House of Representatives

Family and Community Services Legislation Amendment (Australians Working Together and Other 2001 Budget Measures) Bill 2003 - Extracts Only

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Amanda Vanstone)

Outline and financial impact

This Bill gives effect to the "Australians Working Together" package of measures announced as part of the 2001 Budget. The Bill also gives effect to other Budget measures as set out below.

Australians Working Together package

Language, literacy and numeracy supplement

From 20 September 2002, people on specified income support payments who are undertaking approved language, literacy and numeracy training programs will be paid a fortnightly supplement of $20.80 to help with the incidental costs associated with the training. The specified income support payments are newstart allowance, youth allowance, parenting payment, mature age allowance, widow allowance, partner allowance and disability support pension.

Working credit

From 28 April 2003, the working credit will improve employment incentives for workforce age income support customers. The main feature is to allow customers to build up credits at times when they have little or no income, which they can use to reduce later earnings under the income test. There will be a simpler and more consistent approach to measuring income from employment for all workforce age customers. It will also be easier for workforce age customers to resume their income support payments if they lose their job within 12 weeks after those payments stop.

Participation requirements for parents

From 1 July 2003, people receiving parenting payment whose youngest child is aged 13 to 15 years will be subject to a participation requirement to help them prepare for a return to work and to help them access services to acquire or improve their work skills. The requirement will be to undertake one or more activities such as job search, education, training or community work for up to 150 hours in a 6 month period.

The new participation requirement will not apply to parents caring for a child with a serious disability.

Personal Support Programme

The Personal Support Programme (PSP) replaces and expands the Community Support Program from 1 July 2002.

The PSP will assist people who have multiple non-vocational barriers such as homelessness, drug and alcohol problems, mental illness or domestic violence. These people are generally not able to participate in employment-related activities nor can they benefit from employment assistance because of their barriers. The PSP will encourage social as well as economic participation by establishing outcomes that match participant's individual abilities, capacity and circumstances.

The PSP will be an activity available under the activity test for newstart allowance and youth allowance and will be an activity that can be included in a person's activity agreement. PSP will also be an activity that can be included in a person's parenting payment participation agreement from 1 July 2003.

Closing off mature age allowance and partner allowance

From 1 July 2003, there will be no new entrants to mature age allowance or partner allowance. Instead, newstart allowance will be available to working aged people who would have qualified for those payments, along with full access to support services and programs to help them increase their economic and social engagement.

Customers who are receiving mature age allowance or partner allowance at the implementation of this measure will be 'saved' on those payments while their payment remains current.

Under this measure, mature age allowance will be completely phased out by 2008 and partner allowance by 2020.

Flexible participation requirements for mature age newstart allowance recipients

This measure introduces more flexible arrangements for newstart allowance claimants and recipients who are aged at least 50. The measure involves a more flexible approach to the application of the activity test and provides access to an expanded range of services and programs to help maximise economic and social participation.

A participation agreement will be negotiated with new claimants and current recipients who are aged at least 50 which will set out those activities that the person agrees to undertake, or participate in, during the life of the agreement. While the proposed new participation framework maintains the current focus on economic participation for those with the capacity to undertake paid work, it also provides the flexibility to accommodate those with limited prospects of employment in the short-term.

In effect, this new approach will mean that activities that would not previously have been considered appropriate for newstart allowance purposes might now be accepted activities.

If, without a reasonable excuse, a person fails to comply with the terms of the agreement, then an appropriate penalty will be applied. Significantly, where a person 'rectifies' that failure, it will be possible for any residual amount of the penalty to be waived.

The measure also provides for people aged at least 50 who are complying with agreement (which does not require the person to undertake job search) to be able to travel overseas for a period not exceeding 26 weeks.

The measure also maintains and clarifies the intended operation of the provisions dealing with the liquid assets test waiting period.

Financial impact

Total Outlays $m
Element 2001-02 2002-03 2003-04 2004-05 4 year
Language Literacy and Numeracy 0.8 5.8 6.8 7 20.4
Working Credit 10.5 60.5 171.9 189.7 432.6
Participation Requirements for Parents 18.1 58.5 82.6 92.1 251.3
Personal Support Programme 2.7 7.7 17.7 33.8 61.9
Mature Aged (Close MAA/PA and Participation) 2.6 21.9 56.2 65.7 146.4
Total 34.7 154.4 335.2 388.3 912.6

Other 2001 Budget measures

Research into homelessness indicates that, for many families who become homeless, there is a lead-up period in which they frequently move house and experience financial crisis.

Through the new Family Homelessness Prevention and Early Intervention Pilot, families at risk of homelessness will be identified using Centrelink data, with the aim of preventing homelessness, unmanageable debt and other forms of crisis.

Amendments are made to enable Centrelink customer data to be used for this purpose. The amendments become operative on 1 July 2002.

Total funding for the Family Homelessness Prevention and Early Intervention Pilot is estimated to be $5.0 million over 3 years.

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