EXPLANATORY STATEMENT
Social Security (Administration) (Deductible portion — section 123XI) Specification 2008
The Social Security (Administration) (Deductible portion — section 123XI) Specification 2008 is made under paragraph 123XI(3)(b) of the Social Security (Administration) Act 1999 (the Act). The Minister for Families, Housing, Community Services and Indigenous Affairs, as well as making this instrument in her own capacity, is also making this instrument on behalf of the Minister for Education and the Minister for Employment and Workplace Relations.
Background
Part 3B of the Act establishes an income management regime that applies to recipients of certain welfare payments. If a person is subject to the income management regime under Part 3B, the Secretary will deduct amounts from the person’s relevant welfare payments and credit those amounts to the person’s income management account. The Secretary may then debit amounts from the person’s income management account, in accordance with Part 3B, for the purpose of taking actions directed to meeting the priority needs of the person or his or her dependants.
Subdivision A of Division 2 of Part 3B sets out the various situations in which a person is subject to the income management regime. Section 123UC, in that Subdivision, provides that a person is subject to the income management regime at a particular time (the test time) if, amongst other things: before the test time, a child protection officer of a State or Territory has given the Secretary a written notice requiring that the person be subject to the income management regime; and, at the test time, the State or Territory is a declared child protection State or Territory. Western Australia has been determined to be a declared child protection State or Territory in the Social Security (Administration) (Declared child protection State or Territory – Western Australia) Determination 2008.
Division 5 of Part 3B sets out the amounts that are to be deducted from the specified welfare payments of a person who is subject to the income management regime. Subdivision B of Division 5 applies to a person who is subject to the income management regime under section 123UC of the Act. Section 123XI, in that Subdivision, applies if an instalment of a category I welfare payment is payable to the person. (Section 123XJ applies if a category I welfare payment is payable to the person as a lump sum payment.) The term ‘category I welfare payment’ is defined in section 123TC of the Act and includes all social security benefits and social security pensions, other prescribed social security, family assistance and education payments, and some payments under the Veterans’ Entitlements Act 1986.
Subsection 123XI(3) of the Act sets out the amount that the Secretary must deduct from an instalment of a category I welfare payment (‘the deductible portion’). Subsection 123XI(3) specifies that the deductible portion is 100% or such lower percentage as is specified in a legislative instrument made by the Minister for the purposes of paragraph 123XI(3)(b). Subsection 123XI(4) of the Act allows different percentages to be specified in relation to different category I welfare payments.
Purpose
The purpose of this Specification is to specify a percentage that is lower than 100% for the purposes of paragraph 123XI(3)(b) of the Act. The lower percentage that is specified is 70% (70 per cent).
The effect of the Specification is that, for the purpose of subsection 123XI(2) of the Act, the deductible portion of an instalment of a category I welfare payment, other than an instalment of baby bonus under the Family Assistance Act, is 70% of the net amount of the instalment (rounded down to the nearest cent). (The term ‘net amount’ is defined in section 123TC of the Act.) The deductible portion for an instalment of baby bonus under the Family Assistance Act will be 100%, as provided for under paragraph 123XI(3)(a) of the Act. This Specification applies to each instalment of each category I welfare payment, other than an instalment of baby bonus under the Family Assistance Act.
The Specification commences on the day after it is registered.
Consultation
Consultation on the Specification was undertaken the Department of Education, Employment and Workplace Relations and with the Department of Veterans’ Affairs, to ensure a co-ordinated approach in respect of welfare payments, for which they have responsibility, which may become subject to the income management regime.
Regulatory Impact Analysis
The Specification does not require a Regulatory Impact Statement or a Business Cost Calculator Figure. The Specification is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact. It is not expected that any compliance costs will be incurred by business, as a result of this Specification, against the nine categories listed in the Business Compliance Cost Checklist contained in the Best Practice Regulation Handbook prepared by the Office of Best Practice Regulation.