Chapter 1 - Report
Introduction
1.1
The Social Security Amendment (2007 Measures No. 1) Bill 2007 was
introduced in the House of Representatives on 20 June 2007, and was referred to
this committee through the Selection of Bills process the following day for
report on 30 July 2007.
Conduct of the inquiry
1.2
Notice of the inquiry was posted on the committee's website and
advertised in The Australian newspaper on 27 June 2007. The committee also contacted a number of organisations to notify them of the inquiry and to request
submissions. The committee received 6 submissions, a list of which is at
Appendix 1.
1.3
The committee thanks all those who contributed to the inquiry.
Summary of amendments
Vocational rehabilitation program
1.4
The amendments provide for an increase to the standard rate of mobility
allowance for those undertaking a vocational rehabilitation program, or a
follow-up program.[1]
That is, a rehabilitation program that provides a person with assistance to obtain
or retain unsupported paid employment. The amendments will still require an
applicant to be handicapped and, in the opinion of the delegate, unable to use
public transport without substantial assistance, either permanently or for an
extended period due to the person’s physical or mental disability. If a person
withdraws from a program, they can continue to receive mobility allowance for
12 weeks. If a recipient ceases to qualify for a reason other than course
withdrawal, they may continue to receive payment for 2 weeks.[2]
Parenting payment recipients
1.5
The bill extends the higher rate of mobility allowance to Parenting Payment
recipients who are working at least 15 hours per week and are paid at or above the
relevant minimum wage, or are looking for such work. The higher rate is also
extended to people receiving Newstart and/or Youth Allowance under certain
conditions. These include that the person must not be studying full-time, must
not be a new apprentice, or in receipt of the Disability Support Pension (DSP)
or Parenting Payment. Eligible applicants must also work for at least 15 hours
per week at or above the minimum wage.
Employment under the Supported Wage
System
1.6
The bill provides for the higher rate of mobility allowance to be paid
to recipients of Newstart, DSP, Parenting Payment and Youth Allowance (provided
they are not a new apprentice or undertaking full time study), where they work
at least 15 hours per week under the Supported Wage System. Under the amended
legislation, a person will remain eligible for the higher rate of Mobility
Allowance in spite of their income rising to a point where income support is no
longer payable, as long as they continue to work for 15 hours or more per week,
provided the work is on the open market.[3]
Youth allowance and change of
status notification
1.7
These measures aim to ensure that a person receiving Youth Allowance who
stops studying full-time notifies Centrelink of their change in circumstances
within 14 days of the change taking place. The provisions preclude the person
being able to successfully apply for unemployment benefits until such time as they
notify Centrelink of their changed circumstances or Centrelink becomes aware of
these changed circumstances. Notification of changed circumstances will not
operate retrospectively; a person can only meet the test to receive
unemployment benefits after they have notified Centrelink of their change in
circumstances.
Partnered Parenting Payment –
partial capacity
1.8
The bill includes a measure to extend access by Parenting Payment
(partnered) recipients to the pensioner education supplement. Eligibility is
restricted to those who were receiving DSP between 11 May 2005 and 30 June 2006, and who now have a partial capacity to work.
1.9
The effect of the provisions is that a former DSP recipient, who ceases
to be a recipient after June 2006 because they are deemed to have some ability
to work, may move from DSP to partnered Parenting Payment, Youth Allowance, or
Newstart, while also receiving the pensioner education supplement for the
course of study they were undertaking when they ceased to qualify for the DSP.
1.10
The amendments also provide for access for one year to the pensioner
concession card when a parenting payment recipient (either partnered or single)
with partial ability to work ceases payment due to employment income.
Child support changes
1.11
The amendments also provide that recipients of Youth Allowance (except
full-time students and new apprentices), Newstart allowance (single), mature
age allowance (single) and sickness allowance (single) will be entitled to the
dependent child maximum basic rate of child support if they have a child for
whom they are providing care for at least 14 percent of a period, where they are
legally responsible for the child.[4]
1.12
The measure is designed to ensure that the costs incurred by parents
with whom the child does not live but who provide at least 14 percent care of a
child are recognised, even where the person would not otherwise qualify as
having a dependent child. This legislative amendment therefore only extends to
people who have legal responsibility for a child or who are caring for a child
under a family law order, parenting plan or registered parenting plan, and does
not affect the definition of a dependent child in any other provision of the
Act.
Other changes
The bill also includes provides that people over 55 years of
age may meet the Parenting Payment participation requirements, or the activity
test for receiving Newstart, through a combination of paid and voluntary work
totalling at least 30 hours per fortnight. Paid work will include self-employment.
Issues
1.13
This bill would see the continuation of the two-tier mobility allowance,
following the government's decision as part of the welfare to work reforms to
pay a higher rate of allowance to pensioners working or seeking to work 15
hours or more per week. National Disability Services (NDS) argued against the
continuation of the two-tier scheme, arguing that:
[The] extension of the higher rate to a group unaffected by the
welfare-to-work changes weakened the rationale for maintaining two rates of
Mobility Allowance. The Bill that is currently before the Committee further
weakens the rationale by extending the higher rate to people in open employment
paid under the Supported Wage System. National Disability Services welcomes the
extension of the higher rate of Mobility Allowance proposed in this Bill, but
believes that continuing to maintain a lower rate for some groups is
inequitable.[5]
1.14
NDS argued that the two groups most likely to require the higher
allowance were excluded from receiving it currently, and that the bill would
offer no solution. The first is people whose disability is so severe that it
prevents potential recipients working 15 hours a week. This group includes
people with high support needs in open employment.
1.15
The second group is all people with disability employed in a Disability
Business Service, the majority of which receive DSP, but only a small
proportion of which are employed under the Supported Wage System. Even this
small number, it was submitted, would be excluded from receiving the higher
rate because they were not employed on the open employment market, even though
they were likely to earn lower wages as a result. The NDS concluded by calling
for all recipients to receive the higher rate, observing that:
Under current arrangements, the lower the employee’s income and
the more severe the disability the less likely he or she is to receive the
higher rate of Mobility Allowance. The Bill under consideration, although it
extends the higher rate to new groups, does little to rectify this anomaly.
Indeed, it makes the continuing denial of the higher rate to the remaining
group look even more anomalous. There is no sound justification for continuing
to deny access to the higher rate of Mobility Allowance to people who are most
likely to be in need of it.[6]
1.16
The Sydney University Postgraduate Representative Association (SUPRA) argued
for the inclusion of coursework and research toward the participation
requirements for receiving Parenting Payment. SUPRA argued that the bill fails
to recognise the greater financial and personal responsibilities often
experienced by postgraduate students, and that the bill should allow all
coursework and research associated with the degree to count toward
participation requirements for Parenting Payment. SUPRA observed that:
Requiring postgraduate students receiving PP to undertake 15
hours of paid work on top of their studies is already proving onerous for some
students and forcing them to choose between their studies and working to
continue receiving PP. This discourages many prospective postgraduate students
from undertaking studies, and does little to value continuing education and
research in Australia.
Conclusion
The committee notes the underlying support for the bill
expressed in the submissions it received, and that the provisions involve no
reduction in existing entitlements. Rather, the bill would see increases in
Mobility Allowance, Parenting Payment and child support payments, as well as
expanded eligibility for other benefits such as concession cards and telephone
allowances, in a variety of circumstances. The committee notes concerns raised
by National Disability Services about the exclusion of those working in a
supported environment, as opposed to a job on the open employment market, from
receiving the higher rate of Mobility Allowance. However, the committee
considers that such arrangements are consistent with the objectives of the Welfare
to Work reforms insofar as they encourage and assist people with disability to
work in the open labour market, and are justifiable on that basis.
1.17
The committee commends the bill to the Senate.
Recommendation
The committee recommends that the bill be passed.
Senator the Hon. Judith Troeth
Chairman
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