Chapter 1Introduction
1.1This report sets out the findings of a review by the Senate Community Affairs References Committee (the committee) of legislative instruments made under Part 3B or Part 3AA of the Social Security (Administration) Act 1999 (the Act).
1.2Thisis the first such review by the committee (Review 1) since the passage of legislation in 2023 requiring Senate committee review of any legislative instrument made under Part 3B or Part 3AA of the Act. Part 3B of the Act, which concerns the Income Management (IM) regime, has been operating for over 15years. Part 3AA concerns the Enhanced Income Management (eIM) regime legislated in 2022.
1.3The review examines the following six legislative instruments (LIs), allmade by the Hon Amanda Rishworth MP, Minister for Social Services, forthe purposes of Part3AA or Part 3B of the Act:
LIs made on 1 September 2023 for the purposes of Part3AA of the Act (eIM):
Social Security (Administration) (Enhanced Income Management Regime – State Referrals) Determination 2023 [State Referrals Determination];
Social Security (Administration) (Enhanced Income Management Regime – Commonwealth Referrals and Exemptions) Determination 2023 [Commonwealth Referrals Determination]; and
Social Security (Administration) (Enhanced Income Management Regime – Volunteers) Determination 2023 [Volunteers Determination].
LIs made on 14 September 2023 for the purposes of Part 3B of the Act (IM):
Social Security (Administration) (Declared Child Protection State – New South Wales, Queensland, South Australia and Victoria) Determination 2023 [Declared Child Protection State Determination];
Social Security (Administration) (Recognised State or Territory – Northern Territory) Determination 2023 [Recognised State or Territory – NT Determination]; and
Social Security (Administration) (Specified Income Management Territory – Northern Territory) Instrument 2023 [Specified IM Territory – NT Instrument].
Structure of the report
1.4This report contains two chapters. This chapter sets out:
contextual information on income management frameworks;
the purpose and an overview of each of the six legislative instruments under review; and
information on the conduct of the inquiry and on other committees’ consideration of the relevant legislative instruments.
1.5Chapter 2 examines the views of submitters and witnesses on the legislative instruments under review, concluding with the committee’s view and recommendations.
Background
1.6This section provides a brief history of income management (IM), including the enhanced Income Management (eIM) reforms.
Income Management
1.7IM quarantines a proportion of a social security recipient’s payment, so it can be spent only on necessities such as food, housing, clothing and utilities and not on restricted goods and services such as alcohol, gambling, tobacco, pornography and other related products. It also cannot be withdrawn as cash.
1.8The IM regime was first created in 2007 as part of the Northern Territory Emergency Response (NTER) and was initially introduced to prescribed areas of the Northern Territory (NT), including 73 remote communities, associated outstations and ten town camp regions.
1.9Not long after IM was introduced in the NT, a different and more targeted model of IM was established in Cape York through the Cape York Welfare Reform trial communities. The Cape York IM was created as a sanction for individuals who had breached their obligations, as determined by the Family Responsibilities Commission.
1.10In 2008, the BasicsCard was introduced where participants could make purchases at approved merchants with a card that was PIN-protected and used the EFTPOS network.
1.11Between 2008 and 2014 the Australian Government extended income management to a number of smaller sites across Australia.
Cashless Debit Card
1.12First rolled out in 2016, the Cashless Debit Card (CDC) was an income management program administered via a card which blocked the purchase of restricted products and allowed only 20 per cent of payments to be withdrawn as cash. The CDC was a Visa debit card issued by payments company Indue (and later in the NT, by the Traditional Credit Union).
1.13In 2022, the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Act 2022 abolished the CDC program and established the eIM regime in Part 3AA of the Act. This 2022 Act compulsorily transitioned former CDC participants in the Northern Territory and Cape York region to the eIM regime.
1.14In 2023, the Social Security (Administration) Amendment (Income Management Reform) Act 2023 expanded access to the eIM regime by introducing eligibility criteria for mandatory participation in the regime. This 2023 Act directed all new entrants to income management to the eIM regime and closed entry to the IM regime under Part 3B of the Act.
Enhanced Income Management
1.15The eIM was intended to deal with the limitations of the IM regime’s BasicsCard platform by creating a hybrid regime that combined the CDC’s technology platform with policies modelled on those of the existing IM regime.
1.16eIM adopted the policy parameters of the IM regime but introduced the contemporary technology of the SmartCard. The SmartCard operates like a standard Visa Debit Card except that cash cannot be withdrawn. Existing IM participants can only move to eIM on request and can otherwise stay on the BasicsCard.
1.17As at 3 November 2023, there were 28,811 income management participants in Australia, with 23,058 in the IM regime and 5,753 in the eIM regime. The vast majority of IM and eIM participants are in the Northern Territory, with 20,968 in the IM regime and 5,208 in the eIM regime.
Purpose and overview of the legislative instruments under review
1.18The legislative instruments under review implement elements of the Social Security (Administration) Act 1999 (the Act), as amended by the Social Security (Administration) Amendment (Income Management Reform) Act 2023 (the Income Management Reform Act).
The three eIM-related legislative instruments made on 1 September 2023
1.19The purpose of the three legislative instruments made under Part 3AA of the Act (State Referrals Determination, Commonwealth Referrals Determination and Volunteers Determination) is to operationalise the changes to eIM introduced on 4 September 2023, following the commencement of the Social Security (Administration) Amendment (Income Management Reform) Act 2023. Following commencement of the IM Reform Act, the Administration Act requires certain criteria to be defined in legislative instruments to ensure the eIM regime can effectively operate.
StateReferrals Determination
1.20The State Referrals Determination is to enable the operation of the child protection and supporting people at risk (SPaR) measures under the eIM regime.The determination:
specifies New South Wales, Victoria, Queensland, Western Australia, South Australia and the Northern Territory a ‘declared child protection State or Territory’ for the purposes of Part 3AA of the Act (section 5);
specifies the Department of Health of the Northern Territory as ‘arecognised State/Territory authority’ for Part 3AA purposes (section 6);
prescribes 70 [per cent] as the proportion of a person’s eligible payment to be qualified under the child protection measure of the eIM regime (section7); and
includes no repeal date.
1.21The Determination consolidates five IM instruments made under Part 3B into a single instrument under Part 3AA.
1.22The Explanatory Statement for the State Referrals Determination states that:
Once a declared child protection State or Territory or a recognised State/Territory authority is determined, authorised officers or employees will be able to give the Secretary a notice requiring a person to be subject to the enhanced IM regime under the appropriate measure.
1.23The Department of Social Services (DSS) explained that, in combination with the primary legislation, the StateReferrals Determination enables:
(a)existing participants subject to child protection and state/territory referral measures of IM to choose whether to move to enhanced IM;
(b)any new participants subject to these measures in the specified state or territory to access the enhanced IM program;
(c)a lower percentage of regular payments income managed for those subjectto the child protection measure of enhanced IM; and
(d)the Registrar of the Banned Drinkers Register to refer individuals on the banned drinkers register to enhanced IM.
1.24DSS also highlighted that:
Existing child protection and state/territory referral participants that chose to stay on IM will remain subject to that program until the end of their referral notice.
Commonwealth Referrals Determination
1.25The Commonwealth Referrals Determination reflects the content of 9 instruments made under Part 3B of the Act into a single instrument specifying locations and decision-making principles for the purpose of the vulnerable welfare payment recipient, disengaged youth and long term welfare payment recipient measures under the eIM regime. The Determination specifies locations where eligible individuals must reside for eligibility for the vulnerable welfare payment recipient (section 5), and decision-making principles that the DSS Secretary (or delegate) must consider in deciding whether a person is a vulnerable welfare payment recipient for eIM purposes.
1.26The residence locations specified in section 5 of the Determination for eligibility for the vulnerable welfare payment recipient measure are the Northern Territory (subsection 5(a)) and areas covered by three other legislative instruments (subsections 5(b)–(d)). TheExplanatory Statement indicates that:
As at the date the Determination was made [1 September 2023], thefollowing areas are covered by the above instruments:
South Australia: Anangu Pitjantjatjara Yankunytjatjara lands and Playford;
Western Australia: Ngaanyatjarra Lands;
New South Wales: Bankstown;
Queensland: Logan, Rockhampton, Livingstone;
Victoria: Greater Shepparton.
1.27The indicator of vulnerability is central to decision-making on a person’s initial and ongoing eligibility for eIM as a vulnerable welfare payment recipient. The indicator of vulnerability is defined in the Commonwealth Referrals Determination as ‘[e]ach of the following circumstances’ (subsection 4(2)), which are then themselves defined (subsections 4(3)–4(6)):
‘financial exploitation’;
‘financial hardship’;
‘failure to undertake reasonable self-care’; and
‘homelessness or risk of homelessness’.
1.28DSS explained that, in combination with the primary legislation, the Determination enables:
existing participants subject to the [vulnerable welfare payment recipient (VWPR)] measure of IM to choose whether to move to enhanced IM;
consistent decisions on referrals under the VWPR measure;
any new participants under the VWPR measure in the specified locations to access the enhanced IM program; and
easy identification and exclusion of exempt welfare payment recipients.
1.29Section 13 provides that this instrument is repealed at the start of 1 July 2026.
Volunteers Determination
1.30This Determination enables individuals to participate voluntarily in the eIM regime, provided they reside in a declared voluntary eIM area. DSS advised the committee that the geographic areas specified as ‘voluntary enhanced income management areas’ are:
the Northern Territory;
the APY lands and Playford, South Australia;
the Ngaanyatjarra lands and Kiwirrkurra community, Western Australia;
Bankstown, New South Wales;
Logan, Rockhampton and Livingstone, Queensland; and
Greater Shepparton, Victoria.
1.31The Determination, in combination with the primary legislation enables existing IM volunteers to choose whether to move to enhanced IM, and any new volunteers to income management in these locations to access the enhanced IM program.
1.32DSS added that the Volunteers Determination ‘consolidates 4instruments made under Part 3B of [the Act] into a single instrument for the purpose of Part 3AA’.
1.33The Determination has no repeal date.
The three IM-related instruments made on 14September 2023
1.34The three legislative instruments made for the purposes of Part 3B of the Act (Declared Child Protection State Determination; RecognisedState or Territory – NT Determination; and Specified Income Management Territory – NT Instrument) relate to the income management (IM) regime.
1.35They enable IM to continue to operate through to 1 July 2026. The instruments specify the locations in which the Disengaged Youth, Long-term Welfare Payment Recipient, Child Protection and Supporting People at Risk measures of IM operate. DSS advised that ‘the current instruments do not depart from the scope of the earlier instruments in any way’ and ‘are required to ensure eligible individuals continue to have a choice whether they remain part of the IM regime or move to the eIM regime’.
Declared Child Protection State Determination
1.36This Determination repeals and replaces a 2012 legislative instrument due to ‘sunset’ on 1October 2023.
1.37The Determination enables the child protection measure to operate by specifying New South Wales, Queensland, South Australia and Victoria as declared child protection States for the purposes of Part 3B of the Administration Act. There are other determinations in force that declare the Northern Territory and Western Australia as declared child protection areas for this same purpose.
1.38This legislative instrument will self-repeal on 1 July 2026.
1.39DSS advised the committee that the Determination:
ensures eligible individuals in these states [NSW, Queensland, South Australia or Victoria] will continue to be subject to IM until they either choose to move to enhanced IM [eIM] or otherwise cease to be eligible for IM. This will ensure a consistent approach across the country for all individuals under the child protection measure.
Recognised State or Territory – NT Determination
1.40The Determination repeals and replaces a 2012 legislative instrument due to ‘sunset’ on 1October 2023;
relates to Part 3B of the Act, concerning the IM regime – which closed to new entrants on 4September2023;
provides (at section 7) that the Northern Territory is a recognised Territory for the purposes of Part 3B of the Act; and
provides for its repeal at the start of 1 July 2026.
1.41The Explanatory Statement states that section 7 of the determination means that:
a person may be subject to the income management regime if a recognised Northern Territory authority gives the Secretary a written notice requiring the person be subject to the regime, if the person meets all other requirements under subsection 123UFAA(1).[44]
1.42DSS told the committee that the Recognised State or Territory – NT Determination:
allows existing IM participants who have been referred by the Registrar of the Banned Drinkers Register to remain subject to the program until they either choose to move to enhanced IM or otherwise cease to be eligible.
Specified Income Management Territory – NT Instrument
1.43This instrument:
Repeals and replaces a 2012 legislative instrument due to ‘sunset’ on 1October 2023;
relates to Part 3B of the Act, concerning the IM regime – which closed to new entrants on 4September2023;
specifies (at subsections 7–8) the Northern Territory as a Territory where a person may be subject to income management under the IM regime’s ‘disengaged youth’ measure or ‘long-term welfare recipient’ measure; and
provides for its repeal at the start of 1 July 2026.
1.44DSS explained that, in combination with the primary legislation, the SpecifiedIncome Management Territory – NT Instrument:
Specifies the Northern Territory as a Territory where a person may be subject to the IM regime under the Disengaged Youth and Long Term Welfare Payment Recipient measures…
[and] enables existing participants subject to the Disengaged Youth and Long Term Welfare Payment Recipient measures of IM to continue on the IM program, until they either choose to move to enhanced IM or otherwise cease to be eligible.
Disallowable instruments
1.45The Determinations were subject to disallowance by either House of Parliament.
1.46On 28 November 2023, Senator Rice moved to disallow the State Referrals Determination and the Commonwealth Referrals Determination.
1.47On 4 December 2023, following consideration by the Senate, Senator Rice’s motion of disallowance was defeated.
Assessment of compatibility with human rights in the Explanatory Statement
1.48The Explanatory Statement for each of the six legislative instruments, drafted by DSS, contains a Statement of Compatibility with Human Rights, concluding in each case that the instrument is compatible with human rights.
1.49Additional concluding comments were made for each instrument. A common theme across majority of the additional concluding comments was that while some instruments limited certain human rights, the limitations were ‘reasonable, necessary and proportionate’.
1.50Several inquiry participants raised concerns about the instruments’ compatibility with human rights, which are discussed in chapter 2 of the report.
Consideration by other committees
1.51The Parliamentary Joint Committee on Human Rights considered five of the six legislative instruments under review and noted that:
the instruments engage and limit a number of human rights, including the rights to a private life, social security, equality and non-discrimination, the rights of the child, and potentially the right to an adequate standard of living (if being subject to mandatory income management caused difficulties in accessing and meeting basic needs).
1.52The Parliamentary Joint Committee on Human Rights further highlighted:
While facilitating the operation of a regime that provides participants with access to superior technology and improved banking functions is, in itself, an important aim, it remains unclear why this enhanced income management regime must operate on a mandatory basis (or why legislation is required to improve this technology).
1.53The Parliamentary Joint Committee on Human Rights will consider these instruments in more detail as part of its review of compulsory eIM and IM for compatibility with human rights due by 4 September 2024.
1.54Whilst the Standing Committee for the Scrutiny of Bills did not review the legislative instruments, it noted that much of the detail of the framework established by the Social Security (Administration) Amendment (Income Management Reform) Act 2023 was left to delegated legislation, or to non-legislative determinations and that ‘certain provisions within the bill introduce what appear to be new delegated legislation making powers’.
Previous inquiries
1.55Legislation regarding income management has been previously considered by Parliamentary committees on a number of occasions, including most recently:
Parliamentary Joint Committee on Human Rights, Human rights scrutiny report 11 of 2023, 18 October 2023, pp. 42-51 (reviewing five of the six legislative instruments under review in the present inquiry);
Senate Community Affairs Legislation Committee, Social Security (Administration) Amendment (Income Management Reform) Bill 2023 [Provisions], 6 June 2023;
Parliamentary Joint Committee on Human Rights, Human rights scrutiny report 5 of 2023, 9 May 2023, pp. 58–70 (reviewing the Social Security (Administration) Amendment (Income Management Reform) Bill 2023 and related instruments);
Parliamentary Joint Committee on Human Rights, Human rights scrutiny report 4 of 2023, 29 March 2023, pp. 9–25 (also reviewing the Social Security (Administration) Amendment (Income Management Reform) Bill 2023 and related instruments); and
Senate Community Affairs Legislation Committee, Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Bill 2022, 31 August 2022.
Conduct of the review
1.56Pursuant to section 243B of the Act, the committee decided on 18October 2023 to review the following legislative instruments, which had been tabled in the Senate on 5 September 2023:
Social Security (Administration) (Enhanced Income Management Regime –State Referrals) Determination 2023;
Social Security (Administration) (Enhanced Income Management Regime –Commonwealth Referrals and Exemptions) Determination 2023; and
Social Security (Administration) (Enhanced Income Management Regime – Volunteers) Determination 2023.
1.57Pursuant to section 243B of the Act, the committee decided on 15November 2023 to review the following legislative instruments, which had been tabled in the Senate on 16 October 2023:
Social Security (Administration) (Declared Child Protection State – New South Wales, Queensland, South Australia and Victoria) Determination 2023;
Social Security (Administration) (Recognised State or Territory – Northern Territory) Determination 2023; and
Social Security (Administration) (Specified Income Management Territory – Northern Territory) Instrument 2023.
1.58Details of the review were made available on the committee’s website. The committee contacted a number of organisations to invite written submissions. The committee received 16 submissions, as listed in Appendix 1.
1.59The committee held a public hearing in Canberra on 22 January 2024. Hearing witnesses are listed in Appendix 2.
1.60The committee thanks the organisations and individuals that made submissions and appeared at the hearing for their contributions to the review.
Note on references
1.61References to Committee Hansard in this report are to proof transcripts. Page numbers may vary between proof and official transcripts.