House of Representatives

Explanatory Memorandum

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

Outline

This Bill introduces a number of minor 'housekeeping' amendments in the Social Services portfolio.

The amendments will correct technical errors and clarify intended policy by removing minor ambiguities and anomalies.

Clarify that people serving an income maintenance period for a mainstream income support payment cannot access special benefit

Confirm the longstanding policy intent that special benefit, a payment for people in financial hardship due to circumstances beyond their control, should not be paid to a person who is serving an income maintenance period for a mainstream income support payment, due to receiving certain other payments, such as a termination payment or leave payment.

Family tax benefit

Align timeframes for meeting the family tax benefit reconciliation conditions and related amendments.

Alter student payment eligibility criteria so that the requirements for new apprentice can be determined by the Minister in a legislative instrument.

Amends the definition of new apprentice in the Social Security Act to remove the requirement for a Commonwealth Registration Number, and alters the requirements for that definition so it can be determined by the Minister in a legislative instrument.

Confirms that only one course of education is taken into account in assessing 'undertaking full-time study' or 'undertaking qualifying study' for student payments

Confirm that students are only assessed against one course of education under the full-time study requirements of youth allowance (student) and the qualifying study requirements of austudy, and not against more than one course of part-time study during a single study period.

Clarify exemptions from the austudy payment assets test for people with a partner receiving a relevant payment

Clarify the policy intention relating to a person's exemption from the austudy payment assets test if their partner is receiving or has received a relevant pension, benefit, allowance, compensation or has received lump sum compensation as an armed services widow or widower under the Military Rehabilitation Compensation Act 2004 in the past.

Other minor amendments

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in relation to the indexation of pharmaceutical allowance - simplify, consolidate, and remove inconsistencies and redundant provisions;

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clarify which components of newstart allowance are taken into account under the allowable income limits for the health care card;

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remove an administrative restriction in the family assistance delegation provisions; and

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correct cross-references and similar technical errors.

Financial impact statement

There is no financial impact from any of these amendments.

Statements of Compatibility with Human Rights

The statements of compatibility with human rights appear at the end of this explanatory memorandum.

Notes on Clauses

Abbreviations used in this explanatory memorandum

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Social Security Act means the Social Security Act 1991.

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Social Security Administration Act means the Social Security (Administration) Act 1999.

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Family Assistance Act means the A New Tax System (Family Assistance) Act 1999.

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Family Assistance Administration Act means the A New Tax System (Family Assistance) (Administration) Act 1999.

Clause 1 sets out how the new Act is to be cited - that is, as the Social Services Legislation Amendment (Miscellaneous Measures) Act 2015.

Clause 2 provides a table setting out the commencement dates of the various sections in, and Schedules to, the new Act.

Clause 3 provides that legislation that is specified in a Schedule is amended or repealed as set out in that Schedule.

Schedule 1 - Special benefit

Summary

This Schedule makes amendments to the Social Security Act to clarify that special benefit is not payable to people serving an income maintenance period for another income support payment during that period. The amendments made by this Schedule commence the day after this Act receives Royal Assent.

Background

An income maintenance period is a period of time during which certain payments or certain leave payments, for example, termination payments or leave payments, are treated as ordinary income for certain social security payments, such as Newstart Allowance. An income maintenance period can be reduced or waived if a person is in severe financial hardship because the person has incurred reasonable or unavoidable expenditure. "In severe hardship" and "unavoidable or reasonable expenditure" are defined in section 19C of the Social Security Act. An income maintenance period is defined in subsection 23(1) of the Social Security Act as having "the same meaning given in points 1064-F4 and 1064-F5, 1066A-G4 and 1066A-G5, 1067G-H11 and 1067G-H12, 1067L-D5 and 1067L-D6, 1068-G7AG and 1068-G7AH, 1068A-E3 and 1068A-E3 and 1068A-E4 and 1068B-D9 and 1068B-D10." These points are contained in the rate calculators for social security payments.

Under section 729 of the Social Security Act, the Secretary may determine that special benefit should be granted to a person if certain qualification and payability conditions are met. These include that no other social security pension or benefit is payable to the person; that they are unable to earn a sufficient livelihood, because of age, physical or mental disability, domestic circumstances or for any other reason; that they are not disqualified from receiving newstart allowance, youth allowance or parenting payment due to non-compliance; are in severe financial hardship; and are a permanent Australian resident or the holder of an approved temporary visa.

This Schedule clarifies that special benefit is not payable to people serving an income maintenance period for another income support payment (newstart allowance, partner allowance, widow allowance, sickness allowance, parenting payment single and partnered, youth allowance, austudy payment and disability support pension) during that period. This clarifies the intention that special benefit should not be paid to a person serving an income maintenance period for another payment as it circumvents the intention of the income maintenance period that people should use their own resources before drawing on tax payer funded support.

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

Explanation of the changes

Amendments to the Social Security Act

Item 1 inserts into the Social Security Act a new section 734A - income maintenance period exclusion. This section makes clear that special benefit is not payable to a person for a period to the extent that the period falls within an income maintenance period that applies or has applied to the person.

Item 2 is an application provision which states that the amendment made by Item 1 of this Schedule applies in relation to income maintenance periods starting on or after the commencement of that item.

Schedule 2 - Family tax benefit

Summary

This Schedule amends the Family Assistance Administration Act to align the timeframes for meeting the family tax benefit (FTB) reconciliation conditions and to make some related amendments, including to the date of effect provisions. The amendments made by this Schedule commence the day after this Act receives Royal Assent.

Background

Section 32A of the Family Assistance Administration Act states that FTB Part A and FTB Part B supplements must be disregarded unless and until the relevant FTB reconciliation conditions have been met. Sections 32C to 32Q set out the relevant reconciliation conditions. If a person meets all relevant reconciliation conditions applicable to the person, then their FTB entitlement is reviewed and may be recalculated (as required by section 105A of the Family Assistance Administration Act), factoring supplements into the rate. Reconciliation generally occurs at the time actual income for the relevant income year is known. Depending on the timing of reconciliation, the effect of the review decision may be subject to the date of effect provisions in sections 107 or 109E of the Family Assistance Administration Act.

Required to Lodge a Tax Return

Sections 32C, 32D and 32E all concern the relevant reconciliation time where a person (or their partner) is required to lodge an income tax return for a particular period. Under all provisions, the relevant income tax return can in the ordinary case be lodged no later than the end of the first income year after the relevant income year in order to satisfy the relevant reconciliation condition. Under sections 32C and 32D that period may be extended if the Secretary is satisfied that special circumstances prevented the person from lodging the return before the end of that first income year. The amendments will ensure that the timeframes for other circumstances for which reconciliation conditions apply align with these timeframes.

If a person makes a past period claim for FTB and has not lodged their tax return by the end of the year following the past period (or such further period as the Secretary allows where the lodgement was prevented by special circumstances), section 14A of the Family Assistance Administration Act operates so that the claim is taken never to have been made. For consistency, amendments will ensure that where a person is not required to lodge a tax return for the relevant past period, if a person has not confirmed their adjusted taxable income (ATI) by the end of the year following the past period (or such further period as the Secretary allows where there are special circumstances), section 14A of the Family Assistance Administration Act will provide that the claim is taken never to have been made. The overarching time limit for past period claims requiring that such claims be made within two income years of the relevant income year will remain.

Not required to lodge a tax return or amounts not included in tax returns

Sections 32J, 32M and 32N of the Family Assistance Administration Act do not currently have time periods for meeting the relevant reconciliation condition. In each provision, the relevant reconciliation time is the time after the end of the relevant income year when the individual notifies the Secretary of, or the time after the end of the relevant income year when the Secretary becomes satisfied of, the relevant components of the individual's adjusted taxable income. Alternatively, the Secretary may be satisfied that the relevant amount can be worked out without receiving a notification. Time frames are inserted to align with those for persons who are required to lodge a tax return (in sections 32C, 32D and 32E).

Date of Effect

If a review is conducted under section 105 and the review decision creates or increases an entitlement to be paid FTB by instalment, the date of effect rules in section 107 may be relevant. Amendments clarify that section 107 must also be considered where the review was required by the operation of section 105A and ensures that the payment of any increase in rate is not limited by section 107 where the individual has satisfied the FTB reconciliation conditions (as revised to include new timeframes).

Subsection 109E(1) provides the date of effect rules that are to apply where a person initiates review. For consistency, section 109E will be amended to reflect similar changes to those made to section 107.

The amendments will retain the need to meet health check and immunisation requirements before supplements may be paid, despite a person meeting the reconciliation conditions.

Explanation of the changes

Amendments to the Family Assistance Administration Act

Items 1 to 3 amend section 14A to align the timeframes for lodging an effective past period claim for individuals where they or their partner are not required to lodge a tax return with those where they are or their partner are required to lodge a tax return.

Item 2 inserts new subsection 14A(3A). Subsection 14A(3A) applies if the claimant (or any other individual whose adjusted taxable income is relevant in working out the claimant's entitlement to, or rate of FTB for the past period) is not required to lodge an income tax return for the past period income year and does not notify the Secretary of the amount of their adjusted taxable income for the past period income year before the end of the first income year after the past period income year. If this condition is met, the claim is taken never to have been made. If the Secretary is satisfied that there are special circumstances that prevented the claimant from making that notification, the Secretary may allow a further period within which the claimant may notify.

Item 1 amends subsection 14A(1) consequential upon item 2, to include the circumstance in new subsection 14A(3A) as a circumstance in which the claim is taken never to have been made.

Item 3 consequentially amends subsection 14A(4) to provide that any further period allowed by the Secretary must end no later than the end of the second income year after the past period income year.

Items 4 to 12 amend sections 32J, 32M and 32N. Section 32J provides the relevant reconciliation time for individuals who are not required to lodge a tax return. Section 32M provides the relevant reconciliation time for individuals with types of income not usually included in a tax return, such as child maintenance expenditure and foreign income. Section 32N provides the relevant reconciliation time for individuals with maintenance income. The reconciliation time for such individuals relies upon the person notifying the Secretary of the relevant amount, or the Secretary becoming satisfied that the relevant amount can be worked out without receiving a notification from the individual.

Items 4, 7 and 10 repeal and replace paragraph (a) of subsections 32J(2), 32M(2) and 32N(2) so that the relevant reconciliation time under new paragraph (a) is when the individual notifies the Secretary of the relevant amount, provided the notification is given before the end of the first income year after the relevant income year, or within such further period as the Secretary allows, if satisfied that there are special circumstances that prevented the first individual from making that notification before the end of that first income year.

Items 6, 9 and 12 insert a new subsection (3) into sections 32J, 32M and 32N, requiring such further period to end no later than the end of the second income year after the relevant income year.

Items 5, 8 and 11 amend paragraph (b) of subsections 32J(2), 32M(2) and 32N(2) to apply an alternative relevant reconciliation time, being when the Secretary becomes satisfied that the relevant amount can be worked out without receiving a notification, provided the Secretary becomes so satisfied before the end of the first income year after the relevant income year.

In practice, due to data sharing capacity, this provision is likely only to be met by single customers who have been in receipt of an income support payment for more than 300 days in the relevant income year.

Notification of ATI is usually triggered by a customer informing the Secretary that they are not required to lodge an income tax return for the relevant income year. This information prompts a number of questions that confirm a person's status as not required to lodge and their ATI for the relevant income year.

Item 14 clarifies that subsection 107(1) is intended to apply to reviews conducted under section 105, including because of the operation of section 105A. Section 105A triggers a review where the FTB reconciliation conditions have been met. Reconciliation will generally occur at the same time. The individual's rate is reviewed taking into account accurate income information and supplements (unless this is prevented by other provisions, such as sections 61A and 61B of the Family Assistance Act relating to health check and immunisation requirements). A changed rate of FTB may result from new income information alone, or from the addition of supplements into rate, or from a combination of both. Section 107 does not clearly apply both to the recalculation of rate as the result of changed income information and to the addition of supplements into rate. This amendment ensures that both are clearly within the scope of the provision. New subsection 107(1A), as inserted by item 15, then ensures that subsection 107(1) does not apply where review is conducted under section 105 because of the operation of section 105A. This would allow an individual to receive the full benefit of any increased entitlement resulting from the review decision.

Item 15 inserts new subsections 107(1A). Subsection 107(1A) provides that the date of effect provisions in subsection 107(1) do not apply where a review under section 105 was undertaken due to the operation of section 105A, .i.e. as a result of the FTB reconciliation conditions being met. Timeframes will apply as the result of items 4 to 12 to most relevant reconciliation conditions, which are in some instances more generous than the timeframes provided under section 107 generally.

However, these changes will not entitle a person to have supplements automatically included into their rate if they have met the relevant reconciliation conditions. A person is also required to satisfy sections 61A and 61B of the Family Assistance Act before supplements can be factored into a person's FTB rate. This is the current position.

Item 13 is consequential, and amends subsection 107(1) to make it clear it is subject to subsection 107(1A) , and to remove the reference to subsection 107(3).

Item 16 repeals and substitutes a new subsection 107(3). Subsection 107(3) formerly preserved an individual's right to full effect of their rate decision where the review decision was made outside the timeframes imposed under section 107 generally, but the review was triggered by tax returns lodged within the required timeframes. The substituted subsection preserves the rights of the individual in relation to child care benefit. Subsection 107(3) is no longer required to cover FTB by instalment as subsection 107(1A) will prevent subsection 107(1) from limiting the date of effect where a person has lodged an income tax return within time (and hence met the required reconciliation condition), but the Commissioner of Taxation has not made an assessment of the person's taxable income for the relevant year until after the end of the income year following the relevant income year, resulting in the review decision being made after that second income year.

Items 17 to 20 make changes to the date of effect provisions, consistent with the changes made to section 107, in the circumstances where an individual initiates a review.

Item 17 inserts new subsection 109E(2A) which provides that where an individual initiates a review of a decision relating to payment of FTB by instalment in respect of a period, and the individual has satisfied the FTB reconciliation conditions for the relevant income year, subsection 109E(1) will not apply to limit the effect of the review decision.

Item 18 repeals paragraph 109E(3)(a). Paragraph 109E(3)(a) formerly preserved an individual's right to full effect of their rate decision where the review decision was made outside the timeframes imposed under section 109E generally, but the review was triggered by tax returns lodged within the required timeframes. Paragraph 109E(3)(a) is no longer required as subsection 109E(2A) will prevent subsection 109E(1) from operating where a person has lodged an income tax return within time, but the Commissioner of Taxation has not made an assessment of the person's taxable income for the relevant year until after the end of the income year following the relevant income year, resulting in the review decision being made after that second income year.

Items 19 and 20 are consequential amendments to subsection 109E(3A) and paragraph 109E(4)(a) to reflect the omission of paragraph 109E(3)(a).

Item 21 provides for the application of the amendments.

Subitem 21(1) provides that the amendments made by items 1 to 3 setting timeframes for past period claims apply in relation to a claim made on or after the commencement of this Schedule, where the past period falls in the income year in which this Schedule commences, or in a later income year.

Subitem 21(2) provides that the amendments made by items 4 to 12 apply in relation to a decision referred to in subsection 32A(1) of the Family Assistance Administration Act made before, on or after the commencement of this Schedule, where the same-rate benefit period consists of, or is included in, the income year in which this Schedule commences or in a later income year. The decisions referred to in section 32A are always made in the income year following the same-rate benefit period, and relate to actions which occur after the end of the relevant income year. This means that the amendments will in practice apply prospectively only. Stated another way, the amended time periods in sections 32J, 32M and 32N will apply, as a matter of practicality, from the beginning of the income year following the income year in which the amendments commence.

Subitem 21(3) provides that the amendments made by items 13 to 20 apply in relation to a review decision made on or after the commencement of this Schedule, where the original decision related to the payment of FTB by instalment for a same-rate benefit period that consists of, or is included in, the income year in which this Schedule commences or in a later income year.

Schedule 3 - Study requirements for social security payments

Summary

This Schedule makes amendments to the Social Security Act to clarify that in assessing full-time study load for youth allowance (student) and austudy payment, only one course of education is to be taken into account, and not against more than one course of education. The amendments made by this Schedule commence the day after this Act receives Royal Assent.

Background

This measure aims to clarify that in assessing full-time study load for youth allowance (student) and austudy payment, only one course of education is to be taken into account.

It is long standing policy that full-time study for student payment purposes is only to be assessed against one course of education. This allows students to be supported financially to complete a course of education in the minimum amount of time and to enter the labour market. This also includes people undertaking combined courses (for example, Bachelor of Commerce/Bachelor of Finance) where a formal arrangement exists to offer the course as one course of study, albeit with two qualification/awards, which have related/complementary subjects and hence enhance a person's employment/career prospects.

Youth Allowance

Part 2.11 of the Social Security Act sets out the youth allowance provisions. One way of satisfying the activity test for youth allowance (student) under paragraph 541(1)(a) of the Social Security Act is that the person satisfies the Secretary that, throughout the period, the person is 'undertaking full-time study'.

Subsection 541B(1) sets out the general case for when a person is undertaking full-time study.

Austudy payment

Part 2.11A of the Social Security Act sets out the provisions relating to austudy payment, including the requirement to satisfy the activity test under subdivision B of Part 2.11A. Subsection 569(1) provides that subject to subsection (2), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is undertaking qualifying study (section 569A). Subsection 569(2) provides for the circumstances in which a person cannot be taken to satisfy the activity test.

Currently, sections 541B and 569A of the Social Security Act allow a person to be 'undertaking full-time study' or 'undertaking qualifying study' if their study load is equal to or more than a full-time study load as a result of studying more than one approved course at or across approved institutions during a study period. This is an unintended outcome and contravenes the longstanding policy that students are only to be assessed against course of education in meeting the full-time study requirements for student payments.

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

Explanation of the changes

Amendments to the Social Security Act

Item 1 adds a new note to the end of subsection 541B(1) to guide the reader to the new section 541C.

Item 2 inserts new section 541C into the Social Security Act, the effect of which is that only one course of education is to be considered in determining whether a person is undertaking full-time study under section 541B.

Subsection 541C(1) deals with subparagraphs 541B(1)(a)(i) and (ii), where a person is enrolled in a course of education at an educational institution, or was enrolled in the course and satisfies the Secretary that he or she intends and has (since no longer being enrolled) always intended to re-enrol in the course when re-enrolments in the course are next accepted. Whether a person satisfies subparagraph 541B(1)(a)(i) or (ii) and paragraphs 541B(1)(b), (c) and (d) is to be determined in relation to only one course of education.

Subsection 541C(1) deals with subparagraph 541B(1)(a)(iii), where a person was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted. Whether a person satisfies subparagraph 541B(1)(a)(iii) and paragraphs 541B(1)(b), (c) and (d) is to be determined in relation to only one course of education.

Two new notes following subsection 541C(1) clarify that 2 or more courses of education for a person cannot be aggregated to satisfy the undertaking full-time study requirement (note 1) and that one course of education may be a combined course (note 2).

Item 3 adds a new note to the end of section 569A to guide the reader to the new section 569AA.

Item 4 inserts new section 569AA into the Social Security Act, the effect of which is that only one course of education is to be considered in determining whether a person is undertaking qualifying study under section 569A.

Subsection 569AA(1) deals with subparagraphs 569A(a)(i) and (ii), where a person is enrolled in a course of education at an educational institution, or was enrolled in the course and satisfies the Secretary that he or she intends and has (since no longer being enrolled) always intended to re-enrol in the course when re-enrolments in the course are next accepted. Whether a person satisfies subparagraphs 569A(a)(i) or (ii) and paragraphs 569A(b), (c) and (d) is to be determined in relation to only one course of education.

Subsection 569AA(2) deals with subparagraph 569A(a)(iii), where a person was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted. Whether a person satisfies subparagraph 569A(a)(iii) and paragraphs 569A(b), (c) and (d) is to be determined in relation to only one course of education.

Two new notes following subsection 569AA(2) clarify that 2 or more courses of education for a person cannot be aggregated to satisfy the undertaking qualifying study requirement (note 1) and that one course of education may be a combined course (note 2).

Item 5 is an application provision which provides that the amendments made by this Schedule apply in relation to working out if a person is qualified for youth allowance (student), or austudy payment, in respect of days occurring on or after the commencement of this Schedule (whether or not the person first qualified for that allowance or payment before that commencement).

Schedule 4 - New apprentices

Summary

This Schedule amends the definition of new apprentice in the Social Security Act so that the requirements for that definition can be determined by the Minister in a legislative instrument.

Background

A person may qualify for youth allowance or austudy payment if, among other things, the person is a new apprentice. The Social Security Act defines new apprentice by reference to a person who has a Commonwealth Registration Number (CRN) in relation to a full-time apprenticeship, traineeship or trainee apprenticeship under the scheme known as New Apprenticeships, but does not include a person whose CRN is suspended.

The link in this definition to the issuing of a CRN creates some issues. There can be delays in both issuing a CRN and in cancelling or suspending a CRN. Where a person's CRN has been cancelled or suspended, the person can continue to qualify for youth allowance or austudy payment as a new apprentice even though they are no longer undertaking a full-time apprenticeship. Also, the New Apprenticeships scheme is now known as the Australian Apprenticeship scheme.

This Schedule amends the definition of new apprentice so that it is defined by reference to a person who meets the requirements determined by the Minister in a legislative instrument.

The amendments made by this Schedule commence on the 28th day after Royal Assent. This will ensure the Minister has time to make a legislative instrument in the period between the Bill receiving the Royal Assent and this Schedule commencing.

Explanation of the changes

Amendments to the Social Security Act

Item 1 repeals the definition of new apprentice in subsection 23(1) and substitutes a new definition. Under the new definition, a new apprentice is a person who satisfies the requirements determined by the Minister in a legislative instrument under subsection 23(7) (inserted by item 2 of this Schedule).

Item 2 inserts new subsection 23(7) and it provides that the Minister may determine requirements for the purposes of the definition of new apprentice .

In broad terms, it is intended the Minister will determine a requirement for the purposes of the definition of new apprentice is that a fully completed training contract has been submitted for approval to a State Training Authority for the person to undertake a full-time apprenticeship under the scheme known as Australian Apprenticeships. A further requirement may be that the person is undertaking the apprenticeship on a full time basis or is undertaking a pre-vocational course.

Using a legislative instrument to set out requirements for the definition of new apprentice will ensure the Minister has the flexibility to amend the requirements in a timely manner without having to amend the primary legislation. The current definition of new apprentice has become out of date after the scheme known as New Apprenticeships was replaced with the scheme known as Australian Apprenticeships. If the name of the scheme is changed again in the future, the Minister will be able to amend the requirements for the definition of new apprentice in a timely manner without having to amend the primary legislation. Changes to the requirements may also be necessary in the future if States and Territories change the arrangements for the registration of agreements to enter into an apprenticeship.

Any legislative instrument made by the Minister would be subject to Parliamentary scrutiny and disallowance.

Item 3 provides the application provision for this Schedule. The Schedule applies in relation to working out whether a person is qualified for youth allowance or austudy payment in respect of days occurring on or after commencement. This is the case even if the person is first qualified for youth allowance or austudy payment before the commencement of this Schedule.

One of the effects of item 3 is that a person who, immediately before the commencement of this Schedule, is qualified for youth allowance or austudy payment on the basis of being a new apprentice, will need to meet the requirements of the new definition of new apprentice in order to remain qualified for youth allowance or austudy payment for days on and after commencement.

Schedule 5 - Austudy payment assets test

Summary

This Schedule makes amendments to the Social Security Act to clarify that a person is exempt from the assets test for austudy payment if their partner is receiving a relevant pension, benefit, allowance or compensation. The exemption is not intended to apply if the partner has received the relevant payment at any time in the past unless the relevant payment relates to a lump sum compensation received as an armed services widow or widower under the Military Rehabilitation Compensation Act 2004. The amendments made by this Schedule commence the day after this Act receives Royal Assent.

Background

Section 573A of the Social Security Act provides that a person is excluded from the austudy payment assets test if the person's partner is receiving, or has received, a payment of pension, benefit, allowance or compensation listed in the table at the end of that provision.

In its original form, section 573A excluded a person from the application of the austudy payment assets test if their partner was receiving a prescribed payment. The rationale for this rule, as set out in the relevant explanatory memorandum, was that the couple would already have been subjected to the assets test and therefore need not be tested again. As part of the amendments that introduced a new military specific compensation scheme in 2004, consequential amendments were also made to section 573A to include these new compensation payments within the scope of the exemption. However, the amendments were too broad and potentially allow a person to be exempt from the austudy payment assets test where their partner has received, for example, a social security payment at any time in the past.

This Schedule will amend section 573A so that the reference to 'has received' in this provision only relates to 'compensation', as specified in item 4A of the table at the end of section 573A. In terms of compensation payments, if compensation is paid weekly under paragraph 234 (1)(b) of the Military Rehabilitation and Compensation Act 2004, then the assets test does not apply if the person's partner is receiving those payments (consistent with the other payments listed in the table in section 573A of the Social Security Act). If compensation is paid as a lump sum (under subsection 236(5) of the Military Rehabilitation and Compensation Act 2004), then the assets test does not apply if the person's partner has received the lump sum at any time in the past.

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

Explanation of the changes

Amendments to the Social Security Act

Item 1 inserts a new subsection 1 into section 573A before "A person" to allow for new subsection 573A(2) in item 4 of this Schedule.

Item 2 omits "or has received" from section 573A. This clarifies that a person is excluded from the application of the austudy payment assets test only if the person's partner is receiving a payment of pension, benefit, allowance or compensation referred to in the table at the end of this section.

Item 3 omits "or subsection 236(5)" from section 573A (table item 4A). This provision is dealt with in item 4.

Item 4 adds a new subsection 573A(2) which states that a person is excluded from the application of the austudy payment assets test if the person's partner has received a lump sum mentioned in subsection 236(5) of the Military Rehabilitation and Compensation Act 2004.

Item 5 inserts an application provision which provides that amendments made by this Schedule apply in relation to working out if an austudy payment is payable to a person in respect of days occurring on or after the commencement of this Schedule (whether or not the person first qualified for that payment before that commencement).

Schedule 6 - Clarifying indexation of pharmaceutical allowance

Summary

This Schedule makes minor technical corrections to existing provisions indexing pharmaceutical allowance.

Background

Pharmaceutical allowance is added into the rate of some social security payments, or may in some circumstances be paid as a separate payment. To retain currency of the allowance, the amount is indexed or adjusted each year under Part 3.16 of the Social Security Act. Minor technical corrections are made to existing provisions in this Part to correct cross-references, make clearer the various abbreviations and add additional guidance material.

Explanation of the changes

Amendments to the Social Security Act

Section 1190 of the Act sets up a series of abbreviations to identify various amounts within the rate calculators for the purposes of indexation of these amounts under section 1191, or adjustment of the amounts under the various other provisions within Part 3.16.

Items 1 and 2 relate to table item 49A of the table at section 1190. The item relates to the rate of pharmaceutical allowance for a person who is receiving a social security pension and has a partner who is getting a service pension. However, column 4 of the Table at this item incorrectly identifies item 4 of each of Pension Rate Calculator D -point 1066A-D8-Table-column 3 and Pension Rate Calculator E-point 1066B D8-Table-column 3 as covering this circumstance. The correct item is item 5 of each of the tables in the calculators. Item 2 makes the substitution. Item 1 amends the abbreviation in column 2 of item 49A to also refer to the 'item 5' rate.

Items 3 and 4 relate to table item 49B of the table at section 1190. The description at column 2 is that the item relates to the amount of pharmaceutical allowance for a person who is receiving a social security benefit and has a partner who is getting a service pension. However, the abbreviation in column 3 and the provisions in which the amount is specified in column 4 incorrectly identify various pension calculator rates. Item 4 substitutes reference to Benefit Rate Calculator B-point 1068 D10-Table-column 3-item 6 and Benefit PP (Partnered) Rate Calculator-point 1068B E8-Table-column 3-item 4, which relate to this circumstance.

Because both of these calculator rate items are different, the abbreviation substituted by item 3 refers to the Benefit PA "Partnered (partner getting service pension)" rate, in order to clarify the coverage of the abbreviation.

Items 5 to 9 repeal and substitute the abbreviations used in table items 49E to 49J of the table at section 1190, generally to include the word 'rate' in the abbreviations to better match the provisions where the abbreviations are used. Item 6 also inserts the words 'item 49F' into the abbreviation, to match the approach taken at the other items.

Item 10 repeals and substitutes the 'Amount' cell at column 2 of item 31 of section 1191, to capitalise the abbreviation to match the abbreviation as defined at section 1190.

Item 11 repeals and substitutes the 'Amount' cell at column 2 of item 32 of section 1191 to match the new abbreviation substituted by item 3 above. Similarly item 12 repeals and substitutes the 'Amount' cell at column 2 of item 33A of section 1191 to match the new abbreviation substituted by items 6 and 8 above.

Item 13 repeals and substitutes section 1206A. Section 1206A adjusts certain pharmaceutical allowance amounts by reference to certain base pharmaceutical allowance amounts which are indexed under section 1191. In general, substituted section 1206A makes only technical changes to substitute the correct abbreviations from section 1190, in part as amended by earlier items in this schedule.

However, a correction is made at subsection 1206A(3). Currently, subsection 1206A(3) adjusts the relevant single rates of pharmaceutical allowance, including where the person has a partner in gaol or is illness separated or in respite care, which are also treated as circumstances where the person is single for social security purposes. Current paragraph 1206A(3)(aa) refers to the benefit PA "partnered" (item 6) rate. However, there is no abbreviation of this term defined by section 1190. Instead, the paragraph was always intended to refer to the benefit PA "partnered" (item 7) rate which applies to a person who has a partner who is in gaol. The new subsection 1206A(3) corrects this reference, as well as renumbering the paragraphs.

Additional notes are added to subsection 1206A(4), matching those at earlier subsections, to explain the operation of the subsections.

Schedule 7 - Health care card income test

Summary

This Schedule makes amendments to the Social Security Act to clarify how to work out the amount of a person's 'allowable income' for the purposes of step 2 of the health care card income test calculator. The amendments made by this Schedule commence the day after this Act receives Royal Assent.

Background

Division 3 of Part 2A.1 of the Social Security Act provides for qualification for a health care card. One qualification requirement, under section 1061ZO, is that a person satisfies the health care card income test (see paragraphs 1061ZO(2)(d), (3)(e) and (4)(d)).

Section 1071A of the Social Security Act provides that the health care card income test calculator at the end of section 1071A is to be used in working out whether a person satisfies the health care card income test for the purposes of Division 3 of Part 2A.1.

Step 2 of the health care card income test calculator involves working out the amount of the person's allowable income (see points 1071A-1 and 1071A-2). Allowable income is defined in point 1071A-4 as follows:

allowable income , in relation to any period of 8 weeks, means:

(a)

in relation to a person who had a dependant or dependants on the last day of the period-the amount worked out by multiplying by 8, or such other number as is prescribed, the aggregate of:

(i)

the amount of the weekly rate of income that would, on the last day of the period, be sufficient to prevent both members of a one-income couple from receiving newstart allowance; and

(ii)

$20, or such other amount as is prescribed; and

(iii)

an amount worked out by multiplying $34, or such higher amount as is prescribed, by the number of the dependants of the person on the last day of the period; or

(b)

in relation to a person who had no dependants on the last day of the period-the amount worked out by multiplying by 8, or such other number as is prescribed, an amount equal to 60%, or such other percentage as is prescribed, of the aggregate of the amount worked out under subparagraph (a)(i) and the amount referred to in subparagraph (a)(ii) if paragraph (a) had applied to the person.

In order to work out the amount of the weekly rate of income that would be sufficient to prevent both members of a one-income couple from receiving newstart allowance, it is necessary to have regard to point 1068-A1 which provides the method statement for calculating the rate of newstart allowance

Under this method statement, a person's 'income reduction' (worked out under Module G) is taken away from the person's 'maximum payment rate'. The amount of

the weekly rate of income that would be sufficient to prevent both members of a one-income couple from receiving newstart allowance depends upon the amount of the 'maximum payment rate'.

The maximum payment rate is worked out by adding the following amounts to the 'maximum basic rate' (see step 4 of point 1068-A1):

•

pension supplement, if any, worked out using Module BA (step 1A of point 1068-A1);

•

energy supplement, if any, worked out using Module C (step 1B of point 1068-A1);

•

pharmaceutical allowance, if any, worked out using Module D (step 2 of point 1068-A1);

•

rent assistance, if any, worked out in accordance with paragraph 1070A(a) (step 3 of point 1068-A1).

This Schedule will make clear that in working out, for the purposes of the definition of allowable income in point 1071A-4, the amount of the weekly rate of income that would be sufficient to prevent both members of a one-income couple from receiving newstart allowance, the maximum payment rate that is to be used is that obtained by adding up the following amounts:

•

the maximum basic rate referred to in step 1 of point 1068-A1; and

•

the energy supplement provided in item 5 of the table in point 1068-C3 (person has not reached pension age, is not covered by point 1068-B5, is partnered and without dependent child).

None of the following amounts is to be included in the maximum payment rate:

•

the pension supplement referred to in step 1A of point 1068-A1;

•

the pharmaceutical allowance referred to in step 2 of point 1068-A1;

•

rent assistance referred to in step 3 of point 1068-A1.

This schedule amends the definition of 'allowable income' in point 1071A-4 to insert a new point 1071A-2A to provide that in working out the amount of the weekly rate of income that would be sufficient to prevent both members of a one-income couple from receiving newstart allowance:

•

steps 1A, 2 and 3 of the method statement in point 1068-A1 are to be disregarded; and

•

for the purposes of step 1B of that method statement, the amount provided in item 5 of the table in point 1068-C3 is taken to be the energy supplement worked out using Module C.

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

Explanation of the changes

Amendments to the Social Security Act

Item 1 inserts a new point 1071A-2A. This new point is for working out allowable income and for the purposes of step 2 of the method statement in point 1071A-1 or 1071A-2, a person is to disregard steps 1A, 2 and 3 of the method statement in point 1068-A1; and the amount at step 1B of the method statement in point 1068-A1 is taken to be the amount applicable under item 5 of the table in point 1068-C3.

Item 2 adds an application provision which states that the amendment made by this Schedule applies in relation to working out if a person is qualified for a health care card on a day on or after the commencement of this Schedule (whether or not the person held such a card immediately before that commencement).

Schedule 8 - Delegation

Summary

This Schedule repeals a delegation provision in the family assistance law, which does not allow the Secretary of the Department to delegate any of their powers to officers of the Human Services Department under the Family Assistance Administration Act, unless the Secretary of the Human Services Department has agreed to the delegation of these powers.

Background

Under section 221 of the Family Assistance Administration Act delegation powers are provided.

At subsection 221(1) of the Family Assistance Administration Act, subject to this section, the Secretary may delegate to an officer all or any of the powers of the Secretary under the family assistance law, other than the power to engage an expert to carry out an independent audit as mentioned in section 219GB.

Subsection 221(2) of the Family Assistance Administration Act states 'the Secretary must not delegate such a power to an officer of the Human Services Department, unless the Secretary of the Human Services Department has agreed to the delegation'.

These amendments will remove the requirement for the Secretary of the Department to seek the agreement of the Secretary of the Human Services Department to the delegation of the Secretary's powers to officers of the Human Services Department under the family assistance law. Departmental officers would continue to consult closely to ensure delegation instruments drafted are in line with the Human Services Department requirements.

This Schedule will reduce the administrative burden and the time taken in the making of instruments of delegation under the family assistance law. It will also bring the relevant delegation provisions in the family assistance law into line with those in the Social Security Administration Act.

Explanation of the changes

Amendments to the Family Assistance Administration Act

Item 1 repeals subsection 221(2) of the Family Assistance Administration Act. This subsection states that the Secretary must not delegate powers under the family assistance law to an officer of the Human Services Department, unless the Secretary of the Human Services Department has agreed to the delegation.

Item 2 is an application provision which notes that the amendment made by this Schedule applies in relation to delegations made on or after the commencement of this Schedule.

Schedule 9 - Technical amendments

Summary

This Schedule amends paragraph 8(8)(z) of the Social Security Act to change incorrect references in the note of the paragraph. It also repeals clause 49 to Schedule 1A of the Social Security Act.

Background

Subsection 8(8) of the Social Security Act excludes certain amounts from assessment as income under the social security income test.

Paragraph 8(8)(z) provides:

"(z) a periodical payment by way of gift or allowance, or a periodical benefit by way of gift or allowance, from a parent, child, brother or sister of the person;

Note: The rule in paragraph 8(8)(z) is reversed in Youth Allowance Rate Calculator (point 1067G-H21), Austudy Payment Rate Calculator (point 1067L-D15), Benefit Rate Calculator B (point 1068-G5) and the Parenting Allowance Rate Calculator (point 1068B-D5). Points 1067G-H21, 1067L-D15, 1068-G5 and 1068A-D6 are contrary intentions (see the opening words in subsection 8(1) and the definition of income in that subsection)."

Several of the references to rate calculators, where this provision is reversed, are incorrect.

These incorrect references in the Social Security Act will be amended as follows:

•

"point 1067L-D15" to be "point 1067L-D17 (Austudy Payment Rate Calculator) wherever it appears;

•

"Parenting Allowance Rate Calculator" to be "Benefit PP (Partnered) Rate Calculator; and

•

"point 1068A-D6" to be "point 1068B-D5" (Benefit PP (Partnered) Rate Calculator).

Clause 49 of Schedule 1A of the Social Security Act is a spent clause and as such is to be repealed by this Schedule. Nobody is being paid pharmaceutical allowance at the saved rate under this clause.

Explanation of the changes

Amendments to the Social Security Act

Item 1 omits "point 1067L-D15" and substitutes it with "point 1067L-D17" in paragraph 8(8)(z) (note) of the Social Security Act. This is to amend an incorrect reference to the Austudy Payment Rate Calculator.

Item 2 omits "the Parenting Allowance Rate Calculator" and substitutes it with "Benefit PP (Partnered) Rate Calculator" in paragraph 8(8)(z) (note) of the Social Security Act. This is to amend the incorrect reference to the calculator.

Item 3 omits "1067L-D15" and substitutes it with "1067L-D17" in paragraph 8(8)(z) (note). This is to amend an incorrect reference to the Austudy Payment Rate Calculator.

Item 4 omits "1068A-D6" and substitutes it with "1068B-D5" in paragraph 8(8)(z)(note). This is to amend an incorrect reference to the Benefit PP (Partnered) Rate Calculator.

Item 5 repeals clause 49 of Schedule 1A of the Social Security Act. Nobody is being paid pharmaceutical allowance at the saved rate under this clause. As it is spent, this item repeals it from the Social Security Act.

Statements of Compatibility with Human Rights

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

Schedule 1 - Special benefit

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 amends the Social Security Act to clarify that people serving an income maintenance period for a mainstream payment, such as newstart allowance should not access special benefit during that period.

An income maintenance period is a period of time during which termination payments, for example, redundancy or leave payments, are apportioned and treated as ordinary income for certain social security payments, such as newstart allowance. The effect of the income maintenance period is to either reduce the person's income support payment rate or fully preclude them from receiving payment for the period that the termination payment represents. During this time the person is expected to draw on the resources provided by the termination payment.

An income maintenance period may be reduced or waived if the person is in severe financial hardship because he or she has spent their termination payment on reasonable or unavoidable expenditure.

An income maintenance period does not apply to special benefit. However, if a person is serving an income maintenance period for another income support payment, the longstanding policy is that special benefit, a payment intended for people in financial hardship due to circumstances beyond their control, should not be available to the person.

This amendment confirms that policy position - that people should use their own resources.

Human rights implications

Right to social security

Schedule 1 to the Bill engages the rights to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR)

The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide a minimum essential 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 (the Committee) has stated that a social security scheme should be sustainable and that the conditions for benefits must be reasonable, proportionate and transparent (see General Comment No.19).

Article 4 of the ICESCR provides that countries may limit rights such as to social security in a way determined by law only in so far as this may be compatible with the nature of the rights contained within the ICESCR and solely for the purpose of promoting the general welfare in a democratic society. Such a limitation must be proportionate to the objective to be achieved.

A central principle underpinning Australia's social security system is that support should be targeted to those in the community most in need in order to keep the system sustainable and fair. The amendment focuses on promoting self-support by requiring people to meet their own living costs for the period of the income maintenance period. People who need immediate financial assistance are able to have their income maintenance period reduced or waived provided if they meet relevant eligibility criteria. In this way, the amendment helps to ensure that immediate access to income support is targeted to those most in need.

To the extent that the changes in Schedule 1 may limit the right to social security, those limitations are reasonable and proportionate to the policy objective of ensuring a sustainable and well-targeted payment system.

Right to an adequate standard of living, including food, water and housing

Article 11 of the ICESCR provides for that everyone is entitled to adequate food, clothing and housing and to the continuous improvement of living conditions.

To the extent that there is an impact on a person's right to an adequate standard of living, including food, water and housing, by virtue of Schedule 1, the impact is limited. A person who is subject to an income maintenance period may have all or part of their income maintenance period waived where the person is in severe financial hardship due to unavoidable or reasonable expenditure as defined in the Social Security Act. Unavoidable or reasonable expenditure includes reasonable costs of living and any other costs that are determined unavoidable or reasonable expenditure in the circumstances in relation to the person.

Therefore, Schedule 1 to the Bill will be compatible with the right to an adequate standard of living as the potential limitations on this right are proportionate to the policy objective of encouraging self-support while providing a safety net as eligible persons can have the income maintenance period reduced or waived.

Right to equality and non-discrimination

To avoid doubt, Schedule 1 is compatible with the right to equality and non-discrimination contained in articles 2 and 26 of the International Covenant on Civil and Political Rights (ICCPR).

Article 2(1) of the ICCPR obligates each State party to respect and ensure to all persons within its territory and subject to its jurisdiction the rights recognised in the Covenant without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status (see CCPR General Comment No. 18).

Article 26 not only entitles all persons to equality before the law as well as equal protection of the law, but also prohibits any discrimination under the law and guarantees 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 (see CCPR General Comment No. 18).

Schedule 1 to the Bill will clarify that a person who is serving an income maintenance period and who has disposed of their termination payment on unnecessary expenditure, placing them self in financial hardship, should not be able to be paid special benefit. There will be no differential treatment on the basis of race, colour, sex, language, religion, political or other opinion, national or social origin, property or birth.

For these reasons, Schedule 1 to the Bill is compatible with the right of equality and non-discrimination.

Conclusion

This Schedule is compatible with human rights. To the extent that it may have limited adverse impact on a person's right to social security, an adequate standard of living and equality and non-discrimination, the limitation is reasonable, proportionate to the policy objective and for legitimate reasons.

Schedule 2 - Family tax benefit

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 amends the Family Assistance Administration Act to align the timeframes for meeting the Family Tax Benefit (FTB) reconciliation conditions and makes some related amendments, including to the date of effect provisions for consistency.

This consistency will ensure there are equitable arrangements for those individuals who are required to lodge an income tax return and those customers who need to provide their financial year adjusted taxable income amount directly to the Department of Human Services (DHS) while at the same time confirming they are not required to lodge a tax return, to allow reconciliation of their previous income year FTB entitlement.

Human rights implications

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

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to social security. Article 11 of the ICESCR recognises the right of everyone to an adequate standard of living and to the continuous improvement of living conditions.

The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide a minimum essential level of benefits to all individuals and families that will enable them to cover essential living costs.

This Schedule requires FTB recipients to satisfy the relevant reconciliation conditions within one year following the relevant income year. This confirmation timeframe does not restrict FTB recipients from being eligible to receive fortnightly payments of family tax benefit to assist with the costs of raising children. It aligns to those requirements already in place for FTB recipients who are required to lodge their tax returns within one year following the income year.

It is acknowledged there is potential that some individuals will miss out on amounts of FTB such as the supplements, due to notifying their adjusted taxable income after the confirmation timeframe, however, it is a proportional and reasonable requirement to ensure that individuals are paid their correct entitlement at the time they need it most. The individuals impacted by this amendment are required to notify they are not required to lodge a tax return and to advise of their adjusted taxable income from the relevant income year. This is done by a phone conversation or by completing an online statement. Therefore, it is a less burdensome provision than those individuals who have to complete an income tax return in the same confirmation timeframe.

Individuals have been aware of these confirmation timeframes for a number of years already, there have been extensive communications of the requirements, the individuals have been advised of these regularly in letters sent directly to them, on websites and through media reporting of the changes. These changes are going to reflect in legislation what has always been the administrative process.

While the provisions are aligning to the notification requirements that have been long standing and to match the individuals who are required to lodge a tax return, there are mitigation strategies for those who may be unfairly impacted in that the legislation allows for an additional period of time, up to one year after the notification year, if there are special circumstances that prevented the individual from meeting the confirmation timeframe.

Whilst the alignment of the reconciliation times is a legislative change, there will not be any change for FTB recipients relating to the time frames for notifications. There are safeguards in place which ensure that FTB recipients are aware of their obligations and customers have been notified since 1 July 2013 that they must notify within one year of the relevant income year. They receive reminders at key times during the income year about the need to notify to ensure that they notify within the timeframe. Further, there are provisions under family assistance law which enable FTB recipients to seek an extension if there are circumstances which have prevented them from notifying that they are not required to lodge.

Conclusion

The Schedule is compatible with human rights because people are not being restricted from accessing social security payments. Rather, they will now be required to meet their reporting obligations within the same timeframe as those families that are required to lodge their tax returns.

Schedule 3 - Study requirements for social security 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 makes amendments to the Social Security Act to clarify that in assessing full-time study load for youth allowance (student) and for austudy payment, only one course of education is to be taken into account, rather than multiple part-time courses.

Human rights implications

Right to social security

This Schedule engages the right to social security, as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security recognises the right of everyone to social security, including social insurance.

The extent to which this Schedule impacts on a person's right to social security is limited. This Schedule makes minor amendments to the Social Security Act to clarify existing policy and practice whereby in assessing whether a person is undertaking a full-time study load for youth allowance (student) or austudy purposes, only one course of education is taken into account.

It is long standing policy that full-time study for student payment purposes is only to be assessed against one course of education. This allows students to be supported financially to complete a course of education in the minimum amount of time and to enter the labour market. This also includes people undertaking combined courses (for example, Bachelor of Commerce/Bachelor of Finance) where a formal arrangement exists to offer the course as one course of study, albeit with two qualification/awards, which have related/complementary subjects and hence enhance a person's employment and career prospects.

Due to the current ambiguity in the Social Security Act, an unintended consequence exists whereby a very small number of students have been assessed as undertaking a full-time study load by undertaking multiple unrelated courses on a part-time basis at the same or across multiple institutions (for example, a Bachelor of Engineering and Bachelor of Fine Arts (Dance)). It is only these people that will be affected by this Schedule and will no longer will eligible for payment. This Schedule will not prevent any other people who are currently assessed as undertaking full-time study in one course of education, from being eligible for payment.

Right to education

This Schedule engages the right to education, as recognised in Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Whilst this measure will prevent a very small number of people who are undertaking more than one course of education on a part-time basis from being eligible for youth allowance (student) and austudy, it will have limited impact on their ability to access education.

People wishing to study in this manner are still able to do so; however they will be required to self-fund their studies. However, where a person undertakes at least one of their courses on a full-time basis, they will be assessed as undertaking full-time study for youth allowance (student) and austudy purposes.

The Government's objective is to achieve growth in skills, qualifications and productivity through providing income support to students to assist them to undertake further education and training.

Conclusion

This Schedule is compatible with human rights as it reflects current policy and practice. To the extent that it affects a person's right to social security and education, this limitation will be minor and people will be able to seek assistance where undertaking one course of study on a full-time basis.

Schedule 4 - New apprentices

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 amends the definition of new apprentice in the Social Security Act so that the requirements for that definition can be determined by the Minister in a legislative instrument.

It is intended the Minister will determine a requirement for the purposes of the definition of new apprentice is that a fully completed training contract has been submitted for approval to a State Training Authority for the person to undertake a full-time apprenticeship under the scheme known as Australian Apprenticeships. A further requirement may be that the person is undertaking the apprenticeship on a full-time basis or is undertaking a pre-vocational course.

An apprentice is not currently qualified for youth allowance or austudy payment until a state/territory training authority issues a Commonwealth Registration Number (CRN) in respect of the apprentice. The term CRN is soon to become obsolete. Additionally where a person's CRN has been cancelled or suspended, the person can continue to qualify for youth allowance or austudy payment as a new apprentice even though they are no longer undertaking a full-time apprenticeship.

Human rights implications

Right to social security

This Schedule engages the right to social security, as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security recognises the right of everyone to social security, including social insurance.

This Schedule does not adversely impact a person's right to social security. This Schedule amends the definition of new apprentice in the Social Security Act so that the requirements for that definition can be determined by the Minister in a legislative instrument. A person who is currently undertaking an apprenticeship will continue to meet the requirements for the definition that will be determined in the proposed legislative instrument.

This measure will only affect those people who are no longer undertaking an apprenticeship but who currently may continue to qualify for youth allowance or austudy payment because they still hold a CRN. This measure does not extinguish the right of those people who are no longer undertaking an apprenticeship to qualify for newstart allowance or youth allowance as a jobseeker. The measure ensures that social security, particularly youth allowance and austudy payment, is appropriately targeted to people who are undertaking full-time apprenticeships.

Right to education

This Schedule engages the right to education, as recognised in Article 13 of the ICESCR.

In particular, Article 13(2)(b) states that secondary education, including technical and vocational secondary education shall be made generally available and accessible to all by every appropriate means and in particular by the progressive introduction of free education.

The Schedule will promote an individual's right to education by providing access to youth allowance or austudy payment, while undertaking an apprenticeship.

This will improve the accessibility of technical and vocational education, as individuals need not miss out on youth allowance or austudy payment due to delays in approving training contracts by a State Training Authority.

This Schedule will therefore expand the accessibility of technical and further education.

This measure will not prevent any people undertaking a full-time apprenticeship who are currently qualified for youth allowance or austudy payment from continuing to be qualified for that payment. This measure will remove the requirement for a person to have a CRN as issued by a State/Territory training authority.

Conclusion

This Schedule is compatible with human rights. This Schedule will continue to ensure access to social security for people undertaking an apprenticeship and will not limit their right to education.

Schedule 5 - Austudy payment assets test

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 makes amendments to the Social Security Act to clarify that a person is exempt from the assets test for austudy payment if their partner is receiving a relevant pension, benefit, allowance, compensation or has received lump sum compensation as an armed services widow or widower under the Military Rehabilitation Compensation Act 2004 in the past.

Human rights implications

Right to social security

This Schedule engages the right to social security, as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security recognises the right of everyone to social security, including social insurance.

The extent to which this Schedule impacts a person's right to social security is limited. This Schedule does not propose to make any changes to the current policy or practice; however aims to clarify the austudy assets test exemptions.

Currently, the Social Security Act states that a person will be exempted from the austudy assets test if their partner is receiving, or has received, a relevant pension, benefit, allowance or other compensation. This has the unintended consequence of exempting people from the assets test if their partner has, at any time in the past, received one of the relevant payments.

Instead, it is the policy intention that a person will be exempted from the assets test if their partner is receiving a relevant pension, benefit, allowance, compensation or has received lump sum compensation as an armed services widow or widower under the Military Rehabilitation Compensation Act 2004 in the past.

As this Schedule is proposing to reflect current policy and practice, it will not affect anyone accessing austudy.

Conclusion

This Schedule is compatible with human rights. The extent to which is affects a person's right to social security is limited as the proposed amendments reflect current policy and practice.

Schedule 6 - Clarifying indexation of pharmaceutical allowance

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

Pharmaceutical allowance is added into the rate of some social security payments, or may in some circumstances be paid as a separate payment. To retain currency of the allowance, the amount is indexed or adjusted each year under Part 3.16 of the Social Security Act. The Schedule makes minor technical corrections to existing provisions in this Part to correct cross-references, make clearer the various abbreviations and add additional guidance material.

Human rights implications

The repeal of these provisions in the Social Security Act is of a technical nature only. The repeal of these provisions does not change the effect of social security law as currently enacted.

Conclusion

The Schedule does not engage any applicable human rights.

Schedule 7 - Health care card income test

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

Low income health care card

This Schedule will clarify the definition of allowable income for the purpose of the income test for the low income health care card for which a claim is required. Under that income test, a claimant's ascertained income must be less than 100% of the allowable income for an eight week period and an existing cardholder's ascertained income must be less than 125% of the allowable income for an eight week period. Holders of the low income health care card may receive:

•

medicines listed on the Pharmaceutical Benefits Scheme (PBS) at the concessional rate;

•

bulk-billed General Practitioner (GP) appointments, at the discretion of the GP (the Australian Government provides financial incentives for GPs to bulk-bill concession cardholders); and

•

a reduction in the cost of out-of-hospital medical expenses, above a concessional threshold, through the Extended Medicare Safety Net.

Human rights implications

Right to social security

This Schedule engages the right to social security, as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security recognises the right of everyone to social security, including social insurance.

This Schedule also engages Article 11 of the ICESCR, which provides for the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. Holders of a senior's health card are entitled to a range of concessions, including concessions on pharmaceutical and health services.

The Social Security Act does not currently specify exactly what components of newstart allowance are to be included in the calculation of allowable income but current and past practice is, and has been, to include only the maximum basic rate and energy supplement.

The amendment contained in this Schedule seeks to clarify the components of newstart allowance to be included in the calculation of allowable income in a way which gives more legislative support to the current and past practice of calculating allowable income. That is, the amendment seeks to make it clear that the pension supplement, pharmaceutical allowance and rent assistance are all to be excluded from that calculation.

Nobody currently holding the health care card will lose it because of the amendment. This is because the amendment contained in the Schedule does nothing more than provide clearer legislative support for the current practice of calculating allowable income. Furthermore, nobody acquiring the card in the future will be prevented from doing so because of the same amendment. This is because in the future the law will be applied as it is currently.

Conclusion

The Schedule is compatible with human rights because it seeks to clarify, in the Social Security Act, the definition of allowable income for the purpose of the income test for the low income health care card.

Schedule 8 - Delegation

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 repeals a delegation provision in the family assistance law, which does not allow the Secretary of the Department to delegate any of their powers to officers of the Human Services Department under the Family Assistance Administration Act, unless the Secretary of the Human Services Department has agreed to the delegation of these powers. It repeals an administrative burden from the legislation.

Human rights implications

This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

This Schedule is compatible with human rights as it does not raise any human rights issues.

Schedule 9 - Technical amendments

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

Items 1-4 of this Schedule amend paragraph 8(8)(z) of the Social Security Act to change incorrect references in the note to that paragraph. These changes do not change the income test assessment of income support recipients as they are technical amendments.

Subsection 8(8) excludes certain amounts as income under the social security income test. The exemption contained in paragraph 8(8)(z) is reversed in various rate calculators which are referenced in a note to that paragraph. Several of the references to rate calculators in the note to paragraph 8(8)(z) are incorrect.

Item 5 of this Schedule repeals a spent clause 49 of Schedule 1A of the Social Security Act. This is a technical amendment.

Human rights implications

This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

This Schedule is compatible with human rights as it does not raise any human rights issues.