House of Representatives

Payment Processing Legislation Amendment (Social Security and Veterans' Entitlements) Bill 1998

Second Reading Speech

Senator IAN MACDONALD (Queensland-Minister for Regional Services, Territories and Local Government)

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard .

Leave granted.

The speech read as follows-

Madam President, this bill introduces the legislation package to implement Budget initiatives to generally make social security payments payable fortnightly in arrears which will simplify the Social Security Act 1991 and provide consistency. The bill will also simplify the date of effect of determinations made under the act.

Currently, social security payments are payday-based, period-based or lump sum amounts. The Bill will change all payday-based social security payments, that is, social security pensions and payments made under the family allowance system (for example, family allowance and child disability allowance) into period-based payments similar to the current payment system for social security benefits. Payments of lump sum amounts, such as for maternity allowance and maternity immunisation allowance, will not be affected by this initiative.

The changed payment arrangements will provide that an instalment of a social security payment will be payable in arrears for a period and at the times specified by the Secretary. In general terms an instalment period will be a period of 14 days, however, the legislation will be flexible in that shorter or longer periods will able to be determined. For example, all Australian pensioners who reside overseas will continue to receive their portable pensions every 28 days and in respect of a period of 28 days.

Madam President, all social security payments that are period-based will also have specific legislative provisions enabling a daily rate of payment to be calculated. This will ensure that a person's exact entitlement is able to be determined in respect of a period. This will simplify the understanding of the social security system not only for customers, but for interest groups, courts, tribunals and staff of Centrelink and the Department of Family and Community Services, by matching the payments received with the periods for which the payments are made.

The initiative will substantially reduce overlapping entitlements and non-recoverable excess payments because of efficiencies gained by reducing processing times. For those customers who find themselves in financial hardship, legislative provisions that allow an advance payment to be made (generally of an amount equivalent to one weeks entitlement), will be available to ease this hardship.

Madam President, this bill will also make significant amendments to the date of effect provisions in the Social Security Act 1991. These new provisions will ensure greater efficiency, equity and accuracy in the reassessment of social security payments. The commencement provisions will not be affected by this initiative.

The date of effect provisions in the Social Security Act 1991 currently vary from payment to payment. This initiative will simplify these provisions by providing consistent treatment across payment types. The social security system will be enhanced and improved by becoming more responsive because inconsistencies will be removed. More determinations will be automated so errors will be lessened. Further, simpler transfer provisions will also result in more streamlined administration.

Madam President, the general rule in respect of the date of effect of a determination will simply be that an event or a change in circumstances that necessitates a reassessment of a customer's entitlement will be from the date of the event or the change in circumstances. General reporting requirements will be a consistent 7 days (the notification period ). However, a longer period of up to 28 days will be given to those customers who, in special circumstances, either because of the type of event or change in circumstances or because of the individual circumstances of the person concerned, require a longer period in which to report to Centrelink. Customers who reside overseas, in remote localities or experience a bereavement, for example, can all be provided, as a principle of Government policy, with an extended notification period.

This bill will make similar changes to income support payments made under the Veterans' Entitlements Act 1986.

Madam President, I commend the bill to the Senate.

Debate (on motion by Senator Carr) adjourned.