EXPLANATORY STATEMENT
Statutory Rules 1986 No 293
Issued by the authority of the Minister of State for Social Security
Subject Social Security Act 1947
Social Security (Reciprocity with New Zealand) Regulations
The purpose of the proposed Statutory Rules is to give effect to the proposals of the Government to amend the existing agreement on social security with New Zealand so as to limit the availability of unemployment benefit to new arrivals from New Zealand by
- precluding payment of unemployment benefit to a New Zealander during his/her first six months in Australia; and
- making payment of that benefit during the second six months subject to a settlement test in addition to current eligibility criteria, one proof of settlement to include a person having undertaken at least two months’ work in Australia.
A revised Agreement was prepared in the course of formal negotiations by two delegations representing the Governments of Australia and New Zealand respectively.
The revised Agreement was signed in Melbourne on 5 October 1986 by the Minister for Social Security, the Hon Brian Howe, MP, and His Excellency the High Commissioner for new Zealand, Mr Graham Ansell.
Article 24 of the Agreement makes provision for the Agreement to enter into force following an exchange of notes after both countries’ legislative requirements have been fulfilled. In Australia, the Agreement will be given force of law by Regulations made under Section 137 of the Social Security Act 1947. This section provides for the making of Regulations to give effect to reciprocal social security agreements. It provides that the Act can be modified and adapted by such Regulations. In New Zealand the Agreement must be given force of law by separate enactment.
The purpose of the Agreement as set out in the preamble is:
- to co-ordinate the social security systems of New Zealand and Australia; and
- to enhance equitable access to social security benefits by people who move between the two countries.
The Agreement is designed to operate on and complement the social security systems of each country:
- in Australia, the social security system is needs based and provides for indexed, flat-rate, means-tested pensions; and
- in New Zealand, a similar social security system operates, with the exception of National Superannuation which is not means-tested, although it is taxable.
PART I - INTERPRETATION AND SCOPE
Article 1: Interpretation
The terms defined in paragraph 1 of this Article are terms that occur frequently in the Agreement. They have been defined to ensure they are consistently used and to avoid the need to define their meaning each time they are used in the text.
Paragraph 2 of this Article defines the territorial scope of the Agreement.
This Article provides in paragraph 3 that the terms used in the Agreement will have their ordinary meaning under the social security legislation of Australia or New Zealand except those defined in paragraph 1 or where the context of the Agreement requires a different meaning.
Article 2: Legislative Scope
Sub-paragraphs 1(a) and (b) of this Article set out the legislation to which the Agreement will apply and specifically identify the benefits which are to be covered. The legislation is that which is in force at the date of signing the Agreement. Paragraph 1 also provides that any amendments of the legislation of either country also apply insofar as they relate to the benefits identified.
Under paragraph 2 any regulations giving effect to any agreements, including this Agreement, are excluded. The purpose of excluding agreements other than this Agreement is to prevent a person with no links with one agreement country from benefiting under two or more of its reciprocal agreements with other countries. The purpose of excluding this Agreement is simply a technical one - to avoid the circularity that would result if regulations in Australia giving effect to this Agreement operated on themselves.
Under paragraph 3 each country is required to notify the other of any changes to its domestic legislation relevant to the Agreement.
Article 3: Personal Scope
This Article specifies the category of people to whom the Agreement applies, that is, people who move between New Zealand and Australia and are residing in either Australia or New Zealand or in both countries.
Article 4: Equality of Treatment
Paragraph 1 is in bilateral terms and prohibits any discrimination in social security matters between persons moving between New Zealand and Australia to whom the Agreement applies.
Although neither New Zealand nor Australian domestic social security law uses citizenship as an entitlement criterion, Paragraph 2 covers the eventuality and strengthens the equality of treatment provisions, ensuring that citizens of either country have access to any benefits reserved for citizens of the other country.
PART II - RESIDENCE
Article 5: Entitlement to Benefits During Residence or Presence in a Country
The Social Security Acts of Australia and New Zealand both require a person to be residing in the particular country to qualify for benefits or pensions.
Article 5 precludes operation of the Agreement for people temporarily in one country from the other unless they have been in that country for more than six months, but allows the benefits of the Agreement to flow to people who are residing permanently.
This provision dovetails with a six month payment period provided under New Zealand legislation for its beneficiaries temporarily outside New Zealand and with the temporary absence provisions in Article 17 of the Agreement for people being paid under the Agreement.
Such a provision maintains social security cover for people who move permanently between the two countries, while ensuring that persons temporarily in either country from the other remain the responsibility of their home country.
Article 6: Recognition by One Country of Residence in the other Country
Paragraph 1 of this Article provides that residence accumulated in one country is treated as residence in the other country for the purposes of qualifying for social security benefits in that country.
This key mechanism ensures that persons who move between the two countries do not lose acquired entitlement to the residence-based social security cover provided by each country.
Paragraph 2 extends this provision to a person’s immediate relatives so that where qualification for benefit also requires the residence of that relative, the Agreement can still operate.
Unemployment benefit is specifically excluded from the definition of “benefit” as it applies to paragraph 1. (Article 13 of the Agreement contains detailed provisions relating to restricted conditions under which unemployment benefit is payable under this Agreement.
Paragraph 3 relates to family allowance and accommodates a recent change to s.96(2) of the Australian Social Security Act, which now requires, as a qualification for that allowance, physical presence in Australia instead of residence . This enables family allowance cover to be retained under the Agreement for persons moving to Australia from New Zealand, by deeming periods of residence in New Zealand accumulated by a person and a relevant child to be physical presence in Australia for the purposes of a claim for Australian family allowance.
Article 7: Country of Residence
Paragraph 1 of Article 7 provides that the question of whether or not a person is or was a resident of either Australia or New Zealand shall be determined by reference to the laws of the particular country concerned.
Paragraph 2 qualifies paragraph 1 by stipulating that, in cases of dual residence, any particular period shall be counted only once for the purposes of a claim for benefit or pension in either country.
PART III - PROVISIONS RELATING TO BENEFITS
Article 8: Commencement of Benefits
This Article provides for continuity of benefit payments to beneficiaries or pensioners who move permanently from one country to the other, by providing that the grant date of the gaining country’s benefit is contiguous with the cessation of the losing country’s benefit. It allows a transition period of 12 weeks to permit a short holiday to be taken without loss of entitlement.
Article 9: Payment of Supplementary and Additional Amounts
This Article provides that, under the Agreement, any supplementary or additional amounts which would normally be payable in association with a benefit under the domestic legislation of a country shall be payable to a person to whom that benefit is payable by virtue of the Agreement.
Of course, such supplementary or additional amounts where payable continue to be subject to any restrictions imposed by that domestic legislation, such as, for example non-payability outside that country’s territory.
Article 10: Entitlement to Payment by New Zealand of National Superannuation
National Superannuation is payable in New Zealand to males and females at age 60 and is not means-tested. This Article ensures its reciprocity with the Australian age pension which is means-tested and payable at age 65 to males, age 60 to females.
Paragraph 1 restricts payment under the Agreement of National Superannuation to only those persons who meet the age test for Australian age pension. It also requires the person to be eligible for age pension under the Australian means test.
Paragraph 2 allows New Zealand to “top-up” Australian benefits or pensions to the New Zealand National Superannuation level.
Article 11: New Zealand Widows, Domestic Purposes and Orphans Benefits
This Article fills a gap in qualification for Australians claiming these New Zealand benefits under the Agreement by deeming a child born in Australia to have been born in New Zealand for the purposes of those benefits.
Article 12: Restriction on Dual Entitlement to Certain Benefits
This Article overcomes the possibility of dual entitlement arising from of the interaction of qualifications for Australian family allowance and double orphan’s pension and their New Zealand counterparts. It is not intended that both countries pay the same type of benefit concurrently.
Article 13: Unemployment Benefit
This Article stipulates that citizens moving to Australia from New Zealand (or vice versa) whether on a temporary or permanent basis need to have been physically present for at least 6 months and need to satisfy a settlement test, in addition to meeting the normal benefit criteria, before unemployment benefit can be paid. The Article does not apply after 12 months’ residence, at which point the residential provisions of each country’s domestic legislation would, in any case, allow payment of unemployment benefit.
Paragraph 1 restricts the application of this Article to citizens of either country. It is not intended to exclude all persons who may enter Australia or New Zealand after residing in the other country, but only that category of people who presently move freely between the two countries under the Trans-Tasman Travel Arrangement. Use of the citizenship category achieves this objective.
Paragraph 2 precludes the payment of unemployment benefit unless there has been continuous presence in the country of grant for 6 months. In addition the person must satisfy a settlement test, defined in terms of the person’s circumstances or work history.
Paragraph 3 specifies:
(a) the minimum acceptable work history; and
(b) the criteria for settlement to be taken into account as part of the consideration of a person’s circumstances;
for the purposes of paragraph 2.
Paragraphs 4 and 5 provide that once a person has been resident in a country for 12 months, including limited allowable periods of temporary absence, the domestic legislation of that country applies without reference to Article 13.
Article 14: Supporting Parents’ Benefit and Domestic Purposes Benefit
Article 14 places restrictions on the payment of supporting parents’ benefit by Australia and domestic purposes benefit by New Zealand.
Paragraph 1 restricts the application of this Article to citizens of either country. It is not intended to exclude all persons who may enter New Zealand or Australia after residing in the other country, but only that category of people who presently move freely between the two countries under the Trans-Tasman Travel Arrangements. Use of the citizenship category achieves this objective.
Paragraph 2 precludes payment of supporting parents’ and domestic purposes benefits unless there has been continuous presence in the country of grant for at least 6 months.
Paragraph 3 provides that if a person has been resident in a country for a period of 12 months immediately preceding the date of claim, the domestic legislative provisions of that country relating to these benefits will apply without reference to Article 14.
Paragraph 4 provides for the inclusion as residence, for the purposes of paragraph 3, of limited allowable periods of temporary absence, but specifically excludes periods in one country deemed to be residence in the other country by virtue of Article 6.
Article 15: Wife’s Pension and Carer’s Pension
This Article deems a person who receives a wife’s or carer’s pension, as wife or carer of an Agreement pensioner, to be themselves an Agreement pensioner.
This Article has been inserted to clarify the intended treatment under the Agreement of Australian ancillary benefits, ie wives’ or carers’ pensions, normally payable to dependant wives or carers of Australian age or invalid pensioners. By virtue of this Article, any specific provisions of the Agreement applying to the principal benefits specified in Article 2(1)(a) may also be applied to these ancillary benefits
Article 16: Lodgement of Claims
Paragraphs 1 and 3 allow claims under the Agreement to be lodged in either country, but restrict this for Australia to sickness benefit, double orphan’s pension and family allowance.
This latter restriction applies in Australia’s case because there is a “physical presence” lodgement requirement for most other Australian pensions and benefits. Hence, claims for Australian age, invalid and widows’ pensions and supporting parents’, unemployment or sickness benefits, cannot be lodged in New Zealand.
Paragraph 2 confirms the date of lodgement in the other country of such a claim to be the date of lodgement for all purposes relating to the claim.
Article 17: Portability of Benefits for Temporary Absences
This Article allows payments made by virtue of the Agreement to be made during temporary absences of up to 26 weeks from the paying country.
This permits Agreement pensioners and beneficiaries to have holidays or conduct personal business in their country of origin or elsewhere without the loss of entitlement to benefit which could occur for New Zealand benefit, given the absence of provisions in that country’s domestic legislation enabling the payment of New Zealand benefits outside its territory.
A continuity of entitlement arises by virtue of the operation of Article 5 where entitlement to the other country’s benefits arises after 6 months’ presence.
Article 18: Exclusion of New Zealand Benefits from Australian Income Test
Where New Zealand “tops-up” an Australian pension or benefit by virtue of either Article 10 of this Agreement or the social security laws of that country, the “top-up” is excluded from the operation of Australia’s income test.
This exclusion eliminates the need for continuing reassessment of the Australian entitlement under the income test because of the additional income from the New Zealand payment.
Article 19: Recovery of Overpayments
Paragraph 1 authorises one country, on request of the other, to deduct any excess benefit payment incurred by the requesting party, from the continuing entitlement of the pensioner or beneficiary.
Paragraph 2 stipulates that the amount of the excess payment is to be determined by the country which made that payment.
Paragraph 3 stipulates that the rate of recovery of the excess payment is to be determined by the country which is continuing payment.
Paragraph 4 agrees to co-operation between the parties in seeking debt recovery where all benefit payments have ceased.
Paragraph 5 provides for reimbursement of amounts recovered in accordance with this Article.
Paragraph 6 extends the benefits covered by this Article beyond the benefits specifically mentioned in the Agreement.
Article 20; Administrative Arrangements
Paragraph 1 provides for appropriate administrative arrangements to be made to facilitate the operation of the Agreement.
Paragraph 2 provides for co-operation between the parties in the administration of the Agreement.
Paragraph 3 confirms that neither country will raise charges for payment of benefits under the Agreement.
Article 21: Exchange of Information
Australian and New Zealand social security legislations have strict confidentiality requirements. Paragraph 1 of this Article specifies that relevant information may be passed from one country’s social security authority to the other.
Paragraph 2 requires the country receiving the information to treat it with the same degree of confidentiality as is required under its domestic law, and paragraph 3 is a safeguarding provision to avoid situations when one agreement partner asks the other agreement partner for information that cannot be normally obtained legally or through its administrative practice.
Paragraph 4 provides that each agreement partner will accept certification by the other. This is important in enabling quick decisions to be made and avoiding duplication in verification procedures.
In providing administrative assistance, under paragraph 5, the agreement parties would not charge each other for services rendered, but where a service has been provided by another person or organisation, the country requesting the service will meet the costs.
Article 22: Appeals
Paragraph 1 of this Article provides that persons claiming a benefit under the Agreement are to have, to the fullest extent possible, access to the review and appeal mechanisms of the country against which the claim is made as if such a claim were made under its domestic law.
To facilitate the lodgement of appeal documents paragraph 2 provides that these can be lodged in either country and paragraph 3 deems the date of lodgement in one country to be the date of lodgement in the other.
Article 23: Review of Agreement
This Article sets down provisions to facilitate the updating of the Agreement. The contracting parties can agree at any time to review any aspects of the Agreement. This may become necessary from time to time in the light of changes to the domestic legislation of either country or for other reasons.
The Article also specifies at least one review, to take place within 3 years of the date of signing. This provision is intended to give both countries the opportunity to consider the Agreement in the light of the findings of the current New Zealand Royal Commission on Social Policy whose terms of reference include the question of New Zealand’s introducing payment of its pensions and benefits outside its territory.
PART VI - FINAL PROVISIONS
Article 24; Entry Into Force
As indicated in the outline to this explanatory memorandum, paragraph 1 provides that the Agreement will come into force on the date of the exchange of notes through the diplomatic channel once all the necessary legislative requirements of each country have been met.
By paragraph 2 the Agreement between Australia and New Zealand which was signed in Sydney on 15 April 1949 will be terminated when this Agreement comes into force. At the same time it preserves the rights of those being paid by virtue of that Agreement, and allows them to elect to be paid under the new Agreement if they wish.
Article 25: Termination
Paragraph 1 provides that the Agreement will continue in force until one party or the other gives 12 months’ notice of its wish to terminate it.
Paragraph 2 contains a saving provision to ensure that those people who are receiving benefits under the Agreement or who have their claims in process of consideration at the time of termination will continue to receive those benefits after termination.