House of Representatives

Explanatory Memorandum

Jenny Macklin Mp (Minister for Families, Housing, Community Services and Indigenous Affairs)

Schedule 2 - Education entry payment

Summary

This Schedule contains amendments to reduce the qualification period for the education entry payment from 12 months to four weeks of continuous receipt of income support payments. The reduced qualification period begins on 1 January 2009 and ends on either 30 June 2010 or a date determined by the Minister. The Schedule also provides for an education entry payment supplement of $950 payable to people eligible for the education entry payment under the Social Security Act or the Veterans' Entitlements Act.

Background

Education entry payment is a payment made under Part 2.13A of the Social Security Act and Part VIIAA of the Veterans' Entitlements Act to assist recipients of certain welfare payments with the up-front costs of education and training.

The Government has decided to expand the scope of the education entry payment and relax the 'time on payment' qualification criterion as part of the Household Stimulus Package of reforms, and to supplement the payment with an additional payment of $950 to align with the training and learning bonus under the proposed Division 1 of Part 2.18 of the Social Security Act.

The main amendments in this Schedule commence on 1 January 2009. However, Part 2 commences at the same time as item 65 of Schedule 2 to the Social Security Legislation Amendment (Employment Services Reform) Act 2009 commences (expected to be 1 July 2009). The amendments will have effect until 30 June 2010, or such later date as determined by the Minister by legislative instrument.

Explanation of the changes

Item 1 amends section 665U of the Social Security Act to reduce the qualification period for an education entry payment for a newstart allowance recipient from 12 months to four weeks. A new subsection 665U(3) will provide that, during the designated period, the qualification period is reduced to four weeks. Subsection (4) states that the designated period is the period beginning on 1 January 2009 and ending on 30 June 2010 or, where the Minister has made a legislative instrument specifying a later date, that later date.

Items 2 to 7 provide that the qualification period, to receive an education entry payment, for a recipient of widow allowance, partner allowance, or parenting payment partnered, is reduced to four weeks. A new subsection (2) will be inserted in sections 665ZC, 665ZQ and 665ZU, which operates so that, during the designated period , subparagraph (b)(ii), requiring the recipient to be a long-term social security recipient, is omitted and replaced with a subparagraph providing that the recipient must have been receiving income support payments for a continuous period of at least four weeks. The recipient's payment type may have changed over that period and the period may have occurred before 1 January 2009.

A replacement Note 1 provides that an income support payment is a social security benefit, a job search allowance, a social security pension, a youth training allowance, a service pension or an income support supplement.

Note 1A provides a reference to section 38B, which sets out the notional continuous period of receipt of income support payments.

In each case, a new subsection (3) will provide that the designated period is the period beginning on 1 January 2009 and ending on 30 June 2010 or, where the Minister has made a legislative instrument specifying a later date, that later date.

Education entry payment for recipients of youth allowance ( other )

Item 8 inserts a new Division 12A after Division 12 of Part 2.13A, to enable recipients of youth allowance (other) to receive an education entry payment (and hence an education entry supplement under the new Division 14 - see item 9 ).

Youth allowance (other) is youth allowance payable to a person who is not undertaking full-time study and who is not a new apprentice. Under this proposal, recipients of youth allowance (other) will be able either to undertake full-time study or to include short-term vocational-related courses in their activity agreements and then receive an education entry payment to contribute to the up-front cost of that study. If the person commences full-time study, they cease to be eligible for youth allowance (other) and will receive youth allowance (student) instead. People undertaking short-term courses under their activity agreements will be able to remain on youth allowance (other).

Subsection 665ZX(1) provides that a person is qualified for an education entry payment if either the Secretary is satisfied that the person intends to enrol in, or the person is enrolled in, a 'qualifying course'. Immediately before commencing the course, the person must be receiving youth allowance, not undertaking full-time study and not be a new apprentice, and the person must have been continuously receiving an income support payment for at least four weeks. The person must also not have received, within the last 12 months, a payment under Part 2.13A.

The meaning of a qualifying course is set out in subsection (2). A qualifying course is: (a) an approved course for ABSTUDY purposes or an approved course of education or study (as defined); or (b) a course included in the person's youth allowance activity agreement (or, from 1 July 2009, the person's Employment Pathway Plan).

An education entry payment is $208. A person must make a claim for the education entry payment to be qualified for the payment. Division 12A ceases to have effect at the end of 30 June 2010 or, where the Minister determines a later date in a legislative instrument, that later date.

Education entry payment supplement

Item 9 inserts a new Division 14 at the end of Part 2.13A to provide for the education entry payment supplement. If a person is qualified for an education entry payment under Part 2.13A or under Part VIIAA of the Veterans' Entitlements Act, they are eligible for an education entry payment supplement.

The education entry supplement is $950.

If a person makes a claim for the education entry payment, then they are taken to have made a claim for an education entry payment supplement. For the purposes of the social security law, an education entry payment supplement payable to a person who is qualified for an education entry payment under the Social Security Act is taken to be part of the education entry payment payable to the person, except so far as any provision in the social security law expressly provides for or in relation to an education entry payment supplement. For example, the education entry payment supplement is specifically subject to the income management regime (see item 20 of Schedule 5 ), whereas the education entry payment itself is not; and special rules apply to the recovery of the education entry payment supplement (see item 17 of Schedule 5 ).

Division 14 ceases to have effect at the end of 30 June 2010 or, where the Minister determines a later date in a legislative instrument, that later date.

Item 10 repeals subparagraph 665ZX(b)(ii) and replaces it with a new subparagraph to commence on 1 July 2009. The subparagraph provides that, as part of a person's qualification for an education entry payment, the course is to be provided for by a term, whether the term is required to be complied with or not, of the person's Youth Allowance Employment Pathway Plan. This amendment takes into account the proposed change from activity agreements to employment pathway plans under reforms to be put in place by the Social Security and Other Legislation Amendment (Employment Services Reform) Bill 2008 , commencing on 1 July 2009.