Supplementary Explanatory Memorandum(Circulated by the authority of the Minister for Social Services, the Hon Scott Morrison MP)
These Government amendments defer the commencement dates for two measures in the Bill in light of its delayed passage.
The current commencement date for most of the measure provided by Schedule 1 to the Bill (streamlining the current income management programme under a two-year continuation) is 1 July 2015. The Bill also currently provides for Schedule 2 (ceasing residential care subsidy for pre-entry leave) to commence on 1 July 2015. Both measures will now generally commence on the day after Royal Assent.
These Government amendments also clarify that the income management element of Cape York Welfare Reform, provided by the Social Security (Administration) Act 1999, will continue for two additional years to 30 June 2017 in line with the rest of the income management streamlining measure in Schedule 1.
Financial impact statement
Streamlined income management
The financial impact stated in the explanatory memorandum for this measure is not affected by these amendments, assuming enactment by the end of 2015.
Cessation of residential care subsidy for pre-entry leave
The savings associated with this measure as stated in the explanatory memorandum have largely been realised through amendments to the Aged Care (Subsidy, Fees and Payments) Determination 2014 and the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014. The amendments in the Bill formalise these changes in the principal Act and make a number of consequential amendments with limited financial impact. Accordingly, the financial impact of this amendment to the commencement date is negligible.
Notes on amendments
Amendment 1 amends the commencement clause in the Bill in relation to the income management measure provided by Schedule 1 to the Bill and the cessation of residential care subsidy for pre-entry leave provided by Schedule 2.
The measures were previously intended to commence, generally, on 1 July 2015. The measures are now intended to commence on the day after Royal Assent (although consequential amendments to the taxation law made by Schedule 1 will commence on 1 July 2017 to ensure any final relevant payments remain tax-exempt when paid).
Amendment 2 inserts into Schedule 1 new item 9A, which amends paragraphs 123UF(1)(g) and (2)(h) of the Social Security (Administration) Act 1999 to clarify that the income management element of Cape York Welfare Reform will continue for two additional years to 30 June 2017 in line with the rest of the Schedule, which streamlines the current income management programme under a two-year continuation.
The continuation of income management until mid-2017, as a key element of Cape York Welfare Reform, will continue to assist in stabilising people's circumstances and fostering behavioural change, particularly in the areas of school attendance, parental responsibility and increasing individual responsibility.
Amendments 3 to 7 amend the transitional and savings provisions in Part 5 of Schedule 1 to the Bill. These amendments are necessary because of the change in the commencement provision for Schedule 1, from 1 July 2015 to the day after Royal Assent.
Amendment 3 amends item 32 of Schedule 1, which allows a person to accrue a qualifying incentive payment period where the period started accruing before 1 July 2015. A qualifying incentive payment period for the purposes of the voluntary income management incentive payment is a continuous period of 26 weeks. Provided the period has accrued by 28 December 2015 (which is the day 26 weeks after 30 June 2015), then the person may qualify for an incentive payment despite the repeal of Part 2.25D of the Social Security Act 1991.
Amendment 4 amends paragraph 33(a) of Schedule 1, which allows a person to accrue a qualifying savings period. A qualifying savings period is a continuous period of 13 weeks for the purposes of the matched savings scheme (income management) payment. Provided the period has accrued on or before 31 December 2015, then the person may qualify for an incentive payment despite the repeal of Part 2.25E of the Social Security Act 1991.
Amendment 5 amends paragraph 33(c) of Schedule 1, which allows a person to claim a matched savings scheme (income management) payment that they have accrued under item 33, despite the repeal of Part 2.25E. The person can claim their payment provided they make their claim on or before the later of the day 28 days after this item commences or 31 December 2015.
Amendments 6 and 7 amend item 34 of Schedule 1, which provides for transition of persons income managed because they are vulnerable welfare payment recipients. A determination that a person is a vulnerable welfare payment recipient in force prior to the commencement of item 34 will remain in force for the balance of the period for which the determination originally applied, despite the repeal of section 123UGA of the Social Security Act 1991. However, the person may request revocation of a determination made prior to commencement at any time after commencement.