House of Representatives

Revised Explanatory Memorandum

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

Statements of compatibility with human rights

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

Social Services and Other Legislation Amendment Bill 2013

Schedule 1 - Encouraging responsible gambling

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 amendments

Schedule 1 to the Bill makes a number of amendments to the National Gambling Reform Act 2012, and repeals in full the National Gambling Reform (Related Matters) Act (No.1) 2012 and the National Gambling Reform (Related Matters) Act (No.2) 2012.

The Bill repeals provisions relating to: the National Gambling Regulator (including removing all its powers and functions, and the penalties to enforce compliance); the national supervisory levy; the automatic teller machine (ATM) withdrawal limit; the trial on mandatory pre-commitment; and matters for Productivity Commission review.

The Bill also amends the pre-commitment, gaming machine capability and dynamic warning requirements to express the Commonwealth's commitment to work towards, and intention to introduce, measures in the future. Most of the research components in the Act will be retained.

Human rights implications

The amendments have the effect of removing the three main measures in the Act (that is, the pre-commitment, dynamic warning, and ATM withdrawal limit requirements) and replacing the provisions with statements setting out the Commonwealth's commitment to the development and implementation of measures in the future that encourage responsible gambling.

Given that the new provisions will not impose any substantive legal obligations, Schedule 1 to the Bill will not limit any human rights. In addition, as the amendments remove existing provisions relating to the exercise of coercive monitoring and enforcement powers and the collection of personal information, Schedule 1 reduces the risk of interference with a person's right to a fair and public hearing, right against self-incrimination and right to privacy and reputation in accordance with Articles 14(1), 14(3)(g) and 17 of the International Covenant on Civil and Political Rights.

Conclusion

Schedule 1 is compatible with human rights as it does not raise any human rights issues.

Schedule 1A - Charities

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 amendments

This Schedule delays the commencement of the Charities Act 2013 by nine months, from 1 January 2014 to 1 September 2014.

The Charities Act 2013 defines charity and charitable purpose for the purposes of all Commonwealth legislation. The nine-month delay to the commencement of the Act will allow for further consultation on the legislation in the broader context of the Government's other commitments in relation to the civil sector.

Human rights implications

The amendment to the Charities Act 2013 delays the commencement of the Act by nine months. It does not change the policy intent or application of the Act.

Conclusion

Schedule 1A is compatible with human rights as it does not raise any human rights issues.

Schedule 2 - Continuing income management as part of Cape York Welfare Reform

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 amendments

The continuation of income management as part of Cape York Welfare Reform component of the Bill introduces a minor amendment to the Social Security Administration Act (the Social Security Administration Act). Paragraphs 123UF(1)(g) and 123UF(2)(h) of the Social Security Administration Act provide that a person can only be subject to income management under section 123UF after a decision by the Family Responsibilities Commission made before 1 January 2014.

The amendment extends to 1 January 2016 the timeframe for which a person, after a decision by the Family Responsibilities Commission, can be subject to income management under section 123UF.

The purpose of the amendment is to allow income management to continue in Cape York for two further years until 1 January 2016.

Human rights implications

Eliminating racial discrimination

The amendment to the Social Security Administration Act engages Article 2(1) of the Convention on the Elimination of All Forms of Racial Discrimination (CERD), which:

'...imposes an obligation on State parties to undertake to pursue a policy of eliminating racial discrimination in all its forms and promoting understanding among all races...' ^[1]

Equality before the law

The amendment to the Social Security Administration Act also engages Article 26 of the International Covenant on Civil and Political Rights (ICCPR), which states:

'...all persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall 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.' ^[2]

There is no incompatibility with the rights engaged as the circumstances meet the test for legitimate differential treatment under international law.

Legitimate differential treatment

The objective of Cape York Welfare Reform is aimed at supporting the restoration of socially responsible standards of behaviour and assisting community members to resume and maintain primary responsibility for the wellbeing of their community and the individuals and families within their community. This objective is considered sufficiently important to justify differential treatment on the basis of a prohibited ground.

An independent Evaluation of the Cape York Welfare Reform Trial, released in March 2013, indicates that the trial has had a positive impact in participating communities, with increased personal responsibility and positive behavioural changes such as increased school attendance, increased commitment to education by parents, and greater support for local Indigenous authority and leadership.

Moreover, results of consultations conducted to date have established support for the welfare reforms in the four participating Cape York communities.

The Family Responsibilities Commission (FRC), a central plank of the reforms, operates through a conferencing model. In practice, this means an individual will attend a number of conferences with Local Commissioners who are respected local Indigenous elders in the community. At the conferences, options for support are discussed, including referrals to existing support services, prior to any income management direction being made by the FRC. The FRC considers appropriate alternatives in conjunction with the individual, with income management only being used as a final measure.

The results of the reviews and consultations to date demonstrate that the differential treatment of members of the four Cape York communities is having a positive impact on individuals, families and the broader communities.

Conclusion

The amendments are compatible with human rights because, to the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate.

Schedule 3 - Family tax benefit and eligibility rules

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 amendments

This Schedule makes amendments to limit family tax benefit Part A to children aged under 16, or teenagers aged 16 to 19 (end of the calendar year they turn 19) who are in full-time secondary study (or equivalent). Exemptions to the study requirement will continue to apply for teenagers who cannot study due to physical, psychiatric, intellectual or learning disability.

Teenagers with a secondary qualification who cease to be eligible for family tax benefit from 1 January 2014 will be able to apply for youth allowance. Youth allowance, with its 'learn or earn' provisions that require young people to participate in work, job search, study or training, will remain available as the more appropriate payment to help young people transition from school into work or post-secondary study.

Human rights implications

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), as well as Article 26 of the Convention on the Rights of the Child (CRC), recognise the right of a child to benefit from social security.

The right to social security in article 9 of the ICESCR requires a social security system be established and that a country must, within its 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 26 of the CRC requires countries to recognise the right of the child to benefit from social security. Benefits should take into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child.

From 1 January 2014, this Schedule will mean that teenagers aged 16 to 17 who have a Year 12 (or equivalent) qualification will no longer be eligible for family tax benefit. This Schedule makes similar changes to eligibility for family tax benefit for approved care organisations. These teenagers will continue to be eligible to claim youth allowance.

This change will focus payments in the family assistance system on families with children who are at school, while youth allowance will become the primary form of assistance to eligible young people who have completed secondary study. To the extent that the changes in Schedule 3 may limit human rights, those limitations are reasonable and proportionate.

Conclusion

These amendments are compatible with human rights because they advance the protection of human rights and, to the extent that these changes limit access to family and parental payments, these limitations are reasonable and proportionate.

Schedule 4 - Period of Australian working life residence

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 amendments

This Schedule amends the rules for calculating pensions paid outside Australia. It primarily affects age pension and some other pensions which also have unlimited portability, and pensions paid under most social security agreements. Pensioners paid under the Greek and New Zealand agreements will continue to be paid according to the specific terms of those agreements.

Under the change, pensioners who leave Australia on or after the start date will be required to have been Australian residents for 35 years during their working life (from age 16 to age pension age) to receive their full means-tested pension if they choose to retire overseas or travel overseas for extended periods of longer than 26 weeks. The current requirement is 25 years. Thirty-five years is considered a more appropriate period given Australia's pension system is residence-based and taxpayer-funded.

In an associated change, members of a couple paid outside Australia under a social security agreement will now have their pensions calculated on their own Australian working life residence, rather than their partners' Australian working life residence, as already applies to pensioners paid outside Australia in non-agreement countries.

Pensioners paid under the existing rules at the date these changes commence, and who would be adversely affected, will be grandfathered unless they return to Australia for more than 26 weeks and subsequently leave Australia again.

Human rights implications

This Schedule has considered the human rights implications, particularly with reference to the right to social security as contained within Article 9 of the International Covenant on Economic, Social and Cultural Rights. It is concluded that the proposed change to the calculation of pensions for people who, after the start date, leave Australia or claim under a social security agreement is reasonable, subject to due process provided for in national law, and is permissible (under ILO Convention No.168 (1988)) in the case of 'absence from the territory of the State'.

Conclusion

The Schedule is compatible with human rights because it does not limit or preclude people from gaining or maintaining access to social security.

Schedule 5 (Interest charge), Schedule 6 (Student start-up loans), and Part 1 of Schedule 12 (Repayment of financial supplement through taxation system)

These 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

Schedule 5 - Interest charge

Schedule 5 to the Bill amends the Social Security Act 1991 (the Social Security Act) and the Student Assistance Act 1973 (the Student Assistance Act) in order to introduce an interest charge on debts relating to austudy, fares allowance, youth allowance payments to full-time students and apprentices, and ABSTUDY living allowance.

The current lack of an interest charge on student income support debt means recipients have no incentive to repay their debts. Once the interest charge is in place, debtors will have a pressing incentive to engage with the Department of Human Services to make a repayment arrangement in order to avoid the interest charge.

It is also important to note that a debt only arises under the Social Security Act or the Student Assistance Act where a person receives a payment to which they were not entitled. Furthermore, an interest charge can only be applied to the person and the debt where the person has not entered into a repayment arrangement, has failed to comply with a repayment arrangement, or has terminated a repayment arrangement without entering into a new repayment arrangement.

In negotiating a repayment arrangement, the Department of Human Services will take into account the circumstances of the debtor, and will suggest repayment amounts based on the debtor's financial capacity. Where a debtor is experiencing financial hardship, repayment arrangements can be paused and no interest charge applied for that period of time. Students will also be able to continue to receive income support payments whilst repaying any debt and interest charge incurred.

Additionally, an interest charge will not be applied where a person is in circumstances prescribed in a legislative instrument made by the Minister. It is envisaged that the prescribed circumstances would be where the amount that is being withheld from the person's payments (under current section 1231 of the Social Security Act) is satisfactorily repaying the debt.

An interest charge can only be applied if the person has been issued a notice in respect of a debt, which will outline the reason why the debt was incurred, the outstanding amount of the debt, the effect of an interest charge applying, and the day on which the debt is due and payable. When the debt is initially incurred, a notice in respect of a debt will provide that the debt is due and payable 28 days after the notice has been issued. In the event that a repayment arrangement has been terminated, a newly issued notice will provide that the debt is due and payable 14 days after the notice has been issued. This will ensure that the person will have sufficient time either to repay the outstanding debt or to enter into a repayment arrangement and thereby avoid the application of an interest charge.

The interest rate is calculated by adding seven percentage points to the monthly average yield of 90-day Bank Accepted Bills (as published by the Reserve Bank of Australia). This is considered an appropriate method for calculating the rate of the interest charge to apply to income support debt because the rate is high enough to encourage repayment without being punitive, and it provides a return to the Commonwealth, commensurate with the time value of the monies overpaid.

Schedule 6 - Student start-up loans

Schedule 6 amends the Social Security Act and the Student Assistance Act to cease the student start-up scholarship (SSS), from 1 January 2014, for new recipients of student payments who are participating in higher education. Students will instead be able to receive either an ABSTUDY student start-up loan or a student start-up loan (the loans), which are income-contingent loans, equivalent in value to the SSS, and claimed on a voluntary basis. These loans will be available to new full-time students who are in receipt of youth allowance, austudy payment or ABSTUDY living allowance.

The students will be limited to two loans per year of $1,025 (indexed from 2017), in line with the current SSS arrangements, and the loans will be repayable under similar arrangements to Higher Education Loan Program (HELP) debts. Students will only be required to begin repaying the loans once their earnings are above the repayment threshold (which will be consistent with the current HELP repayment thresholds) and after any accumulated HELP debt has been paid.

The loans also provide grandfathering arrangements so that recipients who received an SSS or Commonwealth Education Costs Scholarship, prior to 1 January 2014, and have remained continuously on student payments will continue to be eligible to receive the SSS, as a grant, until coming off student payments.

Part 1 of Schedule 12 - Repayment of financial supplement through taxation system

Part 1 of Schedule 12 to the Bill contains technical amendments to the Social Security Act and Student Assistance Act to give the Commissioner of Taxation increased flexibility in determining how applications for waiver of Student Financial Supplement Scheme (SFSS) debts are to be submitted. The amendments will also remove any doubt that the Commissioner has general administration over the recovery of these debts.

Human rights implications

Right to education

Schedule 5 to the Bill engages the right to education contained in Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

In particular, article 13(2)(b) states that secondary education, in all its different forms, 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.

Schedule 5 - Interest charge

Schedule 5 does not limit the right to education. The interest charge is intended as an incentive for debtors to repay debts in a timely fashion, where they have the financial capacity to do so. Given that a debtor's financial capacity will be taken into account before a repayment arrangement is agreed to, the interest charge will not limit the debtor's ability to access education.

Schedule 6 - Student start-up loans

Schedule 6 to the Bill does not limit the right to education. While the SSS will not be available for new recipients after 1 January 2014, people who would otherwise be entitled to the SSS will be eligible for the loans. The purpose of the SSS and the loans are identical as both payments are designed to help students with the up-front costs of textbooks and equipment. Under the loans, students will be eligible for the same payment amounts and will be able to claim payments when these expenses arise. In this way, students will still have access to funds to assist them with the up-front costs of study. The fact that the loans are repayable once the person reaches a particular income threshold will not limit a person's right to education.

Right to social security

Schedules 5 and 6 to the Bill engage the rights to social security contained in article 9 of the 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 ICESCR provides that countries may limit the 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.

Schedule 5 - Interest charge

To the extent that interest is charged on a person's debt, any impact will be limited and will have a very marginal effect on the ability of a person to cover essential living costs or acquire basic forms of education, thereby engaging a person's right to social security. The provisions in Schedule 5 are therefore unlikely to limit this right, given the appropriate safeguards put in place to protect it.

As noted above, it is intended that the provisions introduced by Schedule 5 will allow the efficient recovery of social security payments, supporting effective and efficient administration of the social security system. This measure is proportionate in achieving this policy objective as all persons can avoid an interest charge by entering into a repayment arrangement, and these rights are safeguarded by the requirements of notice and periods of time in which a person will be able to pay back the debt or enter into an arrangement. Furthermore, the Secretary will have the discretion in appropriate circumstances to waive a debt, including any interest charged on the debt.

By allowing the efficient recovery of social security payments, Schedule 5 ensures the financial sustainability of the social security system. The interest charge, as it applies to persons who receive payments to which they are not entitled, is a reasonable condition on the benefits of the system as it encourages recipients to repay those amounts and ensures that the Commonwealth is able to recover the real value of these amounts. The interest charge, as a condition, is also transparent as it is provided for in legislation, will be accurately communicated through the Department's website, and can only be applied after the recipient is given notice. This ensures that all stakeholders will be informed of how the interest charge will operate before it is applied to recipients.

Therefore, Schedule 5 to the Bill will be compatible with the right to social security as the potential limitation on this right is proportionate to the policy objective and intended to improve the administration of social security system.

Schedule 6 - Student start-up loans

To the extent that there is an impact on a person's rights to social security by virtue of Schedule 6, the impact is limited. In practice, a person will still be entitled to the same amount of financial assistance under the loans as they would have received from an SSS, and will only be required to repay the loans once they reach the relevant threshold level of income. This threshold is set at a level of income at which a person would no longer require financial assistance to acquire essential health care, housing, water and sanitation, foodstuffs, and education. Given the above safeguards, and the fact that the loans will be given on a voluntary basis (that is, a debtor does not need to incur debt) the measures contained in Schedule 6 are compatible with the rights to social security.

Additionally, the Government is committed to providing continuing support to students from regional Australia. Because of this, the Relocation Scholarship, for dependent students who are required to move to study and some independent students, will continue to be provided as a grant to all eligible students. Other student income support payments will also remain unaffected by the loans measure.

Taking into account the continued access to fund the costs of study, together with the fact that there will be no changes to the Relocation Scholarship and other student payments, the amendments to the SSS are consistent with a person's rights to social security and to an adequate standard of living.

Part 1 of Schedule 12 - Repayment of financial supplement through taxation system

Part 1 of Schedule 12 to the Bill contains amendments which will give the Commissioner of Taxation greater flexibility in determining how applications for waiver of youth allowance (student and Australian apprentice), austudy and ABSTUDY SFSS debts are to be submitted.

These amendments are beneficial in nature as they will allow the Commissioner to accept applications for waiver of debt without them having to be in writing. Consequently, these amendments do not have any adverse human rights implications.

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

Schedule 5 to the Bill engages the right to an adequate standard of living, including food, water and housing, contained in article 11 of the ICESCR.

The right to an adequate standard of living, including food, water and housing provides that everyone is entitled to adequate food, clothing and housing and to the continuous improvement of living conditions.

Schedule 5 - Interest charge

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 5, the impact is limited.

It is intended that the provisions of Schedule 5 will allow the efficient recovery of social security payments, which will ultimately improve the efficacy of the social security system. This measure is proportionate in achieving this policy objective as all persons can avoid an interest charge by entering into a repayment arrangement, and these rights are safeguarded by the requirements of notice and periods of time in which a person will be able to repay the debt or enter into an arrangement. The Secretary will also have the discretion to waive a debt in appropriate circumstances, including any interest charged on the debt.

Furthermore, by allowing the efficient recovery of social security payments, Schedule 5 ensures the financial sustainability of the social security system. The interest charge, as it applies to people who receive payments to which they are not entitled, is a reasonable condition on the benefits of the system as it encourages recipients to repay those payments and ensures that the Commonwealth is able to recover the real value of these amounts. The interest charge is also transparent as it is provided for in legislation, will be accurately communicated through the Department's website, and can only be applied after the recipient is given written notice. This ensures that all stakeholders will be informed of how the interest charge will operate before it is applied.

Therefore, Schedule 5 to the Bill will be compatible with the right an adequate standard of living as the potential limitations on this right are proportionate to the policy objective and are intended to improve the administration of the social security system.

Right to equality and non-discrimination

To avoid doubt, Schedules 5 and 6 do not engage the right to equality and non-discrimination contained in articles 2 and 26 of the International Covenant on Civil and Political Rights either on the basis of race or 'other' status.

Article 2(1) of the International Covenant on Civil and Political Rights 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 ^[3] .

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 ^[4] .

It is important to note, however, that not all differential treatment will be considered discriminatory. The Committee on Economic, Social and Cultural Rights has provided the following commentary on when differential treatment will be considered discriminatory:

Differential treatment based on prohibited grounds will be viewed as discriminatory unless the justification for differentiation is reasonable and objective. This will include an assessment as to whether the aim and effects of the measures or omissions are legitimate, compatible with the nature of the Covenant rights and solely for the purpose of promoting the general welfare in a democratic society. In addition, there must be a clear and reasonable relationship of proportionality between the aim sought to be realised and the measures or omissions and their effects. A failure to remove differential treatment on the basis of a lack of available resources is not an objective and reasonable justification unless every effort has been made to use all resources that are at the State party's disposition in an effort to address and eliminate the discrimination, as a matter of priority ^[5] .

Schedule 5 - Interest charge

Discrimination on the basis of race

Schedule 5 to the Bill will apply an interest charge to all debts resulting from student income support debts, including ABSTUDY living allowance, which supports Indigenous Australians. However, there is no differential treatment on the basis of race as the interest charge will apply equally to all student debtors.

For these reasons, Schedule 5 to the Bill will not engage the right of equality and non-discrimination.

Discrimination on the basis of 'other status'

Schedule 5 to the Bill applies an interest charge to debts with respect to overpayments to students (rather than all social security overpayments).

This will not be a limitation on the right to equality and non-discrimination as the differential treatment is for a reasonable and objective purpose.

Recipients of these payments generally transition from study to employment (and thus are no longer recipients of social security payments) before the full amount of the debt is repaid through the social security withholding mechanism. Once the person has left payments, many often choose not to repay the debt, and indeed there is currently little incentive for them to do so.

It is therefore reasonable and objective to apply an interest charge to debts with respect to the above mentioned types of payment to ensure that people with a debt repay the outstanding amount in a timely fashion. Recipients of these payments will be able to avoid the interest charge altogether by either repaying their debt within 28 days of being notified of the debt or by entering into an acceptable repayment arrangement.

For these reasons, Schedule 5 to the Bill will not engage the right of equality and non-discrimination.

Schedule 6 - Student start-up loans

While the provisions of Schedule 6 will establish an ABSTUDY student start-up loan (which, given the eligibility criteria of ABSTUDY, will mean that loan recipients are necessarily of Aboriginal or Torres Strait Islander descent), an equivalent student start-up loan will also be established for those who are eligible for austudy and youth allowance recipients (where austudy and youth allowance are available to non-Indigenous and Indigenous people). As the provisions for the student start-up loan mirror the provisions for the ABSTUDY student start-up loan, there will be no effective distinction between Indigenous and non-Indigenous recipients of these loans.

For these reasons, Schedule 6 to the Bill will not engage the right of equality and non-discrimination.

Conclusion

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

Schedule 7 - Paid parental leave

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 amendments

Schedule 7 makes amendments to the employer role in the Paid Parental Leave Act 2010. The amendments will remove the requirement for employers to provide Government-funded parental leave pay to their eligible long-term employees. From 1 March 2014, employees will be paid directly by the Department of Human Services, unless an employer opts in to provide parental leave pay to its employees and an employee agrees for their employer to pay them. Human rights implications

The Paid Parental Leave scheme engages the right to social security in Article 9 of the International Covenant on Economic, Social and Cultural Rights, and the right to work in Article 10 (2) of the International Covenant on Civil and Political Rights.

However, the amendments in this Schedule are limited to changes to the administrative arrangements for delivering parental leave pay to customers. They do not affect a customer's eligibility to the payment, a customer's rate of pay, or a customer's entitlement to paid or unpaid leave from employment before and after the birth of a child. As such, the amendments do not engage any human rights.

Conclusion

Schedule 7 is compatible with human rights as it does not raise any human rights issues.

Schedule 8 - Pension bonus scheme

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 amendments

From 1 March 2014, the amendments will end late registrations in the pension bonus scheme. Subsections 92H(3) to (7) of the Social Security Act 1991 provide for late registration and backdating of the commencement date. The amendment will repeal these sections. The amendment also inserts a new subsection 92D(2), which states that a person cannot apply to register in the scheme on or after 1 March 2014.

The scheme was implemented in 1998 to encourage workforce participation. The scheme provides a lump sum payment to people registered in the scheme who are qualified for the age pension but who choose to defer their pension and remain in the workforce.

The scheme was closed from 20 September 2009 because the 2009 Pension Review found the pension bonus scheme did not encourage older Australians to remain in work, with most participants saying they would have continued working anyway. The review also found pensioners thought the scheme was complex and inflexible.

While the scheme was closed from 20 September 2009, eligible people who were qualified for the age pension before then have remained able to apply for late registration in the scheme if they had not registered at the time of its closure.

To encourage senior Australians to continue working, the work bonus was introduced. The work bonus is a pension income test concession for age pensioners who have earnings from employment.

Under the work bonus, eligible pensioners can earn up to $250 a fortnight ($6,500 a year) without it being assessed as income under the pension income test. Any unused amount of the fortnightly concession can accumulate up to a maximum of $6,500 and be used to offset future earnings.

Mirror amendments are made to the Veterans' Entitlements Act 1986.

Human rights implications

The pension bonus scheme is not a social security entitlement as described in section 23 of the Social Security Act 1991 and, accordingly, is not considered an income support payment. Social security income support arrangements for senior Australians are unaffected by this legislation.

A pension bonus payment is a one-off lump sum bonus paid to senior Australians who are registered in the scheme but who keep working and defer their age pension receipt.

The scheme was intended to encourage workforce participation but, following the Pension Review findings, was closed and limited to people who were qualified before 20 September 2009. The legislation will further limit access to the pension bonus scheme. However, eligible people will still have until 1 March 2014 to backdate their registration in the scheme.

A work bonus was introduced when the pension bonus scheme was closed to new entrants. It provides a clear and immediate benefit to age pensioners who continue to work by providing a pension income test concession on employment income.

Conclusion

This legislation does not limit human rights because it does not affect social security income support entitlements for senior Australians. Workforce participation by age pensioners who wish to work continues to be well supported through the work bonus.

There are no human rights implications.

Schedule 9 - Indexation - child care rebate limit

These 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.

Background

The child care rebate is a payment that provides assistance for families who use approved child care by covering half of all their out-of-pocket fees (after child care benefit), up to a maximum limit per child per year. The child care rebate is currently not an indexed amount, and is capped at $7,500 until the financial year ending 30 June 2014. To be eligible for the child care rebate, families must have used approved child care and met the work, training, study test and be eligible for child care benefit. Child care rebate is not income tested, and eligibility for child care benefit includes families who are entitled to child care benefit at the zero rate due to income.

The child care rebate payment was initially introduced to assist with up to 30 per cent of out-of-pocket costs per child per financial year, and the payment amount was indexed. To better assist families with the affordability of child care, the maximum child care rebate limit per child per financial year was increased to provide up to 50 per cent of out-of-pocket costs per child per financial year up to a maximum amount of $7,500.

Specifically, legislative amendments were made to paragraph 84F of the A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) by the Family Assistance Legislation Amendment (Child Care Budget Measures) Act 2011 (the Budget Measures Act), which took effect on 15 September 2011, to introduce the cap and pause of the indexation of child care rebate payment amounts.

Overview of the amendments

The purpose of the child care rebate amendments is to extend the current child care rebate payment cap of a maximum of $7,500 per financial year per child, and continue to pause the indexation of the child care rebate payment amounts for a further three financial years to 30 June 2017.

That is, the amendments to paragraph 84F(ea) of the Family Assistance Act preserve the current child care rebate payment amounts, and provide for an extension of the cap and pause measure that were originally introduced through the Budget Measures Act.

Human rights implications

The amendments engage the following human rights:

Rights of the child

The rights of the child are contained in the Convention on the Rights of the Child (CRC).

Article 3 of the CRC requires that, in all actions concerning children, the best interests of the child shall be a primary consideration.

To the extent that the amendments engage the rights of the child, it does not limit those rights as it maintains the provision of payments to assist the affordability of child care for families.

Right to social security

Providing additional payments to families in the context of childcare benefits, to an extent, also engages the right to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), as well as article 26 of the CRC, which specifically recognises the right of a child to benefit from social security.

The right to social security in article 9 of the ICESCR requires a social security system to be established and that a country must, within its 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 26 of the CRC requires countries to recognise the right of the child to benefit from social security. Benefits should take into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child.

The right to social security is not absolute and may be subject to permissible limitations. Article 4 of the ICESR provides that rights in the Covenant may be subject to limitations that are determined by law which are compatible with the nature of these rights and are solely for the purpose of promoting the general welfare in a democratic society.

According to the Committee on Economic, Social and Cultural Rights, the right to social security includes the right not to be subject to arbitrary and unreasonable restrictions of existing social security coverage. ^[6] Any removals in entitlements must be justified in line with Article 4 in the context of the full use of the maximum available resources of the State party. ^[7]

The Government considers that maintaining the current cap on child care rebate payments and the pausing of indexation of child care rebate payments until 1 July 2017 is a reasonable, necessary and proportionate measure to ensure that the payments can continue to be realised for present and future generations, and the measure is in the interest of the general public and Australia's economic position.

Among other reasons, the effect of pausing indexation on child care rebate payments until 1 July 2017 will be, in relation to each child, only a small amount. The cap of a maximum of $7,500 per financial year is currently set out in the legislation; the maximum amount of child care rebate payments is not being reduced through this Schedule.

Conclusion

To the extent that the amendments engage the rights of the child and to the extent it engages and places any limitation on the right to social security, such limitation is reasonable, necessary and proportionate to achieving a legitimate aim.

The amendments are compatible with human rights.

Schedule 9 - Indexation - family tax benefit, parental leave pay and dad and partner pay amounts

These 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

These amendments will pause indexation of certain higher income limits until 30 June 2017. The indexation pauses will apply to the family tax benefit Part A higher income free area, the family tax benefit Part B primary earner income limit, and the parental leave pay and dad and partner pay individual income limits.

The Schedule also includes amendments to pause indexation of the family tax benefit end of year supplements until 30 June 2017.

Maintaining the higher income limits and supplement rates at their current levels until 30 July 2017 will ensure that Government assistance is targeted to low and middle-income families. This measure will result in savings and ensure that family and parental payments are sustainable into the future.

Human rights implications

These amendments are likely to engage the following human right:

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'. That right requires a social security system to be established, and states that a country must, within its 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 26 of the Convention on the Rights of the Child (CRC) ensures that right to 'every child' and requires that 'the benefits should, where appropriate, be granted, taking into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child'.

These amendments maintain the current income test that applies to the higher income limits for family and parental payments. These amendments will not affect the assistance currently provided to low and middle-income families.

There may be families on higher incomes who do experience a reduction in family tax benefit Part A, or who cease to be eligible for assistance if their income exceeds:

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$94,316 plus $3,796 for each child after the first - the family tax benefit Part A higher income free area; or

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$150,000 - the family tax benefit Part B primary earner income limit, paid parental leave and dad and partner pay income limit.

Families at these income levels are considered to have reasonable levels of private income which would enable them to maintain their current living standards.

Maintaining supplements at their current rates until 30 June 2017 ($726.35 for each family tax benefit Part A child, and $354.05 for each family tax benefit Part B family) supports the sustainability of the family assistance program, without reducing assistance provided to low and middle-income families. Indexation will continue to apply to all other components of family tax benefit, ensuring that fortnightly rates continue to increase each year, and assist families with the direct cost of raising children.

Conclusion

These amendments are compatible with human rights because they advance the protection of human rights and, to the extent that these changes limit access to family and parental payments, these limitations are reasonable and proportionate.

Schedule 10 - Reduction of period for temporary absence from Australia

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 amendments

This Schedule makes amendments to the allowed period of temporary absence from Australia for accessing certain family and parental payments. The period of allowed temporary absence will be reduced from three years to 56 weeks. The amendments will apply to individuals eligible for family tax benefit Part A and Paid Parental Leave.

Exemptions will apply to allow some individuals to continue to access payments while overseas for up to three years. Exemptions will apply to individuals who are members of the Australian Defence Force or Australian Federal Police and who are deployed overseas, assisted by the Medical Treatment Overseas Program, or unable to return to Australia for a specified reason (such as a serious accident, or natural disaster).

Human rights implications

These amendments are likely to engage the following human right:

Right to social security

The amendment to reduce the period of temporary period of absence to 56 weeks continues to allow families to access family and parental payments for a reasonable period of time while overseas. The 56-week period ensures that those individuals who may be overseas for one year for work reasons have time to return to Australia before ceasing to be eligible for family assistance or parental payments.

The amendments also continue to allow for a reasonable period of access while overseas as families can become eligible for these payments again if they return to Australia for six weeks or more. The 56-week time period remains more than the maximum six-week period allowed for other payments of government assistance while a person is overseas.

Exemptions to the 56-week rule will allow certain individuals who are temporarily absent from Australia to remain eligible for family and parental payments for up to three years. Exemptions will apply to individuals who are members of the Australian Defence Force or Australian Federal Police who are on an overseas deployment. Exemptions for family assistance will also apply to individuals accessing Government-funded medical treatment under the Medical Treatment Overseas Program, and individuals who are unable to return to Australia due to circumstances out of their control. Exemptions for parental payment purposes would be available in circumstances to be prescribed under the Paid Parental Leave Rules.

Conclusion

These amendments are compatible with human rights because they advance the protection of human rights and, to the extent that these changes limit access to family and parental payments, these limitations are reasonable and proportionate.

Schedule 11 - Extending the deeming rules to account-based income streams

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 legislative amendments

This Schedule will change the social security and veterans' entitlements income test treatment of account-based superannuation income streams for new products assessed.

For account-based income stream products assessed from 1 January 2015, the deeming provisions will apply. In effect, the deeming rates will apply to the combined value of a person's financial assets, including the current account balance of any account-based income streams, to calculate the amount of deemed income that is to be assessed under the income test to determine a person's pension entitlement.

Under the current income test rules for account-based income streams, income received by a person is reduced by an amount reflecting 'return of capital'. This amount is calculated by purchase price by the person's life expectancy at purchase. These rules often result in little or no income being assessed for these products and, accordingly, higher rates of income support payments and social security outlays.

The current income test rules favour people who can only afford to draw down the minimum amount from their income stream each year. Many of these people have no income from their income stream assessed against their pension.

People who draw down significantly larger amounts, including those who need to, would be better off under deeming rules compared to the current income test rules.

The change will improve the sustainability and equity of the income support system. It will assess financial investments held within account-based income streams in the superannuation environment in the same way as the majority of financial investments held outside of the superannuation system.

Account-based income streams held by income support recipients immediately before 1 January 2015 are grandfathered, and continue to be assessed under existing income test rules.

Human rights implications

From 1 January 2015, this change to the social security income test treatment for account-based income streams will affect account-based income streams held by new income support recipients, current income support recipients who purchase a new account-based income stream, or people whose partners are receiving income support.

These people will have their account-based income stream assessed on the same basis as similar financial investments under the current income test deeming rules.

A proportion of these people will receive a higher level of income support under the change, or receive the same amount of income support.

Another proportion will receive lower income support than they otherwise would have under the current rules. However, it is the same amount of income support that an identical person would receive if the assets backing the account-based income stream were held directly in financial investments.

The change will improve the equity of the income testing of social security payments for account-based income streams.

Conclusion

The Schedule is compatible with human rights because it does not limit or preclude people from gaining or maintaining access to social security.

There are no human rights implications.

Parts 2, 4, 5 and 6 of Schedule 12 (Miscellaneous amendments)

These 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

This Schedule makes clarifying and technical amendments to portfolio legislation, consistent with intended policy.

Part 2 - Time periods and FTB reconciliation conditions

Amendments are made to simplify current reconciliation provisions for family tax benefit, addressing some gaps and unintended consequences in the operation of these provisions. For consistency, minor amendments are also made to the review time limit provisions to reflect recent changes that reduced the period allowed for lodgement of relevant tax returns.

Part 4 - Use of tax file numbers

Minor amendments are made to the tax file number (TFN) provisions in the family assistance law. These provisions simplify the TFN provisions, including to enable the Commissioner of Taxation to provide the Secretary with income information about an individual who is not required to lodge a tax return using TFNs as the primary matching key.

Part 5 - Child support amendments

Child support administration involves the Department of Social Services with responsibility for child support policy and the Department of Human Services with responsibility for child support service delivery. Minor amendments of a technical nature to the child support law will ensure that the provisions operate consistently with these arrangements for child support administration.

Part 6 - Other amendments

This Schedule also makes some minor adjustments to provisions relating to the newborn supplement and newborn upfront payment of family tax benefit and the stillborn baby payment, which commence on 1 March 2014, including to:

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ensure that the newborn upfront payment of family tax benefit is treated in the same way as the newborn supplement where the relevant tax returns have not been lodged on time and the non-lodger provisions apply;

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ensure that percentage determinations that allow family tax benefit to be split in blended families and in certain situations where couples separate, are taken into account in determining eligibility for the newborn supplement and amount of the newborn upfront payment;

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allow a claim for stillborn baby payment to be made more than 52 weeks after the birth of the stillborn child in further specified circumstances;

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clarify that the higher rate of newborn supplement is available in relation to the first child aged less than one year who is entrusted to the care of an individual or their partner;

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ensure that a stillborn child in a multiple birth is taken into account in determining the amount of newborn supplement.

Human rights implications

This Schedule is likely to engage the following human rights:

Right to social security

Parts 2, 4, 5 and 6

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), and article 26 of the Convention on the Rights of the Child (CRC) recognise the right to social security.

As the amendments are of a minor or technical nature and are designed to ensure the legislation is consistent with the intended policy, this right is advanced by the amendments, and to the extent that the right is limited, the limitations are reasonable and proportionate.

Right to privacy

Part 4 - Use of tax file numbers

The disclosure of personal information engages the right to privacy under article 17 of the International Covenant on Civil and Political Rights (ICCPR). The protection may be limited where such limitations are authorised by law and are not arbitrary.

The increase to the tax free threshold has increased the number of family tax benefit recipients who are not required to lodge a tax return. This Schedule introduces simpler TFN provisions which more closely align with the model of TFN provisions used in other portfolio acts. The information is relevant for determining the adjusted taxable income of individuals who are not required to lodge tax returns and may be relevant in verifying eligibility for family assistance or to determine an individual's correct rate of payment. The provisions also deal with the transfer of TFN data for debt related purposes. This information is currently provided for individuals who are required to lodge a tax return.

The disclosure of personal information does not treat any group of persons differently, but rather, ensures that income verification at the time of reconciliation for all recipients of family assistance includes relevant information available from the Commissioner of Taxation.

Conclusion

These amendments are compatible with human rights because they advance the protection of human rights and, to the extent that these changes limit access to family assistance, these limitations are reasonable and proportionate.

Part 3 of Schedule 12 (Protection of amounts under the National Disability Insurance Scheme)

These 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

This measure amends the National Disability Insurance Scheme Act 2013 (the NDIS Act) to ensure that amounts paid under the National Disability Insurance Scheme in relation to funding for supports are inalienable. It also seeks to prevent third parties from seeking to recover debts by obtaining a garnishee order over bank accounts kept for the purpose of managing funding for supports under the National Disability Insurance Scheme. The amendments therefore extend protection to participants to ensure that the funding for the reasonable and necessary supports under their individual support plans can only be used that purpose.

Human rights implications

Article 19 of the Convention on the Rights of Persons with Disabilities (CRPD) recognises the equal right of all persons with disabilities to live in the community, with choices equal to others, and requires that effective and appropriate measures be taken to facilitate full enjoyment by persons with disability of this right and their full inclusion and participation in the community.

Article 26 of the CPRD provides that nation states should take effective and appropriate measures to enable people with disability to attain and maintain maximum independence, full physical, mental, social and vocational ability, and full inclusion and participation in all aspects of life. The Article requires that parties should organise, strengthen and extend comprehensive habilitate and rehabilitation services and programmes, particularly in the areas of health, employment, education and social services. Parties should ensure that these services: are available at the earliest possible stage; are based on a multidisciplinary assessment of an individual's needs and strengths; support participation in society; are voluntary; and are available as close as possible to people in their own communities.

The NDIS will also provide opportunities for people with disability to take part in cultural life, consistent with Article 15 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Participant plans

Consistent with the provisions of Article 26 outlined above, the NDIS Act provides for the provision and funding of reasonable and necessary supports for participants in the National Disability Insurance Scheme if:

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the support will assist the participant to pursue the goals, objectives and aspirations included in the participant's statement of goals and aspirations;

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the support will assist the participant to undertake activities, so as to facilitate the participant's social and economic participation;

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the support represents value for money in that the costs of supports are reasonable, relative to both the benefits being achieved and the cost of alternative supports;

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the support will be, or is likely to be, effective and beneficial for the participant, having regard to current good practice;

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the funding or provision of the support takes account of what it is reasonable to expect families, carers, informal networks and the community to provide;

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the support is most appropriately provided through the National Disability Insurance Scheme, and is not more appropriately provided through other general systems of service delivery or support services offered by a person, agency or body, or systems of service delivery or support services offered:

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as part of a universal service obligation; or

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in accordance with reasonable adjustments required under a law dealing with discrimination on the basis of disability;

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the support is not specified in the National Disability Insurance Scheme rules as a support that will not be funded or provided under the National Disability Insurance Scheme; and

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the funding or provision of the support complies with the methods or criteria (if any) specified in the National Disability Insurance Scheme rules for deciding the reasonable and necessary supports that will be funded or provided under the National Disability Insurance Scheme.

Plans are to be approved by the CEO in accordance with prescribed rules (disallowable instruments) and remain in effect until replaced by another plan, or they are revoked. Participants must be provided with a copy of the plan.

The provision and funding of support for participants are individualised and articulated through participant plans. The NDIS Act (sections 31 to 41) requires that preparation, review and replacement of plans, and management of funding and supports provided under them should:

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be individualised;

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be directed by the participant;

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where relevant, consider and respect the role of family, carers and other persons who are significant in the life of the participant;

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where possible, strengthen and build capacity of families and carers to support participants who are children;

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consider the availability to the participant of informal support and other support services generally available to any person in the community;

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support communities to respond to the individual goals and needs of participants;

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be underpinned by the right of the participant to exercise control over his or her own life;

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advance the inclusion and participation in the community of the participant with the aim of achieving his or her individual aspirations;

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maximise the choice and independence of the participant;

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facilitate tailored and flexible responses to the individual goals and needs of the participant; and

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provide the context for the provision of disability services to the participant and where appropriate coordinate the delivery of disability services where there is more than one disability service provider.

These individual plans must be approved by the CEO in accordance with prescribed rules and remain in effect until replaced by another plan, or the plan is revoked.

Managing plans

Funding for supports provided under plans must be managed. This means:

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purchasing the supports identified in the plan;

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receiving and managing any funding provided by the Agency; and

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acquitting any funding provided by the Agency.

Plans may be managed by the participant, by a registered plan management service provider, by the Agency, or by a plan nominee. In most cases, the plan management arrangements put in place will be those requested by the participant.

Payments (known as NDIS amounts) will be paid either to a participant or to the person managing the participant's plan. National Disability Insurance Scheme rules will govern the timing and manner of payments. NDIS amounts must be spent in accordance with the participant's plan, and records of payments and receipts retained for a period to be specified under the National Disability Insurance Scheme rules.

These amendments to the NDIS Act ensure that amounts paid in relation to funding for supports are inalienable. They also seek to prevent third parties from seeking to recover debts by obtaining a garnishee order over bank accounts kept for the purpose of managing funding for supports under the National Disability Insurance Scheme. The amendments therefore extend protection to participants to ensure that the funding for the reasonable and necessary supports under their plans can only be used that purpose.

Conclusion

These amendments are compatible with human rights and extend protections to persons with disabilities that have been afforded by the National Disability Insurance Scheme.

Minister for Social Services, the Hon Kevin Andrews MP