Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2012

EXPLANATORY STATEMENT

Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2012

Summary

The Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2012 (the Principles) are made for the purposes of subsection 123UGA(2) of the Social Security (Administration) Act 1999 (the Act).

The Principles are made by the Minister for Families, Community Services and Indigenous Affairs, and Minister for Disability Reform, both in her own capacity as well as on behalf of the Minister for Employment and Workplace Relations and the Minister for Tertiary Education, Skills, Science and Research.

Background

Part 3B of the Act sets up an income management regime for recipients of certain social welfare payments, including the income management of persons under the vulnerable welfare payment recipient measure. The vulnerable welfare payment recipient measure is directed at people who are vulnerable to factors including financial crisis, economic abuse and homelessness or risk of homelessness.

Section 123UCA of the Act sets out the circumstances in which a person is subject to income management under the vulnerable welfare payment recipient measure. A person is subject to the income management regime under this provision if:

(a)  the person is an eligible recipient of a category H welfare payment; and

(b)  the person’s usual place of residence is within a declared income management area; and

(c)   the person is a vulnerable welfare payment recipient; and

(d)  if the person has a payment nominee – the payment nominee is not an excluded payment nominee; and

(e)  the person is not subject to the income management regime under sections 123UC, 123UD, 123UE or 123UF of the Act.

A person is a vulnerable welfare payment recipient for the purposes of paragraph 123UCA(c) of the Act if the Secretary makes a written determination under subsection 123UGA(1) that the person is a vulnerable welfare payment recipient.

In making a determination under subsection 123UGA(1), the Secretary must comply with any decision-making principles made by the Minister. Subsection 123UGA(2) of the Act provides that the Minister may make decision-making principles that the Secretary must comply with in making a determination under subsection 123UGA(1) that a person is a vulnerable welfare payment recipient for the purposes of the income management regime under Part 3B of the Act.

The Secretary may vary or revoke such a determination under subsection 123UGA(5) of the Act. In doing so, subsection 123UGA(6) requires the Secretary to comply with the Principles in deciding whether to vary or revoke a determination that a person is a vulnerable welfare payment recipient.

Purpose

The Principles have been made for the purposes of subsection 123UGA(2) of the Act and replace the existing Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2010 (the 2010 Principles).

The Principles will replace the 2010 Principles to address service delivery issues raised by the Commonwealth Ombudsman. In particular, this instrument:

• Clarifies the term “failure to undertake reasonable self-care”,

• Clarifies that a delegate may make a vulnerable determination “on the basis of relevant documents and information in his or her possession”,

• Clarifies that the delegate may be satisfied that  income management is an appropriate response, and will assist the person to meet some or all of his or her priority needs, despite the person’s willingness to enter, or having entered into, voluntary income management,

• Clarifies that the delegate may determine that a person is a vulnerable welfare payment recipient if the person is subject to the income management regime at the time the determination is made,

• Restructures the Principles so the delegate has to consider a single set of principles when making, varying or revoking a vulnerable welfare payment recipient determination. This will simplify the documentation of these decisions.

These changes will not significantly alter the underlying process or policy of making a vulnerable welfare payment recipient determination, but they will make the process clearer for Centrelink officers making vulnerable welfare payment recipient determinations.

The Principles are a legislative instrument and commence on 1 July 2012.

Explanation of Provisions

Section 1 of the Principles states the name of the Principles.

Section 2 states that the Principles commence on 1 July 2012.

Section 3 states that the 2010 Principles are revoked.

Section 4 contains definitions and interpretation provisions that are relevant to the Principles.

Subsection 4(2) sets out the circumstances that are an indicator of vulnerability for the purposes of the Principles. This term is relevant in determining that a person is a vulnerable welfare payment recipient, or in varying or revoking a current determination, as explained below.

Subsections 4(3) to (6) of the Principles are interpretation provisions that provide for when a person is experiencing financial exploitation (subsection 4(3)), financial hardship (subsection 4(4)), failure to undertake reasonable self-care (subsection 4(5)) and homelessness or risk of homelessness (subsection 4(6)). These interpretation provisions in the Principles, with the exception of the definition of failure to undertake reasonable self-care, mirror the definitions used in the 2010 Principles. 

The concept of financial hardship is defined in subsection 4(4) so that the amount of income that is available to the person is not the only factor that is relevant to whether a person is experiencing financial hardship. This approach has been adopted to ensure that a person whose only source of income is a welfare payment is not taken to be in ‘financial hardship’ only because of the limited financial resources that are available to them.

Subsection 4(6) sets out three broad circumstances in which a person is experiencing homelessness or risk of homelessness. Examples of these circumstances include:

• where a person is sleeping outdoors (sleeping rough) or is sleeping in an abandoned or untenanted building (squatting);
• where a person lives in, or moves between, temporary accommodation with friends or family, or temporary accommodation provided by a charitable organisation;
• where the accommodation that the person has access to damages, or is likely to damage, their health;
• where the person is at risk of eviction from accommodation;
• where the accommodation that the person has access to threatens, or is likely to threaten, their safety; and
• where the accommodation that the person has access to does not provide the person with access to a reasonable level of personal amenities.

The new definition of failure to undertake reasonable self-care applies to a person who is engaged in conduct that threatens their physical or mental wellbeing and where the Secretary is satisfied that the person has not taken sufficient steps to address the conduct (new subsection 4(5) refers).

Section 5 states the purpose of the Principles.

Section 6 sets out the decision-making principles that the Secretary must comply with in either making, or varying or revoking, a determination that a person is a vulnerable welfare payment recipient. If a determination that a person is a vulnerable welfare payment recipient is made, then subject to other conditions being met, the person will be subject to the income management regime under the vulnerable welfare payment recipient measure..

Subsection 6(1) sets out the matters that must be considered by the Secretary.  Subsection 6(1) is expressed to be subject to subsections (2), (3), (4), (5) and (6).

The Secretary must consider, under paragraph 6(1)(a), whether the person is experiencing an indicator of vulnerability (as defined in subsection 4(2)), or, whether a person who is subject to the income management regime is likely to experience an indicator of vulnerability if the person does not become subject to a vulnerable welfare payment recipient determination or does not remain subject to such a determination.

The Secretary must consider, under paragraph 6(1)(b) whether the person is applying appropriate resources to meet some or all of the person’s relevant priority needs, or, whether a person who is subject to the income management regime is likely not to apply appropriate resources to meet some or all of the person’s relevant priority needs if the person does not become subject to a vulnerable welfare payment recipient determination or does not remain subject to such a determination.

Subparagraphs 6(1)(a)(ii) and (b)(ii) are new since the 2010 Principles and require the Secretary to consider the likelihood of a person who is already subject to the income management regime subsequently experiencing an indicator of vulnerability, and not applying appropriate resources to meet their relevant priority needs, if the person does not become subject to a vulnerable welfare payment recipient determination or does not remain subject to such a determination. This is because it is possible that the reason the person is not experiencing an indicator of vulnerability, and is applying appropriate resources to meet their relevant priority needs, is because they are already subject to income management. In such cases, it might be appropriate for the Secretary to make a vulnerable welfare payment recipient determination in relation to the person, or decide that the person continue to be subject to a determination, even though the person is not presently experiencing an indicator of vulnerability and is currently applying appropriate resources to meet their relevant priority needs.

In practice, a delegate may consider a person is likely to experience an indicator of vulnerability if they are aware that a person was at risk of vulnerability before, or during, the period of income management, and income management is assisting the person in addressing this vulnerability. For example, a person might have been placed on an income management measure and a portion of their income managed funds are directed towards rent payments, which had fallen into arrears. Subsequently, a Department of Human Services social worker, as the delegate, may become aware that a period of income management is about to end, and may determine that the person is unlikely to continue to pay rent and risk eviction if not on income management. The social worker may therefore determine that the person would be likely to experience an indicator of vulnerability if they are not placed on the vulnerable welfare payment recipient measure.

Another example of where these subparagraphs might apply is where a person is about to end a voluntary income management agreement, and the delegate forms the view that the person’s decision to end the agreement has been unduly influenced by another person. The delegate may consider that without the application of the vulnerable measure of income management, the person would be likely to experience financial exploitation.

These provisions apply only where the delegate has grounds to believe that a person would experience an indicator of vulnerability if they do not become subject to a vulnerable welfare payment recipient determination or continue to be subject to such a determination.

The Secretary must consider, under paragraph 6(1)(c), whether income management under the vulnerable welfare payment recipient measure is an appropriate response to an indicator or likely indicator of vulnerability that has been identified in relation to the person.

Finally, the Secretary must consider, under paragraph 6(1)(d) whether income management under the vulnerable welfare payment recipient measure is assisting, or will assist, the person to apply appropriate resources to meet some or all of the person’s relevant priority needs.

Subsection 6(2) states that in considering whether a person who is the subject of a current determination or being considered for a new vulnerable welfare payment recipient determination, is experiencing an indicator of vulnerability or is likely to experience an indicator of vulnerability, the Secretary may act on the basis of relevant documents and information in his or her possession. This will, for example, allow the Secretary to rely on information obtained in relation to a previous vulnerable welfare payment recipient determination about the person, in making a new determination.

Subsections 6(3) and (4) limit the circumstances in which the Secretary is required to consider all of the matters set out in subsection 6(1).

Subsection 6(5) is new since the 2010 Principles and states that for paragraphs 6(1)(c) and (d), the Secretary may be satisfied that income management under the vulnerable welfare payment recipient measure is an appropriate response and will assist the person to meet some or all of his or her relevant priority needs, despite the fact that the person is willing to enter, or has entered, into a voluntary income management agreement with the Secretary under section 123UM of the Act.

Subsection 6(6) states that for paragraphs 6(1)(c) and (d), in considering whether income management under the vulnerable welfare payment recipient measure is an appropriate response and is assisting, or will assist, the person to meet some or all of his or her relevant priority needs, the Secretary must have regard to a specified range of matters.

The Secretary must have regard to all the relevant personal circumstances of the person (paragraph 6(6)(a)) and any services (however described) that are available, or that can be made available, to the person (paragraph 6(6)(b)).

Paragraph 6(6)(c) provides that if the person is, or has been, subject to the income management regime, the Secretary must have regard to any changes that have occurred to the person’s personal circumstances during the period in which the person was subject to that measure. This ensures that where the person is subject to the income management regime or has previously been subject to the income management regime, any changes that have occurred to the person’s personal circumstances during that period are taken into account in deciding whether to make a new determination or vary or revoke a determination that is already in force about the person.

Under paragraph 6(6)(d), if the person is, or has been, subject to the income management regime, the Secretary must consider the likely impact on the person, and on any specified dependent of the person, of a new determination being made about the person under subsection 123UGA(1) of the Act. Paragraph 6(6)(e) provides the same criteria in relation to situations where the Secretary is considering a variation or revocation to a determination that is already in force about the person.

The above paragraphs ensure that any previous experience the person has had on income management is taken into account in considering the likely impact on the person of a new determination or the variation or revocation of an existing one. They also reflect the fact that income management may have had a direct effect not only on the person who was subject to income management but also on dependents of that person who may have benefited from it being in place.

Subsection 6(7) provides that the Secretary is not limited to having regard to only those matters mentioned in subsection 6(6). Therefore, in considering whether income management under the vulnerable welfare payment recipient measure is an appropriate response and will assist the person to meet some or all of his or her relevant priority needs, the Secretary may have regard to any other relevant matters.

Consultation

Consultation on the Principles was undertaken with the Department of Education, Employment and Workplace Relations, the Department of Industry, Innovation, Science, Research and Tertiary Education and the Department of Human Services to ensure a co-ordinated approach in respect of welfare payments which may become subject to the income management regime. Consultation has also been undertaken with the Office of the Commonwealth Ombudsman.

Regulatory Impact Analysis

The Principles are not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights

(Parliamentary Scrutiny) Act 2011

This Legislative Instrument is the Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2012

This Legislative 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

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, such as food, clothing and shelter, of the person and his or her dependants.

Under section 123UCA of the Act a person will be subject to the vulnerable welfare payment recipient measure of income management if they fulfil certain criteria. One of these criteria is that the Secretary (or delegate, such as a Centrelink social worker) has made a vulnerable welfare payment recipient determination under subsection 123UGA(1) of the Act.

A Centrelink social worker will make a vulnerable welfare payment recipient determination if a person is vulnerable, the person is not applying appropriate resources to address this vulnerability, and they consider income management would assist the person in addressing the vulnerability. A Centrelink social worker will also consider these factors when varying or revoking a determination.

A person will be vulnerable if they are:

• Experiencing financial exploitation,

• Experiencing financial hardship,

• Experiencing homelessness or risk of homelessness, or

• Exhibiting a failure to undertake reasonable self-care.

The purpose of the Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2012 (the Principles) is to provide guidance to Centrelink Social Workers when making a decision to place a person on the vulnerable measure of income management. The Principles will replace the 2010 Principles to address service delivery issues raised by the Commonwealth Ombudsman. In particular, this instrument:

• Clarifies the term “failure to undertake reasonable self-care”,

• Clarifies that a delegate may make a vulnerable determination “on the basis of relevant documents and information in his or her possession”,

• Clarifies that the delegate may be satisfied that  income management is an appropriate response, and will assist the person to meet some or all of his or her priority needs, despite the person’s willingness to enter, or having entered into, voluntary income management,

• Clarifies that the delegate may determine that a person is a vulnerable welfare payment recipient if the person is subject to the income management regime at the time the determination is made,

• Restructures the Principles so the delegate has to consider a single set of principles when making, varying or revoking a vulnerable welfare payment recipient determination. This will simplify the documentation of these decisions.

These changes will not significantly alter the underlying process or policy of making a vulnerable welfare payment recipient determination, but they will make the process clearer for Centrelink officers making vulnerable welfare payment recipient determinations.

Human rights implications

The right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognised ‘the right of everyone to social security, including social insurance’. That right requires a country to, within its maximum available resources, 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.

People subject to the vulnerable measure of income management retain their right to social security while being provided a mechanism to acquire the essential items outlined in Article 9 of the ICESCR. The requirement to allocate a percentage of their social security payments on self-maintenance, via food, clothing and housing costs, is a limitation which supports the aim of this right. The Principles assist delegates in identifying people who may have difficulty acquiring the essential items outlined in Article 9 of the ICESCR because they are suffering from financial exploitation, financial hardship, homelessness, or are failing to take care of themselves.

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 the realization of this right’. Further to this, article 11.2 of the ICESCR states that ‘measures, including specific programmes,’ should be taken in ‘recognizing the fundamental right of everyone to be free from hunger’.

Through the vulnerable measure of income management, 50 per cent of a person’s income support and family payments are directed to pay for life’s essentials. Income management is a tool to stabilise a person’s circumstances and ease immediate financial stress.  It ensures that money is available for priority goods such as food, clothing and housing, and provides a tool to help people budget. The Principles guide delegates in identifying people who require vulnerable income management to achieve an adequate standard of living and stable circumstances.

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’.

The Principles assist delegates in determining whether the vulnerable measure of income management is appropriate. The vulnerable measure of income management requires that 50 per cent of a person’s social security payments must be spent on priority goods and services such as food and rent. While this measure does limit a person’s ability to freely dispose of all of their resources it does not impact on their right to freely pursue their economic, social or cultural development. This limitation is to ensure that the essential needs of vulnerable people are met, and provide them with more financial stability, so they can better pursue their economic, social and cultural development. The Principles assist the delegate in applying the vulnerable measure of income management where it would assist people with their economic development, by ensuring they fulfil their priority needs and the priority needs of their child and other dependents. Once a person’s priority needs are met, they are in a better position to pursue their economic development.

The limitation of Rights under the ICESCR

Article 4 of the ICESCR provides that a State may limit the rights outlined in the Convention ‘only to such limitations as are determined by law only in so far as this 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 in the above paragraphs, the Principles, in supporting the application of the vulnerable measure of income management does not unreasonably limit a person’s rights to freely dispose of their resources. The purpose of these limitations is to help vulnerable people stabilise their circumstances and address issues of vulnerability, and the Principles assist in only limiting these rights where necessary. These limitations are consistent with the nature of the rights outlined in the ICESCR, and are also aimed at promoting general welfare.

The right to privacy

Article 17 of the ICCPR provides that no one shall be subjected to arbitrary or unlawful interference with their privacy. Privacy guarantees a right to secrecy from the public of personal information. For interference with privacy not to be arbitrary, it must be in accordance with the provisions, aims and objectives of the ICCPR and should be reasonable in the particular circumstances. Reasonableness in this context incorporates notions of proportionality to the end sought and necessity in the circumstances.

The Principles will not change any existing disclosure or collection of information under the Social Security (Administration) Act 1999.

Conclusion

The Principles are compatible with human rights. They will assist in the protection of human rights by ensuring that vulnerable people are appropriately identified for the vulnerable measure of income management, and ensuring income support payments are spent in the best interest of these vulnerable people. The Principles have been drafted to ensure that any limitation of freedom of expenditure and human rights is reasonable, necessary and proportionate to achieving the legitimate objective of reducing immediate hardship and deprivation, 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.

The Hon Jenny Macklin MP, Minister for Families, Community Services and Indigenous Affairs and Minister for Disability Reform