BILLS DIGEST NO. 32, 2017–18              8 September 2017

Social Services Legislation Amendment (Welfare Reform) Bill 2017

Don Arthur, Dale Daniels and Matthew Thomas
Social Policy Section

Paula Pyburne
Law and Bills Digest Section

Date introduced:  22 July 2017

House:  House of Representatives

Portfolio:  Social Services

Commencement: Various dates as set out in the body of the Bills Digest

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 September 2017.

Purpose of the Bill

The primary purpose of the Social Services Legislation Amendment (Welfare Reform) Bill 2017 (the Bill) is to amend social welfare statutes to:

•       create a single job seeker payment

•       establish a drug testing trial and

•       remove existing exemptions for jobseekers experiencing drug or alcohol dependence.

Structure of the Bill

The Bill has 18 Schedules as follows:

•       Schedule 1 amends the A New Tax System (Family Assistance) Act 1999 (FA Act) Farm Household Support Act 2014, Income Tax Assessment Act 1936 (ITAA 1936), Income Tax Assessment Act 1997 (ITAA 1997), Social Security Act 1991 (SS Act), Social Security (Administration) Act 1999 (SSA Act) and the Veterans’ Entitlements Act 1986 (VEA) to create a single job seeker payment

•       Schedule 2 amends the ITAA 1936, the ITAA 1997, the SS Act, the SSA Act, the Social Security (International Agreements) Act 1999 (SS International Agreements Act) and the VEA to bring about the cessation of widow B pension

•       Schedule 3 amends the FA Act, the Child Support (Assessment) Act 1989, the ITAA 1936, the ITAA 1997, the SS Act, the SSA Act, and the VEA to bring about the cessation of wife pension

•       Schedule 4 amends the ITAA 1997, the SS Act, the SSA Act, the SS International Agreements Act and the VEA to bring about the cessation of bereavement allowance

•       Schedule 5 amends the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 and other social welfare statutes to bring about the cessation of sickness allowance

•       Schedule 6 amends social welfare statutes to bring about the cessation of widow allowance

•       Schedule 7 amends socials welfare statutes to bring about the cessation of Partner allowance

•       Schedule 8 contains a rule-making provision for the Minister

•       Schedule 9 amends the SS Act to change the activity tests for persons aged 55–59

•       Schedule 10 amends the SSA Act to alter the start day to some participation payments

•       Schedule 11 removes the intent to claim provisions from the SS Act and the SSA Act

•       Schedule 12 establishes the drug testing trial

•       Schedule 13 removes the exemptions for drug or alcohol dependence

•       Schedule 14 amends the SSA Act to bring about changes to the reasonable excuses

•       Schedule 15 introduces a new compliance framework for mutual obligation requirements in relation to participation payments

•       Schedule 16 streamlines the collection of tax file numbers

•       Schedule 17 relates to information management and

•       Schedule 18 amends the Disability Discrimination Act 1992 to align the Social Security and disability discrimination law.

Structure of this Bills Digest

As the matters covered by many of the Schedules are independent of each other the relevant background, stakeholder comments (where available) and analysis of the provisions are set out under each Schedule number.

Committee consideration

Senate Community Affairs Legislation Committee

The Bill has been referred to the Senate Community Affairs Legislation Committee for inquiry and report by 4 September 2017.[1] The Committee received 57 submissions. The contents of those submissions are canvassed under the relevant Schedule headings below.

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) reported on the Bill on 9 August 2017.[2] The Committee made comments about certain amendments in Schedules 12, 14 and 15 of the Bill which are canvassed under the relevant Schedule headings below.

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.[3]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights reported on the Bill on 15 August 2017.[4] The Committee comments are canvassed under the relevant Schedule headings below.

Schedule 1—Creation of Jobseeker Payment

Quick guide to Schedule 1

The amendments in Schedule 1 to the Bill create the new Jobseeker Payment. The rules about qualification for, and payment of, Newstart Allowance in Part 2.12 of the Social Security Act will provide the template for the Jobseeker Payment from 20 March 2020.

At that time Newstart Allowance, Sickness Allowance, Wife Pension, Bereavement Allowance and Widow B Pension will cease and most recipients of these payments will transition to Jobseeker Payment, Age Pension or Carer Payment, depending on their circumstances.

Commencement

The amendments in Parts 1–5 of Schedule 1 to the Bill commence on 20 March 2020. The amendments in Part 6 of Schedule 1 which relates to enhanced residency requirements for pensioners commence immediately after the commencement of Schedule 1 to the Social Services Legislation Amendment (Payment Integrity) Act 2017 or on 20 March 2020—whichever is the later.[5] However, if the Social Services Legislation Amendment (Payment Integrity) Act 2017 does not commence, the amendments in Part 6 of Schedule 1 do not commence at all.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 1 is an expense of $11.6 million.[6]

Background

Schedules 1–8 contain measures which abolish or amalgamate a number of payments for workforce-age people. Many of the payments concerned are dependency-based payments which have been closed to new applicants for many years as part of a policy implemented late last century, which required all workforce-age income support recipients to receive payments based on their employment capacity or their caring roles. Several other payments are being amalgamated as part of a policy to simplify the range of workforce-age payments.

In all, seven payments will cease to exist and one Jobseeker Payment will be introduced to cater for the groups formerly eligible for the abolished payments.

Dependency based payments

These changes complete a long running policy trend towards the removal of dependency based payments from the social security system. Dependency based payments were those which provided income support because a person was dependent on another person who was no longer able to provide that support. These payments were made for widows, deserted wives, divorced or separated women and partners of income support recipients who had no workforce attachment. Starting in 1987 with the tightening of eligibility for Widow Class B Pension, income support was recast so that people formerly treated as dependents had to seek income support in their own right based on their own caring roles or capacity for employment.

Steps towards the removal of dependency based payments

In July 1987, Widow Class B Pensions (WidB) eligibility was restricted to:

•       those receiving WidB immediately before 1 July 1987

•       those who turned 45 years of age by 1 July 1987, and who received or subsequently received Special Benefit (SpB) or Widow class A Pension and

•       those aged 50 years and over at 1 July 1987 and who were or subsequently became widows.

This change reflected an expectation that older single women should participate in the workforce.[7]

In September 1994, Partner Allowance (PA) was introduced, replacing the additional amount of Newstart Allowance (NSA) or Sickness Allowance (SA) paid to recipients with a dependent spouse. PA was paid directly to the dependent spouse under the same rates and conditions as the partnered rate of NSA or SA and subject to the same income and asset tests. This change reflected an increased expectation that partnered women should not be treated as dependents of their partners.[8]

In January 1995, Widow Allowance (WA) was introduced for women who were no longer partnered, or who became separated, divorced or widowed after turning 50 years of age and who had little or no recent workforce experience. WA was paid under the same rates and conditions and income and assets tests as Job Search Allowance (JSA) and Newstart Allowance (NSA). WA was not activity tested and no job searching was required. Recipients were eligible for certain labour market assistance, Employment Entry Payment and Education Entry Payment. No new grants of WA were to be made after 30 June 2005. WA was introduced due to concerns that the older widows without workforce experience impacted by the Widow B Pension changes could not yet be expected to readily move into the workforce. It was an interim measure until workforce attachment for this age cohort improved.[9]

In July 1995, Parenting Allowance (PgA) was introduced for PA recipients caring for children aged under 16 years. PgA was paid at same rate and under same income and assets tests as NSA married rate. Partner Allowance eligibility was restricted to dependent spouses aged over 40 years with little or no recent labour market experience. Other spouses ineligible for PgA or PA were required to apply for NSA in their own right. This change distinguished between those with child caring responsibilities that limited their employment options and those who should be able to enter the workforce. PA became an interim payment for the age cohort of older women who had never expected to be in the workforce and had little or no workforce experience.[10]

After 20 March 1997 no new WidB grants were made. WidB recipients were automatically transferred to Age Pension on reaching age pension age provided that they, and their partners, were Australian residents at the time the WidB recipient was widowed. Eligibility for WA was extended to women aged 50 years or more who had been widowed after turning 40 years of age.[11]

After September 2003 no new grants of PA were made. Those unable to apply for PA were eligible to apply for NSA. PA was to be phased out by 2020. This change reflected the increased workforce attachment of older women.[12]

From July 2005 WA was to be phased out, with new grants from this date only made to women born on or before 1 July 1955.[13]

Changes to payments and transitional arrangements

The Bill includes transitional measures that ensure that very few people will have a change in their rate of payment. The Minister’s budget press release included the following statement:

Over 99 per cent of people will have no change to their payment rates.[14]

Position of major interest groups

The National Social Security Rights Network has reservations about the abolition of Bereavement allowance and the situation of wife pensioners who live overseas and will lose entitlements to any payment. Their conclusion on the replacement of seven payments with the Jobseeker Payment is as follows:

Overall the NSSRN supports this as a sensible reform to the structure of working age payments which will have little or no impact on most recipients. However, the Government has not addressed the critical issue of the unacceptably low rate of payment of newstart and other allowances which, among other things, undermines the reform to support for the bereaved. It should also grandfather what are, in effect, changes to portability for a small number of wife pension recipients.[15]

The Australian Council of Social Services (ACOSS) also thinks that those wife pensioners who will lose any payment should be grandfathered (in other words, the rule should not apply to those who benefited from rules made before the current proposed changes).[16]

Key provisions

Part 1 of Schedule 1 to the Bill amends the FA Act, Farm Household Support Act, ITAA 1936, ITAA 1997, SS Act, SSA Act and the VEA to replace references to Newstart Allowance with references to Jobseeker Payment.

Currently Part 2.12 of the SS Act sets out the qualifications for, and the payability of, Newstart Allowance. Item 65 of the Bill renames the heading of Part 2.12 so that it refers, instead, to Jobseeker Payment. Items 66–84 of Part 1 of the Bill substitute references to Newstart Allowance with references to Jobseeker Payment. The effect of these amendments is that the qualifications for Newstart Allowance become the qualifications for Jobseeker Payment.

Items 85–96 of Part 1 of Schedule 1 to the Bill make similar substitutions of terms in those sections which relate to the activity test, whilst items 163–166 make similar substitutions of terms in Division 4 of Part 2.12 which sets out how to calculate the rate of Jobseeker Payment that is payable.

The effect of all the amendments in Part 1 is to preserve the substantive law whilst updating the name of the payment being made.

Item 342 contains transitional provisions. In particular subitem 342(2) provides that any claim for Newstart Allowance that is lodged and not determined before these amendments commence will be treated as if it is a claim for Newstart Allowance in respect of the days before commencement and as a claim for Jobseeker Payment for those days falling on or after commencement.

Schedule 2—Cessation of Widow B Pension

Quick guide to Schedule 2

Widow B Pension is a payment for certain older widows who have lost the financial support of their partner, have limited means of support and who do not otherwise qualify for parenting payment. Widow B Pensions were closed to new applicants on 20 March 1997.

The amendments in Schedule 2 effectively close down Widow B Pensions.

Commencement

The amendments in Schedule 2 to the Bill commence on 20 March 2020.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 2 is an expense of $0.1 million.[17]

Changes to eligibility

The changes to eligibility for Widow B Pension are set out in the table below.[18]

Table 1: Widow B Pension

Current: Widow B Pension

Moving to: Age Pension (AP)

Eligibility

Single widow, deserted wife, divorced wife or husband in prison without dependent children aged fifty or more in 1987 (some exceptions apply). No new grants since 1997.

Aged 65 years or more.

Widow B pensioners are automatically eligible residentially to receive AP once they reach age pension age.

Rate

Pension rate

Pension rate

Activity requirements

None

None

Phase out and transition

Payments cease from 20 March 2020.

Automatic transfer to AP. Proportional portability rules will be adjusted so that no reduction in payment rate occurs.

Numbers

376 of whom 358 live outside Australia (December 2016). All are aged over 65.

Comment

The main issue for those transferring to AP is the workings of the proportional portability rules. Without transitional arrangements for this group some would not qualify for AP or would receive reduced payments. However, the transitional arrangements ensure that nobody will have their payment reduced as they transition to AP.

Key provisions

Item 15 of Schedule 2 to the Bill repeals Part 2.8 of the SS Act which sets out the qualifications for, and payability of, Widow B Pension. Item 16 repeals Division 3 of Part 2.13A of the SS Act which currently allows for an Education Entry Payment to be made to a person receiving Widow B Pension. Items 18 and 20 of Schedule 2 repeal sections 778A and 778 as well as paragraph 796(1)(e) respectively which relate to the qualification and payability of a special needs Widow B Pension.

Item 32 repeals Part 3.4 of the SS Act being Pension Rate Calculator C which relates to Widow B Pension.

Item 14 inserts proposed subsection 43(4) into the SS Act so that women receiving special needs Widow B Pension immediately before 20 March 2020 will automatically qualify for the Age Pension.

Where a pensioner has been absent from Australia for 26 weeks the rate of pension payable is subject to proportionality. It usually means that the pension rate overseas is based on the pensioner’s Australian Working Life Residence.[19] Items 61–63 make adjustments to the proportional portability provisions in section 1220A of the SS Act so that Widow B Pensioners transferring to Age Pension will continue to receive the same rate of payment. In addition, item 64 of Schedule 2 to the Bill inserts proposed section 1221-A3 into the SS Act to treat the Australian working life residence of a former Widow B Pensioner as equal to that of her partner prior to his death. The effect of this provision is that the rate of payment will remain unchanged at the time of transition to Age Pension.

Schedule 3—Cessation of Wife Pension

Quick guide to Schedule 3

Wife pension is a non-activity tested income support payment paid at Age Pension rates to female partners of Age Pensioners or Disability Support Pensioners who are not eligible for a pension in their own right.

The amendments in Schedule 3 operate to cease the payment entirely. Transitional amendments will allow women who cease receiving Wife Pension to receive an alternative payment, where available.

Commencement

The amendments in Schedule 3 to the Bill commence immediately after those in Schedule 2.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 3 is an expense of $6.3 million.[20]

Changes to eligibility

The changes to eligibility for Wife Pension are set out in the table below.[21]

Table 2: Wife Pension

Current: Wife Pension

Moving to: Jobseeker Payment, Age Pension (AP),

Carer Payment (CP) or losing payment

Eligibility

Be a partner of an Age or Disability Support Pensioner. No new grants since 1 July 1995.

Age Pension: be of age pension age.

Carer Payment: caring for a disabled person.

Jobseeker Payment: mutual obligation requirements appropriate to age.

Rate

Pension rate

AP and CP are paid at the same pension rate as WP.

Jobseeker Payment will be paid after the transition period at the Newstart rate.

Activity requirements

None

Age Pension: none.

Carer Payment: caring for a disabled partner.

Jobseeker Payment: mutual obligation requirements.

Phase out and transition

Payments cease from 20 March 2020.

Jobseeker Payment: will receive a transition rate equal to their WP rate on 19 March 2020 plus any supplements. Pension assets free areas and income test will continue to apply. Once the Jobseeker means test provides a higher rate their transitional arrangements will cease. If they cease to be a partner of a pensioner their transition will also cease. Pensioner Concession Cards will be available during the transition period.

Age Pension or Carer Payment: will transfer under the same rate structure and means test as applied to Wife Pension.

Numbers

December 2016

5,490 partners of Age Pensioners

5,326 partners of Disability Support Pensioners

20 March 2020 (estimated)

Jobseeker Payment (2,900)

Age Pension (AP)(2,250)

Carer Payment (CP)(2,400) or

No payment (200)

Comment

Those transferring to Jobseeker Payment (JP) will not have their payments reduced but will have them frozen until they are entitled to more under the JP means test. So over time the value of their payment will be eroded in the absence of indexation.

Those transferring to AP or CP will be going to a payment that has the same rate and means test as their present payment.

A small group of about 200 who live overseas will receive no payments because they will be too young for AP, will not qualify as carers, and will be ineligible for Jobseeker payment because it is generally not paid outside of Australia.[22]

Key provisions

Transfer to pension

Section 43 of the SS Act provides that, generally, a person is qualified for an age pension if the person has reached pension age and the person has 10 years’ qualifying Australian residence. Item 18 inserts proposed subsection 43(1A) into the SS Act to ensure that Wife Pensioners of age pension age can transfer to Age Pension after 20 March 2020 even if they do not satisfy the Age pension residence rules.

Item 19 repeals Part 2.4 which sets out the qualification for and payability of Wife Pension. Items 77–92 make consequential changes to the SSA Act as a result of this repeal.

Transfer to carer payment

Part 2.5 of the SS Act sets out the qualification for, and payability of, carer payment. Item 21 inserts proposed section 198AD into Part 2.5 so that those Wife Pensioners receiving a Carer Allowance immediately before 20 March 2017 will automatically transfer to Carer Payment after that date.

Transfer to jobseeker payment

Item 25 inserts proposed sections 654–656 into the SS Act. These sections contain the transitional rate calculation rules to apply to Wife Pensioners who are transitioning to Jobseeker Payment. Income and asset test arrangements are modified during the transition period to ensure that there is no rate reduction for this group due to the more restrictive income and assets test that will apply to the Jobseeker Payment. The rate for former Wife Pensioners is effectively frozen until indexation pushes the rate of Jobseeker Payment under the normal rules above the frozen pension rate of the former Wife Pensioner.

Item 38 inserts proposed subsection 1061ZA(2E) into the SS Act to provide continued access to the pensioner concession card for former Wife Pensioners while they receive a transitional rate of payment.

Item 71 inserts proposed subsection 1220A(5) into the SS Act which preserves existing exemptions for former Wife Pensioners transferring to Age Pension from the proportional portability rules. This ensures that they will not suffer a rate reduction due to their transfer to Age Pension.

Item 72 inserts proposed point 1221-A4 into the Pension Portability Rate Calculator. The proposed point preserves the treatment of former Wife Pensioners who have their Australian Working Life Residence increased to that of their partner. When they transfer to Age pension they will not suffer a rate reduction.

Schedule 4—Cessation of Bereavement Allowance

Quick guide to Schedule 4

The amendments in Schedule 4 operate so that a person who is qualified for Youth Allowance or Jobseeker Payment will be able to receive a one-off, higher payment if their partner dies, in addition to their regular fortnightly payments.

In addition newly bereaved claimants for Youth Allowance or Jobseeker Payment will be entitled to certain exemptions from existing waiting period requirements.

Commencement

The amendments in Schedule 4 to the Bill commence on 20 March 2010.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 4 is a saving of $1.04 million.[23]

Changes to eligibility

There has been a separate short term payment for married and de facto widows without dependent children since 1942 when a range of widow pensions were introduced. The name of the payment has changed from time to time and from 1989 eligibility was extended to all widowed people of either gender.

From 1943 there was also a lump sum funeral payment to assist with the funeral costs of age and invalid pensioners. This was extended in 1965 to cover funerals of dependent children, widow pensioners and non-pension spouses of pensioners. From 1990 a variety of provisions under the heading of bereavement payments replaced funeral payments and were extended over time to most income support recipients bereaved by the loss of a partner, the person they were caring for or a dependent child.[24]

The Bill replaces the separate Bereavement Allowance and substitutes a one off fortnightly payment of triple the usual rate of Youth Allowance or Jobseeker Payment along with a 14-week exemption from activity test requirements. A summary is provided in the table below.[25]

Table 3: Bereavement Allowance

Current: Bereavement Allowance

Changing to: A one-off higher payment of either Youth Allowance (YA) or Jobseeker Allowance (JP)

Eligibility

For a partner of a person who died during the first 14 weeks after the death

Must claim within 14 weeks of the death.

Rate

Pension rate

Equivalent to triple the usual rate of payment for one fortnight. Can be a single payment to a person who is not already receiving YA of JP, or an additional double payment on top of the normal rate for an existing recipient of YA or JP.

Activity requirements

none

None for new claimants and existing income support recipients for a 14-week period. Also exempt from a number of waiting periods if a new claimant.

Phase out

Payments cease from 20 March 2020

Comment

The 14-week entitlement period for this Bereavement Allowance means that no one needs to transfer to a new payment. Consequently there are no transitional issues for individuals. However, the amount paid to a bereaved person over a 14-week period will be about twenty percent less than is presently paid under the Bereavement Allowance.

Policy position of non-government parties/independents

The ALP has indicated that they cannot support the amendments in Schedule 4 which abolishes the Bereavement Allowance.[26]

Key provisions

Item 10 repeals Part 2.7 of the SS Act which sets out the qualifications for, and the payability of, Bereavement Allowance.

Effect on Parenting Payment

Item 13 inserts proposed section 502BA into Part 2.10 of the SS Act which relates to Parenting Payment. The amendment creates a 14-week exemption from the participation requirements for Parenting Payment claimants and existing recipients after the death of their partner.

Effect on Youth Allowance

Item 15 inserts proposed section 542EA which provides for a 14-week death-of-partner exemption from the Youth Allowance activity test.

Items 18–and 20 insert proposed subsections 549A(7) and 549CA(5) into the SS Act to provide a 14-week exemption from the liquid assets waiting period and the ordinary waiting period respectively for new claimants of Youth Allowance after the death of a partner. Item 21 inserts proposed subsection 553C(6) which has the effect of exempting a new claimant for Youth Allowance from the seasonal worker exclusion period in the event of the death of a partner.

Item 39 inserts proposed Subdivision AA—One off payment for death of partner into Division 10 of Part 2.11 of the SS Act. The proposed subdivision provides for one off payments for Youth Allowance recipients and claimants whose partner has died. Proposed section 567FB sets out the formula for working out the amount of the lump sum to be paid. The payment will be equivalent to two fortnights’ payment of Youth Allowance and will be paid in addition to normal entitlements.

Effect on Jobseeker Payment

Items 41—50 provide for exemptions from various waiting periods and activity test requirements for proposed claimants and recipients of Jobseeker Payment after the death of a partner. A 14-week exemption from the activity test requirements is set out in proposed section 602AA.

Item 54 inserts proposed Subdivision A—One off payment for death of partner into Division 9 of Part 2.12 of the SS Act. The proposed subdivision provides for one off payments for Jobseeker Payment recipients and claimants whose partner has died. The lump sum will be equivalent to twice the normal payment of Jobseeker Payment and will be paid in addition to normal entitlements.

Item 55 inserts proposed section 731DAA into the SS Act to provide relief from the activity test for 14 weeks for a claimant of special benefit upon the death of a partner.

Schedule 5—Cessation of Sickness Allowance

Quick guide to Schedule 5

Sickness Allowance is a short term income support payment for working age people who have a temporary incapacity for work due to illness or injury and who have a job or study to return to after their recovery.

The amendments in Schedule 5 operate so there will be no new grants of Sickness Allowance after 20 March 2020. Instead the qualification conditions for Jobseeker Payment are modified to allow people who are temporarily incapacitated for work to qualify for Jobseeker Payment.

Commencement

The amendments in Part 1 of Schedule 5 to the Bill commence on 20 March 2020. The amendments in Part 2 of Schedule 5 to the Bill commence on 20 September 2020.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 5 is a saving of $6.9 million.[27]

Changes to eligibility

A payment for working age people who were temporarily unable to work due to illness or injury called Sickness Benefit was first introduced in 1945 at the same time as Unemployment Benefit. After the payment was reformed and renamed Sickness Allowance in 1991 many unemployed people with temporary incapacity for work remained on Newstart Allowance with reduced activity test requirements.[28]

The Bill takes this approach to its logical conclusion by removing Sickness Allowance altogether and providing access to the new Jobseeker Payment for all those temporarily incapacitated for work due to illness or injury. A summary is provided in the table below.[29]

Table 4: Sickness Allowance

Current: Sickness Allowance (SA)

Moving to: Jobseeker Payment (JP)

Eligibility

Temporarily incapacitated for work or study, employed or a full-time student on Austudy or Abstudy.

Eligibility for JP with reduced activity obligations the same as for SA.

Rate

Same as Newstart Allowance

Same as Newstart Allowance

Activity requirements

none

Temporarily adjusted to suit the person’s situation.

Phase out and transition

No new grants from 20 March 2020, no payments after 20 September 2020.

Transfer to Jobseeker Payment with an activity requirement exemption.

Numbers

7,088 (December 2016)

8,400 est. (20 March 2020)

Comment

This change should make very little difference to the way those eligible for Sickness Allowance are treated. They will receive JP but their eligibility, entitlements and activity requirements will be much the same.

Key provisions

Currently, section 593 in Part 2.12 of the SS Act provides the qualifications for Newstart Allowance. As already stated, the amendments in Schedule 1 to the Bill rename this as Jobseeker Payment. Item 4 of Part 1 in Schedule 5 to the Bill inserts proposed subsection 593(1A) into the SS Act to create a category of qualification for Jobseeker Payment that covers those people who would previously have qualified for Sickness Allowance due to temporary incapacity for work or study due to a medical condition arising from sickness or accident.

Item 17 inserts proposed section 602D which exempts a person who qualifies for Jobseeker Payment under new subsection 593(1A) from the requirement to satisfy the activity test where the person is undertaking a rehabilitation program which is of at least six weeks’ duration.

Item 19 inserts proposed Division 1A—Time limit on grants of sickness allowance into Part 2.14 of the SS Act. The effect of proposed section 666A which is contained in the new Division, is that Sickness Allowance must not be granted to a person unless the person has lodged a claim before 20 March 2020. Item 21 sets out the relevant transitional arrangements. Where a person has lodged a claim for Sickness Allowance before 20 March 2020, but does not satisfy the qualification or payability conditions for Sickness Allowance before that date because a waiting period applies—then the person is taken to have claimed Jobseeker Payment on 20 March 2020 and any equivalent waiting period for Jobseeker Payment is taken to have started when the waiting period for Sickness Allowance started.

Item 71 in Part 2 of Schedule 5 to the Bill repeals Part 2.14 which sets out the qualifications for and payability of Sickness Allowance. Items 92–106 make consequential amendments to section 1068 and Benefit Rate Calculator B to reflect the repeal of Part 2.14.

Schedule 6—Cessation of Widow Allowance

Quick guide to Schedule 6

Widow Allowance provides income support for older working age women who lose the support of a partner and face barriers to employment. The amendments in Schedule 6 close Widow Allowance to new entrants from 1 January 2018 and cease the payment entirely from 1 January 2022.

All women in receipt of Widow Allowance immediately before 1 January 2022, or who could have qualified for Widow Allowance had they claimed it prior to 1 January 2018 will be of pension age by 1 January 2022.

Commencement

The amendments in Part 1 of Schedule 6 to the Bill commence on the later of 1 January 2018 and Royal Assent. The amendments in Part 2 of Schedule 6 to the Bill commence on 1 January 2022.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 6 is an expense of $4.5 million.[30]

Changes to eligibility

An overview of the changes relating to Widow Allowance is set out in the table below.[31]

Table 5: Widow Allowance

Current: Widow Allowance (WA)

Moving to: Newstart Allowance (NSA) or Age Pension (AP)

Eligibility

Born before 1 July 1955, not partnered and widowed, divorced or separated since turning 40, with no recent workforce experience.

Unemployed and previously eligible for WA.

Rate

Same as Newstart Allowance

Same as Newstart Allowance

Activity requirements

none

none

Phase out and transition

No new entrants from 1 January 2018.

Payments cease from 1 January 2022

After 1 January 2018 any new applicants will be eligible for NSA without activity test requirements or AP. Those not residentially qualified for AP will receive Special Benefit. Recipients of WA at 1 January 2022 will have the residential requirements for AP modified as part of the transition.

Numbers

16,563 (December 2016)

Comment

Most present recipients will be of AP age in 2022. Any who are not will not have activity requirement imposed and can receive Special benefit until they qualify for AP.

Key provisions

Item 2 of Part 1 in Schedule 6 to the Bill inserts proposed subsections 408AA(2) and (3) into the SS Act to ensure that Widow Allowance must not be granted to a woman unless a claim is lodged before 1 January 2018.

Item 3 inserts proposed section 603AC into Part 2.12 so that women who would previously qualified for Widow Allowance are exempt from the activity test for Newstart Allowance.

Items 9–15 make a number of consequential amendments to remove references to Widow Allowance from various provisions of the SS Act.

Item 17 in Part 2 of Schedule 6 to the Bill repeals Part 2.8A which provides the qualification for and payability of Widow Allowance with effect from 1 January 2022.

Item 16 inserts proposed subsection 43(1C) into the SS Act to provide for automatic qualification for the Age Pension for Widow Allowance recipients immediately before 1 January 2022.

Schedule 7—Cessation of Partner Allowance

Quick guide to Schedule 7

Partner Allowance is a non-activity tested income support payment for older partners of income support recipients, who face barriers to finding employment because of their previous limited participation in the workforce.

Partner Allowance has been closed to new applicants since 20 September 2003. However, the amendments in Schedule 7 will cease the payment entirely from 1 January 2022. By the time this measure takes effect on 1 January 2022 or persons in receipt of Partner Allowance immediately before that date will be of pension age.

Commencement

The provisions in Schedule 7 to the Bill commence on 1 January 2022.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 7 is an expense of $1.08 million.[32]

Changes to eligibility

An overview of the changes relating to Partner Allowance is set out in the table below.[33]

Table 6: Partner Allowance

Current: Partner Allowance (PA)

Moving to: Age Pension (AP)

Eligibility

Born before 1 July 1955, partnered, with no recent workforce experience. No new grants since 20 September 2003.

Unemployed and previously eligible for WA.

Rate

Allowance Rate

Pension rate

Activity requirements

none

none

Phase out and transition

Payments cease from 1 January 2022

All recipients will be of AP age by 1 January 2022

Numbers

3,230 (December 2016)

Key provisions

Item 21 repeals Part 2.15A of the SS Act which sets out the qualification for, and payability of Partner Allowance.

Schedule 7 contains consequential amendments as a result of the repeal of Part 2.15A to remove redundant references to Partner Allowance or Partner Bereavement Payment.

In addition, items 64–66 make consequential amendment to the SSA Act to remove references to Partner Allowance as a result of the repeal of Part 2.15A.

Schedule 8—Minister’s rules

Quick guide to Schedule 8

The amendments in Schedule 8 are intended to allow the Minister to make rules of a transitional nature in support of the amendments and repeals made by Schedules 1–7 of the Bill.

Commencement

The amendments in Schedule 8 to the Bill commence on the day after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 8 is nil.[34]

Key provisions

Item 1 of Schedule 8 to the Bill empowers the Minister to make rules, by legislative instrument, prescribing matters of a transitional nature including prescribing any saving or application provisions. Under section 38 of the Legislation Act 2003, legislative instruments must be tabled in each House within six sitting days following registration on the Federal Register of Legislation. A legislative instrument can be subject to disallowance if either a Senator or Member of the House of Representatives moves a motion of disallowance within 15 sitting days of the day that the legislative instrument is tabled.

Schedule 9—Changes to activity tests for persons aged 55–59

Quick guide to Schedule 9

The amendments in Schedule 9 impose a new activity test on Newstart Allowance and certain Special Benefit recipients aged between 55 and 59.

Under the new test the relevant recipients will satisfy the activity test if they are engaged, for at least 30 hours per fortnight, in a combination of approved unpaid voluntary work or suitable paid work, at least 15 hours of which must be suitable paid work.

Commencement

The amendments in Schedule 9 to the Bill commence on 20 September 2018.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 9 is an expense of $47.8 million.[35]

Background

Since 1990, older unemployed people have had reduced activity test requirements compared to younger people. These requirements have changed from time to time but have generally encouraged part time and voluntary work as a means of satisfying activity test requirements.

The current situation for those aged 55 years or more dates back to the Howard Government Welfare to Work reforms of 2006.[36]

The Bill proposes to change the present requirements which allow ‘job seekers aged over 55 years to satisfy their mutual obligation requirements by undertaking at least 30 hours per fortnight of approved voluntary work, paid work (including self-employment) or a combination of the 2’.[37] Voluntary work has to be with an approved, not for profit, community based organisation which has adequate insurance. People who satisfy their requirements in this way ‘must still be available for suitable paid work and must accept all referrals to job interviews’.[38]

The changed requirement for job seekers aged between 55 and 59 years old will be that at least 15 hours per fortnight must be made up of paid work. Voluntary work alone will no longer be sufficient. The change will apply to Newstart Allowance recipients and Special benefit recipients who are subject to activity test requirements.

It is not proposed to make any change for those aged 60 years or more.

The rationale for this change is ‘to strengthen the employment focus of mutual obligation requirements, and better connect mature age job seekers aged 55–59 with the labour market, while still recognising that volunteering can be a valuable stepping stone into paid work’.[39]

Key Provisions

Item 1 inserts proposed subsection 603AA(1A) into the SS Act. This provides for a new category of people aged 55 to 59 years who can satisfy the activity test if engaged in at least 30 hours per fortnight of a combination of approved unpaid voluntary work and suitable paid work. At least 15 hours must be suitable paid work.

Item 8 inserts proposed subsection 731G(1A) into the SS Act to apply the changed activity test to Special Benefit recipients. Item 11 inserts a definition of approved unpaid voluntary work into existing subsection 731G(4) being either full-time or otherwise, is that has been approved by the Secretary for the purposes of that section.

Item 12 repeals the existing definition of approved voluntary unpaid work.

Schedule 10—Start day for some participation payments

Quick guide to Schedule 10

The measures in Schedule 10 to the Bill provide for the start day for Youth Allowance (other) and Newstart Allowance payments to be the day the applicant attends their initial appointment with their employment services provider (unless an appointment is not able to be scheduled within two business days), rather than the date on which the claim for payment was made.

Commencement

The amendments in Schedule 10 to the Bill commence on the later of 1 January 2018 and the day after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 10 is savings of $198.0 million.[40]

RapidConnect

RapidConnect arrangements formed a part of the Welfare to Work measures that were introduced by the Howard Government in 2006.[41] Before their introduction, unemployed job seekers making a claim for income support could wait as long as three or four weeks before being registered with an employment services provider.[42] During this time, they received no formal assistance in preparing for, or finding, paid employment.

As its name implies, the RapidConnect process requires job seekers to register with an employment services provider and sign up to an employment pathway plan as soon as possible in the income support claim process. The idea behind this general approach is that connecting a job seeker with their employment services provider and making them actively seek work as quickly as possible both improves their prospects of finding a job quickly and does not give them a chance to become dependent on welfare.

The RapidConnect process

Under the RapidConnect process a person who intends to make a claim for, or to transfer to, Newstart Allowance or Youth Allowance (other) is required to attend an interview with their employment services provider within two working days of their initial contact with the Department of Human Services (DHS) in order to receive their first income support payment.[43] There are some exemptions from the RapidConnect requirements. These are in circumstances where it has been determined that it would be inappropriate for income support claimants to be referred immediately to their employment services provider and the work force, due to their being disadvantaged.[44]

Under the current jobactive employment services contract, employment service providers are obliged to ensure that they have initial sessions available in the Department of Employment’s IT systems so that the DHS can book appointments within two business days.[45]

If an appointment cannot be booked to occur within two business days, the job seeker remains subject to the RapidConnect process for up to 14 calendar days. As such, the income support payment does not become payable until the job seeker has connected with an employment services provider within 14 days.

So long as the job seeker attends an initial appointment with their employment services provider within 14 days of initial contact then, subject to their meeting other qualification and payability requirements, they have their income support payment backdated to the date of their initial contact—that is, the day on which they made their claim for income support.

Hence, the job seeker is not penalised for those instances in which no provider appointment is available within two business days.

Further, the job seeker is not penalised for their own failure to attend their initial appointment—even though this might be on a number of occasions—providing they ultimately attend within 14 days of initial contact with the DHS. It is this leeway for job seekers that the Government seeks to eliminate with the proposed amendments in this schedule.

The new measures

The amendments in Schedule 10 of the Bill provide that job seekers are still not penalised where an employment services provider appointment is not available within two business days. In this case, upon attending their initial appointment, job seekers will have their payment backdated to the date on which the requirement to attend an interview was imposed.

However, where a job seeker fails to attend the initial appointment more than two business days after the requirement is imposed, or fails to attend without a reasonable excuse, their payment will not be payable until they attend the appointment; that is, they will not receive any back pay.

The amendments implement the Work-First: Faster Connection with Employment Service Providers initiative which formed part of the broader Better Targeting of Assistance to Support Jobseekers measure, announced in the 2017–18 Budget.[46]

Key issues and provisions

Schedule 2 of the SSA Act sets out the rules for working out the start day for income support payments. Subclause 3(1) in Schedule 2 to that Act specifies that, so long as a person is qualified for a payment on the day on which a claim is made, the person’s start day is the day on which the claim is made.

Item 1 adds a note to the end of the subclause to specify that proposed clause 4A (as discussed below) is to apply for claims for Newstart Allowance and Youth Allowance in certain circumstances.

Proposed clause 4A is inserted into the SSA Act by item 2 of Schedule 10 to the Bill. It provides that if the Secretary gives the job seeker a notice under section 63 of the SS Act requiring the job seeker to attend a particular place for an interview on a day specified in the notice then clause 4A is to apply and subclause 3(1) does not.[47] Proposed subclause 4A(4) sets out the start day for income support payment as follows:

•       if the job seeker attends their initial appointment within two business days of the requirement being imposed, their start day is the day specified in the requirement

•       if the job seeker does not attend their initial appointment within two business days, without having requested that the appointment be shifted to a later day, then the start day is the day that the requirement to attend the appointment was imposed

•       if the job seeker attends their initial appointment after more than two business days but has gained approval to do so, then their payment start day is the day specified in the changed requirement.

Proposed subclause 4A(5) provides that if the job seeker fails to attend their initial appointment, then their payment may not be payable under the provisions of the SS Act (section 547AA for Youth Allowance (other) applicants and section 615 for Newstart Allowance applicants) until they comply with the requirement.

If the Secretary determines that the job seeker had a reasonable excuse for their failure to attend their initial appointment then the job seeker’s start day is the day on which the requirement to attend the appointment was imposed. As such, the job seeker receives back pay where they have a reasonable excuse for non-attendance.

Stakeholder comment

This measure will undoubtedly achieve its stated objective of encouraging job seekers to connect more quickly with employment services providers. It will also result in reasonably substantial savings to government, largely as a result of job seekers’ payments being made from a later date than is currently the case.

The proposed measure may exacerbate existing concerns in the community services and welfare sector about the potential for RapidConnect arrangements to contribute to job seekers’ financial hardship. In the past, RapidConnect has been criticised on the grounds that it requires certain job seekers to fulfil various requirements before they have received any money. Without any money to cover expenses like transport costs, it has been argued that it may be difficult for job seekers to meet these requirements:

NWRN [National Welfare Rights Network] has recommended on many occasions that the claiming and obtaining of income support should be separated from the process of even explaining, let alone demanding, activity and other requirements. This is to allow people an opportunity to have the resources to comply with requirements, and allow time to fully comprehend what future requirements will be. Many people when claiming Newstart Allowance have no income and minimal or no savings. The most important thing at that time is to secure an ongoing source of income. This can be an extremely stressful time for people and adding activity requirements before payment is made makes it more so. It is often difficult for people in this time to fully comprehend what they are agreeing to do but rather than own up to this, the person will sign any document required for payments to commence. In our opinion future compliance with requirements is much more likely if a person agrees to those requirements once they know payment has been granted and the immediate need for income support has been met.[48]

Schedule 11—Removal of Intent to Claim provisions

Quick guide to Schedule 11

Schedule 11 amends the SSA Act by removing the current deemed claim provisions that allow a claimant to receive payments from the date on which they initially contacted the Department of Human Services.

The rationale for the amendments is that the deeming provisions were introduced at a time when claim forms were mailed to claimants, completed and then returned to Centrelink by mail. With the progressive rollout of online claiming, these provisions are no longer necessary.[49]

Commencement

If the Social Services Legislation Amendment (Welfare Reform) Act 2017 receives Royal Assent before
1 November 2017—then the amendments in Schedule 11 to the Bill commence on 1 January 2018. Otherwise, the amendments commence on the first 1 April, 1 July, 1 October or 1 January that occurs at the end of two months after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 11 is savings of $68.0 million.[50]

Background

In general, the start date for the payment of a social security payment is the date that the claim for the payment was submitted. However, section 13 of the SSA Act allows the date when a claimant first contacted Centrelink about making a claim to be treated as the start day for payment provided certain conditions are met. Those conditions are:

•       Centrelink must be contacted by, or on behalf of a person in relation to a claim

•       the person must be qualified on the date of the contact

•       generally, the person must lodge a claim within 14 days of the contact

•       if the person, or a person they care for, or their partner is suffering from a medical condition having a significant adverse effect on the person's ability to lodge the claim, it may be lodged within 13 weeks after the contact provided the medical condition was continuous or

•       if special circumstances apply to the person's situation, which make it not reasonably practicable for the person to lodge the claim earlier, it may be lodged within 13 weeks after the contact and

•       Centrelink must give the person a written notice acknowledging the contact.[51]

This provision is of most assistance to people who may find it difficult to quickly gather the necessary documents required to make a claim.

The Bill proposes to repeal the sections which allow the date of contact to be the start day for payment.

Policy position of non-government parties/independents

The ALP has indicated that they cannot support the changes in this Schedule.[52]

Position of major interest groups

The National Social Security Rights Network opposes the changes in this schedule for the following reasons:

Making this requirement more stringent would further disadvantage the most vulnerable claimants by delaying the date from which their payments begin. Social security claim forms are generally long and complex and a significant amount of supporting documentation may also be required (identification documents, payslips, separation certificate from the person’s last job, documentation relating to their partner and so on).

Many of these documents, such as identification documents, may be regarded as in a person’s control. However, it may be difficult for vulnerable people to collect them all quickly. This can be for a range of reasons. Someone who has recently separated from their partner may have their possessions boxed up or spread across friends and family’s homes. New migrants may have difficulty understanding what is required. A single parent may be struggling with the demands of a new baby.[53]

ACOSS opposes the changes because:

This measure risks putting people in desperate situations, including remaining in domestic violence situations.[54]

Carers Australia also oppose the change for similar reasons:

The overall changes in the life circumstances of new carers can include obstacles to lodging a claim online immediately after establishing their entitlement with Centrelink. For example, they may be moving house, possibly to another state, to care for an elderly parent diagnosed with dementia or another degenerative disease; or they may be the partner or parent of someone who has suddenly acquired a serious disability or illness or who has been diagnosed with a terminal illness.[55]

Key Provisions

Item 5 repeals sections 13 and 14 of the SSA Act which contain the deemed claim provisions. Item 7 is a saving provision which operates so that contacts made with DHS prior to the date of commencement of the amendments are not affected.

Schedule 12—Establishment of a drug testing trial

Quick guide to Schedule 12

The measures in Schedule 12 to the Bill provide for a two-year trial in three regions involving mandatory drug testing for 5,000 new recipients of Newstart Allowance and Youth Allowance (other).

Commencement

The amendments in Schedule 12 to the Bill commence on 1 January 2018 if Royal Assent is before that date. Otherwise the amendments commence on the first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of two months beginning on Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 12 is ‘not for publication’.[56]

Background

Drug testing has been part of the international welfare reform debate since the 1990s. Supporters have argued that drug testing has a number of benefits including preventing the misuse of taxpayer’s money, sending a message that drug use is unacceptable, ensuring recipients are ready for work, saving money, and promoting recipient well-being. However, in many cases, policymakers do not make their goals explicit.

Proposals for drug testing income support recipients have been debated in Australia, Canada and the United Kingdom.[57] A number of American state governments have introduced drug testing schemes and the New Zealand Government has a policy that supports pre-employment drug testing by employers and training providers.[58]

According to a 2016 paper by the Congressional Research Service, there is little evidence about the effectiveness of drug testing measures in the United States. Part of the problem is a lack of clarity about what policymakers are trying to achieve.[59] The objectives could include restricting payments to those deemed worthy of support, punishing individuals for engaging in undesirable behaviour or deterring people from engaging in illicit drug use.[60]

The recent debate in the United Kingdom is the most relevant to Australia. As in Australia, United Kingdom policymakers justified drug testing measures in terms of helping income support recipients move into employment. The United Kingdom experience is discussed in more detail below.

Principled versus pragmatic considerations

Many of the arguments for and against drug testing and compulsory treatment draw on ethical principles. For example, Katherine Bradley and Robert Rector of the Heritage Foundation argue:

Taxpayers should provide support to those in need, and recipients in return should engage in responsible and constructive behaviour as a condition of receiving aid. Requiring welfare recipients to stop using illegal drugs is a core element of reciprocal obligation.[61]

Other ethical principles include human rights such as the right to privacy.

As well as considerations of principle, there are pragmatic considerations. These have to do with providers’ ability to implement the measures successfully and how effective the measures are at achieving objectives such as moving income support recipients from welfare to work.

Both internationally and in Australia, supporters of drug testing and compulsory treatment have relied heavily on ethical arguments about mutual obligation while medical professionals and drug treatment providers have relied on arguments based on human rights and pragmatic considerations.

According to evidence given during Senate Estimates hearings, the Department of Social Services did not consult organisations representing medical professionals or drug treatment providers about the measure prior to its announcement in the 2016–16 Budget.[62]

Earlier Australian proposals

During the 2007 election campaign the Coalition announced that, if the Government was re-elected, income support recipients convicted of criminal drug offences involving hard drugs would be placed on income management.[63] Then Prime Minister John Howard said: ‘we take the view that it’s not right that people should have control of taxpayer money when they have been convicted of such offences’.[64] The policy was not part of the Coalition’s 2013 election campaign.

In 2012 Liberal National Party MP George Christensen (Member for Dawson) proposed that income support payments for the unemployed should be conditional on passing a drugs test.[65] However, Kevin Andrews, then Shadow Minister for Families, Housing and Human Services, made it clear that this was not Coalition policy.[66]

In 2013 the Australian National Council on Drugs (ANCD) published a position paper on drug testing. The paper concluded:

There is no evidence that drug testing welfare beneficiaries will have any positive effects for those individuals or for society, and some evidence indicating such a practice could have high social and economic costs. In addition, there would be serious ethical and legal problems in implementing such a program in Australia. Drug testing of welfare beneficiaries ought not be considered.[67]

The issue resurfaced in 2014 after the release of the Interim Report of the Reference Group on Welfare Reform (the McClure Report). The interim report referred to pre-employment drug testing requirements for jobseekers in New Zealand and there was speculation in the media that the Australian Government was considering introducing a similar measure.[68] While then Minister for Social Services, Kevin Andrews, appeared reluctant to completely rule the measure out he said that the Government was unlikely to go ahead with it.[69]

In November 2015 Senator Jacqui Lambie asked the Attorney-General, Senator George Brandis if the Government would support testing income support recipients for illicit drugs. The Attorney-General responded that ‘the government has no present intention to legislate in that respect’.[70]

United Kingdom experience

In the United Kingdom policymakers have considered similar measures to those proposed in this Bill. In 2009 the Brown Labour Government legislated to include drug testing as part of a broader plan to identify problem drug users and require them to accept treatment.[71] While there was some support in the media for a tougher approach to drug users, the proposal was harshly criticised by the Government’s Social Security Advisory Committee and others.[72] The measures were later abandoned by the Cameron Coalition Government and the drug testing requirements were removed from legislation.[73]

Welfare reform proposals

In 2008 the Brown Government’s released a green paper on welfare reform: No one written off: reforming welfare to reward responsibility. The green paper stated: ‘Taxpayers cannot be expected to support a drug-dependent lifestyle, so where drug treatment is available and considered appropriate, then there should be an obligation that individuals will take it up’.[74] It suggested requiring benefit applicants to declare whether they are addicted to heroin or crack cocaine and backing this up by using information sharing with police and contracted-out drug testing (in a small number of cases) to identify those making misleading statements.[75]

The Social Security Advisory Committee criticised the Government’s proposals, particularly the proposal to make income support conditional on accepting drug treatment:

We find the proposals in relation to those citizens who suffer from addiction to crack cocaine and opiates to be unconvincing, simplistic, and to present a number of issues that demand much more thought before they are taken further. The abuse of illegal drugs – just as with alcohol abuse – can be a major barrier to entering, and staying in, employment. However, we find little to commend the Government’s proposed approach. It is our understanding that all the evidence points to drug rehabilitation programmes being most effective when the client actively wishes to engage in treatment.[76]

The proposals also attracted strong criticism from organisations involved in drug treatment. For example, DrugScope, an organisation representing treatment providers, suggested that ‘compulsion and threats of benefit sanctions could do more harm than good, risking further marginalisation’.[77]

While the Government acknowledged that some groups had concerns, it decided to push ahead with the plan. In its white paper Raising Expectations and Increasing Support: Reforming Welfare for the Future the Government outlined a new regime for problem drug users. Income support recipients identified as problem drug users would be referred to a healthcare professional who would determine whether they should be referred to a program of support. The Government indicated that it was ‘exploring whether drug testing has a role to play in respect of claimants who fail to engage’.[78] While on the program, recipients would be required to agree to a rehabilitation plan and ‘make real efforts to make progress against it. If they fail to do so, without good cause, they will be subject to sanctions’.[79] The Government planned to pilot and evaluate these measures before any national rollout.[80]

Welfare Reform Act 2009

The Brown Labour Government introduced provisions to support this new regime for problem drug users in the Welfare Reform Bill 2009. According to legal academic Emma Wincup:

The ‘new regime’ for [problem drug users] was met with relatively little opposition in the early stages, sending out a powerful message that drug testing and the use of quasi-compulsory drug treatment for this group had become palatable to all political parties. It also provides evidence of a new cross-party ‘welfare settlement’ surrounding welfare-to-work policies, characterised by a common moralist or behavioural approach.[81]

Drug sector organisations and the organisations representing the medical profession continued to oppose the measures. For example, DrugScope argued:

Drug testing should not be introduced into the benefit system. It is an invasive procedure. A drug test can only reveal that a particular substance is present in somebody's body at a particular time. This means, for example, that test results can be identical for someone with a serious crack cocaine dependency and for a first time participant.

The Royal College of Psychiatrists supported DrugScope’s position and argued that sanctions may not improve compliance with treatment, could drive people deeper into poverty, and may undermine the relationship between clinicians and clients.[82]

According to Emma Wincup, a widely shared objection to drug testing was that it could breach Article 8 of the European Convention of Human Rights.[83] Article 8 provides a qualified right to privacy. Drug testing and compulsory medical treatment fall under the cope of this article.[84]

The Joint Committee of Human Rights of the UK Parliament took the view that the Government had not provided evidence to support its position that the interference with individual rights was necessary and ‘that evidence to support the Government’s position should be sought during a pilot programme which could pose a significant risk to individual privacy rights’. The Committee recommended that drug testing and compulsory treatment should be removed from the bill.[85]

Plans for a pilot scheme

Despite concerns about drug testing and mandatory treatment measures, the Brown Government pushed ahead with plans for a pilot scheme. After the Welfare Reform Act 2009 was enacted, the Government began consulting on regulations to enable a pilot scheme that included drug testing and mandatory referral to treatment.

The Government’s Social Security Advisory Committee continued to oppose the pilot arguing that there was little evidence that a mandatory approach to treatment would help problem drug users move towards the labour market. It also advised against drug testing stating:

… we believe that the introduction of drugs testing represents a step too far in increasing conditionality. We would very much like to see the use of mandatory drugs tests removed from the pilot.[86]

By the time the Committee’s report reached the Secretary of State for Work and Pensions, an election had been held and the Government had changed. After receiving the Social Security Advisory Committee’s report, the new Cameron Coalition Government announced that it would not proceed with the pilots.[87] The drug testing requirements were removed from legislation in 2012.[88]

Income management proposal

In a 2014 report, the Centre for Social Justice[89] proposed using cashless welfare cards for income support recipients who failed to engage with treatment:

For those with an entrenched alcohol or drug addiction who refuse treatment, who have not been in employment for a year and who have children, the use of welfare cash cards should be considered. Whilst this alone will not help addicts recover, evidence from similar successful initiatives in Australia has shown that such a scheme can protect addicts and their families by limiting the expenditure of their benefits to basic essentials such as food, clothing, travel etc. Beyond this, it will establish a principle that taxpayers’ money should not go directly into the pockets of drug dealers and may restore faith in our welfare system. We recommend piloting the scheme in the first instance.[90]

The Centre for Social Justice supported the principles of the Welfare Reform Act 2009 but argued that the Government would not have been able to implement them effectively. According to report, the major problem is that there are too few high quality abstinence-based treatment options available to people on income support. As a result, the pilots would have placed large numbers of problem drug users on methadone and this ‘would simply lead to people substituting one addiction for another and, ultimately, not help them to become clean’. The report proposed phasing in reforms as new treatment capacity became available.[91]

The Black Review

By early 2015, the Cameron Government had broadened its focus beyond illicit drugs to include other treatable conditions that prevent income support recipients moving into work. These included alcohol dependency and obesity. The Government asked Professor Dame Carol Black to undertake a review.

In February 2015 Prime Minister David Cameron said:

Too many people are stuck on sickness benefits because of issues that could be addressed but instead are not. Some have drug or alcohol problems, but refuse treatment. In other cases people have problems with their weight that could be addressed, but instead a life on benefits rather than work becomes the choice. It is not fair to ask hardworking taxpayers to fund the benefits of people who refuse to accept the support and treatment that could help them get back to a life of work.[92]

The Prime Minister asked Professor Black ‘to consider whether people should face the threat of a reduction in benefits if they refuse to engage with a recommended treatment plan’.[93] Professor Black did not support this option in her 2016 report:

… we doubt whether mandation of treatment – one of the possibilities mentioned in our terms of reference – should be the first response to the evident problems for the cohorts under discussion. Further, there is a strong consensus that mandating treatment would lead to more people hiding their addiction than reveal it. We also heard from health professionals serious concerns about the legal and ethical implications of mandating treatment and whether this would be a cost effective approach.[94]

The Black Report did not recommend using drug testing to identify problem drug users.

Policy position of non-government parties/independents

Australian Labor Party

Labor members have expressed concern about the proposed drug testing trials. They note that similar measures in the United States have shown ‘little evidence of achieving better outcomes for people with substance abuse issues’ and that the Government has not provided evidence to show that the measures will lead to better health outcomes.

In 2014 Senator Kim Carr was asked to comment the idea of drug testing after Kevin Andrews, then Minister for Social Services, had ruled it out:

… it was a silly idea. We’ve seen these punitive measures being taken in a range of Government programs now. This is a Government that is quietly vicious in terms of the way it treats people, particularly our most vulnerable in the community.[95]

Australian Greens

The Australian Greens oppose the drug testing measure. In a media release Senator Rachel Siewert said:

Drug addiction needs to be treated as a health issue. Testing income support recipients has been a failed measure in the US and has been abandoned after proposals in the UK and Canada. It needs to be abandoned.[96]

Nick Xenophon Team

In a post Budget interview Senator Nick Xenophon said that he is a supporter of mandatory rehabilitation for people with severe substance abuse problems but said that it mattered how it was done. When asked whether he would oppose drug testing measures he said he wanted to see the detail.[97]

Jacqui Lambie

In 2015 Senator Jacqui Lambie proposed that income support recipients should be drug tested.[98] Asked about the drug testing measure in the Budget Senator Lambie said: ‘By second-guessing which ones they're going to do rather than doing it full-on random, I'm not sure they’ll get the result they want to achieve’.[99]

Other independents

According to a report in The Australian on 22 May 2017, Senators Derryn Hinch and Cory Bernardi are likely to support the drug testing measure.[100]

How the drug testing trial will operate

The drug testing trial established by the Bill has two objectives. It seeks to:

•       maintain the integrity of, and public confidence in, the social security system by ensuring that tax-payer funded welfare payments are not being used to purchase drugs or support substance abuse, and

•       provide new pathways for identifying recipients with drug abuse issues and facilitating their referral to appropriate treatment where required.[101]

The trial aims to test the effectiveness of these new pathways.[102] Officers of the Department of Social Services told the Senate Community Affairs Committee that the trial is designed to build evidence.[103]

The Government will select three sites for the trial. Over a two-year period, 5,000 new recipients of Newstart Allowance and Youth Allowance (other) will be required to undertake tests to identify whether they have used illegal drugs.[104] The Government plans to begin the trial in 1 January 2018.[105]

Selection of the three trial sites

The Government will select three locations where there is a high incidence of drug use. In order to identify these sites the Government may use data from:

•       the Australian Institute of Health and Welfare's 2013 National Drug Strategy Household Survey

•       state and territory government crime statistics on drug use and possession

•       administrative data from the Department of Human Services on jobseekers that identify drug dependency issues

•       the Australian Criminal Intelligence Commission's 2017 National Wastewater Drug Monitoring Program report.[106]

The Government will also consider the availability of treatment services.

When the drug testing measure was announced in the Budget, there was considerable media interest in the idea that the Government would use National Wastewater Drug Monitoring Program data to identify sites with high levels of drug use. However, it seems unlikely the Government will rely heavily on this data when selecting sites. While the Australian Criminal Intelligence Commission’s report gives results for capital cities, it does not identify particular regional sites.[107]

Item 1 of Part 1 in Schedule 12 to the Bill inserts the definition of drug test trial area into subsection 23(1) of the Social Security Act being an area prescribed by the drug test rules. Item 3 of Part 1 in Schedule 12, inserts proposed section 38FA into the SS Act to empower the Minister, by legislative instrument, to make drug test rules. The rules provide for a range of matters including but not limited to:

•       prescribing the drug test trial areas

•       prescribing substances for the purposes of the definition of testable drug[108]

•       giving and taking samples of persons’ saliva, urine or hair for use in drug tests and the dealing with such samples

•       carrying out drug tests and

•       the giving of results of drug tests in certificates or other documents and the evidentiary effect of those certificates or documents.

Selecting recipients for drug testing

The drug testing regime will only apply to recipients of Newstart Allowance and Youth Allowance (other) who make a claim after 1 January 2018. Item 1 of Part 1 in Schedule 12 to the Bill inserts the definition of drug test trial member into the SS Act. A person is a drug test trial pool member at a time if all of the following are satisfied:

•       that time is in the drug test trial period

•       at that time the person’s usual place of residence is in a drug test trial area and

•       at that time the person is receiving Newstart Allowance or Youth Allowance (otherwise than on the basis that the person is a new apprentice or undertaking full-time study) as a result of a claim made in the drug test trial period.

Claimants will be required to acknowledge that they may be required to undergo drug testing as a condition of payment.[109]

The Government plans to use a two-step process to select individuals for testing. First it will identify a group of recipients who are at higher risk of drug misuse and second, it will randomly select individual recipients from this group.[110] According to the Minister of Social Services, Christian Porter:

We'll use a combination of data that we will help develop with Data61 and the CSIRO, our own internal data at DHS and DSS which looks at track records of clusters of people in terms of their compliance. We'll put all of that together and identify a broad group of people and then randomly select inside that broad group inside each of the three trial sites.[111]

The tests will be conducted by third party drug testing providers.[112] Item 18 of Part1 in Schedule 12 to the Bill inserts proposed section 64A into the SSA Act. This section empowers the Secretary to enter into contracts for the carrying out of drug tests.

Scrutiny of Bills Committee

The Scrutiny of Bills Committee noted that proposed section 64A also provides that the drug test rules may require contracts for the carrying out of drug tests to meet certain requirements, including provisions requiring the giving, withdrawal or revocation of a notice to the Secretary saying that a person should be subject to income management. The Committee stated that in its view:

… significant matters should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. In this instance, the explanatory memorandum does not explain why the confidentiality and disclosure of drug test results, the keeping and destroying of records relating to samples and drug tests, and requirements regarding the contractual arrangements for drug testing are to be included in delegated legislation rather than set out in the primary legislation.[113]

Recipients who fail the first test

Item 24 in Part 1 of Schedule 12 to the Bill inserts proposed subsection 123UFAA(1A) into the SSA Act so that if an income support recipient tests positive they will be placed on income management for 24 months.

Recipients cannot avoid income management by moving off payment and reclaiming later. If they reclaim they will be placed on income management for the remainder of the 24 months.[114]

Recipients who test positive on the first test will be required to undertake further tests. According to the Explanatory Memorandum to the Bill, ‘they will be required to undertake the next test within 25 working days of the first test’.[115] However, this time period is not specified in the Bill itself.

Recipients who fail second or subsequent tests

If a recipient tests positive again during the 24-month period, they will be referred to a medical professional for assessment. If the medical professional recommends some form of treatment, these treatment activities will form part of the recipient’s mutual obligation requirements.

Currently section 544A of the SS Act requires a person who is in receipt of Youth Allowance (with some specified exceptions) to enter into a Youth Allowance Employment Pathway Plan. Section 544B sets out the terms of the Employment Pathway Plan. Sections 605 and 606 of the SS Act contain provisions in equivalent terms in respect of recipients of Newstart Allowance.

Item 4 of Part 1 in Schedule 12 to the Bill inserts proposed subsection 544B(1AA) into the SS Act so that one of the requirements of the Youth Allowance Employment Pathway Plan in relation to a person must relate to undertaking treatment for the use of drugs if:

•       the person is a drug test trial pool member

•       the person has two or more positive drug tests

•       the person has undergone a medical, psychiatric or psychological examination after the person has had those positive drug tests and

•       the report of the examination given to the Secretary recommends that the person undertake treatment for use of drugs.

Item 7 of Part 1 in Schedule 12 to the Bill inserts proposed subsection 606(1AA) into the SS Act in equivalent terms in relation to a Newstart Allowance Employment Pathway Plan.

Minister Porter explained that this treatment could take a number of forms:

… when people think about recovery and rehabilitation from drug abuse they often think of residential rehabilitation, which is probably at the very high end of the spectrum of treatments. The overwhelming—the largest percentage of treatment is usually counselling, and indeed assessment that leads to counselling.[116]

According to the Explanatory Memorandum, if treatment is not immediately available, ‘recipients will be required to take appropriate action such as being on a waiting list to satisfy part of their mutual obligation requirements’.[117] Recipients who are required to undertake drug treatment may also be required to undertake other activities such as job search.[118]

Recipients to repay the cost of positive tests

Recipients who test positive to a drug test other than the first test will have to repay the cost of the test.

Item 11 in Part 1 of Schedule 12 to the Bill inserts proposed Part 3.16C—Drug test repayment deductions into the SS Act. The new Part provides that a drug test repayment amount arises for a person for each positive drug test, with some exceptions. The repayment amount is to be prescribed by a legislative instrument.[119] According to proposed subsection 1206XA(7) of the SS Act, in setting the amount ‘the Secretary must have regard to the lowest cost to the Commonwealth of any drug test that could be carried out at the time the legislative instrument is to commence’.

The cost of the test will be deducted from future income support payments at a rate of no more than 10 per cent (unless the recipient chooses to repay the cost more quickly).[120] The Secretary will be able to reduce the rate in cases of hardship.[121]

Sanctions

Currently section 63 of the SS Act sets out the circumstances in which the Secretary may require a person to attend the Department. Item 15 in Part 1 of Schedule 12 inserts proposed paragraph 63(4)(c) into the SSA Act so that if the person is a drug test trial pool member, the Secretary may require the person to give a sample of a particular kind at a particular place for a drug test to be carried out on the sample. Existing section 64 of the SSA Act operates so that where the Secretary gives a person a notice requiring the person to do a thing (and the requirement is reasonable[122]), payment to the person is not payable if the person does not comply with that requirement.[123]

Refusal to undertake drug test

If a person refuses to undertake a drug test, without reasonable excuse, they will be subject to a drug test refusal waiting period of 28 days starting on the day their payment was cancelled.[124]

In addition, a recipient who tests positive can request a re-test. However, if this test is also positive they will have to repay the cost of the test.[125]

Key issues

Lack of consultation during policy development

The Government did not consult with outside experts while developing the policy.[126] A review of similar policy proposals in the UK consulted widely and did not recommend random drug testing or mandatory drug treatment.[127]

Ministers have said that the trial is designed to make income support recipients better off by helping them move off income support and into paid work:

The drug testing trial we are seeking Parliament’s agreement to is not designed to stigmatise or penalise people. In fact our aim is the complete opposite; we want to identify those people with drug issues and help them so that they can ultimately enjoy the whole range of benefits that come from earning a living through work.[128]

However, the Government has not provided a clear explanation of how the drug testing regime will assist trial participants into employment and avoid stigmatising or penalising them. Few welfare agencies, health professionals or drug treatment experts regard a combination of random drug testing and penalties for refusal to undertake treatment as a promising approach (for example, see stakeholder comments below).

In the UK, Professor Carol Black’s review consulted widely. The review did not recommend random drug testing or mandatory treatment (see above). It also cautioned against relying on drug treatment alone to achieve outcomes:

It is clear that providing treatment alone, without additional support like employment, housing and skills, has limited and inconsistent effects on employment. Increasing the proportion of people with a drug and/or alcohol dependence entering treatment would not, of itself, deliver the Government’s desired improvement in job outcomes.[129]

The Black Review recommended an integrated approach to services. In Australia the National Ice Taskforce recommended better coordination ‘between community-based alcohol and other drug services, and support referral pathways between local health, support, employment and other programmes’.[130] It is not clear whether the Government has considered integrating employment and other services with drug treatment as part of the trials.

Questions about the Government’s objectives

Some policy experts and commentators have suggested that drug testing measures are more about signalling the government’s disapproval of drug use than assisting problem drug users into employment.

In Australia Professor Peter Whiteford wrote: ‘it’s difficult to escape the conclusion that this proposal is symbolic, rather than designed to have a positive impact on the well-being of those to be tested’.[131] Former Coalition adviser Peta Credlin made a similar point in an interview on Sky News:

If it was a more substantial cohort of 5,000, I would say it is a serious policy. If it was built with the support of the welfare constituency, I'd say it was serious policy. I think this is again a shopping list out of the focus groups of things they wanted to include.[132]

Commentators have made similar comments about drug testing schemes overseas. For example, in 2011 The Economist suggested that a Florida drug testing program was designed primarily to signal the government’s ‘disapproval of poor people using drugs’.[133]

Evaluation

Evaluation is a key part of the trial. Currently there is little evidence about the effectiveness of drug testing as a welfare to work measure.[134] According to the Explanatory Memorandum:

The trial will be subject to a comprehensive evaluation which will inform any decisions about extending the trial or rolling out drug testing more broadly.[135]

The Government has not provided any detail about how the evaluation will be designed and conducted. This is a concern because a number of evaluations previously commissioned in the social services portfolio have produced only weak evidence about program impact. For example, the 98 page report of the evaluation of income management in the Northern Territory noted that the evaluation depended on the perceptions and views of stakeholders rather than objective indicators and conceded that ‘the overall evidence about the effectiveness of income management was not strong’.[136]

Privacy and stigmatisation

The cashless debit card used to income manage recipients may lead to stigma because it identifies card holders as drug users.

If an income support recipient tests positive to the first drug test, they will be placed on the cashless debit card.[137] The card used in the current cashless debit card trial sites has been featured in numerous media reports and is readily identifiable.[138]

Unless the drug testing trials and cashless debit card trials are run in the same locations, the cashless debit card could identify a person as a drug user. It is likely to become common knowledge in trial sites that people are only issued with a cashless debit card if they test positive on a drug test.

It is not clear how the Government plans to respond to this problem.

The role of contractors

The Bill empowers the Secretary of the Department of Human Services, on behalf of the Commonwealth, to engage contractors to administer the drug tests.[139]

Proposed subsection 64A(3) of the SSA Act provides that the drug test rules may require a contract to include provisions requiring the following:

•       giving the Secretary written notice of the results of the drug test

•       giving notice (in accordance with proposed paragraph 123UFAA(1A)(c)) that in the 24 months, or longer period (if any) before the test time, the contractor who carried out the test gave the Secretary a written notice saying that the person should be subject to the income management regime

•       withdrawing or revoking a notice (in accordance with proposed paragraph 123UFAA(1A)(d))

•       giving notice (in accordance with proposed subsection 1206XA(5) of the SS Act) and

•       any subcontracts to are to include the matters set out in those provisions.

In effect, the Bill empowers the contractor to give the Secretary a written notice saying that the person should be subject to the income management regime—rather than giving the Secretary notice of the outcome of the person’s drug test and leaving it to the Secretary to determine, on that evidence, that payments are no longer payable.

The Explanatory Memorandum is silent about the rationale for this provision. It may well be that it relates to the privacy of recipients—that is, by merely stating that the person should be subject to the income management regime rather than stating the nature and amount of testable drug which is detected, that information will not become part of the recipient’s file. These matters will be clearer when the relevant drug test rules are made.

Schedule 13—Removal of exemptions for drug or alcohol dependence

Quick guide to Schedule 13

The amendments in Schedule 13:

·    establish a new category of income support recipient—being a declared program recipient—that is, someone who is a participant in an employment services program specified in a determination (an alcohol and/or other drug treatment program) and

·    removing exemptions from the mutual obligation requirements where the reason for the exemption is wholly or predominantly attributable to the person’s dependence on alcohol or another drug, unless the job seeker is a participant in an employment services program to be specified in a determination—that is, an alcohol and/or other drug treatment program.

Commencement

The amendments in Schedule 13 to the Bill commence on 1 January 2018 if Royal Assent is before that date. Otherwise the measures commence on the first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of two months beginning on Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 13 is an expense of $28.8 million.[140]

Background

Schedule 13 gives effect to one of the measures that was announced as part of the 2017–18 Budget.[141]

Mutual obligation requirements

Under the SS Act, job seekers who are in receipt of an activity-tested income support payment must meet various mutual obligation requirements.[142] These requirements are imposed to ensure that job seekers who are able to do so are actively looking for work and participating in activities intended to help them into employment.

Where a job seeker is experiencing special circumstances that are beyond their control (such as a major personal crisis or homelessness) or temporarily incapacitated due to sickness or an accident they may gain an exemption from their mutual obligation requirements for a given period. These special circumstances, sickness, or accidents may be primarily a result of the job seeker’s dependence on or misuse of alcohol and/or other drugs. Currently, there is no obligation for job seekers who gain an exemption from their mutual obligation requirements to attempt to address their alcohol and/or other drug dependency. The Government claims that the number of job seekers with an exemption related to alcohol and/or other drug dependency increased from 2,920 to 5,256 in the five years between September 2011 and 2015.[143]

Before the Department of Human Services is able to impose a penalty on a job seeker for failing to meet their mutual obligation requirements, it must first determine whether or not the job seeker had a reasonable excuse for doing so. Under the reasonable excuse provisions, a job seeker’s alcohol and/or other drug dependency is one of the matters that must be taken into account in determining whether or not they had a reasonable excuse for their compliance failure.[144] Currently, there is no limit on the number of times that a job seeker may use as a reasonable excuse for non-compliance their alcohol and/or other drug dependency.

The Government has argued that the current arrangements, outlined above, enable job seekers to avoid their mutual obligation requirements and penalties for failing to meet these requirements by using their alcohol and/or other drug dependence as an excuse, without making any effort to address their dependency.

The measure in Schedule 13 seeks to deal with these perceived failings.

It does so by removing exemptions from the mutual obligation requirements where the reason for the exemption is ‘wholly or predominantly attributable to the person’s dependence on alcohol or another drug’, unless the job seeker is a participant in an employment services program to be specified in a determination—that is, an alcohol and/or other drug treatment program.

Key provisions

Item 1 in Schedule 13 to the Bill inserts the definition of a declared program participant into the dictionary at subsection 23(1) of the SS Act. According to this definition, a declared program participant is a participant in an employment services program specified in a determination made under section 28C of the SS Act.

Item 2 inserts proposed section 28C into the SS Act to allow the Secretary to make a determination, by legislative instrument, in relation to participants in a specified employment services program.

Currently, the SS Act allows for job seekers to be exempted from their mutual obligation requirements if the Secretary is satisfied that they are unable to meet these requirements due to illness, accident or special circumstances.[145] Items 3–12 in Schedule 13 to the Bill do two things:

•       first they remove these exemptions for recipients of Disability Support Pension, Parenting Payment, Youth Allowance (other), Newstart Allowance and Special Benefit whose illness, accident or special circumstance is determined to be primarily a result of their dependence on or misuse of alcohol or another drug

•       second they provide that the exemptions will remain for job seekers who are declared program participants—that is, participating in alcohol and/or other drug treatment.

The Explanatory Memorandum indicates that remote job seekers participating in the Community Development Program, a majority of whom are Indigenous, and many of whom are disadvantaged, will be included in the declared program participant category.[146] It goes on to suggest that this exemption is justified on the grounds that ‘the Community Development Program is specifically designed to reflect the unique labour market conditions that job seekers face in remote Australia’, and, to the extent that CDP participants will be treated differently to participants on other employment services programs ‘this is reasonable and proportionate to the objective of the Community Development Program ’.[147]

The Explanatory Memorandum notes that Indigenous Australians ‘statistically experience higher levels of alcohol or drug dependency compared with the Australian population generally’.[148] As such, the change is likely to impact disproportionately on those Aboriginal and Torres Strait Islander job seekers who fall outside the Community Development Program. This is acknowledged in the statement of compatibility with human rights.[149]

The Explanatory Memorandum states that for those job seekers who are declared program participants and participating in treatment, ‘participation in this treatment will reduce, or in some circumstances fully meet, their mutual obligation requirements’.[150] However, the basis on which this decision is to be made is unclear.

It is to be assumed that the arrangements will be similar to those that apply under the drug testing trial. Under these arrangements, job seekers are required to complete one or more treatment activities as part of their Employment Pathway Plan. However, where treatment is not immediately available, they will be ‘required to take appropriate action such as being on a waiting list to satisfy part of their mutual obligation requirements. Recipients with a drug treatment activity in the plan may still be required to undertake other activities, including job search depending on their circumstances’.[151] This may be at the discretion of the jobactive employment services provider.

Schedule 14—Changes to reasonable excuses

Quick guide to Schedule 14

Schedule 14 amends the Social Security (Administration) Act 1999 to enable the Secretary to determine by legislative instrument matters that he, or she, must not take into account in deciding whether or not a job seeker has a reasonable excuse for committing a compliance failure.

Commencement

The amendments in Schedule 14 to the Bill commence on the later of Royal Assent and 1 January 2018.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 14 is an expense of $4.3 million.[152]

Background

Schedule 14 gives effect to one of the measures that was announced as part of the 2017–18 Budget.[153]

The material set out under the heading ‘Back ground’ to Schedule 13 above also applies to this measure.

Key provisions

Division 3A in Part 3 of the SSA Act contains the compliance framework which applies to recipients of participation payments. Currently the Division empowers the Secretary to determine, by legislative instrument, that certain matters may be taken into account in deciding whether or not a job seeker has a reasonable excuse for committing a compliance failure. The relevant failures relating to Newstart Allowance, and for some people, Youth Allowance, Parenting Payment and Special Benefit are:

•       no show no pay failures[154]

•       connection failures[155]

•       re-connection failures[156]

•       serious failure for refusing or failing to accept an offer of suitable employment[157]

•       non-attendance failures.[158]

The matters that must be taken into account are those spelled out in a legislative instrument made under section 42U of the SSA Act.

Items 1–5 in Schedule 14 to the Bill amend notes in each of the relevant sections so that whilst the Secretary will continue to be able to take certain matters into account, the Secretary may be prohibited from taking other matters into account. The relevant notes create a cross-reference to section 42U.

Items 6 and 7 amend existing section 42U so that the section will explicitly list those matters that are to be taken into account and those that are not. Proposed subsection 42U(3) of the SSA Act empowers the Secretary, by legislative instrument, to determine matters that are not to be taken into account in determining whether a job seeker has a reasonable excuse for committing a compliance failure.

These changes are to give effect to the Government’s commitment that, where a job seeker’s abuse of, or dependence on, alcohol and/or other drugs has been used once as a reasonable excuse for a compliance failure, it must not be taken into account for a second or subsequent compliance failure.

According to the Explanatory Memorandum to the Bill, it is intended that the existing reasonable excuse provisions will continue to apply if alcohol and/or other drug treatment is unavailable or inappropriate, including where the job seeker:

•       is ineligible or unable to participate;

•       has already participated in all available treatment;

•       has agreed but not yet commenced in treatment; or

•       has relapsed since completing treatment and is seeking further treatment.[159]

That is, the job seeker will be able to continue to have their abuse of, or dependence on, alcohol and/or other drugs taken into account in relation to compliance failures.

The Government has indicated that the legislative instrument will provide that a job seeker’s abuse of, or dependence on, alcohol and/or other drugs will only be able to be used as a reasonable excuse once.[160] The job seeker will not be penalised for the compliance failure, but will be given the option of participating in alcohol and/or other drug treatment. If the job seeker refuses to participate in treatment and fails to meet their mutual obligations again, then drug or alcohol dependency will not be considered a reasonable excuse, and sanctions may be applied. However, this will not be certain until the relevant legislative instrument is made.

Key issues

The proposed measures raise a number of issues.

Whether the treatment is ‘voluntary’

While job seekers are said to be given the option of voluntarily undertaking treatment for alcohol and/or other drug use or dependency, it is open to question just how free this choice is. Given that the alternative is for job seekers to no longer have their alcohol and/or other drug use or dependency taken into account in considering whether they had a reasonable excuse for compliance failure, and the prospect of future financial penalties, some job seekers are likely to feel that they are effectively being coerced into treatment. This has implications for the prospective outcomes of any treatment entered into.

A number of meta-analyses (or systematic reviews) of general research on mandatory drug treatment have been undertaken in recent years.[161] Each of these indicates that the empirical evidence for the effectiveness of mandatory treatment is inadequate and inconclusive. While there is some evidence that coercion improves treatment entry and retention in treatment relative to voluntary treatment, the evidence does not support the view that coercion has positive impacts on treatment outcomes.

With regard to the mandatory treatment of income support recipients in particular, the evidence is limited. This is largely because mandatory drug treatment for income support recipients appears to be confined to some United States (US) jurisdictions.

Availability of treatment

The success or otherwise of the new measures—in terms of increasing participation in treatment of job seekers with alcohol and/or other drug issues—hinges on the availability and effectiveness of alcohol and other drug treatment services.

State and territory governments are largely responsible for the funding and provision of alcohol and/or other drug treatment services. Among other things, state and territory governments provide public sector health services and fund community-based organisations to furnish drug prevention and treatment programs within their jurisdictions.

The Federal Government provides indirect support for alcohol and other drug treatment services through various means, including funding for Medicare, subsidised private health insurance, medication provided through the Pharmaceutical Benefits Scheme (PBS) and allied health services. The Federal Government also directly funds the delivery of treatment services through the Substance Misuse Service Delivery Grants Fund, the Substance Misuse Prevention and Service Improvement Grants Fund and the Non-Government Organisation Treatment Grants Program.

In 2015 the Federal Government provided around $300 million over four years towards a package of measures that make up the National Ice Action Strategy. A substantial proportion of this funding—$241.5 million—has been allocated to the 31 Private Health Networks for the purpose of boosting the alcohol and other drug treatment sector.

In 2012 former Minister for Mental Health and Ageing, Mark Butler requested that the Department of Health and Ageing conduct a review of the drug and alcohol prevention and treatment services sector. This review was undertaken by a team from the National Drug and Alcohol Research Centre (NDARC) at the University of New South Wales, headed by Professor Alison Ritter. The final report was submitted to the Government in 2014.

As a part of the study, the researchers undertook a gap analysis to estimate the ‘the number of individuals who would be suitable for, likely to seek and benefit from AOD treatment in any one year but who are not being accommodated in the current service system’.[162] They found that while Australia provides comprehensive alcohol and other drug treatment services across a range of client groups, treatment types and locations, and probably has one of the lowest rates of unmet demand in the world, there is nevertheless greater demand for services than current supply.

It was estimated that ‘between 200,000 and 500,000 more people would be in treatment if demand were to be fully met’.[163] The study also identified some specific gaps, suggesting that there is a need for more alcohol treatment services; services that cater for young people, families and women with children and Aboriginal and Torres Strait Islander people; and, residential rehabilitation, residential withdrawal, pharmacotherapies and counselling.

As such, the measures are likely to exacerbate existing levels of unmet demand, in the absence of increased services and better matching of services to client need and geographic location. As noted above, funding for alcohol and other drug treatment services is primarily the responsibility of the states.[164]

Whether substance use and abuse is a barrier to employment

Representative national population survey data show that rates of substance abuse are almost uniformly higher in unemployed samples than employed samples. Unemployed people are more likely to consume excessive amounts of alcohol, and to use illicit and prescription drugs. They are also more likely to smoke and develop dependence on alcohol and illicit drugs.[165]

Latest available detailed findings from the National Drug Strategy Household Survey, conducted by the Australian Institute of Health and Welfare (AIHW), indicate that in 2013 use of illicit drugs in the past 12 months was more prevalent among the unemployed.

Unemployed Australians were 1.6 times more likely to have used cannabis, 2.4 times more likely to have used meth/amphetamines, 1.8 times more likely to have used ecstasy, 1.6 times more likely to have misused pharmaceuticals and 1.4 times more likely to have used cocaine than people who were employed.[166] A similar general pattern was seen among people who were unable to work. Unemployed people were, however, less likely to drink alcohol at risky levels. See figure below.

Figure 1: drug use by employment status, people aged 14 or older, 2013 (per cent)

Source: Australian Institute of Health and Welfare (AIHW), National Drug Strategy Household Survey detailed report 2013, Drug Statistics Series no. 28, cat. no. PHE 183, AIHW, Canberra, 2014, p. 92.

While the exact nature of the relationship between unemployment and substance use/disorders is not entirely clear, the evidence shows that problematic substance use increases the likelihood of unemployment and decreases the chance of people finding and holding down a job. The reverse also holds true; unemployment is a significant risk factor for substance use and the subsequent development of substance use disorders. Unemployment has also been found to increase the risk of relapse after alcohol and other drug addiction treatment.[167]

It should be noted that while severe substance abuse or dependence is likely to impede employability, a substantial proportion of the research evidence indicates that drug use per se is not a major barrier to employment.[168] Most drug users are employed. And, while the above AIHW data show that the overall prevalence of illicit drug use is higher among unemployed people than employed people, they do not tell us how many unemployed people are abusing or dependent on drugs.

Scott MacDonald et al note that ‘many factors such as physical and mental health problems, lack of job skills, perceived discrimination, and lack of transportation are major barriers for employment’.[169] They go on to argue that ‘a disproportionate emphasis on drug use as a factor for not obtaining employment could be ineffective if these other factors are not addressed as well’.[170]

Based on a review of the evidence related to substance use among a cohort of income support recipients in the US, Lisa Metsch and Harold Pollack reach similar conclusions. They found that broad trends of substance use among Temporary Assistance to Needy Families (TANF) recipients appeared to parallel trends in the general population, and that widespread substance use was not a major cause of TANF recipients’ continued economic dependence:

Although substance use disorders attract widespread attention, they appear to be no more common, and are no more important to employment and welfare receipt, than are concerns [such] as poor physical health, poor academic skills, psychiatric disorders, transportation difficulties, and more general concerns such as racial minority status, language barriers, and immigration concerns.[171]

Stakeholder comments

A majority of stakeholder comment has been in relation to the proposed drug testing trials, introduced under Schedule 12 to the Bill.

Think tanks—The Centre for Independent Studies

Peter Saunders of the Centre for Independent Studies has argued for drug treatment as a mutual obligation activity. Although Dr Saunders has not commented on the measures in this Bill he has made comments in the past. In a 2013 paper, Re-moralising the Welfare State, he makes an ethical case for measures such as mandatory drug treatment:

It is an ethical mistake when people on the Left repeatedly reject the distinction between ‘deserving’ and ‘undeserving’ cases, for while it can be difficult to draw this distinction in practice in every case, the attempt to do so lies at the heart of the fairness ethic. Those who have paid into the system (through taxes or other contributions) should have entitlements that others have not earned, and those whose irresponsible behaviour has contributed to their neediness should expect behavioural conditions to be attached to payments from which other recipients should be exempted.[172]

Dr Saunders cites a British survey that found 89 per cent of respondents were in favour of requiring ‘people addicted to drugs such as heroin and crack cocaine to declare their problem and seek treatment if they are to continue receiving benefits’.[173]

Drug and alcohol groups

Queensland Mental Health and Drug Advisory Council

At a meeting on 16 June 2017 The Queensland Mental Health and Drug Advisory Council:

… expressed concern over the potential for greater stigmatisation of people living with problematic alcohol and other drug use, and the lack of clarity about how the referrals to treatment and support will be managed.[174]

Australian National Council on Drugs (ANCD)

The Australian National Council on Drugs (ANCD) has not commented on the drug testing measure in the 2017 Budget (ANCD was defunded in 2014), however, it did address the issue of drug testing of welfare beneficiaries in a 2013 position paper. The ANCD argued:

There is no evidence that drug testing welfare beneficiaries will have any positive effects for those individuals or for society, and some evidence indicating such a practice could have high social and economic costs. In addition, there would be serious ethical and legal problems in implementing such a program in Australia. Drug testing of welfare beneficiaries ought not be considered.[175]

The paper draws on international research and experience and concludes: ‘The small amount of (direct and indirect) evidence available seems to indicate that it is more likely to increase harms and costs, both to welfare beneficiaries and the general public, than it is to achieve its stated aims’.

Victorian Alcohol and Drug Association (VAADA)

The Victorian Alcohol and Drug Association (VAADA) has expressed concerns about the drug testing measure:

This proposal does not have an evidence base and is likely to engender greater harm to the community.

These types of ill-considered measures, while popular among a number of cohorts, displace a highly complex drug using market and contributes to increasing stigmatisation toward individuals who consume illicit substances specifically as well as welfare recipients generally.

Media reports on this policy indicate that individuals who [provide two] positive drug tests over a 25 day period will be corralled into the already overburdened alcohol and other drug treatment.[176]

Sharon O’Reilly, acting executive officer of VAADA says that the alcohol and other drugs treatment sector is already overburdened. O’Reilly warns that the trial:

… may generate a shift in consumption patterns among cohorts who consume illicit substances, to consuming substances which cannot be detected through standard drug testing means, such as new and emerging psychoactive substances or shifting onto various prescription drugs. This will likely create unknown harms and further complexities for our treatment services and emergency departments.[177]

She also suggests that some people experiencing dependency may avoid seeking engaging with treatment services so that they are not penalised by Centrelink.[178]

Western Australian Network of Alcohol and other Drug Agencies (WANADA)

WANADA has expressed concerns about the drug testing and other welfare reform measures:

Service Demand. Alcohol and other drug treatment services across the nation are not currently resourced to meet the existing demand. In Western Australia, services must effectively more than double in the next few years to match community need. The announced reforms, while recognising treatment as a legitimate step toward employment, have failed to recognise or address the increased resourcing required to meet any increase in service demand pressure due to this reform.

Consultation. There has been no prior consultation with the alcohol and other drug service sector to inform the development of these reforms. As a result, these reforms do not take into account: the complexity of addressing alcohol and other drug use issues; the readiness of the sector to respond to the welfare reform changes by July 2017; and the existing capacity of services to meet demand.

Service and Welfare complexities. It is currently not clear how some residents will cover their contribution to rehabilitation if they’re found to be ineligible for Youth Allowance or Newstart payments, or if their allowances are suspended. There is also no clarity on the degree to which treatment will go towards meeting ‘mutual obligations’. All these factors have the potential to impact on the provision services.

Clarity. There is currently insufficient information publically available to ascertain the full impact on the alcohol and other drug service sector.

Stigma and Discrimination. The reforms have the potential to further stigmatise those with alcohol and substance use concerns and do not effectively reflect the complex social, health and personal issues that contribute to substance use. If implemented, the largely punitive nature of these reforms have the potential to further discincentivise people from acknowledging they have an alcohol or other drug issue and seeking help.

Penington Institute

In a post-budget media release, the Penington Institute argued that linking income support eligibility to drug testing was likely to result in an increase in crime and homelessness. Chief Executive Officer John Ryan said:

In Australia there is a real lack of funding for drug treatment services – including medically supported drug treatment. The Government would have been better off making stronger investments there rather than attacking the vulnerable.[179]

Alex Wodak and GetUp

President of the Australian Drug Law Reform Foundation, Alex Wodak argues that random drug testing is ‘a crude and problematic way of monitoring drug use’. He notes that it is ‘more likely to identify use of longer acting drugs (such as cannabis) and less likely to identify shorter acting drugs (such as ice and ecstasy)’ and that it ‘fails to distinguish between drug consumption in functional people and problematic drug use’.

Dr Wodak argues that drug testing is unlikely to change behaviour or help income support recipients find work. He notes:

The drug treatment system in Australia is overloaded and underfunded. Unless that crisis is addressed, these people will go to the back of an already long queue.[180]

Dr Wodak has joined with activist organisation GetUp to launch a campaign against the proposed drug testing regime.[181]

Welfare sector

Brotherhood of St Laurence

Brotherhood of St Laurence Executive Director, Tony Nicholson, questioned the rationale for the drug testing measure:

Mr Nicholson said he was … puzzled by the rationale for the proposed trial of American-style random drug testing for new welfare recipients, saying that in his experience any drug use was readily identified and dealt with appropriately as part of the task of preparing people for work. On the other hand, incorporating drug and alcohol rehabilitation programs into job plans as a valid step towards employment was welcome, he said.[182]

Australian Council of Social Service (ACOSS)

ACOSS opposes the measure:

… the Budget continues to demonise people with a range of new welfare crackdown measures. No expert in drug and alcohol addiction has supported the random drug testing of social security recipients. Trials elsewhere have failed to achieve any positive results. ACOSS strongly opposes this measure.[183]

In their Federal Budget Snapshop ACOSS states:

It is unclear what these measures hope to achieve. They are highly unlikely to address people’s addictions if they have them, and will lead to more people living in poverty. The drug testing trial will likely be expensive. New Zealand spent $1 million on a drug testing program and of the 8,001 income support recipients tested, just 22 tested positive for illicit drugs (July 2014).[184]

National Social Security Rights Network

The National Social Security Rights Network opposes the measure:

… in our view, this is a radical and unacceptable expansion of conditionality in the social security system. Job seekers have always been required to look for and accept suitable work or undertake activities to address employment barriers. This measure goes far beyond that. It requires job seekers to agree to random drug testing, a significant intrusion on privacy, as a condition of access to income support. It erodes the core purpose of our social security system, which is to provide a basic safety net for people in need.

The measure has the beneficial objective of seeking to connect people with substance abuse issues with appropriate treatment and engage them with employment services to address barriers to work. However, substance abuse is a complex individual and social problem. Many of our clients with substance abuse issues also have connected histories of trauma, abuse, family violence or mental health problems. We are very concerned that compelling people to submit to testing and, in some cases, undergo treatment may have unintended consequences which undermine the measure’s objectives.

If recipients avoid or refuse testing they may lose access to income support. Rather than engaging recipients as intended, this would disconnect vulnerable people from the social security system. The burden may instead fall on their families, who may already be struggling to help them deal with addiction, and communities.

Making a treatment plan part of their Job Plan exposes recipients to the risk of financial penalties for failing to meet their mutual obligation requirements. This could affect people who are genuinely trying to address substance abuse issues but struggle or relapse. We expect policy settings will seek to accommodate this reality, but they will be difficult to draft and even more so to administer as decision-makers will struggle to distinguish genuine attempts at compliance.

The administrative cost of this measure is unknown, given the commercial-in-confidence cost of the third party drug testing service. As with all public policy initiatives, however, it is important to ask what could be achieved by spending the money available for this measure in other ways. Social security law is an inappropriate tool to deal with complex individual and social problems like substance abuse. There are many alternative measures that could be trialled, which seem more likely to work and do not undermine the fundamental right to social security.[185]

Anglicare Australia

In an interview with Pro Bono News, Anglicare Australia executive director Kasy Chambers said:

“Between drug testing, the demerit point proposal, and the leaked ‘welfare hotspot’ list, what we have seen in recent weeks is a concerted campaign to demonise people accessing the social safety net,” Chambers said.

“Anglicare’s Jobs Availability Snapshot shows that people are already trying their hardest to compete for jobs that just aren’t there. We should be helping them when they need it, instead of degrading them.

“There is no evidence that these tests work. This plan has been rejected in Britain, rejected in Canada, and it ought to be rejected here.”[186]

Catholic Social Services Australia (CSSA)

Catholic Social Services Australia (CSSA) opposes the drug testing trial. CSSA’s CEO, Fr Frank Brennan, said:

I am very sorry to see the government announcing ‘a two-year trial of random drug testing new welfare recipients across three locations’. This is arbitrary and capricious. If you’re going to drug test anyone, it should be for good cause, and with well-founded suspicion, and not because a citizen just happens to be in need of welfare assistance and just happens to be living in one of three locations in this vast land Australia.[187]

UnitingCare Australia

UnitingCare Australia opposes the drug testing trial:

We believe this will unfairly vilify and humiliate unemployed people without assisting them into work. We have taken up this issue through the Senate Estimates process.

Our research into overseas experience shows that drug testing has little impact on drug dependence or helping people into work.

We also question how the Government will create the capacity for the increased service demanded by those forced into treatment. We believe that instead of this punitive measure, the government should focus on constructive support for people with drug and alcohol issues.[188]

Melbourne City Mission

Melbourne City Mission has expressed concern about the measure:

That JobSeeker recipients who test positive will be “subjected to further tests and possible referral for treatment” is of great concern. We know that coercive measures are more likely to push people further to the fringes, increasing pressure on crisis services such as emergency relief and crisis accommodation, rather than effect long-term behaviour change. The 2017-18 budget papers also reference a “denying welfare for a disability caused solely by their own substance abuse”. These welfare reform measures ignore a strong body of evidence around underlying causes (including mental-health reasons) for drug use and abuse.[189]

Good Shepherd Australia New Zealand

Good Shepherd is a Catholic charity founded by the Good Shepherd Sisters with a focus on women and girls. Good Shepherd opposes the measure:

Introducing drug testing for welfare recipients comes dangerously close to criminalising poverty. It makes basic human rights conditional on not only job-seeking requirements, but on the absence of addiction. This demonises people who are already struggling with health issues and reinforces the worst kind of ignorance and prejudice. Furthermore, drug-testing welfare compliance regimes trialled elsewhere have proved an expensive failure at getting people into work and in supporting people to recover from addictions. In fact, evidence shows it makes finding a job more difficult.[190]

Samaritans

Samaritans is an Anglican charity operating in Newcastle and the Hunter Valley. Samaritans opposes the measure:

There is no value in playing the blame game for people who are struggling to overcome addiction. We see that there is no benefit in this solution; it is simply taking money off those who already are struggling.

There needs to be resources and funding attached to Centrelink payments for people to attend Alcohol and Other Drug programs, rather than taking away support payments with no recourse. These people need to be supported in overcoming their addiction, rather than being put in a situation of increased financial stress.

Drug addiction and no money could very well result a rise in the crime rate, suicide rate and the number of children not attending school or attending without food. This is a huge problem for society- and a costly one at that.

It’s costly because the welfare sector and providers such as Samaritans will have to pick up the pieces when people are taken off their Centrelink. People we support will lose their housing which will increase the levels of homelessness. They will not be able to get to appointments including medical or therapy programs because they will have no money on their Opal Cards. They will be hungry and unable to feed children, which will result in increased demand in our Emergency Relief centres.

Drug replacement therapy costs between $50-70 per week if the person is attending a pharmacy outside of the clinic- this is a necessary expense for someone trying to overcome a drug addiction and something which will be completely unaffordable if Centrelink payments are taken away. If a person overcoming a drug addiction does not get this medication, they will become really unwell and research and experience shows that they will return to using illicit drugs to suppress the addiction.[191]

Professional bodies

Royal Australasian College of Physicians

The Royal Australasian College of Physicians (RACP) argues that compulsory drug treatment is likely to be ineffective:

“Research and experience has shown that drug testing has a poor record in modifying drug use. We know that forcing addicts into treatment is an ineffective way of combating illicit drug use,” explained Dr Yelland.

“Addiction is a chronic relapsing and remitting health issue and Governments across Australia must think of it as a chronic healthcare issue moving forward,” said Dr Yelland.

Dr Yelland said the RACP believes the solution to reducing the number of Australians suffering from addiction lies in adequately funding treatment and support services.

“We agree that more people suffering with addiction need to be referred for drug and alcohol treatment. However these plans for drug testing of welfare recipients are likely to be ineffective, expensive and could further negatively impact people’s lives.

“Importantly, any approach to this issue must also include proper investment in treatment and recovery services, otherwise people looking for help will just end up at the back of an already long queue,” she added.[192]

Victorian Government

The Victorian Government is opposed to the trials. In an interview for the ABC’s 7:30, Martin Foley (Minister for Mental Health) described the measure as ‘cheap, populist nonsense’:

MARTIN FOLEY, VIC MINISTER FOR MENTAL HEALTH: It simply won't work and it is cheap, populist nonsense, designed to create a smokescreen as to what really drives disadvantage.

JULIA HOLMAN: The Victorian Government has revealed to 7:30 that it won't cooperate with the drug-testing trial. 

MARTIN FOLEY: We've made it clear to the Government at two ministerial councils that we're not interested in being part of this scam, because all it will do is create even more demand for services that already stretched, that are already under pressure from Commonwealth cuts, and we won't have bar of it.

But if the Commonwealth Government wants to go out and demonise people and pretend that they're doing good work in this space, let them do it somewhere else because all it will do in Melbourne, and Victoria, is drive people more into disadvantage.[193]

Schedule 15—Targeted compliance framework

Quick guide to Schedule 15

Schedule 15 amends the SSA Act, the Farm Household Support Act and the SS Act to introduce a new two-phase job seeker compliance framework.

In the first phase a payment suspension will be imposed to ensure re-engagement by the majority of job seekers.

In the second phase, jobseekers who repeatedly fail to comply with their employment pathway plan requirements, with no underlying cause, will face stronger penalties with graduated loss of income support payments culminating in payment cancellation for four weeks for the most non-compliant jobseekers.

Commencement

The amendments in Schedule 15 to the Bill commence on the later of 1 January 2018 and the day after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 15 is a saving of $204.7 million.[194]

Background

Schedule 15 gives effect to a measure that was announced as a part of the 2017–18 Budget.[195]

The Government has for some time been dissatisfied with the current job seeker compliance system, and, in particular, the system of connection and reconnection failures.

Current compliance framework

Where a job seeker fails, without reasonable excuse, to attend an appointment with their employment services provider, this constitutes a connection failure. Currently, a connection failure does not result in an immediate financial penalty.[196] Instead, the job seeker’s payment is suspended. Once the job seeker contacts or is contacted by Centrelink and agrees to attend a further appointment, their payment is restored from the date that it was suspended (that is, they are fully back paid). If the job seeker does not agree to attend the further appointment, it is booked regardless and their payment remains suspended.

If the job seeker fails to attend the further appointment without a reasonable excuse, this results in a reconnection failure and the suspension of their payment until they comply with the reconnection requirement. During a reconnection failure period, a person accrues a penalty equivalent to their daily rate of payment for each day of the reconnection failure period—that is, they are not back paid upon meeting their requirement.[197]

As the Government sees it, the above arrangements provide insufficient incentive for job seekers to comply with their mutual obligation requirements.[198] It maintains that a small number of job seekers are repeatedly missing their appointments but agreeing to attend a re-scheduled appointment and thereby avoiding any financial penalties. The Government’s preference is for immediate penalties to apply to job seekers who fail to attend appointments without having a reasonable excuse.

The Government has also argued that the current arrangement under which job seekers are able to have their income support non-payment period for serious failures waived through participating in a compliance activity means that there is insufficient deterrent to the commission of such failures.

In short, the Government insists that a proportion of job seekers are ‘wilfully and systematically gaming the welfare system with no intention of working, but at present avoid any financial penalties’.[199]

The Government has previously sought to deal with the above perceived failings through measures contained in three different Bills.[200] These aimed to apply more immediate penalties; stop eight-week non-payment penalties for failures to accept an offer of suitable employment from being waived; and, only allow persistently non-compliant job seekers one opportunity to have their non-payment period waived while in receipt of an activity tested income support payment.

As a part of the 2017–18 Budget, the Government determined not to proceed with the measures in the Social Security Legislation Amendment (Further Strengthening the Job Seeker Compliance Framework) Bill 2015 (which lapsed on the prorogation of Parliament on 17 April 2016), but rather to introduce a new compliance framework.[201]

Proposed compliance framework

Under the new framework, to be introduced from 1 July 2018, there are to be two compliance phases.[202]

In the first phase a payment suspension will be imposed to ensure re-engagement by the majority of job seekers. In the second phase, jobseekers who repeatedly fail to comply with their employment pathway plan requirements, with no underlying cause will face stronger penalties with graduated loss of income support payments: a loss of 50 per cent of a fortnightly payment for the first failure, 100 per cent of a payment for the second failure and cancellation of payment for four weeks for a third failure.

Where a job seeker fails to accept an offer of suitable work, they will have their payment cancelled for four weeks, irrespective of which phase they are in.

Schedule 15 makes the legislative changes necessary to enable the above arrangements. These new arrangements will apply to all job seekers with participation requirements, with the current job seeker compliance framework to apply to declared program participants.

Policy position of non-government parties/independents

The Australian Labor Party (Labor) has expressed concerns with the proposed new targeted compliance framework:

We are worried that vulnerable Australians may be pushed into poverty, homelessness and potentially crime as a result of some [of] these changes. The Government’s proposal could see vulnerable jobseekers made subject to significant financial penalties.

This could include the loss of 50 per cent of a fortnightly payment for their first noncompliance, 100 per cent of their fortnightly payment for a second non-compliance, and cancellation of their payment for a third non-compliance, with a four-week exclusion from re-applying.

We are concerned about possible unintended consequences of this measure.

The truth is the Turnbull Government is failing to create jobs and training opportunities for many Australians.

There is only one job available for every 10 applicants locked out of paid work or who want more paid work.

Of course, people that can work should work, but maligning jobseekers is not the way to get them into the workforce.

Job programs like Work for the Dole are failing under the Turnbull Government.

They should focus on fixing those to support people looking for work.

Australians looking for work need to be properly supported to get a job, not demonised.

The Turnbull Government has a terrible record in this policy area, just look at the Centrelink robo-debt debacle.

That’s why Labor wants to see this legislation carefully examined by a Senate Inquiry.[203]

Labor has in the past been critical of Government attempts to remove waiver provisions for job seekers who commit a serious failure, as have the Australian Greens (the Greens). Their positions are summarised in the Bills Digest for the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014.[204] Further details are provided in their dissenting reports which are a part of the report by the Senate Education and Employment Legislation Committee on the Bill. Both Labor and the Greens were strongly opposed to the measure.

Key issues and provisions

Current compliance failures

Division 3A in Part 3 of the SSA Act contains the current compliance framework which applies to recipients of participation payments. These are Newstart Allowance, Youth Allowance for persons who are not apprentices or full-time students, Parenting Payment for persons who have participation requirements and special benefit for certain visa holders.

Under Division 3A there are currently five types of compliance failure—no show no pay failures, connection failures, reconnection failures, serious failures and non-attendance failures all of which are set out in Division 3A of Part 3 of the SSA Act. The following is a brief summary of the penalty structure of the current job seeker compliance framework.

As its name implies, a no show no pay failure enables a job seeker to have their payment suspended immediately where they either fail to attend or behave appropriately at a required appointment or job interview.[205] The suspension continues until they attend a re-scheduled appointment, with no back-payment for the period in which they do not attend the appointment. Rent assistance and other non-participation-related add-on payments are not affected by the penalty.

A connection failure occurs where a job seeker, without reasonable excuse, fails to enter into an Employment Pathway Plan, comply with the requirements of such a plan, or attend compulsory employment-related activities.[206] There is no immediate penalty for a connection failure; instead, the job seeker’s income support payment is immediately suspended and they are required to comply with a reconnection requirement. Typically, this would entail attending a re-scheduled appointment or resuming the relevant activity.

If the job seeker attends the rescheduled appointment or resumes the activity—that is, meets their reconnection requirement—then their income support payment is reinstated and they are back-paid any income support that was withheld as a result of the suspension. If a job seeker fails to meet their reconnection requirement without a valid excuse then this amounts to a reconnection failure and sanctions apply.[207] For every day that a job seeker fails to meet their reconnection requirement, they incur a penalty equivalent to their daily rate of income support payment.

A job seeker commits a serious failure where they are persistently non-compliant with their participation obligations (committing three connection, reconnection or no show no pay failures during a six-month period) or refuse or fail to accept an offer of suitable employment.[208] The penalty for a serious failure is an eight-week income support non-payment period.[209] Before a serious failure is imposed for persistent non-compliance a job seeker is referred for a Comprehensive Compliance Assessment (CCA).[210] During this assessment, a Department of Human Services social worker looks at why the job seeker has been failing to meet their requirements and identifies any barriers to employment. The CCA report thus seeks to establish whether the non-compliance was persistent and deliberate or the job seeker is in need of more appropriate participation requirements and/or greater assistance in complying with their participation requirements.

A job seeker may also incur an eight-week non-payment penalty if they are unemployed due to their misconduct as a worker or voluntarily leave a suitable job (unless the voluntary act is reasonable).[211] For new claimants, this eight-week non-payment period is effectively a preclusion period rather than a penalty, as they will not have been granted payment yet.

The eight-week non-payment period for serious failures may be waived if the job seeker agrees to undertake a Compliance Activity (generally 25 hours per week for eight weeks of Work for the Dole) or the job seeker does not have the capacity to undertake a Compliance Activity and serving an eight-week non-payment period would cause financial hardship (a job seeker who has less than $2,500 in liquid assets ($5,000 for a couple or for a job seeker with children) is considered to be in financial hardship). Job seekers subject to a preclusion period cannot end this period by undertaking a Compliance Activity, although some vulnerable job seekers who are in hardship can have the penalty waived.

A non-attendance failure occurs where a job seeker, without reasonable excuse, fails to attend an appointment or fails to give prior notice of the reasonable excuse if it was reasonable to expect them to do so.[212] For every day that a job seeker fails to attend the relevant appointment, they incur a penalty equivalent to their daily rate of income support payment.

With the changes made under Schedule 15, the above job seeker compliance framework is to apply to declared program participants (introduced to the Social Security Act 1991 under proposed Schedule 13 of the Bill), with the new compliance framework, described below, to apply to all other recipients of participation payments.

Item 13 of Part 2 of Schedule 15 renames the heading of Division 3A of Part 3 so that it applies a compliance framework to declared program participants. Those persons will be subject to the existing compliance framework which is set out in Division 3A of Part 3 of the SSA Act as discussed above.[213]

New compliance failures

Item 1 in Schedule 15 to the Bill inserts proposed Division 3AA—Compliance with participation payment obligations: persons other than declared program participants into the SSA Act to introduce a new job seeker compliance framework. Proposed Division 3AA will apply to all recipients of participation payments other than declared program participants.

Proposed sections 42AC, 42AD and 42AE introduce three new categories of compliance failure—mutual obligation failures, work refusal failures and unemployment failures, respectively.

A person who is receiving a participation payment commits a mutual obligation failure under proposed section 42AC of the SSA Act where they fail to: attend or be punctual for a required appointment or activity, contact the Department where required, provide required information to the Secretary, complete a required questionnaire or undergo a required examination, give a sample if they are a drug test trial pool member, enter into an Employment Pathway Plan,[214] undertake adequate job search efforts, act in an appropriate manner during a required appointment or activity, or, attend a job interview or act on a job opportunity when requested to do so by an employment services provider. Proposed subsections 42AC(2) and (3) provide that the Secretary may, by legislative instrument, determine what constitutes undertaking adequate job search efforts. The Scrutiny of Bills Committee considered that such a significant matter should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. Accordingly, the Committee has requested the Minister to provide advice as to why it is considered necessary to leave this matter to delegated legislation.[215] A person who is receiving a participation payment commits a work refusal failure under proposed section 42AD where they refuse or fail to accept an offer of suitable employment. As noted above, such conduct currently constitutes a serious failure under paragraph 42N(1)(b) of the SSA Act.

A person who is receiving a participation payment commits an unemployment failure under proposed section 42AE where they become unemployed as a result of a voluntary act or misconduct. If the Secretary is satisfied that the voluntary act was reasonable, then a failure is not applied. The unemployment failure is equivalent to a serious failure under existing subsections 42S(1) and (2). However, unlike the current arrangement for serious failures, there is no exemption within proposed Division 3AA for recipients of Parenting Payment.

Acting in an inappropriate manner

A majority of the mutual obligation failures listed above already constitute compliance failures under the SSA Act. However, the provision that a person who is receiving a participation payment may commit a mutual obligation failure under proposed paragraph 42AC(1)(g) where they are determined by the Secretary to have acted in an inappropriate manner is new.

This is not the first time that the Government has tried to impose a sanction on a job seeker who is alleged to have acted in an inappropriate manner. A similar measure was previously contained in the Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 (2015 Bill) which lapsed when the Parliament was prorogued prior to the Federal election in 2016.[216] The 2015 Bill would have imposed an immediate suspension in circumstances where job seekers act in an inappropriate manner such that the purpose of required appointments is not met. In that case, the Government intended that the suspension would continue until they attend a re-scheduled appointment and behave in a manner deemed to be appropriate, with no back-payments for the period in which they fail to attend the appointment and behave appropriately.[217]

In relation to the 2015 Bill, the Scrutiny of Bills Committee expressed its concern that, without the matters to be considered by the Secretary when deciding whether a job seeker had acted in an inappropriate manner at an appointment having been included in the primary legislation, or a requirement for the Secretary to make a legislative instrument that spelled these matters out, the Secretary would have ‘a broadly framed power to determine what constitutes inappropriate behaviour at an appointment’.[218]

The Human Rights Committee expressed similar reservations in its review of the 2015 Bill which are equally relevant to this Bill.

It observed that the Bill did not provide any guidance as to what constituted inappropriate behaviour, instead leaving such judgements to the providers of employment and related services. In the absence of statutory guidance, the Human Rights Committee argued that the Bill could ‘result in individuals losing social security benefits in circumstances which are unfair or unreasonable’.[219]

Actions for new compliance failures

Proposed Subdivision C in Division 3AA of Part 3 of the SSA Act sets out the compliance action that applies for mutual obligation failures (proposed section 42AF), work refusal failures (proposed section 42AG) and unemployment failures (proposed section 42AH). Proposed Subdivision D of Division 3AA sets out the effect of taking that relevant compliance action.

In the case of a mutual obligation failure, the job seeker is to have their payment suspended according to the terms stipulated at proposed section 42AL. The payment is suspended from the instalment period in which the job seeker commits the failure until they comply with a reconnection requirement—called the payment suspension period. The job seeker must be notified of the reconnection requirement and the effect of not complying with it under proposed subsection 42AM(2). If the job seeker complies with their reconnection requirement,[220] their payment will be resumed and they will receive back pay for the payment suspension period.[221] If the job seeker does not comply with the reconnection requirement within four weeks of having been notified of it, their payment will be cancelled.[222]

However, if the job seeker has committed multiple mutual obligation failures without a reasonable excuse, they will be subject to escalating penalties.[223] For the first subsequent failure they will have their payment reduced by half[224] and for the second lose it entirely for the instalment period in which the failure is committed.[225] The payment reduction arrangements are to be spelled out in a legislative instrument made by the Minister under proposed subsection 42AR(1).

For the third failure the job seeker will have their payment cancelled according to the proposed section 42AP of the SSA Act. The job seeker will have their payment cancelled from the start of the instalment period in which they commit the failure and be subject to a four-week post-cancellation non-payment period. However, they will retain access to concession cards and any benefits paid under the FA Act.[226]

The Government has described the above ‘three strikes’ arrangements as being similar to the drivers’ licence scheme.[227] The language used in describing the arrangements has also been likened to the ‘three strikes’ (and you’re out) rhetoric that is used in relation to criminal sentencing.[228]

One advantage of this aspect of the new compliance framework is that it is, like the drivers’ licence system, relatively simple and likely to be widely understood. This could potentially help to reduce the incidence of non-compliance where some job seekers simply do not grasp ‘the rules’.

However, as is the case for mandatory sentencing laws, a three strikes system would appear on its face to reduce some of the discretion allowed to the Secretary under current arrangements. This could result in some job seekers being subject to more severe penalties that might otherwise have been the case. Relatedly, for some disadvantaged job seekers the prospect of increasing penalties might not serve as a deterrent because they are experiencing some form of crisis. While it is the Government’s intention that genuine job seekers who are having difficulty meeting their requirements should not enter the ‘three strikes’ phase, there is no guarantee that this will be the case. Much will depend on the quality of assessments undertaken to determine if job seekers have undisclosed issues that are impeding their ability to comply with their mutual obligation requirements.

Where a job seeker commits a work refusal failure their payment is suspended until they comply with a reconnection requirement—the terms of which are the same as for mutual obligation failures, summarised above. As such, upon complying with their reconnection requirement, the job seeker will receive back pay. However, if the job seeker does not have a reasonable excuse for the failure,[229] they will have their payment cancelled and be obliged to serve a four-week post-cancellation non-payment period.[230]

Job seekers who commit an unemployment failure will have their payments cancelled and a four-week post-cancellation non-payment period imposed.[231] If they received relocation assistance in the six months prior to committing the failure, job seekers will incur a six-week post-cancellation non-payment period. Job seekers who have made a claim for but are not receiving a payment and who commit an unemployment failure are similarly subject to a four- or six-week post-cancellation non-payment period.

Removal of waiver provisions

The introduction of payment cancellation and a four-week post-cancellation non-payment period for multiple mutual obligation failures and work refusal failures with no reasonable excuse reduces the severity of the current penalty for a serious failure of eight weeks’ non-payment. However, under the proposed new arrangements, job seekers will no longer have the possibility of having their penalty waived.

Section 42NC of the SSA Act currently provides that if the Secretary determines that a person has committed a serious failure, the Secretary must also determine that the non-payment period will apply. There is one exception, with two parts. The first is that the Secretary is satisfied that the job seeker does not have the capacity to undertake any serious failure requirement, for example, ‘because they now have significant caring responsibilities, or if undertaking the activity would aggravate an existing health condition’.[232] The second is that the Secretary is satisfied that serving the penalty would cause them to suffer severe financial hardship.[233]

The procedures for serious failures which were introduced by the Rudd-Gillard Government in 2009 enabled job seekers to have the eight-week income support non-payment period waived or brought to an end early by complying with a serious failure requirement.[234] Job seekers are currently given the option of participating in an activity similar to work experience—a Compliance Activity—for at least 25 hours a week for the eight-week period, rather than losing their payment.[235]

The Rudd-Gillard Government also introduced a comprehensive compliance assessment (CCA) for job seekers who had incurred three participation failures within a six-month period and were thus potentially subject to an eight-week non-payment period. Essentially, this assessment was to determine if a job seeker had been wilfully non-compliant, or if they were experiencing extreme disadvantage that had impacted on their ability to comply with their participation requirements. Under the previous compliance system, where a job seeker had committed three failures this automatically resulted in an eight-week non-payment period, with no discretion given to employment services providers or Centrelink.

The Rudd-Gillard Government changes to arrangements for serious failures were made partly in response to submissions to the 2008 Employment Services Review which raised concerns about the impact on vulnerable job seekers of imposing eight-week non-payment periods.

Under this Bill, those arrangements will remain in place for declared program participants only. All other participants are subject to the new ‘three strikes’ compliance framework. The rationale for the tougher stance is that the Government argues that too many job seekers are having their penalties waived, and that this ‘has undermined the effectiveness of these penalties to the extent that they no longer provide a deterrent to job seekers who persistently fail to meet their requirements’.[236]

However, in its submission to the Community Affairs Committee inquiry into the Bill, the Australian Council of Social Service commented as follows:

The proposed system relies very heavily on drawing a clear distinction between people who are willing to comply but faced difficulties, and people who wilfully and repeatedly avoid activity requirements. Our years of experience with many different compliance systems has taught us that distinctions are in fact more blurred, people's circumstances do change, and many vulnerabilities go unreported. Discretion to tailor responses to non-compliance is essential to ensure that any compliance system remains humane. It is required to maintain relationships between the person receiving income support and their employment service provider, and prevent harsh and detrimental effects on a person's health and well-being.[237]

The Human Rights Committee has argued:

While the statement of compatibility provides information as to the percentage of cases in which a waiver has been applied, the assessment does not establish that the removal or limitation of the waiver will, of itself, provide a deterrent against non-compliance with job seekers' obligations. In particular, the figures provided on the proportion of waivers granted are not accompanied by any basis to conclude that these were inappropriate, excessive or misused. It is therefore unclear how limiting the availability of a waiver on the ground of a job seeker's severe financial hardship, would achieve the stated objective of the measures.[238]

It should be noted that under the new arrangements the Secretary will not be required to conduct a CCA before determining that a person has committed persistent mutual obligation failures, as is currently the case under Section 42M of the SSA Act. Instead:

… administrative arrangements will ensure that job seekers will need to have committed multiple failures without a reasonable excuse before they can be determined to be persistently non-compliant, and their provider and the Department of Human Services (DHS) will conduct checks to ensure the job seeker does not have any undisclosed issues that are affecting their ability to comply, and that their employment pathway plan is suitable for their circumstances. The factors that the Secretary must consider as constituting persistent non-compliance will be included in a legislative instrument.[239]

No payment pending merits review

Sections 131 and 145 of the SSA Act provide that if an adverse decision is made in relation to a Social Security payment which depends on the exercise of discretion or the holding of an opinion (or which would result in the application of the compliance penalty period), and a person has applied for merits review of that decision, the secretary may declare that the payment is to continue pending the outcome of the review.

Items 25 and 27 of Schedule 15 to the Bill amend sections 131 and 145 of the SSA Act respectively to exclude decisions made under proposed Division 3AA from those sections. As the Explanatory Memorandum is silent as to the reason for this omission the Scrutiny of Bills Committee has requested the Minister to provide advice as to ‘why it is considered necessary and appropriate to remove the Secretary's ability to ensure that certain welfare payments continue to be paid pending the outcome of merits review’.[240]

Other provisions

Proposed Sections 42AI and 42AJ set out the reasonable excuse arrangements that apply to the new compliance failures. Proposed Section 42AI stipulates that the Secretary must by legislative instrument determine the matters that must be taken into account and not taken into account in deciding whether a job seeker has a reasonable excuse for committing a mutual obligation or work refusal failure.

Proposed Section 42AJ sets out the conditions under which excuses for mutual obligation failures may or may not be considered reasonable. In particular, proposed subparagraph 42AJ(3)(b)(i) the job seeker is required to notify the Department or the relevant employment services provider of a failure to attend or be punctual for a required activity or appointment before the start of the activity or appointment.[241]

The requirement that job seekers give advance notification of an inability to attend an activity or appointment can sometimes be difficult to meet, especially for disadvantaged job seekers. Importantly, proposed subsection 42AJ(1) of the SSA Act provides that an excuse cannot be considered a reasonable excuse for a mutual obligation failure unless:

•       the job seeker has given prior notification or

•       the Secretary is satisfied that there were circumstances in which it was not reasonable to expect prior notification.

Proposed Section 42AK provides that proposed sections 42AF, 42AG and 42AH do not limit each other; that is, a job seeker can commit and be sanctioned for more than one type of compliance failure at the same time.

Proposed section 42AQ provides that a job seeker to whom a participation payment is not payable is taken to be receiving that payment for that period for the purposes of three specified provisions. One of those is sections 63 and 64.[242] According to the Explanatory Memorandum to the Bill:

This section would ensure that section 63 and 64 [of the SSA Act], which allow the Secretary to send certain notices requiring persons receiving payments to do certain things, remain effective during this period. This is to ensure that a jobseeker continues to meet any relevant requirements that might apply under section 63 or 64 during a period of non-pay ability.[243]

Another is for the purposes set out by the Minister in a legislative instrument.[244] To that end, proposed section 42AR of the SSA Act requires the Minister to determine by legislative instrument the circumstances in which the Secretary must, or must not, be satisfied that a person has persistently committed mutual obligation failures, the circumstances in which the Secretary must make a determination that a person's participation payment for an instalment period is to be reduced; the circumstances in which the Secretary must make a determination that a person's participation payment is cancelled; and, the circumstances in which a determination is to be made reducing instalments of participation payment for mutual obligation failures. As such, the legislative instrument will spell out the Intensive Compliance Phase arrangements outlined above; that is, that when a job seeker has committed persistent mutual obligation failures with no reasonable excuse they will lose 50 per cent of their payment for the first subsequent failure, 100 per cent for the second failure, and have their payment cancelled for the third failure.

It is worth noting that the new job seeker compliance framework relies heavily on the use of legislative instruments. The Scrutiny of Bills Committee’s consistent position on such matters is that significant concepts relating to a legislative scheme should be defined in primary legislation (or at least in legislative instruments subject to Parliamentary disallowance, sun setting and tabling) unless a sound justification for using non-disallowable delegated legislation is provided. In this case, the Scrutiny of Bills Committee noted that ‘in relation to proposed section 42AR, no information is given as to why it is appropriate to include these matters in delegated legislation’.[245]

Part 2 of Schedule 15 contains consequential amendments relating to the Farm Household Support Act, SS Act and SSA Act. Part 3 of Schedule 15 contains application and transitional provisions. These ensure that, if a declared program participant committed a compliance failure under the old compliance rules, those rules and sanctions still apply following the introduction of the new job seeker compliance framework. Upon commencement of the new arrangements, the new compliance rules will apply to all relevant job seekers who are non-declared program participants. Non-payment periods imposed under the old compliance rules that have not ended before the commencement of the new rules (the date the Act receives the Royal Assent) end immediately before the commencement of the new rules.

However, penalty amounts resulting from a determination under the old rules will continue to be deducted. Where this is the case and the job seeker’s payment is reduced to nil for an instalment period, the job seeker cannot incur a penalty under the new rules for a mutual obligation or work refusal failure.

Concluding comments

The proposed job seeker compliance arrangements are more stringent that those currently in place. Under the new system, all job seekers who commit a compliance failure without reasonable excuse will be subject to an immediate sanction. This arrangement, along with the removal of penalty waivers should reduce the gaming of the system by a very small number of job seekers. Ideally, the system of escalating penalties will serve its intended screening function, with only wilful and persistently non-compliant job seekers being penalised, and not those who are genuinely struggling to meet their requirements, through no fault of their own.

Schedule 16—Streamlining tax file number collection

Quick guide to Schedule 16

The amendments in Schedule 16 to the Bill repeal existing provisions of the SSA Act which empower the Secretary to request a person to provide their tax file number; and allow the person 28 days in which to do so.

Instead, a request to provide a tax file number and/or relevant thirds party’s tax file number will be part of a claim for social security payment or senior’s health card. The amendments operate to prevent payment or provision of a health card until the request is satisfied.

Commencement

If the Social Services Legislation Amendment (Welfare Reform) Act 2017 receives Royal Assent before 1 November 2017—then the amendments in Schedule 11 to the Bill commence on 1 January 2018. Otherwise, the amendments commence on the first 1 April, 1 July, 1 October or 1 January that occurs at the end of two months after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 16 is an expense of $5.5 million.[246]

Background

Recipients of income support payments have been asked to provide their tax file numbers to Centrelink since the 1990’s. Tax file numbers are needed to facilitate data matching to combat fraud and overpayments.

The Bill removes the 28-day period within which claimants and recipients must respond to a request for a tax file number. This would ensure that tax file numbers are provided as part of a claim for payment or the authorisation to seek a tax file number from the ATO is provided at that time.

The rationale for the change given in the Department of Social Services submission to the Senate inquiry into the Bill is:

The 28 day grace period is no longer needed as applicants who do not have their TFN on hand can choose to have the Department of Human Services (DHS) obtain the TFN directly from the Australian Taxation Office (ATO). Those yet to be issued with a TFN can authorise DHS to obtain their TFN directly from the ATO, and either submit a TFN application form to DHS for forwarding to the ATO, or apply for a TFN online through the ATO website prior to claiming.[247]

Position of major interest groups

The National Social Security Rights Network had this to say about the proposed change:

On the face of it, this is a sensible measure to improve the efficiency of the claim process by allowing the TFN collection to be done as part of a single transaction. Given that a person who does not know or have a TFN can make a declaration to this effect as part of the claim, this measure should not delay their claim.[248]

Key Provisions

Item 1 repeals and replaces sections 75–77 of the SSA Act. Proposed sections 75–77 are in large part a redrafting of the existing sections. The major change included in this redrafting is the introduction of a requirement that tax file numbers should be provided when a claim is made in proposed section 75.

Proposed section 76 sets out the ways that this requirement can be satisfied and proposed subsection 77(1) sets out in table form the consequences of not giving a tax file number as follows:

Table 7:              Consequences of not satisfying a request for a tax file number

Item

if request under section 75 was given to …

the consequence is …

1

a person who was making a claim for a Social Security payment

the Social Security payment is not payable

2

a person who was making a claim for seniors health card ext

the Secretary must not determine the claim

3

a person who had made a claim for, or was receiving, a Social Security payment

at the end of 28 days after the Secretary made the request, the Social Security payment ceases to be payable to the person

4

a person who made a claim for, or was the holder of, a seniors health card

at the end of 28 days after the Secretary made the request, the Secretary must determine that the card is to be cancelled.

Source: SSA Act, proposed subsection 77(1) inserted by item 1 of Part 1 in Schedule 16 to the Bill.

However, proposed subsection 77(4) of the SSA Act sets out a limited exemption where the Secretary has requested information about a third party’s tax file number and the Secretary is satisfied that the recipient of that request does not know the other person's tax file number and is not able to request a tax file number from the Commissioner of Taxation in relation to that person.

Schedule 17—Information management

Quick guide to Schedule 17

The amendments in Schedule 17 relate to the information gathering and protection provisions in the family assistance law, PPL Act, social security law and Student Assistance Act. They aim to:

·    allow information or documents obtained about a person under the coercive information gathering provisions in the course of an administrative action, to be used in subsequent investigation and prosecution of criminal offences and

·    insert limited abrogation of the privilege against self-incrimination provisions.

Commencement

Items 1–20 of Schedule 17 to the Bill commence on the later of immediately after the commencement of items 21–78 (as set out below) and 2 July 2018.[249]

If the Social Services Legislation Amendment (Welfare Reform) Act 2017 receives Royal Assent before 1 November 2017—then the amendments in items 21–78 of Schedule 17 to the Bill commence on 1 January 2018. Otherwise, the amendments commence on the first 1 April, 1 July, 1 October or 1 January that occurs at the end of two months after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measures in Schedule 17 is nil.[250]

Key provisions—FAA Act

Power to obtain information

Items 1–19 amend the FAA Act. Part 6 of the FAA Act is about information gathering. Within Part 6, section 154 of the FAA Act contains the general power to obtain information. This is a broad power which authorises the Secretary to require a person to give information, or produce a document that is in the person’s custody or under the person’s control in order to establish whether a person is entitled to family assistance or child care benefit, including the amount that is or was payable. Item 9 inserts proposed subsection 154(6) so that the Secretary may also require a person to give information, or produce a document or records, to a specified agency.

Items 6–8 of Schedule 17 omit references to information or documents that are in the person’s custody or under the person’s control.

Item 5 inserts proposed section 153A into the FAA Act so that the Secretary needs a reasonable belief that a person will be able to give information, produce documents or produce records, in order to require a person to do so.

According to the Explanatory Memorandum to the Bill proposed subsection 154(6) ‘will allow a notice to be issued to gather information to investigate the circumstances where a potential overpayment is being quantified and where there is potential for fraud to be identified’.[251] Under the amendments, information provided by a person in response to a request by the Secretary under section 154 of the FAA Act can be used in an investigation to identify offences against the Act:

Any information gathered may subsequently be used in prosecutions of those offences. This has always been the case; nevertheless, in the interests of clarity and transparency in the operation of the Secretary’s powers to request information, it makes this express.[252]

Obtaining information about debtors

Section 156 of the FAA Act empowers the Secretary to obtain information from third parties about debtors. Item 11 repeals and replaces section 156. Proposed section 156 is drafted more broadly than at present in that it empowers the Secretary to require a person to give information, or produce a document, to a specified agency where the information or document would help that specified agency locate a person who owes a debt to the Commonwealth under or as a result of the FAA Act or is relevant to the debtor’s financial situation.

Notice provisions

Under existing section 158 a person who is required to provide information must be given written notice of the requirement. The section sets out the manner of giving the notice and form it is to take. Item 12 inserts proposed subparagraph 158(2)(b)(ia) into the FAA Act so that the notice must contain a description of the information, document or records to which the requirement relates. In addition, item 14 repeals and replaces subsection 158(5) so that where the notice requires the person to appear before an officer, the notice must specify a time and place at which the person is to appear and that the person may be accompanied by a lawyer.

Self-incrimination

Item 16 of Schedule 17 to the Bill inserts proposed section 159B into the FAA Act.              Proposed subsection 159B(1) provides that a person is not excused from giving information, or producing a document or records, on the ground that the information, or production of the document or records, might tend to incriminate the person or expose the person to a penalty.

However, proposed subsection 159B(2) provides a limited protection to an individual with respect to:

•       the information given or document or records produced

•       giving the information or producing the document or records and

•       any information, document or thing obtained as a direct or indirect consequence of giving the information or producing the document or records.

The above are not admissible in evidence against the individual in criminal proceedings. However, there is an exception to the protection. It does not apply to:

•       proceedings for an offence against subsection 159(1)[253]

•       proceedings for an offence against section 137.1 or 137.2 of the Criminal Code[254]

•       proceedings for an offence against Division 145 of the Criminal Code[255] or

•       proceedings for an offence against section 177.[256]

Relationship with other laws

Currently, subsection 153(2), provides that Division 1 in Part 6 does not require a person to give information or produce a document or records to the extent that in doing so the person would contravene a law of the Commonwealth (other than a law of a Territory). Item 4 in Schedule 17 to the Bill repeals that subsection.

However, under Item 19, the subsection is re-inserted as proposed subsection 160(2) of the FAA Act.

Other provisions

Items 21–36 amend the PPL Act. The items insert provisions in equivalent terms to those discussed above to:

•       require the Secretary to have a reasonable belief that a person will be able to give information, produce documents or produce records, in order to require a person to do so[257]

•       obtaining information about a person who owes a debt to the Commonwealth[258]

•       updates to the manner and form of notices[259]

•       abrogating the privilege against self-incrimination[260] and

•       updating the relationship with other laws.[261]

Amendments to the SSA Act

Items 38–57 amend the SSA Act. The items insert provisions in equivalent terms to those discussed above to:

•       require the Secretary to have a reasonable belief that a person will be able to give information, produce documents or produce records, in order to require a person to do so[262]

•       obtaining information about a person who owes a debt to the Commonwealth[263]

•       updates to the manner and form of notices[264]

•       abrogating the privilege against self-incrimination[265] and

•       updating the relationship with other laws.[266]

Amendments to the Student Assistance Act

Items 59–77 amend the Student Assistance Act. The items insert provisions in equivalent terms to those discussed above to:

•       require the Secretary to have a reasonable belief that a person will be able to give information, produce documents or produce records, in order to require a person to do so[267]

•       obtaining information about a person who owes a debt to the Commonwealth[268]

•       updates to the manner and form of notices[269]

•       abrogating the privilege against self-incrimination[270] and

•       updating the relationship with other laws.[271]

Schedule 18—Alignment with disability discrimination law

Quick guide to Schedule 18

The amendments in Schedule 18 to the Bill align the social security law and disability discrimination law.

Commencement

The provisions in schedule a team to the Bill commence on the later of 1 January 2018 and the day after Royal Assent.

Financial implications

According to the Explanatory Memorandum to the Bill, the estimated impact on the fiscal balance over the forward estimates to 2020–21 of the measure in Schedule 18 is nil.[272]

Key provisions

Currently subsection 51(1) of the Disability Discrimination Act 1992 operates to exempt the SS Act from the general prohibition against discrimination. The exemption also extends to a number of statutes including the VEA, Military Rehabilitation and Compensation Act 2004 and the Safety Rehabilitation and Compensation Act 1988.

Item 1 of Schedule 18 to the Bill amends subsection 51(1) of the Disability Discrimination Act so that the exemption include the SSA Act and the Social Security (International Agreements) Act 1999 and any legislative instruments made under any of the three statutes.

Human Rights Committee

The Human Rights Committee considered that the amendment touches on the right to equality and non-discrimination is protected by articles 2, 16 and 26 of the International Covenant on Civil and Political Rights (ICCPR) and article 2 of the International Covenant on Economic Social and Cultural Rights (ICESCR).

According to the Human Rights Committee:

It should be noted that section 45 of the Disability Discrimination Act already exempts special measures “designed to assist people who have a disability to obtain greater equality of opportunity or provide them with benefits to meet their special needs”. An exemption therefore is not required in order to pay benefits to people with disabilities, but would be required for measures which negatively impact people with a disability, such as reducing or suspending payments to those who fail to meet mutual obligation requirements due to their disability where that disability is a drug or alcohol dependency.[273]

The Committee considered that it is unclear from the limited information provided in the statement of compatibility as to why such a broad exemption is required for all social security laws. That being the case the Human Rights Committee has sought further information from the Minister as to how the broad exemption of all social security law is permissible under international law, in particular why such an exemption is required in view of existing section 45 of the Disability Discrimination Act.[274]

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[1].              Details of the terms of reference, submissions to the Senate Community Affairs Legislation Committee, and the final report (when published) are available at the inquiry homepage.

[2].              Standing Committee for the Scrutiny of Bills, Scrutiny digest, 8, 2017, 9 August 2017, pp. 23–31.

[3].              The Statement of Compatibility with Human Rights can be found at pages 136–184 of the Explanatory Memorandum to the Bill.

[4].              Parliamentary Joint Committee on Human Rights, Scrutiny report, 8, 2017, 15 August 2017, pp. 46–77.

[5].              Parliament of Australia, ‘Social Services Legislation Amendment (Payment Integrity) Bill 2017 homepage’, Australian Parliament website.

[6].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[7].              Social Security and Veterans’ Entitlements Amendment Act 1987.

[8].              Social Security (Home Child Care and Partner Allowances) Legislation Amendment Act 1994; C Field, Social Security (Home Child Care and Partner Allowances) Legislation Amendment Bill 1994, Bills digest, 11, 1994, Department of the Parliamentary Library, Canberra, 1994.

[9].              Social Security (Parenting Allowance and Other Measures) Legislation Amendment Act 1994.

[10].              Ibid.

[11].              Social Security Legislation Amendment (Budget and Other Measures) Act 1996; C Field, Social Security Legislation Amendment (Budget and Other Measures) Bill 1996, Bills digest, 39, 1996–97, Department of the Parliamentary Library, Canberra, 1996.

[12].              D Daniel and N Hancock, Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002, Bills digest, 159, 2001–02, Parliamentary Library, Canberra, 2002.

[13].              Social Security (Parenting Allowance and Other Measures) Legislation Amendment Act 1994.

[14].              C Porter (Minister for Social Services), M Cash (Minister for Employment) and A Tudge (Minister for Human Services), A fairer welfare system that supports more people into work, media release, 9 May 2017.

[15].              National Social Security Rights Network (NSSRN), Budget 2017: new jobseeker payment, media release, 27 May 2017, p. 2.

[16].              Australian Council of Social Service (ACOSS), Federal budget snapshot: social security measures, ACOSS, Sydney, May 2017.

[17].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[18].              The information in table 1 is sourced from: Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 8–11; DSS, ‘3.4.4: WidB: qualification and payability’, Guide to social security law, version 1.235, DSS website, 14 August 2017; Australian Government, ‘DSS payment demographic data’, data.gov.au website, 10 July 2017.

[19].              Department of Human Services (DHS), ‘Age Pension if you travel outside Australia’, DHS website, 27 August 2017.

[20].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[21].              The information in table 2 is sourced from: Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 12–20; DSS, ‘3.4.2: WP: qualification and payability’, Guide to social security law, version 1.235, DSS website, 14 August 2017; Australian Government, ‘DSS payment demographic data’, op. cit.; and DSS, Submission to Senate Community Services Committee, Inquiry into the Social Services Legislation Amendment (Welfare Reform) Bill 2017, 4 August 2017, pp. 5–8.

[22].              DSS, Submission to Senate Community Services Committee, Inquiry into the Social Services Legislation Amendment (Welfare Reform) Bill 2017, 4 August 2017, p. 8.

[23].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[24].              H Bancroft, A compendium of legislative changes in social security 1908–1982, Occasional paper, 6, Department of Families, Community Services and Indigenous Affairs (DFaCSIA), Canberra, 2006; B Dapre, A compendium of legislative changes in social security 1983–2000, Occasional paper, 13, DFaCSIA, Canberra, 2006.

[25].              The information in table 3 is sourced from: Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 21–36. DSS, ‘3.4.9: BVA: qualification and payability’, Guide to social security law, version 1.235, DSS website, 14 August 2017.

[26].              J Macklin (Shadow Minister for Families and Social Services), Labor listens to expert advice on drug testing trial, media release, 7 August 2017.

[27].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[28].              Ibid.

[29].              The information in table 4 is sourced from: Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 37–43; DSS, ‘3.6.5: SA: qualification and payability’, Guide to social security law, version 1.235, DSS website, 14 August 2017; Australian Government, ‘DSS payment demographic data’, op. cit.; and DSS, Submission to Senate Community Services Committee, Inquiry into the Social Services Legislation Amendment (Welfare Reform) Bill 2017, 4 August 2017, pp. 9–10.

[30].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[31].              The information in table 5 is sourced from: Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 44–47; DSS, ‘3.4.3: WA: qualification and payability’, Guide to social security law, version 1.235, DSS website, 14 August 2017; Australian Government, ‘DSS payment demographic data’, op. cit.

[32].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[33].              The information in table 6 is sourced from: Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 48–50; DSS, ‘3.3.1: PA: qualification and payability’, Guide to social security law, version 1.235, DSS website, 14 August 2017; Australian Government, ‘DSS payment demographic data’, op. cit.

[34].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[35].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[36].              Australian Government, Budget measures: budget paper no. 2: 2005–06, p. 146.

[37].              DSS, ‘3.2.9.130: suitable activity: voluntary work’, Guide to social security law, version 1.235, DSS website, 14 August 2017.

[38].              Ibid.

[39].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 52.

[40].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[41].              Australian Government, Budget measures: budget paper no. 2: 2005–06, p. 146.

[42].              D Daniels and P Yeend, Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Bill 2005, Bills digest, 70, 2005–06, Parliamentary Library, Canberra, 2005, p. 23.

[43].              For further details of current RapidConnect arrangements see DSS, ‘3.2.3.45: RapidConnect: impact on YA payability’ and ‘3.2.1.40: RapidConnect: impact on NSA payability’, Guide to social security law, version 1.234, DSS website, 3 July 2017.

[44].              See ibid.; DSS, ‘3.2.1.45: exemption from RapidConnect provisions’, Guide to social security law, version 1.235, DSS website, 14 August 2017.

[45].              Department of Employment, Request for tender: for employment services 2015–2020, Department of Employment, Canberra, 2014, p. 27.

[46].              Australian Government, Budget measures: budget paper no. 2: 2017–18, pp. 91–91.

[47].              Under Section 63 of the Social Security (Administration) Act 1999 a job seeker may be required to contact the Department, attend an appointment, produce particular requested information or undergo a medical examination, among other things.

[48].              National Welfare Rights Network (NWRN), Submission to Senate Community Affairs Legislative Committee, Inquiry into the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Bill 2005, 16 November 2005.

[49].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 61.

[50].              Ibid., p. 4.

[51].              DSS, ‘8.1.1.60: deemed claims’, Guide to social security law, version 1.235, DSS website, 14 August 2017.

[52].              J Macklin (Shadow Minister for Families and Social Services), Labor listens to expert advice on drug testing trial, media release, 7 August 2017.

[53].              NSSRN, Budget 2017: changes to claim requirements, media release, 22 June 2017, p. 4.

[54].              ACOSS, Federal Budget snapshot: social security measures, May 2017.

[55].              Carers Australia, Submission to Senate Community Services Committee, Inquiry into the Social Services Legislation Amendment (Welfare Reform) Bill 2017, July 2017.

[56].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[57].              E Wincup, ‘Thoroughfares, crossroads and cul-de-sacs: drug testing of welfare recipients’, International Journal on Drug Policy, 25(5), 2014. P Berger, ‘Science misapplied: mandatory addiction screening and treatment for welfare recipients in Ontario’, Canadian Medical Association Journal, 165(4), August 2001.

[58].              Office of the Assistant Secretary for Planning and Evaluation (US), Drug testing welfare recipients: recent proposals and continuing controversies, US Department of Health and Human Services, October 2011. Ministry of Social Development (NZ), ‘Drug testing for beneficiaries with work obligations’, Work and Income New Zealand website.

[59].              M McCarty, G Falk, R Aussenberg, D Carpenter, Drug testing and crime-related restrictions in TANF, SNAP, and Housing Assistance, Congressional Research Service, Washington, D.C., 28 November 2016, p. 28.

[60].              Ibid., p. 1.

[61].              K Bradley and R Rector, ‘Reforming the food stamp program’, The Heritage Foundation website, 25 July 2012.

[62].              Senate Community Affairs Legislation Committee, Official committee Hansard, 31 May 2017, p. 64.

[63].              Liberal Party of Australia and the Nationals, Tough on drugs, Coalition policy document, Election 2007, p. 2.

[64].              J Howard (Prime Minister), Joint press conference with the Treasurer, the Hon Peter Costello: Phillip Street, Sydney, transcript, 18 November 2007.

[65].              G Christensen (Federal Member for Dawson), No drug test, no dole, media release, 31 May 2012.

[66].              B Packham, ‘Drug test the unemployed before dole, says Coalition MP George Christiansen’, The Australian, 31 May 2012.

[67].              Australian National Council on Drugs, ANCD position paper: drug testing, August 2013, p. 2. The ANCD was formed to provide independent advice to government on national drug and alcohol issues.

[68].              S Maiden, ‘Drug testing for the dole’, Sunday Mail, 1 June 2014.

[69].              C Uhlmann, ‘Interview with Kevin Andrews’, ABC AM, 2 June 2014.

[70].              G Brandis, ‘Answer to Question without Notice: Illicit Drugs’, [Questioner: J Lambie], Senate, Debates, 24 November 2015.

[71].              Explanatory notes, Welfare Reform Act 2009 (UK), Schedule 3.

[72].              L McKinstry, ‘Welfare reform under a Labour government? It just won't happen’, Express, 21 July 2008. Social Security Advisory Committee, No one written off: reforming welfare to reward responsibility: the response of the Social Security Advisory Committee, November 2011.

[73].              Explanatory notes, Welfare Reform Act 2012 (UK), Part 2, Section 60.

[74].              Department for Work and Pensions, No one written off: reforming welfare to reward responsibility: public consultation, July 2008, p. 47.

[75].              Ibid., p. 49.

[76].              Ibid.

[77].              DrugScope, DrugScope responds to publication of Welfare Reform Green Paper, media release, 21 July 2008.

[78].              Department of Work and Pensions, Raising expectations and increasing support: reforming welfare for the future, December 2008, p. 118.

[79].              Ibid., p. 118.

[80].              Ibid., p. 119.

[81].              Wincup, ‘Thoroughfares, crossroads and cul-de-sacs: drug testing of welfare recipients’, op. cit.

[82].              Royal College of Psychiatrists, Written evidence submitted to the Joint Committee on Human Rights, in: Joint Committee on Human Rights, Legislative Scrutiny: Welfare Reform Bill; Apprenticeships, Skills, Children and Learning Bill; Health Bill, Fourteenth report of session 2008–09, April 2009.

[83].              Wincup, op. cit.

[84].              U Kilkelly, The right to respect for private and family life: a guide to the implementation of Article 8 of the European Convention on Human Rights, Directorate General of Human Rights Council of Europe, 2003.

[85].              Joint Committee on Human Rights (UK), Legislative Scrutiny: Welfare Reform Bill; Apprenticeships, Skills, Children and Learning Bill; Health Bill, Fourteenth report of session 2008–09, April 2009, p. 18–19.

[86].              R Tilt, ‘Report of the Social Security Advisory Committee made under section 174(2) of the Social Security Administration Act 1992 on the Social Security (Welfare Reform Drugs Recovery Pilot Scheme) Regulations 2010’, Social Security Advisory Committee, 19 May 2010, p. 6.

[87].              M Miller, Radical rethink on getting drug and alcohol users back to work, media release, 17 June 2010.

[88].              Explanatory notes, Welfare Reform Act 2012 (UK), Part2, Section 60.

[89].              The Centre for Social Justice is a think tank closely associated with the Conservative Party.

[90].              Centre for Social Justice (CSJ), Ambitious for recovery: tackling drug and alcohol addiction in the UK, CSJ, London, August 2014, p. 26.

[91].              Ibid., p. 75.

[92].              Quoted in: H Phibbs, ‘Those on sickness benefit should accept treatment’, Conservative Home, 14 February 2015.

[93].              Ibid.

[94].              C Black, An independent review into the impact on employment outcomes of drug or alcohol addiction, and obesity, December 2016, p. 14.

[95].              M Rowland, ABC News 24 Breakfast, TV interview, 2 June 2014.

[96].              R Siewert, Labor sides with Government as motion to abandon drug testing income support recipients voted down, media release, 14 June 2017.

[97].              M Rowland and V Trioli, ABC News Breakfast, TV interview, ABC, 10 May 2017.

[98].              J Lambie, ‘Questions without notice: take not of answers: illicit drugs’, Senate, Debates, 24 November 2015, p. 8769.

[99].              M Rowland and V Trioli, ABC News Breakfast, TV interview 10 May 2017.

[100].              R Lewis and A Burrell, ‘Senate wall traps $14bn in reforms’, The Australian, 22 May 2017.

[101].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 151.

[102].              Ibid., p. 62.

[103].              Senate Community Affairs Legislation Committee, Official committee Hansard, 31 May 2017, p. 64.

[104].              The number of persons subject to drug testing is limited to 5,000 by the operation of proposed subsection 63(4A) of the SSA Act (inserted by item 16 of Part 1 in Schedule 12 of the Bill).

[105].              DSS, ‘Welfare reform: 2017 Budget’, Budget fact sheet, 2017, p. 3.

[106].              S Ryan, ‘Answer to a question without notice: additional answers’, [Questioner R Siewert], Senate, Debates, 20 June 2017, p. 4339.

[107].              C Dawson (Chief Executive Officer, Australian Criminal Intelligence Commission), Evidence to the Parliamentary Joint Committee on Law Enforcement, Australian Crime Commission annual report 2015–16, 14 June 2017.

[108].              Item 1 of Part 1 in Schedule 12 to the Bill inserts the definition of testable drug into subsection 23(1) of the Social Security Act being: methamphetamine; methylenedioxy-methamphetamine; tetrahydrocannabinol; opioids or another substance prescribed by the drug test rules for the purposes of the definition.

[109].              SSA Act, proposed subsection 37(7A), inserted by item 12 in Part 1 of Schedule 12 to the Bill. .

[110].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 155.

[111].              J O’Brien, ‘Live cross to a press conference with Christian Porter, federal Minister for Social Services, Alan Tudge, Minister for Human Services, and Michaelia Cash, federal Minister For Employment’, Mornings, ABC News, 11 May 2017. Data61 is a data innovation group within the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

[112].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 62.

[113].              Standing Committee for the Scrutiny of Bills, Scrutiny digest, 8, 2017, op. cit.

[114].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 63.

[115].              Ibid.

[116].              O’Brien, ‘Live cross to a press conference with Christian Porter’, op. cit.

[117].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 63.

[118].              Ibid.

[119].              SS Act, proposed subsection 1206XA(6).

[120].              Ibid., proposed section 1206XC.

[121].              Ibid., proposed section 1206XD.

[122].              Item 17 in Part 1 of Schedule 12 to the Bill inserts proposed subsection 64(1AA) into the SSA Act to provide that a notice to undertake drug testing is not unreasonable.

[123].              Section 80 of the SSA Act provides that if a payment is not payable to a person, the Secretary is to determine that the payment is to be cancelled or suspended.

[124].              For Youth Allowance—proposed sections 549EA and 549EB inserted by item 6; for Newstart Allowance—proposed sections 623C and 623D inserted by item 8.

[125].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 150.

[126].              Senate Community Affairs Legislation Committee, Official committee Hansard, 31 May 2017, p. 64.

[127].              C Black, An Independent Review into the impact on employment outcomes of drug or alcohol addiction, and obesity, December 2016

[128].              C Porter, M Cash and A Tudge, Welfare Reform Bill focuses on supporting people into work, media release, 22 June 2017.

[129].              C Black, An Independent Review into the impact on employment outcomes of drug or alcohol addiction, and obesity, December 2016, p. 9.

[130].              National Ice Taskforce, Final report of the National Ice Taskforce, Department of the Prime Minister and Cabinet (PM&C), Canberra, 2015, p. 106.

[131].              P Whiteford, ‘Budget 2017: welfare changes stigmatise recipients and are sitting on shaky ground’, The Conversation, 11 May 2017.

[132].              D Speers, ‘Budget 2017 with David Speers’, Sky News, 9 May 2017.

[133].              JF Atlanta, ‘Welfare and drug testing: signalling as policy’, The Economist, 2 September 2011.

[134].              Senate Community Affairs Legislation Committee, Official committee Hansard, 31 May 2017, p. 64.

[135].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 155.

[136].              Australian Institute of Health and Welfare, Evaluation of income management in the Northern Territory, Department of Families, Housing, Community Services and Indigenous Affairs, 2010, p. 16.

[137].              O’Brien, ‘Live cross to a press conference with Christian Porter’, op. cit.

[138].              For example, M Davey, ‘“Ration days again”: cashless welfare card ignites shame’, The Guardian, 9 January 2017.

[139].              SSA Act, proposed section 64A.

[140].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[141].              See Australian Government, Budget measures: budget paper no. 2: 2017–18, pp. 91–91; Porter, Cash and Tudge, A fairer welfare system that supports more people into work, op. cit.; and M Cash, Helping more Australians into jobs, media release, 9 May 2017.

[142].              Newstart Allowance, Youth Allowance (other), Special Benefit and Parenting Payment recipients must meet activity test or participation requirements in order to qualify, and remain qualified, for payment. Generally speaking, these requirements demand that job seekers are actively looking for work, accepting offers of suitable work, and improving their chances of gaining employment.

[143].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 159.

[144].              The matters that must be taken into account are detailed in Social Security (Reasonable Excuse—Participation Payment Obligations)(DEEWR) Determination 2009 (No. 1).

[145].              For Disability Support Pension the exemption are in subsections 94C(1) and 94F(1); Parenting Payment—subsections 502F(1) and 502H(1); Youth Allowance (other)—subsections 542A(1) and 542H(1); Newstart Allowance—subsections 603A(1) and 603C(1); Special benefit—subsections 731E(1) and 731K(1).

[146].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 81; PM&C, ‘The Community Development Programme (CDP)’, PM&C website.

[147].              Ibid., p. 162.

[148].              Ibid.

[149].              Ibid.

[150].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 85.

[151].              Ibid., p. 63.

[152].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[153].              See Australian Government, Budget measures: budget paper no. 2: 2017–18, pp. 91–91; Porter, Cash and Tudge, A fairer welfare system that supports more people into work, op. cit.; and Cash, Helping more Australians into jobs, op. cit.

[154].              SSA Act, section 42C.

[155].              Ibid., section 42E.

[156].              Ibid., section 42H.

[157].              Ibid., section 42N.

[158].              Ibid., section 42SC.

[159].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 86.

[160].              Ibid., p. 85.

[161].              D Werb, A Kamarulzaman, M Meacham, C Rafful, B Fischer, S Strathdee and E Wood, ‘The effectiveness of compulsory drug treatment: a systematic review’, International Journal of Drug Policy, 28, 2016, pp. 1–9; S Klag, F O’Callaghan and P Creed, ‘The use of legal coercion in the treatment of substance abusers: an overview and critical analysis of thirty years of research’, Substance Use and Misuse, 40/12, 2005, pp. 1777–95; A Stevens, D Berto, V Kerschl, K Oeuvray, M van Ooyen, E Steffan et al., ‘Quasi-compulsory treatment of drug dependent offenders: an international literature review’, Substance Use and Misuse, 40, 2005, pp. 269–283; T Wild, ‘Social control and coercion in addiction treatment’, Addiction, 101, 2006, pp. 40–49; M Broadstock, D Brinson and A Weston, The effectiveness of compulsory, residential treatment of chronic alcohol or drug addiction in non-offenders: a systematic review of the literature, Health Services Assessment Collaboration (HSAC), University of Canterbury, 2008; K Urbanoski, ‘Coerced addiction treatment: client perspectives and the implications of their neglect’, Harm Reduction Journal, 7, 2010.

[162].              A Ritter, L Berends, J Chalmers, P Hull, K Lancaster and M Gomez, New horizons: the review of alcohol and other drug treatment services in Australia: final report, Drug Policy Modelling Program, National Drug and Alcohol Research Centre (NDARC), UNSW, Sydney, July 2014, p. 164.

[163].              The criteria for fully meeting demand was based on a pre-existing decision-support tool for systems planning—the Drug and Alcohol Service Planning Model for Australia (DA-CCP). This was determined to be the equivalent of only treating 35 per cent of all people who meet diagnostic criteria. It is important to note, here, a distinction between unmet need and unmet demand for drug and alcohol treatment services. In the DA-CCP, need is defined as the population prevalence of alcohol and other drug disorders, and demand as a proportion of that total prevalence, based on expert judgement. The expert judgement is an assessment of the proportion of people who seek treatment but are unable to access it. A Ritter, J Chalmers and M Sunderland, Planning for drug treatment services: estimating population need and demand for treatment, Drug Policy Modelling Program, National Drug and Alcohol Research Centre, UNSW.

[164].              As a part of the abovementioned review of the drug and alcohol prevention and treatment services sector, the NDARC researchers sought to clarify Australian drug and alcohol treatment funding. They estimated total spending on alcohol and other drug treatment in Australia by all jurisdictions’ health departments in 2012–13 at $1.26 billion. The states and territories contributed the largest share of total funding (49 per cent) with the Commonwealth providing 31 per cent. A majority of the overall funding went towards alcohol and other drug treatment services (39.6 per cent), followed by public hospitals (15 per cent), private hospitals (11 per cent) and Commonwealth alcohol and other drug treatment grants (10 per cent). Ritter et al, op. cit., pp. 66–67.

[165].              D Henkel, ‘Unemployment and substance use: a review of the literature (1990–2010)’, Current Drug Abuse Reviews, 4, 2011.

[166].              Australian Institute of Health and Welfare (AIHW), National Drug Strategy Household Survey detailed report 2013, Drug Statistics Series no. 28, cat. no. PHE 183, AIHW, Canberra, 2014, p. 91.

[167].              Henkel, op. cit., pp. 4–23.

[168].              S Macdonald, C Bois, B Brands, D Dempsey, P Erickson, D Marsh, S Meredith, M Shain, W Skinner and A Chiu, ‘Drug testing and mandatory treatment for welfare recipients’, International Journal of Drug Policy, 2001, p. 4; L Metsch and H Pollack, ‘Welfare reform and substance abuse’, The Milbank Quarterly, 83(1), 2005.

[169].              Ibid., pp. 4–5.

[170].              Ibid., p. 5.

[171].              Metsch and Pollack, op. cit., p. 71.

[172].              P Saunders, Re-moralising the welfare state, Occasional paper, 131, The Centre for Independent Studies, Sydney, March 2013, p. 23.

[173].              YouGov, YouGov / Daily Telegraph Survey Results, YouGov, London, 23–25 July 2008.

[174].              Queensland Mental Health and Drug Advisory Council (QMHDAC), Communique, QMHDAC Meeting, Brisbane, 16 June 2017.

[175].              Australian National Council on Drugs (ANCD), ANCD position paper: drug testing, ANCD, Canberra, August 2013.

[176].              Victorian Alcohol and Drug Association, Drug testing welfare recipients a false positive, media release, 10 May 2017.

[177].              Ibid.

[178].              Ibid.

[179].              Penington Institute, Increase in crime likely with drug testing budget announcement, media release, 9 May 2017.

[180].              A Wodak, ‘Federal Budget: drug testing welfare recipients is ineffective policy’, Australia 21 website, 2017.

[181].              GetUP, Govt ignoring experts: Dr Alex Wodak AM launches campaign against mandatory drug testing, media release, 1 August 2017.

[182].              Brotherhood of St Laurence, Mixed messages in new Turnbull Budget, media release, 9 May 2017.

[183].              ACOSS, Federal Budget snapshot: social security, ACOSS, Sydney, May 2017, p. 3.

[184].              ACOSS, Federal Budget snapshot: social security measures, ACOSS, Sydney, May 2017.

[185].              NSSRN, Budget 2017: trial of compulsory random drug testing for job seekers, NSSRN, Sydney, 2017.

[186].              W Williams, ‘Victoria applauded for refusing plan to drug test welfare recipients’, ProBono News, 15 June 2017.

[187].              Fr F Brennan, 2017–18 Budget overview, Catholic Social Services Australia, 9 May 2017.

[188].              UnitingCare Australia, Connecting, 8 June 2017.

[189].              Melbourne City Mission, ‘Federal Budget 2017’, 11 May 2017.

[190].              Good Shepherd Australia New Zealand, ‘Federal Budget’s support of universal services undermined by divisive welfare approach’, 11 May 2017.

[191].              Samaritans, ‘Random drug testing for Centrelink recipients’, blog post, 16 May 2017.

[192].              Royal Australasian College of Physicians (RACP), RACP urges Government to abandon welfare drug testing plans, media release, 31 May 2017.

[193].              J Holman, ‘Victorian government reject Commonwealth plan to drug test welfare recipients’, 7.30, ABC, 13 June 2017.

[194].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[195].              See Australian Government, Budget measures: budget paper no. 2: 2017–18, pp. 91–91; Porter, Cash and Tudge, A fairer welfare system that supports more people into work, op. cit.; and Cash, Helping more Australians into jobs, op. cit.

[196].              A connection failure does, however, contribute towards a count of failures used to determine whether a job seeker has committed a serious failure due to persistent non-compliance. Before determining if a job seeker has committed a serious failure due to persistent non-compliance a Comprehensive Compliance Assessment (CCA) must be undertaken. If a job seeker has incurred three or more connection or reconnection failures in the six months before the CCA, then this may result in their being assessed as persistently non-compliant. See DSS, ‘3.1.13.40: serious failures and penalties’, Guide to social security law, version 1.232, 8 May 2017, DSS website.

[197].              For further details, see DSS, ‘3.1.13.30: participation payment suspensions, connection failures, non-attendance Failures, reconnection failures and penalties’, op. cit.

[198].              See Porter, Cash and Tudge, op. cit.

[199].              Ibid.

[200].              Parliament of Australia, ‘Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014 homepage’, ‘Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Bill 2014 homepage’ and ‘Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 homepage’, Australian Parliament website.

[201].              Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 78.

[202].              See Cash, Helping more Australians into jobs, op. cit.

[203].              J Macklin (Shadow Minister for Families and Social Services), B O’Connor (Shadow Minister for Employment and Workplace Relations), L Burney (Shadow Minister for Human Services) and E Husic (Shadow Minister for Employment Services, Workforce Participation and the Future of Work), Labor concerned by social security changes, media release, 22 June 2017.

[204].              M Thomas, Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, Bills digest, 17, 2014–15, Parliamentary Library, Canberra, 22 August 2014.

[205].              SSA Act, section 42C.

[206].              Ibid., section 42E.

[207].              Ibid., section 42H.

[208].              Ibid., sections 42M and 42N.

[209].              Ibid., section 42P.

[210].              Ibid., section 42NA.

[211].              Ibid., section 42S.

[212].              Ibid., section 42SC.

[213].              Ibid., proposed section 42AB also states that proposed Division 3AA will not apply to job seekers who are declared program participants.

[214].              The requirement to enter into an employment pathway plan is contained in the SS Act: for recipients of Parenting Payment, section 501; for recipients of Youth Allowance, section 544A; for recipients of Newstart Allowance, section 605; and for recipients of Special Benefit, section 731L.

[215].              Standing Committee for the Scrutiny of Bills, Scrutiny digest, 8, 2017, op. cit., p. 30.

[216].              Parliament of Australia, ‘Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 homepage’, Australian Parliament website.

[217].              Parliament of Australia, ‘Social Security Legislation Amendment (Further Strengthening Job Seeker Compliance) Bill 2015 homepage’, Australian Parliament website.

[218].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 10, 2015, The Senate, 16 September 2015, p. 6.

[219].              Ibid., p. 28.

[220].              SSA Act, proposed section 42AM sets out the reconnection requirement for mutual obligation failures and work refusal failures.

[221].              Ibid., proposed subsection 42AL(4).

[222].              Ibid., proposed subsection 42AM(3).

[223].              Ibid., proposed paragraph 42AR(1)(a) empowers the Minister, by legislative instrument, to determine the circumstances in which the Secretary must, or must not, be satisfied that person has persistently committed mutual obligation failures.

[224].              Ibid., proposed paragraph 42AN(3)(a).

[225].              Ibid., proposed paragraph 42AN(3)(b).

[226].              Ibid., proposed subsection 42AP(6).

[227].              C Porter, M Cash and A Tudge, Welfare reform bill focuses on helping people into work, media release, 22 June 2017, p. 2.

[228].              P Whiteford, ‘Budget 2017: welfare changes stigmatise recipients and are sitting on shaky ground’, The Conversation, 11 May 2017.

[229].              SSA Act, proposed subsection 42AG(2).

[230].              Ibid., proposed section 42AP.

[231].              Ibid., proposed section 42AO.

[232].              Department of Employment, Submission to Senate Standing Committee on Community Affairs, Inquiry into the Social Security Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014, 2014.

[233].              Under Part 1.2, Subsection 14A(7) of the SS Act a person is considered to be in financial hardship if the value of their liquid assets does not exceed $2,500 for a person who is not a member of a couple and does not have a dependent child or $5,000 in any other case.

[234].              Social Security (Administration) Act, subsection 42P(3) and subsection 42Q(1).

[235].              Department of Human Services (DHS), Penalties for not meeting your mutual obligation requirements, DHS website.

[236].              See, for example, Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 90.

[237].              ACOSS, Submission to Senate Standing Committee on Community Affairs, Inquiry into the Social Security Legislation Amendment (Welfare Reform) Bill 2017, August 2017.

[238].              Parliamentary Joint Committee on Human Rights, Report, 8, 2017, op. cit., p. 70.

[239].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, pp. 89–90.

[240].              Standing Committee for the Scrutiny of Bills, Scrutiny digest, 8, 2017, 9 August 2017, p. 31.

[241].              The requirement to attend is set out in subsection 63(2) of the SSA Act.

[242].              SSA Act, proposed paragraph 42AQ(b).

[243].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 102.

[244].              SSA Act, proposed paragraph 42AQ(c).

[245].              Standing Committee for the Scrutiny of Bills, Scrutiny digest, 8, 2017, op. cit., p. 30.

[246].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[247].              DSS, Submission to Senate Community Services Committee, Inquiry into the Social Services Legislation Amendment (Welfare Reform) Bill 2017, 4 August 2017, p. 32

[248].              NSSRN, Budget 2017: changes to claim requirements, op. cit., pp. 2–3.

[249].              That is, immediately after the commencement of Schedule 1 to the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Act 2017.

[250].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[251].              Ibid., p. 117.

[252].              Ibid.

[253].              That is, a refusal or failure to comply with a requirement to give information or produce a document.

[254].              That is, the provision of false and misleading information or documents.

[255].              That is, an offence relating to forging of documents.

[256].              That is, relating to the making of false statements.

[257].              PPL Act, proposed section 116A, inserted by item 21 of Schedule 17 to the Bill.

[258].              Ibid., proposed section 119, inserted by item 25 of Schedule 17 to the Bill.

[259].              Inserted into existing section 120 of the PPL Act by items 26–29 of Schedule 17 to the Bill.

[260].              PPL Act, proposed section 122A, inserted by item 33 of Schedule 17 to the Bill.

[261].              Ibid., proposed subsection 121(2), inserted by item 32 of Schedule 17 to the Bill.

[262].              SSA Act, proposed section 191A, inserted by item 43 of Schedule 17 to the Bill.

[263].              Ibid., proposed section 194, inserted by item 49 of Schedule 17 to the Bill.

[264].              Inserted into existing section 196 of the SSA Act by items 50–53 of Schedule 17 to the Bill.

[265].              SSA Act, proposed section 197A, inserted by item 54 of Schedule 17 to the Bill.

[266].              Ibid., proposed subsection 198(2), inserted by item 57 of Schedule 17 to the Bill.

[267].              Student Assistance Act, proposed section 342A, inserted by item 63 of Schedule 17 to the Bill.

[268].              Ibid., proposed section 345, inserted by item 70 of Schedule 17 to the Bill.

[269].              Inserted into existing section 347 of the Student Assistance Act by items 71–73 of Schedule 17 to the Bill.

[270].              Student Assistance Act, proposed section 347A, inserted by item 74 of Schedule 17 to the Bill.

[271].              Ibid., proposed subsection 348(2), inserted by item 77 of Schedule 17 to the Bill.

[272].              Explanatory Memorandum, Social Services Legislation Amendment (Welfare Reform) Bill 2017, p. 4.

[273].              Parliamentary Joint Committee on Human Rights, Report, 8, 2017, op. cit., p. 77.

[274].              Ibid.