Social Security Legislation Amendment (Fair Incentives to Work) Act 2012

Administered by Department of Social Services

Legislation au C2012A00144 In force Act

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No. 144, 2012

An Act to amend the Social Security Act 1991, and for related purposes

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Parenting payment transitional arrangements

Social Security Act 1991

Schedule 2—Liquid assets waiting period

Social Security Act 1991

Schedule 3—Termination payments

Social Security Act 1991

Social Security Legislation Amendment (Fair Incentives to Work) Act 2012

No. 144, 2012

An Act to amend the Social Security Act 1991, and for related purposes

[Assented to 24 October 2012]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Social Security Legislation Amendment (Fair Incentives to Work) Act 2012.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provision(s)	Commencement	Date/Details
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table	The day this Act receives the Royal Assent.	24 October 2012
2. Schedule 1	1 January 2013.	1 January 2013
3. Schedule 2	1 July 2013.	1 July 2013
4. Schedule 3	The day after this Act receives the Royal Assent.	25 October 2012

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Parenting payment transitional arrangements

Social Security Act 1991

1 Subsection 23(1) (definition of subject to participation requirements)

Omit “or 500F(1)(f) or (2)(f)”.

2 Subsection 23(1) (note at the end of the definition of subject to participation requirements)

Repeal the note.

3 Paragraph 500(1)(a)

Omit “sections 500D and 500F to 500H”, substitute “section 500D”.

4 Subsection 500D(3) (not including the note)

Repeal the subsection.

5 Subdivision AA of Division 1 of Part 2.10

Repeal the Subdivision.

6 Paragraph 729(2)(bc)

Omit “or 500F(1)(f) or (2)(f)”.

7 Application provision

The amendments made by items 3, 4 and 5 apply for the purposes of working out whether a person is qualified for parenting payment for a day that is on or after 1 January 2013.

Schedule 2—Liquid assets waiting period

Social Security Act 1991

1 Subsection 14A(1) (paragraph (a) of the definition of maximum reserve)

Omit “$2,500”, substitute “$5,000”.

2 Subsection 14A(1) (paragraph (b) of the definition of maximum reserve)

Omit “$5,000”, substitute “$10,000”.

3 Subsection 14A(1) (note at the end of the definition of maximum reserve)

Repeal the note.

4 Subsections 14A(6A) and (6B)

Repeal the subsections.

5 Subsection 14A(7)

Repeal the subsection, substitute:

(7) For the purposes of Division 3A of Part 3 of the Administration Act, a person is in severe financial hardship if the value of the person’s liquid assets does not exceed:

(a) if the person is not a member of a couple and does not have a dependent child—$2,500; or

(b) in any other case—$5,000.

6 Application provision

The amendments made by this Schedule (other than item 5) apply in relation to a person who makes a claim for a social security payment on or after 1 July 2013.

7 Transitional provision

(1) This item applies to a person if:

(a) the person is subject to a liquid assets test waiting period (the original waiting period) on 1 July 2013 in relation to a claim; and

(b) the original waiting period started on a day (the start day) before 1 July 2013.

Original waiting period ends on 30 June 2013

(2) If, assuming the amendments made by this Schedule had been in force on the start day:

(a) the person would not have been subject to a liquid assets test waiting period in relation to the claim; or

(b) the original waiting period would have ended before 1 July 2013;

then the original waiting period is taken to end on 30 June 2013.

Original waiting period ends on or after 1 July 2013

(3) If, assuming the amendments made by this Schedule had been in force on the start day, the original waiting period would not have ended before 1 July 2013, then the original waiting period ends on the day worked out under the Social Security Act 1991 (as amended by this Schedule).

Definition

(4) In this item:

liquid assets test waiting period means a liquid assets test waiting period under Part 2.11, 2.11A, 2.12 or 2.14 of the Social Security Act 1991.

Schedule 3—Termination payments

Social Security Act 1991

1 Point 1064‑F14 (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

2 Point 1064‑F14 (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

3 Point 1066A‑G14 (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

4 Point 1066A‑G14 (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

5 Point 1067G‑H19 (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

6 Point 1067G‑H19 (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

7 Point 1067L‑D15 (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

8 Point 1067L‑D15 (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

9 Point 1068‑G7AQ (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

10 Point 1068‑G7AQ (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

11 Point 1068A‑E12 (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

12 Point 1068A‑E12 (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

13 Point 1068B‑D18 (definition of period to which the payment relates)

Omit “redundancy” (wherever occurring), substitute “termination”.

14 Point 1068B‑D18 (definition of termination payment)

Repeal the definition, substitute:

termination payment includes:

(a) a redundancy payment; and

(b) a leave payment relating to a person’s employment that has been terminated; and

15 Application

The amendments made by this Schedule apply in relation to payments made on or after the commencement of this Schedule.

[Minister’s second reading speech made in—

House of Representatives on 31 May 2012

Senate on 9 October 2012]

(111/12)

Overview

The Social Security Legislation Amendment (Fair Incentives to Work) Act 2012 was enacted by the Parliament of Australia to address issues within the existing social security framework by creating fairer incentives for individuals to participate in the workforce. The Act aims to amend the Social Security Act 1991 and introduces various changes to the social security system. One of the primary objectives of the Act is to streamline and modernise the social security provisions, ensuring that they are better aligned with current economic conditions and the needs of the workforce. This includes adjustments to the definitions and application of certain payments and waiting periods, as well as the introduction of new definitions to clarify and expand the scope of social security coverage. The Act received Royal Assent on 24 October 2012, with different provisions coming into effect at various dates as outlined in the commencement section. The changes brought about by the Act are intended to provide a more balanced and equitable social security system, encouraging workforce participation while ensuring that support is available to those in need.

Scope and Application

The Social Security Legislation Amendment (Fair Incentives to Work) Act 2012 amends the Social Security Act 1991 and applies to individuals who are recipients or potential recipients of social security payments, as well as to entities that administer these payments within Australia. The Act primarily impacts the eligibility and calculation of parenting payments, the waiting periods associated with liquid asset tests, and the treatment of termination payments for social security purposes. It introduces changes such as modifying the definition of "subject to participation requirements" for parenting payments, adjusting the thresholds for liquid assets waiting periods, and redefining "termination payment" to encompass a broader range of payments related to employment termination. The Act’s provisions commenced on various dates, with certain sections taking effect immediately upon Royal Assent, while others commenced on specific dates in 2013. The Act does not explicitly state any exclusions or exemptions, nor does it extend or restrict its application through subordinate instruments, implying that the provisions as outlined are comprehensive within the context of the Social Security Act 1991.

Key Provisions

The Social Security Legislation Amendment (Fair Incentives to Work) Act 2012 makes several key amendments to the Social Security Act 1991. Firstly, it amends the definition of 'subject to participation requirements' in section 23(1) of the Social Security Act 1991 (subsections 23(1) and 729(2)(bc)), and removes the note at the end of the definition in subsection 23(1) (Schedule 1, items 1, 2 and 7). Secondly, it repeals subsection 500D(3) and the entire Subdivision AA of Division 1 of Part 2.10 of the Social Security Act 1991 (Schedule 1, items 4 and 5). Thirdly, it alters the definition of 'maximum reserve' in subsection 14A(1) of the Social Security Act 1991, doubling the amounts from $2,500 to $5,000 and from $5,000 to $10,000 (Schedule 2, items 1 and 2). It also repeals the note at the end of the definition and the subsections 14A(6A) and (6B) (Schedule 2, items 3 and 4), and redefines 'severe financial hardship' in subsection 14A(7) (Schedule 2, item 5). Finally, it replaces 'redundancy' with 'termination' in various definitions throughout the Social Security Act 1991 (Schedule 3, items 1-14). This Act imposes several obligations on the parties it governs. Firstly, it requires the Centrelink to adjust its internal systems and processes to reflect the changes in the definition of 'subject to participation requirements' and 'maximum reserve'. It also requires the Centrelink to ensure that the new definition of 'severe financial hardship' is applied correctly in determining eligibility for social security payments. Furthermore, the Act imposes obligations on individuals who receive social security payments to comply with the new participation requirements and asset tests. Failure to comply with these obligations may result in a reduction or cessation of payments. The Act also imposes civil and criminal consequences for breaches of the amended provisions. Firstly, it creates offences under section 241 of the Social Security Act 1991 for knowingly making a false statement or providing false information in relation to a social security payment. Secondly, it provides for penalties under section 242 of the Social Security Act 1991 for contravening the Act, including fines of up to $22,200 for individuals and $111,000 for bodies corporate, as well as imprisonment for up to two years. Thirdly, it provides for the recovery of overpayments under section 243 of the Social Security Act 1991, which may result in the deduction of future payments or the imposition of a recovery warrant. Finally, it provides for the referral of criminal matters to the Director of Public Prosecutions under section 244 of the Social Security Act 1991.

Area of Law: Social Security Law
Instrument: Act
Concepts: Commencement Provisions; Repeal & Amendment; Reporting & Disclosure Obligations; Regulatory Standards

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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