Chapter 1Introduction

1.1On 25 May 2023, the Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023 (the bill) was introduced into the House of Representatives by the Minister for Social Services, the Hon Amanda Rishworth MP (the Minister).[1]

1.2On 22 June 2023, the Senate referred the provisions of the bill to the CommunityAffairs Legislation Committee (the committee) for inquiry and report by 24July2023.[2]

Purpose of the bill

1.3The bill seeks to implement the 2023-24 Budget measures on income support.

1.4The Explanatory Memorandum (EM) to the bill describes those measures as including:

expanding qualification for Parenting Payment (Single) to single principal carers whose youngest child is aged under 14 years (PPS) (upfrom under 8 years);

increasing the rates of working age and student payments by $40 per fortnight, including Jobseeker Payment, Youth Allowance, Parenting Payment (Partnered), Austudy Payment and Disability Support Pension (youth);

expanding eligibility for the higher rate of Jobseeker Payment to recipients aged 55 years and over who have been on payment for nine or more continuous months (reducing the qualifying age from 60 years); and

increasing the maximum rates of Commonwealth Rent Assistance by 15percent.[3]

1.5In her second reading speech, the Minister described the bill as implementing Budget measures to provide ‘targeted support to strengthen Australia’s social safety net’. The Minister commented that this additional assistance would benefit around two million people.[4]

Background

1.6This section provides some context for the income support measures implemented in the bill.

Eligibility for Parenting Payment (Single)

1.7Eligibility for Parenting Payment (Single) currently ceases when a recipient’s youngest dependent child turns eight. This cut-off age has applied to new recipients since 2006, when the cut-off age was reduced from 16. For a time, grandfathering provisions preserved the PPS entitlement of those who had been receiving PPS as at 1 July 2006 for as long as their youngest dependent child was under 16. However, those grandfathering arrangements ceased with effect from 1 January 2013.[5]

1.8Upon the eighth birthday of the youngest dependent child of a PPS recipient, if still in need of income support that recipient is typically transferred from PPS to the JobSeeker Payment, which has a lower payment.[6] This transfer of payment results in a significant reduction in income because ‘the eligible carer’s maximum basic rate drops from $922.10… to $745.20’ per fortnight.[7]

1.9In March 2023, the Prime Minister’s Women’s Economic Equality Taskforce wrote to the Minister for Women, Senator the Hon Katy Gallagher, nominating as its first priority for ‘urgent and targeted actions’ in the 2023–24 Budget:

Reinstatement of the Parenting Payment (Single) for women with children over eight. This will more appropriately classify single mothers as doing parenting work, rather than as being unemployed.[8]

DSS Impact Analysis: Additional support for single parents

1.10In exploring options for providing additional support to single parents, the Department of Social Services (DSS) stated in May 2023 that:

It is important payment rates provide support for people to meet an adequate cost of living, whilst supporting and incentivising recipients to enter or re‑enter the workforce.[9]

1.11In relation to PPS, the DSS Impact Analysisof May2023 set out six policy options designed to ‘address the issue of providing adequate income for single principal carers on income support’ while balancing increased support with its economic impacts, and also ‘ensuring these recipients remain connected to the workforce’.[10]

1.12The Impact Analysis identified expanding PPS eligibility for single principal carers of a dependent child aged under 14 as the preferred policy option. This is the option that would be implemented if the provisions of Schedule 1 of the bill were passed by the Parliament.

Eligibility for the higher rate of JobSeeker Payment

1.13Since 1990, unemployment benefit recipients who are single and aged over 60 have been paid a higher benefit rate if they have been on income support for a specified period. Originally six continuous months or more, this period was increased in 1996 to nine continuous months or more.[11]

1.14The EM notes that ‘[o]ver the past ten years, the proportion of mature-aged Australians on Jobseeker Payment has significantly increased’; and that this cohort may face higher barriers to employment (e.g. poor health and age discrimination).[12]

Rates of Commonwealth Rent Assistance

1.15Commonwealth Rent Assistance is ‘a non-taxable income supplement payable to eligible people who rent in the private rental market or community housing’. To qualify for CRA:

…a person or family must qualify for an eligible social security payment, more than the base rate of Family Tax Benefit Part A, or an eligible Department of Veterans’ Affairs service pension, income support supplement or veteran payment, and pay or be liable to pay more than a minimum amount of rent, called the rent threshold, for their principal home.[13]

1.16The Productivity Commission found in 2022 that ‘[t]he value of the [CRA] payment has declined over time, relative to rents, reducing its effectiveness.’ It also called for a review of CRA, suggesting CRA could be better targeted to those most in need.[14]

1.17The current Government’s Interim Economic Inclusion Advisory Committee found in 2023 that ‘inadequacy of Commonwealth Rent Assistance (CRA) risks leaving households that rent in housing and financial stress’. It recommended that the Government ‘commit to increase CRA and reform its indexation to better reflect rent paid’.[15]

Key provisions of the bill

1.18This section provides details on the three schedules contained in the bill.

1.19Theamendments made by the bill would commence on 20 September 2023 if the bill is passed by the Parliament.

1.20The bill would amend the following Acts:

Social Security Act 1991 (the Social Security Act);

A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act); and

Veterans’ Entitlements Act 1986 (the Veterans’ Entitlements Act).

Schedule 1

1.21Schedule 1 would amend Part 2.10 of the Social Security Act to expand eligibility for Parenting Payment (Single) to single principal carers of a dependent child under 14 years. This contrasts with the current rule limiting qualification to single principal carers of a dependent child under eightyears. Schedule 1 would also make consequential amendments of the Social Security Act to ensure consistency across the respective frameworks for PPS, Pensioner Education Supplement and the Pensioner Concession Card.

1.22Item 1 would raise the maximum age for which a child is a ‘PP Child’ for the purposes of PPS by raising the age from the youngest child’s 8th birthday to that child’s 14th birthday.[16]

1.23Item 2 would make consequential amendments to ensure the continuing eligibility for Pensioner Education Supplement (PES) of a person previously receiving PES who is transitioning from PPS to Youth Allowance because their youngest dependent child has reached the maximum age.[17]

1.24Item 3 would make consequential amendments to paragraph 1061ZDA(1)(b) of the Social Security Act to extend by 12weeks the duration of a person’s entitlement to a Pensioner Concession Card where that entitlement is ceasing because the person no longer qualifies for PPS due to the age of their youngest dependent child.[18]

1.25The Minister has said that under the proposed amendments around 57,000 eligible single principal carers on JobSeeker Payment whose youngest child was under 14 would be transferred to the higher PPS rate of $922.10, worth an additional $176.90 per fortnight.[19] DSSnotes that for this measure the Government has committed $1.9 billion over fiveyears from 2022‑23.[20]

Schedule 2

Increase to working age payments

1.26Schedule 2 would amend the Social Security Act to increase by $40 per fortnight the maximum basic rates of working age and student social security payments.

1.27The table at Appendix1 sets out how this increase would apply to selected payments: Disability Support Pension for recipients under 21; Youth Allowance, Austudy, JobSeeker Payment; and Parenting Payment (Partnered).

1.28The EM indicates that the $40 fortnightly interest would also apply to ABSTUDY Living Allowance and to Special Benefit.[21] Other payments that would similarly benefit include Farm Household Allowance, veterans’ student programs and Self-Employment Allowance.[22]

1.29However, the $40 fortnightly payment increase proposed in Schedule 2 would not apply to Parenting Payment (Single).[23]

1.30The Minister has said the proposed $40 per fortnight increase in payments would provide additional support to 1.1million people.[24] DSSnotes that for this measure the Government has committed $4.9 billion over fiveyears from 2022–23.[25]

Reduction in qualifying age for the higher rate of JobSeeker Payment

1.31Schedule 2 would further amend the Social Security Act to expand eligibility for the higher rate of JobSeeker Payment to recipients aged 55 or more who have been receiving the payment for nine or more months. This would lower the qualifying age from 60 to 55.

1.32Schedule 2 would also make consequential amendments to align other entitlements with the new qualifying age for the higher rate of JobSeeker Payment. Examples of such other entitlements include the Pensioner Concession Card and Telephone Allowance.

1.33The Minister has said 52,000 Australians aged 55-59 would benefit by at least $92.10 per fortnight by the proposed reduction of the qualifying age from 60 to 55.[26]

Schedule 3

1.34Schedule 3 would increase by 15 per cent the maximum rate of Commonwealth Rent Assistance by replacing CRA rate tables and rent thresholds in the following acts:

Items 1-8: Family Assistance Act;

Items 9-16: Social Security Act; and

Items 17-19:Veterans’ Entitlements Act.

1.35The impact of the proposed increase on CRA rates is set out in the table at Appendix 2.

1.36The Minister has said that the proposed increase in CRA rates would benefit around 1.1 million households by up to $31 per fortnight; and that this would be the largest increase in CRA in over 30 years.[27] DSSnotes that for this measure the Government has committed $2.7 billion over fiveyears from 2022–23.[28]

Compatibility with human rights

1.37The statement of compatibility with human rights in the EM concludes that ‘the Bill is compatible with human rights because it promotes the protection for human rights for some of the most vulnerable groups in society’.[29]

1.38The Parliamentary Joint Committee on Human Rights (PJCHR) concluded its examination of the bill and reported that it had no comment on the bill.[30]

Legislative scrutiny

1.39The Standing Committee for the Scrutiny of Bills reported on 14 June 2023 that it had no comment on the bill.[31]

Financial impact statement

1.40The EM’s financial impact statement indicates the following financial impact over the forward estimates, totalling $9.5 billion:[32]

Additional support for single parents/parenting payment (single) – improved support for single parents $1.9 billion

Increase to working age payments$4.9 billion

Increased support for Commonwealth rent assistancerecipients$2.7 billion

Conduct of the inquiry

1.41Details of the inquiry were made available on the committee’s website.[33]Thecommittee also contacted a number of organisations and individuals inviting written submissions by 3 July 2023. The committee received 66 submissions, as detailed at Appendix 3.

1.42The committee held a public hearing in Canberra on 18 July 2023. The witness list for the hearing can be found at Appendix 4.

1.43The committee thanks the individuals and organisations that made submissions and gave evidence at the hearing for their contributions to the inquiry.

Structure of the report

1.44This report contains two chapters. This chapter has set out the conduct of the inquiry and the purpose of the bill, provided relevant background information and outlined the key provisions of the bill.

1.45Chapter two canvasses the key issues raised by submitters and witnesses, and sets out the committee’s concluding views and recommendation.

Acknowledgments

1.46The committee thanks the organisations and individuals who contributed to the inquiry by preparing written submissions and giving evidence at the public hearing.

Note on references

1.47In this report, references to Hansard are to proof transcripts. Page numbers may vary between proof and official transcripts.

Footnotes

[1]House of Representatives—Votes and Proceedings, No. 58, 25 May 2023, p. 736.

[2]Journals of the Senate, No. 56, 22 June 2023, pp. 1595–1598.

[3]Explanatory Memorandum (EM), p. 1.

[4]The Hon Amanda Rishworth, House of Representatives Hansard, 25 May 2023, p. 5.

[5]Don Arthur, Michael Klapdor and Matthew Thomas, Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023, Bills Digest No. 88, 2022-23, Parliamentary Library, Canberra, 2023, pp. 6 and 7.

[6]Department of Social Services (DSS), Impact Analysis: Additional Support for Single Parents OIA23-04851, May 2023 (the Impact Analysis), p. 7.

[7]EM, p. 2, noting that the cited rates are applicable from 20 March 2023 to 19 September 2023.

[8]Women’s Economic Equality Taskforce, Letter to the Minister for Women, Re: Women’s Economic Equality Taskforce Advice for May Budget, correspondence to Sen the Hon Katy Gallagher, Minister for Women, 24 March 2023, https://www.pmc.gov.au/office-women/womens-economic-equality/womens-economic-equality-taskforce/letter-minister-women (visited 7 July 2023), p. 3.

[9]DSS, Impact Analysis: Additional Support for Single Parents OIA23-04851, May 2023 (the Impact Analysis), p. 5.

[10]DSS, Impact Analysis: Additional Support for Single Parents OIA23-04851, May 2023 (the Impact Analysis). For a summary of the Impact Analysis, see EM, p. 12.

[11]Don Arthur, Michael Klapdor and Matthew Thomas, Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023, Bills Digest No. 88, 2022-23, Parliamentary Library, Canberra, 2023, p. 14.

[12]EM. p .4.

[13]DSS, Commonwealth Rent Assistance (https://www.dss.gov.au/housing-support/programmes-services/commonwealth-rent-assistance, accessed 7 July 2023).

[14]Productivity Commission, In need of repair: The National Housing and Homelessness Agreement – Study report, September 2022 (https://www.pc.gov.au/inquiries/completed/housing-homelessness/report), pp. 46, 16 and 20–21.

[15]Interim Economic Inclusion Advisory Committee, 2023–24 Report to the Australian Government, 2023, pp.36 and 4.

[16]EM, p. 2.

[17]Item 2 of Schedule 1 would achieve this end by amending the age reference in subpara.1061PJ(2A)(b)(iii) of the Social Security Act. See also EM, p. 2.

[18]See also EM, p. 3.

[19]The Hon Amanda Rishworth, House of Representatives Hansard, 25 May 2023, p. 6.

[20]DSS, Submission 18, p. 2.

[21]EM, p. 4: ‘Equivalent changes will also be made to ABSTUDY living allowance by changes to the ABSTUDY Policy Manual, and to special benefit, which is paid at a discretionary rate.’

[22]EM, p. 4.

[23]Parenting Payment (Single) does not appear in the EM’s list of the working age payments that would be increased by Schedule 2 (EM, p. 4). See also Don Arthur, Michael Klapdor and Matthew Thomas, Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023, Bills Digest No. 88, 2022-23, Parliamentary Library, Canberra, 2023, p. 9.

[24]The Hon Amanda Rishworth, House of Representatives Hansard, 25 May 2023, p. 5.

[25]DSS, Submission 18, p. 3.

[26]The Hon Amanda Rishworth, House of Representatives Hansard, 25 May 2023, p. 6.

[27]The Hon Amanda Rishworth, House of Representatives Hansard, 25 May 2023, p.7.

[28]DSS, Submission 18, p. 4.

[29]EM, p.14.

[30]Parliamentary Joint Committee on Human Rights, Human rights scrutiny report – Report 7 of 2023, 21 June 2023, pp. 1 and 3.

[31]Senate Standing Committee for the Scrutiny of Bills, ‘Bills with no committee comment’, ScrutinyDigest 6 of 2023, 14 June 2023, p. 29.

[32]EM, p.1.

[33]The committee’s website can be accessed via www.aph.gov.au/senate_ca.