EXPLANATORY STATEMENT
Social Security (Administration) Act 1999
Social Security (Administration) (Trial - Declinable Transactions) Amendment Determination (No. 2) 2016
Purpose
This Amendment Determination is made by a delegate of the Secretary of the Department of Social Services (the Secretary) under subsection 124PQ(2) of the Social Security (Administration) Act 1999 (‘the Act’).
Section 124PQ provides exceptions to Part IV of the Competition and Consumer Act 2010. Part IV of the Competition and Consumer Act 2010 relates to restrictive trade practices. Subsection 51(1) of the Competition and Consumer Act 2010 lists exceptions to this Part. Under subsection 51(1), anything specified in, and specifically authorised by, an Act or regulations made under such an Act, must be disregarded when deciding whether a person has contravened Part IV. Section 124PQ specifies and specifically authorises the declining of certain transactions by a financial institution, if it involves money in a welfare restricted bank account and a business of a kind that is specified in a legislative instrument made under subsection 124PQ(2).
In accordance with subsection 124PQ(2) of the Act, the Secretary may, by legislative instrument, determine a kind of business (whether by reference to merchant category codes, terminal identification codes, card accepted identification codes or otherwise) in relation to which transactions involving money in a welfare restricted bank account may be declined by a financial institution.
In accordance with subsection 124PQ(2) of the Act, this Amendment Determination amends the Social Security (Administration) (Trial – Declinable Transactions) Determination 2016 (the Determination) to add terminal identification codes as items in the table at Schedule 4, as well as an additional schedule, to the Determination. This additional schedule is Schedule 6 to the Determination which declares kinds of business by reference to BPAY biller codes. As the debit card trial (the Trial), established by Part 3D of the Act, progresses, more terminal identification codes will be identified and added to these tables.
Background
The Trial established by Part 3D of the Act, tests the concept of cashless welfare arrangements by disbursing a percentage of particular welfare payments to a welfare restricted bank account, accessed solely by a debit card that does not allow cash withdrawals. The restricted portion of a restrictable payment may not be used to purchase alcoholic beverages or for gambling (paragraph 124PM(a) of the Act). In order to support this restriction, the financial institution that provides a welfare restricted bank account may identify transactions involving the person’s bank account or cashless debit card which would breach this requirement, and refuse to complete the transaction.
Effect of determination
The Amendment Determination is a legislative instrument.
Commencement
The Amendment Determination commences on the day after registration on the Federal Register of Legislation.
Consultation
The Government has undertaken an extensive consultation process leading up to implementation of the Trial. Initial community consultations in the two Trial locations of Ceduna and East Kimberley were undertaken to better understand local needs and gauge interest in the Trial. Advice was also sought from community members about the identification of local and cultural protocols and preferred entry points for community discussion. This consultation process provided Government with valuable feedback on the issues faced by the community. Consultation has been conducted with all levels of the community including merchants, community leaders, people in scope for the Trial and the general community.
Consultations in Ceduna and East Kimberley will extend through to implementation of the Trial and beyond to ensure that the community is prepared and that it has all the necessary information and support for the Trial. Consultations with the Department of the Prime Minister and Cabinet and the Department of Human Services have also informed the development of this Amendment Determination.
Additionally, intensive consultations with Indue Limited, the Authorised Deposit-Taking Institution engaged to deliver the Trial, have been undertaken and have informed the development of this Amendment Determination. These consultations will continue throughout the Trial.
Regulation Impact Statement (RIS)
This Amendment Determination is not regulatory in nature, will have minimal impact on business activity and will have no, or minimal, compliance costs or competition impact.
Explanation of the provisions
Section 1 states the name of the Amendment Determination.
Section 2 provides for commencement of the Amendment Determination. The instrument will be repealed on the day after its commencement by section 48A of the Legislation Act 2003, as the only effect of the instrument is to amend another legislative instrument.
Section 3 provides that Schedule 1 amends the Social Security (Administration) (Trial –Declinable Transactions) Determination 2016.
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.
Schedule 1 to the Amendment Determination sets out the amendments to the Determination.
Item [1] omits the words ‘Schedule 4 or Schedule 5’ and substitutes ‘Schedule 4, Schedule 5 or Schedule 6’, consequential to item [3] which inserts new Schedule 6.
Item [2] inserts nineteen items which refer to specific merchants in the Ceduna and East Kimberley trial regions after table item 8 of Schedule 4 – Declared kinds of business pursuant to s 124PQ(2) – by reference to terminal identification codes.
Item [3] inserts Schedule 6 after Schedule 5, declaring kinds of business pursuant to s 124PQ(2) by reference to BPAY biller code. The table contains one biller code relating to purchase of on-line ‘money orders’ at Australia Post.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SOCIAL SECURITY (ADMINISTRATION) (TRIAL AREA – DECLINABLE TRANSACTIONS) AMENDMENT DETERMINATION (No. 2) 2016
This Amendment 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 debit card trial (the Trial) established by Part 3D of the Act will test the concept of cashless welfare arrangements by disbursing a percentage of particular welfare payments to a welfare restricted bank account, accessed by a debit card which does not allow cash withdrawals. The restricted portion of a restrictable payment may not be used to purchase alcoholic beverages or gambling (paragraph 124PM(a) of the Act). In order to support this restriction, the financial institution which provides a welfare restricted bank account may identify transactions involving the person’s bank account or cashless debit card that would breach this requirement, and refuse to complete the transaction.
Section 124PQ provides exceptions to Part IV of the Competition and Consumer Act 2010. Part IV of the Competition and Consumer Act 2010 relates to restrictive trade practices. Subsection 51(1) of the Competition and Consumer Act 2010 lists exceptions to this Part. Under subsection 51(1), anything specified in, and specifically authorised by, an Act or regulations made under such an Act, must be disregarded when deciding whether a person has contravened Part IV. Section 124PQ specifies and authorises the declining of certain transactions by a financial institution, if it involves money in a welfare restricted bank account and a business of a kind specified in a legislative instrument made under subsection 124PQ(2).
In accordance with subsection 124PQ(2) of the Act, the Secretary may, by legislative instrument, determine a kind of business (whether by reference to merchant category codes, terminal identification codes, card accepted identification codes or otherwise) in relation to which transactions involving money in a welfare restricted bank account may be declined by a financial institution.
In accordance with subsection 124PQ(2) of the Social Security (Administration) Act 1999 (the Act), this Amendment Determination amends the Social Security (Administration) (Trial – Declinable Transactions) Determination 2016 (the Determination) to add terminal identification codes as items in the table at Schedule 4, as well as an additional schedule, to the Determination. This additional schedule is Schedule 6 to the 2016 Determination which declares kinds of business pursuant to subsection 124PQ(2) by reference to BPAY biller codes. As the Trial progresses, more terminal identification codes located in individual businesses will be identified and added to these tables.
Human rights implications
Objectives
The Objectives of Part 3D of the Act and this Amendment Determination are to:
(a) reduce the amount of certain restrictable payments available to be spent on alcoholic beverages, gambling and illegal drugs; and
(b) determine whether such a reduction decreases violence or harm in the Region; and
(c) determine whether such arrangements are more effective when community bodies are involved; and
(d) encourage socially responsible behavior.
In other words, the debit card has the objectives of reducing immediate hardship and deprivation, reducing violence and harm, encouraging socially responsible behavior, and reducing the likelihood that welfare payment recipients will be subject to harassment and abuse in relation to their welfare payments.[1]
In Ceduna and Surrounding Region and East Kimberley trial areas, there is clear evidence of the harm caused by alcohol. For example, in terms of the East Kimberley trial region, according to Western Australia (WA) Police data in 2013-14 there were 1,456 offences against the person for every 100,000 people. The Kimberley region had offence rates against the person 4.5 times that of overall WA figures. In 2012-13, there were 100 reported incidents of family violence per 1,000 people in the Kimberley, as compared to the next highest of rate of family violence which was 43 per 1,000 people.[2]
General Safeguards
A number of general safeguards that help to protect human rights have been incorporated into the Trial. First, the roll-out of the Trial in trial areas has been subject to an extensive consultation process.
The second safeguard is the power of community bodies to vary the percentage of funds that a person has restricted, subject to that person’s agreement (as provided for under section 124PK of the Act). This will provide an ongoing mechanism to ensure that there is flexibility to treat individual cases differently.
A third safeguard lies in the Trial being subject to an independent, comprehensive evaluation that will consider the impacts of limiting the amount of welfare funds that may contribute to community-level harm. The evaluation will use both quantitative and qualitative information to explore perceived and measurable social changes in trial communities.
Finally, subsection 124PF(1) of the Act specifies that the Trial will commence on 1 February 2016 and end on 30 June 2018. The policy intention is that the Trial will only run for 12 months in each trial area. The clause acts as an appropriate and effective safeguard as Parliament must amend the legislation to continue the Trial beyond 2018.
The right to a private life
Article 17 of the International Covenant on Civil and Political Rights (ICCPR) sets out the right to a private life. It prohibits arbitrary or unlawful interferences with an individual’s privacy, family, correspondence or home.
The Trial seeks to achieve the legitimate objectives of reducing immediate hardship and deprivation, reducing violence and harm, encouraging socially responsible behavior, and reducing the likelihood that welfare payment recipients will be subject to harassment and abuse in relation to their welfare payments.
In order to achieve these objectives, the Trial will place 80 per cent of restrictable payments received by a person on a trigger payment into a restricted bank account. Funds held in this bank account will not be able to be withdrawn as cash, or to be spent on alcohol or gambling products. There is a clear, rational connection between these objectives and the restrictions on the right to a private life – the restrictions on the purchase of alcohol, illegal drugs and gambling products by trial participants in the trial area are designed to reduce alcohol fuelled violence and harm, and to encourage socially responsible behaviour.
This Amendment Determination limits how, and at what businesses, trial participants can spend their welfare payment. It does this by ensuring that transactions performed at businesses that sell certain products, including alcoholic beverages, gambling or gift cards that could provide access to cash, alcoholic beverages or gambling, are declined. In doing so, the Amendment Determination engages the right to a private life. This limitation on a person’s right to a private life is reasonable and proportionate given the extensive harm caused by alcohol and gambling in the trial areas (as discussed above). The limitations are also directly related to minimising such harms given they are placed on the execution of transactions at businesses that sell those certain products.
The right to an adequate standard of living
Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (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’ and that ‘appropriate steps’ be taken to ‘ensure realisation of this right’. 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’.
This Amendment Determination limits how, and at what businesses, trial participants can spend their welfare payment. It does so by ensuring that transactions performed at businesses that sell certain products, including alcoholic beverages, gambling, or gift cards that could provide access to cash, alcoholic beverages or gambling, are declined. This promotes the right to an adequate standard of living. It will mean that people will be able to use restricted funds to access any goods, with the exception of alcohol and gambling products, with the aim of reducing abuse of these goods and the associated harm and violence. This Amendment Determination will not have the effect of restricting access to essential needs required to maintain an adequate standard of living. Access to some discretionary cash will be available, ensuring that people can still participate in cash economies to purchase items which contribute to an adequate standard of living.
The rights of equality and non-discrimination
The rights of equality and non-discrimination are provided for in several of the seven core international human rights treaties to which Australia is a party, most relevantly the 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 a 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)).
Discrimination is impermissible differential treatment among persons or groups that result in a person or a group being treated less favourably than others, based on a prohibited ground for discrimination such as race. However, the UN Human Rights Committee has recognised that ‘not every differentiation of treatment will constitute discrimination, if the criteria for such differentiation are reasonable and objective, and if the aim is to achieve a purpose which is legitimate under the Covenant’.
The rights to equality and non-discrimination are not directly limited by this Amendment Determination. This is because, as set out in this Amendment Determination, anyone who is a trial participant will be subject to the same restrictions on how and at what businesses they can spend their welfare payment. This Amendment Determination is not targeted at people of a particular race, gender or cultural characteristic, but to trial participants and voluntary trial participants.
While this Amendment Determination does not directly limit the rights to equality and non-discrimination, it may indirectly limit these rights. In both trial areas, Indigenous people will make up a substantial majority of the total income support payment population who will become trial participants and who will be affected by this Amendment Determination.
It is acknowledged that Indigenous Australians comprise a large proportion of those likely to become trial participants and who will be affected by this Amendment Determination. However, the trial areas have been chosen as locations based on objective criteria, such as ‘high levels of welfare dependence and community harm, as well as the outcomes of comprehensive consultation with prospective communities.’[3] These criteria clearly relate to the legitimate objectives of this Amendment Determination. In turn, this Amendment Determination affects only those in the trial regions and those who volunteer for the Trial. Therefore, there is a rational connection between any limitation on the right to social security and the objectives of this Amendment Determination.
Finally, given the objectives of the Act and this Amendment Determination, as well as the scale of unacceptable harm in trial areas as discussed above, any limitation on the right to equality and non-discrimination is reasonable and proportionate.
The right to self-determination
Article 1 of the 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’.
It may appear that the right to self-determination is engaged by this Amendment Determination. However, any such engagement of this right is reasonable and proportionate given the extensive harm caused by alcohol and gambling in the trial areas (again, as discussed above). Any limitation of this right is also directly related to limiting such harm, given the restrictions in this Amendment Determination being placed on the execution of transactions at businesses that sell certain products including alcoholic beverages, gambling or gift cards.
Conclusion
This Amendment Determination is compatible with human rights. A trial of cashless welfare arrangements will advance the protection of human rights by ensuring that income support payments are spent in the best interests of welfare payment recipients and their dependents. To the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate to achieving the legitimate objectives of reducing immediate hardship and deprivation, reducing violence and harm, encouraging socially responsible behaviour, and reducing the likelihood that welfare payment recipients will be subject to harassment and abuse in relation to their welfare payments.
Tristan Reed, Branch Manager, Financial and Specialist Support Branch, as a delegate of the Secretary of the Department of Social Services
[1] Social Services Legislation Amendment (Debit Card Trial) Bill 2015, Explanatory Memorandum, Statement of Compatibility, p. 4.
[2] Western Australia Department of Child Protection and Family Support, Western Australia’s Family & Domestic Violence Prevention Strategy to 2022, Achievement Report to 2013 (2013).
[3] Social Services Legislation Amendment (Debit Card Trial) Bill 2015, Explanatory Memorandum, Statement of Compatibility, p. 3.