Purpose of the bill
1.1
The Social Services Legislation Amendment (Consistent Waiting Periods for New Migrants) Bill 2021 (bill) proposes to standardise the waiting period for newly arrived migrants to access particular social security payments. The Newly Arrived Residents Waiting Period (NARWP) would be increased to four years and would apply to the following payments and concession cards:
Family Tax Benefit - Part A and Part B;
the Low Income Health Care Card; and
the Commonwealth Seniors Health Card.
1.2
According to the Explanatory Memorandum, the rationale for standardising the NARWP across all relevant payments is to '[make] the system simpler and easier for new migrants to understand’. The Explanatory Memorandum also notes that the waiting and qualifying residency periods for access to social security payments are designed to reflect the ‘reasonable expectation’ that newly arrived migrants will be financially self‑sufficient when they first permanently settle in Australia.
Background
1.3
Australia’s social security system is funded from general government revenue and operates on a residency and needs based approach. This approach is different from other countries in which social security payments are funded by direct contributions from employers and individuals, and payments are often calculated on the level and duration of these contributions.
1.4
To access Australia’s social security system individuals, at a minimum, must be an Australia resident, as defined by the Social Security Act 1991. Other requirements for access to payments may include waiting periods and income or asset tests.
1.5
The NARWP is one requirement to access the social security system. It is classified as the time a person spends in Australia as an Australian resident. Any time a person travels outside of Australia does not count towards the waiting period for payments. Additionally, for most temporary visa holders, the time spent in Australia on a temporary visa does not count towards the NARWP.
1.6
The NARWP was first introduced in 1993. In 1997, additional payments became subject to the NARWP and the NARWP was increased from 26 weeks (six months) to 104 weeks (two years). Further changes in 2018 extended the NARWP from two years to four years for the following payments:
Youth Allowance (student and other);
Farm Household Allowance; and
1.7
The 2021-22 Budget announced the proposed increase of the NARWP to four years.
1.8
Table 1.1 summarises the previous, current and proposed NARWP for the relevant payments.
Table 1.1:
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Previous rules
Visas granted before 1 January 2019
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Commonwealth Seniors Health Card
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2 years
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4 years*
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4 years
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Low Income Health Care Card
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2 years
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4 years*
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4 years
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Carer Payment
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2 years
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2 years
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4 years
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Carer Allowance
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Nil
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1 year
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4 years
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Parental Leave Pay
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Nil
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2 years
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4 years
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Dad and Partner Pay
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Nil
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2 years
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4 years
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Family Tax Benefit Part A
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Nil
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1 year
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4 years
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Family Tax Benefit Part B
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Nil
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Nil
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4 years
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* The NARWP is 2 years for certain visa classes. Source: Department of Social Services, Submission 17, p. 2.
1.9
The bill does not propose to introduce a NARWP for the Childcare Subsidy, Double Orphan Pension and Stillborn Baby Payment, which are not subject to a NARWP.
Key provisions of the bill
1.10
The bill contains three schedules which amends the following four acts:
the Social Security Act 1991;
the Social Security (International Agreements) Act 1999;
the A New Tax System (Family Assistance) Act 1999; and
the Paid Parental Leave Act 2010.
1.11
The proposed amendments to each Act would apply a 208 week NARWP across the payments included in the respective Acts.
1.12
The provisions of the bill will only apply to a person who becomes the holder of a permanent visa or other relevant temporary visa on or after 1 January 2022.
1.13
Individuals who become a permanent visa holder prior to 1 January 2022 will be subject to the current arrangements as specified in the Social Services and Other Legislation Amendment (Promoting Sustainable Welfare) Act 2018.
1.14
Additionally, those who transfer from a relevant temporary visa to a permanent visa will be subject to the waiting periods that applied when they were granted a temporary visa.
Exemptions
1.15
The bill does not amend the current exemptions to the NARWP within the specified Acts.
1.16
Australian citizens are exempt from waiting periods and as a result migrants who are granted citizenship during their waiting period will not be required to serve the remainder of the waiting period to be eligible to receive payments.
1.17
Permanent humanitarian entrants and their family members are exempt from the NARWP for all payments and concession cards.
1.18
Orphan and remaining relative visa holders are excluded from the changes to the NARWP and will remain subject to the rules in place prior to 1 January 2019.
1.19
Temporary humanitarian-type visa holders (subclasses 449, 785, 786, 790, 060 and 070) are exempt from the NARWP for Special Benefit, the Low Income Health Care Card, Family Tax Benefit, Parental Leave Pay and Dad and Partner Pay.
1.20
Permanent Carer Visa holders (subclass 116 and 836) are exempt from the NARWP for Carer Payment and Carer Allowance.
1.21
New Zealand citizens on a Special Category Visa (subclass 444) are also exempt from the NARWP for Family Tax Benefit, Parental Leave Pay, and Dad and Partner Pay.
1.22
The existing exemptions from the NARWP within the Social Security Act 1991, A New Tax System (Family Assistance) Act 1999 and the Paid Parental Leave Act 2010 for certain visa holders and those who experience hardship or a substantial change in circumstance will continue to apply in the application of this bill.
Schedule 1 – Social security amendments
1.23
Schedule 1 amends the Social Security Act 1991 and the Social Security (International Agreements) Act 1991.
1.24
The schedule increases the NARWP for Carer Payment and Carer Allowance from 104 weeks (two years) and 52 weeks (one year) respectively, to 208 weeks (four years). It also applies the existing 208 week NARWP for the Low Income Health Care Card and Commonwealth Seniors Health Card to Special Category visa holders and temporary partner visa holders.
1.25
It removes the qualifying residency requirements for the parenting payment as it is already subject to a 208 week NARWP and removes references to payments which are no longer available, such as the bereavement allowance.
1.26
Schedule 1 also includes consequential amendments to the Social Security (International Agreements) Act 1991 which are consistent with the proposed changes to the Social Security Act 1991.
Schedule 2 – Family assistance amendments
1.27
Schedule 2 amends the A New Tax System (Family Assistance) Act 1999 and increases the NARWP for Family Tax Benefit Part A from 52 weeks to 208 weeks and introduces a 208 week NARWP for Family Tax Benefit Part B.
Schedule 3 – Paid parental leave amendments
1.28
Schedule 3 amends the Paid Parental Leave Act 2010 and increases the NARWP for Parental Leave Pay and Dad and Partner Pay from 104 weeks to 208 weeks.
Financial implications
1.29
The measures in the bill are expected to result in total net savings of approximately $672 million over the forward estimates to 2024‑25. Table 1.2 below outlines the estimated savings for each schedule of the bill.
Table 1.2:
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Schedule 1 – Social security amendments
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Savings of $64.9 million
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Schedule 2 – Family assistance amendments
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Savings of $515.5 million
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Schedule 3 – Paid parental leave amendments
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Savings of $71.9 million
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Source: EM, p. 5.
1.30
It is estimated that approximately 45 000 families will be impacted by the changes to the Family Tax Benefit and 13 200 individuals affected by the changes to the other payments.
Legislative scrutiny
1.31
The Senate Standing Committee for the Scrutiny of Bills made no comment on the bill.
1.32
The Parliamentary Joint Committee on Human Rights (human rights committee) noted that measures contained within the bill engages and limits the rights to social security, adequate standard of living, health, maternity leave, and equality and non-discrimination.
1.33
The human rights committee notes any limitation on the above rights must ‘pursue a legitimate objective’ and acknowledges that the objective of the bill - to ensure the financial sustainability of the welfare system - ‘may be capable of a constituting a legitimate objective. However, that the objective of reinforcing self-reliance for new migrants is unlikely to constitute a legitimate objective.
1.34
The human rights committee raised concerns that the increased waiting periods could restrict access to paid maternity leave and ‘may ultimately exacerbate inequalities experienced by women subject to the waiting period’.
1.35
At the time of tabling this report, the human rights committee had yet to reach a concluded view on the bill and sought further information from the Minister regarding the following matters:
how the measure promotes general welfare for the purpose of constituting a legitimate objective;
the number of individuals subject to a NARWP, the number of individuals who applied for an exemption, and the number of exemptions granted or denied;
the assistance provided to migrants in navigating the exemption process;
the review and oversight mechanisms for denied exemption applications;
how the measure is the least rights restrictive approach; and
the consideration of alternative measures.
Conduct of the inquiry
1.36
The bill was introduced in the House of Representatives on 24 June 2021. Pursuant to the adoption of the Selection of Bills report on the same day, the provisions of the bill were referred to the Community Affairs Legislation Committee (committee) for inquiry and report by 14 September 2021. The committee subsequently sought an extension of time to report on 27 September 2021.
1.37
The committee wrote to relevant stakeholders inviting them to make a submission to the inquiry by 26 July 2021. Submissions continued to be accepted after that date.
1.38
The committee received 25 public submissions and held a public hearing in Canberra, on 13 September 2021. Submitters and witnesses are listed in Appendix 1.
1.39
The committee thanks the individuals and organisations that made submissions and gave evidence at the public hearing.
Note on references
1.40
References to the Committee Hansard are to the proof Hansard. Page numbers may vary between the proof and official Hansard transcripts.