Bills Digest No. 18, 2019–20
PDF version [551KB]
Don Arthur
Social Policy Section
Juli Tomaras
Law and Bills Digest Section
8
August 2019
Contents
History of the Bill
Purpose of the Bill
Background
Committee consideration
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Date introduced: 25
July 2019
House: House of
Representatives
Portfolio: Social
Services
Commencement: Schedule
1, Part 1 on 1 September 2019. Schedule 1, Part 2 on 20 March 2020. All
other sections, on Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at August 2019.
History of
the Bill
The Social Services Legislation Amendment (Overseas Welfare
Recipients Integrity Program) Bill 2019 (the earlier Bill) was introduced into
the House of Representatives on 13 February 2019.[1]
The Bill was read a second time but did not progress. The earlier Bill lapsed
when the Parliament was prorogued on 11 April 2019.
The present Bill was introduced into the House of
Representatives on 25 July 2019 and is in identical terms to the earlier Bill.
The only difference is that Part 1 of Schedule 1 of the Bill will commence on 1
September 2019, rather than 1 July 2019, as proposed in the earlier Bill.
A Bills
Digest was prepared in respect of the earlier Bill.[2]
This Bills Digest largely reproduces the material published in that earlier one.
Purpose of
the Bill
The purpose of the Social Services Legislation Amendment
(Overseas Welfare Recipients Integrity Program) Bill 2019 (the Bill) is to
amend the Social
Security Act 1991 and the Social Security
(Administration) Act 1999 to introduce an assurance requirement for
individuals aged 80 years and over, who are in receipt of particular social
security payments and have been continuously absent from Australia for at least
two years, to return a proof of life certificate at least once every two years
when notified by the Secretary of the Department of Social Services, in order
to maintain eligibility for those payments.
Background
The proposed amendments arise out of a budget and welfare
integrity measure announced in the 2018–19 Mid-Year Economic and Fiscal Outlook.[3]
According to the Bill’s Explanatory Memorandum, around
96,000 people receive an Australian social security payment while living
permanently overseas. Most of these people are receiving the Age Pension.[4]
This stems from a decision made in 1973 that introduced ‘indefinite
portability’ for many pensions.[5]
As the number of pensioners living overseas grew, an
obvious administrative problem emerged. As Liberal Senator Michael Townley
expressed the issue in 1977: ‘How on earth ... can the Department of Social
Security even be sure that a recipient of a pension is still alive if he or she
is overseas?’[6]
Maintaining
accurate data on deaths
Internationally, it is common for governments to allow
individuals to receive pensions while living abroad. In most cases these are
pensions made under social insurance schemes where individuals are entitled to
payments because they have made contributions while working.
To avoid making payments to people after they have died,
pension agencies need some way to check that recipients are still alive. There
are a number of ways to do this. They can rely on the recipient’s family to
notify them, they can exchange data on deaths with other countries, and they
can send a recipient a form that requires an authorised person to verify their
identity and confirm that they are alive. These forms are often known as ‘life
certificates’.
One problem with relying on family members to report
deaths is the risk of fraud. If a family member has a joint bank account with
the recipient or has power or attorney, they may be able to access payments
after the recipient’s death. In his second reading speech the Minister for Communications,
Cyber Safety and the Arts, Paul Fletcher, raised another possibility—that some
family members may mistakenly believe they are entitled to receive payments
after the recipient’s death (in some countries spouses and dependents can
receive benefits through contributory social insurance schemes).[7]
A number of countries have reciprocal death reporting
agreements. For example, the United States Social Security Administration
reports that it has agreements with a number of countries including Australia.[8]
The United Kingdom also conducts data-matching using death data from Australia
and a number of other countries.[9]
According to information provided by the Department of Social Services,
Australia is not able to rely on information on deaths provided by overseas
governments. In some cases countries that have social security agreements with
Australia are not able to share data due to their domestic laws governing
confidentiality.[10]
Life certificates are one of the oldest ways to maintain
accurate data on deaths. In the past, before it was possible to automatically
match pension data with official data on deaths, life certificates were often
used by pension schemes for recipients living within the country. The major
problem with relying on life certificates is vulnerability to fraud.
Administrators need some way to check the accuracy of the information provided
on the form.[11]
Overseas
use of life certificates
As the Explanatory Memorandum notes, a number of countries
overseas use life certificates. One example is the United Kingdom.[12]
In response to a question in the House of Lords in 2011, Lord Freud explained:
Under the life certificate programme, we target those
pensioners abroad who are aged 80 and over and living in all countries where
they are not covered by our data-matching agreements.[13]
In December 2013, the UK Government announced that it
would increase its activity on life certificates and that this would deliver
savings of £45 million over two years.[14]
According to reports in The Telegraph the Department of Work and
Pensions would move from requesting life certificates on a random basis to
requiring certificates every two years. The requirement only applies to
pensioners who live in countries not covered by a data-matching agreement.[15]
According to reports in The Telegraph, a number of
pensioners complained that the policy was inconvenient and unfair.[16]
Australian
use of life certificates
The Australian Government has used life certificates in
the past. According to a 1990
Auditor-General’s report:
If [International Operations Branch] officers are in any
doubt whether a pensioner is still alive they issue a ‘life certificate' which
must be signed by a prominent local official (teacher, post-master etc) who
knows the pensioner, and returned to the Department. Alternatively, a review by
mail may be carried out. DSS is of the view that regular mail reviews are at
least as effective as life certificates.[17]
The report also notes the risk that people will ‘complete
falsely a life certificate in respect to a deceased pensioner and continue to
convert fraudulently pension cheques received.’[18]
A life certificate form is currently posted on the
Department of Human Services website but it is not currently part of a regular
compliance process.[19]
In the section of the form titled ‘customer responsibilities’, it states: ‘if
you fail to return this certificate within six weeks your pension may be
stopped.’[20]
It requires an authorised person to verify the identity of a pension recipient.[21]
Committee
consideration
Senate
Standing Committee for the Selection of Bills
The Senate Standing Committee for the Selection of Bills determined
that the Bill should not be referred to a committee for inquiry.[22]
Senate Standing Committee
for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
had no comment on the Bill.[23]
Policy
position of non-government parties/independents
While not opposing the measure, the Australian Labor Party
has questioned the Government’s ability to implement it. In a December 2018
media release Shadow Minister for Families and Social Services, Linda Burney,
and Shadow Minister for Human Services, Ed Husic, stated:
The Government’s cuts and outsourcing of Centrelink jobs have
taken their toll. There are serious questions about the Government’s ability to
competently implement this new proof-of-life requirement.
Ms Burney and Mr Husic added ‘Labor will review the details
of this plan carefully.’[24]
At the time this digest was written, it appeared that no
other political party or independent members of parliament had commented on the
Bill.
Position
of major interest groups
At the time this digest was written, no major interest
groups had taken a public position on the measure.
Financial
implications
According to the Explanatory Memorandum, the measure will
save $221.1 million over the forward estimates.[25]
Statement
of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[26]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[27]
Key
issues and provisions
Schedule
1
Part 1 — General Amendments
Part 1 of Schedule 1 commences on 1 September 2019.
Amendments
to the Social Security Act 1991
The Wife (Age) Pension is an income support payment for
female partners of people receiving Age or DSP as of June 1995. It is for
female partners of age pensioners who do not qualify for Age Pension in their
own right. Subsection 146V(1) of the Social Security Act provides that a
Wife Pension cannot be granted to a woman who claimed that payment on or after
30 June 1995, in recognition of women's increased labour force participation. The
Wife Pension is normally portable outside Australia, though the amount of
payment will change based on certain criteria. To remain qualified for the Wife
Pension, a person must be a member of a couple, and have a partner who is
receiving Age Pension. Current recipients remain eligible until otherwise
disqualified.
However, subsection 146V(1) provides that the limitation
on granting the Wife Pension does not apply to the resumption of a cancelled or
suspended Wife Pension if, on reconsideration of the cancellation or suspension
under section 85 of the Social Security (Administration) Act (the Administration
Act), the Secretary of the Department of Social Services determines that
the payment was or is payable.
Item 1 amends subsection 146V(1) to also add a
reference to proposed section 85AA of the Administration Act, at item
8 of Schedule 1 to the Bill, which deals with the circumstances under which
a person’s social security payment may be resumed following a suspension or
cancellation of that payment due to failure to comply with the requirement to
provide a proof of life certificate (see below).
Subsection 362A(1) of the Social Security Act
provides that Widow B Pension has been phased out since
20 March 1997, and is basically only available to women who were
receiving the Pension before this time. Currently, subsection 362A(3) of the
Act provides that this does not apply in relation to a determination by the
Secretary under section 85 of the Administration Act. As set out above,
section 85 of the Administration Act deals with the resumption of
payment after cancellation or suspension.
Item 2 amends subsection 362A(3) inserting a
reference to proposed subsection 85AA. This has the effect of enabling
the resumption of Widow B pension following a suspension or cancellation of
that payment due to failure to comply with the requirement to provide a proof
of life certificate.
Amendments to the Social Security
Act (Administration) Act 1999
How the measure will work
People affected by this measure
This measure targets recipients of certain social security
payments who are aged 80 and over and have been continuously absent from
Australia throughout the previous two years. It affects recipients of:
- Age
Pension
- Carer
Payment
- Disability
Support Pension
- Widow
B Pension and
- Wife
Pension.[28]
Proof of life to be required at
least once every two years
Proposed paragraph 63(2AB)(a) provides that
the Secretary may notify a person captured by the abovementioned criteria that
they are required to provide a proof of life certificate within the 13-week
period from when the notice is given to them. The requirement for a certificate
to be provided does not apply if the person enters Australia within the 13-week
period (proposed paragraph 63(2AB)(b)).
Proposed subsection 63(2AC) imposes a requirement
on the Secretary to give notice at least once every two years, to a person
captured by the criteria in proposed subsection 63(2AA),
requiring them to provide a proof of life certificate.
According to the Minister’s second reading speech, around
25,000 pensioners will be required to provide proof of life.[29]
Proof of life certificate
Social security payment recipients will be required to
provide proof of life using a form approved by the Secretary.
Proposed section 63A sets out the minimum
requirements for a proof of life certificate, including a requirement for it to
be in a form approved by the Secretary.[30]
The proof of life certificate must include a statement
that the person is alive and this statement must be signed and dated by the
person or, under certain circumstances, another person. The certificate must
also include a statement by an ‘authorised certifier’[31]
that the authorised certifier:
- has
sighted the person while in their physical presence
- has
verified the person’s identity using a method set out in the approved form and
- is
satisfied that the person is alive.
The authorised certifier must sign and date their statement.
The Bill does not stipulate who will be an authorised
certifier for the purpose of this measure, although the Explanatory Memorandum
to the Bill suggests that authorised certifiers may include ‘a judge or
magistrate of a law court, a medical doctor who is registered or licensed to
practice in that country, or an Australian official at an embassy, consulate or
high commission’.[32]
The Secretary will determine the class of person by making a legislative
instrument.
Failure to provide a proof of life
certificate
Subsection 64(1) of the Administration Act provides
that a social security payment is not payable to a person who has not complied
with a reasonable requirement imposed by the Secretary under subsection 63(2)
or (4) of that Act. Those provisions allow the Secretary to require a person to
attend or contact the Department, provide relevant information, or undergo a
medical, psychiatric or psychological examination. As set out above, item 3
of Schedule 1 to the Bill will insert proposed subsections 63(2AA) to (2AC)
to allow the Secretary to require a person to provide a proof of life
certificate. Item 6 of Schedule 1 to the Bill proposes to amend
subsection 64(1) so that a social security payment will also not be payable to
a person who has not complied with a reasonable requirement imposed by the Secretary
under subsection 63(2AB) to provide a proof of life certificate. Subsection
80(1) of the Administration Act obliges the Secretary to cancel or
suspend a payment that is not payable.
Accordingly, if a recipient fails to provide a proof of
life certificate within 13 weeks (or does not enter Australia within that
period), their payment will be suspended. If, after a further 13 weeks, they do
not provide a proof of life certificate (or do not enter Australia), their
payment will be cancelled.
Resumption of payment after
suspension or cancellation
If a recipient’s payment is suspended or cancelled they
can have it restored by submitting a current proof of life certificate or by
entering Australia. Their payments will resume and they will receive back pay
for the period it was suspended or cancelled.[33]
Risk
of inconvenience and hardship
There is a risk that some recipients will have their
payments suspended because the proof of life certificate form fails to reach
them or because they are unable to complete it. This could happen if a
recipient had changed their address and not notified Centrelink or because they
were incapacitated. The temporary loss of payments could cause hardship.
Some recipients may find it difficult or inconvenient to
meet the proof of life requirements. A similar UK scheme led to complaints.
According to a report in The Telegraph, a pensioner living in Canada
spent more than a week’s worth of her pension in order to meet the
requirements. This included long distance phone calls to the UK Department of
Work and Pensions.[34]
The Bill limits the negative impact on recipients by
targeting the measure to recipients who are aged 80 and over.
Risk
of fraud
In implementing the measure there may be a trade-off
between limiting inconvenience to recipients and limiting the risk of fraud.
Much of this will depend on who is included as an authorised certifier. This is
not set out in the Bill but will be determined by the Secretary through a
legislative instrument.
[1]. Parliament
of Australia, ‘Social
Services Legislation Amendment (Overseas Welfare Recipients Integrity Program)
Bill 2019 homepage’, Australian Parliament website.
[2]. D
Arthur and J Tomaras, Social
Services Legislation Amendment (Overseas Welfare Recipients Integrity Program)
Bill 2019, Bills digest, 76, 2018-19, Parliamentary Library, Canberra,
3 April 2019.
[3]. J
Frydenberg (Treasurer) and M Cormann (Minister for Finance and the Public
Service), Mid-year
economic and fiscal outlook 2018–19, p. 223.
[4]. Explanatory
Memorandum, Social Services Legislation Amendment (Overseas Welfare
Recipients Integrity Program) Bill 2019, p. 3.
[5]. Department
of Social Services (DSS), ‘Portability
requirements (taking your payment overseas),’ DSS website.
[6]. M
Guilfoyle, ‘Answer
to Question without notice: overseas payments of pensions’, [Questioner: M
Townley], Senate, Debates, 19 August 1977, p. 342.
[7]. P
Fletcher, ‘Second
reading speech: Social Services Legislation Amendment (Overseas Welfare
Recipients Integrity Program) Bill 2019ram) Bill 2019’, House of
Representatives, Debates, 25 July 2019, pp. 9–10.
[8]. United
States, Office of the Inspector General, Social Security Administration, The
Social Security Administration’s foreign enforcement questionnaires,
Audit report, September 2012, p. B-2.
[9]. D
Freud (Parliamentary Under-Secretary of State, Department for Work and
Pension), ‘Benefits’,
United Kingdom, House of Lords, Debates, 24 January 2011, col. 88.
[10]. Information
provided to the Parliamentary Library by Payment Design and Conditionality
Branch, Department of Social Services, 5 March 2019.
[11]. United
Kingdom, Audit Commission, A
perfect match: report of the 1998 National Fraud Initiative, Audit
Commission Update, May 2000, p. 11.
[12]. R
Harrington (Parliamentary Under-Secretary—Department for Work and Pensions), ‘Answer
to written Question: State retirement pensions: British nationals abroad:
written question 58970’, [Questioner: A Main], UK Parliament, Debates,
16 January 2017.
[13]. D
Freud (Parliamentary Under-Secretary of State – Department for Work and Pensions),’Answer
to written Question: Pensions: written question HL6276’, [Questioner: Lord
Laird], UK Parliament, Debates, 8 February 2011.
[14]. HM
Treasury (UK), Autumn
statement 2013, Stationery Office, London, December 2013, pp. 79 and
90.
[15]. A
Steed and E Roberts, ‘Expat
pensioners losing out as Government thinks they're dead’, The Telegraph
[UK[, 5 June 2015. J Harper and E Roberts, ‘Frozen
pensioners: we shouldn't have to prove we're still alive’, The Telegraph
[UK], 12 December 2013.
[16]. Ibid.
[17]. Auditor-General,
Department
of Social Security: payment of pensions overseas, Audit report, 8,
1990–91, Australian Government Publishing Service, Canberra, 1990, p. 31.
[18]. Ibid.
[19]. Information
provided to the Parliamentary Library by Payment Design and Conditionality
Branch, Department of Social Services, 22 February 2019.
[20]. Department
of Human Services (DHS), ‘Proof of Life
Certificate form (AUS061)’, DHS website.
[21]. Ibid.
[22]. Senate
Standing Committee for the Selection of Bills, Report,
4, 2019, The Senate, 31 July 2019.
[23]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 4, 2019, The Senate, 31 July 2019, p. 38.
[24]. L
Burney and E Husic, Government
needs to guarantee pension proof-of-life won’t be another debacle,
media release, 13 December 2018.
[25]. Explanatory
Memorandum, Social Services Legislation Amendment (Overseas Welfare
Recipients Integrity Program) Bill 2019, p. 1.
[26]. The
Statement of Compatibility with Human Rights can be found at page 11 of the
Explanatory Memorandum to the Bill.
[27]. Parliamentary
Joint Committee on Human Rights, Report,
3, 2019, The Senate, Canberra, p. 19.
[28]. Proposed
subsection 63(2AA).
[29]. P
Fletcher, ‘Second
reading speech: Social Services Legislation Amendment (Overseas Welfare
Recipients Integrity Program) Bill 2019ram) Bill 2019’, op. cit.
[30]. Proposed
paragraph 63A(1)(c).
[31]. Proposed
subsections 63A(8) and (9) provide that an ‘authorised certifier’ is
a person included in a class of persons specified in a determination by the
Secretary.
[32]. Explanatory
Memorandum, Social Services Legislation Amendment (Overseas Welfare
Recipients Integrity Program) Bill 2019, p. 12.
[33]. Proposed
subsection 85AA(1) deals with the resumption of payment after suspension. Proposed
subsection 85AA(2) deals with the resumption of payment after cancellation.
[34]. Harper
and Roberts, ‘Frozen
pensioners’, op. cit.
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