Chapter 1 - Government Senators' Report
Introduction
1.1
The Employment and Workplace Relations Legislation Amendment (Welfare to
Work and Vocational Rehabilitation Services) Bill 2006 was introduced into the House of Representatives on 7 December 2006. On the same day, the Senate referred the provisions of the bill to the
committee for inquiry and report by 20 February 2007.
Conduct of the Inquiry
1.2
Notice of the inquiry was posted on the committee's website and
advertised nationally in The Australian. The committee also
contacted a number of organisations likely to be affected by the bill, notifying
them of the inquiry and requesting submissions. The committee received ten
submissions and two supplementary submissions. A list of those who made
submissions is at Appendix 1.
1.3
The committee conducted a public hearing in Melbourne on 30 January 2007, followed by a brief hearing in Canberra on 8 February. A list of the
witnesses who gave evidence is at Appendix 2. The committee would like to thank all those who contributed
to the inquiry.
Background
1.4
When the principal Act was being considered by the Community Affairs
Committee in 2005, the Department of Employment and Workplace Relations (DEWR)
provided detailed information on the welfare dependence of people of a working
age. They stated that in September 2005, 19 per cent of working age people were
receiving an income support payment, with more people receiving the Disability
Support Pension (DSP) and Parenting Payment than any other form of income
support.[1]
1.5
The Welfare to Work legislation, which commenced on 1 July 2006, aimed to reduce this welfare dependency and increase workforce participation. It was
supported by a $3.6 billion expenditure on extra services, including employment
services and other assistance to support people to re-enter the workforce and
find a suitable job. This package
specifically included an additional $192 million over three years for
vocational rehabilitation services to ensure access for all eligible people
with new part-time activity tests or participation requirements. These services
are intended to provide a range of employment and related facilities to assist
people on income support locate and retain employment, especially those with an
injury, disability or particular health condition.[2]
Purpose of the bill
1.6
There are two key components of the bill. Firstly, it provides for
changes to the delivery of government funded vocational rehabilitation services,
allowing for the staged introduction of partial competitive tendering by 1 July 2007 by amending the Disability Services Act 1986. The amendments remove the
current requirement for individual rehabilitation programs to be approved under
that Act. It also broadens the delegation powers of the DEWR Secretary to allow
for additional providers of vocational rehabilitation services.
1.7
Second, the bill amends social security laws to ensure that measures in
the Welfare to Work legislation accord with policy intent and are internally
consistent.[3]
These amendments include:
- clarifying the definition of the transitional group of DSP recipients
and their entitlement to keep the Pensioner Education Supplement (PES) if moved
to Newstart or Youth Allowance;
- allowing for Financial Case Management debts to be deducted from
social security payments;
- reflecting changes in terminology, replacing the term 'pension
period' with 'instalment period', and removing references to the redundant
payment of rehabilitation allowances in the New Enterprise Incentive Scheme
provisions;
- making changes to the income test arrangements for the Community Development
Employment Project Scheme to reflect the new higher rates and to clarify the income
calculation process for particular members of a couple; and
- clarifying the intended treatment of indexation decisions.
1.8
In summary, the committee majority sees these amendments as improving the
Welfare to Work legislation. It notes that the amendments are the latest
measures to increase workforce participation and improve employment rates.[4]
1.9
The committee majority now turns its attention to three specific matters
of concern raised during the inquiry. These include the changes to the
provision of Vocational Rehabilitation Services, the Pensioner Education
Supplement changes and the raising of debts through the Financial Case
Management system.
Vocational rehabilitation services
1.10
At present, Commonwealth Rehabilitation Services (CRS) Australia, a
business unit of the Department of Health and Ageing, is the sole provider of
government funded Vocational Rehabilitation Services under Part III of the Disability
Services Act 1986. The bill will mean that, in selected regions, CRS
Australia will effectively become a competitor within a wider vocational
rehabilitation market. This competition should provide more choice, in some
areas, improving the range of assistance needed for people on welfare to re-enter
the workforce.[5]
Not only will competition advantage recipients of income support but as the
Minister for Workforce Participation, the Hon Dr Sharman Stone MP, has also
observed:
The competition that results will promote
innovation [by providers] and better ways to help people overcome disability
and rejoin the workforce as soon as possible.[6]
1.11
The government has decided to introduce competition in stages. The first
stage introduces partial competition for the two-year period beginning 1 July 2007. DEWR has advised the committee that it has already begun the tendering
process and aims to offer up to 20 per cent of the current fixed places (about
23,000 people each year) and up to 50 per cent of the new demand driven stream
(about 34,000 people a year) to private
rehabilitation providers.[7]
The committee majority believes that this staged introduction of competition
will achieve the best outcome for beneficiaries. The department explained:
You want to take it slowly and actually test the capacity of the
market to provide a quality service and, in future years...you go in and look at
the market again. The market changes and the demands change.[8]
1.12
Many submissions were concerned about DEWR's ability to regulate the
private market and ensure that quality services continue to be provided. The
Community and Public Sector Union (CPSU) forcefully argued that CRS Australia
is best placed to deliver quality vocational rehabilitation services as they
are bound by the Public Service Act 1999, giving people access to review
decisions before the Administrative Appeals Tribunal, as well as other
protections. Although the government commends the work that CRS Australia has
undertaken (they serviced 43,945 clients in the last financial year[9])
the committee majority does not believe that they are the only quality provider
of vocational rehabilitation services or that the Public Service Act 1999
is the only appropriate regulatory mechanism.
1.13
Other vocational rehabilitation providers include workers' compensation
authorities, motor accident compensation authorities, compulsory third party
scheme authorities and non-governmental organisations.[10]
They work in different regulatory environments including those associated with
the Occupational Health and Safety (Commonwealth Employment) Act 1991
and the Safety, Rehabilitation and Compensation Act 1988. There are also
various state-based workers’ compensation and motor accidents/transport
accidents legislation.[11]
The committee is satisfied that there are other standards and regulations
outside of the Public Service Act 1999 which could ensure quality of
service.
1.14
Furthermore, the committee was provided with a copy of the draft
contract and the request for tender document compiled by DEWR.[12]
The contract outlines a service guarantee, code of practice, performance review
and star ratings systems which are continually monitored by DEWR, ensuring “that
those that can deliver the services at the high standard are the ones that are
supporting the people that need the assistance.”[13]
In the case of non-compliance, the contract outlines penalties, including whole
or partial termination of the contract, suspension of referrals of clients to
providers and reduction in, or suspension of, allocated business.[14] The committee majority
is satisfied that the draft contract would provide a comprehensive monitoring
and compliance regime resulting in a comparable or better quality of service.
1.15
The committee also notes that the Australian Federation of Disability Organisations
(AFDO) and the National Welfare Rights Network, supported by the Physical
Disability Council of Australia, raised important concerns about a number of cases
where Job Capacity Assessment providers operated from sites which were not
accessible for people with disabilities who were required to attend an
assessment.[15]
While these are legitimate concerns, these were contracts administered by the
Department of Human Services. The committee majority regards the DEWR contractual
requirement of compliance with the Disability Services Standards, as
recommended by AFDO,[16]
as a satisfactory measure to avoid the occurrence of similar incidents.
1.16
The Mental Health Coordinating Council (MHCC) and the Mental
Health Council of Australia (MHCA) raised specific concerns about the adequacy
of rehabilitation services for people with mental health problems, citing a
concern over the possible lack of tenders from specialist services.[17] The MHCC supports the
amendments in principle providing there is guaranteed access to mental health
specialist vocational rehabilitation services.[18]
The committee was assured by DEWR that there is an incentive payment structure within
the tender arrangements, which allows for an intermittent support fee of an
additional $605 specifically for supporting a job seeker with an assessed
mental health condition.[19] In light of this advice the
committee takes the view that the legislation addresses this concern.
1.17
Some submissions also raised concerns about the right to review
the assessment of needs made by the private vocational rehabilitation provider.
As CRS Australia is a government authority, people currently have the right to
appeal a decision to the Administrative Appeals Tribunal. The committee put
this question to DEWR and was assured that people will still have clear access
to complaints procedures. This could initially be by addressing the issue with
the organisation concerned and if their issues are not resolved they will be
able to contact the Complaints Resolution and Referral Service (CRRS), an
independent body responsible for resolving complaints.[20]
1.18
Finally, there was a technical concern raised with the committee
regarding item 17 of the bill, which was revisited at the supplementary
hearing. The amendment provides for a limited time override of subsection 5(2),
(3) and (4) of the Disabilities Services Act 1986 between Royal
Assent of the Act and 1 July 2007. Currently,
section 5 requires any guidelines to be tabled in parliament, followed by 15
sitting days, before they will take effect. The explanatory memorandum stated
that the guidelines would still be subject to the Legislative
Instruments Act 2003 and thus subject to disallowance by parliament.
The committee sought an assurance from DEWR that the guidelines would remain
subject to disallowance under the Legislative Instruments Act 2003. DEWR
advised that it had sought advice from the Office of Parliamentary Counsel
during the drafting of the bill and was certain that the Act would apply and
the guidelines would be subject to disallowance by parliament.[21]
Pensioner Education Supplement
1.19
A number of submissions, and several witnesses who gave evidence, indicated
strong concern about the proposed amendments to the Pensioner Education
Supplement (PES), a weekly allowance of $31.20 to assist people with the costs
of study while on the DSP. The National Welfare Rights Network (NWRN) submitted
that the government is seeking to disadvantage allowance recipients in
contradiction to a prior commitment to assist people with disabilities to
complete their studies.[22]
Catholic Social Services Australia (CSSA) argued that the amendments illustrate
the government's desire to make negligible financial savings at the expense of
increased productivity and other long-term social benefits.[23]
1.20
The committee majority considers the concerns in regard to the PES to be
overstated, and based on a misunderstanding of the intent of the government. This
amendment is not about financial savings, as the number of people potentially
affected is nominal, and DEWR advised that there are no savings expected from
the amendment to the legislation.[24]
Neither is this amendment intended to persecute people with disabilities. The Welfare
to Work package specifically provided protections for people with disabilities in
the transitional group (about 20,000 to 25,000 people)[25]
and the PES remains a valuable support for those eligible for the DSP.
1.21
The committee majority accepts that the legislation does not contain a
sufficient definition of the transitional group and the circumstances under which
the protections would apply. The initial intention of the government was to encompass
only those people who qualified for the DSP between 11 May 2005 and 30 June 2006 and who were transferred to Youth Allowance or Newstart Allowance after their
first review. If after that first review they remain
on the DSP, the amendment aims to clarify that at future reviews they will be
considered an ordinary DSP recipient, in line with policy intent.
1.22
The committee majority commends the government's ongoing commitment to
supporting people to undertake study in preparation for work and welcomes the
protection granted to the transitional group of DSP recipients.
Financial Case Management
1.23
Submissions sent to the committee make it clear that there is
considerable concern about the amendment to enable deductions to be made from
income support payments to repay debts raised through financial case
management. Opposition to this amendment by the welfare agencies appears to be
based on a general dislike of the financial case management system, rather than
opposition to the amendment which deals with the method for recovering the debt.
1.24
The Australian Council of Social Services (ACOSS), supported by AFDO,[26]
acknowledges the need for Centrelink to recover overpayments of income support,
provided the legislation also defines circumstances in which debts could be
raised.[27]
However, CSSA would prefer any overpayments made under this system to be deemed
unrecoverable and seen as "an additional cost of an imperfect compliance
system."[28]
The NWRN also expressed the view that payments should
not be recoverable by deductions from social security payments, with their main
concern being the lack of a statutory right of
appeal.[29]
1.25
The committee sought information from DEWR regarding the financial case
management payment process, as there was some uncertainty over whether these
payments could be mistaken for charity. DEWR provided the committee with the
forms given to a job seeker under the program, one an initial registration form
and the other an expense lodgement form signed before each payment is made.
Both forms clearly state the conditions under which payments are made,
acknowledging that any incorrect payments made on a job seeker’s behalf will
have to be repaid to Centrelink.[30]
The committee majority is of the view that these payments are clearly not
gratuities and that the recipient should be well aware of the obligations and
the possibility of a debt being raised.
1.26
It should also be noted that debts incurred under the financial case
management system can already be recovered under statute or common law, or
according to legal principles of equity.[31]
It is not currently possible for the debt to be recovered through the process
of fortnightly income support payment deductions, a well established mechanism
used for other government welfare programs. This amendment intends only to modify
the means of debt recovery, making it is easier and simpler for all concerned,
and does not seek the right to raise or recover debts. It is also important to
note that of the 247 job seekers who have taken up an offer of case management,
none have so far incurred a debt.[32]
Conclusions and recommendation
1.27
A key objective of the government is to maximise the ability of people
to find work, particularly those who face the most severe barriers to work, and
to reducing welfare dependency.
1.28
In considering the evidence to this inquiry, the committee concludes
that the provisions of the bill are consistent with the intent of the existing Welfare
to Work package. Amendments to the provision of vocational rehabilitation
services will pave the way for increased choice as well as encouraging
innovation in the provision of services.
Recommendation
The committee majority recommends that the bill be passed without
amendment
Senator the Hon Judith Troeth
Chairman
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