Referral of the inquiry
1.1
The Social Services Legislation Amendment (Workforce Incentive) Bill 2022 (the bill) was introduced in the House of Representatives and read a first time on 10 February 2022.
1.2
On 10 February 2022, the Senate referred the provisions of the bill to the Senate Community Affairs Legislation Committee (the committee) for inquiry and report by 24 March 2022.
Structure of the report
1.3
This report consists of two chapters:
Chapter 1 outlines the purpose of the bill and its key provisions, and discusses various administrative details relating to the inquiry.
Chapter 2 examines the key issues raised by inquiry participants and provides the committee’s view and recommendation.
Purpose of the bill
1.4
As outlined in the bill’s explanatory memorandum, the bill amends the social security law and the Veterans’ Entitlement Act 1986 to 'remove possible disincentives for age pension, disability support pension and veterans’ entitlement recipients to engage in paid employment'.
1.5
The explanatory memorandum submits that the measures in the bill may assist in providing additional labour supply in areas of the economy impacted by COVID‑19 related labour shortages, and will be beneficial over the longer term.
Provisions of the bill
1.6
The bill contains two schedules that amend the following three Acts:
Social Security (Administration) Act 1999;
Veterans’ Entitlement Act 1986; and
Social Security Act 1991.
Schedule 1—Suspension of benefits and entitlements instead of cancellation
1.7
Schedule 1 of the bill amends the Social Security (Administration) Act 1999 and the Veterans’ Entitlement Act 1986 to enable age pensioners and certain veterans’ entitlement recipients to have their payment suspended for up to two years, instead of cancelled, if their income exceeds the relevant income limit.
1.8
Currently, if an age pensioner’s total ordinary income exceeds the relevant income limit, they will have their payment suspended for up to 12 weeks before their payment is cancelled. During this 12-week period, recipients are still considered to be receiving payments and, hence, can continue to access other supports, such as concessions and supplements.
1.9
The new provisions have a similar effect to the current suspension provisions for Disability Support Pension recipients, which provide for a suspension of up to two years.
1.10
The bill also extends the suspension mechanism to the partners of these individuals, as well as partners of disability support pensioners, where those partners are themselves receiving a social security pension or certain veterans’ entitlements. As outlined in the explanatory memorandum, this aims to enable both pensioners and their partners to resume receiving pension payments more easily if they become payable again within two years.
Schedule 2—Extended qualification for pensioner concession cards
1.11
Schedule 2 amends the Social Security Act 1991 and the Veterans’ Entitlement Act 1986 to ensure that working age pensioners, disability support pensioners, and certain veterans’ entitlement recipients can retain their pensioner concession card for up to two years after their payments cease.
1.12
Currently, age pensioners have their pensioner concession card cancelled 12 weeks after their pension ceases to be payable due to their level of income. This contrasts with disability support pensioners who only have their pensioner concession cards cancelled 52 weeks after they lose eligibility for the pension due to their employment hours, or ordinary income from employment.
1.13
The explanatory memorandum states that the amendments contained in the bill 'recognise the value pensioners place on their pensioner concession cards, and that older Australians often have additional medical needs, even if they are able to work'.
Commencement of the bill
1.14
Clauses 1 to 3 of the bill will commence on the day the bill receives royal assent.
1.15
Schedules 1 and 2 of the bill will commence on the first 1 January, 1 April, 1 July, or 1 October to occur after the bill receives royal assent.
Financial implications of the bill
1.16
The measures in the bill form part of a 2021–22 Mid-Year Economic and Fiscal Outlook measure: Supporting Jobs in the Economy Recovery. The explanatory memorandum states that the legislative component will result in savings of $5.5 million over the forward estimates from 2021–22.
Legislative scrutiny and human rights
1.17
The bill engages the following human rights as recognised in the International Covenant on Economic, Social and Cultural Rights:
the right to social security (Article 9);
the right to an adequate standard of living (Article 11); and
the right to work (Article 6).
1.18
The explanatory memorandum states that the bill is compatible with the above human rights, as well as the other human rights and freedoms recognised, or declared, in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
1.19
The explanatory memorandum submits that this compatibility is because the bill provides Australians, including senior Australians, with 'greater pension flexibility to help improve their standard of living'.
1.20
The Senate Standing Committee for the Scrutiny of Bills had no comment on the bill; however, at the time of writing this report, the Parliamentary Joint Committee on Human Rights had not considered the bill.
Conduct of the inquiry
1.21
The committee advertised the inquiry on its website and wrote to relevant stakeholders, and other interested parties, inviting submissions by 4 March 2022. The committee received six submissions, which are listed at Appendix 1.
Acknowledgements
1.22
The committee thanks all individuals and organisations who assisted with the inquiry, especially those who made written submissions.