EXPLANATORY STATEMENT
Social Security (Experiencing a Personal Financial Crisis) Instrument 2017
Summary
Subsection 19DA(5) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services to prescribe circumstances for the purposes of determining whether a person is experiencing a personal financial crisis.
Background
A person who is qualified for parenting payment, newstart allowance, sickness allowance and youth allowance (for a person who is not undertaking full-time study and is not a new apprentice) must serve an ordinary waiting period of seven days before any of the allowances or payment is payable.
However, an exemption to the ordinary waiting period for a relevant payment will apply if, in addition to the person being in severe financial hardship (section 19C of the Act), the person also experiences a personal financial crisis (section 19DA of the Act). A person is experiencing a personal financial crisis if the person:
- has been subjected to domestic violence in the four-week period before the person makes a claim for a relevant payment, if the person is qualified for the payment on the day of claim (subsection 19DA(2));
- is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure in the four-week period before the person makes a claim for a relevant payment, if the person is qualified for the payment on the day of claim; or
- satisfies circumstances prescribed in a legislative instrument made by the Secretary (subsection 19DA(4)). Subsection 19DA(5) provides the Secretary with the power to prescribe circumstances for this purpose.
This instrument prescribes circumstances for the purposes of subsection 19DA(4).
Explanation of provisions
Section 1 states the name of the Instrument.
Section 2 provides that the Instrument commences on 1 July 2017.
Section 3 provides that the authority for making this Instrument is subsection 19DA(5) of the Social Security Act 1991.
Section 4 contains definitions of certain terms used in the Instrument. The definition for extreme circumstances includes, but is not limited to, a flood, a fire, an earthquake and a storm. Humanitarian visa means the visa classes listed in the definition.
Start day means the day worked out in accordance with Schedule 2 to the Social Security (Administration) Act 1999 (the Administration Act).
The note directs readers to provisions in the Act for the definitions of the terms in gaol and psychiatric confinement.
Section 5 prescribes the circumstances for the purpose of determining whether a person is experiencing a personal financial crisis under subsection 19DA(4). A person satisfies the circumstances in subsection 19DA(4) if at some time in the four weeks immediately before the person’s start day (which is worked out by disregarding clause t of Schedule 2 to the Administration Act):
(a) the person was in gaol or psychiatric confinement; or
(b) the person first entered Australia and was the holder of a humanitarian visa on that entry to Australia; or
(c) the person’s principal place of residence was lost or sustained major damage as a result of an extreme circumstance.
Consultation
No public consultation has been undertaken. The power provided by this instrument can only be used beneficially, and provides the Secretary with flexibility to consider unforeseeable or extreme circumstances where it would be appropriate for a person to be exempt from the ordinary waiting period.
The Department of Human Services has been consulted in regards to implementing the primary legislation and Instrument.
Regulatory Impact Analysis
The Instrument does not require a Regulatory Impact Statement. The instrument is 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
Social Security (Experiencing a Personal Financial Crisis) Instrument 2017
The effect of the Instrument is to prescribe circumstances for the purposes of exempting a person from serving an ordinary waiting period if, in addition to the person being in severe financial hardship, the person is also experiencing a personal financial crisis.
Human rights implications
This instrument engages the rights to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).
The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide a minimum essential level of benefits to all individuals and families that will enable them to cover essential living costs.
A central principle underpinning Australia’s social security system is that support should be targeted to those in the community most in need in order to keep the system sustainable and fair.
The ordinary waiting period is a period of one week only, during which claimants with the means to support themselves are expected to do so. Those who are in severe financial hardship and have experienced a personal financial crisis are able to access an exemption from the ordinary waiting period provided they meet the relevant eligibility criteria set out in the Social Security Act 1991.
The circumstances prescribed in this instrument, relating to a personal financial crisis, provide additional coverage for claimants experiencing extreme personal circumstances further to the following legislated exemption criteria that a person is:
- in severe financial hardship and experiencing a personal financial crisis because:
- they have been subjected to domestic violence in the four-week period before making a claim for payment; or
- they have incurred unavoidable or reasonable expenditure in the four-week period before making a claim for payment.
The Instrument provides that the following circumstances also constitute a personal financial crisis if at some time in the 4 weeks immediately before the person’s start day:
a) the person was in gaol or psychiatric confinement;
b) the person:
- first entered Australia; and
- was the holder of a humanitarian visa on that entry to Australia; or
c) the person’s principal place of residence was lost or sustained major damage as a result of an extreme circumstance.
Conclusion
This instrument is compatible with human rights as it does not restrict a person’s eligibility for social security benefits. It has a beneficial effect by prescribing additional circumstances of personal financial crisis which will attract an exemption from the ordinary waiting period for people who may find themselves in these circumstances.
Finn Pratt, Secretary of the Department of Social Services