House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Social Services, the Hon Amanda Rishworth MP)

OUTLINE

This Bill amends several Acts that provide for social security or equivalent payments, to implement income support measures being provided for in the 2023-24 Budget. These measures include:

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expanding qualification for parenting payment (single) to single principal carers whose youngest child is aged under 14 years (up from under 8 years);

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increasing the rates of working age and student payments by $40 per fortnight, including jobseeker payment, youth allowance, parenting payment (partnered), austudy payment, disability support pension (youth);

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expanding eligibility for the higher rate of jobseeker payment to recipients aged 55 years and over who have been on payment for nine or more continuous months (reducing the qualifying age from 60 years); and

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increasing the maximum rates of Commonwealth rent assistance by 15 per cent.

Financial impact statement

IMPACT ANALYSIS

The impact analysis appears at the end of this explanatory memorandum.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The statement of compatibility with human rights appears at the end of this explanatory memorandum.

Notes on Clauses

Abbreviations used in this explanatory memorandum

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Social Security Act means the Social Security Act 1991;

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Family Assistance Act means the A New Tax System (Family Assistance) Act 1999;

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Veterans' Entitlements Act means the Veterans' Entitlements Act 1986.

Clause 1 sets out how the new Act is to be cited - that is, as the Social Services and Other Legislation Amendment (Strengthening the Safety Net) Act 2023.

Clause 2 provides a table setting out the commencement dates of the various sections in, and Schedules to, the new Act.

Clause 3 provides that legislation that is specified in a Schedule to the new Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the new Act has effect according to its terms.

Schedule 1 - Additional support for single parents

Summary

This Schedule amends the Social Security Act to expand eligibility for parenting payment (single) to single principal carers of a dependent child under 14 years (eligible carers), from the current rules limiting qualification to single principal carers of a child under 8 years.

Background

This Schedule provides additional financial assistance for single parents with dependent children until they have reached an age where they have commenced high school and require less supervision.

A person's qualification for parenting payment (single) currently ceases when their youngest child turns 8. Although the person ceases to qualify for parenting payment (single) at this time, they generally remain qualified for jobseeker payment. Due to the respective rate differences, the eligible carer's maximum basic rate drops from $922.10 (parenting payment (single)) to $745.20 (jobseeker payment - single person with a dependent child) (rates applicable 20 March 2023 to 19 September 2023).

This Schedule will make amendments to Subdivision A of Division 1 of Part 2.10 of the Social Security Act to sustain the eligible principal carer's parenting payment (single) qualification and higher rate of payment by raising the parenting payment (single) child age restriction from 8 to 14 years. This will allow eligible carers who have already transferred to a different payment, such as jobseeker payment, and experienced a rate reduction due to the current policy (i.e. their youngest child is between the age of 8 and 14), to requalify for parenting payment (single). These recipients will automatically transfer to parenting payment (single) on 20 September 2023.

The age of the child determines whether they are a PP child under section 500D of the Act.

Explanation of the changes

Social Security Act

Item 1 increases the maximum age for which a child is a PP Child for the purposes of parenting payment (single). This is achieved by amending the age in paragraph 500D(2)(c) of the Social Security Act from 8 to 14.

Item 2 makes consequential amendments to subparagraph 1061PJ(2A)(b)(iii) of the Social Security Act, which provides for the payments attracting pensioner education supplement. The amendment substitutes age 14 for age 8 in the subparagraph, dealing with when a person may cease to be qualified for parenting payment (single) because their child reached the maximum age of PP Child, allowing a person transitioning between payments for this reason to retain qualification for the pensioner education supplement. This will ensure consistency across the respective frameworks for parenting payment (single) and the pensioner education supplement.

Item 3 makes consequential amendments to paragraph 1061ZDA(1)(b) of the Social Security Act, aligning the maximum age of a PP Child in that provision with the amendments in Item 1. The amendment will provide for extended qualification for a pensioner concession card in circumstances where the person ceases to qualify for parenting payment (single) because their youngest child has turned 14. This will ensure consistency across the respective frameworks for parenting payment (single) and qualification for the pensioner concession card.

Item 4 prescribes application provisions for Items 1 to 3. Item 4 provides that these amendments will apply to working out whether a person is qualified for parenting payment, the pensioner education supplement or the pensioner concession card for days occurring on or after 20 September 2023.

Schedule 2 - Increase to working age payments

Summary

This Schedule amends the Social Security Act to increase financial support for people receiving working age and student social security payments.

Background

This Schedule implements the Government's commitment to increase working age and student payments, by increasing rates of jobseeker payment, youth allowance, parenting payment (partnered), austudy payment and disability support pension for recipients aged under 21 (referred to as disability support pension (youth)). This Schedule also extends eligibility to the higher rate of jobseeker payment for recipients aged 55 years and over who have been on a social security payment for 9 or more continuous months in recognition of the additional barriers to employment this cohort faces.

The increase of $40 per fortnight is applied to the current rates of eligible payments. Legislated indexation arrangements continue to apply. For parenting payment and jobseeker payment, the indexation will apply on 20 September 2023 to the new higher rate and onwards on 20 March and 20 September of each year thereafter. For disability support pension (youth), youth allowance and austudy payment, future indexations will apply from 1 January 2024 and onwards on 1 January each year thereafter.

Currently, there is a higher rate of jobseeker payment provided to recipients aged 60 years and over, who have been on payment for 9 continuous months. This Schedule reduces the qualifying age for the higher rate of jobseeker payment to recipients aged 55 years and over. Over the past ten years, the proportion of mature-aged Australians on jobseeker payment has significantly increased. This cohort can face higher barriers to employment, including age discrimination and poor health.

This Schedule also includes consequential amendments to extend eligibility to relevant supplementary payments (such as pharmaceutical allowance and telephone allowance) and the pensioner concession card, to ensure similar support is available to certain recipients who are aged 55 and over and receiving payments for 9 continuous months.

Threshold and maximum rates of social security payments are provided for by reference to the nature of the social security payment to which they relate. In each instance, they are then broken up further by the recipient's circumstances.

Equivalent changes will also be made to ABSTUDY living allowance by changes to the ABSTUDY Policy Manual, and to special benefit, which is paid at a discretionary rate. The $40 increase to working age and student payments will flow through to specific payments administered across Government, such as the farm household allowance, various veterans' student programs, and self-employment allowance.

Explanation of the changes

Part 1 - Main amendments

Division 1 - Disability support pension (under 21)

Social Security Act

Items 1 and 2 increase the maximum basic fortnightly rate and yearly rate of disability support pension paid to persons under 21 years of age in various circumstances, by repealing and substituting the tables which set the basic rates within the relevant rate calculators at sections 1066A and 1066B of the Social Security Act. These are table B in point 1066A-B1 and table B in point 1066B-B1.

Division 2 - Youth Allowance

Social Security Act

Items 3 to 5 increase the maximum basic fortnightly rate of youth allowance paid in various circumstances by repealing and substituting the tables which set the basic rates within the rate calculator in section 1067G of the Social Security Act.

Item 3 repeals and substitutes table BA in point 1067G-B2 of the Social Security Act with increased fortnightly rates of youth allowance for the various circumstances in which the payment is payable.

Item 4 repeals and substitutes table BB in point 1067G-B3 of the Social Security Act with increased fortnightly rates of youth allowance for the various circumstances in which the payment is payable.

Item 5 repeals and substitutes table BC in point 1067G-B4 of the Social Security Act with increased fortnightly rates of youth allowance for the various circumstances in which the payment is payable.

Division 3 - Austudy payment

Social Security Act

Items 6 and 7 increase the maximum basic fortnightly rate of austudy payment paid in various circumstances, by repealing and substituting the tables which set the basic rates within the rate calculator at section 1067L of the Social Security Act. These are table BA in subpoint 1067L-B2(1) and table BB in point 1067L-B3.

Division 4 - Jobseeker payment

Social Security Act

Item 8 increases the maximum basic fortnightly rate of jobseeker payment paid in various circumstances by repealing and substituting the table (table B) at point 1068-B1 with increased fortnightly rate of jobseeker payment in the rate calculator at section 1068 of the Social Security Act. Table items 4A, 4B and 5 in table B expands the eligibility for jobseeker payment to those who are 55 and over and who have been on a social security payment for 9 months or more.

Division 5 - Parenting payment (partnered)

Social Security Act

Item 9 increases the maximum basic fortnightly rate of parenting payment (partnered) paid in various circumstances by repealing and substituting the table (table C) at point 1068B-C2 in the rate calculator at section 1068B of the Social Security Act.

Division 6 - Application of amendments

Social Security Act

Item 10 prescribes application provisions for Items 1 to 9. Subitem 10(1) provides that the amendments will apply to working out the rate of a person's disability support pension (youth), youth allowance, austudy payment, jobseeker payment, parenting payment (partnered), and the rate of a person's farm household allowance under the Farm Household Support Act 2014, for days occurring on or after 20 September 2023. Subitem 10(2) provides that, for the purposes of indexing an amount specified in a table of the Social Security Act, as substituted by an item of this Schedule, the first indexation day for the amount occurs after the day item 10 commences. The current figures for the amount immediately before that first indexation is taken to be the amount as specified by this Schedule.

Part 2 - Other amendments

Social Security Act

Items 11 to 16 provide consequential amendments to section 1061Q (telephone allowance), paragraph 1061ZA(2)(a) (pensioner concession card), point 1067L-C1 (pharmaceutical allowance for austudy payment), point 1068-D3 (pharmaceutical allowance for jobseeker payment) and point 1068B-E1 (pharmaceutical allowance for parenting payment (partnered)) of the Social Security Act. The amendments align the criteria for these allowances with the new jobseeker payment eligibility age of 55 as amended by table items 4A, 4B and 5 in item 8 of this Schedule. This will ensure consistency across the respective frameworks for jobseeker payment and qualification for telephone allowance and pharmaceutical allowance for austudy payment, jobseeker payment and parenting payment (partnered).

Item 17 substitutes and expands the types of jobseeker payments under table B in Benefit Rate Calculator B at point 1068-B1 which are captured by column 4 of item 2 to the table in section 1190 of the Social Security Act. This ensures indexation is consistent with the amendments made by this Schedule at item 8.

Item 18 prescribes application provisions for the consequential amendments stipulated in items 11 to 17.

Subitem 18(1) provides the amendments at item 11 apply in relation to each telephone allowance payday for a person, that occurs on or after 20 September 2023, on which telephone allowance is payable to the person.

Subitems 18(2) to (5) prescribe that the consequential amendments at items 12 to 16 apply for days occurring on or after 20 September 2023. Subitem 16(6) provides the amendments made to section 1190 at item 17 apply in relation to indexing an amount on each indexation day for the amount that occurs after the day item 18 commences.

Schedule 3 - Increased support for Commonwealth rent assistance recipients

Summary

This Schedule provides additional support to renters, increasing the maximum rates of Commonwealth rent assistance by 15 per cent.

Background

Rent assistance provides support to individuals to help them cover the costs of renting in the private rental market or community housing. It is paid as a component of an individual's rate of income support payment, or family tax benefit, or veterans' entitlements payment. This increase in maximum rates will benefit the majority of Commonwealth rent assistance recipient households because around 76 per cent (as at March 2023) are paying rent which is high enough to receive the maximum rate. In each instance, if rent paid by an individual exceeds a certain threshold prescribed in the Acts, the rate of rent assistance is calculated by rules within legislation, and depends upon the person's payment and the person's family situation. The rules generally involve paying the lesser of 75 cents for each dollar of rent paid above the threshold, or a maximum rate. Rent thresholds and maximum rates of rent assistance vary depending on the person's family circumstances, and the nature of the payment of which their rent assistance forms part. For single people in receipt of a social security payment without children, the maximum rate also varies according to whether or not accommodation is shared with others.

Rent assistance is indexed twice a year, on 20 March and 20 September, by reference to increases (if any) in the Consumer Price Index. The maximum rates of rent assistance substituted by this measure will apply from 20 September 2023, and will be immediately indexed on that day. Threshold figures are also indexed on 20 March and 20 September.

For persons in receipt of Family Tax Benefit Part A, rent assistance is paid as part of their family assistance payment, under Division 2B of Part 5 of Schedule 1 to the Family Assistance Act. Rate of rent assistance is provided by clauses 38D and 38E, on an annual basis. Under clause 38D the current rates of rent assistance, as indexed, are paid to persons who have at least one FTB child and are not a relevant shared carer. Under clause 38E, the current rates of rent assistance are paid to persons who are a relevant shared carer (has at least 35 percent care of an eligible child) or who has only one or more regular care children (for whom they care less than 35 per cent of the time).

For social security, rent assistance varies depending upon the individual's circumstances. Different rates are provided for by the Act for persons who are single, and single persons who share accommodation. Members of a couple are paid a different rate, and couples separated by circumstances such as illness, respite care or imprisonment are paid a different rate. Temporarily separated couples are paid a different rate again. Persons partnered with a person receiving a veterans related payment, with differing numbers of children, are paid different rates.

For eligible persons, rent assistance is paid as part of a veterans' entitlements payment under Schedule 6, Part 2, Module C of the Veterans' Entitlements Act. The rate of rent assistance is provided by section SCH6-C8(1), where a number of different rates are provided depending upon the family situation of the recipient. These amounts are indexed every 20 March and 20 September. The indexation method is provided by section 59B to 59D, and the amounts are rounded under section 59E. The 'current figure' is defined by subsection 5NA(1) of the Veterans' Entitlements Act.

Explanation of the changes

Family Assistance Act

Clause 38C of Schedule 1 to the Act deals with eligibility for rent assistance, including providing for the threshold rate of rent assistance. The dollar figures appearing on the face of the provision reflect rates from 2006, although their current value as the result of indexation is much higher. Paragraph 38C(1)(f) provides for the threshold rent rates for a person with at least one FTB child who is not a shared carer, for various family circumstances. Items 1 to 3 substitute the current threshold dollar figures into the various subparagraphs, prior to these figures being again indexed on 20 September 2023. Similarly, paragraph 38C(1)(fa) provides the threshold rent rate for a person who is a relevant shared carer or has only one or more regular care children. Items 4 to 6 substitute the current threshold rent dollar figures into the various subparagraphs, prior to these again being indexed on 20 September 2023.

Under clause 38D the current rates of rent assistance, as indexed, are paid to individuals who have at least one FTB child and are not a relevant shared carer. Item 7 repeals the table setting out the annual rates of rent assistance for various family circumstances, and substitutes rates equivalent to the current indexed rate for each of those family circumstances, increased by 15 percent and rounded. Item 8 does the same to the table at clause 38E, dealing with the rates of rent assistance paid to persons who are a relevant shared carer (has at least 35 per cent care of an eligible child) or who has only one or more regular care children (for whom they care less than 35 per cent of the time).

Social Security Act

Threshold and maximum rates of social security payment are provided for by reference to the nature of social security payment to which they relate. In each instance, they are then broken up further by family circumstance.

Items 9 to 14 substitute the table including new threshold and maximum rates for rent assistance paid to recipients of carer payments and certain age and disability support pensions (subsection 1070L(2)), certain parenting payments (subsection 1070M(2)), disability support pension (person aged under 18) (subsection 1070N(2)), disability support pension (person aged between 18 and 21) (subsection 1070P(2)), youth allowance, austudy payment and jobseeker payment (subsection 1070Q(2) and certain parenting payments (subsection 1070R(2)).

Items 15 and 16 substitute the current rent threshold amount into subsections 1070T(1) and the example at subsection 1070T(3), which section defines this concept.

Veterans' Entitlements Act

Item 17 substitutes the rent threshold rates in table C-1 under point SCH6-C6 of Schedule 6 of the Act to the current indexed threshold rates in relation to working out the rate of a person's service pension, income support supplement or a veteran payment for days occurring on or after 20 September 2023.

Item 18 substitutes the rates of rent assistance in relation to working out the rate of a person's service pension, income support supplement or a veteran payment for days occurring on or after 20 September 2023 in table C-2 under subpoint SCH6-C8(1) of Schedule 6 of the Veterans' Entitlements Act.

Item 19 provides for the application of the amendments.

Subitems 19(1) and (2) provide for the application of the amendments to the Family Assistance Act. Subitem 19(1) provides that the amendments apply in relation to working out an individual's Part A rate of family tax benefit for days occurring on or after 20 September 2023.

Subitem 19(2) provides that for the purposes of indexing an amount specified in a table of the Family Assistance Act as amended or repealed by an item of this Schedule on the first indexation day for the amount that occurs after the day this item commences, the current figure for the amount immediately before that first indexation day is taken to be that specified amount. Indexation is applied to the current figure for each such amount (defined in section 3 of the Act), which would generally be the amount as previously indexed. In this instance, it will be the amounts as substituted by this Schedule.

Subitems 19(3) and (4) provide for the application of the amendments made to the Social Security Act. Subitem 19(3) provides that the amendments of the Social Security Act made by this Schedule apply in relation to working out the rate of a person's social security payment for days occurring on or after 20 September 2023; and the rate of a person's farm household allowance under the Farm Household Support Act 2014 for days occurring on or after 20 September 2023.

Subitem 19(4) provides that for the purposes of indexing an amount specified in a subsection or table of the Social Security Act as amended or repealed by an item of this Schedule on the first indexation day for the amount that occurs after the day this item commences, the current figure for the amount immediately before that first indexation day is taken to be that specified amount. Indexation is applied to the current figure for each such amount (defined in subsection 20(1) of the Act), which would generally be the amount as previously indexed. In this instance, it will be the amounts as substituted by this Schedule.

Subitems 19(5) and 19(6) provide for the application of the amendments made to the Veterans' Entitlements Act. Subitem 19(5) provides that the amendments of the Act made by this Schedule apply in relation to working out the rate of a person's service pension, income support supplement or a veteran payment for days occurring on or after 20 September 2023.

Subitem 19(6) provides that the purposes of indexing an amount as specified in a point or subpoint of Schedule 6 of the Act as amended or repealed by an item of this Schedule on the first indexation day for the amount that occurs after the day this item commences, the current figure for the amount immediately before that first indexation day is taken to be that specified amount. Indexation is applied to the current figure for each such amount (defined in subsection 5NA(1) of the Act), which would generally be the amount as previously indexed. In this instance, it will be the amounts as substituted by this Schedule.

IMPACT ANALYSIS

The Department of Social Services undertook an Impact Analysis in relation to the measure to expand qualification for parenting payment (single) for single principal carers. The full text of this Impact Analysis can be found on the website of the Office of Impact Analysis ( Additional Support for Single Parents | The Office of Impact Analysis (pmc.gov.au) ).

Executive Summary

This Impact Analysis (IA) examines the case for the Australian Government to enhance support provided to single parents through income support payments, including the adequacy and effectiveness of JobSeeker Payment for single principal carers and Parenting Payment (Single), while balancing the need to maintain incentives and support for labour force participation.

To address the issue of providing adequate income for single principal carers on income support, the impact of six policy options are analysed, all of which aim to provide additional support to this cohort compared with the status quo. Each option balances, to different degrees, increased support with the economic impacts of the policy, as well as ensuring these recipients remain connected to the workforce and are not left behind if unable to work full time to support themselves.

On balance, the preferred option is to expand eligibility for Parenting Payment (Single) for single principal carers with dependent children from aged under 8 to under 14, in order to ensure the vast majority of single parent families will receive higher levels of income support until their youngest child has commenced high school.

This increase broadly aligns both with the age at which most children start high school and the rate of Family Tax Benefit Part A is increased. Supporting single parents with additional payments until their youngest child commences high school provides support until their child has transitioned to high school, at a time when parents will have greater opportunities to re-engage in employment

The OIA has informed a decision to implement expanding eligibility for Parenting Payment (Single) for single principal carers with dependent children from aged under eight to age under 14.

The other measures in the Bill do not require an impact analysis as they are unlikely to have more than minor regulatory impact (OIA23-04914, OIA23-04853 and OIA23-04852 refers).

Statement of Compatibility with Human Rights

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

Social Security Amendment (Strengthening the Safety Net)

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

The Bill amends several Acts that provide for social security or equivalent payments, to implement income support measures being provided for in the 2023-24 Budget.

The Bill:

•

expands qualification for parenting payment (single) to single principal carers whose youngest child is aged under 14 years (up from under 8 years);

•

increases the rates of working age and student payments by $40 per fortnight, including jobseeker payment, youth allowance, parenting payment (partnered), austudy payment, disability support pension (youth);

•

expands eligibility for the higher rate of jobseeker payment to recipients aged 55 years and over who have been on payment for nine or more continuous months (reducing the qualifying age from 60 years); and

•

increases the maximum rates of Commonwealth rent assistance by 15 per cent.

Subject to the passage of legislation, these measures will have effect from 20 September 2023. The timing aligns with legislated indexation changes for some social security payments, including jobseeker payment, parenting payment and Commonwealth rent assistance. Rates of payment will be increased with the 2023-24 Budget measure and then indexed at that higher rate of payment.

Human rights implications

This Bill engages the following human rights:

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The right of everyone to social security in Article 9 of the International Covenant on Economic, Social and Cultural Rights.

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The right of everyone to an adequate standard of living, including food, water and housing in Article 11 of International Covenant on Economic, Social and Cultural Rights.

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The right to of everyone to education in Article 13 of International Covenant on Economic, Social and Cultural Rights.

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The rights of parents and children in all actions concerning children, to have the best interests of the child be the primary consideration in Article 3 of the Convention on the Rights of the Child.

Increased payment rates

The right of everyone to social security and the right of everyone to adequate standard of living, including food, water and housing are promoted by increasing the rate of working age and student payments by $40 per fortnight. The increased payments are targeted at recipients of Government assistance and will have a flow-on benefit to the children of recipients by increasing the support for families. Increased payments will support adequate living standards for income support recipients and their households.

It also has flow-on effects for recipients of student payments, as education enables students to acquire knowledge and skills which contributes to their employability.

Extending higher rate of jobseeker payment eligibility

Human rights are promoted by expanding the eligibility for the higher rate of jobseeker payment to recipients aged 55 years and over who have been on payment for 9 months of more (reducing the qualifying age from 60 years). The higher rate of jobseeker payment is targeted towards a cohort that face additional barriers to work, including age discrimination and risk of poor health.

Extending parenting payment eligibility

Human rights are also promoted by the extension of the eligibility for parenting payment (single) to support single principal carers with a youngest child aged under 14 years (up from 8 years). This measure will ensure that eligible single parents access a higher level of support until the youngest child turns 14, helping single parent families to achieve an adequate standard of living.

Increased rates of Commonwealth rent assistance

Human rights are promoted by increasing the maximum rates of Commonwealth rent assistance by 15 per cent. The increased payments are targeted towards recipients who are paying rent high enough to receive maximum rent assistance.

Conclusion

The Bill is compatible with human rights because it promotes the protection for human rights for some of the most vulnerable groups in society.