Purpose of the bill
2.1
The Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Bill 2022 (the bill) was introduced to the House of Representatives on 27 July 2022. The third reading was agreed to on 3 August 2022, and the bill was introduced to the Senate on the same day.
2.2
The bill gives effect to the Government’s 2022 election commitment to abolish the cashless debit card (CDC) program. It will enable program participants to exit the CDC as soon as practicable in 2022.
2.3
Upon exit, certain participants may be subject to mandatory income management, while others will be able to volunteer for income management if they decide to retain restrictions on their ability to access welfare payments in cash.
2.4
Specifically, the bill will:
Establish a date on which Part 3D of the Social Security (Administration) Act 1999 (Administration Act) is repealed and the CDC ceases in its entirety.
Prevent new participants from being placed onto the CDC.
Allow participants to request to cease being subjected to the CDC, and the request to take effect within seven days.
Allow the Family Responsibilities Commission (FRC) to continue to place people onto the Income Management (IM) program in the Cape York region — people with existing FRC notices will revert back to the IM program.
Provide for a class or classes of person who exit the CDC program in the Northern Territory (NT) to enter or re-enter the IM regime where they meet specified criteria.
Ensure CDC participants who exited the program due to wellbeing requirements or a determination by the Secretary that they are able to reasonably and responsibly manage their financial affairs to not be placed on compulsory IM, with minor exceptions.
2.5
In order to reflect the repeal of Part 3D and associated measures, the bill will also make consequential amendments to the following Acts:
A New Tax System (Family Assistance) (Administration Act) Act 1999;
National Emergency Declaration Act 2020; and
Social Security Act 1991.
Scope of the bill
2.6
The explanatory memorandum (EM) to the bill makes clear that the reforms announced by the Commonwealth Government in order to end the CDC program will be implemented in two legislative tranches, alongside consultations with impacted communities.
2.7
It explains that a second bill will be required to complete the process:
This Bill abolishes the CDC program. A further Bill, to be introduced later in 2022 after consultations with affected areas and communities, will address the transition for individuals who access income management arrangements after their exit from the CDC program.
2.8
A joint submission from the Department of Social Services (DSS) and Services Australia also highlighted the consultation process which will accompany the legislative reform:
The abolition of the CDC and the future of IM has been, and will continue to be, the subject of engagement with participants and stakeholders, including representative bodies and service providers.
2.9
Numerous issues linked to the abolition of the CDC program, but not contained in the bill, were raised in evidence to the committee, including the transition process and the future of income management more broadly.
2.10
As these matters are not addressed in the bill under inquiry, they will not be examined in detail in this report.
Parts of the bill
2.11
The bill is comprised of one schedule made up of two parts, each with different commencement dates.
Part 1 — Stage 1 amendments
2.12
The key measures in Part 1 of Schedule 1 will:
Establish a ‘closure day’, being the day that the Part 1 amendments commence the process of abolishing the CDC program, and a ‘repeal day’, being the day that Part 3D of the Administration Act is repealed and the CDC program will cease in its entirety.
Remove the sunset provision in section 124PF of the Administration Act, which was to repeal cashless welfare arrangements on 31 December 2022. This is no longer necessary as Part 3D of the Administration Act will now be repealed on a date to be proclaimed, or the day after the 6 month period after the Bill receives Royal Assent, whichever is earlier.
Amend Part 3D of the Administration Act to prevent the Secretary from giving notices making a person a program participant in the CDC program on or after the closure day. This applies to all program participants.
Amend Part 3D of the Administration Act to allow program participants to make a request to the Secretary to cease being subject to the CDC program, and for that cessation to be given effect within 7 days of the person’s request. This applies to all program participants.
Amend Part 3B of the Administration Act to require classes of persons who exit the CDC program in the Northern Territory (NT), to enter or re-enter the income management regime where they meet other specified criteria. This includes the criteria related to child protection; vulnerable welfare payment recipients; disengaged youth; long term welfare payment recipients; school enrolment; school attendance; or other state or territory referrals. A class or classes of persons will be determined by legislative instrument.
Provide that certain exits from the CDC program determined by the Secretary due to a person’s wellbeing requirements or their ability to reasonably and responsibly manage their financial affairs cannot be revoked on or after the closure day. This will prevent these exiting program participants from being placed on compulsory income management. This measure applies to persons who were a program participant on the day before the closure day under section 124PGE of the Administration Act (due to their residence in the NT).
Make consequential amendments and include savings provisions with respect to appropriation provisions for transitioning certain account credits and debits, and to prevent internal and Administrative Appeals Tribunal (AAT) review of decisions relating to issuing notices to give effect to voluntary exits from cashless welfare arrangements.
2.13
Further detail on some of these elements is set out in a subsequent section of this chapter.
Part 2 — Stage 2 amendments
2.14
Part 2 of Schedule 1 will repeal Part 3D of the Administration Act on a day to be fixed by proclamation (or, if the Principal Act is not proclaimed, the day after the end of 6 months after Royal Assent).
Abolishing the CDC program on a date to be proclaimed will allow for a staged transition from the CDC program. This staged approach will provide the opportunity for the government to put in place supports for individuals transitioning from the CDC program.
2.16
Part 2 also makes consequential amendments to the Administration Act, the Social Security Act 1991, the A New Tax System (Family Assistance) (Administration) Act 1999 and the National Emergency Declaration Act 2020, to reflect the repeal of Part 3D of the Administration Act. There will be some savings provisions, and the Minister will have a power to make rules, by legislative instrument, with respect to matters of a transitional nature.
Key measures
2.17
The following section sets out further detail on some of the key measures contained in Part 1 of the bill.
Repealing the sunset provision to bring forward the end of the CDC program
2.18
As outlined above, the CDC program is enabled by Part 3D of the Administration Act. Section 124PF within Part 3D includes a sunset provision, the effect of which is that the CDC program must cease at 31 December 2022.
2.19
This means that legislation is not needed to end the CDC program. Regardless of the bill, the Government will not be able to operate the CDC program after 31 December 2022.
2.20
Item 32 in Part 1 of the bill repeals the sunset provision, thereby bringing forward the date that participants can leave the CDC program.
…this is required to ensure a smooth and supported transition for CDC program participants at an appropriate time and following community consultations.
Establishing a ‘closure day’ and ‘repeal day’
2.22
Item 1 in Part 1 of the bill defines two key days: closure day and repeal day.
2.23
Closure day is the day the CDC program will be closed to new entrants and current participants may request to cease to be a program participant. It will be either the day after Royal Assent or 19 September 2022, whichever occurs later.
2.24
Repeal day is the day the CDC program is abolished due to the repeal of Part 3D of the Administration Act. It will be no later than six months after Royal Assent, although the Governor-General can proclaim an earlier date.
Leaving the CDC program
2.25
As outlined above, the bill sets out certain details of how participants in each of the CDC areas will leave the program.
Participants outside of the NT and Cape York
2.26
In Ceduna, the East Kimberley, the Goldfields and in Bundaberg and Hervey Bay, CDC participants will be able leave the program before the repeal day by making a request to the Secretary. The Secretary will be required to give the person a notice that specifies the day on which they are no longer a program participant. This day must be no later than seven days after the person made the request. New participants will not be placed on the CDC program from the closure day onwards. This is set out in items 33–36 in Part 1 of the bill.
NT participants
2.27
Currently income support recipients in the NT targeted by income management are offered a choice of the IM scheme (that is, the BasicsCard) or the CDC. The bill takes away this choice by repealing Part 3D and abolishing the CDC.
2.28
The bill amends Part 3B of the Administration Act to require classes of persons who exit the CDC program in the NT to enter or re-enter the IM regime where they meet other specified criteria.
2.29
This includes the criteria related to:
vulnerable welfare payment recipients;
long term welfare payment recipients;
other state or territory referrals.
2.30
A class or classes of persons will be determined by the Minister by legislative instrument.
2.31
For each of the specified criteria, the EM justified the use of a legislative instrument to determine a class or classes of persons as follows:
It is appropriate to base entry or re-entry into income management for this group of participants on a class or classes specified in a legislative instrument, as this will allow transition from the CDC program to proceed in a way that is consistent with the needs of different program participants in the Northern Territory. For example, the transition might be implemented on a geographic basis although other criteria could be applied in light of community consultations. The legislative instrument determining a class or classes of persons will be subject to disallowance by the parliament.
2.32
Once a person has been declared by legislative instrument to be a member of a specific class of persons, the bill operates so that the person will be subject to the IM regime for the same reason as other members of that class. These amendments mean that people currently on the CDC can be transitioned to IM regime under the appropriate measure.
2.33
The EM advises that this approach allowed for a staged return to income management ‘where necessary or appropriate’.
2.34
Additionally, the Hon Amanda Rishworth MP, Minister for Social Services, stated that the bill:
…allows for me to determine, following further consultation with First Nations people and my colleagues, how the Northern Territory participants on the CDC will transition, and the income management arrangements that will exist.
Cape York participants
2.35
As noted earlier in this chapter, the bill allows for CDC participants in Cape York to be able to be transitioned to income management.
2.36
Specifically, items 20 to 26 amend section 123UF of the Administration Act to require that the FRC must issue a new notice on or after the closure date of the CDC to trigger entry or re-entry into the IM regime for persons exiting the CDC program in Cape York.
2.37
Further discussion on the impact of the bill on the work of the FRC is contained in Chapter 3 of this report.