Explanatory Memorandum
(Circulated by the authority of the Minister for Families and Social Services, Senator the Hon Anne Ruston)Schedule 2 - Youth allowance independence and paid work concession
Summary
The amendments made by Schedule 2 support young people whose path toward demonstrating independence through work has been disrupted by the economic impacts of COVID-19.
From 1 January 2021 (or the day after Royal Assent if that is later), the six-month period between 25 March 2020 and 24 September 2020 (the COVID-19 concession period) will automatically be recognised as contributing to existing workforce independence criteria for Youth Allowance.
Under the amended definition of independence, a person applying for, or currently receiving, Youth Allowance will be considered to have worked 30 hours per week for the COVID-19 concession period regardless of hours worked.
Young people from regional and remote areas applying for Youth Allowance under the Concessional Workforce Independence Criteria (CWIC) will be considered to have:
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- earned 75 per cent of the National Training Wage Schedule weekly rate during the COVID-19 concession period (unless in receipt of a higher income); or
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- worked 15 hours per week for the COVID-19 concession period.
This Schedule implements the measure for Youth Allowance. Changes to the ABSTUDY Policy Manual will implement the measure for ABSTUDY.
Schedule 2 commences on 1 January 2021, or the day after Royal Assent if that is later.
Explanation of the changes
Social Security Act
Item 1 inserts new subsections 1067A(10M) and 1067A(10N). New subsection 1067A(10M) creates a concessional variation to the existing workforce independence criteria for people who are self-supporting in subsection 1067(10) for the purposes of youth allowance.
New subsection 1067A(10M) means that the workforce independence criteria in paragraphs 1067A(10)(a), (b) and (d) (where they relevantly apply in relation to a person) are deemed to be met for all weeks within the COVID-19 concessional period, where the person does not otherwise meet the criteria. This means that a person claiming youth allowance is taken to satisfy the independence criterion, for a particular week in that period, that they were:
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- in paid work consisting of full-time employment of 30 hours; or
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- in paid work consisting of part-time employment of 15 hours; or
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- in paid work consisting of employment that earnt the person at least the equivalent of 75% of the maximum weekly rate applicable for that week.
New subsection 1067A(10N) provides that for the purposes of new subsection 1067A(10M), the COVID-19 concession period is the period beginning on 25 March 2020 and ending at the end of 24 September 2020.
Item 2 sets out application and transitional provisions. Subitem 2(1) provides that the independence concession in new subsection 1067A(10M) will apply in relation to people who:
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- are in receipt of youth allowance immediately before the commencement of this item;
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- claim youth allowance after commencement of this item and before the end of 24 September 2022; and
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- claim youth allowance before the commencement of this item, where the claim is not determined immediately before the item commences (that is, the claim is pending when the item commences).
Subitem 2(2) ensures that after the end of 24 September 2022 both existing payment recipients and new claimants cannot rely on the new subsection 1067A(10M) to be assessed as independent. Those who have been determined as independent under the new subsection prior to the end of 24 September 2022 will retain their independence status after this date.