Social Security (International Agreements) Act 1999 Amendment Regulations 2006 (No. 1)

EXPLANATORY STATEMENT

Select Legislative Instrument 2006 No. 149

Issued by the Authority of the Minister for Families, Community Services and Indigenous Affairs

Social Security (International Agreements) Act 1999

Social Security (International Agreements) Act 1999 Amendment Regulations 2006 (No. 1)

Subsection 8(1) of the Social Security (International Agreements) Act 1999 (the Act) provides that a Schedule setting out the terms of an agreement between Australia and another country may be added to the Act by regulations, if the agreement relates to reciprocity in social security or superannuation matters.

Subsection 8(2) of the Act provides that regulations made by virtue of subsection 8(1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia.

Section 25 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient for carrying out or giving effect to the Act.

The purpose of the Regulations is to insert the Agreement on Social Security between the Government of Australia and the Government of the Kingdom of Norway done at Canberra on 2 December 2005 (the Agreement) as new Schedule 19 to the Act.  The Agreement will coordinate the social security schemes of the countries to give better welfare protection for people who move between Australia and Norway.  The Norwegian Government has confirmed that the Agreement could enter into force on 1 January 2007.

When people live in more than one country during their working lives, they often find that when they claim a pension or benefit they do not have enough residence or contributions under a social security system to qualify for payment.  A network of social security agreements has been set up within the international community to help alleviate this problem.  A key element in these agreements is the undertaking by the partners to share the responsibility for providing adequate social security coverage and, as a consequence, the associated costs.  Australia is a country with a large foreign‑born population and a growing internationally mobile Australian‑born population, and it is appropriate for it to participate in this network of agreements.

The Agreement will enable people with contribution records in Norway living in Australia, to claim and qualify for part pensions from the Government of Norway.  Similarly, many former Australian residents living in Norway will be able to claim and qualify for a part Australian pension.  The Agreement also includes provisions modifying Australia’s Superannuation Guarantee arrangements to avoid double coverage of Norwegian employees seconded to work temporarily in Australia.  Reciprocal exemptions are provided for Australian workers seconded to work temporarily in Norway.

The new Agreement on Social Security with Norway complements similar agreements with Austria, Belgium, Canada, Chile, Croatia, Cyprus, Denmark, Germany, Ireland, Italy, Malta, the Netherlands, New Zealand, Portugal, Slovenia, Spain and the United States of America.

All international agreements specify ‘entry into force’ requirements, which stipulate that each party notify the other party by an exchange of diplomatic notes or by ratification that all constitutional, legislative and any other matters that are necessary to be done have been done.  An agreement will then come into operation on a date specified by reference to the exchange of diplomatic notes or instruments of ratification.

The Agreement with Norway provides for entry into force on the first day of the third month after an exchange of diplomatic notes indicating that all constitutional or legislative matters that are necessary to give effect to the Agreement have been finalised.  The exchange of diplomatic notes is expected to take place in October 2006.  The Agreement will, following the exchange of notes, enter into force on 1 January 2007.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.  Section 12 of this Act provides when provisions of legislative instruments take effect.  In particular paragraph 12(1)(c) provides that a legislative instrument takes effect from the day, or day and time, of the commencement of an Act, or of a provision of an Act, or of the occurrence of an event, that is specified in the instrument for the purposes of the commencement of the instrument or provision.

Three separate groups (listed below) were contacted as part of the treaty process.  These were Norwegian community groups (7), welfare organisations (20) and all State and Territory Governments.

Letters and an information sheet outlining the new Agreement were sent to each group on 31 January 2006 seeking their views and asking for a response by 28 February 2006.

Two formal responses were received.  One was from the Multicultural Communities’ Council of South Australia supporting the new agreement.  The other was from the Federation of Ethnic Communities’ Council of Australia (FECCA) raising concerns about the assessment of overseas income.  A reply was sent to FECCA explaining the rationale behind the assessment of overseas pensions as income.

The Norwegian community organisations consulted were:

The welfare organisations consulted were:

The Regulations will commence on the day on which the Agreement enters into force for Australia, this is expected to be 1 January 2007.  This commencement provision satisfies the requirements of subsection 8(2) of the Act that regulations not come into operation on a day earlier than the day the relevant agreement comes into effect for Australia and also satisfies paragraph 12(1)(c) of the Legislative Instruments Act 2003.