Purpose of the bill
1.1
The Social Services Legislation Amendment (Strengthening Income Support) Bill 2021 (bill) seeks to amend the Social Security Act 1991 (Social Security Act) to:
permanently increase the maximum base rates of working age income support payments by $50 per fortnight;
permanently increase the ordinary income free area for jobseeker and youth allowance (other) payments to $150 per fortnight; and
extend certain temporary eligibility criteria for income support payments due to the COVID-19 pandemic until 30 June 2021.
Background
1.2
Part of the Australian Government's response to impact of COVID-19 pandemic, the Coronavirus Economic Response Package Omnibus Act 2020 (Omnibus Act) was passed by Parliament on 23 March 2020.
1.3
The Omnibus Act amended the Social Security Act to provide for several temporary changes to social security arrangements, including creation of a coronavirus supplement for recipients of working age payments for the period of the emergency, listing of new qualification categories, and waiving of certain waiting periods and assets tests. It also provided the Minister for Social Services the power to make legislative instruments to extend the coronavirus supplement period, and further update and amend qualification criteria relating to income support payments.
Coronavirus supplement rates
1.4
The Omnibus Act set the initial rate of the coronavirus supplement at $550 per fortnight for six months, from 27 April until 24 September 2020.
1.5
Payment of the supplement was then extended by legislative instruments from 25 September until 31 December 2020, at a rate of $250 per fortnight.
1.6
In December 2020, the Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Act 2020 (Extension Act) was passed, allowing for the extension of the coronavirus supplement for a further three months, to 31 March 2021, at a rate of $150 per fortnight. The Extension Act also provided that the coronavirus supplement could not be extended past that date.
Income free earnings
1.7
From 25 September 2020, the personal income test for working age income support payments, known as the income free area, was temporarily expanded from $106 to $300 per fortnight for jobseeker and youth allowance (other) recipients, allowing recipients to earn more income before their income support payment was reduced.
1.8
The Extension Act and Social Security (Coronavirus Economic Response—2020 Measures No. 16) Determination 2020 provided that this expanded income free area would continue until 31 March 2021 and cease after that date.
Qualification measures
1.9
Under the Omnibus Act and related instruments, arrangements for social security qualification were made to temporarily:
waive the ordinary waiting period for those seeking to receive jobseeker, youth allowance (other) or parenting payment, for the period during which the coronavirus supplement was being paid;
expand eligibility for jobseeker payment and youth allowance (other) to take into account the impacts of coronavirus, such as requirements for quarantine or self-isolation, on employment and wages; and
extend the portability period for certain age pensioners and recipients of the disability support pension who are unable to return to, or depart from, Australia within 26 weeks due to travel restrictions relating to coronavirus.
1.10
These qualifications provisions were also extended to 31 March 2021 through the Extension Act and Social Security (Coronavirus Economic Response–2020 Measures No. 16) Determination 2020.
Permanent increases in payments and income free earnings
1.11
On 23 February 2021, the Australian Government announced new measures to enhance the social security safety net in Australia from 1 April 2021, following the conclusion of the coronavirus supplement payment. These changes include permanently increasing the rate of working age income support payments by $50 a fortnight and permanently increasing the income free area for jobseeker and youth allowance (other) payment recipients to $150 per fortnight.
1.12
This announcement also included further extensions for the waiver of the ordinary waiting period and the expanded eligibility criteria due to coronavirus to 30 June 2021, as well as proposed changes to strengthen the Mutual Obligations Scheme for job seekers over the coming months.
1.13
The bill makes the necessary changes to the Social Security Act to allow for these permanent increases in payments and the income free area, as well as the extensions to temporary measures. In introducing the bill, the Hon Stuart Robert MP, Minister for Government Services and Minister for the National Disability Insurance Scheme, outlined:
The government strongly believes the key to improving people's living standards and reducing welfare dependency is job creation and having the right incentives to ensure there is a workforce ready to take those jobs.
… This bill will provide a permanent increase to working age payments provided to over 1.95 million Australians.
This $50 increase is the largest increase to employment payments in more than 35 years. It will be provided to jobseekers, student payment recipients, parenting payment recipients and youth payment recipients.
This $9 billion increase to payments balances the need to ensure income support payments encourage and enable workforce participation with the need for the welfare system to be fiscally sustainable for future generations.
Key provisions of the bill
1.14
The bill contains one schedule set out in five parts:
Part 1 allows for an increase in base working age income support payments by $50 per fortnight, with affect from 1 April 2021. It also allows for the increased base payments to continue to be indexed under usual arrangements into the future.
Part 2 extends the qualification criteria for youth allowance (other) and jobseeker payment in circumstances relating to the COVID-19 pandemic for three months, until 30 June 2021.
Part 3 extends the waiver of the ordinary waiting period for three months, until 30 June 2021.
Part 4 introduces a permanent increase of the ordinary income free area for jobseeker and youth allowance (other) to $150 from 1 April 2021, sets the taper rates for income over that amount, and provides that the amount will no longer be indexed.
Part 5 extends the portability period for certain recipients of the age or disability support pensions who are unable to return to, or depart from, Australia within 26 weeks due to the impact of COVID-19 for three months, until 30 June 2021.
Financial implications
1.15
The financial impact of the provisions of the bill over forward estimates to 2024–25 will be approximately $9 billion.
Legislative scrutiny
1.16
Neither the Senate Standing Committee for the Scrutiny of Bills nor the Parliamentary Joint Committee on Human Rights had reported on their consideration of the bill at the time this report was prepared.
1.17
The bill's statement of compatibility with human rights noted that the bill engages the following rights:
the right of everyone to social security in Article 9, and the right of everyone to an adequate standard of living for an individual and their family, and the continuous improvement in living conditions in Article 11 of the International Covenant on Economic, Social and Cultural Rights; and
the rights of the child in Article 26 of the Convention on the Rights of the Child.
1.18
The statement of compatibility with human rights notes that the bill is compatible with human rights as it 'promotes the protection for human rights for some of the most vulnerable groups in society'.
Conduct of the inquiry
1.19
The bill was introduced into the House of Representatives on 25 February 2021. Pursuant to the adoption of the Senate Standing Committee for the Selection of Bills report on that same day, the provisions of the bill were referred to the Community Affairs Legislation Committee (committee) for inquiry and report by 12 March 2021.
1.20
The committee wrote to relevant organisations inviting them to make a submission to the inquiry by 5 March 2021.
1.21
The committee received 317 public submissions, which were published on the committee's website, and 71 confidential submissions largely from individuals describing their personal experience in receiving income support payments. A list of submissions received is included at Appendix 1.
1.22
A public hearing for the inquiry was held on 9 March 2021. The committee heard evidence from a range of organisations, peak bodies and academics. A list of witnesses is included at Appendix 2.
1.23
The committee also received pro-forma correspondence from more than 220 individuals through an online campaign. Information about these form letters is included at Appendix 3.
1.24
The committee would like to thank those individuals and organisations that made submissions and gave evidence at the public hearing.
Note on references
1.25
References to the Committee Hansard are to the proof Hansard. Page numbers may vary between the proof and official Hansard transcripts.