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 .


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