House of Representatives

Second Reading Speech

Mr Shorten (Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations)

I move:

That this bill be now read a second time.

The Australian government recognises that households reliant on income support benefits as their main source of income can find it hard to manage unexpected costs such as urgent repairs on the family car or appliances, bills that are higher than expected, or unforeseeable medical or dental costs.

The Social Security and Other Legislation Amendment (Income Support Bonus) Bill 2012 will give effect to this government's 2012-13 budget commitment to introduce a new supplementary allowance for eligible income support recipients.

The bill includes amendments to the Social Security Act 1999, theSocial Security (Administration) Act 1999, the Farm Household Support Act 1992, and the Income Tax Assessment Act 1997 to give effect to this commitment.

This supplementary allowance, the income support bonus, will help over one million Australians to manage unanticipated expenses by providing an additional $210 a year to single recipients and $350 to most couples where both partners are eligible.

The income support bonus will be tax free and indexed twice yearly in line with the consumer price index, making sure the payment keeps pace with the real costs recipients might face.

The bill underlines the government's $1.1 billion commitment over the next four years to support eligible recipients of Newstart allowance, youth allowance, parenting payment, Austudy, ABSTUDY living allowance, sickness allowance, exceptional circumstances relief payment, transitional farm family payment and special benefit.

Eligible Australians, those receiving a qualifying income support payment on 20 March 2013, can look forward to receiving their initial payment with their first income support payment after this date. They will not have to apply to receive the income support bonus and payment will be automatically made to those eligible people.

Income support bonus payments will then be made in March and September every year provided the recipient is on a qualifying income support payment on 20 March or 20 September for the respective payment.

For single recipients, the initial payment will be $105, or $210 a year. The payment to most persons who are a member of couple will be $87.50, or $175 a year. As is the case with other supplements, each entitled member of a couple separated by illness, or with a partner in respite care, or with a partner in gaol will be paid at the single rate of $105.

The bonus is not separately means tested because income and assets tests already apply to the person's qualifying income support payment, but will be subject to the existing income management provisions.

The government also welcomes today the Senate committee's report on the adequacy of the allowance payment system and will be carefully and seriously considering the report recommendations. I am indebted to the work of the senators and also to those who have made contributions to this report.

The government has acknowledged on a number of occasions that it is not easy for a person to live on the current rate of Newstart allowance and that many people in our community are doing it tough.

Combined with related measures such as the doubling of the liquid assets waiting period thresholds, the income support bonus will assist vulnerable members of our society, including those on Newstart allowance, to manage unforseen expenses and increasing costs.

The income support bonus offers assistance to disadvantaged Australians while being framed against a background of fiscal prudence, given the current tough budgetary considerations of the government. I commend the bill to the House.

Debate adjourned.