House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP)

Schedule 5 - Non-cancellation of concession cards for temporary overseas absences

Summary

This Schedule gives effect to the 2008 Budget measure that will provide for concession cards to remain current for a period of no more than 13 weeks when the cardholder travels overseas temporarily.

Background

Currently, if a person travels overseas, he or she is not able to retain a concession card issued under the Social Security Act or Veterans' Entitlements Act, as qualification for each type of concession card requires the person to be 'in Australia'. As a result, if a cardholder departs Australia, his or her concession card is cancelled, despite some cards being linked to a payment which is portable under Chapter 4 of the Social Security Act.

This Schedule provides for a person's concession card to remain current for a maximum period of 13 weeks when the cardholder leaves Australia temporarily. Although the cardholder is generally not able to use their card while overseas, Schedule 5 will end the requirement to cancel a concession card from the day the cardholder departs Australia and will result in the cardholder being able to use their concession card on the day of their departure to purchase required pharmaceuticals.

Explanation of the changes

Part 1 - Main amendments

Amendments of the Social Security Act

Item 1 inserts into subsection 6A(1) a definition of 'concession card', which means a pensioner concession card, a health care card or a seniors health card.

Items 2 to 8 inserts a note at the end of various subsections in Division 1, signposting that Division 4 sets out provisions allowing a person to continue to be qualified for a pensioner concession card for a maximum period of 13 weeks if the person is temporarily absent from Australia.

Item 9 inserts a note at the end of subsection 1061ZG(1), signposting that Division 4 sets out provisions allowing a person to continue to be qualified for a seniors health card for a maximum period of 13 weeks if the person is temporarily absent from Australia.

Items 10 and 11 insert notes at the end of various subsections in Division 3, signposting that Division 4 sets out provisions allowing a person to continue to be qualified for a health care card for a maximum period of 13 weeks if the person is temporarily absent from Australia.

Item 12 inserts new Division 4 at the end of Part 2A.1 of Chapter 2A of the Social Security Act.

New Division 4 provides for the non-cancellation of concession cards (whether automatically issued to a person who is receiving a social security payment or issued to a person who has made a claim for the card) if the concession cardholder travels temporarily overseas. If the holder of a concession card leaves Australia permanently, the person's concession card will be cancelled from the date of departure.

New section 1061ZUA sets out the circumstances in which this Division applies to a person.

New subsection 1061ZUA(1) provides that Division 4 applies to a person if:

(a)

a person temporarily leaves Australia (subsection (2) sets out how to determine whether an absence is temporary); and

(b)

the person is absent from Australia for a continuous period ( period of absence ) which begins on the day the person leaves Australia; and

(c)

any of the following applies:

(i)

immediately before the commencement of the period of absence, the person was the holder of a concession card; or

(ii)

during the period of absence, the person's claim for a seniors health card or a health care card is granted under the Social Security Administration Act; or

(iii)

during the period of absence, the person is issued an automatic issue card.

New subsection 1061ZUA(2) provides that (for the purposes of paragraph (1)(a)) in determining whether an absence is temporary, the purpose of the absence and the intended duration of the absence must be taken into account.

New section 1061ZUB provides for the non-cancellation of concession cards if a person is temporarily absent from Australia.

New subsection 1061ZUB(1) provides that, if a person is absent from Australia throughout the person's maximum non-cancellation period (see subsection (3)), the person's qualification for the concession card is not affected by that absence. In other words, provided a person continues to meet the qualification requirements for a concession card, and despite the requirement that a person must be 'in Australia' to be qualified for a card, the fact that a person may be temporarily absent from Australia will not affect qualification for a card. For example, where a person is receiving a social security pension, qualifies for a pensioner concession card under subsection 1061ZA(1) of the Social Security Act, and leaves Australia temporarily, if he or she continues to receive the social security payment (as a result of the portability rules for that pension), then the qualification under section 1061ZA is not affected. Qualification for the pensioner concession card can continue for a maximum of 13 weeks outside Australia.

New subsection 1061ZUB(2) provides that a person will no longer be qualified for a concession card after the end of the person's period of absence of 13 weeks, if the period of absence exceeds 13 weeks. Where a person's card is attached to receiving a social security payment, the person will no longer qualify for the card after 13 weeks even if the person is still qualified and receiving the social security payment. For example, a person may be issued with a pensioner concession card due to their qualification for age pension. The person may continue to receive age pension for more than 13 weeks while overseas. However, the attached pensioner concession card will be cancelled after 13 weeks' absence from Australia.

The portability provisions for payments allow a person to negotiate an extension to their maximum portability period in certain circumstances. However, any concession card linked to the payment will be cancelled after 13 weeks' absence from Australia.

New subsection 1061ZUB(3) provides that (for the purposes of subsection (1)) a person's maximum non-cancellation period is the shorter of either:

(a)

the person's period of absence (if less than 13 weeks); or

(b)

the period of 13 weeks beginning on the day the person leaves Australia.

New section 1061ZUC provides for a person, whose qualification for a concession card is extended for a limited period as a result of the person's social security payment being cancelled, for example, due to employment income, they will continue to be qualified for the residual period of the card if the person's temporary absence from Australia exceeds 13 weeks. If a person returns to Australia after the end of the 13 week period of absence and is still qualified for a concession card, under sections 1061ZF and 1061ZS the Secretary must issue a card for the residual period of the extended period of the card.

New subsection 1061ZUC(1) sets out the circumstances in which a person remains qualified for a concession card which has been extended for a limited period. The section applies if:

(a)

a person qualifies for a concession card under section 1061ZB, 1061ZC, 1061ZD, 1061ZE, 1061ZEB, 1061ZM or 1061ZEA (as a result of the operation of subsection 1061ZEA(2A) ( the qualification section ); and

(b)

the person's qualification for the card is not affected by a period of absence as provided by subsection 1061ZUB(1); and

(c)

the card is cancelled at the end of the period of 13 weeks as mentioned in subsection 1061ZUB(2); and

(d)

the person returns to Australia after the end of the 13 week period; and

(e)

the person qualifies again for the card under the qualification section; and

(f)

the period for which the person was qualified under the qualification section, before the card was cancelled, has not yet ended.

New subsection 1061ZUC(2) clarifies that a person will continue to qualify for a concession card until the end of the extended period that the person was originally qualified for under the qualification section. This does not apply if a person ceases to be qualified for the card at an earlier time. For example, a person receiving disability support pension may lose qualification for payment due to an increase in their ordinary income from employment. The person is given a 52 week retention of their pensioner concession card ('extension card'). If the person travels overseas for six months, their extension card would remain current for 13 weeks and then be cancelled. Upon the person's return to Australia, subsection 1061ZUC(2) provides for the person to be reissued with their extension card for the remainder of their 52 week extension period, provided they remain qualified. The reissued extension card would have the same expiry date as the person's original extension card.

Amendments of Social Security Administration Act

Item 13 is a minor technical amendment which is consequential to item 1 and repeals the definition of concession card in subclause 1(1) of Schedule 1.

Amendments of the Veterans' Entitlements Act

Item 14 is a consequential amendment to subsection 118PA(1), brought about as a result of the proposed amendments to section 118V (refer to items 15 to 21 of this Schedule).

The amendment repeals paragraphs 118PA(1)(a) and (b) and substitutes new paragraph 118PA(1)(a).

Subsection 118PA(1) sets out the eligibility criteria for the payment of seniors concession allowance. Repealed paragraphs 118PA(1)(a) and (b) had referred to the person being eligible where either the person was the 'holder of a seniors health card and in Australia' or the circumstances in which a person who was holder of a seniors health card before they left and was temporarily absent from Australia would retain eligibility for the seniors concession allowance.

New paragraph 118PA(1)(a) provides that a person will be eligible for a seniors concession allowance if the person is the holder of a seniors health card. This reflects that a person may now retain their seniors health card during a temporary absence from Australia not exceeding 13 weeks.

Items 15 to 21 amend section 118V, which sets out the various criteria under which a person may be eligible for a seniors health card.

Subsection 118V(1) sets out the criteria under which a veteran with qualifying service may be eligible for a seniors health card.

Item 15 repeals and substitutes paragraph 118V(1)(e). Paragraph 118V(1)(e) had provided that a veteran who met all of the other criteria had to be 'in Australia' to be eligible for a seniors health card.

New paragraph 118V(1)(e) provides that a veteran may be eligible for a seniors health card if he or she is in Australia or is temporarily absent from Australia and the absence has been for a continuous period that has not exceeded 13 weeks.

Item 16 inserts a new Note 5 that refers the reader to the definition of 'temporarily' in section 5Q.

Item 17 repeals and substitutes paragraph 118V(1A)(d).

Subsection 118V(1A) sets out the criteria under which a war widow or war widower may be eligible for a seniors health card.

New paragraph 118V(1A)(d) provides that a war widow or war widower may be eligible for a seniors health card if he or she is in Australia or is temporarily absent from Australia and the absence has been for a continuous period that has not exceeded 13 weeks.

Item 18 repeals and substitutes paragraph 118V(2)(e).

Subsection 118V(2) sets out the criteria under which the partner of a veteran may be eligible for a seniors health card.

New paragraph 118V(2)(e) provides that the partner of a veteran may be eligible for a seniors health card if he or she is in Australia or is temporarily absent from Australia and the absence has been for a continuous period that has not exceeded 13 weeks.

Item 19 inserts a new Note 6 to subsection 118V(2) that refers the reader to the definition of 'temporarily' in section 5Q.

Item 20 repeals and substitutes paragraph 118V(3)(e).

Subsection 118V(3) sets out the criteria under which the non-illness separated spouse or the widow or widower of a veteran may be eligible for a seniors health card.

New paragraph 118V(3)(e) provides that the non-illness separated spouse or the widow or widower of a veteran may be eligible for a seniors health card if he or she is in Australia or is temporarily absent from Australia and the absence has been for a continuous period that has not exceeded 13 weeks.

Item 21 inserts a new Note 6 to subsection 118V(3) that refers the reader to the definition of 'temporarily' in section 5Q.

Part 2 - Amendments contingent on the Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Act 2008

The Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Bill 2008 was introduced into the House on 13 March 2008. It is expected that the bill will be passed during the Winter sittings.

Included in the bill are amendments to subsection 118V(1A) [refer to Item 38 of Part 2 to Schedule 2] that insert Note 5 referring to the definition of 'qualifying age' in section 5Q.

The amendments made by this Part 2 are contingency amendments to section 118V(1A) of the Veterans' Entitlements Act and to section 2 of the Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Act 2008 that will depend on whether Royal Assent is given to that Act before this particular Act.

Division 1 - Amendments if the Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Act 2008 receives the Royal Assent on the same day or earlier

Item 22 inserts Note 5 to subsection 118V(1A) referring the reader to the definition of 'temporarily' in section 5Q.

Division 2 - Amendments if the Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Act 2008 does not receive the Royal Assent on the same day or earlier

Item 23 inserts Note 3A to subsection 118V(1A) referring the reader to the definition of 'temporarily' in section 5Q.

Item 24 repeals and substitutes section 2 of the Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Act 2008 . The amendment is a consequential amendment to the commencement provision of that Act relating to the amendment made by item 23 of this Schedule.

The commencement provision is amended to provide that the amendment made by Item 38 of Schedule 2 of the Veterans' Entitlements Legislation Amendment (2007 Election Commitments) Act 2008 will commence immediately after the commencement of item 23 of this Schedule.

Part 3 - Application

Item 25 is an application provision, which sets out that the amendments made by this Schedule apply in relation to a person who leaves Australia on or after 1 July 2008.