EXPLANATORY STATEMENT
Issued by the authority of the Minister for Social Services
Social Security (Administration) Act 1999
Social Security (Administration) (Enhanced Income Management Regime –Qualified Portion of Payments) Determination 2025
Purpose
The Social Security (Administration) (Enhanced Income Management Regime –Qualified Portion of Payments) Determination 2025 (the Determination) prescribes circumstances where a new participant subject to enhanced income management under Part 3AA of the Social Security (Administration) Act 1999 (the Administration Act) will have the qualified portion of their welfare payment temporarily reduced to nil for a certain period.
The Determination ensures that a new participant subject to enhanced income management is not prevented from accessing their full welfare payment in instances where their welfare payment is treated under the portioning regime in Division 3 of Part 3AA of the Administration Act, but where their participation in enhanced income management is not yet operationalised by Services Australia.
Background
The enhanced income management (enhanced IM) regime is prescribed in Part 3AA of the Administration Act.
A key purpose of the enhanced IM regime is to ensure that welfare payments are not spent on products and services that contribute to social harm. This is achieved in part by the Administration Act prescribing that a portion of a participant’s welfare payment is ‘qualified’. The qualified portion of the welfare payment becomes regulated under the enhanced IM regime and may only be spent on goods or services which are not ‘excluded’. Examples of excluded goods and excluded services include alcoholic beverages, gambling, tobacco products and pornographic material.
Welfare recipients who become subject to the enhanced IM regime under one of the application provisions (see Division 2 of Part 3AA of the Administration Act) may only access the qualified portion of their payment through a BasicsCard bank account and the associated debit card (the SmartCard). BasicsCard bank account and SmartCard arrangements have been determined in accordance with section 123SU of the Administration Act and the Social Security (Administration) (Declinable Transactions and BasicsCard Bank Account) Determination 2023.
For each category of enhanced IM participant, the portioning framework specifies default percentages of the participant’s welfare payment to be the qualified portion (see for example subparagraph 123SLG(1)(a)(i) of the Administration Act). Importantly, the portioning regime applies to enhanced IM participants from the point in time the participant is subject to the enhanced IM regime under one of the application provisions in Division 2 of Part 3AA of the Administration Act.
For all participants except those subject to enhanced IM under section 123SE, this point in time is referred to as the ‘test time’. However, for participants who are subject to enhanced IM under section 123SE as ‘volunteers’, this point in time is the time that their voluntary enhanced IM agreement is in force.
The portioning regime further provides that the Minister for Social Services may determine a different percentage of the participant’s welfare payment as being the qualified portion (see for example, subsection 123SLD(2) of the Administration Act).
The portioning regime in the Administration Act stipulates that the remaining percentage for the gross amount of the person’s welfare payment is ‘unqualified’. The unqualified amount is not regulated under enhanced IM, and may be used at the participant’s discretion.
The Administration Act does not expressly provide for a new participant to access the qualified portion of their welfare payment straight away. This means that, where the portioning mechanism immediately applies to qualify an amount of a new participant’s payment, there will be instances where the new participant will not be able to access those qualified amounts because, for example, they have yet to receive their SmartCard. This would result in serious detrimental implications for the well-being of these new participants and their families, as their capacity to manage and meet their financial costs would be significantly restricted.
The Determination addresses this issue by temporarily reducing the qualified portion of a new participant’s welfare payment to nil (that is, 0%) for a certain period. This is referred to below as the ‘operational waiting period’.
The particular period applicable to a new participant, for which there will be a nil qualified portion, depends on various factors specific to the participant. The key considerations are:
- the participant’s geographic location as relevant to accessing key services such as postal services (and associated postal delivery times), banking services and Services Australia Service Centres (including their servicing arrangements, and whether they may be serviced by a remote travel team); and
- whether the participant became subject to the enhanced IM regime through a referring authority (for example, a child protection case worker). In such circumstances, generally the referral officers provide considerable support to the individual subject to the referral such as explaining the reasons for referral and encouraging individuals to contact Services Australia to discuss their start date, obtain access to their SmartCard and receive general program assistance.
Consequentially, the period of time it may take for Services Australia to operationalise a new participant in the enhanced IM regime can vary. Where a new participant resides in urban areas, it generally takes up to 28 days (including activation of the BasicsCard bank account and delivery of the SmartCard). However this process can take up to 56 days in more extreme circumstances, such as where the new participant lives in a remote or flood-affected area.
The Determination provides a legislative basis for new participants subject to enhanced IM to continue to receive the full amount of their welfare payment while their participation in the regime is being operationalised by Services Australia. This will also give Services Australia the necessary time to provide the new participant with the SmartCard, ensure the participant’s BasicsCard bank account is fully operational, and ensure the new participant is appropriately supported to understand the operation of the enhanced IM regime, before the participant’s qualified portion is increased pursuant to the intended operation of the regime.
The power to determine the qualified portion of a welfare payment, for persons who are subject to the enhanced IM regime under section 123SC of the Administration Act (Queensland Commission), lies with the Secretary of the Department of Social Services. Appropriate delegates of the Secretary in Services Australia are able to make determinations under subsection 123SJ(2) to ensure new participants subject to enhanced IM under section 123SC are not also prevented from accessing their welfare payments for an appropriate initial period.
Applying an Operational Waiting Period
The Determination applies either a 28-day or 56-day waiting period (operational waiting period) in prescribed circumstances. The particular waiting period depends on an assessment of various factors as described above.
If a person is subject to enhanced IM under an application provision in Division 2 of Part 3AA of the Administration Act which involves notice being provided to Services Australia by a State or Territory, a 28-day waiting period will be applied. This includes instances where a person becomes subject to enhanced IM under any of the following provisions:
- section 123SCA–child protection; or
- section 123SCB–school enrolment; or
- section 123SCC–school attendance; or
- section 123SCJ–referrals by recognised State/Territory authority.
These are the circumstances discussed above in which generally, the referral officers provide considerable support to a new participant in understanding the operation and implications of the enhanced IM regime. However, if a new participant is subject to enhanced IM under application provisions which do not require provision of notice, the new participant’s geographic information is considered against data prescribed in the Declared Area Table (DAT) to determine which operational waiting period will apply (either 28 days or 56 days). This includes where a new participant is subject to enhanced IM under any of the following provisions:
- section 123SCL–vulnerable welfare payment recipients; or
- section 123SD–disengaged youth and long-term welfare payment recipients–Northern Territory; or
- section 123SDA– disengaged youth and long-term welfare payment recipients–persons residing in other areas; or
- section 123SE–volunteers.
Declared Area Table
The DAT that applies for the purposes of this Determination is freely accessible to the public on the Australian Government’s Guides to Social Policy Law website at https://guides.dss.gov.au.
The DAT is a tool published by the Department of Social Services that specifies whether a 28-day or 56-day operational waiting period should be applied to a new participant based on their geographic information. The participant’s geographic information is considered because their location may impact administrative processes affecting the participant’s ability to participate in enhanced IM. This could include, for example, the amount of time it takes to deliver the SmartCard to a new participant in a flood-affected region.
To work out the correct operational waiting period, the participant’s geographic information is identified in the DAT, which is ordered in categories according to the below hierarchy:
- Community code
- Postcode
- Administrative Local Government Area (LGA)
- Australian Bureau of Statistics (ABS) LGA
- Australian Statistical Geography Standard – Statistical Area Level 2 (SA2)
- Commonwealth Electoral Divisions (CED).
The participant’s geographic information is searched for in the DAT by order of the categories 1 – 6 above. For example, if a participant’s geographic information is matched with data in 1. Community Code, the corresponding operational waiting period is applied. If the participant’s geographic information is not located in 1. Community Code, the reader progresses through the other categories 2. Postcode to 6. CED, in order, until the geographic information is matched. This means that if the participant’s geographic information matches data in 1. Community Code, there is no need to consider whether the person’s information is also listed in the DAT by postcode, LGA, ABS LGA, SA2 or CED.
The DAT is incorporated by reference into the Determination, as at the date the Determination is made, pursuant to section 14 of the Legislation Act 2003.
Authority
The Determination is made under subsections 123SLA(2), 123SLA(5), 123SLD(2), 123SLD(5), 123SLG(2), 123SLG(5), 123SLJ(2), 123SLJ(5), 123SM(1A), 123SM(2A), 123SP(1A) and 123SP(2A) of the Administration Act, which provide that the Minister may make a legislative instrument.
Under subsection 33(3A) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), with respect to particular matters (however the matters are described), the power shall be construed as including a power to make, grant or issue such an instrument with respect to some only of those matters or with respect to a particular class or particular classes of those matters and to make different provision with respect to different matters or different classes of matters. In making the Determination, the Minister is relying on this subsection in conjunction with the instrument-making powers in subsections 123SLA(2), 123SLA(5), 123SLD(2), 123SLD(5), 123SLG(2), 123SLG(5), 123SLJ(2), 123SLJ(5), 123SM(1A), 123SM(2A), 123SP(1A) and 123SP(2A) of the Administration Act.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Commencement
This Determination commences on the day after it is registered on the Federal Register of Legislation.
Consultation
The Department of Social Services consulted with Services Australia on the text of this Determination. Services Australia supported the Determination being made.
It was not necessary to consult with the welfare payment recipients likely to be affected by the Determination given it is purely beneficial in nature.
Explanation of the provisions
Section 1 – Name
This section states how the instrument is to be cited, that is, as the Social Security (Administration) (Enhanced Income Management Regime – Qualified Portion of Payments) Determination 2025 (the Determination).
Section 2 – Commencement
This section sets out a table providing for the commencement of the Determination, that is, the day after it is registered.
Section 3 – Authority
This section provides that the Determination is made under subsections 123SLA(2), 123SLA(5), 123SLD(2), 123SLD(5), 123SLG(2), 123SLG(5), 123SLJ(2), 123SLJ(5), 123SM(1A), 123SM(2A), 123SP(1A) and 123SP(2A) of the Social Security (Administration) Act 1999 (the Administration Act).
Section 4 – Definitions
This section prescribes a list of definitions used in the Determination.
The ‘Declared Area Table’ as defined in the Determination is incorporated by reference as described above.
Section 5 – Qualified portion of payment
This section provides the circumstances in which the qualified portion of a new participant’s welfare payment is 0%, for the period worked out under section 6.
Subsection 5(1) applies to instances where the person:
- is subject to the enhanced IM regime under section 123SCA, 123SCB, 123SCC, 123SCJ, 123SCL, 123SD or 123SDA of the Administration Act; and
- immediately before the person’s test time, the person was not subject to the enhanced IM regime under Part 3AA of the Administration Act, or the income management regime under Part 3B of the Administration Act.
Section 123SE of the Administration Act, which enables ‘volunteers’ to be subject to the enhanced IM regime, operates differently to the other application provisions insofar as the time at which a person is subject to the enhanced IM regime. The Determination accordingly separates this category of new enhanced IM participants, and temporarily reduces their qualified portion to 0% for the relevant period commencing on the date their voluntary enhanced income management agreement comes into force (see also section 123SF of the Administration Act), rather than from a ‘test time’.
Accordingly, subsection 5(2) applies to instances where the person:
- is subject to the enhanced IM regime under section 123SE of the Administration Act; and
- immediately before the time in which the person’s voluntary enhanced income management agreement comes into force, the person was not subject to the enhanced IM regime under Part 3AA of the Administration Act, or the income management regime under Part 3B of the Administration Act.
Section 6 – Qualified portion period
This section prescribes the period for which the qualified portion of a new participant’s payment will be reduced to 0% where either subsection 5(1) or subsection 5(2) applies. Where subsection 5(1) applies, the relevant period is to be worked out under subsection 6(1), and where subsection 5(2) applies, the relevant period is to be worked out under subsection 6(2).
Paragraph 6(1)(a) provides that if the new participant is subject to the enhanced IM regime under section 123SCA, 123SCB, 123SCC or 123SCJ of the Administration Act then, subject to subsection 6(3) of the Determination, subsection 5(1) applies to that person for the period from the day of the person’s test time and ending after 28 days.
Paragraph 6(1)(b) provides that if the new participant is subject to the enhanced IM regime under section 123SCL, 123SD or 123SDA of the Administration Act then, subject to subsection 6(3) of the Determination, subsection 5(1) applies to that person for the period from the day of the person’s test time and ending after either 28 or 56 days, depending on the number of days applicable to the person, as worked out by reference to the DAT.
Subsection 6(2) provides that if the new participant is subject to the enhanced IM regime under section 123SE of the Administration Act then, subject to subsection 6(3) of the Determination, subsection 5(2) applies to that person for the period from the day the person’s voluntary enhanced income management agreement comes into force and ending after either 28 days or 56 days, depending on the number of days applicable to the person, as worked out by reference to the DAT.
Subsection 6(3) prescribes the circumstances in which an operational waiting period will cease to have effect prior to the end of the period worked out under subsection 6(1) or subsection 6(2). This is where the period has not ended, and the person requests the Human Services Department to end the period. In such circumstances, the period will end on the day the person made the request.
As provided for in the definitions listed in section 4 of the Determination, the phrase ‘Human Services Department’ draws meaning from the definition of that phrase in subsection 23(1) of the Social Security Act 1991, which prescribes that ‘Human Services Department’ means Services Australia.
If subsection 6(3) applies, the relevant period commences on the day of the person’s test time under subsection 6(1), or the date their voluntary income management agreement comes into force under subsection 6(2), and ends on the day the request was made by the person to Services Australia.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security (Administration) Act 1999
Social Security (Administration) (Enhanced Income Management Regime –Qualified Portion of Payments) Determination 2025
The Social Security (Administration) (Enhanced Income Management Regime –Qualified Portion of Payments) Determination 2025 (the Determination) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
The Determination is made by the Minister for Social Services for the purposes of Part 3AA of the Social Security (Administration) Act 1999 (the Administration Act), which prescribes the legislative framework for the enhanced income management regime (enhanced IM). The Determination is made under subsections 123SLA(2), 123SLA(5), 123SLD(2), 123SLD(5), 123SLG(2), 123SLG(5), 123SLJ(2), 123SLJ(5), 123SM(1A), 123SM(2A), 123SP(1A) and 123SP(2A) of the Administration Act.
The Determination prescribes circumstances where a new participant subject to enhanced IM will have the qualified portion of their welfare payment temporarily reduced to nil for a certain period. The particular period depends on various factors specific to the participant, including their geographic location and whether they became subject to enhanced IM through a referring authority.
The Determination ensures that a new participant subject to enhanced IM is not prevented from accessing their full welfare payment in instances where their welfare payment is treated under the portioning regime in Division 3 of Part 3AA of the Administration Act, but their participation in enhanced IM is not yet operationalised by Services Australia.
This provides Services Australia with appropriate time to provide the new participant with the SmartCard, ensure the participant’s BasicsCard bank account is fully operational, and the participant is appropriately supported to understand the operation of the enhanced IM regime, before a qualified portion greater than nil applies to the participant’s welfare payment under the enhanced IM regime.
Human rights implications
The Determination engages the following rights:
- the right to equality and non-discrimination
- the right to self-determination
- the right to an adequate standard of living, including food, water and housing
- the right to social security
The right to equality and non-discrimination
The right to equality and non-discrimination are provided for in international human rights treaties to which Australia is a party, most relevantly the International Covenant on Civil and Political Rights and the Convention on the Elimination of All Forms of Racial Discrimination.
Although the Determination does not directly engage the rights to equality and non‑discrimination, it may indirectly engage these rights because it imposes either a 28-day or 56-day period in which a new participant’s welfare payment is subject to a nil qualified portion under the enhanced IM regime.
Whether a 28-day or 56-day waiting period applies relates to the participant’s personal circumstances, such as their geographic location as relevant to their access to key services such as postal services (and associated postal delivery times), banking services and Services Australia Service Centres (including their servicing arrangements) and whether the participant became subject to enhanced IM through a referring authority. Despite this, either waiting period is beneficial for the participant, and enables the participant to access the full amount of their welfare payment while Services Australia operationalises their participation in enhanced IM.
The right to self-determination
Article 1 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) states that ‘all peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development’.
The Determination does not limit or interfere with the right to self-determination or a person’s right to freely pursue their economic, social or cultural development. Rather, the Determination ensures that a new participant in enhanced IM will not be prevented from accessing their full welfare payment for a certain period, in instances where their welfare payment is treated under the portioning regime in Division 3 of Part 3AA of the Administration Act, but their participation in enhanced IM is not yet operationalised by Services Australia (for example, they have not yet received their SmartCard or their BasicsCard bank account is not yet operational).
The right to an adequate standard of living, including food, water and housing
The right to social security
Article 11(1) of the ICESCR details that all people have the right to an ‘an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions’.
Article 9 of the ICESCR details that all people have access ‘to social security, including social insurance’. The United Nations Committee of Economic, Social and Cultural Rights has stated that implementing this right requires a country, with maximum available resources, to ensure ‘a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education’.
The Determination does not limit or interfere with a person’s right to an adequate standard of living or the right to social security. Rather, the Determination ensures that a new participant in enhanced IM will not be prevented from accessing their full welfare payment for a certain period, in instances where their welfare payment is treated under the portioning regime in Division 3 of Part 3AA of the Administration Act, but their participation in enhanced IM is not yet operationalised by Services Australia (for example, they have not yet received their SmartCard or their BasicsCard bank account is not yet operational).
Conclusion
The Determination is compatible with human rights as it does not limit or interfere with the right to self-determination, the right to social security or the right to an adequate standard of living. To the extent the right to equality and non-discrimination is engaged or limited, the impact is for a legitimate objective and is reasonable, necessary and proportionate.
The Hon Tanya Plibersek MP, Minister for Social Services