Supplementary Explanatory Memorandum
(Circulated by the authority of the Minister for Social Services, the Hon Christian Porter MP)Schedule 10 - Start date for some participation payments
Summary
The amendments to Schedule 10 of the Bill amend the provisions in the Social Security Act that determine whether a person on Newstart Allowance or Youth Allowance (other) is subject to an Ordinary Waiting Period (OWP), and the commencement of that period.
Under Schedule 10 of the Bill, the day on which these payments become payable for persons subject to RapidConnect and who are also subject to an OWP would be later than intended. The effect of these amendments is that there will be no changes as a result of the Bill to whether or not a person is subject to an OWP, or when that OWP begins - whether they are subject to RapidConnect or not.
Background
Schedule 10 of the Bill amends the day from which Newstart Allowance or Youth Allowance (other) for job seekers who are subject to RapidConnect becomes payable (that is, their start day). For persons not subject to an OWP, the new start day will be the day the job seeker attends their first appointment with an employment services provider, unless the provider is unable to offer an appointment within two business days, the person has a reasonable excuse for not attending their first appointment, or the person is not qualified for the allowance on the day.
The Social Security Act provides that the OWP is a period of 7 days that generally commences on the day the person's payment would start, but for their serving an OWP. Currently, that day is usually the day they make their claim for income support under the general start day rule in the Social Security Administration Act.
Because Schedule 10 generally makes the start day for persons subject to RapidConnect the day they attend their appointment, rather than the day of their claim (as is currently the case), the OWP for these people will instead begin on the day of their attendance at the appointment, not from the day of their claim. This means that a person subject to both an OWP and RapidConnect will usually have their OWP commence later, and therefore end later, than a person who is subject to an OWP, but not subject to RapidConnect. As a person cannot be paid their payment until after their OWP ends (at the earliest), these people will have to wait longer for their payment to start than was intended under the amendments in Schedule 10.
These amendments to Schedule 10 amend the OWP provisions so that the OWP for people subject to RapidConnect will commence on the same day as for people not subject to RapidConnect, as is currently the case under the social security law.
These amendments will also ensure that Schedule 10 to the Bill will not affect the calculation of certain time periods relating to whether a RapidConnect participant is subject to an OWP, in particular in circumstances where they:
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- received an income support payment in the 13 weeks immediately prior to the person's start day; or
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- are experiencing a personal financial crisis (which may include being subject to domestic violence or severe financial hardship in the 4 weeks immediately prior to the person's start day).
Explanation of the changes
Social Security Act
Amendment (1 ) inserts new Item 1A . This item inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act, into paragraph 549CA(2)(a) of the Social Security Act.
Paragraph 549CA(2)(a) currently provides that, subject to subsection 549CA(3), a person who is qualified for youth allowance (other) is subject to an ordinary waiting period unless, at some time in the 13 weeks immediately before the person's start day (which is worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), the person received an income support payment. Item 1A amends paragraph 549CA(2)(a) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.
This amendment ensures that the amendments made by Item 2 of Schedule 10 to the Bill (that is, the insertion of clause 4A into Schedule 2 to the Social Security Administration Act), will not affect how the start day is worked out for the purposes of determining whether a youth allowance (other) claimant who is also a RapidConnect participant is subject to an ordinary waiting period under paragraph 549CA(2)(a). The 13 week period referred to in paragraph 549CA(2)(a) will be worked out by reference to a start day that will be the same for both youth allowance (other) claimants who are RapidConnect participants, and youth allowance (other) claimants who are not RapidConnect participants.
Another effect of the amendment in Item 1A is that the calculation of certain time periods relating to whether a RapidConnect participant is subject to an ordinary waiting period in circumstances where they are experiencing a personal financial crisis will not be affected by the amendments made by Item 2 of Schedule 10. The 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be based on the start day worked out disregarding both clauses 4A and 5 of Schedule 2 to the Social Security Administration Act (see below).
Under paragraph 549CA(2)(b), a person who is qualified for youth allowance (other) is subject to an ordinary waiting period unless the Secretary is satisfied that the person is 'experiencing a personal financial crisis'. The definition of when a person is 'experiencing a personal financial crisis' is contained in section 19DA of the Social Security Act, and is when a person is in severe financial hardship, and either subsection 19DA(2), (3) or (4) applies to the person. Subsection 19DA(2) applies where the person was subject to domestic violence at some time in the 4 weeks immediately before the person's start day mentioned in, relevantly, paragraph 549CA(2)(a). Subsection 19DA(3) applies where the person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure in the 4 weeks immediately before the person's start day mentioned in, relevantly, paragraph 549CA(2)(a). The definition of 'unavoidable or reasonable expenditure' in paragraph 19C(4)(a)(iv) provides that unavoidable or reasonable expenditure includes the reasonable costs of living that the person is taken to have incurred in respect of the 4 weeks immediately before the person's start day mentioned in, relevantly paragraph 549CA(2)(a).
By ensuring that clause 4A of Schedule 2 is disregarded in the calculation of the start day in paragraphs 549CA(2)(a), the relevant 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be worked out by reference to a start day that will be the same for both youth allowance (other) claimants who are RapidConnect participants, and youth allowance (other) claimants who are not RapidConnect participants, as is currently the case.
Amendment (2 ) inserts new Items 1B and 1C . Item 1B inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into subsection 549CB(1) of the Social Security Act.
Subsection 549CB(1) currently provides that, subject to subsections 549CB(2) and (4), if a youth allowance (other) claimant is subject to an ordinary waiting period, the ordinary waiting period is the period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act). Item 1B amends subsection 549CB(1) to provide that a person's start day for the purposes of that subsection is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.
This amendment ensures that the amendments made by Item 2 of Schedule 10 to the Bill will not affect how the start day is worked out for the purposes of determining when an ordinary waiting period commences for a youth allowance (other) claimant who is also a RapidConnect participant. The day an ordinary waiting period commences under subsection 549CB(1) will be the same for both youth allowance (other) claimants who are RapidConnect participants, and youth allowance (other) claimants who are not RapidConnect participants.
Item 1C inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into paragraph 549CB(2)(b) of the Social Security Act.
This amendment is consequential to the amendment made by Item 1B. Subsection 549CB(2) determines when an ordinary waiting period commences for a youth allowance (other) claimant where the person would otherwise be subject to an ordinary waiting period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), but where the person is subject to one or more exclusion periods. Item 1C amends paragraph 549CB(2)(b) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.
Amendment (3 ) inserts new Item 1D . This item inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into paragraph 620(1)(a) of the Social Security Act.
Paragraph 620(1)(a) currently provides that, subject to subsection 620(2), a newstart claimant is subject to an ordinary waiting period unless, at some time in the 13 weeks immediately before the person's start day (which is worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), the person received an income support payment. Item 1D amends paragraph 620(1)(a) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.
As discussed above regarding the amendments made by Item 1A in relation to youth allowance (other) claimants, this amendment ensures that the amendments made by Item 2 of Schedule 10 to the Bill will not affect how the start day is worked out for the purposes of determining whether a newstart claimant who is also a RapidConnect participant is subject to an ordinary waiting period under paragraph 620(1)(a).
Another effect of the amendment in Item 1D is that the calculation of certain time periods relating to whether a RapidConnect participant is subject to an ordinary waiting period in circumstances where they are experiencing a personal financial crisis will not be affected by the amendments made by Item 2 of Schedule 10. The 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be based on the start day worked out disregarding both clauses 4A and 5 of Schedule 2 to the Social Security Administration Act.
Under paragraph 620(1)(g), a newstart claimant is subject to an ordinary waiting period unless the Secretary is satisfied that the person is 'experiencing a personal financial crisis'. As discussed above in relation to the amendments made by Item 1A, the definition of when a person is 'experiencing a personal financial crisis' is contained in section 19DA of the Social Security Act. Subsections 19DA(2) and (3) also refer to a person begin subject to domestic violence or severe financial hardship in the 4 weeks immediately prior to the person's start day mentioned in, relevantly paragraph 620(1)(a). Similarly, the relevant definition of 'unavoidable or reasonable expenditure' in paragraph 19C(4)(a)(iv) also refers to the reasonable costs of living that the person is taken to have incurred in respect of the 4 weeks immediately before the person's start day mentioned in, relevantly, paragraph 620(1)(a).
By ensuring that clause 4A of Schedule 2 is disregarded in the calculation of the start day in paragraph 620(1)(a), the relevant 4 week periods referred to in subsections 19DA(2), 19DA(3) and paragraph 19C(4)(a)(iv) of the Social Security Act will also be worked out by reference to a start day that will be the same for both newstart claimants who are RapidConnect participants, and newstart claimants who are not RapidConnect participants, as is currently the case.
Amendment (4 ) inserts new Items 1E and 1F . Item 1E inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into subsection 621(1) of the Social Security Act.
Subsection 621(1) currently provides that, subject to subsections 621(3) and (5), if a newstart claimant is subject to an ordinary waiting period and not disqualified for newstart under section 589 (liquid assets test), the ordinary waiting period is the period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act). Item 1E amends subsection 621(1) to provide that a person's start day for the purposes of that subsection is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.
As discussed above regarding the amendments made by Item 1B in relation to youth allowance (other) claimants, this amendment ensures that the amendments made by Item 2 of Schedule 10 to the Bill will not affect how the start day is worked out for the purposes of determining when an ordinary waiting period commences for a newstart claimant who is also a RapidConnect participant.
Example:
Jenny makes a claim for newstart allowance on 1 February 2018 and is identified as a RapidConnect participant. On 2 February, Jenny is given a notice under section 63 of the Social Security Administration Act to attend an appointment with her employment provider on the next business day, 5 February 2018. She attends that appointment on 5 February 2018 as required .
Jenny is subject to an ordinary waiting period under subsection 620(1) of the Social Security Act. The day the waiting period commences is determined under subsection 621(1) and will be Jenny's start day which is worked out disregarding clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act. Jenny's start day for the purposes of subsection 621(1) of the Social Security Act is therefore worked out under clause 3(1) of Schedule 2 to the Social Security Administration Act, which is the day she made her claim (1 February 2018 ). Consequently, Jenny's ordinary waiting period is the 7 day period from 1 February 2018 - 7 February 2018. This would have been Jenny's ordinary waiting period even if she was not a RapidConnect participant .
Jenny's actual start day is worked out under clause 5 of Schedule 2 to the Social Security Administration Act. As a RapidConnect participant, if she was not subject to an ordinary waiting period, Jenny's start day would be worked out under clause 4A(4) of Schedule 2, and would be the day she attended the appointment with her employment provider (5 February 2018 ). However, because she is serving an ordinary waiting period on 5 February 2018, her start day is worked out under clause 5(1 )( a) of Schedule 2 instead. This is the day after her ordinary waiting period ends. Because Jenny's ordinary waiting period ends on 7 February 2018, the start day for her newstart allowance is 8 February 2018 .
Item 1F inserts a reference to clause 4A of Schedule 2 to the Social Security Administration Act into paragraph 621(3)(b) of the Social Security Act.
This amendment is consequential to the amendment made by Item 1E. Subsection 621(3) determines when an ordinary waiting period for a newstart claimant commences where the person would otherwise be subject to an ordinary waiting period of 7 days that starts on the person's start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act), but where the person is subject to one or more exclusion periods. Item 1F amends paragraph 621(3)(b) to provide that a person's start day for the purposes of that paragraph is worked out disregarding both clause 4A and clause 5 of Schedule 2 to the Social Security Administration Act.