Senate

Revised Explanatory Memorandum

(Circulated by the authority of the Minister for Social Services, the Hon Christian Porter MP)

Schedule 10 - Start day for some participation payments

Summary

This Schedule amends the Social Security Administration Act so that, if a person who is claiming or transferring to Newstart Allowance or Youth Allowance (other than a new apprentice or a full-time student) is subject to RapidConnect, their income support payments will be payable from the day the person attends their initial appointment with their employment services provider, unless their employment services provider is unable to offer an appointment within two business days, or the person is not qualified for the allowance on the day. These amendments are aimed at ensuring that job seekers claiming Newstart or Youth Allowance (other) connect as quickly as possible with their employment services provider (for example, jobactive or Transition to Work). This Schedule also amends the Social Security Act so that the ordinary waiting period for job seekers subject to RapidConnect continues to commence on the same day as for people not subject to RapidConnect.

This Schedule implements the faster connection to employment services initiative forming part of the 'Better Targeting of Assistance to Support Jobseekers' measure announced in the 2017-18 Budget.

Background

Under RapidConnect, certain unemployed people claiming income support are assisted to join the workforce by being required to promptly access employment opportunities through an employment services provider. Exemptions to RapidConnect apply (such as where the person is assessed as having multiple barriers to employment).

Currently, a person who claims Newstart Allowance or Youth Allowance (other) and is subject to RapidConnect is required to attend an initial interview with an employment services provider before their income support is payable. If the person attends the interview as required, the start day for their payment is the day on which the claim is made. In some circumstances, this is the date on which the person first contacted the Department of Human Services in relation to the claim.

If the person fails to attend their initial interview, existing sections 547AA and 615 of the Social Security Act have the effect that the income support payment is generally not payable until the person meets that requirement. However, if the Secretary determines that section 547AA or section 615 should cease to apply (for example because the person had a reasonable excuse for the failure or because of circumstances beyond the person's control), the income support payment is typically backdated to the date on which the claim for the payment was made.

This Schedule amends the Social Security Administration Act so that from the commencement of this Schedule, for job seekers subject to RapidConnect, their Newstart Allowance or Youth Allowance (other) payment will be payable from the date the job seeker attends their initial appointment with an employment services provider, unless their employment services provider is unable to offer an appointment within two business days, or the person is not qualified for the allowance on the day, instead of the date the claim for the payment was made.

Employment services providers are contractually required to have appointment times available for job seekers to attend interviews within two business days. When a job seeker registers with Department of Human Services (DHS), DHS staff will be able to access employment service providers' calendars. If there is availability with the job seeker's preferred provider on the day the job seeker registers with DHS and the job seeker is able to attend an appointment, DHS staff will then book this into the employment service provider's calendar.

Where there is no availability, DHS may contact the employment service provider to request available time be made to accommodate the appointment.

Alternatively the job seeker may be able to choose a different employment service provider in their local area. DHS will then review the new employment service provider's calendar for availability and book the appointment for that day as long as the job seeker is able to attend.

If an employment services provider does not have an appointment available within two business days the job seeker will not be penalised. If a job seeker cannot attend an interview within two business days because no provider appointment is available, the job seeker will have their income support backdated to the date on which the requirement to attend an interview was imposed.

If a job seeker elects to attend an interview more than two business days after the Secretary imposes the requirement, or fails to attend the interview as required without a reasonable excuse, their income support payment will not be payable until they comply with the requirement to attend an interview.

However, if a person fails to attend their initial interview, the amendments made by this Schedule interact with existing sections 547AA and 615 of the Social Security Act to allow the Secretary to take account of their individual circumstances and the reasons why they failed to attend an interview to determine the relevant start day for their income support payments. That is, if the Secretary is satisfied that it is appropriate to do so (for example, because the person had a reasonable excuse for failing to attend the appointment or because of circumstances beyond the person's control), the Secretary may determine that section 547AA or section 615 should cease to apply at an earlier time such that their income support will be payable from the date of the appointment they missed, rather than that of the subsequent appointment.

This Schedule also amends the Social Security Act so that the ordinary waiting period for job seekers subject to RapidConnect continues to commence on the same day as for people not subject to RapidConnect.

An ordinary waiting period is a 7 day waiting period which certain income support claimants are subject to, and which generally commences on a person's start day. Due to the amendments made by this Schedule, a RapidConnect participant's start day will usually be later than the start day of a Newstart Allowance or Youth Allowance (other) claimant who is not a RapidConnect participant, which would result in their ordinary waiting period commencing (and expiring) later than is currently the case.

Therefore, this Schedule will also preserve the way a start day is currently worked out for the purposes of determining:

-

when an ordinary waiting period commences for a RapidConnect participant; and

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whether a RapidConnect participant is subject to an ordinary waiting period in circumstances where they:

o

received an income support payment in the 13 weeks immediately prior to the person's start day; or

o

are experiencing a personal financial crisis (which may include being subject to domestic violence or severe financial hardship in the 4 weeks immediately prior to the person's start day).

This Schedule will not apply to job seekers who are exempt from RapidConnect (for example, highly disadvantaged job seekers including those with a partial work capacity or who are principal carers of a child) or those referred to the Community Development Program or Disability Employment Services.

This Schedule will not affect individuals who make a claim for Youth Allowance who are new apprentices or undertaking full-time study.

The amendments made by this Schedule commence on the later of 1 January 2018 and the day after Royal Assent.

Explanation of the changes

Social Security Act

Item 1A inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act, into paragraph 549CA(2)(a).

Paragraph 549CA(2)(a) currently provides that, subject to subsection 549CA(3), a person who is qualified for youth allowance (other) is subject to an ordinary waiting period unless, at some time in the 13 weeks immediately before the person's start day (which is worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), the person received an income support payment. Item 1A amends paragraph 549CA(2)(a) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.

This amendment ensures that the amendments made by Item 2 (that is, the insertion of new clause 4A into Schedule 2 to the Social Security Administration Act), will not affect how the start day is worked out for the purposes of determining whether a youth allowance (other) claimant who is also a RapidConnect participant is subject to an ordinary waiting period under paragraph 549CA(2)(a). The 13 week period referred to in paragraph 549CA(2)(a) will be worked out by reference to a start day that will be the same for both youth allowance (other) claimants who are RapidConnect participants, and youth allowance (other) claimants who are not RapidConnect participants.

Another effect of the amendment in Item 1A is that the calculation of certain time periods relating to whether a RapidConnect participant is subject to an ordinary waiting period in circumstances where they are experiencing a personal financial crisis will not be affected by the amendments made by Item 2. The 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be based on the start day worked out disregarding both clauses 4A and 5 of Schedule 2 to the Social Security Administration Act (see below).

Under paragraph 549CA(2)(b), a person who is qualified for youth allowance (other) is subject to an ordinary waiting period unless the Secretary is satisfied that the person is 'experiencing a personal financial crisis'. The definition of when a person is 'experiencing a personal financial crisis' is contained in section 19DA of the Social Security Act, and is when a person is in severe financial hardship, and either subsection 19DA(2), (3) or (4) applies to the person. Subsection 19DA(2) applies where the person was subject to domestic violence at some time in the 4 weeks immediately before the person's start day mentioned in, relevantly, paragraph 549CA(2)(a). Subsection 19DA(3) applies where the person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure in the 4 weeks immediately before the person's start day mentioned in, relevantly, paragraph 549CA(2)(a). The definition of 'unavoidable or reasonable expenditure' in paragraph 19C(4)(a)(iv) provides that unavoidable or reasonable expenditure includes the reasonable costs of living that the person is taken to have incurred in respect of the 4 weeks immediately before the person's start day mentioned in, relevantly paragraph 549CA(2)(a).

By ensuring that new clause 4A of Schedule 2 is disregarded in the calculation of the start day in paragraphs 549CA(2)(a), the relevant 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be worked out by reference to a start day that will be the same for both youth allowance (other) claimants who are RapidConnect participants, and youth allowance (other) claimants who are not RapidConnect participants, as is currently the case.

Item 1B inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into subsection 549CB(1).

Subsection 549CB(1) currently provides that, subject to subsections 549CB(2) and (4), if a youth allowance (other) claimant is subject to an ordinary waiting period, the ordinary waiting period is the period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act). Item 1B amends subsection 549CB(1) to provide that a person's start day for the purposes of that subsection is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.

This amendment ensures that the amendments made by Item 2 will not affect how the start day is worked out for the purposes of determining when an ordinary waiting period commences for a youth allowance (other) claimant who is also a RapidConnect participant. The day an ordinary waiting period commences under subsection 549CB(1) will be the same for both youth allowance (other) claimants who are RapidConnect participants, and youth allowance (other) claimants who are not RapidConnect participants.

Item 1C inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into paragraph 549CB(2)(b).

This amendment is consequential to the amendment made by Item 1B. Subsection 549CB(2) determines when an ordinary waiting period commences for a youth allowance (other) claimant where the person would otherwise be subject to an ordinary waiting period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), but where the person is subject to one or more exclusion periods. Item 1C amends paragraph 549CB(2)(b) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.

Item 1D inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into paragraph 620(1)(a).

Paragraph 620(1)(a) currently provides that, subject to subsection 620(2), a newstart claimant is subject to an ordinary waiting period unless, at some time in the 13 weeks immediately before the person's start day (which is worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), the person received an income support payment. Item 1D amends paragraph 620(1)(a) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.

As discussed above regarding the amendments made by Item 1A in relation to youth allowance (other) claimants, this amendment ensures that the amendments made by Item 2 will not affect how the start day is worked out for the purposes of determining whether a newstart claimant who is also a RapidConnect participant is subject to an ordinary waiting period under paragraph 620(1)(a).

Another effect of the amendment in Item 1D is that the calculation of certain time periods relating to whether a RapidConnect participant is subject to an ordinary waiting period in circumstances where they are experiencing a personal financial crisis will not be affected by the amendments made by Item 2. The 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be based on the start day worked out disregarding both clauses 4A and 5 of Schedule 2 to the Social Security Administration Act.

Under paragraph 620(1)(g), a newstart claimant is subject to an ordinary waiting period unless the Secretary is satisfied that the person is 'experiencing a personal financial crisis'. As discussed above in relation to the amendments made by Item 1A, the definition of when a person is 'experiencing a personal financial crisis' is contained in section 19DA of the Social Security Act, and is when a person is in severe financial hardship, and either subsection 19DA(2), (3) or (4) applies to them. Subsections 19DA(2) and (3) refer to a person being subject to domestic violence, or in severe financial hardship due to unavoidable or reasonable expenditure in the 4 weeks immediately prior to the person's start day mentioned in, relevantly paragraph 620(1)(a). Similarly, the relevant definition of 'unavoidable or reasonable expenditure' in paragraph 19C(4)(a)(iv) also refers to the reasonable costs of living that the person is taken to have incurred in respect of the 4 weeks immediately before the person's start day mentioned in, relevantly, paragraph 620(1)(a).

By ensuring that clause 4A of Schedule 2 is disregarded in the calculation of the start day in paragraph 620(1)(a), the relevant 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be worked out by reference to a start day that will be the same for both newstart claimants who are RapidConnect participants, and newstart claimants who are not RapidConnect participants, as is currently the case.

Item 1E inserts a reference to new clause 4A of Schedule 2 to the Social Security Administration Act into subsection 621(1).

Subsection 621(1) currently provides that, subject to subsections 621(3) and (5), if a newstart claimant is subject to an ordinary waiting period and is not disqualified for newstart under section 589 (liquid assets test), the ordinary waiting period is the period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act). Item 1E amends subsection 621(1) to provide that a person's start day for the purposes of that subsection is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.

As discussed above regarding the amendments made by Item 1B in relation to youth allowance (other) claimants, this amendment ensures that the amendments made by Item 2 will not affect how the start day is worked out for the purposes of determining when an ordinary waiting period commences for a newstart claimant who is also a RapidConnect participant.

Example:

Jenny makes a claim for newstart allowance on 1 February 2018 and is identified as a RapidConnect participant. On 2 February, Jenny is given a notice under section 63 of the Social Security Administration Act to attend an appointment with her employment provider on the next business day, 5 February 2018. She attends that appointment on 5 February 2018 as required.

Jenny is subject to an ordinary waiting period under subsection 620(1) of the Social Security Act. The day the waiting period commences is determined under subsection 621(1) and will be Jenny's start day which is worked out disregarding clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act. Jenny's start day for the purposes of subsection 621(1) of the Social Security Act is therefore worked out under clause 3(1) of Schedule 2 to the Social Security Administration Act, which is the day she made her claim (1 February 2018). Consequently, Jenny's ordinary waiting period is the 7 day period from 1 February 2018 - 7 February 2018. This would have been Jenny's ordinary waiting period even if she was not a RapidConnect participant.

Jenny's actual start day is worked out under clause 5 of Schedule 2 to the Social Security Administration Act. As a RapidConnect participant, if she was not subject to an ordinary waiting period, Jenny's start day would be worked out under clause 4A(4) of Schedule 2, and would be the day she attended the appointment with her employment provider (5 February 2018). However, because she is serving an ordinary waiting period on 5 February 2018, her start day is worked out under clause 5(1)(a) of Schedule 2 instead. This is the day after her ordinary waiting period ends. Because Jenny's ordinary waiting period ends on 7 February 2018, the start day for her newstart allowance is 8 February 2018.

Item 1F inserts a reference to new clause 4A of Schedule 2 to the Social Security Administration Act into paragraph 621(3)(b).

This amendment is consequential to the amendment made by Item 1E. Subsection 621(3) determines when an ordinary waiting period for a newstart claimant commences where the person would otherwise be subject to an ordinary waiting period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), but where the person is subject to one or more exclusion periods. Item 1F amends paragraph 621(3)(b) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.

Social Security Administration Act

Item 1 inserts a note at the end of subclause 3(1) of Schedule 2. Subclause 3(1) provides the general rule for determining a person's start day in relation to a social security payment. The note informs the reader that in certain circumstances, new clause 4A applies instead of subclause 3(1) to claims for newstart allowance and youth allowance. This amendment is consequential to the amendment to be made by item 2.

Item 2 would insert new clause 4A. In certain circumstances, clause 4A will apply instead of subclause 3(1) to determine the start day in relation to a person's claim for newstart allowance or youth allowance.

Subclause 4A(1) provides that clause 4A applies instead of subclause 3(1) in relation to a person's claim for newstart allowance or youth allowance (where the person is not a new apprentice or undertaking full-time study) if the Secretary gives the person a notice under section 63 requiring the person to attend a particular place for an interview on a day specified in the notice. The 'interview' is generally their initial appointment with an employment services provider.

The note to subclause 4A(1) advises the reader that clause 5 of Schedule 2 to the Social Security Administration Act may override a person's start day in certain circumstances. One example of this will be where a person attends an initial appointment with their employment services provider, but does not enter into either a Newstart Employment Pathway Plan or a Youth Allowance Employment Pathway Plan if required such that subparagraph 547AA(1)(b)(ii) or subparagraph 615(1)(b)(ii) applies to them on the day that would otherwise be their start day. In that case, the person's start day is worked out under clause 5(1) (see clause 5(2)(e)).

Subclause 4A(2) gives the Secretary the power to decide, in accordance with any guidelines made under new subclause 4A(3), that new clause 4A does not apply to a person. This power is needed to allow flexibility in the application of the clause. The power will be exercised in relation to the variety of people who are exempt from RapidConnect (for example, someone who is assessed as having multiple barriers to employment, a partial work capacity, or who is a principal carer of a child).

Subclause 4A(3) gives the Secretary the power to make guidelines to be complied with when deciding whether clause 4A applies to a person. Any such guidelines will be in a legislative instrument.

Subclause 4A(4) provides that the start day for a person to whom clause 4A applies is to be worked out using the table in that subclause.

Currently, if a person who is subject to RapidConnect is required by the Secretary to attend an interview under section 63 (that is, usually, to attend an initial appointment with an employment services provider), and the person attends the interview, their start day is generally the day on which their claim was made, in accordance with subclause 3(1). However, the effect of new subclause 4A(4) will be that a person's start day will generally be the day on which the person complies with the requirement to attend an interview.

The table in subclause 4A(4) provides that if the period between the time the Secretary imposes the requirement under section 63, and the specified day (that is, the initial appointment day), is two business days or less, the person's start day will be the specified day. If that period is more than two business days for reasons other than at the person's request, the person's start day will be the day on which the Secretary imposes the requirement under section 63. If the period is more than two business days at the request of the person, the person's start day will be the specified day.

Subclause 4A(5) provides that, despite subclause 4A(4), if the person does not comply with the requirement to attend a particular place for an interview on a specified day, and because of that failure, section 547AA or 615 of the Social Security Act applies to the person, the person's start day will be the day on which section 547AA or section 615 (as applicable) ceases to apply to the person.

Sections 547AA and 615 of the Social Security Act apply to a youth allowance or newstart allowance recipient (respectively) who is subject to RapidConnect, and who fails to comply with a requirement to attend an interview as required, and/or fails to enter into a Newstart Employment Pathway Plan, or Youth Allowance Employment Pathway Plan as required, in certain circumstances. Sections 547AA and 615 generally cease to apply to a person on the day the person complies with the relevant requirements, or any requirements the Secretary has required them to undertake instead of those requirements. The effect of this is that the start day of a person who is subject to RapidConnect, and who fails to attend their initial appointment with their employment services provider, will generally be the day that they attend the appointment.

However, in some circumstances, sections 547AA and 615 may cease to apply to a person on an earlier day if the Secretary is satisfied that this is appropriate (for example, because the person had a reasonable excuse for failing to attend the appointment, or because of circumstances beyond the person's control) (see paragraphs 547AA(4)(b) and 615(4)(b)). If this occurs, the person's start day is that earlier day.

Subclause 4A(6) provides that, despite subclauses 4A(4) and 4A(5), if a person is not qualified for the allowance on the day that would, but for subclause 4A(6), be the person's start day, their start day is the first day, after what would otherwise (under subclauses 4A(4) or 4A(5)) be the person's start day, on which the person is qualified for the allowance. This means that a person's start day will not occur prior to the person becoming qualified for the relevant payment.

For example, if, due to the application of subclause 4A(5), a person's start day will be the day on which section 547AA or 615 of the Social Security Act ceases to apply to them, but on that day the person is not qualified for their allowance, then subclause 4A(6) will apply such that the person's start day will be the day they are first qualified for the allowance. This subclause essentially postpones their start day until they are qualified.

Subclause 4A(7) provides that clause 4A will cease to apply if the Secretary revokes the requirement to attend a particular place for an interview before the specified day. The effect of subclause 4A(7) is that if the Secretary revokes a requirement made under section 63, clause 4A will cease to apply to the person and subclause 3(1) will apply instead. A note to be included under subclause 4A(7) advises the reader that in the event that the Secretary were to revoke the requirement before the specified day, subclause 3(1) will apply.

Item 3 omits the references to sections 547AA and 615 of the Social Security Act in paragraph (e) of the definition of 'exclusion period' in subclause 5(2), and replaces them with references to subparagraphs 547AA(1)(b)(ii) and 615(1)(b)(ii), respectively.

Subclause 5(1) determines the start day of a person who is subject to an 'exclusion period' on the day that would, apart from clause 5, be the person's start day. Currently, a period during which a person's youth allowance or newstart allowance is not payable because of the operation of section 547AA or 615 of the Social Security Act is included in the definition of 'exclusion period' in subclause 5(2).

By amending the definition of 'exclusion period', item 3 removes the application of subclause 5(1) to a person subject to RapidConnect who falls within the circumstances set out in subparagraph 547AA(1)(b)(i) or subclause 615(1)(b)(i) of the Social Security Act - that is, where the person does not attend an interview with a specified person at a specified time or place as required. This is because the new start date for these people is set out in the amendments made by item 2 of this Schedule.

However, item 3 will preserve the operation of subclause 5(1) of Schedule 2 in relation to a person subject to RapidConnect who falls within the circumstances set out in subparagraphs 547AA(1)(b)(ii) or 615(1)(b)(ii) of the Social Security Act - that is, if they fail to comply with a requirement to enter into a Newstart Employment Pathway Plan or a Youth Allowance Employment Pathway Plan in certain circumstances. This is because it is not intended that the amendments made by Schedule 10 will affect the current start day of these people.

Item 4 is an application provision and provides that the amendments which will be made by Schedule 10 will apply in relation to claims made on or after the commencement of Schedule 10. Schedule 10 commences on the later of 1 January 2018 and the day after Royal Assent.

The effect of item 4 is that any claims for newstart allowance or youth allowance (where the claim is not based on the claimant being a new apprentice or undertaking full-time study) made before the commencement date will not be affected by the amendments made by Schedule 10.