nature of these rights and solely for the purpose of promoting the general welfare in a democratic society'. The Committee on Economic, Social and Cultural Rights has stated that such limitations must be proportionate and the least restrictive alternative where several types of limitations are available, and even where such limitations are permitted, they should be of limited duration and subject to review.

It is intended that this Schedule would only apply to job seekers subject to RapidConnect. Job seekers may be exempt from RapidConnect, including if they are assessed by the Department of Human Services as having multiple significant barriers to finding employment (whether those barriers are vocational or non-vocational). Job seekers who are exempt from RapidConnect would not be affected by this Schedule.

The intention of the amendments made to the Social Security Administration Act is to encourage job seekers to connect more quickly with employment services providers. The longer a job seeker takes to attend their initial appointment with their provider the longer their income support might be delayed. It is appropriate that job seekers who are not highly disadvantaged and who have claimed income support should connect quickly with the employment services that are available to help them find a job.

Around 80 per cent of job seekers subject to RapidConnect are connected with an employment services provider within a short period of time. However, 20 per cent are not connected with their provider more than 14 days after the lodgement of their claim for income support. Linking the start day for income support payments to attendance at the first provider appointment reinforces the original policy intent of RapidConnect (introduced in 2005).

The right to social security is not impermissibly limited by requiring job seekers to attend an initial appointment with their employment services provider before their income support becomes payable. The Schedule encourages a job seeker who has no significant barriers to obtaining employment to connect with their employment services provider and begin to undertake activities that will assist them to obtain employment as soon as they can.

The amendments made by this Schedule to the Social Security Administration Act do not limit a job seeker's right to social security if they connect with their employment services provider as required, because income support would be payable to them once they attend. Importantly, if a job seeker complies with the requirement to attend an interview on a specified day, there would be a maximum of two business days between the imposition of the requirement and the income support payment being payable. If there is no appointment available with a provider within two business days after the Secretary imposes the requirement, and the job seeker attends the next available appointment, the job seeker's income support payment is payable from the date on which the requirement is imposed. As such, job seekers who comply with the requirement would not be disadvantaged as a result of an appointment being unavailable within two business days.

If a job seeker fails to comply with a requirement to attend an interview with their employment services provider on a specified day, or elects to attend an appointment more than two business days after the Secretary imposes the requirement, their income support payment would be delayed until they connect with an employment services provider.

However, if a person fails to attend their initial interview, the amendments made by this Schedule would interact with existing sections 547AA and 615 of the Social Security Act, to allow the Secretary to take account of their individual circumstances and the reasons why they failed to attend an interview to determine the relevant start day for their income support payments.

That is, if the Secretary is satisfied that it is appropriate to do so (for example, because the person had a reasonable excuse for failing to attend the appointment or because of circumstances beyond the person's control), the Secretary may determine that sections 547AA or 615 should cease to apply at an earlier time such that their income support would be payable from the date of the appointment they missed, rather than that of the subsequent appointment.

To the extent that the amendments made by this Schedule to the Social Security Administration Act may limit the right to social security, the impact is reasonable and proportionate to the policy objective of having job seekers who have no significant barriers to employment connect quickly with employment service providers that will increase their employment prospects.

Encouraging job seekers who have no significant barriers to employment to connect more quickly with employment services providers, who are there to assist them to obtain work, can have a positive effect on a job seeker's standard of living. Connecting more quickly with employment services improves the job seeker's employability and their chances of finding and obtaining employment. Assisting a job seeker out of the social security system and into the workforce improves the job seeker's standard of living, and helps maintain both the integrity and sustainability of the social security system by ensuring that finite resources are allocated to those in most need.

To the extent that the amendments to the Social Security Administration Act would have an impact on the right to an adequate standard of living, that impact is limited. As noted above, if a job seeker complies with the requirement to attend an interview on a specified day - or there is no appointment available within two business days - there would be a maximum of two business days between the imposition of the requirement and the income support payment being payable. The Schedule would also interact with existing sections 547AA and 615 of the Social Security Act to allow the Secretary to take account of a job seeker's individual circumstances and the reasons why they failed to attend an interview to determine the relevant start day for their income support payments.

The impact on job seekers who choose not to connect quickly with their employment services provider is reasonable and proportionate because, although these job seekers have no significant barriers to obtaining employment, they have chosen not to engage with the specialist employment services that are available to them as quickly as they could have.

For the reasons set out above, to the extent that the amendments made by this Schedule to the Social Security Administration Act may limit the right to social security or the right to an adequate standard of living, the impact is necessary and proportionate to the legitimate policy objective of encouraging greater workforce participation and self-support for job seekers who have no significant barriers to employment.

The intention of the amendments made by this Schedule to the Social Security Act is to ensure that the ordinary waiting period for job seekers subject to RapidConnect continues to commence on the same day as for people not subject to RapidConnect, as is currently the case under the social security law.

The effect is that RapidConnect participants subject to an ordinary waiting period will not be unduly disadvantaged by their later start day in calculating when their ordinary waiting period commences or in determining whether they are subject to an ordinary waiting period.

The amendments made by this Schedule to the Social Security Act will ensure that the ordinary waiting period continues to operate in accordance with existing rules and commences on the same day irrespective of whether the job seeker is subject to RapidConnect. This promotes a RapidConnect participant's right to social security and an adequate standard of living by ensuring that the ordinary waiting period is consistently applied.

Right to work

Article 6 of the ICESCR recognises the right to work. This includes the right to the opportunity to gain a living by work which the job seeker freely chooses or accepts and is considered an inherent part of human dignity.1

The Schedule promotes the right to work by encouraging unemployed Australians subject to RapidConnect to engage with their right to work by connecting quickly with employment services providers that are there to help them obtain gainful employment. Compliance by a job seeker with their RapidConnect requirements places them in an optimum position to seek and obtain gainful employment more quickly. As such, this Schedule seeks to ensure that more job seekers engage with their right to work and experience the benefits of employment sooner than might otherwise be the case.

Conclusion

This Schedule is compatible with human rights. To the extent that it limits rights, the limitation is reasonable, proportionate to the policy objective and for legitimate reasons.

Schedule 11 - Removal of intent to claim provisions

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

This Schedule will amend the Social Security Administration Act by removing the current deemed claim provisions that allow a claimant to receive payments from the date on which they initially contacted the Department of Human Services.

Human rights implications

This Bill engages human rights related to the right of everyone to social security in Article 9, and the right of everyone to an adequate standard of living for an individual and their family, including adequate food, clothing and housing, and the continuous improvement of living conditions in Article 11 of the International Covenant on Economic Social and Cultural Rights.

Abolishing the current deemed claim provisions does not remove access to the range of social security payments that attracted these provisions. Access to these payments will remain, regulated by the same qualification rules in place prior to the removal of deemed claim provisions. Payments will now be made from the date on which a person submits all material necessary to be assessed that is within their control with the aim of maintaining the general integrity of the social security system.

Provisions also exist to support people during the claim process who, as a result of exceptional circumstances, require financial assistance. This is to ensure access to income support for those most in need.

Conclusion

This Bill is compatible with human rights because to the extent that it may tighten the claim process, the stricter requirements are reasonable, necessary and proportionate and people are otherwise provided for.

Schedule 12 - Establishment of a drug testing trial

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

This Schedule will, from 1 January 2018 (or date of commencement), establish a two year trial of drug testing for 5,000 recipients of Newstart Allowance (NSA) and Youth Allowance (other) (YA(o)) in three locations.

The trial sites will be set out in a legislative instrument and will be selected based on the best available evidence and data around drug use in Australia, as well as the availability of alcohol and other drug treatment options.

People who claim NSA or YA(o) on or after commencement of the trial (intended to be 1 January 2018) and reside in a trial location will be eligible for the trial. Those claiming on or after this date will need to acknowledge in their claim that they may be required to participate in the drug testing trial. Claims will be unable to be determined unless this has been acknowledged by claimants who live in the trial locations.

Recipients who are selected for testing will be notified of a requirement to attend an appointment with the Department of Human Services. At this appointment they will be notified of a requirement to provide a sample of saliva, urine or hair for the purposes of a drug test. Testing will be undertaken by a contracted third party provider in accordance with a set of drug testing rules which will be set out in a legislative instrument. The rules will cover issues relating to the conduct of the test to ensure that testing is conducted appropriately and in accordance with relevant standards. The contracted testing provider will be required to provide notice of the test results to the Department of Human Services.

Recipients who fail to attend this appointment will have their payment suspended until they attend a rescheduled appointment as is currently the case for other types of appointments. Those who have a reasonable excuse for missing their appointment will have their payment restoration backdated. Should a job seeker refuse to undertake the drug test, their payment will be cancelled and they will be subject to a four week waiting period, if they subsequently re-claim.

Recipients who test positive to the initial drug test will become subject to Income Management for a period of 24 months. The contracted testing provider will be required to provide a notice to the Department of Human Services for the purpose of referring the job seeker to Income Management.

Job seekers will have the option to dispute the result of a positive test by requesting a re-test. If the re-test result is also positive, the job seeker will also have to repay the cost of the test.

Job seekers who return a positive test result will also be subject to a second drug test within 25 working days. If the job seeker tests positive to the second test, they will need to repay the costs of the test.

When required, repayment of positive test results will be by temporary reduction of the job seeker's rate of payment at a rate determined by the Secretary through legislative instrument. The rate of repayment will not be set at more than 10 per cent of a person's instalment and financial hardship provisions will apply. The amount of the test to be repaid will be set out in a legislative instrument, and will not be more than the price of the lowest test available to the Department of Human Services.

Recipients who test positive to a second drug test during the trial period will be referred to a suitably qualified health professional for assessment of their drug use issues and the recommendation of any treatment appropriate to the individual's circumstances. Based on the report from the medical professional, where appropriate, recipients will be required to complete one or more activities designed to address their substance abuse as part of their Job Plan, such as rehabilitation, counselling or ongoing drug testing.

Recipients with a drug treatment activity in their Job Plan may still be required to undertake other activities, including job search, depending on their circumstances. Job search or other activities may be reduced depending on treatment requirements. Intensive treatment which precludes participation in other activities would fully meet mutual obligation requirements. Job seekers who fail to comply with their Job Plan will be subject to normal compliance actions.

Reasonable excuse provisions continue to apply, with the exception of drug or alcohol use reasons under the related proposal Tightening Reasonable Excuse for Non-compliance Due to Drug or Alcohol-Related Reasons (see Schedule 14).

Human rights implications

Rights under the International Covenant on Economic, Social and Cultural Rights (ICESCR)

This Schedule engages a numbers of rights under the ICESCR as outlined below. Limitations on these rights are permissible where they are: determined by law; compatible with the nature of the rights in the treaty in question; seek to achieve a legitimate objective; and are a reasonable and proportionate means of achieving that objective. Measures that limit rights in a way that meets these requirements will be consistent with those rights.

The drug testing trial will be provided for by law under the amendments in this Schedule. The trial has two key objectives - it seeks to:

•: maintain the integrity of, and public confidence in, the social security system by ensuring that tax-payer funded welfare payments are not being used to purchase drugs or support substance abuse;
•: provide new pathways for identifying recipients with drug abuse issues and facilitating their referral to appropriate treatment where required.

Substance abuse can be a major barrier to social and economic participation. Administrative data from the Department of Human Services shows that, for some job seekers, substance abuse is directly impacting their ability to undertake job search and other activities to help them gain employment. The number of job seekers using drug or alcohol abuse as an excuse for not meeting their requirements increased by 131 per cent between 2015 and 2016 while the number exempt from all requirements due to drug or alcohol dependency increased by 80 per cent between 2011 and 2016.

While there are a number of existing mechanisms for identifying job seekers with drug abuse issues, including through reasonable excuse and exemption arrangements, these mechanisms generally rely on self-disclosure by the job seeker and the disclosure is often only once the job seeker's drug misuse has directly impacted their ability to meet their mutual obligation requirements,

The amendments in this Schedule will trial drug testing as a new means of identifying job seekers for whom drug abuse is (or may become) a barrier to work, providing a disincentive for further drug use and supporting those with ongoing drug misuse issues to seek treatment.

This Schedule meets the requirements for permissible limitations on rights under the ICESCR as outlined below and is therefore consistent with these rights

Right to social security (Article 9), the right to an adequate standard of living (Article 11) and the rights of the family and child to special protection and assistance

Article 9 of the ICESCR recognises the right of everyone to social security. The right to social security requires parties to establish a social security system and, within their maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.

Article 11(1) recognises the right of everyone to an adequate standard of living for themselves and family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The right to an adequate standard of living is closely connected to the right to social security.

Article 10 provides for the rights of family and child to special protection and assistance. These rights also overlap substantially with other rights in the ICESCR, particularly the right to social security and an adequate standard of living. In light of the close relationship between these rights, it is considered that the arguments set out below apply to a person's rights under articles 9, 10 and 11(1) of the ICESCR.

Australia's social security system is underpinned by a key principle that people of working age who have the capacity to work and become self-sufficient should do all they can to achieve this. In line with this principle, recipients of Newstart Allowance and Youth Allowance (other) are subject to range of obligations in return for taxpayer-funded income support which reflect the purpose of these payments - to support people while they look or prepare for work.

The amendments in this Schedule will trial random drug testing as a new condition for the receipt of Newstart Allowance or Youth Allowance (other). People claiming these payments in the trial locations will be required to acknowledge this new condition in order for their claim to be granted. This is designed to ensure that these claimants are aware of and willing to meet the new conditions that apply under the trial. Job seekers who later refuse to undertake a drug test where required will have their payments cancelled and a four week waiting period will apply when re-claiming. These consequences reflect that job seekers are expected to meet all their obligations, including random drug testing for those in the trial, in return for their payments.

Recipients who are subject to this measure and who test positive to a drug test will not lose access to income support. Those who return a positive drug test will be placed on Income Management, which limits the amount of money a job seeker can receive as cash and therefore their capacity to expend their payments on drugs.

Income management does not reduce the total amount of income support available to a person, just the way in which they receive it. Under Income Management, majority portion of a job seeker's normal payment is quarantined and the remaining amount is paid into their regular bank account and is accessible as cash. Job seekers placed on Income Management under this trial will still be able to purchase items at approved merchants and pay rent and bills with their quarantined funds. However, the recipient will not be able to use their quarantined funds to withdraw cash, gamble, buy alcohol or cash-equivalent products (such as gift cards).

Income Management is already used as a welfare quarantining mechanism in a number of locations across Australia as a means of assisting recipients to manage their finances to meet their essential living costs, including food and housing. Evidence collected on Income Management in Western Australia indicates that the program is improving the lives of many Australians. It has given many participants a greater sense of control of money, improved housing stability and purchase restraint for socially harmful products, while reducing a range of negative behaviours in their communities including drinking and violence.

Job seekers who test positive to a second or subsequent drug test costs will need to be repay the cost of the test through a temporary reduction of their social security instalment. Consistent with the objective of trial, this repayment requirement is designed to discourage future drug use and potential positive test results. It is intended that the trial will utilise up to three different testing methods which may have varying costs. To ensure that all job seekers are treated consistently, irrespective of the testing method used in their case, and the amount of the test to be repaid will be set at the lowest cost option used. In addition, the rate of repayment will not be set at more than 10 per cent of a person's instalment, with the option to reduce this percentage, including to zero, in cases of financial hardship. The repayment reduction will only apply to the recipient's income support payment. Any payments made to parents for the maintenance of their children, such as Family Tax Benefit, or to meet childcare costs, would not be affected. These arrangements are designed to ensure that job seekers will not be put in the position of being unable to meet their basic needs or those of their family as a result of the requirement to repay the cost of a positive test.

Job seekers who test positive to more than one drug test will be referred to a medical professional for assessment of any appropriate treatment options. If the assessment recommends treatments, the job seeker will be required to have a treatment activity included in their Job Plan. As per existing arrangements, job seekers who fail to meet their activity requirements under their Job Plan (including any drug treatment activity requirements under this trial) may be subject to a financial penalty. Compliance action such as this is a standard feature under the social security law, and the placing of qualifying conditions on social security benefits (and the enforcement of those conditions) is permissible under article 9 where they are reasonable and proportionate to the objective of the policy. As noted above, a key objective of this trial is to assist job seekers with drug misuse issues to address their barriers to employment. Where a job seeker has been assessed by a medical professional as needing treatment, it is reasonable to expect the job seeker to pursue treatment as part of their Job Plan and to be subject to proportionate consequences if they fail to do so.

It is, however, important to note that the vulnerability of people and the impact of their circumstances on their ability to comply with their mutual obligation requirements is considered under social security law through reasonable excuse and exemption provisions, and delegates have significant discretionary powers regarding the application of compliance actions to consider the circumstances of each individual case.

In addition, the availability of appropriate treatment will be taken into consideration in determining the requirements that should be included in a person's Job Plan. Job seekers will not be penalised if treatment is not available or there is a delay in being able to access treatment. In this case, job seekers will be able to meet their treatment requirement by demonstrating a commitment to pursuing treatment when it is available (for example, being on a waiting list) and participating in other approved activities, tailored to their circumstances in the meantime.

To the extent that this trial may limit a job seeker's rights under article 9 and article 11, this limitation is reasonable and proportionate to the objective of the trial as outlined above. There are appropriate safeguards in place to ensure that job seeker's participating in the trial are still provided with the means to meet their basic needs and those of their families.

Right to equality and non-discrimination

Article 2(2) of the ICESCR recognises the right of persons to equality and not to be discriminated against in the enjoyment of their rights under the ICESCR.

This Schedule engages the right to equality and non-discrimination in that it will result in differential treatment on the basis of a job seeker's location. The use of drug testing as a condition of payment is being implemented as a trial in three areas only in order to assess the effectiveness of this type of intervention in achieving the objectives outlined above, namely ensuring taxpayer-funded income support payments are used appropriately and identifying job seekers with drug misuse issues and facilitating their referral to treatment where appropriate. There are a number of existing place-based arrangements provided for in the social security law, including Income Management and the Cashless Debit Card trial.

To the extent that this Schedule limits the right to equality and non-discrimination for those in a drug testing trial location, this is reasonable and proportionate to the objective of a trial. The trial will be subject to a comprehensive evaluation which will inform any decisions about extending the trial or rolling out drug testing more broadly.

The drug testing trial also engages the right to equality and non-discrimination insofar as it may involve a direct or indirect distinction on the basis of disability or illnesses associated with drug or alcohol dependency. While the drug testing trial is not specifically aimed at Indigenous Australians, statistics suggest that Aboriginal and Torres Strait Islander people experience disproportionately high levels of substance misuse compared to the Australian population generally.2 On this basis, there may be indirect differential treatment on the basis of race.

This measure seeks to trial new ways of identifying people with drug use issues and assisting them to enter treatment where this is required to address their barriers to work. It is intended that individuals will be selected for drug testing at random, from a pool of new recipients who have been profiled as being at higher risk of drug misuse issues. A risk profile will be developed for this purpose, drawing on a range of available data. To the extent that certain cohorts may be more likely to test positive and that this may represent a limitation on the right to equality and non-discrimination (whether direct or indirect), this is reasonable and proportionate to the objectives of the trial

Obligations under the Convention on the Elimination of all forms of Racial Discrimination (CERD) and the Convention on the Rights of Persons with Disability (CPRD)

To the extent that the drug testing trial engages the right to non-discrimination, including on the basis of race or disability, the trial also engages Australia's obligations under the CERD to eliminate all forms of racial discrimination and under the CPRD. The rights of persons with a disability expressed in the CRPD largely mirror those economic and social rights set out in the ICESCR, and include rights to habitation and rehabilitation, the highest attainable standard of health and reasonable accommodation.

As noted above, it is intended that recipients will be selected for testing on the basis of their risk factors for having drug misuse issues. To the extent that certain cohorts may be more likely to test positive, this constitutes legitimate differential treatment and does not discriminate on the basis of race or disability.

Obligations under the Convention on the Rights of the Child (CRC)

The drug testing trial engages with the rights under the CRC as it is applied to people with children. Article 3 provides that in all actions concerning a child, the best interests of the child will be a primary consideration. This measure is intended to achieve the objectives of ensuring appropriate use of welfare payments (including to meet essential living costs for recipients and their families) and identifying drug use and helping people who require it to seek treatment. These objectives are in line with article 3 of CRC. Supporting and encouraging recipients to address their drug misuse issues will improve their capacity to find work and support themselves and their children. As noted above in relation to the rights under the ICESCR, including the rights of family and child to special protection and assistance, there are appropriate safeguards in place to ensure that job seekers participating in the trial are still provided with the means to meet their basic needs and those of their families.

Obligations under the International Covenant on Civil and Political Rights (ICCPR)

Right to equality before the law

Article 26 of the ICCPR provides that 'all persons are equal before the law and are entitled without any discrimination to the equal protection of the law'. It also provides that the law must 'prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status'. The Human Rights Commission has also interpreted 'other status' to include disability.3

The drug testing trial engages with this right, however article 26 is subject to the principle of legitimate differential treatment, similar to Australia's obligations under the CERD to eliminate all forms of racial discrimination and under the CPRD which are discussed above. For the same reasons, the drug testing trial is considered to be consistent with article 26.

Right to privacy

The drug testing trial engages article 17 of the ICCPR which affords the right to protection against arbitrary or unlawful interference with their privacy, family, home or correspondence. Lawful interferences with the right to privacy are permitted provided they are not arbitrary. The right to privacy extends to protecting a person's bodily integrity against compulsory procedures, such as drug testing.

Mandatory drug testing is not prohibited under international human rights law; however it must be necessary and proportionate to achieving a legitimate objective.

The drug testing trial is a reasonable and proportionate limitation on the right to privacy under the ICCPR in order to achieve the objective of ensuring appropriate use of welfare payments and identifying people with drug misuse issues and assisting them to address those issues.

People who return a positive test will be placed on Income Management for a two year period to help them to manage their finances and limit their access to cash which could be spent on further harmful drug use. Other elements of the measure, including the compulsory referral to health professionals for assessment if more than one positive test is returned during the trial period and subsequent inclusion of appropriate treatment in a person's Job Plan, are also reasonable and proportionate to achieving these objectives.

This trial will be subject to the existing safeguards in the Privacy Act 1988 and the confidentiality provisions in the Social Security (Administration) Act 1999 which protect the collection, use and disclosure of protected information. A joint Privacy Impact Assessment by the Department of Human Services and the Department of Social Services is being conducted for this measure and will be submitted to the Office of the Australian Information Commissioner to ensure implementation of the measure minimises privacy law risks.

Rights of the child to special protection and assistance

This right is substantially similar right to that in article 10(3) of the ICESCR which is considered above. For the same reasons, the drug testing trial is considered to be consistent with the rights of the child to special protection and assistance.

Conclusion

This Schedule is compatible with human rights because, to the extent that it may impact human rights, the impact is for a legitimate objective, and is reasonable, necessary and proportionate as outlined above.

Schedule 13 - Removal of exemptions for drug or alcohol dependence

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

Currently, recipients with activity test or participation requirements (mutual obligation requirements) may be granted an exemption from these requirements in circumstances that may be directly attributable to drug or alcohol misuse.

Under the amendments in this Schedule, from 1 January 2018, exemptions from mutual obligation requirements will no longer be available where the reason for the exemption is wholly or predominantly attributable to drug or alcohol dependency or misuse. This includes an incapacity exemption relating to a drug or alcohol dependency condition or a special circumstances exemption relating to circumstances caused (wholly or substantially) by the person's drug or alcohol misuse.

Recipients who are no longer eligible for an exemption will remain subject to mutual obligation requirements tailored to their circumstances, for example, undertaking appropriate drug or alcohol treatment.

Remote job seekers participating in the Community Development Program will not be subject to this measure.

Human rights implications

The measure contained in this Schedule engages the following human rights:

•: Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), which recognises the right of everyone to social security;
•: Article 11 of the ICESCR, which recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions;
•: Article 10 of the ICESCR, which recognises the rights of the family and the child to protection and assistance;
•: Article 4 of the Convention on the Rights of Persons with Disabilities (CRPD), which recognises the rights of those with a disability not to be discriminated against of the basis of their disability. Article 2(2) of the ICESCR recognises the rights of persons to equality and not to be discriminated against in the enjoyment of their rights under the ICESCR; and
•: Article 5 of the International Convention on the Elimination of All Forms of Racial Discrimination (CERD), which recognises the right of everyone to equality before the law, without distinction as to race, colour, or national or ethnic origin.

The right to social security and the right to an adequate standard of living

Article 11(1) of the ICESCR recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions. The right to social security is important in realising many of the other rights in the ICESCR, including the right to an adequate standard of living.

Australia's social security system is underpinned by a key principle that people of working age who have the capacity to work and become self-sufficient, whether currently or in the future, should do all they can to achieve this. In line with this principle, certain recipients of working age payments, including Newstart Allowance, Youth Allowance, parenting payment, special benefit and disability support pension, are subject to mutual obligation requirements, which may include looking for work or undertaking activities to address any barriers that may prevent them from finding and maintaining work.

Exemptions from mutual obligation requirements are provided in recognition that, in some circumstances, a recipient may be temporarily unable to meet these requirements. Currently, this may include circumstances caused by drug or alcohol dependency or misuse. However, granting an exemption in these circumstances means that there is no requirement or expectation on the recipient to address the underlying drug or alcohol issues that are prevent them from looking for or preparing for work. This is not consistent with the principle of mutual obligation requirements.

The number of recipients granted an exemption from mutual obligation requirements for drug or alcohol related reasons has increased significantly over the past five years. Between September 2011 and September 2016, the number of recipients with an incapacity exemption related to a drug or alcohol dependency condition nearly doubled from 2,920 to 5,256. This shows that there are an increasing number of recipients being exempt from all requirements rather than actively encouraged to address their substance-related barriers to work.

For this reason, under the amendments in this Schedule, recipients will no longer be able to receive an exemption from their mutual obligation requirements for reasons primarily attributable to drug or alcohol misuse. This will have the effect that they will need to meet mutual obligation requirements, tailored to meet their needs and circumstances. This seeks to ensure people with drug and alcohol dependency or misuse issues remain engaged with their employment services provider and work to address their barriers to employment, including through drug or alcohol treatment, if necessary, or through participation in suitable employment or training related activities.

Recipients will still be eligible for an exemption as per existing rules for circumstances, including temporary incapacity, that are not wholly or substantially attributable to drug or alcohol misuse.

The removal of exemptions wholly or substantially attributable to drug or alcohol misuse does not affect a person's eligibility for social security or reduce the basic rate of the payment they receive. However, if a recipient who is no longer exempt from their mutual obligation requirements fails to attend or participate in required activities, they may be subject to compliance action which may result in a short-term financial penalty. To the extent that this may limit a recipient's right to social security and the right to an adequate standard of living, this limitation is considered to be reasonable and proportionate to the objective of encouraging recipients with drug or alcohol dependency or misuse issues to actively engage in activities to address those issues.

Mutual obligation requirements are tailored to a recipient's circumstances and the activities they are required to undertake in their Job Plan are expected to be activities that the recipient is able to comply with. For those with drug or alcohol dependency or misuse issues, this may include appropriate treatment. Importantly, the recipient will remain connected with their employment services provider and will be supported to meet their mutual obligation requirements and to engage in treatment and/or employment preparation activities to address their barriers to employment. This will limit the risk of recipients being unable or failing to meet their mutual obligations requirements and incurring a financial penalty.

The removal of the ability to be granted an exemption from mutual obligation requirements due to drug or alcohol use will not impact job seekers who comply with their participation obligations, including those who are actively trying to address their drug or alcohol dependency and have these activities in their Job Plan. If treatment is not available, recipients who commit to pursuing treatment when available will be able to have this taken into account in setting their mutual obligation requirements.

The effect of the Schedule will be to provide an additional incentive for job seekers to seek the treatment they require and to ensure the activities in their Job Plan are appropriate to their capacity, without penalising or otherwise adversely impacting those who are unable to access treatment. To the extent that this Schedule would limit the right to social security and an adequate standard of living, it would affect a very small minority of income support recipients.

The rights of the family and child to protection and assistance

Article 10 of the ICESCR recognises the rights of the family and the child to protection and assistance. These rights overlap substantially with other rights in the ICESCR, particularly the right to social security and the right to an adequate standard of living.

As noted above, if a recipient is subject to mutual obligation requirements because they are no longer eligible for an exemption and they fail to meet those requirements as set out in their Job Plan, they may be subject to a financial penalty. However, as per existing arrangements, any penalties would only apply to income support payments made to the parent in respect of themselves. Any payments made to parents for the maintenance of their children, such as Family Tax Benefit, or to meet childcare costs, would not be affected by the penalty.

In addition, principal carer parents on working age payments are only required to meet part-time mutual obligation requirements in recognition of the impact of their caring role on their availability for work and other activities. Parents who are no longer eligible for an exemption due to this measure will continue to have access to these flexible, part-time requirements (including the option to undertake appropriate treatment) and support from their employment services provider to ensure they are able to balance their requirements and caring responsibilities.

Importantly, ensuring that parents on income support are doing all that they can to move into employment, including addressing any substance misuse issues they may have, will help parents to secure paid work and ultimately increase the financial support available to their children.

To the extent that this may impact the rights of the family and the child, this is considered to be reasonable and proportionate to the objective of encouraging parents with drug or alcohol dependency or misuse issues to overcome those issues and increase their ability to support themselves and their family.

The rights not to be discriminated against on the basis of disability or race, and not to be discriminated against in the enjoyment of social and cultural rights

Article 4 of the CRPD recognises the rights of those with a disability not to be discriminated against on the basis of their disability. Article 5 of the CERD recognises the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law. Article 2(2) of the ICESCR recognises the right of persons to equality and not to be discriminated against in the enjoyment of their rights under the ICESCR.

This Schedule engages the rights to equality and non-discrimination because people who may have a disability or illnesses associated with drug or alcohol dependency (such as alcoholism) will be subject to differential treatment insofar as they will not be eligible for the exemption that people with another illness or disability could potentially access.

This Schedule may also have a greater impact on job seekers who are Aboriginal and Torres Strait Islander people, who statistically experience higher levels of alcohol or drug dependency compared with the Australian population generally. The Schedule may therefore indirectly result in differential treatment for Aboriginal and Torres Strait Islander people.

Individuals will be affected by this Schedule if they would otherwise use incapacity on the basis of drug or alcohol dependency as a reason for exemption from mutual obligation requirements. However, to the extent that this may discriminate against those with drug or alcohol dependency compared to other conditions, this is reasonable and proportionate to the objective of encouraging these recipients to address the underlying cause of their incapacity.

As part of this measure, where recipients participate in available and appropriate treatment, this will reduce their other participation requirements or, in some cases, fully meet their requirements. This will provide such job seekers with the opportunities to undertake any relevant treatment they require. Where treatment is not available, job seekers will not be penalised or otherwise adversely impacted and will be supported to engage in other appropriate activities.

To the extent that this Schedule may impact the right not to be discriminated against on the basis of disability or race, whether directly or indirectly, this impact is considered to be reasonable and proportionate to the objective of ensuring that people with disability due to drug or alcohol dependency are supported to engage in treatment or other appropriate activities to improve their employment prospects and increase their capacity for self-support.

The amendments in this Schedule will not apply to designated program participants, as specified by legislative instrument. This will include participants in the Community Development Program, the majority of whom are Indigenous Australians. As such, these recipients will remain subject to existing exemption arrangements. The Community Development Program is specifically designed to reflect the unique labour market conditions that job seekers face in remote Australia. To the extent that these recipients will be treated differently to recipients in other employment services programs, this is reasonable and proportionate to the objective of the Community Development Program.

Necessary and proportionate restriction of rights

Article 4 of the ICESCR provides that countries may subject economic social and cultural rights only to such limitations 'as are determined by law only in so far as this may be compatible with the nature of these rights and solely for the purpose of promoting the general welfare in a democratic society'. The Committee on Economic, Social and Cultural Rights has stated that such limitations must be proportionate and the least restrictive alternative where several types of limitations are available, and even where such limitations are permitted, they should be of limited duration and subject to review.

Similarly, the right to equality and non-discrimination is subject to the international human rights principle of 'legitimate differential treatment'. This principle allows particular groups of people to be treated differently from other groups where the treatment is aimed at achieving a legitimate objective, is based on reasonable and objective criteria and is proportionate to the objective to be achieved.

This Schedule may limit the rights of individuals as outlined above but only to achieve the legitimate objective of encouraging recipients to do all they can to support themselves through work, where they are able. Drug or alcohol use, and particularly dependence, is a significant barrier to successful participation in the workforce. Therefore, this Schedule also encourages recipients to address drug or alcohol dependency so that they can participate fully in employment and training opportunities available to them. Where a recipient's drug or alcohol dependency or misuse prevents them from being able to look for or find work, it is reasonable that they should actively engage in treatment to address that dependency where appropriate and available.

Conclusion

Schedule 14 - Changes to reasonable excuses

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

The Schedule would amend the Social Security (Administration) Act 1999 to provide the Secretary with a new power to make a legislative instrument setting out matters that must not be taken into account when deciding whether a person has a reasonable excuse for committing a no show no pay failure, a connection failure, a reconnection failure, a serious failure, or a non-attendance failure.

It is envisaged that the Secretary would exercise this power to close a loophole in the current provisions surrounding reasonable excuse so that income support recipients will not be able to repeatedly use drug or alcohol misuse or dependency as a reasonable excuse for committing the relevant participation failures without seeking treatment, if it is available and appropriate.

Human rights implications

The measure contained in this Schedule engages the following human rights:

•: Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), which recognises the right of everyone to social security;
•: Article 10 of the ICESCR, which recognises the rights of the family and the child to protection and assistance;
•: Article 11 of the ICESCR, which recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions;
•: Article 4 of the Convention on the Rights of Persons with Disabilities (CRPD), which recognises the rights of those with a disability not to be discriminated against on the basis of their disability. Article 2(2) of the ICESCR recognises the rights of persons to equality and not to be discriminated against in the enjoyment of their rights under the ICESCR; and
•: Article 5 of the International Convention on the Elimination of All Forms of Racial Discrimination (CERD), which recognises the right of everyone to equality before the law, without distinction as to race, colour, or national or ethnic origin.

The right to social security and the right to an adequate standard of living

It is envisaged that the Secretary will exercise the new power provided for in this Schedule to make a legislative instrument determining that where a person's misuse of, or dependency on, drugs or alcohol is used once as a reasonable excuse for a relevant participation failure, such misuse or dependency must not be used in relation to determining whether the person has a reasonable excuse for committing a second or subsequent participation failure.

Following a relevant participation failure due to drug or alcohol misuse or dependency, job seekers will be given the option of voluntarily undertaking treatment for their use or dependency (if appropriate and available), or continuing with their normal mutual obligation requirements as managed by their employment services provider. For job seekers who choose treatment, participating in this treatment will reduce, or in some circumstances fully meet, their mutual obligation requirements. Regardless of their choice, job seekers will continue to be connected with their employment services provider.

The restriction of reasonable excuse relating to drug or alcohol misuse or dependency may limit a person's right to social security and the right to an adequate standard of living. This is because of the possible penalty for a person who is no longer able to repeatedly rely on drug or alcohol misuse or dependency as a reasonable excuse if they refuse to undertake available and appropriate treatment is a reduction in the amount of their social security payment. This may limit the person's right to both social security and an adequate standard of living (depending on the extent of the non-compliance).

However, the changes to the operation of the reasonable excuse provisions will not impact job seekers who comply with their participation obligations or who are trying to address their drug or alcohol misuse or dependency. If treatment is not available, or if it is inappropriate for the person, the Secretary will decide whether a job seeker has a reasonable excuse in accordance with the current arrangements.

The effect of the Schedule will be to provide an additional incentive for job seekers to seek the treatment they require, without penalising or otherwise adversely impacting those who are unable to access treatment. Further, to the extent that this Schedule would restrict the right to social security and an adequate standard of living, it would affect a very small minority of income support recipients.

The rights of the family and child to protection and assistance

Financial penalties for those who are no longer able to repeatedly rely on drug or alcohol misuse or dependency as a reasonable excuse for a relevant participation failure without seeking treatment, may affect parents in receipt of income support, and, by extension, support available to their children. However, as per existing arrangements, any penalties would only apply to income support payments made to the parent in respect of themselves. Any payments made to parents for the maintenance of their children, such as Family Tax Benefit, or to meet childcare costs, would not be affected by the penalty.

Ensuring that parents on income support are doing all that they can to move into employment will help parents to secure paid work, and therefore increase the financial support available to their children.

The rights not to be discriminated against on the basis of disability or race, and not to be discriminated against in the enjoyment of social and cultural rights

This Schedule engages the rights to equality and non-discrimination because, if the envisaged legislative instrument regarding drug or alcohol misuse or dependency is made, people with disabilities or illnesses associated with drug or alcohol dependency (such as alcoholism) will be subject to differential treatment.

Further, while the amendments are neutral on their face, this Schedule may have a greater impact on job seekers who identify as Aboriginal and Torres Strait Islander people, who experience higher levels of alcohol or drug misuse and dependency when compared with the Australian population generally. The Schedule may therefore indirectly result in differential treatment for Aboriginal and Torres Strait Islander people.

Individuals will be affected by this Schedule if they have used drug or alcohol misuse or dependency as a reasonable excuse for relevant participation failures. Accordingly, those with disabilities or illnesses associated with drug or alcohol dependencies are also likely to be overrepresented in the group of affected job seekers.

However, those individuals who have drug or alcohol-related conditions that do not affect their ability to meet their participation requirements will be unaffected.

The Schedule will provide an additional incentive for job seekers with a drug or alcohol dependency, including those who identify as Aboriginal and Torres Strait Islander, to seek treatment needed to help them improve their ability to move into employment and support themselves. As part of this measure, where job seekers are referred to available and appropriate treatment, they will be able to reduce their other participation requirements, or in some cases fully meet their requirements. This will provide such job seekers with the opportunities to undertake any relevant treatment they require. Those who are unable to access treatment will not be penalised or otherwise adversely impacted.

Necessary and proportionate restriction of rights

Article 4 of the ICESCR provides that countries may subject economic social and cultural rights only to such limitations 'as are determined by law only in so far as this may be compatible with the nature of these rights and solely for the purpose of promoting the general welfare in a democratic society'. The Committee on Economic, Social and Cultural Rights has stated that such limitations must be proportional and the least restrictive alternative where several types of limitations are available, and even where such limitations are permitted, they should be of limited duration and subject to review.

This Schedule may limit the rights of individuals, but only to achieve the legitimate objective of encouraging job seekers to do all they can to support themselves through work, where they are able. Drug or alcohol misuse or dependency can be a significant barrier to successful participation in the workforce. Therefore, this Schedule also encourages job seekers to address drug or alcohol misuse or dependency so that they can participate fully in employment and training opportunities available to them. Where a job seeker's drug or alcohol misuse or dependency prevents them from being able to look for or find work, and they are referred to appropriate and available treatment, it is reasonable that they be required to undertake that treatment or face a potential reduction in their payment.

Noting that the intended exercise of the power in this Schedule may have a more significant impact on job seekers who identify as Aboriginal or Torres Strait Islander people, and people with disabilities or illnesses associated with drug or alcohol dependency, it is intended that financial penalties will not be imposed following an initial participation failure due to drug or alcohol dependency, or where treatment is unavailable or inappropriate for the person. Therefore, to the extent the Schedule may result in distinctions between different groups of job seekers, it complies with the principle of legitimate differential treatment and does not constitute prohibited discrimination.

Those who comply or who genuinely cannot comply with their participation requirements for other reasons would not be adversely affected by this Schedule. This ensures that any limitation on the rights to social security and an adequate standard of living is proportionate to the objectives of this Schedule. While a person with a drug or alcohol-related condition may face a financial penalty as a result of this Schedule, a financial penalty will not be imposed if:

•: the person's drug or alcohol-related condition does not affect their ability to meet their participation requirements while in receipt of income support; or
•: the person agrees to undertake available and appropriate treatment to which they are referred; or
•: treatment is not available in the person's area; or
•: participation in the treatment would not be appropriate; or
•: the person has another reasonable excuse for the participation failure and, where applicable and reasonable, the person gives prior notice of the reasonable excuse.

Additionally, any penalties that are imposed are potentially subject to review, both within the Department of Human Services and by appeal to the Administrative Appeals Tribunal.

The limitation on the right to social security and the right to an adequate standard of living is necessary because, without the possibility of a penalty for a relevant participation failure, there is less incentive for a person to do all they are reasonably able to do to meet their mutual obligation requirements, which are designed to facilitate participation in the workforce. Insofar as there is any differential treatment for income support recipients with disabilities or illnesses or for job seekers who identify as Aboriginal and Torres Strait Islander people because of association with a drug or alcohol misuse or dependency, this is necessary for the same reason. An ineffective compliance framework has a detrimental impact on job seekers as they are not given a sufficient incentive to take active steps to meet their requirements and therefore increase their chances of moving off income support and experiencing the benefits of participation in the work force.

Conclusion

This Schedule is compatible with human rights because, to the extent that it may limit human rights, the impact is for a legitimate objective, and is reasonable, necessary and proportionate.

Schedule 15 - Targeted compliance framework

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

This Schedule introduces a new job seeker compliance framework into the Social Security (Administration) Act 1999, which will replace the existing job seeker compliance framework for job seekers in certain employment services programs.

The new targeted compliance framework is designed to change the behaviour of non-genuine job seekers. It will not adversely affect the majority of job seekers who are genuine in their efforts to find work, but will be stringent on those who are not. Job seekers who repeatedly fail to comply with their agreed employment pathway plan requirements, without a reasonable excuse, will face stronger penalties, with graduated loss of income support payments culminating in payment cancellation and a four week re-application preclusion period for the least compliant job seekers.

The new targeted compliance framework will allow for payment suspensions to be applied if a person fails to meet their mutual obligation requirements, whilst limiting the application of stronger penalties (payment reductions or cancellation), so that they can only apply to persons who have persistently committed mutual obligation failures or who have refused or failed to remain in suitable work.

Suspension of payments

Job seekers who fail to meet their mutual obligation requirements will have their income support payment suspended until they comply with a reconnection requirement. That is, until they re-engage with employment services by attending an appointment or meeting a requirement such as entering into an employment pathway plan or demonstrating adequate job search efforts. Once the job seeker's payment suspension is ended, they will receive full back-pay for the period of the suspension.

However, if the job seeker fails to re-engage with employment services within four weeks of being notified of their reconnection requirement, their participation payment will be cancelled.

Persistently non-compliant job seekers - payment reductions and cancellation

Job seekers who have persistently committed mutual obligation failures will also face graduated loss of income support payments for further failures to meet their mutual obligation requirements. The penalty amount will be either 50% or 100% of the person's income support payments for the fortnight. Job seekers may also be subject to payment cancellation, and, if they then reapply for income support, a four week non-payment period starting from the date of cancellation.

Immediate cancellation of payments for certain failures

Job seekers who refuse to accept an offer of suitable work or fail to commence in suitable work will also be subject to payment cancellation, with a four week non-payment period if they then reapply for income support.

Job seekers who voluntarily leave a suitable job (without a valid reason) or are dismissed due to misconduct and who are in receipt of participation payments at the time will also be subject to payment cancellation, with a four week non-payment period (or a six week non-payment period where the person received relocation assistance to move to take up the work) if they then re-apply for income support. Job seekers who voluntarily leave a suitable job (without a valid reason) or are dismissed due to misconduct and are not receiving income support at the time but subsequently make a claim for a participation payment, will also be subject to the four week non-payment period (or a six week non-payment period where the person received relocation assistance to move to take up the work) commencing from the date they became unemployed.

The new framework will retain existing protections to ensure that job seekers are not penalised unfairly. Job seekers who have a reasonable excuse for any failure will not be subject to any payment reductions or cancellation. Job seekers who have participation payments suspended, reduced or cancelled will continue to be eligible for concession cards (including health care cards) and any benefit to which a person may be entitled under A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) during the non-payment period applicable to them at the time.

Human rights implications

This Schedule engages the following rights:

•: the right to social security in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR);
•: the right to an adequate standard of living in article 11(1) of the ICESCR;
•: the rights of the family and child to protection and assistance in article 10(1) in the ICESCR and article 26 of the Convention on the Rights of the Child (CRC); and
•: the right to work in article 6 of the ICESCR.

Additionally, it is envisaged that this Schedule will, in conjunction with legislative instruments to be made for the purposes of the Schedule, also engage the following rights:

•: the right to equality and non-discrimination in article 2(2) of the ICESCR and article 26 of the International Covenant on Civil and Political Rights (ICCPR); and
•: the right to equality before the law in article 5 of the International Convention on the Elimination of All Forms of Racial Discrimination (CERD).

Article 9 of the ICESCR recognises the right of everyone to social security. The right to social security requires States to establish a social security system and, to the maximum of its available resources[1], ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education[2].

Article 11(1) of the ICESCR recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions.

Article 10(1) of the ICESCR recognises that 'the widest possible protection and assistance should be accorded to the family', particularly for its establishment, and 'while it is responsible for the care and education of dependent children'. A similar right in Article 26 of the CRC recognises that every child has the right to benefit from social security. The Committee on Economic, Social and Cultural Rights has noted that the provision of family benefits by way of cash payments and services is crucial for the realisation of the rights under article 9 and article 10, thereby acknowledging that article 10(1) may require provision of financial assistance (this may require the provision of family benefits as a measure of assistance).

Article 6(1) of the ICESCR recognises the right to work, which includes the right to the opportunity to gain a living by work which the job seeker freely chooses or accepts.

Article 2(2) of the ICESCR and article 26 of the ICCPR recognise the right to equality and non-discrimination on a range of grounds including of race, sex, colour, language, national or social origin or 'other status'. Place of residence within a country is considered to fall within 'other status' for the purposes of these articles.

Article 5 of the CERD reinforces this general prohibition and provides that States 'undertake to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law'.

General overview

The new targeted compliance framework engages the right to social security, the right to an adequate standard of living, and the rights of the family and child to protection and assistance. It also engages the right to work and the right to equality and non-discrimination.

Right to social security, right to an adequate standard of living and rights of the family and child to protection and assistance

To the extent to which this measure may limit the right to social security or the right to an adequate standard of living, that limitation is reasonable, necessary and proportionate to achieving the legitimate objective of encouraging persons to remain engaged with employment services and actively seek and accept suitable work. This is because persons who comply, or who genuinely cannot comply, with their participation requirements will not be adversely affected by this measure. Failures by job seekers to meet their participation requirements will not result in a payment reduction or cancellation if the job seeker has a reasonable excuse for failing to comply with their participation requirements.

The matters a decision maker must take into account and not take into account when making a determination that a person had a reasonable excuse will be outlined in a legislative instrument made by the Secretary under section 42AI.

A reasonable excuse may include (but is not limited to) whether the person or a close family member has suffered an illness or was prevented from complying by circumstances beyond their control. When making a decision that a person has a reasonable excuse, the decision maker must take into account a range of factors listed in the instrument, including (but not limited to) whether the person has access to safe housing, their literacy and language skills, unforeseen caring responsibilities, or whether the person was affected by an illness, impairment or condition that impeded their ability to meet their requirements.

All failures by a job seeker to meet participation requirements that lead to a determination to suspend payments, reduce payments or cancel a participation payment are subject to review, both within the Department of Human Services and by appeal to the Administrative Appeals Tribunal. This is an important safeguard in the operation of these provisions.

In addition, despite a job seeker being affected by a suspension, cancellation or reduction in participation payments under the new targeted compliance framework, this measure ensures job seekers continue to be eligible for concession cards (including health care cards) and other benefits to which a person may be entitled under the Family Assistance Act as a result of receiving social security payments.

The only instance when a job seeker will not continue to be eligible for their concession card and/or benefits under the Family Assistance Act is when a participation payment has been cancelled as a result of the person failing to reconnect with employment services within four weeks of being notified of the requirement to reconnect. However, where such job seekers are otherwise qualified, they are able to reclaim immediately and so regain access to all income support payments and benefits.

Right to equality and non-discrimination

This measure engages the right to equality and non-discrimination because it is likely to involve differential treatment for people in certain employment services programs (these will be income support recipients with mutual obligations to whom the new targeted compliance framework will not apply). The Schedule will not apply to individuals in specified employment services programs (these people will be "declared program participants"). The Schedule allows the Secretary to make a legislative instrument, specifying an employment services program for the purposes of the definition of a declared program participant. The instrument would be disallowable for the purposes of the Legislation Act 2003 and therefore subject to scrutiny by Parliament.

It is appropriate to declare the relevant employment services programs in a legislative instrument to allow for flexibility in determining which program participants are not subject to the new targeted compliance framework. This permits the needs of different cohorts of job seekers to be considered and addressed in the application of the framework.

It is envisaged that, at least initially, this Schedule will not apply to job seekers in the Community Development Programme (CDP) (i.e. they will be in an employment services program declared by the Secretary under the above instrument). The CDP supports job seekers in remote Australia. Approximately 83 per cent of job seekers in the CDP identify as Aboriginal and Torres Strait Islander people.

The right to equality and non-discrimination is subject to the international human rights principle of 'legitimate differential treatment'. This principle allows particular groups of people to be treated differently where the treatment is aimed at achieving a legitimate objective, is based on reasonable and objective criteria and is proportionate to the objective to be achieved.

In particular, the CDP provides employment services to job seekers in remote Australia who face unique obstacles such as fewer job opportunities, higher levels of dependence on welfare, lower levels of literacy and numeracy and persistent and entrenched disadvantage. These factors and the lack of a labour market in remote Australia when compared with the opportunities for employment available in other parts of Australia, mean it is appropriate to further consider the most appropriate and effective compliance framework for CDP participants. As the Government is currently reviewing the operation of the CDP generally, it is appropriate to consider the compliance framework (and related participation requirements) that should apply to CDP participants as part of that broader review, and in the interim for the current compliance framework to continue to apply to CDP participants.

This aspect of the measure is therefore reasonable, necessary and proportionate to achieve the legitimate objective of applying a compliance framework that the Secretary considers is most appropriate for persons in certain employment services programs.

The right to work

This measure promotes the right to work because it will encourage social security recipients who have mutual obligation requirements to remain engaged with employment services and to actively seek work and to accept suitable work when it is available. Activities directed towards finding suitable work include attending appointments and undertaking activities designed to improve employment prospects. It is appropriate that a person who is able to work and is receiving social security payments while they are unemployed should demonstrate that they are actively looking for work and attending appointments to improve their employment prospects and, where appropriate, that they are accepting suitable job offers.

Specific compliance actions to be taken and their interaction with relevant rights

Suspensions, payment reductions, and payment cancellation for non-compliance

Suspensions, payment reductions and payment cancellation for non-compliance encourage non-genuine income support recipients to remain engaged with employment services. This is important so income support recipients can continue to receive assistance and support in finding employment. As such, these aspects of the measure promote the right to work as the legitimate objective.

To the extent that suspensions may limit the right to social security or the right to an adequate standard of living, therefore, the impact of payment suspensions is reasonable, necessary and proportionate as income support recipients will have their social security payments reinstated, with full back pay for the period of the suspension, simply by reengaging with their employment services provider or fulfilling reasonable requirements related to looking for work. As long as a job seeker re-engages prior to the end of a fortnightly instalment period, they will not even suffer any delay in receiving their regular social security payment.

To the extent that payment reductions and cancellation limit the right to social security or the right to an adequate standard of living, the use of financial penalties and cancellation is reasonable, necessary and proportionate as job seekers must have persistently committed mutual obligation failures with no reasonable excuse before any penalties resulting in permanent loss of payment may be applied (except for refusing suitable work).

The details of when a person may be found to have persistently committed mutual obligation failures will be contained in a legislative instrument made by the Minister under s 42AR.

In practice, persistent non-compliance will apply in a staged manner. It will only be found where a job seeker has committed multiple failures to meet requirements in a six month period. These job seekers will also have undergone multiple assessments to ensure they do not have any undisclosed issues which are making them unable to comply, and to ensure that their mutual obligation requirements are suitable for their circumstances.

Job seekers who have previously demonstrated that they have persistently committed mutual obligation failures can avoid further penalties by consistently meeting their requirements for a period of time. Once they have demonstrated a good compliance record, they will no longer be subject to loss of payments for future failures. Given these limitations on the circumstances in which penalties will be applied, any impact on the right to social security is reasonable and proportionate.

These aspects of the measure therefore promote the right to work as a legitimate objective by ensuring that job seekers remain engaged with their employment services provider and continue to look for work and undertake activities that will improve their employment prospects.

These aspects of the measure also promote the rights of the family and child to protection and assistance because job seekers will still be entitled to concession cards (including health care cards) and any benefits under the Family Assistance Act they are eligible for despite these payment suspensions, reductions and cancellations applying to them.

To the extent that these aspects of the measure limit the right to social security or the right to an adequate standard of living, those limitations are reasonable, necessary and proportionate to achieving that legitimate objective.

Refusing or failing to commence in suitable work

The penalty for refusing or failing to commence in suitable work is also reasonable, necessary and proportionate. This aspect of the measure does not affect a job seeker who complies by accepting a suitable job offer. If a job seeker accepts a suitable job offer, they will be receiving income from paid work and, as such, will reduce or remove the need to continue to rely on participation payments. In fact, paid work is essential for realising an adequate standard of living.

Strong incentives for job seekers who are capable of working to engage in suitable employment will assist those job seekers to experience the benefits that result from paid employment. By enabling and encouraging participation in the work force for job seekers who are able to work, the right to work is made more achievable for those job seekers.

This aspect of the measure is necessary, reasonable and proportionate because existing protections such as reasonable excuse provisions will still apply. Further, the existing provisions that prevent the Secretary from requiring job seekers to look for work that is unsuitable for them will ensure that job seekers are not penalised where they have a good reason not to accept a job. A job seeker cannot be penalised for failing to accept a job that they are not capable of doing (or for which the employer will not provide training), that does not meet the applicable statutory conditions, that involves unreasonable commuting, that would involve moving to a new place of residence or that would aggravate any pre-existing medical conditions.

In practice, before deciding whether to cancel a person's income support payment and impose a four week non-payment period for refusing work, the Department of Human Services (DHS) would talk to the job seeker, the job seeker's employment service provider, and the employer that offered the work. This is to enable DHS to check whether the job that was refused was suitable work, in light of provisions in the social security law about the suitability of work for a person, and that the job seeker did not have valid reasons for refusing it.

Further, this aspect of the measure promotes the rights of the family and child to protection and assistance because job seekers will still be entitled to concession cards (including health care cards) and any benefits under the Family Assistance Act they are eligible for despite the payment cancellation and the four week non-payment period having been imposed on them.

For the reasons above, the right to work is promoted, and to the extent that this measure may limit the right to social security and the right to an adequate standard of living, the impact is necessary and proportionate to the legitimate objective of having demonstrably employable job seekers remain committed to obtaining work as soon as they can rather than continuing to remain in receipt of income support at tax-payers' expense.

Job seekers who incur penalties for refusing suitable work are demonstrably employable and should be expected to find and take work rather than remain in receipt of income support at tax-payer expense.

Voluntarily leaving employment or being dismissed due to misconduct

The cancellation of a job seeker's participation payment and the imposition of a four week non-payment period (or a six week non-payment period where the person received relocation assistance to move to take up the work) if they reapply or lodge a claim for participation payment for job seekers who voluntarily leave suitable employment or are dismissed due to misconduct is necessary to promote the right to work and ensure that job seekers do not unnecessarily cease work in order to receive income support payments. Job seekers who are not receiving income support at the time they voluntarily leave suitable employment or are dismissed due to misconduct but who subsequently lodge a claim for income support will also have a four week (or six week) non-payment period imposed.

The measure is reasonable and proportionate because existing protections will still apply. A person cannot be penalised where they leave their job voluntarily and where doing so was reasonable in the circumstances. Further, the Secretary cannot, under existing provisions, require a person to look for or undertake unsuitable work. These protections will ensure that job seekers are not penalised where they have a good reason for leaving a job. The four week waiting period represents a reduction from the eight week waiting period under the existing compliance framework.

This aspect of the measure promotes the rights of the family and child to protection and assistance because job seekers will still be entitled to concession cards (including health care cards) and any benefits under the Family Assistance Act they are eligible for despite the payment cancellation and the four week non-payment period imposed on them.

For the reasons above, the right to work is promoted, and to the extent that this measure may limit the right to social security and the right to an adequate standard of living, the impact is necessary and proportionate to the legitimate objective of having demonstrably employable job seekers remain committed to paid work rather than choosing to receive income support at tax-payers expense.

Conclusion

The Bill is compatible with human rights because it promotes the right to work, and to the extent that it may limit human rights, the impact is for a legitimate objective, and is reasonable, necessary and proportionate.

Schedule 16 - Streamlining Tax File Number Collections

The amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the amendments

The amendments to Schedule 16 will allow the request for tax file number provisions in the social security law to apply to a relevant third-party as part of a person's claim for a social security payment, and to an income-tested health care card. The amendments will also allow the use of tax file numbers to verify qualification for the seniors health card and an income-tested health care card.

Human rights implications

The amendments in relation to an income-tested health care card engage the following human rights:

•: the right to social security: Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR);
•: the right to an adequate standard of living: Article 11 of the ICESCR.

This is because of the consequence that would arise if a person did not satisfy a request to provide a tax file number, which is that the person's claim for an income-tested health care card would not be granted or an existing card would be cancelled.

The amendments in relation to social security payments and the seniors health card do not engage the rights noted above, as the amendments streamline the existing administrative process through which tax file numbers are already collected and do not remove access to social security payments. The amendments aim to improve the general integrity and administration of the social security system and are machinery in nature.

Right to social security and an adequate standard of living

Article 11 of the ICESCR recognises the right of everyone to an adequate standard of living including adequate food, water and housing, and to the continuous improvement of living conditions.

The amendments in relation to an income-tested health care card would limit these rights to the extent that a person did not satisfy a request to provide a tax file number. However, this consequence is consistent with the existing administration of the tax file number provisions for social security payments and the seniors health card. The amendments would rectify an anomaly of treating health care cards differently, and would enhance the arrangements for protecting the integrity of the social security system.

Conclusion

The amendments in relation to an income-tested health care card are compatible with human rights because they only impose limitations on the rights to social security and to an adequate standard of living that are reasonable, necessary and proportionate to uphold these rights by protecting the integrity of the social security system.

Schedule 17 - Information management

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

This Bill amends social security legislation in order to streamline the process of referrals for welfare fraud prosecution by allowing information or documents about a person in the course of an administrative action by the Department of Human Services to be used in subsequent investigation and criminal prosecution.

This Bill includes amendments to the Social Security (Administration) Act 1999 (SS (Admin) Act), the A New Tax System (Family Assistance) (Administration) Act 1999, the Student Assistance Act 1973 and the Paid Parental Leave Act 2010. For clarity, all examples in this explanatory memorandum will be drawn from the SS(Admin) Act

Currently, the process of gathering admissible evidence is currently hampered by the administrative focus of section 192 of the SS(Admin) Act. This section grants the Secretary the ability to issue coercive notices in order to assess a person's qualification, payability or rate of payment. However, it cannot currently be used to obtain information after all administrative questions have been resolved. Information or documents obtained under this section are not currently admissible as evidence in criminal proceedings.

Because of this, admissible evidence is obtained by using search warrants pursuant to section 3E of the Crimes Act 1914 (Cth). The Department of Human Services requests around 1,000 of these warrants annually. Each warrant requires two to three business days of a seconded Australian Federal Police agent's effort. This process places a significant burden on the Department of Human Services, the Australian Federal Police, warrant recipients and the courts, particularly when this information has already been collected under section 192 of the SS(Admin) Act for administrative purposes.

This Bill removes duplication by allowing documents obtained under the Department of Human Services' administrative information-gathering powers to then be available as evidence for subsequent criminal proceedings. It also allows section 192 to be used to gather evidence while the Department of Human Services is investigating whether to proceed to refer the matter for criminal prosecution.

Under this Bill, there may still be a requirement for the Department of Human Services to require search warrants, however this this measure will significantly reduce this burden.

Human rights implications

This Bill engages the following rights:

Fair trial and fair hearing rights

This Bill engages the fair trial and fair hearing rights contained in article 14 of the International Covenant on Civil and Political Rights (ICCPR) in two areas. It modifies the rules of evidence in criminal proceedings and it interacts with the common law right of an individual's freedom from self-incrimination.

Article 14(3) of the ICCPR provides minimum guarantees for the defendant in any criminal trial. These include:

Article 14(3)(e): 'To examine, or have examined, the witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same condition as witnesses against him.'

and

Article 14(3)(g): 'Not to be compelled to testify against himself or to confess guilt.'

Freedom from self-incrimination - Article 14(3)(g)

This Bill interacts with an individual's right to freedom from self-incrimination, as can be seen (for example) in its amendments to the Social Services (Administration) Act 1999. Section 197A of the Act specifies that an individual who receives a statutory demand to provide information or produce a document under Division 1 of Part 5 must produce the information or documents requested, even when doing so would tend to incriminate them.

Nevertheless, subsection 197A(2) provides individuals with a 'use/derivative use immunity' for the information and documents so produced. Due to this, any information or document that the individual produces in response to this demand (along with any information or document or thing obtained as a direct consequence of this disclosure) cannot be admitted into evidence against them in criminal proceedings, with only limited exceptions.

The exceptions to this use/derivative use immunity are limited to the criminal offenses that relate to the falsity or incompleteness of information provided in response to a demand to produce under Division 1 of Part 5 of this Act. In this case, the false or incomplete information can be admitted in criminal proceedings against the individual for provision of false information. In these circumstances, this measure is a proportionate limitation on an individual's right to freedom from self-incrimination, because the Department of Human Services depends on individuals disclosing complete and accurate information in order to ensure the sustainability and integrity of the social security system (see the section: 'Right to social security').

Consistent rules of evidence - article 14(3)(e)

Despite the use/derivative use immunity discussed in the previous section, any information or documents obtained under Division 1 of Part 5 of the Act is admissible as evidence in criminal proceedings, provided that the defendant in said proceedings is either not an individual or is not the individual who provided the information or documents. It also allows the Department of Human Services to use its information-gathering powers to gather evidence to determine whether to refer a matter for criminal prosecution.

The legislative intent for this measure is to streamline the process of gathering evidence for welfare fraud prosecution. This will not only reduce administrative duplication, but will also help provide natural justice to offenders, who will not have to wait as long to find out whether they will face prosecution for their actions. In turn, this will increase the general deterrent to welfare fraud because once this measure becomes more widely known in the community, it will put potential fraudsters on notice that the Department of Human Services will promptly respond to all cases of alleged welfare fraud.

As such, this Bill modifies the standard procedure for gathering admissible evidence for criminal proceedings. Under Federal law, the standard coercive means to acquire admissible information and documents for criminal prosecution is by search warrant pursuant to section 3E of the Crimes Act 1914 (Commonwealth). This requires the approval of a magistrate, who can reject the application if they believe that the case for a warrant has not been made.

The coercive information powers available to the Department of Human Services to demand information about current and former recipients does not go unfettered. The legislation contains two important limitations. First, these powers cannot be delegated to a machine, but must be exercised by an Officer who has the 'reasonable belief' that the person is able to provide the information or document requested. Also, the Officer must have a valid reason for obtaining this information, including questions of qualification, payability and rate of payment, and also for the purpose of determining whether a suspected case of welfare fraud should be further investigated and possibly referred to the Commonwealth Director of Public Prosecutions for prosecution through the courts.

These restrictions guard against abuses of this provision, and given the intent of this legislation, constitute a reasonable modification to the standard rules of evidence.

Right to social security

This Bill engages the right to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights.

The right to social security requires that the system be established in the domestic law, and that public authorities must take responsibility for the effective administration of the system. The Social Security system provides a basic level of benefits to all individuals and families that will enable them to cover essential living costs. The United Nations Committee on Economic, Cultural and Social Rights lists a number of contingencies that the social security system should address. The contingencies relevant to this policy include payments to individuals for: unemployment, sickness, disability, old age, family and child support, maternity leave and to survivors and orphans of the death of a breadwinner (see General Comment No. 19).

In this same document, a social security scheme should be sustainable so that this right is available to people in future generations.

The Principles of Administration in Section 8 of the Social Services (Administration) Act 1999 reflects these concerns. It states: 'In administering the social security law, the Secretary is to have regard to... the development of procedures to ensure that abuses of the social security system are minimised'.

This measure improves the information and evidence-gathering powers of the Department of Human Services, so that they can better protect social security outlays from serious non-compliance and welfare fraud. It allows the Department of Human Services to issue coercive notices to obtain information or documents from an individual in order to assess their qualification, payability or rate of payment.

Because recipients of these coercive notices must provide any information or documents that are requested, even if this disclosure would tend to incriminate them, fraudsters and seriously non-compliant recipients will be questioned about their actions sooner. This will help reduce their period of non-compliance, since they will be more likely to cease their fraudulent activities once they realise that they are under investigation.

Furthermore, once the community becomes aware of these changes, it will provide a signal to would-be fraudsters and recipients who are negligent in fulfilling their reporting requirements that the Government is serious about ensuring compliance with the rules of the welfare system. This is thereby expected to improve compliance and so protect the integrity of welfare payment outlays.

Therefore, this provision promotes the right to social security by taking measures to ensure Australia's welfare system is fair and sustainable.

Right to privacy

The right to privacy is outlined in article 17 of the International Covenant on Civil and Political Rights (ICCPR). It protects all individuals from 'arbitrary or unlawful interference with his privacy, family, home or correspondence,...[and from] unlawful attacks on his honour and reputation.' Note that it does not provide the same protections for legal persons such as companies.

This measure engages with an individual's right to privacy because it explicitly provides the Department of Human Services with the ability to make statutory demands for information under Division 1 of Part 5 of the SS (Admin) Act 1999, even when that information would tend to incriminate the information provider, where that information relates to themself.

It is important to note that the amendments proposed do not seek to expand the coercive information gathering powers. The Department of Human Services already exercises this power cautiously and judiciously when obtaining information and documents where the information may be relevant to assess a person's qualification, payability or rate of payment. These amendments seek to make the information or documents sought available for investigation of potential criminal offences, and for use in criminal prosecutions where necessary. The same information, already obtained for an administrative purpose using the coercive information gathering powers, is currently sought for a second time by search warrant pursuant to section 3E of the Crimes Act 1914, to enable it to be admissible in criminal investigations and proceedings.

In cases where this measure is used to obtain evidence from individuals other than the person under investigation for welfare fraud, this method does not impose any additional interference to their privacy, family, home or correspondence. This is because any evidence obtained under this measure would previously have been obtained using a search warrant, sometimes after they had already provided this information for administrative purposes.

In cases where this measure is used to obtain information from the individual under administrative investigation, this information is only obtained for the purposes of ensuring the sustainability and integrity of the social security system. This does not entail any risk of reputational harm, except where an individual commits an offence by providing false or incomplete information (see the above section on self-incrimination). As this measure only requires individuals to make a limited disclosure of information necessary for the proper administration of the social security system, it is also not arbitrary or unlawful, and so this measure does not limit a person's right to privacy.

Conclusion

This Bill is compatible with human rights because it only imposes limitations on the fair trial and fair hearing rights that are reasonable, necessary and proportionate to uphold the right to social security by protecting the integrity of the social security system.

Schedule 18 - Aligning social security and disability discrimination law

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedule

Currently, the Social Security Act 1991 (the Social Security Act) is exempt from the operation of the Disability Discrimination Act 1992 (the Disability Discrimination Act). This exemption from the Disability Discrimination Act is designed to ensure that social security pensions, allowances and benefits, including for people with disability, can be appropriately targeted according to the purposes of the payments.

At the time the Disability Discrimination Act commenced, the Social Security Act encompassed provisions that were subsequently included in the Social Security Administration Act 1999 (the Social Security Administration Act) and the Social Security (International Agreements) Act 1999 (the International Agreements Act) in 1999. At that time, the exemption from the Disability Discrimination Act was not extended to cover these new Acts.

To ensure all of the social security law is covered by the exemption, the Social Security Administration Act and the International Agreement, as well as legislative instruments made under the Social Security Act and the Social Security Administration Act, will also be exempt from the operation of the Disability Discrimination Act.

Human rights implications

This Schedule engages the following human rights:

•: Article 4 of the Convention on the Rights of Persons with Disabilities (CRPD), which recognises the rights of those with a disability not to be discriminated against of the basis of their disability.
•: Article 2(2) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the rights of persons to equality and not to be discriminated against in the enjoyment of their rights under the ICESCR.

The rights not to be discriminated against on the basis of disability or race, and not to be discriminated against in the enjoyment of social and cultural rights

Article 4 of the CRPD recognises the rights of those with a disability not to be discriminated against on the basis of their disability. Article 2(2) of the ICESCR recognises the right of persons to equality and not to be discriminated against in the enjoyment of their rights under the ICESCR.

Payments under social security law are made to eligible people on the basis of a variety of factors such as their health, disability, age, income and asset levels. This ensures that Australia's social security system is targeted based on people's circumstances and need and constitutes legitimate differential treatment.

As such, the Social Security Act 1991 has always been exempt from disability discrimination law since the Disability Discrimination Act commenced. A number of other key pieces of legislation providing for various pensions and allowances are also exempt, including the Veterans' Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation and Compensation Act 1988.

The Social Security Act was subsequently split into three separate Acts. The Explanatory Memorandum to the Bills that enacted these changes stated that this division was intended to "implement a simpler and more coherent social security system that more effectively meets its objectives of adequacy, equity, incentives for self provision, customer service and administrative and financial sustainability".

At that time, however, the exemption from the Disability Discrimination Act was not extended to those new Acts.

Given the significant provisions now provided for in the Social Security Administration Act and the International Agreement in relation to the administration and payment of social security pensions and allowances, the amendments in this Schedule extend the existing exemption from the Disability Discrimination Act to cover the those Acts in line with the original intent of the Disability Discrimination Act.

The amendments will also exempt legislative instruments made under the Social Security Act or the Social Security Administration Act from the Disability Discrimination Act. This reflects that the number and complexity of issues that are dealt with in subordinate legislation under the social security law has also increased significantly in particular policy areas. For example, the Impairment Tables for assessing eligibility for the Disability Support Pension, are set out in a legislative instrument.

These amendments will extend the coverage of the existing exemption to all legislation and subordinate legislation that comprise the social security law. This is in line with the original intent of the exemption of the Social Security Act which was designed to ensure that in relation to pensions, allowances and benefits, a person's entitlement is as set out in the legislation, and is not affected by disability discrimination law4.

This Schedule does not constitute a new engagement with or limitation on the rights of people with a disability. It ensures that all social security law decisions made with respect to pensions, allowances and benefits are made without illegal discrimination.

These changes will not affect the broader protections that the Disability Discrimination Act provides for people with disability.

Conclusion

This Schedule is compatible with human rights because, to the extent that it may limit human rights, the impact is for the legitimate objective of ensuring that social security payments are appropriately targeted, and is reasonable, necessary and proportionate to this objective.

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STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

SOCIAL SERVICES LEGISLATION AMENDMENT (WELFARE REFORM) BILL 2017

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