House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Employment and Workplace Relations, the Honourable Bill Shorten MP)

General outline

The Bill amends the Social Security Act 1991, the Social Security (Administration) Act 1999 , the Farm Household Support Act 1992 and the Income Tax Assessment Act 1997 to create a new Income Support Bonus to be paid to recipients of ABSTUDY Living Allowance, Austudy, Newstart Allowance, Parenting Payment, Sickness Allowance, Special Benefit, Youth Allowance, Transitional Farm Family Relief Payment, and Exceptional Circumstances Payment.

People on these payments who are receiving more than the basic amount of the Pension Supplement will not be eligible to also receive the Income Support Bonus.

The Income Support Bonus will provide additional support for eligible income support payment recipients to manage unanticipated expenses.

Eligible payment recipients will receive a tax-free, twice-yearly, non means tested Income Support Bonus of $105.00 for single people (or $210.00 per annum) or $87.50 for most people who are an eligible member of a couple (that is, $175.00 per annum per person). Eligible members of a couple separated by illness, or couple where a partner is in respite care, or couple where a partner is in gaol, will be paid at the single rate of $105.00 (or $210.00 per annum per person).

Payment of the Income Support Bonus will occur on or after 20 March and 20 September, commencing in 2013.

Qualification for the payment is based on whether a recipient receives an eligible income support payment on 20 March (for the March payment) or 20 September (for the September payment).

The Income Support Bonus will be indexed to the Consumer Price Index twice annually, in March and September, from September 2013.

The Income Support Bonus will be subject to income management as a category I and category Q payment. This is in line with income management of most other supplementary payments.