RESEARCH PAPER SERIES, 2014–15              10 NOVEMBER 2014

The 2014–15 social services budget Bills: a quick guide

Michael Klapdor

Social Policy Section

The 2014–15 Budget proposed an array of changes to social security, family assistance and veterans’ payments. Many are contentious, including a change to the way pension payment rates are set, an increase in the pension age to 70, six-month exclusion periods for jobseekers aged under 30, cuts to Family Tax Benefit payments and limiting eligibility for a range of social security and family assistance payments. All of the main legislative amendments required to implement these measures were previously proposed in two omnibus Bills:

•        the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 (the No. 1 Bill) and

•        the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014 (the No. 2 Bill).

Neither of those Bills proceeded beyond the second reading stage in the Senate, most likely because the Government was unable to secure their passage due to opposition to various measures from the Labor Opposition, the Australian Greens, minor parties and independent senators. Both Bills were discharged from the Notice Paper in the Senate on 28 October 2014.

It appears that in order to secure passage of those measures which were supported by either Labor or the Greens, the Government has reintroduced measures from the No. 1 Bill and the No. 2 Bill in four new Bills:

•        the Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014 (the Seniors Supplement Bill)

•        the Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014 (the No. 4 Bill)

•        the Social Services and Other Legislation Amendment (2014 Budget Measures No. 5) Bill 2014 (the No. 5 Bill) and

•        the Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014 (the No. 6 Bill).

The Greens previously stated that they ‘could’ support the measures proposed by the Seniors Supplement Bill. However, Greens Senator Rachel Siewert has since ruled out supporting the Seniors Supplement Bill, stating: ‘We ain’t going to support it’. Labor has expressed support for the measures proposed by the No. 6 Bill. The No. 4 Bill contains measures from the No. 1 and No. 2 Bills which are due to commence from Royal Assent or in 2015. It does not appear that these measures are supported by Labor or crossbench senators. The No. 5 Bill contains measures from the No. 2 Bill which are due to take effect from 2017 or later; primarily changes to pension payments. These measures were not supported by Labor or crossbench senators.

The following tables set out the measures in the Bills currently before Parliament and the relevant Schedules in the previous Bills (with hyperlinks to the relevant sections of the previous Parliamentary Library Bills Digests for background information and analysis). Bills Digests for the Seniors Supplement, No. 4, No. 5 and No. 6 Bills, noting any differences from the previous Bills, are also available from the relevant Bill Homepages (via the hyperlinks for each Bill).

Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014

Measure

Previous Bill

Cease payment of the Seniors Supplement for Commonwealth Seniors Health Card holders and Veterans’ Gold Card holders from 20 September 2014

Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014—Sch. 1

Social Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014

Measure

Previous Bill

Sch. 1—Pause indexation of the income test free areas for all working age allowances (other than student payments) and for Parenting Payment Single (PPS) for three years from 1 July 2015

Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014—Sch. 3

Sch. 1—Index PPS to the Consumer Price Index (CPI) only, removing benchmarking to Male Total Average Weekly Earnings (MTAWE) from 1 January 2015

No. 1 Bill—Sch. 3

Sch. 1—Pause the indexation of several Family Tax Benefit (FTB) income test free areas for three years from 1 July 2015

No. 1 Bill—Sch. 3

Sch. 1—Pause indexation of the income test free areas and other means test limits for student payments for three years from 1 January 2015

Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014—Sch. 1

Sch. 2—Pause indexation of the maximum and basic rates of Family Tax Benefit Part A (FTB-A) and the maximum rate of Family Tax Benefit Part B (FTB-B) for two years from 1 July 2015

No. 1 Bill—Sch. 7

Sch. 2—Reduce the FTB end-of-year supplements, close to their 2004 values, and cease indexation from 1 July 2015

No. 2 Bill—Sch. 10

Sch. 2—Limit FTB-B to families with children under six years of age from 1 July 2015 (with transitional arrangements for existing recipients applying for two-years)

No. 2 Bill—Sch. 10

Sch. 2—Introduce a new FTB allowance for single parents receiving the maximum rate of FTB-A for each child aged 6–12, from 1 July 2015, to partially make up for the loss of FTB-B

No. 2 Bill—Sch. 10

Sch. 3—Extend the application of the one-week Ordinary Waiting Period to all working age payments, limit exceptions from this period and make clarifying amendments, from 1 January 2015

No. 1 Bill—Sch. 6

Sch. 4—Cease payment of the Pensioner Education Supplement from 1 January 2015

No. 2 Bill—Sch. 6

Sch. 5—Cease payment of the Education Entry Payment from 1 January 2015

No. 2 Bill—Sch. 7

Sch. 6—Raise the qualifying age for Newstart Allowance and Sickness Allowance from 22 years to 25 years (and raise the ceiling age for Youth Allowance from 21 years to 24 years) from 1 January 2015

No. 2 Bill—Sch. 8

Sch. 7—From 1 January 2015: amend participation requirements for those aged under 30 in receipt of Youth Allowance (Other) or Newstart Allowance; introduce six-month waiting periods for new applicants for these payments aged under 30; and, only allow these payments to be paid for periods of six-months at a time for recipients aged under 30

No. 2 Bill—Sch. 9

Sch. 8—From 1 January 2015: remove the capacity for veterans’ Disability Pension to be back payed by up to three-months

No. 2 Bill—Sch. 12

Social Services and Other Legislation Amendment (2014 Budget Measures No. 5) Bill 2014

Measure

Previous Bill

Sch. 1 Part 1—From 1 July 2017: pause indexation of the income test free areas for pension payments and the deeming thresholds for all income support payments

Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014—Sch. 1

Sch. 1 Part 2—From 20 September 2017: index all pensions to the Consumer Price Index only, by removing indexation to the Pensioner and Beneficiary Living Cost Index (PBLCI) and benchmarking to Male Total Average Weekly Earnings (MTAWE); and, reduce the deemed income thresholds for all income support payments

No. 2 Bill—Sch. 1

Sch. 2—Increase the qualifying age for the age pension, and the non-veteran pension age, to 70, increasing by six months every two years starting from 1 July 2025

No. 2 Bill—Sch. 11

Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014

Measure

Previous Bill

Sch. 1—Rename the Clean Energy Supplement (CES) as the ‘Energy Supplement’ and cease indexation of the payment from 20 September 2014

Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014—Sch. 2

Sch. 2—From 1 July 2015: pause indexation of the assets value limits for all working age allowance, student payments and Parenting Payment Single (PPS) for two years from 1 July 2015

No. 1 Bill—Sch. 3; Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014—Sch. 1

Sch. 2—From 1 July 2017: pause indexation of the assets test free areas for all pension payments for three years

No. 2 Bill—Sch. 1

Sch. 3—From Royal Assent: review Disability Support Pension recipients aged under 35 years against the revised impairment tables and apply program of support requirements

No. 1 Bill—Sch. 4

Sch. 4—From 1 January 2015: limit the overseas portability period for student payments

No. 1 Bill—Sch. 5

Sch. 5—From 1 January 2015: reduce the general overseas portability period for Disability Support Pension from six-weeks at a time to 28 days in a 12-month period

No. 2 Bill—Sch. 2

Sch. 6—From 1 January 2015: exclude from the social security and veterans’ entitlements income test any payments under the Young Carer Bursary Programme

No. 2 Bill—Sch. 3

Sch. 7—From 1 January 2015: include untaxed superannuation income in the income test for the Commonwealth Seniors Health Card (with grandfathering arrangements for existing holders), and extend the overseas portability period for cardholders from six to 19 weeks

No. 2 Bill—Sch. 4

Sch. 8—From 1 January 2015: remove Relocation Scholarships for students relocating within and between major cities

No. 2 Bill—Sch. 5

Sch. 9—From 1 July 2015: limit the Family Tax Benefit Part A (FTB-A) large family supplement to families with four or more children; remove the FTB-A ‘per child add-on’ to the higher income free area for each additional child after the first; and, reduce the primary earner income limit for Family Tax Benefit Part B (FTB-B) from $150,000 per annum to $100,000 per annum

No. 2 Bill—Sch. 10

Sch. 10—From Royal Assent: allow for payment of Commonwealth supplementation from the Social and Community Services Pay Equity Special Account to service providers affected by a decision of the Western Australian Industrial Relations Commission on 29 August 2013

No. 1 Bill—Sch. 8

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