Overview of Social Services and Other Legislation Amendment Bill 2013

The government has introduced a large raft of social welfare changes in the form of the Social Services and Other Legislation Amendment Bill 2013 into the House of Representatives on 20 November 2013. Some key areas are:

• Problem gambling
• Continuing income management  Cape York Welfare Reform
• Family tax benefit and eligibility rules
• Period of Australian working life residence
• Interest charge for debts relating to certain student payments
• Student start-up loans
• Paid parental leave payment methodology changed
• Pension bonus scheme
• Indexation
• Changes to rules for receiving payments overseas
• Extension of deeming rules to account-based income streams

As well as the above key areas the Bill also proposes amendments: 

• to the administration of debt recovery under the Student Financial Supplement Scheme
• the clarification of provisions relating to the time period for lodging tax returns for family assistance purposes
• to ensure that funding under the National Disability Insurance Scheme paid into a person's account, which is set up for the purpose of managing the funding for supports for a  participant's plan, cannot be garnisheed for debt recovery purposes.

The details

Problem gambling:  In the explanatory memorandum to the Bill measures listed under the heading "Encouraging responsible gambling" are outlined by the Government as being the repeal of the position and functions of the National Gambling Regulator as well as provisions relating to the supervisory and gaming machine regulation levies, the automatic teller machine withdrawal limit, dynamic warning provisions, the trial on mandatory pre-commitment, and matters for Productivity Commission review.  Along with the removal of these provisions the Bill also amends the pre-commitment and gaming machine capability provisions, to "express clearly" according to the Government its "commitment to the development and implementation of these measures in the near future" following it says on "informed . . . consultations with industry, State and Territory Governments, and other stakeholders".

The measures are described by the Government as the "first stage of a different approach to addressing problem gambling, reducing bureaucracy and the duplication of functions between the Australian Government and State and Territory Governments".

Continuing income management as part of Cape York Welfare Reform: The Bill provides for income management to continue for another two years in the indigenous communities participating in the Cape York Welfare Reform trial. The Bill proposes to amend the Social Security Administration Act 1999 (Cth) to provide for this. The continuation of income management until the end of 2015 is said by the government to be:

Family tax benefit and eligibility rules: The Bill proposes to amend family tax benefit and eligibility rules from 1 January 2014 so that family tax benefit Part A will be paid to families only up to the end of the calendar year in which a teenager is completing school. In lieu of Part A the government says that youth allowance, with its "learn or earn" provisions requiring young people to participate in work, job search, study or training remains available as the "more appropriate payment to help young people transition from school into work or post-secondary study".

Period of Australian working life residence: The Bill proposes that from 1 January 2014, age pensioners and certain other pensioners with unlimited portability, will be required to have been Australian residents for 35 years during their working life (from age 16 to age pension age) to receive their full means-tested pension after 26 weeks absence from Australia. This differs from the current requirement of 25 years and will also apply to all pensioners paid under social security agreements outside Australia, except Greece and New Zealand due to  the specific terms of those agreements. The government says the change recognises that Australia's social security system is different from the "contributory systems" operating overseas, and that payments in Australia are made from general tax revenue and based on concepts of  "residence" and "need" whereas, other countries generally require 35 to 45 years of pension contributions for a resident to receive a full pension. The changes also affect members of a couple paid outside Australia under a social security agreement who's pensions will be calculated on the basis of their own Australian working life residence, rather than that of their partners.

Interest charge for debts relating to certain student payments: The Bill proposes an interest charge to be applied to certain debts arising from austudy payment, fares allowance, youth allowance payments to full-time students and apprentices, and ABSTUDY living allowance payments. The interest charge will  only be applied where the debtor does not have or is not honouring an acceptable repayment arrangement.Debtors already making repayments, or who come to a repayment agreement with the Department of Human Services following the implementation of the amendments will not be charged interest. The government sees the key purpose of the interest charge as being to "encourage debtors to repay their debt, in a timely fashion, where they have the financial capacity to do so. The rate of interest charged will be based upon on the 90-day Bank Accepted Bill rate, plus an additional seven per cent, currently the rate stands at 9.6 percent.

Student start-up loans: The Bill proposes to establish, from 1 January 2014, a student start-up loan and a student start-up scholarship with the aim to assist students with the costs of study, including the purchase of text books, computers and Internet access.

Paid parental leave payment methodology changed: The Bill proposes to "ease administrative burdens on business", by amending the Paid Parental Leave legislation from 1 March 2014 to remove the requirement for employers to provide Government-funded parental leave pay to their eligible long-term employees instead employees will be paid directly by the Department of Human Services, unless an employer opts in to provide parental leave pay to its employees and an employee agrees for their employer to pay them.

Pension bonus scheme: The Bill proposes from 1 March 2014, to end late registrations for the closed pension bonus scheme which provides a lump sum payment to people who are qualified for age pension, age service pension, partner service pension after reaching pension age, or income support supplement after reaching qualifying age – but who choose to defer their pension and remain in the workforce.

Indexation: This Bill proposes to extend the indexation pauses on certain higher income limits for three further years until 30 June 2017. The amendments will apply to the family tax benefit Part B primary earner income limit, the parental leave pay and dad and partner pay individual income limits, and the higher income free area for family tax benefit Part A. In addition, the annual end-of-year family tax benefit supplements will remain at current levels for three years.The Bill also maintains the annual child care rebate limit at $7,500 for three further income years starting from 1 July 2014, with the first indexation occurring on 1 July 2017.

Changes to rules for receiving payments overseas: The Bill proposes that from 1 July 2014, the length of time that families can be temporarily overseas and  continue to receive family and parental payments will reduce from three years to 56 weeks with exceptions such as where certain Australian Defence Force and Australian Federal Police personnel are deployed overseas.

Extension of deeming rules to account-based income streams: The Bill proposes to align the income test treatment of account-based superannuation income streams, for products assessed from 1 January 2015, with the deemed income rules applying to other financial assets.  

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• Social Services and Other Legislation Amendment Bill 2013 and related materials as reported in the TimeBase LawOne Service.
• Cape York 'progress' extends income trial (The Australian - 21 November 2013)