EXPLANATORY STATEMENT
Issued by the authority of the Minister for Human Services
Social Security (Administration) Act 1999
Social Security (Administration) (Trial - Variation of Percentage Amounts) Determination 2016
Purpose
This Determination is made by the Minister under subsection 124PJ(3) and subsection 124PJ(4) of the Social Security (Administration) Act 1999 (the Act).
This Determination is made for the purposes of the debit card trial established in Part 3D of the Act.
Under the trial, the Secretary for Social Services (or delegate) must divide payments of certain welfare payments (‘restrictable payments’) to trial participants or voluntary participants into a ‘restricted portion’ and ‘unrestricted portion’.
The restricted portion must be paid into a welfare restricted bank account and may only be used by the recipient to purchase goods and services other than alcoholic beverages or gambling. It will also not be possible to make cash withdrawals from a welfare restricted bank account.
The purpose of this Determination is to vary the restricted and unrestricted portion of the payment made to a trial participant or voluntary participant, and set out the class of person and trial area to which the varied percentages apply.
If the Secretary determines that a trial participant or voluntary participant is in a class of persons set out in section 7 of this Determination, the trial participant’s or voluntary participant’s restricted portion will be reduced to 0 per cent.
Background
The debit card trial established in 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.
Subsections 124PJ(3) and (4) of the Act empower the Minister, by legislative instrument, to vary the percentage amount of a trial participant’s or voluntary participant’s payments (‘restrictable payments’) paid into the participant’s restricted welfare account and subject to welfare restrictions under the trial.
For restrictable payments paid to a trial participant or voluntary participant by instalments, the default restricted portion percentage amount is 80 per cent (subsection 124PJ(1)).
The default restricted portion percentage amount is 100 per cent for restrictable payments paid to a trial participant or voluntary participant otherwise than by instalments (subsection 124PJ(2)).
Under paragraphs 124PJ(4)(a) and (b) of the Act, the Minister may, by legislative instrument, determine that these percentage amounts are varied:
(a) both:
(i) in respect of a particular class of person; and
(ii) in relation to a particular trial area; or
(b) in relation to a particular trial area.
Ordinarily a trial participant or voluntary participant would have the restricted portion of their payment paid into their welfare restricted bank account. There would then be restrictions on the goods and services that can be purchased with this money. Cash withdrawals from the person’s welfare restricted bank account would also not be allowed.
If this Determination applies, the Secretary may pay the whole of the person’s payment into the participant’s regular bank account, where it may be accessed in cash. This will be important where, due to particular circumstances specified in section 7 of the Determination, the participant is unable to use their cashless welfare card or access their welfare restricted bank account.
The Minister for Human Services has been appointed to also administer the Department of Social Services, and so pursuant to section 19A of the Acts Interpretation Act 1901 has the powers of the ‘Minister’ under Part 3D of the Act.
The Determination is a legislative instrument.
Commencement and cessation of instrument
This Determination commences the day after it is registered on the Federal Register of Legislation and is taken to have been repealed at the end of 30 June 2018.
Consultation
The Government has undertaken an extensive consultation process leading up to and during the implementation of the trial. Initial community consultations in the two trial locations were undertaken to better understand local needs and gauge interest in the trial. Advice was also sought from community members about identification of local and cultural protocol 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 the community is prepared and has all necessary information and support for the trial. Consultation with the Department of Prime Minister and Cabinet and the Department of Human Services have informed the development of this Determination.
Regulation Impact Statement (RIS)
This 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 Determination.
Section 2 provides that the Determination commences on the day after it is registered on the Federal Register of Legislation.
Section 3 provides that the Determination is taken to have been repealed at the end of 30 June 2018. Under section 124PF of the Act the debit card trial established in Part 3D of the Act must cease by 30 June 2018.
Section 4 provides for the interpretation of terms that are used in the Determination.
Any references to the Act in the Determination are references to the Social Security (Administration) Act 1999.
Many of the terms used in the Determination are defined in the Act, in particular Part 3D of the Act. These terms have therefore not been defined in section 4 of the Determination.
Under paragraph 13(1)(b) of the Legislation Act 2003, where enabling legislation confers on a rule‑maker the power to make a legislative instrument, then, unless the contrary intention appears, expressions used in any legislative instrument so made have the same meaning as in the enabling legislation as in force from time to time.
The following additional definitions have been included in section 4 of the Determination:
- A definition of cashless welfare card has been included for the purposes of paragraph 7(a) of the Determination. A cashless welfare card is a debit card issued to a participant in the trial which is linked to a welfare restricted bank account. ‘Welfare restricted bank account’ is defined in section 124PD of the Act.
- A definition of intervening occurrence has been included for the purposes of paragraph 7(a) of the Determination.
Under section 4, an ‘intervening occurrence’ means:
(a) a technological fault or malfunction with a participant's cashless welfare card;
(b) a technological fault or malfunction with a participant's welfare restricted bank account; or
(c) a natural disaster.
- A definition of participant has been included, to mean a ‘trial participant’ or ‘voluntary participant’ in the debit card trial. The terms ‘trial participant’ and ‘voluntary participant’ are defined in the Act in section 124PD.
- A definition of urgent payment has been included for the purposes of subparagraph 7(b)(i) of the Determination. An ‘urgent payment’ means a payment of a person’s social security periodic payment under subsection 43(1) of the Act, which is made before the person’s usual payment date because the person is in severe financial hardship as a result of exceptional and unforeseen circumstances.
Section 5 invokes the Minister’s power in paragraph 124PJ(4)(a) of the Act to apply the varied amount of a participant’s payment.
Section 5 of the Determination provides that the varied percentage amounts set out in section 6 of the Determination apply both:
(a) in respect of a class of person comprising participants who are the subject of a determination by the Secretary under section 7 of this Determination; and
(b) in relation to any trial area.
Section 6 invokes the Minister’s power in subsection 124PJ(3) of the Act to vary the percentage amounts in paragraphs 124PJ(1)(a) and (b) of the Act and subsection 124PJ(2) of the Act.
Under section 6:
(a) the percentage amount in paragraph 124PJ(1)(a) of the Act is varied to 0 per cent of the gross amount of the payment;
(b) the percentage amount in paragraph 124PJ(1)(b) of the Act is varied to 100 per cent of the gross amount of the payment; and
(c) the percentage amount in subsection 124PJ(2) of the Act is varied to 0 per cent of the gross amount of the payment.
Paragraphs 6(a) and (b) apply in relation to a participant who receives payments by instalments.
Paragraph 6(c) applies in relation to a participant who receives payments otherwise than by instalments.
If the Secretary determines that a participant is in a class of persons to whom section 7 of the Determination applies, the participant will have the restricted portion of their payment varied in accordance with this section. The effect of this is that the participant’s restricted portion will be varied to 0 per cent and they will be able to receive 100 per cent of their payment by deposit to a bank account other than a welfare restricted bank account while the Secretary’s determination is in force and they are in the relevant class of persons.
Section 7 provides that the Secretary may make a determination that a participant is within a class of persons to whom the Determination applies.
If the Secretary determines that a trial participant or voluntary participant is in a class of persons set out in section 7 of this Determination, the percentage amount of the participant’s restricted portion will be reduced to 0 per cent in accordance with section 6 of the Determination.
Paragraphs 7(a) and (b) of the Determination set out two classes of persons in respect of whom the Secretary may make a determination under section 7.
The first class in paragraph 7(a) is where the Secretary is satisfied that the participant is unable to use his or her cashless welfare card or access the participant's welfare restricted bank account as a direct result of an ‘intervening occurrence’.
The concept of an ‘intervening occurrence’ is defined in paragraphs 4(a) to (c) of the Determination.
Paragraphs 4(a) and 4(b) of the definition of intervening occurrence are intended to address circumstances in which technological issues, either with a participant’s card or their welfare restricted bank account, prevent the participant from accessing a payment in their welfare restricted bank account. This can include circumstances in which the systems required to access a payment are offline due to a system error.
Paragraph 4(c) is intended to address circumstances in which a natural disaster (such as a bushfire, flood or severe storm) prevents the participant from using their cashless welfare card or welfare restricted bank account. In these circumstances it may be necessary to pay a person’s payment into an account other than the participant’s welfare restricted bank account.
The Secretary or delegate will consider making this determination once they become aware of facts which may indicate that a participant is unable to use their cashless welfare card or access their welfare restricted bank account for reasons set out in section 7. The determination will affect payments of the person’s welfare payment while the determination is in force. However, if the Secretary ceases to be satisfied that the participant is unable to use their cashless welfare card or welfare restricted bank account for the reasons set out in section 7, the determination will be revoked and the person will no longer be in the class of persons under section 7, resulting in the restricted portion and unrestricted portion of the person’s payment reverting to their default amount.
The second class in paragraph 7(b) is where the Secretary is satisfied that the participant is a participant to whom a restrictable payment is payable in instalments, and that any part of the restrictable payment is payable as either:
(i) an urgent payment; or
(ii) an advance payment pursuant to section 51 of the Act.
The concept of an ‘urgent payment’ is defined in section 4 of this Determination which is discussed above. Subparagraph 7(b)(i) of the Determination applies so that the Secretary may determine that where a person receives an urgent payment, the participant is in a class of persons to whom the Determination applies.
Subparagraph 7(b)(ii) of the Determination refers to an advance payment under section 51 of the Act.
Section 51 of the Act allows the Secretary to make advance payments to certain social security payment recipients where the Secretary is satisfied that a recipient would suffer severe financial hardship if required to wait until the end of the first instalment period (or the first instalment period after the resumption of a payment).
In certain circumstances an advance payment can be made to a social security claimant under section 51 of the Act prior to their release from gaol or psychiatric confinement if the Secretary thinks it is necessary to do so in order to ensure that the claimant, on release, will not suffer severe financial hardship.
Subparagraph 7(b)(ii) of the Determination applies so that the Secretary may determine that the participant is in a class of persons to whom the Determination applies.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SOCIAL SECURITY (ADMINISTRATION) (TRIAL– VARIATION OF PERCENTAGE AMOUNTS) DETERMINATION 2016
This 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 purpose of this Determination is to vary the restricted and unrestricted portion of the payment made to a trial participant or voluntary participant, and set out the class of person and trial area to which the varied percentages apply.
If the Secretary determines that a trial participant or voluntary participant is in a class of persons set out in section 7 of this Determination, the trial participant’s or voluntary participant’s restricted portion will be reduced to 0 per cent.
Human rights implications
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights (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 form of education’.
This Determination recognises and promotes this right by ensuring an individual’s payment is directed effectively in certain situations such as a natural disaster. By reducing the restricted portion of a trial participant’s welfare payment to 0 per cent, the welfare payment will be directed to their primary and pre-existing bank account rather than their welfare restricted bank account. This will mean that trial participants and voluntary participants will be able to make cash withdrawals of their welfare payment from their primary bank account.
The right to an adequate standard of living
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’ 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 Determination recognises and promotes this right by ensuring an individual’s payment is directed effectively in certain situations such as a natural disaster. By reducing the restricted portion of a trial participant’s welfare payment to 0 per cent, the welfare payment will be directed to their primary and pre-existing bank account rather than their welfare restricted bank account. This will mean that trial participants and voluntary participants will be able to make cash withdrawals of their welfare payment from their primary bank account.
Conclusion
This Determination is compatible with human rights as it does not raise any human rights issues. A trial of cashless welfare arrangements in the Trial Area 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. This Determination recognises and promotes the right to social security and the right to an adequate standard of living.
[Circulated by the authority of the Minister for Human Services, the Hon Alan Tudge MP]