Senate

Revised Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

Chapter 13 Debt recovery

Outline of chapter

Schedule 13 of the Bill introduces departure prohibition orders so that, in certain cases where a person does not have a satisfactory arrangement in place to repay their social security, family assistance, paid parental leave or student assistance debt(s), they may be prevented from leaving Australia without either having wholly paid their debt(s) or making satisfactory arrangements to pay. This system will closely mirror the existing departure prohibition order system in place under the Child Support (Registration and Collection) Act 1988 (Child Support Registration and Collection Act). Targeted debtors will largely comprise ex-recipients of social welfare payments but may also apply to other social welfare payment recipients in limited circumstances.

Background

This Part amends the A New Tax System (Family Assistance) (Administration) Act 1999 (Family Assistance Administration Act), Paid Parental Leave Act 2010 , Social Security Act 1991 and Student Assistance Act 1973 to introduce departure prohibition orders to prevent debtors under these Acts from leaving the country. Departure prohibition orders will not be made without consideration of all the circumstances and only where the Secretary believes on reasonable grounds that it is appropriate to do so. Where a departure prohibition order is in force, the Secretary can vary or revoke the order, or can issue a departure authorisation certificate allowing the person to depart the country for a specified period of time.

Departure prohibition orders were introduced into the Child Support Registration and Collection Act in 2000. Currently, there are approximately 120,000 child support customers with child support debts. However, there are only some 2,000 departure prohibition orders in place - that is, departure prohibition orders apply to less than two per cent of all debtors. Departure prohibition orders are only invoked when all reasonable administrative actions have been undertaken to recover the child support debt from the paying parent.

While the number of social welfare payment debtors is significantly higher than the number of child support debtors, it is anticipated that the departure prohibition orders will only be issued in the most extreme social welfare payment debt cases.

Explanation of the changes

Amendments to Family Assistance Administration Act

Item 1 consequentially adds a note to the definition of Australia in subsection 3(1), alerting the reader that in new Division 5 of Part 4 of the Family Assistance Administration Act (about departure prohibition orders, inserted by item 3), Australia has an extended meaning.

Similar notes are inserted regarding the definition of Australia into section 6 of the Paid Parental Leave Act at item 5 , Subsection 23(1) of the Social Security Act at item 10 (and item 11 renumbers the existing note to this definition 'note 2'), and subsection 3(1) of the Student Assistance Act at item 14 .

Item 2 inserts two new definitions into subsection 3(1) of the Act - departure authorisation certificate and departure prohibition order .

Similar definitions are also inserted into section 6 of the Paid Parental Leave Act at item 6 , subsection 23(1) of the Social Security Act at item 12 , and subsection 3(1) of the Student Assistance Act at item 15 .

Item 2 adds new Division 5 - Departure prohibition orders to Part 4 of the Act.

Similarly, item 8 adds to Part 4-3 to the Paid Parental Leave Act new Division 7A - Departure prohibition orders. Item 7 amends the relevant Guide within the Paid Parental Leave Act to mention departure prohibition orders. Item 13 adds to Chapter 5 of the Social Security Act new Part 5.5 - Departure prohibition orders. Item 16 adds to Part 6 of the Student Assistance Act new Division 4 - Departure prohibition orders.

Subdivision A - Secretary may make departure prohibition orders

Section 102A - Secretary may make departure prohibition orders

New section 102A outlines when the Secretary can make a departure prohibition order prohibiting a person from departing from Australia for a foreign country. An order may only be made, in a form approved by the Secretary, in respect of a person if the following conditions are met:

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the person has one or more debts to the Commonwealth under Part 4 of the Act; and

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there are not arrangements satisfactory to the Secretary in place for the one or more debts to be wholly paid; and

•

the Secretary believes on reasonable grounds it is desirable to make the order to ensure the person does not leave Australia for a foreign country without having wholly paid the debt(s) or there being arrangements in place satisfactory to the Secretary for the debt(s) to be wholly paid.

Before making an order, the Secretary must have regard to certain matters, including:

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the person's capacity to pay the debt(s);

•

whether any debt recovery action has been taken and the outcome of the recovery action;

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the length of time the debt(s) have remained unpaid; and

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any other matters the Secretary considers appropriate.

The provision will apply to debts arising from time to time.

These provisions are mirrored in the Paid Parental Leave Act, Social Security Act and Student Assistance Act, albeit recognising the differences in the debts covered by each Act. In particular:

•

New section 200A of the Paid Parental Leave Act provides that a departure prohibition order can be issued where the person has one or more debts to the Commonwealth under that Act. Debts under section 168 of that Act are to be disregarded for the purposes of making departure prohibition orders.

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New section 1240 of the Social Security Act provides that a departure prohibition order can be issued where the person has one or more debts to the Commonwealth under the social security law.

•

New section 43G of the Student Assistance Act states that a departure prohibition order can be made if the person has one or more debts to the Commonwealth under Part 6 of that Act.

Subdivision B - Departure from Australia of debtors prohibited

Section 102B - Departure from Australia of debtors prohibited

New section 102B is a criminal offence provision stating that a person must not depart from Australia for a foreign country if:

•

a departure prohibition order in respect of the person is in force, and the person knows that the order is in force (or is reckless as to whether the order is in force); and

•

the person's departure is not authorised by a departure authorisation certificate, and the person knows that the departure is not authorised by such a certificate (or is reckless as to whether the departure is authorised by such a certificate).

The penalty for breaching this provision is 12 months' imprisonment.

This offence provision is mirrored in new section 200B of the Paid Parental Leave Act, new section 1241 of the Social Security Act and new section 43H of the Student Assistance Act.

Subdivision C - Other rules for departure prohibition orders

Section 102C - Notification requirements for departure prohibition orders

New section 102C outlines the notification requirements where the Secretary makes a departure prohibition order in respect of a person.

Firstly, the Secretary must notify the person in respect of whom a departure prohibition order is made that the departure prohibition order has been made, and must do so in an approved form. In light of the consequences to a person of a departure prohibition order, the Secretary must notify the person that an order has been made as soon as practicable.

Secondly, the Secretary must give the Secretary of the Department administering the Migration Act 1958 ('the Migration Secretary') a copy of the order and information likely to assist in identifying the person, as soon as practicable. However, this does not apply if the person is an Australian citizen. This provision enables the Migration Secretary to establish whether a person in respect of whom the departure prohibition order has been made is the subject of a deportation order under the Migration Act 1958 . A departure prohibition order and a deportation order cannot operate concurrently as the deportation order would prevail (under new subsection 102D(2)). The Migration Secretary needs to know about a departure prohibition order to ensure that there is no confusion among enforcement officers as to which order prevails. However, as an Australian citizen cannot be deported, the Migration Secretary does not need to know if a departure prohibition order is made in respect of a citizen.

The Secretary must also give a copy of the order, and information likely to assist in identifying the person, to such other persons as the Secretary considers appropriate in the circumstances, as soon as practicable. A legislative instrument will specify the persons to whom the Secretary must provide a copy of the order. Orders will be provided to the Comptroller-General of Customs, the Commissioner of the Australian Federal Police and the Secretary of the Department of Foreign Affairs and Trade.

This provision is mirrored in new section 200C of the Paid Parental Leave Act, new section 1242 of the Social Security Act and new section 43J of the Student Assistance Act.

Section 102D - Operation of departure prohibition order

Under new section 102D, a departure prohibition order is in force from the time it is made until it is revoked or set aside by a court. However, as mentioned above, a departure prohibition order is not in force during any period when a deportation order in respect of the person is in force.

This operation of departure prohibition orders is also reflected in new section 200D of the Paid Parental Leave Act, new section 1243 of the Social Security Act and new section 43K of the Student Assistance Act.

Section 102E - Revocation and variation of departure prohibition orders

New section 102E addresses the situations in which a departure prohibition order can be revoked or varied. An order must be revoked if:

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the person no longer has any debts to the Commonwealth under Part 4 of the Act; or

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there are arrangements, satisfactory to the Secretary, for the debt(s) to be wholly paid; or

•

the Secretary is satisfied that the debt(s) are completely irrecoverable.

A departure prohibition order may also be revoked or varied if the Secretary considers it desirable to do so. Revocation or variation may be on application by the person or on the Secretary's own initiative. A departure prohibition order may be varied if there was an error, such as a typographical mistake, in the original departure prohibition order.

These provisions are reflected in new section 200E of the Paid Parental Leave Act, new section 1244 of the Social Security Act and new section 43L of the Student Assistance Act, noting the differences in the debts the Acts cover, detailed above. In particular:

•

For the purposes of the Paid Parental Leave Act, debts under section 168 of that Act are to be disregarded for the purposes of revoking or varying departure prohibition orders.

Section 102F - Notification requirements for revocations and variations

New section 102F requires the Secretary to notify the person concerned as soon as practicable if the Secretary revokes or varies the departure prohibition order (whether on application or on the Secretary's initiative). If the person has applied for a revocation or variation, the Secretary must also notify the person if the Secretary refuses to revoke or vary the order. Each person originally given a copy of the departure prohibition order (as described above) must be notified if the order is revoked or varied.

This provision is mirrored in new section 200F of the Paid Parental Leave Act, new section 1245 of the Social Security Act and new section 43M of the Student Assistance Act.

Subdivision D - Departure authorisation certificates

Departure authorisation certificates allow a person to depart Australia for a foreign country for a specified period, despite a departure prohibition order being in force.

Section 102G - Application for departure authorisation certificate

Under new section 102G, a person in respect of whom a departure prohibition order is in force may apply in the approved form for a departure authorisation certificate authorising them to depart Australia for a foreign country.

This provision is mirrored in new section 200G of the Paid Parental Leave Act, new section 1246 of the Social Security Act and new section 43N of the Student Assistance Act.

Section 102H - When Secretary must issue departure authorisation certificate

New section 102H addresses when the Secretary must issue a departure authorisation certificate on application by a person. A certificate must be issued if the Secretary is satisfied that:

•

it is likely that the person will depart and return to Australia within an appropriate period; and

•

revocation of the departure prohibition order is likely within an appropriate period; and

•

security for the person's return to Australia is not necessary.

If the Secretary is not satisfied of these circumstances, a departure authorisation certificate must instead be issued if:

•

the person has given security for their return to Australia under new section 102J; or

•

if the person is unable to give security, the Secretary is satisfied either that the certificate should be issued on humanitarian grounds, or that refusing to issue the certificate would be detrimental to Australia's interests.

The circumstances in which the Secretary must issue departure authorisation certificates are reflected in new section 200H of the Paid Parental Leave Act, new section 1247 of the Social Security Act, new section 43P of the Student Assistance Act.

Section 102J - Security for person's return to Australia

New section 102J provides that a person may give such security as the Secretary considers appropriate for their return to Australia by an agreed date specified in the departure authorisation certificate. Security can be in the form of a bond, a deposit or by other means and will be forfeited to the Commonwealth if the person does not return to Australia by the agreed date. However, the Secretary may substitute a later day for the person's return to Australia on application by the person or on the Secretary's own initiative. In the case where a person has applied for the substitution of a later day, the Secretary may refuse to substitute a later day if the person refuses to increase the value of the security appropriately, or to give such further security as the Secretary considers appropriate, or the Secretary considers it would not be appropriate to substitute the later day.

The provision is mirrored in new section 200J of the Paid Parental Leave Act, new section 1248 of the Social Security Act and new section 43Q of the Student Assistance Act.

Section 102K - What departure authorisation certificate must authorise

New section 102K provides that a departure authorisation certificate is to authorise the person to leave Australia on or before the seventh day after a day specified in the departure authorisation certificate. That day must be after, but no more than seven days after the departure authorisation certificate is issued.

This is reflected in new section 200K of the Paid Parental Leave Act, new section 1249 of the Social Security Act and new section 43R of the Student Assistance Act.

Section 102L - Notification requirements for departure authorisation certificates

Under new Section 102L, if the Secretary issues a departure authorisation certificate, a copy of the certificate must be given, as soon as practicable to the person and to each person to whom a copy of the departure prohibition order was given under subsection 102C(4) and (5).

The Secretary is also required to notify a person, as soon as practicable, after refusing to issue a certificate.

These notification requirements are reflected in new section 200L of the Paid Parental Leave Act, new section 1250 of the Social Security Act and new section 43S of the Student Assistance Act.

Section 102M - Notification requirements for substituted days

Under new section 102M, if the Secretary substitutes a later day for the person's return to Australia, the person and each person to whom a copy of the departure prohibition order was given under subsection 102C(4) or (5) must be notified, as soon as practicable.

Where a person applies to substitute a later day for the person's return to Australia which is refused by the Secretary, the Secretary must give notice of the refusal to the person, as soon as practicable.

Notification requirements for substituted days are contained in new section 200M of the Paid Parental Leave Act, new section 1251 of the Social Security Act and new section 43T of the Student Assistance Act.

Subdivision E - Appeals and review in relation to departure prohibition orders and departure authorisation certificates

Section 102N - Appeals to courts against making of departure prohibition orders

Under new section 102N, a person aggrieved by the making of a departure prohibition order may appeal to the Federal Court of Australia or the Federal Circuit Court of Australia against the making of the order. This has effect subject to Chapter III of the Constitution.

The Secretary's power to make a departure prohibition order is onerous and discretionary. The conditions required for the Secretary to be satisfied that a departure prohibition order should be made are prescribed in new section 102A. New section 102A provides a list of prescriptive matters that the Secretary must take into consideration.

The Secretary's power to make a departure prohibition order is a 'last resort' position following lengthy, unsuccessful efforts to engage with the debtor to enter into satisfactory arrangements for repayment of the debt. This policy intent will be set out in the Guide to Social Security Law to guide the Secretary's decision making process.

The Federal Court of Australia or the Federal Circuit Court of Australia has greater capacity to conduct judicial reviews of the Secretary's discretionary legislative power to ensure that the decision was properly made at that point in time and met the required legislative threshold. This position is based on jurisprudence developed by the Federal Court in the context of taxation departure prohibition orders which indicates that a court has greater capacity, under similar review provisions, to inquire into the reasonableness of the grounds for the order and thus into factual matters, than a court undertaking a purely judicial review.

Under new section 102R a person against whom a departure prohibition order has been made can seek merits review of a refusal by the Secretary to: revoke or vary a departure prohibition order; or issue a departure authorisation certificate to allow a temporary absence from Australia.

This provision is reflected in new section 200N of the Paid Parental Leave Act, new section 1252 of the Social Security Act and new section 43U of the Student Assistance Act.

Section 102P - Jurisdiction of courts

New section 102P clarifies that the jurisdiction of a court under section 102N must be exercised by a single Judge.

This is mirrored in new section 200P of the Paid Parental Leave Act, new section 1253 of the Social Security Act and new section 43V of the Student Assistance Act.

Section 102Q - Orders of court on appeal

Under new section 102Q, a court hearing an appeal under section 102N against the making of a departure prohibition order may, in its discretion, either make an order setting aside the order or dismiss the appeal.

This rule also appears in new section 200Q of the Paid Parental Leave Act, new section 1254 of the Social Security Act and new section 43W of the Student Assistance Act.

Section 102R - Review of decisions

New subsection 102R(1) allows applications to be made to the Administrative Appeals Tribunal (AAT) for review of a decision of the Secretary under section 102E (Revocation and variation of departure prohibition orders), 102H (Where Secretary must issue departure authorisation certificate) or 102J (Security for a person's return to Australia).

New subsection 102R(2) clarifies that, despite any provision in Part 5 (Review of decisions) of the Family Assistance Administration Act, that Part does not apply in relation to any decision of the Secretary under this Division. In other words, any decision of the Secretary regarding departure prohibition orders is not subject to the review provisions outlined in Part 5 of the Family Assistance Administration Act.

These provisions are reflected in the Paid Parental Leave Act, Social Security Act and Student Assistance Act. In particular:

•

New subsection 200R(2) of the Paid Parental Leave Act states that Chapter 5 (Review of decisions) does not apply in relation to any decision of the Secretary about departure prohibition orders.

•

Similarly, new subsection 1255(2) of the Social Security Act states that Part 4 (Internal review of decisions) and Part 4A (Review by the AAT) of the Social Security (Administration) Act 1999 do not apply to any decision of the Secretary about departure prohibition orders.

•

New subsection 43X(2) of the Student Assistance Act states that Part 9 (Review of decisions) does not apply in relation to any decision by the Secretary about departure prohibition orders.

It is anticipated that due to the minimal number of departure prohibition orders expected to be issued, appeals to the AAT will be low in number.

Subdivision F - Enforcement

Section 102S - Powers of officers of Customs and members of the Australian Federal Police

New section 102S allows Australian Border Force officers or members of the Australian Federal Police to do specified things if they believe on reasonable grounds that a person is about to depart Australia where a departure prohibition order is in force but their departure is not authorised by a departure authorisation certificate.

The officer or member may take steps as are reasonably necessary to prevent the person's departure, including, but not limited to, steps to prevent the person going on board, or to remove the person from, a vessel or aircraft in which the officer or member believes on reasonable grounds the departure will take place. In addition, the officer or member may also require the person to answer questions or produce documents to the officer or member for the purposes of working out whether a departure prohibition order in respect of the person is in force and, if an order in respect of a person is in force, whether the person's departure is authorised by a departure authorisation certificate.

Refusal or failure to comply with a requirement to answer question or produce documents is an offence, attracting a penalty of 30 penalty units. However, no offence exists where the person answers the questions or produces documents to the extent they are capable of doing so.

Subsection 102S(4) provides for an exception, preventing a person committing an offence of refusing or failing to comply with a requirement to answer questions or produce documents for the purposes of an officer working out whether a person is prohibited from leaving the country under a DPO. There is no offence committed if a person answers the question or produces the document to the extent that the person is capable (the exception). Subsection 13.3(3) of the Criminal Code provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification provided by the law creating an offence bears an evidential burden in relation to that matter. This is explicitly noted at subsection 102S(4).

The powers of Australian Border Force officers and the Australian Federal Police are mirrored in new section 200S of the Paid Parental Leave Act, new section 1256 of the Social Security Act and new section 43Y of the Student Assistance Act.

Section 102T - Privilege against self-incrimination

New section 102T provides that an individual is not excused from the requirement to answer questions or produce documents on the basis that to do so might tend to incriminate them or expose them to a penalty, as this information is essential for ensuring the effectiveness of the scheme. It is crucial that an officer can obtain information from an individual, through answers to questions and production of documents such as a departure authorisation certificate, to determine whether a person should be prevented from leaving the country under a departure prohibition order.

However, the answers given and documents produced and any information, document or thing obtained as an indirect consequence of answering the questions or producing the documents are not admissible in evidence against the individual in any criminal proceedings, aside from proceedings under section 137.1 (False or misleading information) or section 137.2 (False or misleading documents) of the Criminal Code Act 1995 .

These provisions are mirrored in new section 200T of the Paid Parental Leave Act, new section 1257 of the Social Security Act and new section 43Z of the Student Assistance Act.

Section 102U - Production of authority to depart

Under new section 102U, an Australian Board Force officer or a member of the Australian Federal Police may request a person to provide a copy of a departure authorisation certificate if the person is about to leave Australia for a foreign country.

If the person refuses or fails to comply with this request, an offence of strict liability is committed, attracting a penalty of five penalty units. Strict liability under the Criminal Code Act 1995 applies to this provision, rather than fault elements applying to all physical elements of the offence. This is because of:

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the difficulty the prosecution would have in proving fault (especially knowledge or intention) in this case;

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the fact that the offence is minor (only five penalty units); and

•

the fact that the offence does not involve dishonesty or other serious imputation affecting the person's reputation.

This provision also appears in new section 200U of the Paid Parental Leave Act, new section 1258 of the Social Security Act and new section 43ZA of the Student Assistance Act.

Subdivision G - Interpretation

Section 102V - Interpretation - departure from Australia for foreign country

New section 102V provides the interpretative rule for when a person departs from Australia for a foreign country. This is to be interpreted as the person's departure from Australia for a foreign country, whether or not the person intends to return to Australia.

This interpretative provision is mirrored in new section 200V of the Paid Parental Leave Act, new section 1259 of the Social Security Act and new section 43ZB of the Student Assistance Act.

Section 102W - Meaning of Australia

New section 102W states that, for the purposes of Division 5, Australia, when used in a geographical sense, includes the external Territories. In relation to the other Acts:

•

This provision is replicated in new section 200W of the Paid Parental Leave Act.

•

The provision is also replicated in new section 43ZC of the Student Assistance Act.

•

New section 1260 of the Social Security Act also replicates section 102W, but clarifies that the definition of external Territory in subsection 23(1) of the Social Security Act does not apply. Instead, the term external territory has the meaning given by section 2B of the Acts Interpretation Act 1901, which has a wider meaning.

Item 4 inserts a note after the heading to Part 5 - Review of decisions, clarifying that Part 5 does not apply in relation to any decision of the Secretary under Division 5 of Part 4 of the Family Assistance Administration Act about departure prohibition orders.

Further amendments to the Paid Parental Leave Act

Item 9 inserts a note after the heading to Chapter 5 - Review of decisions, to the effect that this Chapter does not apply in relation to any decision of the Secretary about departure prohibition orders under Division 7A of Part 4-3.

Part 3 - Application provisions

Item 17 ensures that amendments made by Part 1 apply to debts that arise on or after the commencement of this item and debts that arose before commencement, but were outstanding immediately prior to commencement.

Part 2 - Removal of 6-year limit on debt recovery

Summary

This Part removes the six-year limit on debt recovery currently in place for social security, family assistance and paid parental leave debts. Removing this limitation will prevent debts from 'ageing' out of recovery, and will improve the ability to recover old debts. Debt recovery will be able to commence at any time.

Background

This Part amends the Social Security Act, Family Assistance Administration Act and Paid Parental Leave Act to remove the current six-year limit on the commencement of debt recovery. The amendments will mean that relevant methods of debt recovery, including deductions from payment, legal proceedings and garnishee arrangements, can commence at any time.

Explanation of the changes

Amendments to the Family Assistance Administration Act

Item 18 repeals section 86 to remove the time limits for debt recovery action through deductions from a debtor's family tax benefit, setting off family assistance against a debt owed, and setting off debts of an approved child care service against child care service payments.

Item 19 repeals subsections 87(3) and (4) to remove the time limit for debt recovery action to commence through the application of an income tax refund payable to the person.

Items 20 and 21 amend section 88 by repealing subsections 88(2) to (6), thus removing the six-year time limit on commencing legal proceedings to recover outstanding debts and making technical amendments.

Item 22 repeals section 90 to remove the time limits on debt recovery action through garnishee notice.

Item 23 inserts new section 93B, which clarifies that, for the purposes of Part 4 of the Family Assistance Administration Act, legal proceedings, or any debt recovery action under the Part may be commenced or taken at any time.

Item 24 repeals paragraph 95(3)(a) so that a debt will no longer be considered irrecoverable at law if the debt cannot be recovered by means of the outlined actions because the relevant time limit for recover action has elapsed, to reflect the removal of these time limits.

Amendments to the Paid Parental Leave Act

Items 25, 26 and 27 repeal notes to sections 183 and 184, which refer to time limits on debt recovery, consequential to item 11.

Item 28 repeals section 189 to remove the time limits for debt recovery by legal proceedings and garnishee notices.

Item 29 inserts new section 192A, which provides that, for the purposes of Part 4-3 of the Paid Parental Leave Act, legal proceedings, or any debt recovery action under the Part may be commenced or taken at any time.

Item 30 amends paragraph 193(3)(a) by omitting reference to a debt becoming irrecoverable at law as a result of the time limit for debt recovery action lapsing.

Amendments to the Social Security Act

Items 31 and 32 amend section 1231 by repealing subsections (2A) to (2E). This removes the six-year limitation on the recovery of debts by deductions from any social security payments or any payment of arrears of social security payments or both, and makes consequential technical amendments.

Items 33 and 34 amend section 1232 by repealing subsections (2) to (6) and making technical amendments. These amendments remove the six-year limitation on debt recovery by legal proceedings.

Item 35 amends section 1233 by repealing subsections (7A) to (7E). This removes the six-year limitation on debt recovery by garnishee notice.

Item 36 inserts new section 1234B, which clarifies that, for the purposes of Chapter 5, legal proceedings, or any debt recovery action under a provision of the Chapter, may be commenced or taken at any time.

Item 37 amends section 1236 by repealing paragraphs (1B)(a) and (aa). This amends the circumstances in which a debt is taken to be irrecoverable at law, by removing reference to debts that cannot be recovered by means of deductions, legal proceedings or garnishee notice because the relevant six-year period has elapsed or the debt cannot be recovered by means of deductions or setting off because the six-year period has elapsed under section 86 of the Family Assistance Administration Act.

Amendments to the Student Assistance Act

Item 38 inserts new section 42B, which clarifies that any debt recovery action under a provision in Part 6 of the Student Assistance Act may be taken at any time.

Part 2 - Application provisions

Items 40 to 42 clarify that the amendments made to the Family Assistance Administration Act, the Paid Parental Leave Act, the Social Security Act and the Student Assistance Act apply in relation to debts that arise on or after commencement of the items, and to debts that arose before commencement, to the extent that the debt was outstanding immediately before that commencement.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

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

Debt recovery

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

The Schedule introduces provisions in the Social Security Act 1991 , A New Tax System (Family Assistance) (Administration) Act 1999 , Paid Parental Leave Act 2010 and the Student Assistance Act 1973 , which give the Secretary power to issue departure prohibition orders (DPOs), from the later of 1 July 2016 or the day after Royal Assent, to targeted social welfare payment debtors who have outstanding debts and have failed to enter into a satisfactory repayment arrangement.

DPOs will be used to prevent targeted social welfare debtors from leaving the country to encourage payment their debt. DPOs will apply to social security, family assistance (including child care), paid parental leave and student assistance debts in the same way that DPOs have been applied against for people with child support debt.

While a DPO may be in place, the Schedule includes procedures to allow for people subject to a departure prohibition to travel overseas in specified circumstances. Departure Authorisation Certificates (DACs) may also be granted on humanitarian grounds or where the person's travel may be in Australia's best interests.

It is important to note that a debt only arises where a person receives a payment to which they were not entitled. In most circumstances, current recipients of social welfare payments with outstanding debts have their payments reduced until their debts are repaid. By comparison, ex-recipients who are no longer dependent on the social security system, have no incentive to repay their debts and may actively avoid repayment.

Debtors who are no longer eligible to receive financial support through social welfare payments are more likely to have the financial capacity to make repayments than those in receipt of social welfare payments.

The Schedule also amends the Social Security Act 1991 , A New Tax System (Family Assistance) (Administration) Act 1999 and Paid Parental Leave Act 2010 to remove the current limitation on the recovery of debt where recovery action has not been undertaken in the preceding six years. This measure will commence from the later of 1 July 2016 or the day after Royal Assent. This will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt, where there is no such limitation. Debt recovery will be able to commence at any time.

Human rights implications

The Schedule engages the following human rights:

Rights to freedom of movement

The Schedule engages the right to freedom of movement in article 13 of the Universal Declaration of Human Rights (UDHR) and article 12(2) of the International Covenant on Civil and Political Rights (ICCPR). The UDHR provides a common standard of achievements for all peoples and all nations. It sets out fundamental human rights to be universally protected.

Article 13(2) of the UDHR states that 'everyone has the right to leave any country, including his own, and to return to his country'.

Article 12(2) of the International Covenant on Civil and Political Rights (ICCPR) provides that 'Everyone shall be free to leave any country, including his own. Article 13(3) goes on to state that 'The above-mentioned rights shall not be subject to any restrictions except those which are provided by law, are necessary to protect national security, public order (ordre public), public health or morals or the rights and freedoms of others, and are consistent with the other rights recognized in the present Covenant.

Where a person has received support in the way of social welfare payment, and that person receives an excess payment to which they were not entitled, the person has a legal and moral obligation to repay those monies to the issuing body, the Commonwealth of Australia. Currently, there are virtually no consequences if the person fails to enter into an arrangement to repay those excess funds (the debt).

Where the person has the means to repay their debt, they should do so. It is considered that where a person with a debt, not in an acceptable repayment arrangement, has the means to travel overseas, their travel movements should be restricted to enable them to enter into suitable arrangements to repay of their debt. It is unreasonable that people with debts to the Commonwealth can travel feely to and from Australia without regard to repayment of the excess social welfare payments previously received, while the community is denied access to the funds being withheld by the debtor.

This Schedule seeks to correct that imbalance, and will continue to allow debtors to travel overseas where they have wholly repaid the debt, or made a satisfactory arrangement to repay the debt.

The Schedule contains provisions to allow for travel on humanitarian grounds or where the person's travel may be in Australia's best interests, through the issuance of a DAC, in spite of a DPO being in place.

Debtors will also be able to travel through the issuance of DACs where it is likely the person will depart and return to Australia within an appropriate period or where the person has given an appropriate level of security.

Therefore, the human right permitting a person to leave his country under the UDHR, and the ICCPR, is preserved and protected provided the person complies with the law (as provided under this Schedule) and makes the arrangements necessary to repay his social welfare payment debt to the country that provided him with the social support. Further, those rights are enshrined in the capacity for person to travel under a DAC on humanitarian grounds.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right to depart and enter Australia.

Right to liberty and security of the person and freedom from arbitrary detention

The Schedule does not impinge upon the article 9 of the International Covenant on Civil and Political Rights (ICCPR).

DPOs do not provide for the power of arbitrary arrest or detention, and there is no suggestion of any criminality leading to a DPO being issued. However, attempting to depart Australia while a DPO is in force, in the absence of a DAC, is a criminal offence.

A person subject to a DPO is typically taken aside by officers of the Australian Federal Police at an international port of departure, but not detained, and advised of the reasons for the DPO, and asked whether they have obtained a DAC to authorise departure notwithstanding the existence of the DPO. Further access to the point of departure will be denied if no DAC is presented, however the person is able to return to their home within Australia and undertake the necessary negotiations to revoke the DPO (by making a satisfactory repayment arrangement), offer up sufficient security or seek to satisfy conditions under which a DAC can be issued - for example, on humanitarian grounds.

The Schedule does not invoke a limit on the rights of persons to liberty within Australia, nor does it subject persons to arbitrary arrest or detention.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on a person's right to liberty or security of a person.

Rights of parents and children

The Schedule engages the right of parents and children contained in article 3 of the Convention of the Rights of the Child (CRC) and article 24(1) of the International Covenant on Civil and Political Rights (ICCPR).

Under the CRC, countries are required to apply the principle of best interests of the child. The principle applies to all actions concerning children and requires active measures to protect their rights and promote their survival, growth, and wellbeing, as well as measures to support and assist parents and others who have day - to - day responsibility for ensuring recognition of children's rights.

Countries are also required under the CRC to ensure recognition of the principle that both parents have common responsibilities for the upbringing and development of the child and to provide appropriate assistance to parents and legal guardians in the performance of their child-rearing responsibilities, in particular to ensure that children of working parents have the right to benefit from child-care services and facilities for which they are eligible. Countries should ensure that parents and legal guardians are aware of their rights to access information on payments and services to which they are entitled to for the benefit of children.

The Schedule does not limit the rights of parents and children. DPOs will apply to targeted debtors of social welfare payments with outstanding debts, where there are not arrangements satisfactory to the Secretary in place to repay the debt. To ensure all debtors are treated consistently and fairly, DPOs will also apply to those in receipt of only child care assistance and/or payment under the Paid Parental Leave Act 2010 with outstanding debts. These debtors are not subject to deductions from their payment and should be required to enter into an acceptable repayment arrangement to repay the debt as with other debtors.

A debt only arises where a person receives a payment to which they were not entitled. DPOs are intended as an incentive for debtors to repay debts in a timely fashion and is only applied where the debtor does not have an arrangement satisfactory to the Secretary in place to repay the debt. DPOs will not limit the rights of parents and children.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the rights of parents or children.

Right to maternity leave

The Schedule engages the right to maternity leave contained in contained in article 10(2) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and article 11(2)(b) of the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).

The right to maternity leave includes an entitlement for working mothers to paid leave or social security benefits during a reasonable period before and after childbirth. It also requires countries, as a measure of prevention of discrimination against women, to provide maternity leave with pay or with comparable social benefits without loss of former employment or seniority.

The Schedule does not limit the right to maternity leave. DPOs will apply to targeted debtors of social welfare payments with outstanding debts, where there is not an arrangement satisfactory to the Secretary in place to repay the debt. To ensure all debtors are treated consistently and fairly, DPOs will also apply to those in receipt of only child care assistance and/or payments under the Paid Parental Leave Act 2010 with outstanding debts. These debtors are not subject to deductions from their payment and should be required to enter into an acceptable repayment arrangement to repay the debt as with other debtors.

A debt only arises where a person receives a payment to which they were not entitled. DPOs are intended as an incentive for debtors to repay debts in a timely fashion and is only applied where the debtor does not have an arrangement satisfactory to the Secretary in place to repay the debt. DPOs will not limit the right to maternity leave.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right to maternity leave.

Rights of people with disability

The Schedule engages the rights of people with disability contained in the Convention on the Rights of Persons with Disabilities .

In particular, to ensure that people with disability have the same right as others to live, take part and be included in the community, article 19 states that countries take appropriate steps to ensure that people with disability have the opportunity to choose where they live and who they live with, have access to in-home, residential and other community support services to help them be included in the community and prevent them from being isolated, and to ensure that they have equal access to community services and facilities that are available to the public.

Article 26 (1) states that parties shall take effective and appropriate measures, including through peer support, to enable persons with disabilities to attain and maintain maximum independence, full physical, mental, social and vocational ability, and full inclusion and participation in all aspects of life.

The Schedule does not limit the rights of people with disability. DPOs will apply to targeted debtors of social welfare payments with outstanding debts, where there is no arrangement satisfactory to the Secretary in place to repay the debt (this includes carer payments and the Disability Support Pension). A debt only arises where a person receives a payment to which they were not entitled. DPOs are intended as an incentive for debtors to repay debts in a timely fashion and is only applied where the debtor does not have a satisfactory arrangement in place to repay the debt. DPOs will not limit the rights of people with disability.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the rights of people with disability including the same rights as others to live, take part and be included in the community.

Right to work and rights in work

The Schedule engages the right to work and rights in work contained in articles 6(1), 7 and 8(1)(a) of the ICESCR.

In particular, article 6(1) recognises the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts and states that countries must have specialised services to assist and support individuals in order to enable them to identify and access available employment.

The Schedule does not limit the right to seek or undertake work and work rights within Australia. DPOs will apply to targeted debtors of social welfare payments with outstanding debts, where there is no arrangement satisfactory to the Secretary in place to repay the debt (this includes working age payments). A debt only arises where a person receives a payment to which they were not entitled. DPOs are intended as an incentive for debtors to repay debts in a timely fashion and is only applied where the debtor has no arrangement satisfactory to the Secretary in place to repay the debt. DPOs will not limit the debtor's right to work and rights in work in Australia.

DPOs may limit the debtor's right to depart the country to undertake work. In these cases, the debtor can enter into acceptable repayment arrangements where they have the financial capacity to do so on the basis of part of the income to be earned from that overseas employment can be sent to Australia to repay their debt, and departure can be facilitated through a DAC or revocation of the DPO to enable the person to depart Australia and undertake employment overseas.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right of persons to seek or undertake work, or work rights, within Australia.

Right to education

The Schedule engages the right to education contained in Article 13 of the 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.

The Schedule does not limit the right to education. DPOs will apply to targeted debtors of social welfare payments with outstanding debts, who are unwilling to enter into acceptable repayment arrangements (this includes student payments). A debt only arises where a person receives a payment to which they were not entitled. DPOs are intended as an incentive for debtors to repay debts in a timely fashion and are only applied where the debtor does not have arrangements satisfactory to the Secretary in place to repay the debt. DPOs will not limit the debtor's ability to access education.

A DPO may prevent a person departing Australia to undertake education where they have an outstanding social welfare payment debt and they have not entered into acceptable repayment arrangements where they have the financial capacity to do so. Careful examination of whether the person has capacity to enter into an arrangement for repayment, or where it is determined they have no capacity to repay the debt while a student but they will be returning to Australia within a set or known period, travel may be permitted and the debt pursued once the person returns to Australia.

A DPO will not be issued by the Secretary for people with a Higher Education Loan Programme debt (that is, HECS-HELP, FEE-HELP, VET FEE-HELP) or Student Financial Supplement Scheme debt.

Therefore, the Schedule will not impinge on the right of a person to an education within Australia, and may not necessarily prevent a person seeking an education outside of Australia.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right of a person to an education within Australia.

Right to social security

The Schedule engages the right 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.

DPOs will apply to targeted debtors of social welfare payments with outstanding debts, where there is no arrangement satisfactory to the Secretary in place to repay the debt. A debt only arises where a person receives a payment to which they were not entitled.

Targeted debtors who are no longer eligible to receive financial support through social security or family assistance are more likely to have the financial capacity to make repayments on any outstanding debt than those in receipt of social welfare payments. In addition a debtor's financial capacity will be taken into account before a repayment arrangement is agreed to. Given this, the impact of DPOs will be limited and will have a very marginal effect on the ability of a person to cover essential living costs, thereby engaging a person's right to social security. The provisions in the Schedule are therefore unlikely to limit this right, given the appropriate safeguards put in place to protect it.

It is intended that the provisions in the Schedule will allow the efficient recovery of social welfare payments, supporting effective and efficient administration of the social security system. This measure is proportionate in achieving this policy objective as all people can avoid a DPO being issued by entering into a satisfactory 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, for example in humanitarian cases, to issue a DAC to enable a person to travel in spite of having a DPO in force.

By allowing the efficient recovery of social security payments, the Schedule ensures the financial sustainability of the social security system. DPOs, as they apply to people who receive social welfare payments to which they are not entitled, are 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 value of these amounts. DPOs, as a condition, are also transparent as they are provided for in legislation, will be communicated through the Department of Human Service's website, and can only be applied after the recipient is given notice. This ensures that all stakeholders will be informed of how DPOs will operate before they are applied to debtors.

Therefore, the Schedule 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 the social security system.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right of persons to access social security to provide a minimum standard of living.

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

The Schedule 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.

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 the Schedule, the impact is limited.

It is intended that the provisions will allow the efficient recovery of social welfare payment debts, which will ultimately improve the efficacy of the social security system. This measure is proportionate in achieving this policy objective as DPOs will only targeted debtors who are no longer eligible to receive financial support through social security or family assistance payments and debtors can avoid DPOs being issued by entering into a satisfactory repayment arrangement.

To ensure all debtors are treated consistently and fairly, DPOs will also apply to those in receipt of only child care assistance and/or payments under the Paid Parental Leave Act 2010 with outstanding debts. These debtors are not subject to deductions from their payment and should be required to enter into an acceptable repayment arrangement to repay the debt as with other debtors.

A debtor's 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. In addition, a debtor's financial capacity will be taken into account before a repayment arrangement is agreed to. The Secretary may also revoke a DPO if the person no longer has any debts to the Commonwealth, or there are arrangements satisfactory to the Secretary for the one or more debts the person has to the Commonwealth to be wholly paid, or the Secretary is satisfied that the one or more debts the person has to the Commonwealth are completely irrecoverable.

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

Therefore, the Schedule 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.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right of persons to an adequate standard of living, including food, water and housing.

Right to equality and non-discrimination

To avoid doubt, the Schedule does not engage the right to equality and non-discrimination contained in articles 2 and 26 of the ICCPR either on the basis of race or 'other' status.

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 ^[7] .

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 ^[8] .

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:

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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 ^[9] .

Discrimination on the basis of race

The Schedule will apply DPOs to all social security debts including ABSTUDY payments, which supports Indigenous Australians. However, there is no differential treatment on the basis of race as DPOs will apply equally to all debtors.

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

Discrimination on the basis of 'other status'

The Schedule applies DPOs to targeted debtors of social welfare payment recipients with outstanding debts, rather than all customers with outstanding debts.

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

In most circumstances, current recipients of social welfare payments with debts have their payments reduced until their debts are repaid. By comparison, targeted debtors who are no longer dependent on the social security system, have little incentive to repay their debts and may actively avoid repayment.

Debtors who are no longer eligible to receive financial support through social welfare payments are more likely to have the financial capacity to make repayments than those in receipt of income support or family assistance.

The introduction of DPOs will ensure that people who are targeted debtors of social welfare payments do not receive an unfair advantage over those current recipients of social welfare payments who are subject to compulsory withholdings from their ongoing payments.

To ensure all debtors are treated consistently and fairly, DPOs will also apply to those in receipt of only child care assistance and/or payments under the Paid Parental Leave Act 2010 with outstanding debts. These debtors are not subject to deductions from their social welfare payment and should be required to enter into an acceptable repayment arrangement to repay the debt as with other debtors.

It is therefore reasonable and objective to apply a DPO to debts with respect to targeted debtors of social welfare payments to ensure that people with a debt repay the outstanding amount in a timely fashion.

The removal of the limitations on the recovery of debt where recovery action has not been undertaken in the preceding six years will allow recovery of debt older that would have otherwise aged out of scope of the Commonwealth's capacity to recover the debt by involuntary means. This provision will align social welfare debt recovery with other government agencies involved in the recovery of Commonwealth debt where there is no such limitation. This provision does not impinge on the right of persons to equality and non-discrimination.

For these reasons, the Schedule will not engage 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 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.