House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families and Social Services, Senator the Hon Anne Ruston)

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT (SIMPLIFYING INCOME REPORTING AND OTHER MEASURES) BILL 2020

The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The Bill implements the Budget 2019-20 measure 'Changing the Social Security Income Assessment Model.' Under the new measure, employment income will be assessed under the social security law ^[1] when it is paid, rather than when it is earned, as is currently the case.

To make this possible, the Australian Government will use data collected by the Australian Taxation Office (primarily Single Touch Payroll data). Single Touch Payroll is a streamlined system employers use to report taxation and superannuation information. The Bill removes any doubt concerning the basis for Services Australia to participate in the information exchanges that enable this.

The Australian Government will also use this information to better integrate and strengthen the integrity of Australia's tax-transfer system. In this respect, the Bill removes any doubt concerning the basis for Services Australia to exchange information with the Australian Taxation Office so that it can also use this information to administer entitlements under the family assistance law, ^[2] the Student Assistance Act 1973 (Student Assistance Act) and the ABSTUDY scheme (which is partly administered under the Student Assistance Act).

Human rights implications

The Bill engages the following human rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 :

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the right to social security in article 9 of the International Covenant on Economic, Social and Cultural Rights [1976] ATS 5 (ICESCR), and

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the right to privacy in article 17 of the International Covenant on Civil and Political Rights [1980] ATS 23 (ICCPR).

Right to social security

Article 9 of the ICESCR recognises 'the right of everyone to social security. 'The Committee on Economic, Social and Cultural Rights (CESCR) has described this right as encompassing the right to access and maintain benefits, in cash or in kind, provided in order to ensure protection in respect of social risks and contingencies. ^[3]

The elements of the right are:

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a social security system is available for the provision of benefits

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the social security system provides for coverage of social risks and contingencies

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benefits, whether in cash or kind, are adequate and in amount and duration in order that everyone may realise rights contained in articles 10, 11 and 12 of the ICESCR, and

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benefits are accessible.

The CESCR has conceded that social security may be subject to certain limitations, provided that they are 'reasonable, proportionate and transparent.' ^[4]

The Bill will change the way in which employment income is assessed for entitlements under the social security law. It will do this by providing that employment income is to be assessed when it is paid, rather than when it is earned. The Bill will also assist the Australian Government administer the family assistance law and the Student Assistance Act (and the ABSTUDY scheme).

The use of Single Touch Payroll data for these things will make it easier for individuals to access social security, in the sense of making it easier for individuals to participate in the administration of entitlements under the family assistance law, the social security law and the Student Assistance Act (and the ABSTUDY scheme). It will:

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reduce the amount of time and effort for individuals to estimate and report employment income

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increase transparency of entitlements and changes to payment, and

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increase the accuracy of employment income reported to government, resulting in greater payment integrity and less risk of inaccurate payments.

In this way, the Bill enhances the right to social security in article 9 of the ICESCR.

The Bill will not otherwise change the availability of social security, the amount or duration of social security, or the social risks and contingencies in respect of which the social security law affords protection.

Right to privacy

Article 17 of the ICCPR provides that 'no one shall be subjected to arbitrary or unlawful interference with their privacy.' The Human Rights Committee has said that the right to privacy includes respect for informational privacy, including in respect of storing, using and sharing private information and the right to control the dissemination of that information. ^[5] It has further indicated that the right to privacy can be limited to achieve a legitimate objective where the limitations are lawful and not arbitrary. In order not to be arbitrary, any limitation must be reasonable and necessary in the particular circumstances, as well as proportionate to the objectives it seeks to achieve. ^[6]

The use of Single Touch Payroll data to assess employment income under the social security law when it is paid, and to administer Australia's tax-transfer system, will require Services Australia and the Australian Taxation Office to exchange personal information. The social security law, the family assistance law and the Student Assistance Act contain detailed provisions dealing with the gathering and protection of information about individuals. These provisions authorise the collection and use of personal information for the purposes of the Privacy Act 1988 .

The Bill removes any doubt concerning whether Services Australia can participate in the information exchange with the Australian Taxation Office consistently with the confidentiality provisions of the social security law, the family assistance law and the Student Assistance Act. It does this by making explicit that existing provisions of these laws authorise the obtaining of, making a record of, disclosure of or use of information about a person relating to taxation information. ^[7] In this way, the Bill engages the right to privacy in article 17 of the ICCPR.

The information exchange is necessary to alleviate inefficient and burdensome reporting processes and systems for Australia's tax-transfer system. This system relies on a range of income-related information to underpin the making of decisions about the provision of payments and benefits. Payroll systems are a key source of this information, particularly for working age payments. The current approach can mean employers are required to provide or confirm this information, often as part of a manual process. Where this occurs, it is inefficient for all involved. The current approach can alternatively mean employees need to estimate employment income they have earned in a particular period (generally, fortnightly), and report this to Services Australia. Challenges in the current environment include:

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employers are placed under an administrative burden in responding to government and employee enquiries, and complying with requirements to provide information

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individuals who claim and receive welfare payments face challenges in reporting income accurately and obtaining information from employees for this purpose

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government experiences a range of inefficiencies in dealing with inaccurate information leading to inaccurate payments and costly monitoring, compliance and debt management processes.

The information exchange will support more efficient and accurate decision-making processes, providing benefits for employers, individuals and government. Key benefits include:

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for employers, there will be a reduction in reporting burden due to a decrease in payroll information requests from government and employees

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for individuals, there will be simplified compliance obligations and greater confidence in the accuracy of payments received, and

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for government, there will be enhanced integrity of welfare payments and family tax benefits.

Two important protections will operate in relation to the information exchange. Firstly, existing subsection 162(2) of the Family Assistance Administration Act, existing subsection 202(2) of the Social Security Administration Act and existing subsection 351(2) of the Student Assistance Act authorise the disclosure of protected information (as defined in those Acts) in certain circumstances. The Bill makes explicit that this includes disclosure for the purpose of a taxation officer matching that information against taxation information to facilitate the performance of functions, or the exercise of powers, under the relevant law. That is, the Bill makes explicit that disclosure is permitted for a limited purpose. Secondly, it will remain an offence to access or use protected information without authority. ^[8] These protections ensure that the Bill is a reasonable and proportionate means of achieving the objectives of the information exchange.

Conclusion

The Bill is compatible with recognised or declared human rights or freedoms. The Bill enhances the right to social security, by making it easier for individuals to participate in the administration of entitlements under the family assistance law, the social security law and the Student Assistance Act (and the ABSTUDY scheme). To the extent the Bill limits a person's right to privacy, the limitation is a reasonable and proportionate means of achieving a legitimate objective.