Purpose of the bill
1.1
The Social Security (Administration) Amendment (Continuation of Cashless Welfare) Bill 2020 (bill) was introduced into the House of Representatives on 8 October 2020.
1.2
The primary purpose of the bill is to transition Income Management (IM) participants in the Northern Territory (NT) and Cape York region onto the Cashless Debit Card (CDC) and to allow the CDC to continue as an ongoing measure in all existing sites as well as the NT and Cape York region following transition from IM. The bill also makes a number of minor changes to program administration to improve outcomes for individuals and families in those communities.
1.3
Specifically, the bill seeks to amend the Social Security (Administration) Act 1999 (Act) to:
remove trial parameters to establish the CDC as an ongoing program in all existing sites;
transition IM in the NT and the Cape York region to the CDC;
remove the exclusion to allow people in the Bundaberg and Hervey Bay program area to voluntarily participate in the CDC program;
allow a voluntary participant to continue to volunteer for the CDC even if they no longer reside in a program area;
enable the Secretary to advise a community body when a person has exited the CDC program;
allow the Minister to determine decision-making principles for the purposes of determining whether a person can demonstrate reasonable and responsible management of the person’s affairs (including financial affairs);
enable the Secretary to review a wellbeing exemption or exit determination in certain circumstances and revoke the determination as a result of such review;
enable the Secretary to issue a notice informing the person that they are a CDC program participant. The Secretary may also issue a notice revoking that notice;
improve the workability of the evaluation process; and
extend the sunset date for IM in Cape York, Queensland from 30 June 2020 to 31 December 2021.
Background
1.4
The Australian Government currently has two programs, IM and CDC, to deliver its commitment of maintaining a strong welfare system while reducing social harm in communities with high levels of welfare dependency, and supporting people, families and communities to achieve positive outcomes.
1.5
As at 25 September 2020 there were 12 114 CDC participants and 25 572 IM participants in the Northern Territory and Cape York.
Cashless debit card
1.6
There are currently four CDC trial sites. The CDC commenced in Ceduna on 15 March 2016, the East Kimberley on 26 April 2016, the Goldfields region on 26 March 2018 and the Bundaberg and Hervey Bay region on 29 January 2019.
1.7
The objective of the CDC is to limit the amount of welfare payment available as cash with an aim to reduce harm caused by substance abuse and problem gambling. The CDC is also a helpful financial management tool.
1.8
Under the CDC, 80 percent of a participant’s welfare payment is placed on a Visa debit card provided by Indue Ltd. that operates like a regular bank card, except it cannot be used to withdraw cash and to purchase alcohol, gambling products and open loop gift cards.
1.9
In March 2020, the Government announced a temporary pause on placing new eligible participants on to the CDC in all existing trial sites due to Services Australia’s workforce constraints relating to the coronavirus pandemic.
1.10
The four trial sites are currently legislated until 31 December 2020.
Transition from BasicsCard to CDC
1.11
IM has been operating in communities in the NT and Cape York for more than ten years. IM aims to reduce hardship by directing between 50 and 90 percent of a welfare payment to the priority needs of participants and their families. IM is used primarily as a budgeting tool.
1.12
Under IM, a welfare recipient has the option to access their income managed funds via a BasicsCard which can be used at approved stores and businesses, through the EFTPOS system.
1.13
BasicsCard merchants are stores or businesses that have applied and been approved to accept the BasicsCard through the EFTPOS system. The BasicsCard is accepted at around 17 000 merchants and cannot be used for online shopping or bank transfers.
1.14
Participants in Cape York and the NT will retain their existing ratio of quarantined income when they transition from the IM system to the CDC program.
1.15
The objective of the transition to the CDC for IM participants in the NT and Cape York is to provide the improved technology of the CDC, which enables a range of flexible payment options, greater access to merchants and fewer restrictions on participants.
Evaluation and reports
1.16
The Commonwealth Government commissioned ORIMA Research to undertake an independent evaluation of the CDC trials in Ceduna and the East Kimberley. The final evaluation report was released on 1 September 2017.
1.17
On 15 May 2018, the Commonwealth Government announced an independent Second Impact Evaluation to assess the ongoing impact of the CDC in the first three trial sites of Ceduna, the East Kimberley and the Goldfields. Conducted by the University of Adelaide, the Second Impact Evaluation has not yet been finalised. However early findings are available in the explanatory memorandum (EM).
1.18
The Australian National Audit Office undertook an independent performance audit of the CDC trial, the objective of which was to assess the Department of Social Services’ (DSS) implementation and evaluation of the trial. The Auditor‑General presented the report to Parliament on 17 July 2018.
1.19
The University of Adelaide was also commissioned by DSS to collect baseline data for the CDC trial in the Goldfields and Bundaberg and Hervey Bay regions. The reports were released in February 2019 and May 2020 respectively.
1.20
The findings of these reports were referenced frequently in submissions made to this inquiry and are discussed, where relevant, in Chapter 2.
Previous inquiries
1.21
The Senate Community Affairs Legislation Committee (committee) has reported on, and consistently supported, legislation relating to the CDC trial and IM in Cape York and other trial sites on several occasions in recent years:
The Social Security Legislation Amendment (Debit Card Trial) Bill 2015 (report tabled 12 October 2015) established the CDC trial in the East Kimberley and Ceduna.
The Social Services Legislation Amendment (Queensland Commission Income Management Regime) Bill 2017 (report tabled on 20 June 2017) extended the Cape York IM program.
The Social Services Legislation Amendment (Cashless Debit Card) Bill 2017 (report tabled 6 December 2017) expanded the CDC trial to the Goldfields region.
The Social Services Legislation Amendment (Cashless Debit Card Trial Expansion) Bill 2018 (report tabled 14 August 2018) expanded the CDC trial to the Bundaberg and Hervey Bay region.
The Social Security (Administration) Amendment (Income Management and Cashless Welfare) Bill 2019 (report tabled 1 April 2019) extended the Cape York IM program and the end date for CDC trial sites in East Kimberley, Ceduna and the Goldfields.
The Social Security (Administration) Amendment (Income Management to Cashless Debit Card Transition) Bill 2019 (report tabled 7 November 2019) proposed to transition the NT and Cape York sites from IM to the CDC trial.
Key provisions of the bill
Continuing the CDC as an ongoing measure
1.22
Item 16 repeals section 124PF to remove the trial parameters (including the CDC trial cap of 15 000 participants), reflecting the transition to the CDC as an ongoing measure. The ability to place people onto the CDC program is still limited by the operation of the program participant and voluntary participant criteria.
Transition from IM to CDC in the NT and Cape York region, Queensland
1.23
Item 50 adds new subsection 123UF(4) which provides for the relationship between section 123UF and Part 3D of the Act as a person transitions from IM to the cashless welfare arrangements.
1.24
Item 81 amends subsection 124PJ(1) to ensure that program participants who transition to the cashless welfare arrangements under new sections 124PGD and 124PGE will not be subject to the same restricted portion and unrestricted portion as existing program areas. This will maintain the current restricted and unrestricted portions for the NT and Cape York area under IM.
Extension of IM in the Cape York area
1.25
Item 5 extends the sunset date for IM in Cape York, Queensland from 30 June 2020 to 31 December 2021 under paragraphs 123UF(1)(g) and 123UF(2)(h) of the Act. This reflects that the transition to the CDC in the Cape York region will not occur until after the existing test time of 31 December 2020.
Sharing information with community bodies
1.26
Item 93 adds new sections 124POA, 124POB, 124POC and 124POD at the end of Division 4 of Part 3D, which authorises certain information disclosures to be made to the Secretary by an officer or employee of a financial institution or by a member, officer or employee of a community body (as well as certain reverse disclosures). New section 124POA will allow the Secretary to disclose information to a member, officer or employee of a community body that a person has ceased to be a program participant or a voluntary participant. New sections 124POB, 124POC and 124POD replicate the current information sharing provisions in place for IM in Part 3B of the Social Security Administration Act.
Remaining a voluntary participant after moving out of a program area
1.27
Item 29 omits the phrase ‘is within a trial area’ under paragraph 124PH(1)(b) and substitutes it with ‘is, becomes or was within a program area’. This allows a person the choice to remain as a voluntary program participant if the person no longer resides in a program area.
Allowing reviews of wellbeing exemption determinations
1.28
Item 32 repeals subsection 124PHA(3) and substitutes it with new subsections 124PHA(3), (3A) and (3B). New subsection 124PHA(3) allows the Secretary to reconsider existing wellbeing exemptions if asked to do so by an officer or employee of a State or Territory. New subsection 124PHA(3A) provides that the Secretary must revoke the subsection 124PHA(1) determination if the Secretary receives a request under subsection 124PHA(3) and the Secretary is no longer satisfied that being a program participant poses a serious risk to the person. New subsection 124PHA(3B) provides that subsection 124PHA(3A) does not prevent the Secretary from making another determination under subsection 124PHA(1).
Enabling determinations for exit criteria
1.29
Item 37 inserts new subsections 124PHB(7A) and (7B) in section 124PHB. Section 124PHB provides that a person may exit the CDC if the Secretary is satisfied that a person can demonstrate reasonable and responsible management of their affairs (including financial affairs) in line with the requirements set out in this section. New subsection 124PHB(7B) provides that the Minister may, by legislative instrument, determine decision-making principles for the purposes of subsection 124PHB(7A). This instrument is subject to disallowance. New subsection 124PHB(7A) provides that the Secretary must comply with any decision-making principles determined in an instrument under subsection 124PHB(7B) when deciding whether the Secretary is satisfied of the requirements mentioned in subsection 124PHB(3) (i.e. demonstrating reasonable and responsible management of their affairs (including financial affairs)).
Reviewing exit determinations
1.30
Item 39 inserts new subsection 124PHB(9A) which provides that, if the Secretary ceases to be satisfied as mentioned in subsection 124PHB(3), the Secretary must revoke the exit determination. While a person may have met the criteria at one point and been exited from the CDC program, this provision ensures that the Secretary has the power to review and revoke an exit determination where the Secretary becomes aware of information that suggests a person is no longer reasonably and responsibly managing their affairs.
Enabling the Secretary to issue notices
1.31
New subsections 124PG(4), 124PGA(4), 124PGB(4) and 124PGC(4) provide that the Secretary may give a written notice stating that the person is a program participant under the relevant section and comes into force on a day specified in the notice which must not be earlier than the day on which the notice is given.
Improving the evaluation process
1.32
Item 114 repeals subsections 124PS(2) and (3) to remove the statutory requirement that an evaluation be conducted by an independent expert within six months of the completion of a review of the cashless welfare arrangements. This addresses the potentially circular nature of current section 124PS. The repeal of subsection 124PS(3) removes the requirement on independent experts to consult program participants which, in turn, will avoid the ethical implications of unnecessary repeat contact with vulnerable individuals.
Financial implications
1.33
The EM to the bill notes that $17.5 million will be provided for support services to assist the transition in the NT and Cape York area. The costs associated with changing the CDC to an ongoing measure are not for publication as negotiations with potential commercial providers are yet to be finalised.
Legislative scrutiny
Senate Standing Committee for the Scrutiny of Delegated Legislation
1.34
The Senate Standing Committee for the Scrutiny of Delegated Legislation (delegated legislation committee) is considering the Coronavirus Economic Response Package (Deferral of Sunsetting— Income Management and Cashless Welfare Arrangements) Determination 2020. The instrument extends the end date for the CDC trial in all existing sites and IM in the Cape York region for a further six months until 31 December 2020.
1.35
The delegated legislation committee has raised scrutiny concerns with the use of delegated legislation to defer the sunsetting of primary legislation and on 31 August 2020 placed a notice of motion to disallow the instrument, for consideration and debate in the Senate on 3 September 2020.
1.36
Following correspondence with the Minister for Families and Social Services and the introduction of the current bill into the House of Representatives, the delegated legislation committee resolved to postpone its notice of motion to disallow the instrument to 12 November 2020, with a view to withdrawing the notice of motion should the bill be agreed to by the Senate. On 11 November 2020, the notice of motion to disallow the instrument was postponed until 7 December 2020.
Parliamentary Joint Committee on Human Rights
1.37
The Parliamentary Joint Committee on Human Rights (PJCHR) had not reported on its consideration of the bill at the time this report was prepared. Consideration of previous related legislation by PJCHR is outlined in the committee’s earlier reports on legislation related to the CDC trial.
1.38
Earlier this year, the PJCHR finalised its consideration of the Social Security (Administration) Amendment (Income Management to Cashless Debit Card Transition) Bill 2019. The PJCHR commented that the bill engages and limits the rights to privacy, social security, and equality and non-discrimination but concluded that any limitation on human rights is justifiable, noting the important outcomes sought to be achieved by the CDC program.
Senate Standing Committee for the Scrutiny of Bills
1.39
The Senate Standing Committee for the Scrutiny of Bills (scrutiny of bills committee) had not reported on its consideration of the bill at the time this report was prepared. Consideration of previous related legislation by the scrutiny of bills committee is outlined in the committee’s previous reports on this matter.
1.40
Last year, the scrutiny of bills committee considered the Social Security (Administration) Amendment (Income Management to Cashless Debit Card Transition) Bill 2019. Detailed advice was sought and received from the Minister regarding the nature of participants’ information that could be collected under amended paragraph 192(db) (also proposed in the current bill) and the safeguards for participants’ privacy. The scrutiny of bills committee requested the Minister’s advice be included in the EM and made no further comment.
Conduct of inquiry
1.41
On 8 October 2020, the Senate referred the provisions of the bill to the committee for inquiry and report. The committee agreed to a reporting date of 17 November 2020.
1.42
The committee advertised the inquiry on its website and invited submissions by 23 October 2020. The committee received 145 submissions, listed at Appendix 1 of this report.
1.43
The committee also conducted a public hearing on 5 November 2020. A list of witnesses for that hearing is included at Appendix 2 of this report.
Acknowledgement
1.44
The committee would like to thank those individuals and organisations that made submissions and gave evidence at the public hearing.
Note on references
1.45
References to the committee Hansard are to the proof transcript. Page numbers may vary between the proof and official Hansard transcripts.