Explanatory Statement
Issued by the authority of the Minister for Social Services
Social Security (Administration) Act 1999
Social Security (Administration) Legislation Amendment (Income Management and Enhanced Income Management) Instrument 2026
Purpose
The Social Security (Administration) Legislation Amendment (Income Management and Enhanced Income Management) Instrument 2026 (the Instrument) supports the ongoing administration of the income management regime and enhanced income management regime by removing the self-repeal dates of 1 July 2026 in the following legislative instruments:
- Social Security (Administration) (Declared Child Protection State – New South Wales, Queensland, South Australia and Victoria) Determination 2023 (Child Protection Determination)
- Social Security (Administration) (Enhanced Income Management Regime—Commonwealth Referrals and Exemptions) Determination 2023 (Commonwealth Referrals Determination)
- Social Security (Administration) (Recognised State or Territory – Northern Territory) Determination 2023 (Recognised Territory Determination)
- Social Security (Administration) (Specified Income Management Territory – Northern Territory) Instrument 2023 (Specified Territory Determination).
The Instrument also makes a minor change to the Commonwealth Referrals Determination to confirm the broad interpretation of the money management strategies considered under subsection 12(4) of that Determination.
The Instrument, particularly the removal of the self-repeal dates from the legislative instruments above, gives effect to the fact that each of these instruments is still required to enable the income management regime and enhanced income management regime to continue to be administered under the social security law.
Background
Income management regime
The income management regime in Part 3B of the Social Security (Administration) Act 1999 (the Administration Act) contains provisions for the income management regime for recipients of certain welfare payments. A person who is subject to the income management regime will have amounts deducted from the person’s welfare payments and credited to the person’s income management account. The Secretary may debit amounts from the person’s income management account to meet the priority needs of the person and the person’s children, partner or dependants. The priority needs of a person are defined under subsection 123TH(1) of the Administration Act and include food, clothing, housing, household utilities and health.
The Social Security (Administration) Amendment (Income Management Reform) Act 2023 (IM Reform Act) closed entry to the income management regime (see Schedule 2 to the IM Reform Act) for new entrants. A person cannot be subject to the regime unless the person was subject to the regime immediately before commencement of the IM Reform Act. The income management regime continues to operate in its current form for those persons who do not choose to move to the enhanced regime.
Enhanced income management regime
The enhanced income management regime in Part 3AA of the Administration Act was inserted by the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Act 2022 and began operating from 6 March 2023.
The purpose of the enhanced income management regime is to ensure that welfare payments are not spent on products and services that contribute to social harm and aims to provide budgeting support for participants.
Welfare recipients who are subject to the enhanced income management regime have access to a BasicsCard bank account with an associated debit card (known as a SmartCard) that operates like a standard visa debit card (except that cash cannot be withdrawn). A SmartCard can be used to make purchases at most merchants who can undertake eftpos transactions unless they primarily offer excluded goods or excluded services. People subject to the enhanced income management regime are also able to access a range of mainstream banking functions including ‘Tap and Go’ payments, online shopping and BPAY.
The IM Reform Act expanded access to enhanced income management by including all of the same measures that are in place for the income management regime in Part 3B of the Administration Act. This allows people subject to the income management regime under Part 3B the choice to move to enhanced income management as well as allowing new entrants that meet the eligibility criteria to enter enhanced income management.
Child Protection Determination
Section 123TF of the Administration Act provides that the Minister may determine that a specified State or Territory is a declared child protection State or Territory for the purposes of Part 3B of that Act (that is, the income management regime). This Determination provides that New South Wales, Queensland, South Australia and Victoria are declared child protection States.
Section 123UC, which is also in Part 3B of the Administration Act, provides for when a person may be subject to the income management regime under the child protection measure.
Commonwealth Referrals Determination
This Determination deals with Commonwealth referrals under the enhanced income management regime. It specifies locations and decision-making principles for the purpose of vulnerable welfare payment recipients (see section 123SCL of the Administration Act), and disengaged youth and long-term welfare payment recipient measures (see Part 3AA, Division 2, Subdivision F of the Administration Act).
Section 12 of the Commonwealth Referrals Determination contains decision-making principles for the purposes of subsection 123SDD(5) of the Administration Act. Subsection 123SDD(5) requires the Secretary to comply with any such principles in deciding whether the Secretary is satisfied that there were no indications of financial vulnerability in relation to a person during the last 12-month period, as specified in paragraph 123SDD(1)(d). This forms part of the Secretary’s considerations in determining whether a person is an “exempt welfare payment recipient” under subsection 123SDD(1) of the Administration Act.
Subsection 12(4) of the Commonwealth Referrals Determination requires the Secretary to consider any strategies the person used in the relevant 12-month period to manage their financial resources, and whether it is likely that the person will continue to use those strategies, or similar strategies, to manage their financial resources in the foreseeable future. The note following subsection 12(4) contains examples of money management strategies for the purposes of paragraph 12(4)(a).
The Instrument removes the note to confirm that a broad interpretation of the money management strategies referred to in subsection 12(4) of the Commonwealth Referrals Determination is intended to be considered by the Secretary. This better aligns with the intent to encourage persons to establish good habits, relating to money management, which are fit for purpose for the individual.
Recognised Territory Determination
Section 123TGAB of the Administration Act provides that the Minister may determine that a State or Territory is a recognised State or Territory for the purposes of Part 3B of the Administration Act (that is, the income management regime). This Determination determines that the Northern Territory is a recognised Territory.
Section 123UFAA, which is also in Part 3B of the Administration Act, specifies when a person may be subject to the income management regime at a particular time (the test time) because of a referral from a recognised State/Territory authority and, at the test time, the State or Territory is a recognised State or Territory.
Specified Territory Determination
This Determination specifies the Northern Territory as a Territory where a person may be subject to the income management regime under subsections 123UCB(1) (disengaged youth measure) and 123UCC(1) (long-term welfare payment recipients measure) of the Administration Act.
Commencement
The Instrument commences on the day after it is registered on the Federal Register of Legislation.
Authority
The Instrument is made under subsections 123SCL(5), 123SCM(12), 123SDB(2), 123SDD(2), 123SDD(3) and 123SDD(6), sections 123TF and 123TGAB, and subsections 123UCB(4) and 123UCC(4) of the Administration Act.
Under subsection 33(3) 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), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. In making the Instrument, the Minister is relying on this subsection in conjunction with the instrument-making powers in subsections 123SCL(5), 123SCM(12), 123SDB(2), 123SDD(2), 123SDD(3) and 123SDD(6), sections 123TF and 123TGAB, and subsections 123UCB(4) and 123UCC(4) of the Administration Act.
The Instrument is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Consultation
The Department of Social Services consulted with Services Australia on the text of the Instrument. Services Australia supported the Instrument.
It was not necessary to consult with income management regime and enhanced income management regime participants. This is because the amendments made by the Instrument are minor in nature and support the continued administration of the regimes.
Availability of independent review
Decisions made under social security law in relation to the income management regime and enhanced income management regime are generally subject to internal and external merits review under Parts 4 and 4A of the Administration Act. Such decisions are not made or affected by the Instrument.
Explanation of the provisions
Details of the Social Security (Administration) Legislation Amendment (Income Management and Enhanced Income Management) Instrument 2026
Section 1 – Name
Section 1 states how the Instrument is to be cited, that is, as the Social Security (Administration) Legislation Amendment (Income Management and Enhanced Income Management) Instrument 2026.
Section 2 – Commencement
Section 2 sets out a table providing for the commencement of the Instrument on the day after it is registered on the Federal Register of Legislation.
Section 3 – Authority
Section 3 provides that the Instrument is made under subsections 123SCL(5), 123SCM(12), 123SDB(2), 123SDD(2), 123SDD(3) and 123SDD(6), sections 123TF and 123TGAB, and subsections 123UCB(4) and 123UCC(4) of the Social Security (Administration) Act 1999.
Section 4 – Schedules
Section 4 provides that each instrument that is specified in a Schedule to the Instrument is amended or repealed as set out in the applicable items in that Schedule, and any other item in a Schedule to the Instrument has effect according to its terms.
Schedule 1 to the Instrument sets out the amendments to the Child Protection Determination, Commonwealth Referrals Determination, Recognised Territory Determination and Specified Territory Determination.
Schedule 1 – Amendments
Schedule 1 contains amendments to the Child Protection Determination, Commonwealth Referrals Determination, Recognised Territory Determination and Specified Territory Determination, which repeal the self-repeal provisions in each of these instruments. This ensures these instruments do not self-repeal on 1 July 2026, and will continue in effect to support the ongoing administration of the income management and enhanced income management regimes beyond this date.
The effect of these amendments is that the Child Protection Determination, Commonwealth Referrals Determination, Recognised Territory Determination and Specified Territory Determination are subject to the usual sunsetting requirements in section 50 of the Legislation Act 2003, unless repealed earlier.
Child Protection Determination
Item 1 of Schedule 1 repeals section 4 of the Child Protection Determination, which contains the current repeal date of the Determination.
Commonwealth Referrals Determination
Item 2 of Schedule 1 repeals the note following subsection 12(4) of the Commonwealth Referrals Determination. This repeal ensures the note does not inadvertently limit the intended broad scope of the money management strategies to be considered by the Secretary in accordance with this provision.
Item 3 of Schedule 1 repeals Part 4 of the Commonwealth Referrals Determination, which contains the current repeal date of the Determination.
Recognised Territory Determination
Item 4 of Schedule 1 repeals section 4 of the Recognised Territory Determination, which contains the current repeal date of the Determination.
Specified Territory Determination
Item 5 of Schedule 1 repeals section 4 of the Specified Territory Determination, which contains the current repeal date of the Determination.
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) Legislation Amendment (Income Management and Enhanced Income Management) Instrument 2026
The Social Security (Administration) Legislation Amendment (Income Management and Enhanced Income Management) Instrument 2026 (the Instrument) 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 Instrument supports the ongoing administration of the income management regime and enhanced income management regime by removing the self-repeal dates of 1 July 2026 in the following legislative instruments:
- Social Security (Administration) (Declared Child Protection State – New South Wales, Queensland, South Australia and Victoria) Determination 2023 (Child Protection Determination)
- Social Security (Administration) (Enhanced Income Management Regime—Commonwealth Referrals and Exemptions) Determination 2023 (Commonwealth Referrals Determination)
- Social Security (Administration) (Recognised State or Territory – Northern Territory) Determination 2023 (Recognised Territory Determination)
- Social Security (Administration) (Specified Income Management Territory – Northern Territory) Instrument 2023 (Specified Territory Determination).
The Instrument also makes a minor change to the Commonwealth Referrals Determination to confirm the broad interpretation of the money management strategies considered under subsection 12(4) of that Determination.
The Instrument, particularly the removal of the self-repeal dates from the legislative instruments above, gives effect to the fact that each of these instruments is still required to enable the income management regime and enhanced income management regime to continue to be administered under the social security law.
Human rights implications
The Instrument engages the following rights or freedoms:
- the rights of equality and non-discrimination
- the right to self-determination
- the right to an adequate standard of living, including food, water and housing, and
- the right to social security.
The right to equality and non-discrimination
The rights of equality and non-discrimination are provided for in a number of the 7 core international human rights treaties to which Australia is a party, most relevantly the International Covenant on Civil and Political Rights (ICCPR) and the Convention on the Elimination of All Forms of Racial Discrimination (the CERD). In particular, article 5 of the CERD requires parties ‘to prohibit and eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour or national or ethnic origin, to equality before the law’, notably in the enjoyment of ‘the right to…social security and social services’ (article 5(e)(iv)).
Income management programs do not directly limit the rights of equality and non-discrimination. The programs are not applied on the basis of race or cultural factors. Rather, participation in the programs is based on a set of objective criteria.
While income management does not directly limit the rights to equality and non-discrimination, it may indirectly limit these rights. Across the programs, over 80 per cent of income management participants are First Nations people.
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’.
Income management programs do not directly impact a person’s pursuit of their economic, social and cultural development as the welfare recipient still receives the benefit of the entire amount of the welfare payment under the programs. Individuals subject to income management or enhanced income management can continue to spend the unquarantined percentage of their welfare payments on any goods or services when and how they choose. As part of income management programs, a portion of their payment is reserved for essential items. While this does limit individual’s ability to freely use their resources, it does not impact on their right to freely pursue their economic, social or cultural development.
The limitation on the right to self-determination is considered to be minimal.
The right to an adequate standard of living, including food, water and housing
Article 11(1) of the ICESCR states that everyone has the right to ‘an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions’. Further to this, article 11(2) of the ICESCR states that ‘measures, including specific programmes,’ should be taken in ‘recognising the fundamental right of everyone to be free from hunger’.
The Instrument promotes the right to an adequate standard of living by ensuring that certain amounts of a person’s welfare payments are directed to pay for essential goods and services of a person and their dependants, which include food, clothing and housing.
The right to social security
Article 9 of the ICESCR recognises ‘the right of everyone to social security, including social insurance’. The United Nations Committee of Economic, Social and Cultural Rights (the UN Committee) has stated that implementing this right requires a country, within its maximum available resources, to provide ‘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’.
Individuals subject to income management programs retain the same rights to social security, while being provided a mechanism to acquire the essential items encompassed under article 9 of the ICESCR. The requirement to allocate a percentage of their welfare payments to meet their essential needs, such as food, clothing, housing and household utilities, supports this right.
The limitation of rights under the ICESCR
Article 4 of the ICESCR provides that States may limit rights under the ICESCR only in so far as the limitations may be compatible with the nature of these rights, and solely for the purpose of promoting the general welfare in a democratic society.
As noted above, the Instrument does not unreasonably limit a person’s rights under the ICESCR. Although the income management regime and enhanced income management regime does restrict how a welfare recipient may spend their welfare payments, these restrictions are consistent with the nature of the rights which are being limited and have the purpose of promoting the general welfare of society.
Conclusion
The Instrument is compatible with human rights. It protects human rights by ensuring that welfare payments are spent in the best interests of welfare payment recipients and their dependents. To the extent the Instrument may limit human rights, those limitations are reasonable, necessary and proportionate to achieving the legitimate objective of the income management regime and enhanced income management regime.
The Hon Tanya Plibersek MP, Minister for Social Services