Senate

Explanatory Memorandum

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

Schedule 1 - Energy supplement replacing seniors supplement

Summary

From 20 June 2015, this Schedule will cease payment of the seniors supplement for holders of the Commonwealth Seniors Health Card or the Veterans' Affairs Gold Card.

Background

Under this measure, the seniors supplement will be abolished for holders of the Commonwealth Seniors Health Card. Veterans who hold a Commonwealth Seniors Health Card or Gold Card would also no longer receive the seniors supplement. Holders of the Commonwealth Seniors Health Card will continue to be paid energy supplement. The last quarterly seniors supplement payment generally received by cardholders would be the one made on 20 June 2015 or shortly thereafter.

Under the Social Security Act, qualification for the seniors supplement is currently provided by Part 2.25B. The Veterans' Entitlements Act 1986 (Veterans' Entitlements Act) provisions are in Part VIIAD. The supplement is payable quarterly on a test day, based upon accrued days for which the person qualified for the supplement during the quarter ending on the day before the test day. The seniors supplement test days are 20 March, 20 June, 20 September and 20 December. Qualification is based upon the person being the holder of a Commonwealth Seniors Health Card or being an eligible holder of the Gold Card under the Veterans' Entitlements Act.

Energy supplement is currently added to the rate of seniors supplement. As the result of these amendments, energy supplement under Part 2.25B of the Social Security Act or Part VIIAD of the Veterans' Entitlements Act will become payable to people who are holders of the Commonwealth Seniors Health Card or eligible holders of the Gold Card as a free-standing payment.

The amendments made by this Schedule commence on 20 June 2015, although the amendments will generally only affect payment of the supplement from 20 September 2015, which marks the payment day for the next relevant quarterly instalment period beginning 20 June. No person's interests will be adversely affected because of the apparent retrospective commencement of Schedule 1, noting that a transitional provision will prevent any debts arising if seniors supplement is paid after 20 June 2015 but before passage of the Bill.