House of Representatives

Second Reading Speech

Mr Slipper (Parliamentary Secretary to the Minister for Finance and Administration)

I move:

That this bill be now read a second time.

This bill gives effect to most of the Family and Community Services and Veterans' Affairs 2003 budget measures that require legislation. The bill also gives effect to a 2001 budget measure upon which the 2003 measure relating to recovery of overpayments arising from lump sum foreign pension payments depends. Finally, the bill makes a small number of non-budget minor policy or technical changes.

Compensation payments made by Germany or Austria to victims of National Socialist persecution are currently excluded under the social security and veterans' entitlements income tests. This bill will exclude any such payment from the income test, regardless of the country making it. Ex-gratia payments are being made now in anticipation of the legislation.

Centrelink continues to target social security fraud, particularly where people use the cash economy and false identities to evade detection. This bill will allow limited access to newly available sources of data on taxation and financial transaction activities to combat this fraud.

In a related non-budget measure, the bill will restore access by the Child Support Agency - part of the Department of Family and Community Services - to financial transaction information held in the AUSTRAC database. The agency lost this access when it ceased to be part of the Australian Taxation Office following the 1998 changes in administrative arrangements. The restored access is for the administration of the child support legislation.

From 1 July 2004, responsibility for the operation of the Assurance of Support Scheme will be transferred from the Department of Immigration and Multicultural and Indigenous Affairs to the Department of Family and Community Services. The Assurance of Support Scheme will be established under the social security law and administered by Centrelink.

The new arrangements will improve the administration of the scheme and minimise assurance of support debts. Under the new arrangements, the immigration department will continue to decide when an assurance is needed. However, Centrelink will administer the scheme, including assessing proposed assurances, accepting or rejecting them and, should the need arise, recovering debts. Centrelink will become a single point of contact for assurers. Centrelink's extensive customer network will provide assurers with easy access to comprehensive information about their financial commitments, in their preferred language. No assurance will be accepted without an assurer having the nature of the commitment explained in a face-to-face interview. All this will enhance awareness on the part of assurers, resulting in fewer migrants needing to claim income support.

From 1 July 2004, Centrelink will be able to suspend payment where a person leaves Australia without notifying their departure and they are receiving a payment, or part of a payment - for example, rent assistance - that has limited portability. Depending on the outcome of a review of the person's case, payment would either be fully restored or cancelled.

The social security debt recovery provisions will now allow for full recovery of overpayments that arise when a foreign pension payment is made as a lump sum in arrears. The new rules will apply if a person receives a foreign pension payment in arrears for a period during which a social security payment was paid to the person. The amount by which the person's social security payments would have been reduced if the arrears had been paid as periodical payments will be a debt. The effect will be similar for the person's partner, because half of the person's arrears payment is counted as the partner's income.

From 1 July 2004, the allowable period of temporary overseas absence for portable social security payments will be reduced from 26 to 13 weeks. The changes will apply to absences from Australia on or after 1 July 2004. The new portability period will not affect age, wife and widow B pensions, which currently have unlimited portability, but the changes will apply to disability support pension. However, it will be possible to grant unlimited portability to a severely disabled disability support pensioner who returns overseas after a short visit to Australia.

A person's rate of family tax benefit may also be reduced or stopped if the person or an FTB child of the person is absent from Australia for longer than 26 weeks. This allowable period of absence will also be reduced to 13 weeks. The secretary will still be able to extend a person's portability period in defined circumstances - for example, where a person is unable to return to Australia because of serious illness of the person or a family member, or a natural disaster in the country where the person is.

This bill also contains some minor technical amendments. I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Ms Roxon) adjourned.