House of Representatives

Explanatory Memorandum

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

Schedule 5 - Portability of disability support pension

Summary

This Schedule introduces a change in relation to disability support pension generally to limit the overseas portability period for disability support pension to 28 days in a 12-month period from 1 January 2015.

Background

Division 2 of Part 4.2 of the Social Security Act provides for the portability of social security payments. The portability period refers to the length of time that social security payments can be paid to a person while that person is outside Australia. A person's payment is not payable for any period of absence that occurs after the end of the person's portability period for a payment (section 1215).

Current portability rules for disability support pension state that, in the general case, a person in receipt of the disability support pension can continued to be paid during any temporary absences, provided each period of absence is no longer than six weeks in length.

In addition, certain exceptions to the general rule apply, which allow for absences of longer than six weeks. For example, unlimited portability period applies for severely impaired disability support pensioners (section 1218AAA). A person's portability period may also be extended (under section 1218C) if the person is unable to return to Australia for specified reasons beyond their control and which occurred while the person was absent from Australia and before the end of their general portability period.

If a disability support pensioner's absence from Australia exceeds their portability period, their pension is not payable and will be cancelled after the end of their portability period.

The amendments made by this Schedule will commence on 1 January 2015.

Explanation of the changes

The amendments in this Schedule are intended to limit the portability period for Australian resident disability support pensioners. Generally, the maximum portability period is a total of 28 days (whether consecutive or not) in the last 12 months. There is no limit to the number of times a person may be absent from Australia, so long as the number of days in each period of absence over the past 12 months, when added together, do not exceed 28 days.

Where an absence is for the purposes of seeking medical treatment, to attend to an acute family crisis or for a humanitarian purpose, the maximum portability period is four weeks. It is intended that, if a person has already been absent for a period for the purposes of seeking medical treatment, to attend to an acute family crisis or for a humanitarian purpose, these days of absence are to count towards the 28 days of absence that is allowed for any purpose.

These portability rules are subject to the existing exceptions under sections 1218AAA, 1218AA, 1218AB, 1218, 1218C or 1218D. That is, the current rules allowing unlimited portability in exceptional circumstances, or an extension to the portability period under certain circumstances, will continue to apply.

Amendments to the Social Security Act

Item 3 repeals existing paragraph 1217(2)(b), and substitutes new paragraph 1217(2)(b). Existing paragraph 1217(2)(b) provides that a person's absence is an allowable absence if the absence does not exceed the period specified in column 5 of the table. The new paragraph 1217(2)(b) provides that, in the case of item 2, an absence is an allowable absence if the absence does not cause the total number of days (whether consecutive or not) of the person's temporary absence from Australia in the last 12 months to exceed 28 days. The counting of the 28 days would include any days of absence for purposes of seeking eligible medical treatment; to attend to an acute family crisis or for a humanitarian purpose.

The rule in new paragraph 1217(2)(b) (that an absence is only an allowable absence if it does not exceed 28 days in the last 12 months) does not apply if an exception rule in Subdivision B of Division 2 of Part 4.2 applies. That is, an absence is an allowable absence even if it exceeds 28 days in the last 12 months if any one of the following provisions applies:

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section 1218AAA - unlimited portability for severely impaired disability support pensioners;

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section 1218AA - unlimited portability for terminally ill overseas disability support pensioner;

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section 1218AB - extended portability period for disability support pension;

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section 1218 - full time students outside Australia for purposes of Australian course;

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section 1218C - extension of person's portability period - general; or

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section 1218D - life saving medical treatment overseas.

Item 4 makes a technical amendment to subsection 1217(4) by omitting the words 'a period of weeks', and substituting 'not an unlimited period'. Item 5 also makes a technical amendment to subparagraph 1217(4)(b)(ii) by deleted the words 'of weeks'. These amendments are required because the portability period for disability support pension (general) is now calculated in days rather than in weeks.

Item 6 provides for the amendment of the table at the end of section 1217, by the repeal of existing item 2 of the table and the substitution of new items 2 and 2AA.

New item 2 provides that, for disability support pensioners generally, their maximum portability period is the period that is a total of 28 days (whether consecutive or not) of temporary absence from Australia for any purpose in the last 12 months. The 28 days is not to include days on which the person was not receiving disability support pension. It is intended that these 28 days would include any days of absence, including if they are for the purpose of seeking medical treatment, to attend to an acute family crisis or for a humanitarian purpose.

New item 2AA provides that, for disability support pensioners who are absent for one of the purposes in column 4 of item 2AA (that is, to seek eligible medical treatment, to attend to an acute family crisis, or for a humanitarian purpose), their maximum portability period is a continuous period of four weeks of absence from Australia. It is intended that any previous days of absence, regardless of the purpose of the previous absence/s, would not affect the right to continue to be paid during future periods of absence, provided the future absence is for any of the purposes listed in column 4 of item 2AA, and each future period of absence is no longer than four weeks.

Item 7 repeals existing subsection 1218AA(3), and substitutes new subsection 1218AA(3). Existing subsection 1218AA(1) provides that the Secretary may determine that a person has an unlimited portability period if all of the qualifying circumstances exist. Existing subsection 1218AA(2) provides that the Secretary may revoke the determination if any of the qualifying circumstances ceases to exist.

New subsection 1218AA(3) provides that, if the Secretary revokes the determination, the person's maximum portability period would be worked out under whichever one of items 2, 2AA and 2A of the table in section 1217 applies. If the person was absent from Australia at the time of the revocation, the person's absence is taken to have started on the date of effect of the revocation. If item 2 of the table in section 1217 applies, the person is taken not to have been absent from Australia at any time in the 12 months before the revocation.

Amendments to the Social Security Administration Act

Item 10 provides for the application and transitional provisions. The amendments are to apply in relation to temporary absences that start on or after 1 January 2015. In applying the amendments in relation to temporary absences that start on, or in the first 12 months after, the commencement of this Schedule, days of temporary absence that occurred before that commencement are to be ignored.

The effect of subitem 10(3) is that, where a person has, on or before the day this measure was announced, booked travel outside Australia, which involves transport of the person back to Australia before 1 January 2016, the amendments made by this Schedule would not apply. That is, the existing six-week portability rule would continue to apply to any such person.