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House of Representatives

COVID-19 Disaster Payment (Funding Arrangements) Bill 2021

COVID-19 Disaster Payment (Funding Arrangements) Act 2021

Explanatory Memorandum

(Circulated by authority of the Minister for Agriculture, Drought and Emergency Management, the Hon David Littleproud MP)

OUTLINE

The COVID-19 disaster payment has been introduced under the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) to provide time-limited financial assistance to eligible workers who are unable to earn their usual income as a result of public health restrictions, such as public health orders imposed by State or Territory governments, and where the Commonwealth Chief Medical Officer has determined the location to be a COVID-19 hotspot for the purposes of Commonwealth support.

At the time of introduction of the Bill, the COVID-19 disaster payment is available to a person who:

is an Australian citizen, permanent resident or the holder of a temporary visa who has the right to work in Australia; and
is aged 17 years or over; and
resides or is employed in a location in Australia that is, or resided or was employed in a location in Australia at a time that it was, subject to a State or Territory public health order restricting the movement of persons for a period of more than seven days and that has been determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot for the purposes of Commonwealth support; and
is, or was, unable to earn their usual income because restrictions imposed by the public health order prevent, or prevented, them from being able to work in their usual employment; and
other than annual leave, has, or had, no available leave entitlements to cover the period of the restrictions; and
declares that, during the period of the restrictions, they reside or are employed, or resided or were employed, in the hotspot area and have, or had, liquid assets of less than $10,000; and
is not, or was not, during the period of restrictions, otherwise receiving Commonwealth income support payment or payments of a similar nature, or the pandemic leave disaster payment (see item 434 of the table in Part 4 of Schedule 1AB to the FF(SP) Regulations).

Additional eligibility criteria may also apply, set out in the COVID-19 Disaster Payment Guidelines that are publicly available, free of charge on the GrantConnect website ( www.grants.gov.au ).

The purpose of the COVID-19 Disaster Payment (Funding Arrangements) Bill 2021 (the Bill) is to establish a special appropriation to draw funds from the Consolidated Revenue Fund for the payment of the COVID-19 disaster payment. Item 492 of the table in Part 4 of Schedule 1AB to the FF(SP) Regulations provides legislative authority for government spending on the COVID-19 disaster payment from the special appropriation established by this Bill.

As the COVID-19 payment is intended to be available to all persons who qualify, a special limited as to time appropriation will ensure that funds can be appropriated in the 2021-22 financial year to make payments. Annual Appropriation Acts only provide a limited amount of funding from the Consolidated Revenue Fund to meet expenses in a specific year making them largely unsuitable for demand driven payments of this nature.

Due to the urgency of payments needing to be made in June 2021, unspent prior year annual appropriations to the Department of Home Affairs (Home Affairs) were used to make initial payments. The availability of these appropriations was fortuitous and may not be repeatable in the 2021-22 financial year.

Given the entitlement based and demand driven nature of the COVID-19 disaster payments, together with the unpredictability of the timing and duration of lockdown events which restrict the movement of persons, the amount that may potentially be payable by government cannot be suitably quantified. Funding the COVID-19 disaster payments from a special appropriation will mean that payments can be made as needed on or before 30 June 2022.

As of 1 July 2021, responsibility for the payment will shift to the National Recovery and Resilience Agency (NRRA). Reflecting this shift, the Bill also contains an obligation for the Coordinator-General of the NRRA to include information in the NRRA's annual report that relates to COVID-19 disaster payments made in the 2021-22 financial year. This will ensure that information about payments made under the special appropriation is available on the public record, alongside the information already required to be provided under the Commonwealth Grants Rules and Guidelines 2017 on the GrantConnect website.

Further information concerning the administration of the COVID-19 disaster payment is available in the explanatory statements for the Financial Framework (Supplementary Powers) Amendment (Home Affairs Measures No. 2) Regulations 2021 and the Financial Framework (Supplementary Powers) Amendment (Home Affairs Measures No. 3) Regulations 2021.

FINANCIAL IMPACT STATEMENT

The financial impact of the Bill is unquantifiable as it depends on the specifics of each lockdown event which restricts the movement of persons, such as the timing and duration of the lockdown, and the size of the eligible population and geographical area (or areas) affected. It is a potentially high expense for Government, depending on whether further public health orders are made by State and Territory governments to respond to a COVID-19 pandemic event and whether that location is also determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot for the purposes of Commonwealth support. There is no effective cap on the expenditure as it is demand driven. As outlined above, information about payments made from the special appropriation will be publicly available on the GrantConnect website and in the NRRA's annual report.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

A Statement of Compatibility with Human Rights has been completed in relation to the Bill and assesses that the Bill is compatible with Australia's human rights obligations. A copy of the Statement of Compatibility with Human Rights is included in the Attachment .

NOTES ON PROVISIONS

Part 1 - Preliminary

Clause 1 Short title

1. Clause 1 of the Bill provides for the short title of the Act to be the COVID-19 Disaster Payment (Funding Arrangements) Bill 2021.

Clause 2 Commencement

2. Clause 2 of the Bill sets out the times at which the Act commences once passed by the Parliament.

3. A table in subclause (1) provides that the Bill commences on the later of 1 July 2021 and the day after the Act receives the Royal Assent (see column 2 of the table).

4. Subclause (2) provides that any information in column 3 of the table is not part of the Bill. Information may be inserted in this column, or information in it may be edited, in any published version of this Bill. The date of commencement will be inserted into column 3 when the Bill is given the Royal Assent.

Clause 3 Definitions

5. Clause 3 defines the term COVID-19 disaster payment to mean a payment or grant of financial assistance covered by item 492 of the table in Part 4 of Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations).

6. Item 492 of the FF(SP) Regulations, at the time of introduction of the Bill, provides that a person qualified for a payment or grant where the person:

is an Australian citizen, permanent resident or the holder of a temporary visa who has the right to work in Australia; and
is aged 17 years or over; and
resides or is employed in a location in Australia that is, or resided or were employed in a location in Australia at a time that it was, subject to a State or Territory public health order restricting the movement of persons for a period of more than seven days and has also been determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot for the purposes of Commonwealth support; and
is, or was, unable to earn their usual income because restrictions imposed by the public health order prevent, or prevented. them from being able to work in their usual employment; and
other than annual leave, has, or had, no available leave entitlements to cover the period of the restrictions; and
declares that, during the period of the restrictions, they reside or are employed, or resided or were employed, in the hotspot area and have, or had, liquid assets of less than $10,000; and
is, or was, not, during the period of restrictions, otherwise receiving Commonwealth income support payment or payments of a similar nature, or the pandemic leave disaster payment (see item 434 of the table in Part 4 of Schedule 1AB to the FF(SP) Regulations).

7. Additional eligibility criteria may also apply under the COVID-19 Disaster Payment Guidelines, available on the GrantConnect website ( www.grants.gov.au ).

Part 2 - Appropriation

Clause 4 Appropriation

8. Clause 4 provides for a special appropriation for the COVID-19 Disaster Payment.

9. Subclause 4(1) provides that the Consolidated Revenue Fund is appropriated for the purpose of making COVID-19 disaster payments. Given that the payment is demand driven and entitlement based, the special appropriation established by subclause 4(1) is unlimited as to amount.

10. Subclause 4(2) sets out that the special appropriation in subclause (1) applies to COVID-19 Disaster Payments made on or after the commencement of clause 4 and before the end of 30 June 2022. This limitation reflects the time-limited nature of Commonwealth income support for the COVID-19 pandemic.

11. Given the proposal for the Bill to commence on 1 July 2021, as outlined in clause 2, the special appropriation in this clause will apply from the start of the 2021-22 financial year (subject to passage through the Parliament).

Part 3 - Annual report

Clause 5 Inclusion of information in the National Recovery and Resilience Agency's annual report

12. The NRRA is prescribed to be a 'listed entity' for the purpose of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act), and the Coordinator-General of the NRRA is the 'accountable authority' for the agency (see section 15A of the Public Governance, Performance and Accountability Rule 2014). This means that, under section 46 of the PGPA Act, the Coordinator-General is required to prepare an annual report to the Minister responsible for the NRRA (currently in the Prime Minister's portfolio) about the NRRA's activities each financial year.

13. Clause 5 creates an obligation on the Coordinator-General of the NRRA to include information in the NRRA's annual report that relates to COVID-19 Disaster Payments made in each reporting period (see subclause (1)). The obligation will provide for the inclusion of information such as:

the total amount paid in COVID-19 Disaster Payments for the reporting period;
the number of payments granted, and the number of applications that were not granted;
if COVID-19 Disaster Payments are required for multiple events in the reporting period-the amount paid and number of claims for each event; and
qualitative information to assist with the interpretation of the abovementioned quantitative information.

14. These particular obligations have not been specified in primary legislation to reflect the fact that the nature and scope of required COVID-19 disaster payments, which are available on a demand driven basis, cannot be suitably quantified. It is noted that the Privacy Act 1988 applies to the NRRA and its officials, and that personal information will not be unreasonably disclosed in the NRRA's annual report.

15. Subclause 5(2) provides that the annual reporting obligation applies to each reporting period that ends after the commencement of this section. This means that, if the Bill does not commence until after 1 July 2021, the obligation to provide information relating to COVID-19 disaster payment will still be contained in the NRRA's 2021-22 annual report.

ATTACHMENT - Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

COVID-19 Disaster Payment (Funding Arrangements) Bill 2021

The COVID-19 Disaster Payment (Funding Arrangements) Bill 2021 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

1. The Bill provides for a special appropriation from the Consolidated Revenue Fund for the payment or grant of COVID-19 disaster payments, as authorised by item 492 of the table in Part 4 of Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997, and for the inclusion of information in the National Recovery and Resilience Agency's annual report about the payments made under this special appropriation.

2. On 3 June 2021, the Prime Minister, the Hon Scott Morrison MP, announced the establishment of a temporary COVID-19 disaster payment in recognition that extended lockdown periods can have serious financial implications for workers. The COVID-19 disaster payment aims to help lawful workers unable to work and earn their usual income, because they are subject to state or territory public health orders restricting the movement of persons and the Commonwealth Chief Medical Officer has determined the area to be a COVID-19 hotspot for the purposes of Commonwealth support.

Human rights implications

3. The Bill engages the following rights:

the right to health in Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR); and
the right to an adequate standard of living in Article 11 of the ICESCR.

Right to health

4. Article 12 of the ICESCR states, in part:

1. The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.
2. The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for: [...]

(c)
The prevention, treatment and control of epidemic, endemic, occupational and other diseases; [...].

5. This Bill ensures that the Government will have secure funding to make the COVID-19 disaster payment available to all people who qualify for it. The COVID-19 disaster payment was introduced as time limited financial assistance to those who are, or were, unable to work because of state or territory public health orders and who do not have sufficient leave entitlements, other than annual leave, or another means of income support for the period of the orders in effect for greater than seven days.

6. The primary aim of this Bill is to provide for a suitable ongoing funding mechanism for the COVID-19 disaster payment, in order to promote public health by ensuring that economic pressure is not a reason for persons to break public health orders and risk spreading COVID-19 to others. This measure therefore promotes the right to health.

Right to an adequate standard of living

7. Article 11(1) of the ICESCR states:

The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. [...]

8. Similarly, in securing funding for the COVID-19 disaster payment, this Bill assists in promoting the right to an adequate standard of living for those persons who are, or were, unable to work because of state or territory public health orders and who do not have sufficient paid leave entitlements, other than annual leave, or another means of income support for the period of the orders in effect for greater than seven days.

Conclusion

9. This Bill is compatible with human rights because it supports and promotes the rights to health and to an adequate standard of living.


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