Explanatory Memorandum
(Circulated by the authority of the Minister for Families and Social Services, Senator the Hon Anne Ruston)Schedule 3 - Youth allowance independence and agricultural work
Summary
This measure will create temporary incentives in the income support system to encourage young Australians to undertake seasonal agricultural work to address concerns across the agriculture sector about immediate workforce availability for the upcoming harvest season.
A young person claiming Youth Allowance student (YA student) who demonstrates participation in agricultural work throughout the forthcoming harvest season would have access to the new independence criteria.
Under the new criteria, a person who earns $15,000 through employment in the agricultural industry between 30 November 2020 and 31 December 2021, would be considered as independent for the purpose of YA student. This change will shorten the period of time a young person engaging in agricultural work would need to work to demonstrate their financial independence from their parents.
If a young person does not reach the $15,000 threshold, their workforce participation will be assessed as part of the relevant independence criteria, but with no concessional treatment.
This Schedule implements the measure for Youth Allowance. Changes to the ABSTUDY Policy Manual will implement the measure for ABSTUDY.
Schedule 3 commences the day after Royal Assent.
Explanation of the changes
Social Security Act
Item 1 amends paragraph 1061ZAAA(5)(b) so that individuals who have become independent due to the temporary agricultural work concession (inserted by item 3 below) remain qualified for fares allowance under subsection 1061ZAAA(1). This ensures that those who become independent under the new agricultural work concession are treated similarly to those who become independent under existing workforce independence criteria, or by turning 22 years of age.
Item 2 amends subsection 1067A(10K) so that the parental income thresholds in that subsection also apply to the temporary agricultural work concession in new subsections 1067A(14) to (16) (inserted by item 3 below).
Item 3 adds new subsections 1067A(14) to (16) to add an additional way that a person claiming youth allowance can qualify as independent. A person will qualify as independent for youth allowance if they:
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- are studying full time;
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- undertake qualifying agricultural work during the period 30 November 2020 and 31 December 2021;
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- earn at least $15,000 (gross, that is, before tax) for that work; and
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- meet the parental income threshold in subsection 1067A(10K) for the 2019-2020 tax year or 2018-2019 tax year.
What constitutes qualifying agricultural work for the purposes of this subsection will be determined in a legislative instrument made by the Secretary under new subsection 1067A(16).
Item 4 sets out application and transitional provisions. Subitem 4(1) provides that the agricultural work concession will apply in relation to people who:
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- are in receipt of youth allowance immediately before 1 March 2021; and
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- claim youth allowance on or after 1 March 2021 and before the end of 1 March 2023.
Subitem 4(2) makes it clear that if a person did not become independent under new subsection 1067A(14) before the end of 1 March 2023, then new subsection 1067A(14) does not apply to that person after 1 March 2023.