SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT (WELFARE PAYMENT REFORM) BILL 2007 Explanatory Memorandum
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT (WELFARE PAYMENT REFORM) BILL 2007
2004-2005-2006-2007
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT
(WELFARE PAYMENT REFORM) BILL 2007
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families, Community Services and Indigenous Affairs,
the Hon Mal Brough MP)
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT
(WELFARE PAYMENT REFORM) BILL 2007
OUTLINE
The bill will amend Commonwealth welfare legislation to provide new national
welfare measures to help address child neglect and encourage school
attendance.
Income management regime
The bill establishes a national income management regime that applies to a
person in receipt of welfare payments, whose child is at risk of neglect, is not
enrolled at school, or fails to attend school adequately. The part of the
affected person's payment that is subject to income management will,
generally, be used to pay the priority needs of that person, their partner and
their children. The bill also establishes an income management regime that
applies in respect of people on certain welfare payments in the Northern
Territory, as part of the Commonwealth's Northern Territory national
emergency response, and in Cape York. There will be no overall reduction in
payments as a result of these measures
Baby bonus
Baby bonus will be paid in 13 fortnightly instalments to claimants who are
subject to the income management regime.
Northern Territory CDEP transitional payment
Beginning in September 2007, the Community Development Employment
Projects (CDEP) program in the Northern Territory will progressively be
replaced with other employment services. CDEP participants, on a
community by community basis, will move into real jobs, training or to more
appropriate income support including Work for the Dole. These legislative
amendments are broadly designed to assist CDEP participants who move
onto income support by establishing a Northern Territory CDEP transition
payment. The payment will make up the difference between average
earnings from CDEP scheme payments and income support payments at
23 July 2007 (being the date of announcement of the CDEP changes by the
Minister for Families, Community Services and Indigenous Affairs, and the
Minister for Employment and Workplace Relations) and the payments made
under income support arrangements after the changes to CDEP.
Financial impact statement
Total resourcing for the measures in the bill for 2007-08 is $71.6 m.
SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT
(WELFARE PAYMENT REFORM) BILL 2007
NOTES ON CLAUSES
Clause 1 sets out how the Act is to be cited, that is, the Social Security and
Other Legislation Amendment (Welfare Payment Reform) Act 2007.
Clause 2 provides that the Act commences on the day after it receives the
Royal Assent.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule.
This explanatory memorandum uses the following abbreviations:
· `Social Security Act' means the Social Security Act 1991;
· `Social Security Administration Act' means the Social Security
(Administration) Act 1999;
· `Family Assistance Act' means the A New Tax System (Family
Assistance) Act 1999;
· `Family Assistance Administration Act' means the A New Tax System
(Family Assistance) (Administration) Act 1999; and
· `Veterans' Entitlements Act' means the Veterans' Entitlements
Act 1986.
Clause 4 ensures that new Part 3B of the Social Security Administration Act,
and all actions and omissions in anyway related to it or the income
management regime, are deemed to be special measures and are also
excluded from the operation of Part II of the Racial Discrimination Act 1975 in
relation to the people specified in paragraphs 4(1)(c), (d) and (e).
Clause 4 provides that, where new Part 3B of the Social Security
Administration Act applies in respect of a person on the basis of
section 123UF (Queensland Commission) or applies, or potentially applies, in
respect of a person on the basis of:
· new section 123UD or 123UE (school enrolment and attendance), but
only where the person is in the Northern Territory; or
· new section 123UB (relevant Northern Territory Area);
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then any acts or omissions done under, or for the purposes of, the operation
of Part 3B, or the income management regime, in respect of that person is
deemed to be a special measure for the purposes of the Racial Discrimination
Act 1975 and is also excluded from the operation of Part II of that Act. Part II
of the Racial Discrimination Act 1975 includes sub-sections 9(1) and (1A) and
section 10. Subclause 4(3) overlaps with subclause 4(2).
Subclauses 4(4) and 4(5) provide that any provisions of any laws made, or
acts or omissions done, by Queensland in establishing or operating the
Queensland Commission or any act of omission of the Queensland
Commission in giving a notice or a direction under the Social Security
Administration Act, relating to Part 3B, is deemed to be a special measure for
the purposes of the Racial Discrimination Act 1975 and also excluded from
the operation of Part II of the Racial Discrimination Act 1975. Subclause 4(5)
overlaps with subclause 4(4).
Clauses 4 and 5 of the bill relate to the Northern Territory national emergency
response and the Queensland Commission welfare reforms announced by the
government. The provisions of the bill that relate to the Northern Territory
national emergency response and the Queensland Commission recognise the
importance of Australia's obligations under international law:
· The Convention on the Rights of the Child requires Australia to protect
children from abuse and exploitation and ensure their survival and
development and that they benefit from social security. The
International Convention for the Elimination of All Forms of Racial
Discrimination requires Australia to ensure that people of all races are
protected from discrimination and equally enjoy their human rights and
fundamental freedoms.
· Preventing discrimination and ensuring equal treatment does not mean
treating all people the same. Different treatment based on reasonable
and objective criteria and directed towards achieving a purpose
legitimate under international human rights law is not race
discrimination. In fact, the right not to be discriminated against is
violated when governments, without objective and reasonable
justification, fail to treat differently people whose situations are
significantly different.
The impact of sexual abuse on Indigenous children, families and communities
is a most serious issue requiring decisive and prompt action. The Northern
Territory national emergency response will protect children and implement
Australia's obligations under human rights treaties. In doing so, it will take
important steps to advance the human rights of the Indigenous peoples in
communities suffering the crisis of community dysfunction.
In the case of Indigenous people in the Northern Territory, there are
significant social and economic barriers to the enjoyment of their rights to
health, development, education, property, social security and culture.
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The provisions of this bill that relate to the Northern Territory national
emergency response and the Queensland Commission reforms are the basis
of action to improve the ability of Indigenous peoples to enjoy these rights and
freedoms. This cannot be achieved without implementing measures that do
no apply in other parts of Australia. The bill will provide the foundation for
rebuilding social and economic structures and give meaningful content to
Indigenous rights and freedoms. In a crisis such as in the Northern Territory,
the Northern Territory measures in the bill are necessary to ensure that there
is real improvement before it is too late for many of the children.
Clause 5 provides that, where a person is subject to, or potentially subject to,
the income management regime under Part 3B of the Social Security
Administration Act on the basis of section 123UD or 123UE, but only where
the person is in the Northern Territory (school enrolment and attendance),
section 123UB (relevant Northern Territory Area) or section 123UF
(Queensland Commission), then the provisions of Part 3B, or any acts or
omissions done under Part 3B, or for the purposes of the income
management regime, will apply to the exclusion of, or have effect despite, any
discrimination laws of Queensland or the Northern Territory, unless provided
otherwise by the Minister in a legislative instrument.
In response to the national emergency in the Northern Territory, the
government decided to amend the procedures and guidelines relating to Work
for the Dole, with the objective of cleaning up those communities in the
Northern Territory subject to the Northern Territory national emergency
response.
Work for the Dole is an `approved program of work for income support' for the
purposes of the social security law.
The procedures and guidelines enable providers of Australian Government
employment services (PAGES) to place job seekers in the affected
communities in Work for the Dole activities promptly and until they no longer
receive income support payments, they are no longer eligible to be referred to
Work for the Dole, or they are referred to another activity by PAGES that will
lead them to gaining employment.
The purpose of clauses 6 and 7 is to ensure that actions taken by PAGES
and others in pursuance of these Work for the Dole measures are not
rendered unlawful by the Racial Discrimination Act 1975 or Northern Territory
anti-discrimination legislation. Implementation of these guidelines is also a
special measure for the purposes of the Racial Discrimination Act 1975.
Actions taken to implement the Work for the Dole measures commenced on
9 July 2007. As the measures are only intended to operate for the duration of
the Northern Territory national emergency response, these provisions will
cease to operate five years after the commencement of section 1 of what will
become the Northern Territory National Emergency Response Act 2007.
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Schedule 1 - Income management regime
Summary
This schedule establishes a national income management regime that applies
to a person in receipt of welfare payments, whose child is at risk of neglect, is
not enrolled at school, or fails to attend school adequately. The part of the
affected person's payment that is subject to income management will,
generally, be used to pay the priority needs of that person, their partner and
their children. The schedule also establishes an income management regime
that applies in respect of people on certain welfare payments in the Northern
Territory, as part of the Commonwealth's Northern Territory National
Emergency Response, and in Cape York. There will be no overall reduction
in payments as a result of these measures
Background
Children at risk of neglect
This measure is designed to target children at risk of neglect and ensure that,
where parents are not meeting these responsibilities to their children, action
can be taken to ensure that welfare payments are directed to their intended
purpose so children receive shelter, food and clothing. Although child
protection is a responsibility of the States and Territories, these amendments
will provide a Commonwealth mechanism to help ensure that parents provide
appropriate care for their children, and that the welfare income of these
parents is managed so the needs of the children are met.
National child school enrolment and attendance
This proposal requires parents on income support to ensure their children are
enrolled at, and regularly attend, school. The measure provides for income
management arrangements to apply for parents who fail to ensure the
enrolment, or sufficient school attendance, of their children. These changes
are designed to complement State responsibilities.
In couples where both parents receive income support, it is intended that both
parents' income support and family payments would be subject to income
management if this requirement is not met. In couples where one parent
receives income support, the total family payments of the couple could also
potentially become subject to income management, regardless of which
parent actually receives the payment.
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In more complex family circumstances where care for a child may be shared
between natural parents, step-parents and/or other carers (such as
grandparents), it is intended that all adults who have a recognised level of
responsibility for the care of the child are held to this in relation to getting the
child to school. Measures introduced as part of the child support reforms
provide existing benchmarks for what could constitute a level of responsibility
which merits recognition by means of a higher rate of income support
payment to people in certain circumstances. Adults with at least 14 per cent
care of a child may be subject to income management. However, Centrelink
is given some discretion to exclude parents on a case by case basis from
income management where the parent has lower levels of shared care of a
child (for example, in the bandwidth of 14 to 34 per cent care) especially
where a parent has care of a child primarily on the weekends.
Northern Territory
On 21 June 2007, the Australian Government announced a number of
measures in response to the national emergency confronting the welfare of
Aboriginal children in the Northern Territory.
This measure has two primary aims:
a) to stem the flow of cash that is expended on substance abuse and
gambling; and
b) to ensure funds that are provided for the welfare of children are
actually expended in this way.
Cape York
This measure establishes the Cape York Welfare Reform trials. The trials will
initially run in four communities: Hope Vale, Coen, Aurukun and Mossman
Gorge. These trials aim to rebuild social norms in these communities by
linking the receipt of welfare payments to fulfilment of socially responsible
behaviours. These behaviours focus in particular on the wellbeing and
education of children and seek to respond to concerns about truancy and
child neglect.
The legislation envisages a statutory body, created under Queensland State
legislation, which the Minister can authorise to make decisions affecting the
payment of welfare entitlements to residents in the trial communities. The
Commission will be responsible, on a case by case basis, for deciding
whether a person has breached their obligations and then whether their
welfare payments should be subject to income management. The
Commission will also decide the proportion of the person's welfare payments
which will be subject to income management and the purposes for which that
income will be directed. This income could be directed towards meeting
priority needs or savings or to another responsible adult.
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Explanation of the changes
Inalienability
Section 66 of the Family Assistance Administration Act provides that family
assistance payments are inalienable, subject to specified exceptions (such as
section 84, which is about deductions from a person's family tax benefit to
repay a debt of the person). Item 1 inserts a new exception at the end of
subsection 66(2), which ensures that the inalienability principle is subject to
the new income management regime in Part 3B of the Social Security
Administration Act.
Social security payments are inalienable under section 60 of the Social
Security Administration Act, while section 1061EK of the Social Security Act
provides for the inalienability of advance payments.
These provisions are amended by items 4 and 3 respectively to ensure that
the inalienability principle is subject to the new income management regime in
Part 3B of the Social Security Administration Act.
Section 125 of the Veterans' Entitlements Act provides that a pension,
allowance or other pecuniary benefit under that Act is inalienable. Item 22
inserts an exception into this provision to take account of the new income
management regime provided for in Part 3B of the Social Security
Administration Act.
Nominee provisions
Section 219TE of the Family Assistance Administration Act enables the
Secretary to cancel the appointment of a nominee in prescribed
circumstances. Item 2 inserts a new subsection 219TE(1A) that requires the
appointment of a payment nominee to be cancelled by the Secretary if the
nominee becomes subject to the income management regime under new
section 123UC (child protection).
Section 123E of the Social Security Administration Act is the equivalent social
security provision relating to the revocation of nominee arrangements.
Item 16 makes the same amendment to this provision.
Notification obligations
Sections 67 and 68 of the Social Security Administration Act enable the
Secretary to require claimants and recipients of social security payments to
inform the Department of specified events or changes in circumstances and/or
to give the Department a statement about a matter that might affect payment.
6
Items 5 to 10 amend these provisions to ensure that the Secretary can
require a person to notify of an event or change in circumstances, or give a
statement to the Department about a matter, that might affect the operation,
or prospective operation, of the new income management regime in Part 3B
of the Social Security Administration Act in relation to the person.
Item 11 inserts new section 70A into the Social Security Administration Act,
which allows the Secretary to give a person subject to, or likely to become
subject to, the income management regime a notice requiring him or her to
notify of a change, or potential change, of circumstances or to give a
statement about a matter that could impact on the way that Part 3B has effect
in relation to the person.
Item 12 inserts new paragraphs 72(3)(e) and (f) into the Social Security
Administration Act, which provide that, if a person has been given a notice to
inform the Department of a change of circumstances, in accordance with new
section 70A, then, if a change of circumstances does occur, the person must
notify the Department of the change within 14 days. Additionally, if the
Secretary has given a person a notice requiring them to give a statement in
relation to a matter that may affect the operation of Part 3B in respect of the
person, the person must provide that statement within 14 days.
Items 13, 14 and 15 make minor consequential changes to sections 72 and
74 of the Social Security Administration Act to take account of the new
section 70A.
Item 16 is described above.
Part 3B - Income management regime
Division 1 - Introduction
Item 17 inserts new `Part 3B - Income management regime' into the Social
Security Administration Act. An outline of new Part 3B is provided in new
section 123TA.
The objects of Part 3B are set out in new section 123TB. The objects are to
promote socially responsible behaviour, particularly in relation to the care and
education of children, and to set aside some or all of a recipient's welfare
payments and ensure they are directed to the priority needs of the recipient,
their partner, their children and any other dependants. The concept of
priority needs is defined in new section 123TH.
New section 123TC sets out the definitions for terms and concepts used in
Part 3B.
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A person who is subject to the income management regime will have a
notional income management account within the Special Account (defined to
mean the Income Management Special Account established by new
section 123VA). An income management account is defined as a notional
account kept in accordance with new section 123WA. By definition, an
account statement will set out the amounts credited and debited from a
person's income management account in a particular period and the balance
of the account at the end of that period. Accounts statements are provided for
in new sections 123WG, 123WH and 123WI. Under new section 123WI, if an
income management account is kept in the name of a person, the Secretary is
required to give the person a written account statement for the income
management account at least once each quarter. Quarter is defined as a
period of three months beginning on 1 January, 1 April, 1 July or 1 October.
The terms acquire, goods, service and supply have the same meaning as
in the Trade Practices Act 1974.
An alcoholic beverage means a beverage that contains more than 0.1% by
volume of alcohol. An alcoholic beverage is listed as one of the excluded
goods that are not priority needs (new section 123TI refers). A non-alcoholic
beverage, which can be a priority need, is defined to mean a beverage other
than an alcoholic beverage.
There are a number of situations in which a person can be subject to the
income management regime (relevant Northern Territory area) under new
section 123UB.
A person is subject to the income management regime under new
subsection 123UB(1) if, among other things, the person or the person's
partner is an eligible recipient of a category A welfare payment. A category A
welfare payment is defined as a social security benefit or a social security
pension (each of which is defined in subsection 23(1) of the Social Security
Act) or ABSTUDY living allowance.
The concept of eligible recipient is defined in new section 123TK by
reference to the earliest day for which the payment can be made (the start
day for social security payments and provisional commencement day for
veterans' payments) to the date of cancellation of the payment.
If a person is subject to the income management regime under new
subsection 123UB(1), then:
· 50 per cent of the net amount of those payments listed in the definition
of category B welfare payment that are payable to the person are
subject to income management; and
· 100 per cent of the net amount of those payments listed in the
definition of category C welfare payment that are payable to the
person are subject to income management.
8
The situation is similar for a person who is subject to the income management
regime under new subsection 123UB(3) because the person has a payment
nominee who is subject to the income management regime under new
subsection 123UB(1) or (2).
One of the payments covered under category C welfare payment is arrears of
family tax benefit by instalment. To clarify, this description would include
top-up payments of family tax benefit owed to a person as a result of the
reconciliation process which occurs at the end of the relevant income year
and any arrears of instalments owed to a person due to a successful review or
a change in the person's circumstances.
The term net amount is defined to mean so much of an instalment or
payment that remains after specified deductions are made or set offs occur.
An example is where deductions are made from a person's fortnightly
instalments to repay a debt owed by the person (section 1231 of the Social
Security Act and section 84 of the Family Assistance Administration Act
refers). These deductions would continue in the case of a debtor who is
subject to the income management regime and would not be taken into
account in working out the amount of the welfare payment that is subject to
income management.
A person is subject to the income management regime under new
subsection 123UB(2) if, among other things, neither the person, nor the
person's partner, is an eligible recipient of a category A welfare payment but
the person or the person's partner is an eligible recipient of a category D
welfare payment and the person or the person's partner is entitled to be paid
family tax benefit. A category D welfare payment is defined as a service
pension, income support supplement or Defence Force Income Support
Allowance (as defined in subsection 23(1) of the Social Security Act).
If a person is subject to the income management regime under new
subsection 123UB(2), then:
· 50 per cent of the net amount of those payments listed in the definition
of category F welfare payment that are payable to the person are
subject to income management; and
· 100 per cent of the net amount of those payments listed in the
definition of category G welfare payment that are payable to the
person are subject to income management.
9
New section 123UC sets out the conditions in which a person is subject to the
income management regime (child protection). New sections 123UD
and 123UE outline the conditions that trigger income management in
situations involving school enrolment and school attendance. One of the
relevant conditions in each of these provisions is that the person or the
person's partner is an eligible recipient of a category H welfare payment. A
category H welfare payment is defined as a social security benefit, a social
security pension, ABSTUDY living allowance, a service pension, income
support supplement or Defence Force Income Support Allowance.
If a person is subject to income management under any of these provisions,
then the deductible portion of the net amount of the payments listed in the
definition of category I welfare payment that are payable to the person are
subject to income management. The deductible portion in this context is
100 per cent or a lower percentage specified by the Minister (see, for
example, new section 123XI).
The situation is similar for a person who is subject to the income management
regime under new subsection 123UD(4) or 123UE(4) because the person has
a payment nominee who is subject to the income management regime under
new subsection 123UD(1) or 123UE(1) respectively.
Together with a notice from the Queensland Commission, there are certain
welfare payment types the receipt of which will subject a person to the income
management regime (Queensland Commission) under new section 123UF.
A person is subject to the income management regime under new
subsection 123UF(1) if, among other things, the person or the person's
partner, is an eligible recipient of a category P welfare payment. A
category P welfare payment is defined as a social security benefit or a
social security pension (other than age pension and carer payment) or
ABSTUDY living allowance.
If a person is subject to the income management regime under new
subsection 123UF(1), then the deductible portion of the net amount of the
payments listed in the definition of category Q welfare payment that are
payable to the person are subject to income management. The deductible
portion in this context is the percentage determined by the Secretary (see, for
example, new section 123XM) on direction from the Queensland Commission
(see section 123ZK).
The situation is similar for a person who is subject to the income management
regime under new subsection 123UF(3) because the person has a payment
nominee who is subject to the income management regime under new
subsection 123UF(1) or (2).
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A person is subject to the income management regime under new
subsection 123UF(2) if, among other things, neither the person nor the
person's partner is an eligible recipient of a category P welfare payment but
the person or the person's partner is an eligible recipient of a category R
welfare payment. A category R welfare payment is defined as an age
pension, carer payment, a service pension, income support supplement or
Defence Force Income Support Allowance.
If a person is subject to the income management regime under new
subsection 123UF(2), then the deductible portion of the net amount of the
payments listed in the definition of category S welfare payment that are
payable to the person are subject to income management. The deductible
portion in this context is the percentage determined by the Secretary (see, for
example, new section 123XO) on direction from the Queensland Commission
(see section 123ZK).
Centrelink means the Commonwealth Services Delivery Agency.
The term child is defined as a dependent child, FTB child or regular care child
(a concept that exists on and after 1 July 2008) of the person. An example of
where this definition is relevant is in the context of debiting a person's income
management account to meet the priority needs of, among others, the
person's children. The definition does not apply to the definition of child
protection officer, Division 2, new subsection 123ZE(2) or new
section 123ZEB.
A child protection officer is defined to mean an officer or employee of a
State or Territory with responsibility relating to the care, protection or welfare
of children. The definition is relevant for the provisions relating to income
management in the child protection context. For example, one of the
requirements under new section 123UC is for a child protection officer of a
State or Territory to have given the Secretary written notice requiring that a
particular person be subject to income management.
A declared child protection State or Territory is defined by reference to
new section 123TF, which enables the Minister, by legislative instrument, to
determine that a specified State or Territory is a declared child protection
State or Territory. That a State or Territory is a declared child protection State
or Territory is a condition of income management under section 123UC.
The terms declared primary school area and declared secondary school
area are defined by reference to new section 123TG. Under this provision,
the Minister may determine in writing that a specified State, Territory or area
meets the definition. The terms are used in new section 123UD and 123UE.
The terms family law order, parenting plan and registered parenting plan
are defined. These terms are relevant for the purposes of the definition of
eligible care child in new section 123UH which, in turn, is relevant for the
income management provisions relating to school enrolment and school
attendance (see, for example, subsection 123UE(1)).
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The related concepts of declared relevant Northern Territory area and
relevant Northern Territory area are defined. A person is subject to the
income management regime (relevant Northern Territory area) if, among other
things, the person was physically present overnight in a relevant Northern
Territory area at any time during a prescribed period and, at the test time, the
relevant Northern Territory area is a declared relevant Northern Territory area.
A relevant Northern Territory area is each prescribed area within the
meaning of what will become the Northern Territory National Emergency
Response Act 2007, and the place known as Finke or Aputula as well as the
place known as Kalkarindji or Wave Hill. The definition is in new
section 123TD.
Under new section 123TE, the Minister may, by writing, determine that a
specified relevant Northern Territory area is a declared relevant Northern
Territory area. The declaration lasts for a period specified by the Minister, up
to 12 months. However, new subsections 123TE (7) and (10) enable the
Minister to extend a declaration by up to 12 months or revoke an existing
declaration respectively.
In deciding whether to determine a specific relevant Northern Territory area as
a declared relevant Northern Territory area, the Minister must have regard to
the matters set out in new subsection 123TE(5). For example, the Minister
must have regard to the opportunities that have been made available to
people in the area to discuss with employees or officers of the Commonwealth
the proposal to make the area a declared relevant Northern Territory area and
the consequences of making the determination. However, a contravention of
subsection 123TE(5) does not invalidate the declaration of the area. New
subsection 123TE(12) provides that a court must not make an interlocutory
order which suspends the operation of a decision made under this section
unless there are exceptional circumstances.
Subsections 123TE(13) and (14) exempt instruments made under
subsections 123TE(1), (7) and (10) from the disallowance provisions of the
Legislative Instruments Act 2003. The roll-out of the income management
regime and the continued capacity to target communities for whom income
management should apply is a matter of significant government policy as it is
designed to restore order and social norms. It is important that there is
certainty in relation to the making of these welfare payments, to enable the
Minister to take action urgently. Disallowance would create uncertainty in the
administration of the income management regime so that it would be unclear
which Northern Territory areas are being targeted and whose welfare
payments are being affected.
Also related is the definition of exempt Northern Territory person. This
term is defined in new section 123UG and explained further in the context in
which it appears (Division 2).
12
A designated nominee is defined as a payment nominee or a person to
whom instalments of youth allowance are paid on behalf of the young person
(generally, their parent). This concept is relevant for the purposes of
Division 6, which deals with debits from a person's income management
account.
An excluded payment nominee is defined as the Public Trustee of a State or
Territory or a payment nominee who is not subject to the income management
regime.
The related term payment nominee is defined as a person who, by virtue of
an appointment in force under section 123B of the Social Security
Administration Act or under section 219TB of the Family Assistance
Administration Act, is a payment nominee. A payment nominee is also a
person to whom payment of another person's service pension is made by
virtue of an approval under section 58D of the Veterans' Entitlements Act or
an appointment under section 202 of the Veterans' Entitlements Act.
The terms applicable school period, eligible care period, eligible care
child and unsatisfactory school attendance situation are relevant to the
income management regime relating to school enrolment and school
attendance and have their substantive definitions in Division 2 (in new
sections 123UH to 123UK). These terms are explained further in the context
in which they appear.
The terms excluded goods and excluded service are defined as having the
meaning in new section 123TI.
Excluded goods are:
· alcoholic beverages (defined as beverages containing more than
0.1% by volume of ethyl alcohol);
· tobacco products (defined as having the same meaning as in the
Tobacco Advertising Prohibition Act 1992);
· pornographic material (defined in new section 123TJ by reference to
classification as used in the Classification (Publications, Films and
Computer Games) Act 1995); and
· goods specified in a legislative instrument made by the Minister.
Excluded services are gambling (defined as a service provided to a person in
the capacity of a customer of a gambling service within the meaning of the
Interactive Gambling Act 2001) and a service specified in a legislative
instrument made by the Minister.
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The term priority needs is defined by reference to new section 123TH. This
provision contains a list of items that are considered to be a person's priority
needs. Amounts are debited from a person's income management account to
meet priority needs.
Priority needs include food, beverages, clothing, basic household items,
housing, household utilities, health, child care and development, education
and training, and other specified items. The Minister may specify other things
as priority needs in a legislative instrument.
Excluded goods and excluded services are not priority needs.
Finance Minister has the same meaning as in the Financial Management
and Accountability Act 1997.
The term income tax law has the same meaning as in the Income Tax
Assessment Act 1997.
Queensland Commission is defined as a body or agency established by a
law of Queensland that is specified in a legislative instrument made by the
Minister for the purposes of the definition. The definition is relevant for the
purposes of the income management regime relating to the Queensland
Commission. Under new section 123UF, a person is subject to the income
management regime (Queensland Commission) if, among other things, the
Queensland Commission has given the Secretary a notice requiring the
person to be subject to the income management regime.
A bereavement payment under the Social Security Act may be available
where a recipient of a social security payment dies or where a child or partner
of a recipient dies. There are rules relating to bereavement payments at the
end of each of the relevant payment Parts in Chapter 2 of the Social Security
Act. In many cases, qualification for the primary payment continues for a
bereavement period, in which case payments received during the
bereavement period continue to be the primary payment. An example of this
type of provision is section 235 of the Social Security Act (carer payment). In
other cases, a person can qualify for a payment under the relevant
subdivision to cover the bereavement period. The definition of social
security bereavement payment lists the provisions that come within the
latter category.
The definition of veterans' entitlements bereavement payment covers a
similar category of bereavement payments under the Veterans' Entitlements
Act, related to service pension and income support supplement.
A social security bereavement payment and a veterans' entitlements
bereavement payment can be subject to income management in certain
circumstances (for example, as a category I welfare payment).
14
A person who is subject to the income management regime can be given a
stored value card that enables the person to acquire goods or services. A
stored value card is defined to include a portable device that is capable of
storing monetary value in a form other than cash, and of a kind specified in a
legislative instrument made by the Minister.
The concept of being subject to the income management regime has the
meaning given by new section 123UB, 123UC, 123UD, 123UE or 123UF.
The situations in which a person is subject to the income management regime
are set out in Subdivision A of Division 2.
Division 2 - Persons subject to the income management regime
New section 123UA provides that new Subdivision A of Division 2 of Part 3B
sets out the various situations in which a person is subject to the income
management regime. There are five general situations in which this can
occur. These situations are set out in new sections 123UB, 123UC, 123UD,
123UE and 123UF.
New section 123UB deals with the situation where a person is subject to the
income management regime because they are in a relevant Northern Territory
area (see section 123TD). This provision enables the income management
regime to apply to certain persons in any area declared by the Minister to be a
declared relevant Northern Territory area (see section 123TE). Many of the
people affected by this measure will be Indigenous people. New
section 123UB will enable the income management regime to apply without
delay in Indigenous communities where child abuse and neglect is occurring
and where parents are not ensuring that welfare payments are providing
appropriately for the care of their children. This provision will apply as a
short-term measure to enable these issues to be addressed as soon as
possible in the Northern Territory, because of the particular problems
experienced in Northern Territory Indigenous communities. It is intended that
other elements of the income management scheme will, as soon as they
become operational, operate alongside of, and gradually replace, the
Northern Territory scheme under section 123UB. This provision is subject to
the five year limitation period which applies to other parts of the Northern
Territory emergency response legislation.
New subsection 123UB(1) deals with the situation where receipt of a
category A welfare payment leads to a person being subject to the income
management regime. It provides that a person is subject to the income
management regime at the test time if:
(a) the person or their partner is an eligible recipient (see section 123TK)
of a category A welfare payment (see section 123TC);
(b) the person was physically present in a relevant Northern Territory area
at any time from 21 June 2007 to the end of the most recent instalment
period relating to that payment or payments;
15
(c) at the test time, the area is a declared relevant Northern Territory area
(see section 123TE);
(d) at the test time, the person is not an exempt Northern Territory person
(see section 123UG);
(e) if, at the test time, the person had a payment nominee - the payment
nominee is not an excluded payment nominee (see section 123TC);
(f) at the test time, the person is not subject to the income regime under
section 123UC, 123UD, 123UE or 123UF; and
(g) the test time occurs within five years of the commencement of this
section.
New subsection 123UB(2) deals with the situation where entitlement to family
tax benefit (FTB) in combination with receipt of a category D welfare payment
leads to a person being subject to the income management regime. It
provides that a person is subject to the income management regime at the
test time if:
(a) neither the person nor their partner is an eligible recipient (see section
123TK) of a category A payment (see section 123TC);
(b) the person or their partner is an eligible recipient of a category D
welfare payment;
(c) the person or their partner is entitled to be paid FTB;
(d) the person was physically present in a relevant Northern Territory area
at any time from 21 June 2007 to the end of the most recent instalment
period relating to the category D welfare payment or payments;
(e) at the test time, the area is a declared relevant Northern Territory area
(see section 123TE);
(f) at the test time, the person is not an exempt Northern Territory person
(see section 123UG);
(g) if, at the test time, the person had a payment nominee - the payment
nominee is not an excluded payment nominee (see section 123TC);
(h) at the test time, the person is not subject to the income regime under
section 123UC, 123UD, 123UE or 123UF; and
(i) the test time occurs within 5 years of the commencement of this
section.
New subsection 123UB(3) provides that, for the purposes of Part 3B, a person
is subject to the income management regime at the test time if, at that time:
16
(a) the person is not subject to the income management regime under any
other provision;
(b) the person had a payment nominee; and
(c) the payment nominee is subject to the income management regime
under subsection 123UB(1) or (2).
New section 123UC deals with the situation where a person is subject to the
income management regime because a child protection officer of a State or
Territory has given a notice to the Secretary requiring that a person be subject
to the income management regime.
Section 123UC provides that a person is subject to the income management
regime at the test time if:
(a) the person or their partner is an eligible recipient of a category H
welfare payment;
(b) before the test time, a child protection officer (see section 123TC) of a
State or Territory gave the Secretary a written notice requiring that the
person be subject to the income management regime;
(c) the notice was given under either a law of, or the executive power of,
the State or Territory;
(d) at the test time, the notice had not been withdrawn or revoked;
(e) at the test time, the State or Territory is a declared child protection
State or Territory (see section 123TF);
(f) if, at the test time, the person had a payment nominee - the payment
nominee is not an excluded payment nominee; and
(g) at the test time, the person is not subject to the income management
regime under section 123UF.
New section 123UD sets out the mechanism when a person may be subject
to income management as a result of failing to ensure that his or her child is
enrolled at school.
Income management will act as a tool to help ensure parents and carers
receiving income support meet a key parental responsibility by enrolling their
compulsory school aged children in school.
A person may be subject to income management when the person (or
person's partner) is an eligible recipient of a Category H welfare payment.
17
A Category H welfare payment is a social security benefit or pension, a
service pension, an income support supplement or a Defence Force Income
Support Allowance. These are the `trigger' payments for the school enrolment
measure. If a person is subject to income management a broader range of the
person's payments will be subject to income management.
An eligible recipient is a person who has been granted a claim and who has
commenced payment and the claim for the payment has not been cancelled
(see section 123TK).
If a person or the person's partner has an eligible care child and the child
should be enrolled at a school that is in an area that the Minister has declared
to be a declared primary or secondary school area and the child is not
enrolled, then the person will be subject to income management. This
recognises that under State and Territory laws, some children may not be
required to be enrolled at a school. For example if the child is not of
compulsory school age or the child is being home schooled according to
relevant State or Territory law.
An eligible care child is a dependent child or a child for which the person
cares under a family law order, a registered parenting plan or parenting plan
for at least 14 per cent of a particular period described as an eligible care
period (see sections 123UH and 123UJ). The eligible care period, being the
period to which the 14 per cent minimum care relates will be set out in a
legislative instrument.
The declaration of the school is relevant as the implementation of this new
income management framework will require close consultation with the States
and Territories regarding enrolment and school attendance (see
section 123TG regarding declarations). It is intended that the framework will
be implemented on a State or Territory by State or Territory basis or in some
instances on a community by community or school by school basis.
A person will not be subject to income management under section 123UD if
the person has a payment nominee and that nominee is an excluded nominee
or if the person is subject to income management under section 123UC (child
protection) or section 123UF (Queensland Commission).
Paragraph 123UD(1)(h) has the effect that income management will not apply
if a person has been exempted under subsection 123UD(2). Any exemption
made will need to be made in accordance with any principles made by the
Minister by legislative instrument (see subsection 123UD(3)).
Paragraph 123UD(1)(i) allows for the Minister by legislative instrument to set
other conditions that also need to be met before a person is subject to income
management under section 123UD.
18
New subsection 123UD(4) provides that if a person's payment nominee is
subject to the income management regime under section 123UD, then the
person will also be subject to the income management regime under
section 123UD.
Subsections 123UD(5) to (9) are relevant for determining if a child is enrolled
in school. Under subsection (5) the Secretary may give to a person who has
an eligible care child a written notice requiring that within a specified time
documentary evidence of the child's enrolment at a school during a specified
applicable school period is to be provided to the Secretary. A person will be
given at least 7 days to provide evidence of a child's enrolment at school
(subsection 123UD(7)). The period that is specified can be extended (see
subsection 123UD(8)). The intention is for this extension power to be used
particularly in circumstances where the reason for why the parent or carer
could not provide proof of enrolment within the initial specified period is
outside of their control.
The notice must set out that if a person does not comply, the Secretary may
determine that the person's eligible care child is not enrolled at any time
during the applicable school period specified in the notice. This in effect,
means that the Secretary may determine that a person (or the person's
partner) is subject to income management for all or part of the period for
which the person has been requested to evidence his or her child's enrolment.
Documentary evidence of school enrolment is evidence of enrolment not
evidence of non-enrolment.
New subsection 123UD(10) makes it clear that nothing in the new Part stops
a notice being a notice under subsection (5) or another provision of the law of
the Commonwealth. For example, a notice under subsection (5), if the
relevant conditions are met could still be a notice under section 68 of the
Social Security Administration Act.
The broad effect of section 123UD is that if a child is enrolled at school then
the person will not be subject to income management. If a child should be
enrolled and a person has been requested to provide evidence of his or her
child's enrolment and fails to do so, then the child will be deemed not to be
enrolled for a particular period as set out in the notice provided to the person.
Any person who provides the required documentary evidence of enrolment
(assuming the child is enrolled) will of course not be subject to income
management.
A person can also be subject to income management if the person fails to
ensure that their child attends school. Income management will also be a tool
to help in improving parental behaviour which adversely affects the adequate
school attendance of compulsory school aged children. Helping to ensure
children reach their full potential at school will also help to reduce the risk of
the potential for these children to become long term unemployed and welfare
dependent.
19
New section 123UE sets out when a person will be subject to income
management. As with school enrolment, a person may be subject to income
management when the person (or person's partner) is an eligible recipient of
a Category H welfare payment.
An unsatisfactory school attendance situation needs to exist in relation to the
eligible care child at the test time (paragraph 123UE(1)(b)). When an
unsatisfactory school attendance situation will exist will be set out in a
legislative instrument made by the Minister (see section 123UK). Such an
instrument may for example provide that unsatisfactory school attendance
exists in relation to the child, when the child was absent from school on a
particular number of days (or more occasions) without an acceptable reason
(as determined by school officials in accordance with the relevant State or
Territory guidelines) in the previous applicable school period. Under
section 123UI, an applicable school period will also be defined in a legislative
instrument and for example may be defined to be a school term or semester.
However, as the duration of State and Territory school terms may differ,
different unsatisfactory school attendance situations may exist in respect of
different States and Territories. It is necessary that the income management
regime is practical and workable taking into account the varying education
system structures.
For income management to apply a child needs to be enrolled at a school
(paragraph 123UE(1)(d)) which is a school in a declared primary or secondary
school area (paragraph 123UE(1)(e) and (f)). The declaration of the school
area is relevant, as the implementation of this new income management
framework will require close consultation with the States and Territories
regarding enrolment and school attendance (see section 123TG regarding
declarations). It is intended that the framework will be implemented on a State
or Territory by State or Territory basis or in some instances on a community
by community or school by school basis. If a child is not enrolled and the
child should be enrolled, then a person may be subject to income
management under section 123UD.
Throughout a period that ended before the unsatisfactory school attendance
situation was in existence the person or the person's partner needs to have
an eligible care child. This does not mean that a person who has an eligible
care child after this time can't be subject to income management. In this
regard, the unsatisfactory school attendance situation is the point in time
when a person is subject to income management. This paragraph makes it
clear that the relevant link to the care and responsibility for the eligible care
child relates to a period when the failure to attend school could be occurring.
Eligible care child is a dependent child or a child for which the person cares
under a family law order, registered parenting plan or parenting plan for at
least 14 per cent of a particular period described as an eligible care period
(see sections 123UH and 123UJ). The eligible care period will be set out in a
legislative instrument.
20
Paragraph 123UE(1)(g) requires that before a person is subject to the income
management regime that the person or the person's partner be given a formal
warning under section 123UL. This warning under section 123UL may be
given if a person is not subject to income management under section 123UE
and the person has an eligible care child and an unsatisfactory school
attendance situation exists or such a situation previously existed in relation to
the child. The warning is to set out that a person or the person's partner could
immediately become income managed if an unsatisfactory school attendance
situation subsequently exists in relation to the child.
The unsatisfactory school attendance situation will be set out in a legislative
instrument and as set out above this could be, for example, when the eligible
care child was absent from school on a particular number of days or more
occasions without an acceptable reason (as determined by the school in
accordance with the relevant State or Territory guidelines) in the previous
applicable school period.
However, a person only needs to receive one warning before the person can
be subject to income management. These are not separate warnings for each
of a person's eligible care children. Therefore, if a person is warned and
becomes subject to income management but then is not subject to income
management a person does not need to be given another warning before they
can again be subject to income management.
However, before a person can be subject to income management the whole
or part of an applicable school period needs to have occurred after the formal
warning was given and before the test time (paragraph 123UE(1)(h)).
A person will not be subject to income management under section 123UE if
the person has a payment nominee and that nominee is an excluded nominee
or if the person is subject to income management under section 123UC (child
protection) or section 123UF(Queensland Commission).
Paragraph 123UE(1)(k) has the effect that a person will not be subject to the
income management regime if the Secretary has made a written
determination exempting the person. Such an exemption must be made in
accordance with principles (if any) contained in a legislative instrument made
by the Minister.
The Minister may also under paragraph 123UE(1)(l) make other conditions
that must be met before a person will be subject to income management
under the school attendance framework in section 123UE.
New subsection 123UE(4) provides that if a person's payment nominee is
subject to the income management regime under section 123UE, then the
person will be also be subject to the income management regime under
section 123UE.
21
New section 123UF deals with the situation where a person is subject to the
income management regime because the Queensland Commission has given
a notice to the Secretary requiring that a person be subject to the income
management regime.
New subsection 123UF(1) deals with the situation where receipt of a
category P welfare payment leads to a person being subject to the income
management regime. It provides that a person is subject to the income
management regime at the test time if:
(a) the person or their partner is an eligible recipient of a category P
welfare payment;
(b) before the test time, the Queensland Commission gave the Secretary
a written notice requiring that the person be subject to the income
management regime;
(c) the notice was given under a law of Queensland;
(d) the notice was not given in circumstances specified in a legislative
instrument made by the Minister;
(e) at the test time, the notice had not been withdrawn or revoked;
(f) if, at the test time, the person had a payment nominee - the payment
nominee is not an excluded payment nominee; and
(g) the test time occurs before 1 January 2012.
New subsection 123UF(2) deals with the situation where receipt of a
category R welfare payment leads to a person being subject to the income
management regime. It provides that a person is subject to the income
management regime at the test time if:
(a) neither the person nor their partner is an eligible recipient of a category
P welfare payment;
(b) the person or their partner is an eligible recipient of a category R
welfare payment
(c) before the test time, the Queensland Commission gave the Secretary
a written notice requiring that the person be subject to the income
management regime;
(d) the notice was given under a law of Queensland;
(e) the notice was not given in circumstances specified in a legislative
instrument made by the Minister;
(f) at the test time, the notice had not been withdrawn or revoked;
22
(g) if, at the test time, the person had a payment nominee - the payment
nominee is not an excluded payment nominee; and
(h) the test time occurs before 1 January 2012.
New subsection 123UF(3) provides that, for the purposes of Part 3B, a person
is subject to the income management regime at the test time if, at that time:
(a) the person is not subject to the income management regime under any
other provision;
(b) the person had a payment nominee; and
(c) the payment nominee is subject to the income management regime
under subsection 123UF(1) or (2).
New section 123UG provides for the circumstances in which a person is
exempt from the income management regime that would otherwise apply to a
person because of section 123UB (relevant Northern Territory area).
Subsections 123UG(1) to (4) deal with exempting a person from each relevant
Northern Territory area (that is, so that they cannot be subject to the income
management regime because of section 123UB).
New subsection 123UG(1) provides that the Secretary may, by written notice
given to a person, determine that the person is an exempt Northern Territory
person in relation to each relevant Northern Territory area.
New subsection 123UG(2) provides that, in deciding whether to make a
determination under subsection (1), the Secretary must have regard to the
matters specified in that provision.
New subsection 123UG(3) provides that a determination under subsection (1)
is not a legislative instrument. This provision is included to assist readers, as
the instrument is not a legislative instrument within the meaning of section 5 of
the Legislative Instruments Act 2003.
New subsection 123UG(4) provides that the Minister may, by legislative
instrument, determine that a specified person is an exempt Northern Territory
person in relation to each relevant Northern Territory area. This enables the
Minister to make a legislative instrument which specifies that a person or a
class, or classes, of persons, such that a member of any of those classes is
an exempt Northern Territory person for the purposes of Part 3B. A note
under the provision directs readers to subsection 13(3) of the Legislative
Instruments Act 2003, which deals with specification by class.
New subsection 123UG(5) provides that subsection (1) and (4) do not limit
each other.
23
New subsection 123UG(6) provides that the Secretary may, by written notice
given to a person, determine that the person is an exempt Northern Territory
person in relation to a specified relevant Northern Territory area. This means
that a person could still be subject to the income management regime under
section 123UB if they were in a declared relevant Northern Territory area to
which the exemption under subsection 123UG(6) did not relate.
New subsection 123UG(7) provides that, in deciding whether to make a
determination under subsection (6), the Secretary must have regard to the
matters specified in that provision.
New subsection 123UG(8) provides that a determination under subsection (6)
is not a legislative instrument. This provision is included to assist readers, as
the instrument is not a legislative instrument within the meaning of section 5 of
the Legislative Instruments Act 2003.
Subdivision C - Additional provisions relating to school enrolment and
attendance
New section 123UH sets out when a child is an eligible care child. The
concept of an eligible care child is relevant for both the school enrolment and
school attendance trigger. Broadly, a person will have an eligible care child
when the person has a dependent child (as defined in section 5 of the Social
Security Act) or during a particular period under a family law order, registered
parenting plan or parenting plan that is in force during that period and the
person is caring for the child for at least 14 per cent of the period. The
`period' in this context is essentially the period during which the level of care
will be assessed. This is referred to as the eligible care period.
New section 123UI provides for the Minister to make a legislative instrument
setting out what is meant by an applicable school period. An applicable
school period is relevant to the school enrolment trigger. A person may be
given a notice requiring him or her to provide evidence of his or her child's
enrolment at school during a specified applicable school period.
Subsection (2) makes it clear that such a period can be a recurring period and
does not require the instrument to define a singular period of time.
Subsection (3) also indicates that an applicable school period may be defined
by reference to a term of a school attended by a child. Subsection (4)
provides that even if an applicable school period begins before the
commencement of the provision it can still form part of an applicable school
period. For example a legislative instrument may define an applicable school
period to be a school term plus any adjoining holidays. Following the
commencement of the provisions, a person is requested to provide evidence
of his or her child's enrolment in that school term (even though that particular
school term commenced before the new provision started). If a person failed
to do so, then the person could be subject to income management during the
remainder of that term plus the school holidays.
24
New section 123UJ provides for a legislative instrument to be made by the
Minister setting out the eligible care period. This is the period over which the
level of care of a child (under a family law order, registered parenting plan or
parenting plan that is in force during that period) is assessed. Subsection (2)
makes it clear that such a period can be a recurring period and does not
require the instrument to define a singular period of time. Subsection (3)
provides that such a period can commence before the commencement of the
section.
New section 123UK provides that the question of whether an unsatisfactory
school attendance situation exists or has existed in relation to a child is to
be ascertained in accordance with a legislative instrument made by the
Minister.
An unsatisfactory school attendance situation is relevant for the school
attendance trigger. Before a person can be subject to the income
management regime under section 123UE, a person needs to be provided a
formal warning under section 123UL. Before a formal warning is given an
unsatisfactory school attendance situation must exist or must previously have
existed. Additionally, a person can be subject to the income management
framework only when an unsatisfactory school attendance situation exists.
Furthermore, throughout a period which ends when the unsatisfactory school
attendance situation came into existence the child must be an eligible care
child of the person or the person's partner.
New subsection 123UK(2) provides that an unsatisfactory school attendance
situation cannot exist if under a State or Territory law the child is not required
to attend school. Subsection (3) makes it clear that once an instrument is
made setting out when an unsatisfactory school attendance situation exists,
such a situation can exist before the commencement of the provision. For
example, if the legislative instrument set out that an unsatisfactory school
attendance situation exists if an eligible care child has been absent on more
than five days during a school term without an unacceptable reason then
those absences can have taken place prior to the commencement of these
provisions. The broad effect of this is that a warning under section 123UL
could then be given to a person.
New section 123UL provides the mechanism through which a formal warning
can be given to a person in respect of an unsatisfactory school attendance
situation. A warning can be given to a person or the person's partner that
they may become subject to the income management regime if:
· a person is not subject to income management under the school
attendance trigger (section 123UE),
· the person or the person's partner has an eligible care child
(section 123UH); and
· an unsatisfactory school attendance situation exists (section 123UK) or
has previously existed in relation to the eligible care child.
25
Division 3 - Establishment of the Income Management Special Account
New subsection 123VA(1) provides that the Income Management Special
Account is established by this section. New subsection 123VA(2) provides
that the Account is a Special Account for the purposes of the Financial
Management and Accountability Act 1997 (FMAA).
New section 123VB provides that an amount standing to the credit of the
Special Account is not held on trust and is special public money for the
purposes of section 16 of the FMAA.
New section 123VC provides that amounts standing to the credit of the
Special Account may be kept in a single bank account. This provision is
intended to negate any inference that amounts credited to notional accounts
(see Division 4) should be kept in separate bank accounts.
Division 4 - Income management accounts
Subdivision A - Income management accounts
New subsection 123WA(1) provides that separate notional accounts are to
be kept in the Special Account in the names of particular persons.
New subsection 123WA(2) provides that an account in the name of a person
is to be known as the person's income management account.
New section 123WB deals with the opening of income management
accounts.
New subsection 123WB(1) provides that the Secretary may open an income
management account in the name of a particular person. New
subsection 123WB(2) provides that the Secretary can do so even if the
person is not subject to the income management regime. This enables the
Secretary to make preparations for an account to be opened prior to a person
becoming subject to the income management regime.
New subsection 123WB(3) imposes a duty on the Secretary to open an
account in the name of a particular person if the person does not already have
an account and they are subject to the income management regime.
New section 123WC provides that the Secretary may close an account if the
balance of the account is nil and:
(a) the person is not subject to the income management regime; or
(b) the person has died.
There is no obligation to close an account merely because a person is no
longer subject to the income management regime.
26
New subsection 123WD(1) provides that a person's account may have a nil
balance. Subsection 123WD(2) provides examples of cases where this might
occur.
New subsection 123WE(1) provides that only one account may be kept for a
particular person. New subsection 123WE(2) provides that a contravention of
subsection (1) does not affect the validity of an account. New
subsection 123WE(3) requires the Secretary to amalgamate accounts into a
single account if the Secretary becomes aware that two or more accounts are
being kept for the same person.
New section 123WF provides that an amount must not be credited to or
debited from an account except as provided for by new Part 3B.
Subdivision B - Account statements
New section 123WG provides that the Secretary may issue a means of
identification (such as a personal identification number) to a person who has
an account that enables them to do either or both of the following:
(a) to access their account statements on the Internet;
(b) to be told the balance of their account using an automated telephone
answering system.
New subsection 123WH(1) provides that the section applies if a person has
an account in their name. New subsection 123WH(2) provides that a person
who has an account may request the Secretary to give them a written account
statement. New subsection 123WH(3) provides that the Secretary must
comply with such a request. New subsection 123WH(4) provides that the
Secretary may refuse to comply with a request if the person has made a
request within the past 30 days.
New subsection 123WI(1) provides that the section applies if a person has
an account in their name. New subsection 123WI(2) provides that at least
once a quarter, the Secretary must give the person a written account
statement. New subsection 123WI(3) provides that the Secretary is not
required to give a written account statement for a particular period unless the
account has been debited or credited during that period, or unless the account
has a credit balance at the end of the period.
Subdivision C - Miscellaneous
New section 123WJ deals with the payment of credit balances in an income
management account where a person ceases to be subject to the income
management regime.
27
New subsection 123WJ provides that the section applies if a person ceases to
be subject to the income management regime, their account has a credit
balance and the Secretary is satisfied that they are not likely to become
subject to the income management regime within the next 60 days. New
subsections 123WJ(2) and (3) provide that the residual amount is the credit
balance when the person ceases to be subject to the income management
regime and that this amount is payable in accordance with the section.
Subsections 123WJ(4), (7), (9), (11) and (14) provide that the Secretary may
enable payment of the residual amount by instalments, or by way of a lump
sum in specified circumstances, make a payment to discharge an obligation in
specified circumstances or make a set-off against an amount owed to the
Commonwealth in specified circumstances. Subsections 123WJ(5), (8), (12)
and (15) provide that each of these things must occur within 12 months from
the person ceasing to be subject to the income management regime.
Subsections 123WJ(6), (10), (13) and (16) provide for the debiting of the
Special Account and of the person's income management account and for the
payment of the residual amount (in the case of expense payments and
set-offs). Subsection 123WJ(17) and (18) provide that any actions under this
provision do not have consequences under the income tax law for the person
no longer subject to the income management regime.
New section 123WK provides for the payment of instalments and lump sums
under new section 123WJ (person ceasing to be subject to the income
management regime). New subsections 123WK(2) and (3) provide that,
generally, such amounts are to be paid to the credit of a bank account kept by
the person alone or jointly. However, subsection 123WK(4) provides that the
Secretary may direct that it be paid in a different way: if such a direction is
made, the amount is to be paid in accordance with such a direction
(subsection 123WK(5)).
New section 123WL deals with the payment of credit balances of a person's
income management account if the person dies. New subsection 123WL(2),
(3) and (4) provide that the residual amount (the credit balance of the account
on the person's death) is to be paid to the person's legal personal
representative as a single lump sum within 12 months of the person's death.
If this occurs, the Special Account and the person's income management
account is debited by the amount of the lump sum (subsection 123WL(5)).
Subsection 123WL(6) provides that making such a payment does not have
consequences under the income tax law for the person's estate.
New section 123WM applies the same rules for the payment of amounts
under 123WL to a person's legal personal representative (where the person
dies) as for the person ceasing to be subject to the income management
regime (see new section 123WK).
28
New section 123WN provides that the Minister administering new Part 3B
and the Finance Minister (defined in section 123TC to have the same
meaning as in the Financial Management and Accountability Act 1997) may,
by legislative instrument, make rules providing that an amount is to be
credited to the Special Account and a person's income management account
in specified circumstances.
Division 5 - Deductions from welfare payments
Subdivision A - Relevant Northern Territory area
New section 123XA provides that, if a person is subject to the income
management regime under subsection 123UB(1) or (3) (relevant Northern
Territory area) and an instalment of a Category B welfare payment is payable
to the person, the Secretary must deduct 50 per cent of the net amount of that
payment and credit the person's income management account and the
Special Account accordingly.
New section 123XB provides that, if a person is subject to the income
management regime under subsection 123UB(1) or (3) (relevant Northern
Territory area) and payment of a Category B welfare payment is payable to
the person other than by instalments (that is, by lump sum), the Secretary
must deduct 50 per cent of the net amount of that payment and credit the
person's income management account and the Special Account accordingly.
New section 123XC provides that, if a person is subject to the income
management regime under subsection 123UB(1) or (3) (relevant Northern
Territory area) and an instalment of a Category C welfare payment is payable
to the person, the Secretary must deduct 100 per cent of the net amount of
that payment and credit the person's income management account and the
Special Account accordingly.
New section 123XD provides that, if a person is subject to the income
management regime under subsection 123UB(1) or (3) (relevant Northern
Territory area) and payment of a Category C welfare payment is payable to
the person other than by instalments (that is, by lump sum), the Secretary
must deduct 100 per cent of the net amount of that payment and credit the
person's income management account and the Special Account accordingly.
New section 123XE provides that, if a person is subject to the income
management regime under subsection 123UB(2) (relevant Northern Territory
area) and an instalment of a Category F welfare payment is payable to the
person, the Secretary must deduct 50 per cent of the net amount of that
payment and credit the person's income management account and the
Special Account accordingly.
29
New section 123XF provides that, if a person is subject to the income
management regime under subsection 123UB(2) (relevant Northern Territory
area) and payment of a Category F welfare payment is payable to the person
other than by instalments (that is, by lump sum), the Secretary must deduct
50 per cent of the net amount of that payment and credit the person's income
management account and the Special Account accordingly.
New section 123XG provides that, if a person is subject to the income
management regime under subsection 123UB(2) (relevant Northern Territory
area) and an instalment of a Category G welfare payment is payable to the
person, the Secretary must deduct 100 per cent of the net amount of that
payment and credit the person's income management account and the
Special Account accordingly.
New section 123XH provides that, if a person is subject to the income
management regime under subsection 123UB(2) (relevant Northern Territory
area) and payment of a Category G welfare payment is payable to the person
other than by instalment (that is, by lump sum), the Secretary must deduct
100 per cent of the net amount of that payment and credit the person's
income management account and the Special Account accordingly.
Subdivision B - Child protection
New section 123XI provides that, if a person is subject to the income
management regime under section 123UC (child protection) and an
instalment of a Category I welfare payment is payable to the person, the
Secretary must deduct 100 per cent of the net amount of that payment (unless
the Minister has, by legislative instrument, specified a lower percentage) and
credit the person's income management account and the Special Account
accordingly.
New section 123XJ provides that, if a person is subject to the income
management regime under section 123UC (child protection) and payment of a
Category I welfare payment is payable to the person other than by instalments
(that is, by lump sum) the Secretary must deduct 100 per cent of the net
amount of that payment (unless the Minister has, by legislative instrument,
specified a lower percentage) and credit the person's income management
account and the Special Account accordingly.
Subsections 123XI(4) and 123XJ(4) provide that an instrument may specify
different percentages in relation to different category I welfare payments.
30
Subdivision C - School enrolment and attendance
New section 123XK provides that, if a person is subject to the income
management regime under section 123UD or 123UE (school enrolment and
attendance) and an instalment of a Category I welfare payment is payable to
the person, the Secretary must deduct 100 per cent of the net amount of that
payment (unless the Minister has, by legislative instrument, specified a lower
percentage) and credit the person's income management account and the
Special Account accordingly.
New section 123XL provides that, if a person is subject to the income
management regime under section 123UD or 123UE (school enrolment and
attendance) and payment of a Category I welfare payment is payable to the
person other than by instalments (that is, by lump sum), the Secretary must
deduct 100 per cent of the net amount of that payment (unless the Minister
has, by legislative instrument, specified a lower percentage) and credit the
person's income management account and the Special Account accordingly.
Subsections 123XK(4) and 123XL(4) provide that an instrument may specify
different percentages in relation to different category I welfare payments.
Subdivision D - Queensland Commission
New section 123XM provides that, if a person is subject to the income
management regime under subsection 123UF(1) or (3) (Queensland
Commission) and an instalment of a Category Q welfare payment is payable
to the person the Secretary must deduct a percentage, that he determines, of
the net amount of that payment and credit the person's income management
account and the Special Account accordingly. In determining the percentage
of a person's payment to be deducted, the Secretary must comply with a
direction of the Queensland Commission (see section 123ZK).
New section 123XN provides that, if a person is subject to the income
management regime under subsection 123UF(1) or (3) (Queensland
Commission) and payment of a Category Q welfare payment is payable to the
person other than by instalment (that is, by lump sum), the Secretary must
deduct a percentage, that he determines, of the net amount of that payment
and credit the person's income management account and the Special Account
accordingly. In determining the percentage of a person's payment to be
deducted, the Secretary must comply with a direction of the Queensland
Commission (see section 123ZK).
New section 123XO provides that, if a person is subject to the income
management regime under subsection 123UF(2) (Queensland Commission)
and an instalment of a Category S welfare payment is payable to the person,
the Secretary must deduct a percentage, that he determines, of the net
amount of that payment and credit the person's income management account
and the Special Account accordingly. In determining the percentage of a
person's payment to be deducted, the Secretary must comply with a direction
of the Queensland Commission (see section 123ZK).
31
New section 123XP provides that, if a person is subject to the income
management regime under subsection 123UF(2) (Queensland Commission)
and payment of a Category S welfare payment is payable to the person other
than by instalments (that is, by lump sum), the Secretary must deduct a
percentage, that he determines, of the net amount of that payment and credit
the person's income management account and the Special Account
accordingly. In determining the percentage of a person's payment to be
deducted, the Secretary must comply with a direction of the Queensland
Commission (see section 123ZK).
New section 123XQ provides that, where an amount is deducted from a
person's payment under Division 5 (that is, so that deducted amount is to be
subject to the income management regime), then, for the purposes of the
income tax, social security and family assistance laws as well as the Student
Assistance Act 1973, the Veterans' Entitlements Act and the Child Support
(Assessment) Act 1989, the person is taken to have been paid the amount of
the deduction at the time it would have been paid apart from the operation of
this Part. This means, in effect, that, for the purposes of those
Commonwealth laws listed above that rely upon the assessment of an amount
of income paid to a person, this Part will not change how much income was
paid, and when that income was paid, to a person subject to the income
management regime. Consequently, in relation to the income tax laws, if the
deducted amount taken to have been paid to the person is assessable income
under the income tax law, it is assessable in the year in which the amount
would have been paid if the deduction had not been made.
Division 6 - Debits from income management accounts
Subdivision A - General
New section 123YA provides that, where a person is subject to the income
management regime and has a credit balance in their income management
account, then the Secretary must take appropriate action under Subdivision B
to meet any unmet priority needs of the person, their partner, their children or
other dependants, within a reasonable period after becoming aware of those
needs. If the Secretary is satisfied that the balance of the person's income
management account is greater than what is reasonably required to meet the
priority needs of the person, their partner, their children and dependants and
any reasonably foreseeable priority needs of those same people then the
Secretary must not unreasonably refuse a request by the person for the
payment of funds, for other than priority needs, under Division 6, as long as
making such a payment will not result in the balance of the person's income
management account falling below a level necessary to pay the current, and
reasonably foreseeable, priority needs of the person, their partner, their
children and dependants.
32
New section 123YB provides that, where a person is subject to the income
management regime and has a credit balance in their income management
account and that person also has one or more children then, in deciding
whether to take an action under this Division, the Secretary must have regard
to the best interests of the person's children and any other matters that the
Secretary considers relevant. This provision recognises that a person has an
obligation not only to care for themselves, but also to care for any children
they may have.
Subdivision B - Restricted debits
New section 123YC provides that, where a person who is subject to the
income management regime has a credit balance in their income
management account, then the Secretary may issue a voucher to that person
or, with the person's consent, to a third party that enables the person, or third
party, to acquire goods or services, of a value up to the face value of the
voucher, unless the Secretary is satisfied that the relevant goods or services
are excluded goods or services. The voucher cannot be for a greater value
than the amount standing to the credit of the person in their income
management account and may be issued to acquire only limited goods or
services, as determined by the Secretary in each case.
Where a voucher is issued by the Secretary, the person's income
management account and the Special Account are to be debited by an
amount equal to the face value of the voucher. There are no taxation
consequences related to the issue of a voucher under this provision. This
section is to be used to meet the priority needs of the person, their partner,
their children or any other dependants. This section does not apply to a
person who has a payment nominee nor to a youth allowance recipient under
18 years of age where the person is not independent and their parent
receives the payment of youth allowance on their behalf (see new
section 123YD, which deals with these situations).
New section 123YD applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YC does not apply to that person (that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf). Where a person to whom this section applies, has a credit
balance in their income management account then the Secretary may issue a
voucher to that person's parent or nominee or, with the parent or nominee's
consent, to a third party that enables the parent or nominee, or third party, to
acquire goods or services, of a value up to the face value of the voucher,
unless the Secretary is satisfied that the relevant goods or services are
excluded goods or services. The voucher cannot be for a greater value than
the amount standing to the credit of the person in their income management
account and may be issued to acquire only limited goods or services, as
determined by the Secretary in each case.
33
Where a voucher is issued by the Secretary, the person's income
management account and the Special Account are to be debited by an
amount equal to the face value of the voucher. There are no taxation
consequences related to the issue of a voucher under this provision. This
section is to be used to meet the priority needs of the person, their partner,
their children or any other dependants.
New section 123YE provides that, where a person, who is subject to the
income management regime, has a credit balance in their income
management account then the Secretary may issue a stored value card (or
top-up the value of an existing stored value card) to that person or, with the
person's consent, to a third party that enables the person, or third party, to
acquire goods or services, unless the Secretary is satisfied that the relevant
goods or services are excluded goods or services, and so long as the card
cannot be used to obtain cash. The amount of the card (or top-up) issued
cannot be greater than the amount standing to the credit of the person in their
income management account and may be issued to acquire only limited
goods or services, as determined by the Secretary in each case.
Where a card is issued by the Secretary (or topped-up), the person's income
management account and the Special Account are to be debited by an
amount equal to the value of the card, or top-up. There are no taxation
consequences related to the issue, or top-up, of a card under this provision.
This section is to be used to meet the priority needs of the person, their
partner, their children or any other dependants. This section does not apply
to a person who has a payment nominee nor to a youth allowance recipient
under 18 years of age where the person is not independent and their parent
receives the payment of youth allowance on their behalf (see section 123YF,
which deals with these situations).
New section 123YF applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YE does not apply to that person, that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf. Where a person to whom this section applies, has a credit
balance in their income management account then the Secretary may issue a
stored value card (or top-up an existing stored value card) to that person's
parent or, with the parent's consent, to a third party that enables the parent, or
third party, to acquire goods or services, unless the Secretary is satisfied that
the relevant goods or services are excluded goods or services, and so long as
the card cannot be used to obtain cash. The amount of the card (or top-up)
issued cannot be greater than the amount standing to the credit of the person
in their income management account and may be issued to acquire only
limited goods or services, as determined by the Secretary in each case.
34
Where a card is issued by the Secretary (or topped-up), the person's income
management account and the Special Account are to be debited by an
amount equal to the value of the card, or top-up. There are no taxation
consequences related to the issue, or top-up, of a card under this provision.
This section is to be used to meet the priority needs of the person, their
partner, their children or any other dependants.
New section 123YG provides that, where a person, who is subject to the
income management regime, has a credit balance in their income
management account then the Secretary may pay an amount to partially or
wholly discharge a debt incurred by the person for goods, services, rates or
land tax or, with the person's consent, by a third party (e.g. a spouse), unless
the Secretary is satisfied that the relevant goods or services are excluded
goods or services. The amount paid cannot be greater than the amount
standing to the credit of the person in their income management account.
Where an amount is paid by the Secretary under this provision, the person's
income management account and the Special Account are to be debited by
an amount equal to the amount paid. There are no taxation consequences
related to a payment made under this provision. This section is to be used to
meet the priority needs of the person, their partner, their children or any other
dependants. This section does not apply to a person who has a payment
nominee nor to a youth allowance recipient under 18 years of age where the
person is not independent and their parent receives the payment of youth
allowance on their behalf.
New section 123YH applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YG does not apply to that person (that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf). Where a person to whom this section applies, has a credit
balance in their income management account then the Secretary may pay an
amount to partially or wholly discharge a debt incurred by the person or their
nominee or parent for goods or services or, with the nominee's or parent's
consent, by a third party, unless the Secretary is satisfied that the relevant
goods or services are excluded goods or services. The amount paid cannot
be greater than the amount standing to the credit of the person in their income
management account.
Where an amount is paid by the Secretary under this provision, the person's
income management account and the Special Account are to be debited by
an amount equal to the amount paid. There are no taxation consequences
related to a payment made under this provision. This section is to be used to
meet the priority needs of the person, their partner, their children or any other
dependants.
35
New section 123YI provides that, where a person who is subject to the
income management regime has a credit balance in their income
management account then the Secretary may pay an amount to a third
person (for example, a merchant) where that money is to be used to credit an
account held with the third person for the benefit of the person and the person
will only be allowed to use the balance of that account to acquire goods or
services. Alternatively, where the person consents, payment can also be
made out of the person's income management account in respect of an
account held for the benefit of another person (for example. a spouse) for the
purposes of that other person acquiring goods or services. Payment to the
third person cannot be made where the Secretary is satisfied that the relevant
goods or services are excluded goods or services, and is paid on condition
that, if required under section 123ZH, the amount will be repaid if not used for
the benefit of the person or, where consent was given, by another person.
The amount paid cannot be greater than the amount standing to the credit of
the person in their income management account and may be restricted to a
limited range of goods or services, as determined by the Secretary in each
case.
Where an amount is paid by the Secretary under this provision, the person's
income management account and the Special Account are to be debited by
an amount equal to the amount paid. There are no taxation consequences
related to a payment made under this provision. This section is to be used to
meet the priority needs of the person, their partner, their children or any other
dependants. This section does not apply to a person who has a payment
nominee nor to a youth allowance recipient under 18 years of age where the
person is not independent and their parent receives the payment of youth
allowance on their behalf.
New section 123YJ applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YI does not apply to that person (that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf). Where a person to whom this section applies, has a credit
balance in their income management account then the Secretary may pay an
amount to a third person (for example, a merchant) where that money is to be
used to credit an account held with the third person for the benefit of the
person or their parent or nominee and the person, parent or nominee will only
be allowed to use the balance of that account to acquire goods or services.
36
Alternatively, where the parent or nominee consents, payment can also be
made out of the person's income management account in respect of an
account held for the benefit of another person (for example, a spouse) for the
purposes of that other person acquiring goods or services. Payment to the
third person cannot be made where the Secretary is satisfied that the relevant
goods or services are excluded goods or services, and is paid on condition
that, if required under section 123ZH, the amount will be repaid if not used for
the benefit of the person or their parent or nominee or, where consent was
given, by another person. The amount paid cannot be greater than the
amount standing to the credit of the person in their income management
account and may be restricted to a limited range of goods or services, as
determined by the Secretary in each case.
Where an amount is paid by the Secretary under this provision, the person's
income management account and the Special Account are to be debited by
an amount equal to the amount paid. There are no taxation consequences
related to a payment made under this provision. This section is to be used to
meet the priority needs of the person, their partner, their children or any other
dependants.
New section 123YK provides that, where a person who is subject to the
income management regime, has a credit balance in their income
management account then the Secretary may pay money into an account
held by the person, or with the person's consent, by a third person with a bank
or, with a particular person, specified in a legislative instrument made by the
Secretary. Funds can only be paid into such an account for the purposes of
acquiring goods or services or paying account-related fees or charges, but not
if the Secretary is satisfied that the relevant goods or services are excluded
goods or services. The funds paid by the Secretary under this provision
cannot be of a greater amount than the amount standing to the credit of the
person in their income management account and may be restricted to a
limited range of goods or services, as determined by the Secretary in each
case.
Where funds are paid by the Secretary, the person's income management
account and the Special Account are to be debited by an amount equal to the
value of the funds paid. There are no taxation consequences related to the
payment of funds under this provision. This section is to be used to meet the
priority needs of the person, their partner, their children or any other
dependants. This section does not apply to a person who has a payment
nominee nor to a youth allowance recipient under 18 years of age where the
person is not independent and their parent receives the payment of youth
allowance on their behalf.
37
New section 123YL applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YK does not apply to that person (that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf). Where a person to whom this section applies has a credit
balance in their income management account then the Secretary may pay
money into an account held by the person's parent or nominee, or with the
parent or nominee's consent, by a third person with a bank or, with a
particular person, specified in a legislative instrument made by the Secretary.
Funds can only be paid into such an account for the purposes of acquiring
goods or services or paying account-related fees or charges, but not if the
Secretary is satisfied that the relevant goods or services are excluded goods
or services. The funds paid by the Secretary under this provision cannot be of
a greater amount than the amount standing to the credit of the person in their
income management account and may be restricted to a limited range of
goods or services, as determined by the Secretary in each case.
Where funds are paid by the Secretary, the person's income management
account and the Special Account are to be debited by an amount equal to the
value of the funds paid. There are no taxation consequences related to the
payment of funds under this provision. This section is to be used to meet the
priority needs of the person, their partner, their children or any other
dependants.
New section 123YM provides that, where a person, who is subject to the
income management regime, has a credit balance in their income
management account then the Secretary may pay money directly to them or,
with the person's consent to a third person, in one of a number of different
ways, as long as the Secretary does not have reasonable grounds to believe
that any of the funds paid are to be used to acquire excluded goods or
services. This provision allows the Secretary to pay out funds to a bank
account kept by the person (whether solely or with another party), or by
cheque or cash, or by issuing a stored value card that allows the withdrawal of
cash. Alternatively, an amount can be paid to an account held by a third
person, without the first person's consent, where a person is subject to the
income management regime under section 123UF (Queensland Commission)
and the Queensland Commission has directed the Secretary to pay the funds
to that bank account. Generally, this would be done where that third person
has been instructed by the Queensland Commission to apply those funds for
the benefit of the person. The funds paid, or put into a stored value card, by
the Secretary under this provision cannot be greater than the amount standing
to the credit of the person in their income management account.
38
Where funds are paid, or put into a stored value card, by the Secretary, the
person's income management account and the Special Account are to be
debited by an amount equal to the value of the funds paid, or put onto the
stored value card. There are no taxation consequences related to the paying
of funds under this provision, whether directly or by way of a stored value
card. This section is to be used to meet the priority needs of the person, their
partner, their children or any other dependants. This section does not apply
to a person who has a payment nominee nor to a youth allowance recipient
under 18 years of age where the person is not independent and their parent
receives the payment of youth allowance on their behalf.
New section 123YN applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YM does not apply to that person (that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf). Where a person to whom this section applies has a credit
balance in their income management account, then the Secretary may pay
money directly to their parent or nominee or, with the consent of the parent or
nominee to a third person, in one of a number of different ways unless the
Secretary has reasonable grounds to believe that any of the funds paid are to
be used to acquire excluded goods or services. This provision allows the
Secretary to pay out funds to a bank account kept by the person's parent or
nominee (whether solely or with another party), or by cheque or cash, or by
issuing a stored value card that allows the withdrawal of cash. Alternatively,
where a person is subject to the income management regime under
section 123UF (Queensland Commission), then the Queensland Commission
may direct the Secretary to pay the funds to a bank account held by a third
party. Generally, this would be done where that third person has been
instructed by the Queensland Commission to apply those funds for the benefit
of the person. The funds paid, or put into a stored value card, by the
Secretary under this provision cannot be of a greater amount than the amount
standing to the credit of the person in their income management account.
Where funds are paid, or put into a stored value card, by the Secretary, the
person's income management account and the Special Account are to be
debited by an amount equal to the value of the funds paid, or put onto the
stored value card. There are no taxation consequences related to the paying
of funds under this provision, whether directly or by way of a stored value
card. This section is to be used to meet the priority needs of the person, their
partner, their children or any other dependants.
39
Subdivision C - Unrestricted debits
New section 123YO provides that, where a person, who is subject to the
income management regime, has a credit balance in their income
management account then the Secretary may pay money directly to them or,
with their consent to a third person, in one of a number of different ways. In
deciding whether to apply this provision, the Secretary must have regard to
any matters specified in a legislative instrument made by the Minister for this
purpose and to any other matters that the Secretary considers relevant. This
provision allows the Secretary to pay out funds to a bank account kept by the
person (whether solely or with another party), or by cheque or cash, or by
issuing a stored value card that allows the withdrawal of cash. The funds
paid, or put into a stored value card, by the Secretary under this provision
cannot be of a greater amount than the amount standing to the credit of the
person in their income management account.
Where funds are paid, or put into a stored value card, by the Secretary, the
person's income management account and the Special Account are to be
debited by an amount equal to the value of the funds paid, or put onto the
stored value card. There are no taxation consequences related to the paying
of funds under this provision, whether directly or by way of a stored value
card. This section does not apply to a person who has a payment nominee
nor to a youth allowance recipient under 18 years of age where the person is
not independent and their parent receives the payment of youth allowance on
their behalf. This section, unlike section 123YM, does not have specific
restrictions for excluded goods or services.
New section 123YP applies to a person who has a payment nominee.
Alternatively, it applies to a youth allowance recipient under 18 years of age,
where section 123YO does not apply to that person (that is, the person is not
independent and their parent receives the payment of youth allowance on
their behalf). Where a person to whom this section applies has a credit
balance in their income management account then the Secretary may pay
money directly to their parent or nominee or, with the consent of the parent or
nominee to a third person, in one of a number of different ways. In deciding
whether to apply this provision, the Secretary must have regard to any
matters specified in a legislative instrument made by the Minister for this
purpose and to any other matters that the Secretary considers relevant. This
provision allows the Secretary to pay out funds to a bank account kept by the
person's parent or nominee (whether solely or with another party), or by
cheque or cash, or by issuing a stored value card that allows the withdrawal of
cash. The funds paid, or put into a stored value card, by the Secretary under
this provision cannot be of a greater amount than the amount standing to the
credit of the person in their income management account.
40
Where funds are paid, or put into a stored value card, by the Secretary, the
person's income management account and the Special Account are to be
debited by an amount equal to the value of the funds paid, or put onto the
stored value card. There are no taxation consequences related to the paying
of funds under this provision, whether directly or by way of a stored value
card. This section, unlike section 123YN, does not have specific restrictions
for excluded goods or services.
New section 123YQ provides that where a person, who is subject to the
income management regime, has a credit balance in their income
management account then the Secretary may take any action specified in a
legislative instrument made by the Minister for the purposes of this section as
long as the payment for that action is not for a greater value than the amount
standing to the credit of the person in their income management account.
Where the Secretary takes action under this section, the person's income
management account and the Special Account are to be debited by an
amount equal to the amount paid by the Secretary under this provision. There
are no taxation consequences for any party related to the taking of any action
under this section. This section is to be used to benefit the person, their
partner, their children or any other dependants and is not used if the
Secretary is satisfied that the action will result in the acquisition of any
excluded goods or services.
Division 7 - Information
New section 123ZA enables the Secretary to use his information gathering
powers under section 192 or 195 in relation to a relevant Northern Territory
area prior to it becoming a declared relevant Northern Territory area. In
effect, this means that information can be collected in the Northern Territory,
in respect of a person potentially subject to the income management regime,
prior to the introduction of the income management regime in a particular
area.
New section 123ZB enables the Secretary to use his information gathering
powers under section 192 or 195 in relation to a declared primary school area,
or declared secondary school area prior to that area actually being
determined under section 123TG. In effect, this means that information can
be collected in regard to school attendance and enrolment, in respect of a
person potentially subject to the income management regime, prior to the
introduction of the income management regime in a particular area.
New section 123ZC provides that, where a person is subject to the income
management regime under section 123UC (child protection), but the person
leaves the income management regime because the person or their partner
has their Category H welfare payment cancelled, the Secretary must give
written notice of the cancellation to a child protection officer of the relevant
State or Territory as soon as practicable.
41
New section 123ZD provides that, where a person is subject to the income
management regime under section 123UF (Queensland Commission), but the
person leaves the income management regime, because the person or their
partner has their Category P welfare payment cancelled, or the Category R
welfare payment of the person or their partner is cancelled, the Secretary
must give notice of the cancellation to the Queensland Commission as soon
as practicable.
New sections 123ZE and 123ZEA provide that, despite any State or Territory
law, a child protection officer or the Queensland Commission can give
information about a particular person to the Secretary if the officer, or the
Commission, is considering whether to give a notice under
paragraph 123UC(b) (child protection) or paragraphs 123UF(1)(b) or (2)(c)
(Queensland Commission) or the person in question is already subject to the
income management regime under either section 123UC or section 123UF,
and the information being disclosed is relevant to Part 3B (that is, the
application of the income management regime). Where information has been
provided to the Secretary by either a child protection officer or the
Queensland Commission then the Secretary will be authorised to release
protected information back to a child protection officer or the Queensland
Commission for the purposes of the functions or powers of the child protection
officer or the Queensland Commission.
New section 123ZEB provides that, despite any State or Territory law, a
State or Territory, non-government school authority or any other person who
is responsible for the operation of a school, can give information to the
Secretary about the enrolment or non-enrolment of children at school, or
about the attendance or non-attendance of children at school.
Division 8 - Debt Recovery etc
New section 123ZF provides that, where a person is subject to the income
management regime and an amount is paid out of that person's income
management account by cheque, in accordance with section 123YM, 123YN,
123YO or 123YP, and a person other than the payee obtains value for that
cheque without the permission of the payee (that is the payee did not endorse
the cheque to that other person), then the amount of the cheque is a debt
owed by the person who obtained the benefit of the cheque (the second
person) to the Commonwealth. Where an amount is recovered under this
provision then that amount is to be recredited to the income management
account that was originally debited with the value of the cheque and the
Special Account is also to be recredited accordingly.
42
New section 123ZG provides that, where a person is subject to the income
management regime and an amount is paid out of that person's income
management account by way of a voucher under subsection 123YC(2) or
123YD(2) or a stored value card under subsection 123YE(2), 123YF(2),
123YM(2), 123YN(2), 123YO(2) or 123YP(2), and a person other than the
intended recipient obtains the benefit of that voucher or stored value card
without the consent of the intended recipient then the amount of the voucher
or stored value card is a debt owed by the unauthorised recipient to the
Commonwealth. Where an amount is recovered under this provision then that
amount is to be recredited to the income management account that was
originally debited with the value of the voucher or stored value card and the
Special Account is also to be recredited accordingly.
New section 123ZH provides that, where a person is subject to the income
management regime and an amount is paid out of that person's income
management account to a third person, in accordance with section 123YI or
123YJ, then the Secretary may give that third person a written notice requiring
repayment of any amount not used by the account holder to acquire goods or
services. Where any amount is received by the Commonwealth in
accordance with the notice then the income management account of the
person and the Special Account is to be credited with the recovered amount.
New section 123ZI provides that, where a person is subject to the income
management regime and an amount is paid out of that person's income
management account to a third person, in accordance with section 123YI
or 123YJ, and the third person has breached any of the conditions of
payment, then any amount that has not been applied by the third person for
the acquisition of goods or services is a debt due to the Commonwealth.
Where any amount is recovered by the Commonwealth in accordance with
this section then the income management account of the person and the
Special Account is to be credited with the recovered amount.
New section 123ZJ provides that, if a person is subject to the income
management regime and the Secretary, due to an error, purports to take
action under Division 6 (that is, pay funds out of the person's income
management account in one of a variety of ways) that would have resulted in
the person's income management account having a negative balance, then
such an action (payment) will be valid for the purposes of this part. Where
such an error occurs and a customer's income management account has a
negative balance then the Special Account will be credited with an amount
equal to the amount of the customer's negative balance and the amount of the
negative balance is a debt owed by the person to the Commonwealth. Where
funds are recovered from the customer, under this provision, the amount of
the customer's income management account, and the Special Account, will be
credited with the amount recovered and the Special Account will also be
debited to repay the amount credited from the Consolidated Revenue Fund.
43
Division 9 - Miscellaneous
New section 123ZK provides that, where a person is subject to the income
management regime under section 123UF (Queensland Commission), then
where an amount is to be deducted from that person's Category Q or S
payment then in deciding the deductible portion in relation to the person's
payment the Secretary will be bound by any direction of the Queensland
Commission. That is, the Secretary will deduct the portion of the person's
Category Q or S payment that he is directed to by the Commission. This
deducted portion will then be subject to the income management regime.
Additionally, in deciding how to pay out the deducted portion of a person's
payment under Division 6, where that person is subject to the income
management regime due to section 123UF (Queensland Commission), the
Secretary must also comply with any direction of the Queensland
Commission.
New section 123ZL applies where a person is subject to the income
management regime and the Secretary has debited that person's income
management account to issue them, or another person, a voucher under
subsection 123YC(2) or 123YD(2) or a stored value card under
subsection 123YE(2), 123YF(2), 123YM(2), 123YN(2), 123YO(2) or
123YP(2). Where that voucher, or stored value card, is not used then it may
be surrendered to the Secretary and the income management account that it
was originally debited from, together with the Special Account, will be
recredited for the amount of the voucher or the amount of credit remaining on
the card.
New section 123ZM, without limiting the executive power of the
Commonwealth, allows the Secretary to purchase and issue vouchers for the
purposes of subsections 123YC(2) and 123YD(2) and enter into agreements
with suppliers to accept those vouchers in exchange for the provision of
goods and services to the holders of those vouchers. To any extent that the
issue of a voucher, or entering into such an agreement with a supplier,
involves the borrowing of money by the Commonwealth then this section
authorises that borrowing. A note under this provision directs readers to
section 37 of the Financial Management and Accountability Act 1997 which
provides that an agreement for the borrowing of money by the Commonwealth
is of no effect unless the borrowing is authorised by an Act.
New section 123ZN appropriates the Consolidated Revenue Fund for the
purposes of:
· returning funds to a person where they have ceased to be subject to
the income management regime, or to their estate where they have
died;
· purchasing vouchers or paying suppliers in accordance with any
agreement under which the supplier agrees to accept a voucher; and
44
· paying any amounts, including the issue (or top-up) of stored value
cards, for the purposes of Division 6.
Subsection 123ZN(2) clarifies that subsection 123ZN(1) is the only provision
in Part 3B of the Social Security Administration Act that appropriates the
Consolidated Revenue Fund.
New section 123ZO provides that the provisions of this Part (that is, the
income management regime) take precedence over any other part of the
social security or family assistance law or any part of the Student Assistance
Act 1973 or the Veterans' Entitlements Act.
Item 18 inserts new paragraph 144(ka) into the Social Security Administration
Act, which has the effect that the SSAT cannot review a decision made in
respect of a person subject to the income management regime under
section 123UB (relevant Northern Territory area). This provision has the
flow-on effect that such a decision will also not be reviewable by the AAT.
Such decisions will still be subject to review by an authorised review officer,
the Secretary or the Chief Executive Officer of Centrelink (see section 135 of
the Social Security Administration Act). The reason for these review
arrangements is the unique circumstances of the emergency response, given
that people still have full external merits review in relation to their substantive
entitlements and rates.
Section 192 provides a general power for the Secretary to obtain information
from a person where the Secretary considers that information is relevant to a
range of specified matters related to the administration of social security
payments and concession cards. Item 19 amends section 192 to insert a new
matter in relation to which information sought may be relevant, namely, the
operation of the income management regime. The effect of this amendment
is that where the Secretary considers that information may be relevant to new
Part 3B, such as which persons might be subject to the regime or how
payments under the regime might be administered, he or she may require
information or a document under a person's custody or control to be provided
to the Department.
Section 195(1) allows the Secretary to obtain information from a person about
a class of persons for a range of detection and verification purposes related to
the administration of social security payments. Item 20 inserts a new purpose
in paragraph (ca), namely, to facilitate the administration of the income
management regime in new Part 3B. Note that subsections 195(2) to (6),
which:
· restrict the nature of the kind of information which may be requested
about the class of persons;
· allow a broad scope of such a request if necessary; and
· direct the Secretary to deal with any irrelevant information obtained as
part of that request;
45
apply to requirements to provide information relevant to the administration of
the income management scheme.
Item 21 adds new subsections 202(6) and (7) to the Social Security
Administration Act. These new provisions allow the Secretary to release
protected information to a person who is responsible for the operation of one
or more schools in relation to the enrolment, attendance or non-attendance of
children at that school or schools.
Item 22 amends section 125 of the Veterans' Entitlements Act to take account
of the new Part 3B of the Social Security Administration Act.
46
Schedule 2 - Baby bonus
Summary
Baby bonus will be paid in 13 fortnightly instalments to claimants who are
subject to the income management regime.
Background
Baby bonus is currently paid in 13 fortnightly instalments to claimants who
have not turned 18 on the day they claim the baby bonus. Claimants who
have turned 18 generally receive their baby bonus as a lump sum payment,
although there is discretion to pay these customers their entitlement in
6 fortnightly instalments or in another way. The relevant payment provision is
section 47 of the Family Assistance Administration Act.
The amendments made by this schedule ensure that claimants who have
turned 18 on the day they claim the baby bonus and who are subject to
income management on the day that their claim for baby bonus is determined,
are paid their baby bonus in 13 fortnightly instalments.
Also included is a power for the Minister to specify, in a legislative instrument,
a class of individuals who are to be paid their baby bonus entitlement in 13
instalments.
Explanation of the changes
A New Tax System (Family Assistance) Act 1999
Item 1 makes a consequential amendment to subparagraph 38(c)(ii) of the
Family Assistance Act so that any unpaid baby bonus under the new rules
can be paid to a third party if the eligible individual dies before receiving their
full entitlement.
A New Tax System (Family Assistance) (Administration) Act 1999
Section 47 of the Family Assistance Administration Act provides for the
payment of baby bonus (and maternity immunisation allowance). Items 2
to 6 amend various provisions in section 47 to ensure that baby bonus is paid
in 13 fortnightly instalments to claimants who have turned 18 and who are
subject to income management.
The substantive rules are set out in new subsections 47(1A) and (1B),
inserted by item 2.
47
New subsection 47(1A) does two things. First, it ensures that a person who
has turned 18 when they claim the baby bonus and who is subject to income
management on the date of determination of their claim is paid their baby
bonus in 13 fortnightly instalments. Second, it enables the Minister to specify,
in a legislative instrument, a class of individuals that are to be paid their baby
bonus in 13 fortnightly instalments.
Instalments of baby bonus are to be paid at such time as the Secretary
considers appropriate and into a bank account nominated and maintained by
the claimant, although there would be discretion for the instalments to be paid
to the claimant in another manner. The relevant rules are at the end of new
subsection 47(1A) and in new subsection 47(1B). If the claimant is subject to
the income management regime under new Part 3B of the Social Security
Administration Act, then the claimant's instalments of baby bonus will be paid
in accordance with that regime.
The amendments made by items 3 and 5 are technical and make it clear that
the instalment regimes set out in subsections 47(2) and (3) operate despite
the rule in subsection 47(1) (payment of baby bonus in a lump sum). A note
at the end of item 3 also omits the existing heading to subsection 47(2).
Item 4 inserts a new paragraph into subsection 47(2) so that the instalment
regime set out in subsection 47(2) (payment of baby bonus by 6 fortnightly
instalments) cannot apply to claimants covered by new subsection 47(1A).
Subsection 47(4) enables the Secretary to change the day on which
instalment periods are to begin in relation to a claimant or class of claimants.
Subsection 47(6) enables the Secretary to change the day on which an
instalment is paid where payment cannot reasonably be made on the
designated day (for example, if the day is a public holiday).
Item 6 ensures that the rules in subsections 47(4) and (6) also apply in
relation to the payment of baby bonus by instalment under new
subsection 47(1A).
Item 7 provides that the amendments made by this Schedule apply to claims
for baby bonus made after this item commences (that is, the day after this Act
receives the Royal Assent).
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Schedule 3 - Northern Territory CDEP transitional payment
Summary
Beginning in September 2007, the Community Development Employment
Projects (CDEP) program in the Northern Territory will progressively be
replaced with other employment services. This change will involve the
movement of CDEP participants into real jobs, training or appropriate income
support including Work for the Dole.
These legislative amendments are designed to assist CDEP participants who
move onto income support by establishing a Northern Territory CDEP
transition payment. The payment will make up the difference between
average earnings from CDEP Scheme payments and income support
payments at 23 July 2007 (being the date of announcement of the CDEP
changes by the Minister for Families, Community Services and Indigenous
Affairs, and the Minister for Employment and Workplace Relations) and the
payments made under income support arrangements after the changes to
CDEP. Broadly, the payment will assist eligible individuals to manage any
changes in income that may result from their move to income support.
The CDEP changes will occur on a community by community basis. Each
Northern Territory CDEP provider will be issued with a transition day date at
which time CDEP Scheme participants will cease to be paid CDEP Scheme
payments. The Northern Territory CDEP transition payment will be available
to people in the Northern Territory who were receiving CDEP scheme
payments on 23 July 2007. The payment will be available on or after the day
the CDEP provider's CDEP transition date, and until 30 June 2008.
The transition payment will be calculated by determining an amount, as at
23 July 2007, of average CDEP scheme payments plus income support.
From this amount, a person's fortnightly income support rate and remote area
allowance (as at the date the person applies and is determined to be qualified
for income support after the CDEP transition date) will be deducted to provide
for a fortnightly transition payment. The maximum fortnightly rate that the
payment can be is $794.80.
For some former CDEP recipients, the amount of the Northern Territory CDEP
transition payment will be nil as they will receive more on income support than
they would have received through participating in the CDEP Scheme.
The Northern Territory CDEP transition payment ceases to be payable to
people who are in a compliance non-payment period or to those who are in
receipt of CDEP Scheme payments.
If a person's income support payment is quarantined, the Northern Territory
CDEP transition payment will also be quarantined in line with other social
security payments.
49
Background
In moving CDEP participants onto income support, the government has made
a commitment to minimise any associated loss of government-subsidised
income. A person participating in CDEP can receive income from a number
of sources and this income can be more than the amount a person could
receive from income support payments. In order to assist eligible individuals
to manage any changes in income that may result from their move to income
support, the government has introduced a new payment for former CDEP
participants in the Northern Territory, being the Northern Territory CDEP
transition payment.
People will generally be moved off the CDEP Scheme on a
community-by-community basis. During the transition phase, CDEP providers
will be supported in moving from delivering CDEP services to other
arrangements. A new Programme Funding Agreement will be offered to
current CDEP providers that will provide funding for the ongoing delivery of
critical CDEP activities until other arrangements are place.
Explanation of the changes
Income Tax Assessment Act 1936
Item 1 inserts new subparagraph 160AAA(1)(d) to include the Northern
Territory CDEP transition payment as a rebateable benefit for the purposes of
income tax assessment. This ensures that the Northern Territory CDEP
transition payment is, for tax purposes, treated the same as payments that are
currently made under the CDEP Scheme.
Social Security Act 1991
Item 2 amends subsection 23(1) to insert a definition of CDEPManager.
CDEPManager is the computer system used by the Department and CDEP
Scheme providers to assist with the management of CDEP. In particular,
CDEPManager is used to manage information on CDEP participants and
CDEP activities.
Item 3 amends subsection 23(1) to insert a new definition of CDEP Scheme
Provider. A CDEP Scheme Provider is a person or organisation that is a
party to a Programme Funding Agreement with the Commonwealth under
which the person or organisation receives Commonwealth funding to deliver
the CDEP Scheme.
50
Item 4 amends subsection 23(1) to insert a new definition of Northern
Territory CDEP transition payment. Broadly, this is a payment contained in
Part 2.27 which is made to former CDEP Scheme participants who transition
from the CDEP Scheme to income support payments. Its purpose is to
support people as the payment of CDEP Scheme payments cease. As CDEP
in the Northern Territory is progressively phased out, people who move onto
income support may have a change in their level of income. The Northern
Territory CDEP transition payment is to assist people to manage any changes
resulting from moving off CDEP Scheme payments.
Item 5 amends subsection 23(1) to insert a definition of transition day.
Broadly, the transition day is the day on which a CDEP Scheme Provider will
cease to provide Commonwealth funded CDEP payments to CDEP Scheme
participants.
Item 6 inserts a new part to Chapter 2. This new Part 2.27 creates the
Northern Territory CDEP transition payment. Division 1 of Part 2.27 sets out
qualification and payability criteria for the new payment.
Qualification for Northern Territory CDEP transition payment
New section 1061ZAAL provides that a person is qualified for the Northern
Territory CDEP transition payment if the person was eligible to participate in
the CDEP Scheme and was recorded as active in CDEPManager on
23 July 2007. To qualify for the transition payment, a person must also not
have had a break from participating in the CDEP Scheme for more than
12 consecutive weeks during the period between 23 July 2007 and the
transition day (the day CDEP Scheme payments will be ceased in relation to
the person's provider). Any period of approved leave is disregarded for the
purposes of calculating the 12 weeks. The eligibility criteria for the CDEP
Scheme is available at www.workplace.gov.au.
These are the CDEP eligibility criteria as at 23 July 2007 and are the criteria
that a person will need to meet on that day.
New paragraph 1061ZAAL(1)(e) allows for additional criteria to be included in
subsection 1061ZAAL(1) by legislative instrument.
New subsection 1061ZAAM(1) outlines that CDEP Scheme providers will be
given a notice which will specify a date on which they are to cease making
Commonwealth funded payments to CDEP Scheme participants. The date
specified in the notice will be specific to each CDEP Scheme provider. For a
person who is or has been registered with that CDEP Scheme provider, this is
the person's transition date. This date can be varied if the intended transition
day contained in the notice has not arrived (see subsection 1061ZAAM(3)).
Subsection 1061ZAAM (2) is intended to assist readers as the notice given
under subsection 1061ZAAM(1) is not a legislative instrument within the
meaning of section 5 of the Legislative Instruments Act 2003. Therefore, the
provision is merely declaratory of the law.
51
The purpose of subsection 1061ZAAM(5) is to provide that, in effect, a person
can only have one transition day. If a person is with a CDEP Scheme
provider which ceases making CDEP Scheme payments, and the person
subsequently moves to another provider which is still paying CDEP Scheme
payments, then even if the second provider ceases to make such payments
the person's transition day (for the purposes of qualifying for the transition
payment) is the transition day which occurred with the first provider. The rate
of the Northern Territory transition payment will be worked out relevant to the
person's first transition day (although where appropriate the rate can be
varied).
Payability of Northern Territory CDEP transition payment
Under new section 1061ZAAN the Northern Territory CDEP transition
payment will also not be payable unless a person:
· before the transition day has made a claim for a social security benefit
or social security pension which was granted or is yet to be granted; or
· makes a claim for a social security benefit or pension on or after the
transition day.
Making a claim for a social security pension or benefit is necessary as the
amount of a person's pension or benefit is required to calculate a person's
transition payment.
New section 1061ZAAO provides the Northern Territory CDEP transition
payment will also not be payable if a person is receiving CDEP Scheme
payments.
New section 1061ZAAP outlines that the Northern Territory CDEP transition
payment will not be payable if, as worked out in accordance with new
section 1061ZAAS, the payment would be less than $5.
New section 1061ZAAQ provides that the Northern Territory CDEP transition
payment is not payable if a compliance penalty period applied in relation to a
person. This means that, if a person's income support payment is not
payable due to the imposition of a compliance penalty period, the Northern
Territory CDEP transition payment will also not be paid. In the event a person
decides to, in effect, self-serve the compliance penalty period and cancels
their income support payment, the Northern Territory CDEP transition
payment will remain not payable until the compliance penalty period has
finished.
52
New section 1061ZAAR provides that the Northern Territory transition
payment will not be paid after 1 July 2008. The intention of the transition
payment is to assist people in adjusting when moving from CDEP Scheme
payments to income support during the transition phase. It is not intended to
be a long term income support payment. People who move onto income
support will be provided training and employment services to assist them into
real jobs.
Rate of Northern Territory CDEP transition payment
Division 2 of Part 2.27 sets out the rate of the Northern Territory CDEP
transition payment.
Broadly, the method of calculation is designed so that a person who ceases to
be paid CDEP Scheme payments and moves onto income support will not
receive less money as an income support recipient as opposed to the amount
they received from CDEP Scheme payments and income support payments.
CDEP Scheme payments are fortnightly payments made from the wages
component grant under the CDEP Scheme (see current subsection 23(1)).
The establishment of the Northern Territory CDEP transition payment was
announced on 23 July 2007 and the inclusion of 23 July 2007 as being the
relevant date for the calculations in section 1061ZAAT is so that people do not
arrange their participation in the CDEP Scheme in such a way as to maximise
the rate of the Northern Territory CDEP transition payment.
New section 1061ZAAS provides that the rate of the Northern Territory
CDEP transition payment will be the excess of the person's pre-transition
fortnightly income as calculated in accordance with new section 1061ZAAT,
over the amount of the person's post-transition day fortnightly income as
calculated in accordance with new section 1061ZAAU. However, if the
Secretary considers that the calculation of the rate is not appropriate, the
Secretary can determine a rate that is to be paid to the person. This is to
ensure that if for some reason the calculation does not appropriately provide
for what a person would receive through income support and CDEP Scheme
payments on 23 July 2007, then an appropriate rate can be calculated. This
calculation must be made subject to any guidelines (if any) that are contained
in legislative instrument rules. While generally the Northern Territory CDEP
transition payment will be paid in fortnightly instalments similar to other social
security payments, the rate of the transition payment is a daily rate (see
subsection 1061ZAAS(1)).
53
New section 1061ZAAT outlines the method for calculating a person's
pre-23 July 2007 fortnightly income. The period over which the person's
income is to be averaged will depend on the person's circumstances, but it
will not be greater than a 13 week period and it must end on 23 July 2007.
The intention is that the period will be less than 13 weeks if the person was
participating in the CDEP Scheme for less than 13 consecutive weeks prior to
23 July 2007 or if the person changed CDEP Scheme providers within the
13 week period immediately prior to 23 July 2007. If a person falls within
either of these circumstances, the period will be the period for which the
person has been with their most recent CDEP Scheme provider or has been
participating in the CDEP Scheme.
In the event a person had only been participating in the CDEP Scheme for
less than one fortnight prior to 23 July 2007, the income earned by that
person will be calculated on a pro rata basis in order to determine the average
fortnightly income.
For some social security benefits, even where a person is qualified for that
benefit, participation in the CDEP Scheme results in no rate payable.
However, for certain pensions and benefits a person can receive both an
amount of pension or benefit in addition to CDEP Scheme payments. The
amount of a person's payment is decreased against CDEP Scheme payments
received (see current section 1188C). However, to ensure that when people
leave the CDEP Scheme, the total amount that was payable to a person is
accounted for it is appropriate that any amount of pension or benefit is
included in the calculation.
Any fortnightly provision rate of social security benefit or social security
pension which a person was receiving on 23 July 2007 will also be calculated
to determine the fortnightly amount of income. This amount of pension or
benefit will be added together with the average fortnightly CDEP Scheme
payments. If a person was receiving the remote area allowance and/or the
CDEP Scheme Participant supplement on 23 July 2007, this will also be
added on to the CDEP wages and income support to determine a person's
overall pre-transition fortnightly income.
However, if the Secretary considers this calculation as not being appropriate,
the Secretary can determine a different amount of the person's
pre-23 July 2007 fortnightly income. However, in doing so, the Secretary
must have regard to the person's income as at 23 July 2007 from CDEP
Scheme payments and any social security pension or benefit. This is
necessary to ensure that any anomalous situations that arise can be
adequately provided for.
54
New section 1061ZAAU outlines the method for calculating a person's post-
transition day fortnightly income. The post-transition day fortnightly income
will be the fortnightly provisional rate of social security benefit or provisional
annual payment rate (expressed as a fortnightly rate) of social security
pension (if the person is receiving the amount) plus the remote area
allowance (if the person is receiving the amount) calculated on the person's
start day or another day determined by the Secretary.
To be granted a claim (see section 37 of the Administration Act) for the
Northern Territory CDEP transition payment a person will need to be both
qualified and payable for the Northern Territory CDEP transition payment.
The person's start date for the transition payment will be worked out under the
normal rules applying to social security payments (see Schedule 2 of the
Administration Act). Broadly, this will be the day the person claimed for the
transition payment or if the person claims before he or she is qualified, the
first day the person becomes qualified for the transition payment.
New subsection 1061ZAAU(3) provides that, if the Secretary considers the
calculation as not being appropriate, the Secretary can determine the amount
of the person's post-23 July 2007 fortnightly income. However, in making any
determination under section 1061ZAAU the Secretary must have regard to
guidelines (if any) set out in legislative instrument rules.
New section 1061ZAAV provides that the maximum fortnightly rate of the
Northern Territory CDEP transition payment under section 1061AAR is
$794.80. This figure is based on the maximum income a person could
receive through CDEP Scheme payments as at 23 July 2007 (maximum
allowable quarterly CDEP payments calculated as fortnightly payments).
Northern Territory CDEP transition payment - miscellaneous rules
Division 3 of Part 2.27 sets out miscellaneous rules in relation to Northern
Territory CDEP transition payment.
New section 1061ZAAW provides that the Secretary may, by legislative
instrument, make rules in relation to any matters under the new Part 2.27, the
qualification and payability rules and/or matters in relation to the Northern
Territory CDEP transition payment. The section also provides that the rules
imposed by legislative instrument will be in addition to those imposed by the
new Part 2.27.
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Item 7 inserts new subsection 1188B(2A). This subsection provides that a
person participating in CDEP transitional activities is not a CDEP Scheme
participant. This does not preclude a person who is eligible to be part of a
CDEP Scheme to forgo the Northern Territory CDEP transition payment and
transfer to a provider who is still operating under the CDEP Scheme.
However, currently, CDEP Scheme participants as defined in the Social
Security Act are unable to access the maximum basic rate of certain
payments and the remote area allowance. People in the Northern Territory
who are moving from the CDEP Scheme to income support will need to be
able to access income support on the same basis as all other income support
recipients.
Item 8 inserts new sections 1188BA and 1188BB into Part 3.15A of the
Social Security Act. Under new section 1188BA the Secretary may, in writing,
approve activities as CDEP transitional activities. This approval is not
necessarily intended to be an approval in respect of individual recipients. It is
intended that these activities will be set out in the new Programme Funding
Agreement which will be offered to current CDEP providers. Such activities
are likely to be similar to those currently undertaken through the CDEP
Scheme. Any activity tested income support recipients will also have the
activities set out in their Activity Agreement.
Subsection 1188BA(2) is intended to assist readers as the approval under
subsection 1188BA(1) is not a legislative instrument within the meaning of
section 5 of the Legislative Instruments Act 2003. Therefore, the provision is
merely declaratory of the law.
New section 1188BB clarifies that a person who engages in Northern Territory
CDEP transitional activities is not taken to be an employee merely because of
undertaking those activities for purposes of the following legislation:
· Occupational Health and Safety Act 1991;
· Safety, Rehabilitation and Compensation Act 1988;
· Superannuation Guarantee (Administration) Act 1992; or
· Workplace Relations Act 1996.
Social Security (Administration Act) 1999
Item 9 inserts new paragraph 52(1)(l). This means that the Northern Territory
CDEP transition payment will continue to be payable to a person if a person is
overseas for such times as the Secretary determines.
Item 10 inserts new subsection 138(3). This subsection provides that
paragraphs 138(1)(a) and 138(1)(c) do not apply to decisions that are made in
relation to the Northern Territory CDEP transition payment.
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Item 11 inserts new paragraph 144(daa). This paragraph has the effect that
decisions under the Social Security Act or the Social Security Administration
Act in relation to the Northern Territory CDEP transition payment are not
reviewable by the Social Security Appeals Tribunal, or consequently the
Administrative Appeals Tribunal. However, any decisions will still be subject
to internal review, either at the request of the person or as an own motion
review by the Secretary (or delegate). The exclusion of external merits review
is considered appropriate as this payment is a short term transitional payment
that is above other payments available to all other income support recipients
including people who cease to participate in the CDEP Scheme in other
circumstances. The internal review mechanism will ensure adequate
oversight in the correct calculation of payments.
Item 12 includes in the definition of social security periodic payment,
Northern Territory CDEP transition payment. This means that the rules which
apply to social security periodic payments will also apply to the Northern
Territory CDEP transition payment except where the Act provides otherwise.
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