Minority Report by Coalition Senators

1.1        The coalition has serious concerns about the Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) Amendment Bill 2011, Schedule 4.  Instead, the Coalition recommends that Schedule 4 be removed from the Bill and be subjected to more detailed scrutiny and consultation with affected parties.

1.2        Provisions within the bill place a particularly large emphasis on the notification process.  The legislation would require that compensation payers advise Centrelink of information on the payment of any compensation under an injury compensation scheme or insurance contract, in advance of the payment occurring.  The objective is to allow Centrelink to commensurately adjust a compensation affected payment if any such payment would impact on a person's Centrelink benefit.  Such benefits include age or disability support pensions and unemployment benefits.

1.3        Although it would appear that the intention of the Bill is to place a notification onus on insurance companies, it is clear that Schedule 4 would place a significant administrative and financial burden on insurance companies as well as government agencies.  It is also clear that a burden would also be borne by the wider business community, including small and medium businesses, non-government, charity and not-for-profit groups.

1.4        In their submission[1], Allianz outlined the scope of notifications that would be required under the legislation.  According to their submission, some of the payments that would be required to be reported include:

• past economics loss;
• future economic loss;
• gratuitous care;
• general damages;
• compensation for relatives;
• funeral expenses; and
• medical and related expenses.

1.5        There is also concern that if this legislation was passed in its current form it would cause financial hardship to the recipients of injury compensation, including families.  Under the provision of the Bill, it is not only individual Centrelink payments that would be affected but also those such as carer and family payments.  As a result, the impact extends beyond any one person.

1.6        Of particular concern to the Coalition is the potential cost to industry if the legislation was to be enacted.  According to one submission[2], the cost would be in the tens of millions of dollars:

The administrative and financial burden on workers compensation payers if this were the case would be significant, amounting to over $100 million per annum just in the wage costs of the additional staff that would be required to meet the Bill's proposed notification requirements.

1.7        Allianz's submission[3] went on to give an estimate of the time impact on the organisation:

If it took 15 minutes to complete the notification [using the online form the Department advised would be made available] for each payment, the estimated number of hours required to provide such notifications in relation to workers' compensation payments alone would be 5.35 million hours).

1.8        Accordingly, Coalition Senators reiterate their serious concerns with the Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) Amendment Bill 2011, Schedule 4.

Recommendation 1

1.9        Coalition senators recommend that Schedule 4 be removed from the Bill and be subjected to more detailed scrutiny and consultation with affected parties.

Senator Alan Eggleston

Deputy Chair

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