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1996-97
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
SOCIAL SECURITY LEGISLATION AMENDMENT
(ACTIVITY TEST PENALTY PERIODS) BILL
1997
EXPLANATORY
MEMORANDUM
(Circulated by the
authority of the Minister for Social Security,
Senator the Hon
Jocelyn Newman)
80947 Cat. No. 96 7388 1 ISBN 0644 49896 X
SOCIAL SECURITY LEGISLATION AMENDMENT
(ACTIVITY
TEST BREACH PENALTY PERIODS) BILL 1997
OUTLINE AND FINANCIAL
IMPACT STATEMENT
Outline
During Senate debate on the then Social
Security Legislation Amendment (Budget and Other Measures) Bill 1996, the
Minister for Social Security foreshadowed the introduction of a new activity
test penalty period regime based on a combination of rate reduction and
non-payment. This Bill introduces such a regime into the Social Security
Act 1991 and the Student and Youth Assistance Act 1973.
In broad terms, the new activity test penalty regime will operate as
follows:
· 18% rate reduction for 26 weeks for a first activity test
breach within a 2 year period;
· 36% rate reduction for 26 weeks for
the second activity test breach within a 2 year period; and
· a
non-payment period of 13 weeks for a third or subsequent activity test breach
within a 2 year period.
The 2 year period will not take account of
activity test breaches that occurred before the commencement of the new activity
test penalty regime.
A person's rate reduction will be worked out as a
percentage of the person's maximum basic rate and will then be deducted from the
person's rate of allowance as worked out under the relevant rate calculator, in
a similar manner to the way that rate reduction works for administrative
breaches.
Some minor amendments are also made to the administrative
breach rate reduction period rules that came into effect on 20 March 1997 (by
operation of Schedule 5 of the Social Security Legislation Amendment
(Budget and Other Measures) Act 1996).
Financial Impact
Statement
The measures in this Bill have the following financial
impact
(savings):
1996-97 $15.41m
1997-98 $20.76m
1998-99 $20.76m
This
will bring the total program savings from the Government's 1996 Budget package
to tighten the activity test and simplify penalty periods
to:
1996-97 $102.54m
1997-98 $108.99m
1998-99 $108.99m
These
figures include both legislative and administrative changes.
PRELIMINARY
Clause 1 of the Social Security Legislation Amendment (Activity Test
Breach Penalty Periods) Bill 1997 sets out how the amending Act is to be
cited.
Clause 2 provides for the commencement of the various
Items, Parts and Schedules of the amending Act.
Clause 3 provides
that each Act that is specified in the Social Security Legislation Amendment
(Activity Test Breach Penalty Periods) Bill 1997 (the Amending Act) is amended
as set out in the Schedules.
SCHEDULE 1 - AMENDMENT OF THE SOCIAL SECURITY ACT
TO INTRODUCE A NEW ACTIVITY TEST BREACH
PENALTY PERIOD
REGIME
1. Summary of proposed changes
The amendments made by Schedule 1 introduce into the Social
Security Act 1991 (the Social Security Act) a new activity test penalty
regime based on a combination of rate reduction and non-payment. For a first
activity test breach within a 2 year period, a rate reduction of 18% of the
person's maximum basic rate of newstart allowance will apply to the person for a
period of 26 weeks. For a second activity test breach, a 36% rate reduction
will apply for 26 weeks. If a person has a third or subsequent activity test
breach within a 2 year period, then payment of newstart allowance will be
withdrawn for 13 weeks. The 2 year period referred to will not take account of
activity test breaches that occurred before the date of commencement of the new
activity test penalty regime.
Multiple activity test breach penalties
will be served concurrently (rather than consecutively) with the later breach
penalty applicable.
Some minor amendments are also made to the new
administrative breach rate reduction period rules that came into effect on 20
March 1997 (by operation of Schedule 5 of the Social Security Legislation
Amendment (Budget and Other Measures) Act 1996). The most significant
of these provides for multiple breaches to be served concurrently instead of
consecutively, in line with the treatment of activity test breaches under the
new regime.
Similar amendments are made by Schedule 1 to
provisions in the Student and Youth Assistance Act 1973 (the SYA
Act) that relate to activity test and administrative breach
penalties.
2. Background
During Senate debate on the then Social Security Legislation Amendment
(Budget and Other Measures) Bill 1996, the Minister for Social Security
foreshadowed the introduction of a new activity test penalty period regime based
on a combination of rate reduction and non-payment. This new regime will
replace existing provisions in the Social Security Act and the SYA Act that
impose a non-payment period for activity test breaches, the duration of which is
determined by reference to a person's unemployment duration and the number of
past breaches.
Schedule 1 introduces such a new activity test
breach regime into the Social Security Act and the SYA Act. The features of the
new regime are discussed in detail below.
3. Schedule and clauses involved in the
changes
Schedule 1: Amends various provisions in the Social Security Act and
the SYA Act relating to activity test penalty periods.
Amendments
to the Social Security Act
Items 1 and 2: Amend the index
of definitions in section 3 of the Social Security Act.
Items 3 to
6: Insert definitions of "activity test non-payment period", "activity test
breach", "activity test breach rate reduction period" and "activity test penalty
period" into subsection 23(1) of the Social Security Act.
Items 7 and
8: Amend subsection 615(3A) - how to work out a person's provisional
commencement date where the person is subject to an administrative breach rate
reduction period.
Item 9: Inserts a new heading to Subdivision F
of Division 1 of Part 2.12 of the Social Security Act - "Activity test
breaches".
Items 10 to 12: Amend section 624 - failure to satisfy
the activity test.
Items 13 to 15: Amend section 625 - failure to
enter into a newstart activity agreement.
Items 16 to 18: Amend
section 626 - failure to take reasonable steps to comply with a newstart
activity agreement.
Item 19: Reworks sections 628, 629, 630, 630AA
and 630A to allow for the application of a rate reduction period or non-payment
period, depending on the number of prior activity test breaches in the previous
2 years) and set the duration of an activity test non-payment period at 13
weeks.
Items 20 to 23: Amend various provisions in section 630B to
provide for concurrent service of activity test breach non-payment periods and
make consequential amendments.
Items 24 to 26: Make consequential
amendments to various provisions in section 660BA.
Item
27: Repeals section 630BB and inserts new sections 660BBA and 660BB to deal
with the interaction between activity test penalty periods and waiting
periods.
Item 28: Makes a consequential amendment to section
630BC.
Item 29: Reworks section 660BD to take account of the
introduction of the new activity test penalty period regime.
Items 30
and 31: Amends the claim provision in subsection 641(2) to allow a claim for
newstart allowance to be granted where a person is subject to an activity test
breach rate reduction period where the person's rate is reduced to
nil.
Item 32: Inserts new Subdivision AA into Division 4 of Part
2.12 of the Social Security Act (new sections 644AA, 644AB, 644AC, 644AD and
644AE) to provide the new rules relating to activity test rate reduction
periods.
Items 33 to 35: Amend various provisions in section 644C
to ensure multiple administrative breach rate reductions periods are served
concurrently and make other minor consequential amendments.
Item
36: Repeals sections 644D and 644E and inserts new sections 644D, 644E and
644EA to provide for the interaction between the various administrative and
activity test penalty periods and waiting periods.
Items 37 and
38: Amends subsection 729(2) to ensure that special benefit cannot be paid
to persons who are subject to activity test non-payment periods.
Item
39: Inserts new subsections 771HA(3A) and (3B) to ensure that a person who
is subject to an activity test or administrative breach rate reduction period
cannot qualify for partner allowance.
Item 40: Makes a
consequential amendment to section 1241.
Item 41: Makes a
consequential amendment to section 1251.
Item 42: Inserts new
clause 102A into Schedule 1A of the Social Security Act to provide application
and transitional provisions for the changes effected by the
Bill.
Amendments to the Student and Youth Assistance
Act
Items 43 to 71: Amend the provisions in the SYA Act
relating to activity test and administrative breach penalty periods as they
apply to youth training allowance - these amendments mirror those listed above
relating to newstart allowance customers under the Social Security
Act.
Schedule 2: Makes technical amendments to the Social Security
Act, the SYA Act and the Social Security Legislation Amendment (Budget and
Other Measures) Act 1996.
Part 1: Repeals and reinserts
clause 98 into Schedule 1A of the Social Security Act, with effect from 20 March
1997.
Part 2: Repeals and reinserts clause 2 into schedule 5 of
the SYA Act, with effect from 20 March 1997.
Part 3: Makes minor
technical amendments to the Social Security Legislation Amendment (Budget
and Other Measures) Act 1996.
4. Explanation of the changes
Social Security Act 1991
Schedule 1 of the Bill
makes amendment to introduce a new activity test penalty regime. Amendments are
made to the Social Security Act and the SYA Act.
Items 1 and 2
amend the index of definitions in section 3 of the Social Security Act. Several
new entries are added to the index, highlighting newly defined terms that will
be relevant for the purposes of the new activity test penalty regime introduced
by the Bill and the reference to "activity test deferment period" is removed.
The new terms are "activity test breach", "activity test breach rate
reduction period", "activity test non-payment period", "activity test penalty
period" and "administrative breach rate reduction period". They are defined in
subsection 23(1) of the Social Security Act.
Item 3 omits the
existing definition of "activity test deferment period" from
subsection 23(1) of the Social Security Act. This definition is
effectively replaced by a new definition for "activity test non-payment period"
meaning a period worked out under section 630A of the Social Security Act or a
period worked out under the equivalent SYA Act provision, that is, section
109.
Item 4 inserts a definition of "activity test breach" into
subsection 23(1) of the Social Security Act. Activity test breach will mean an
act or omission covered by subsections 624(1), 625(1), 626(1), 630(1) and
630AA(1) and sections 628 and 629 of the Social Security Act or the equivalent
SYA Act provisions as in force on or after the date of commencement of the
definition.
The definition of activity test breach will be relevant for
the purposes of the 2 year rule that will be used to determine whether a person
is subject to a rate reduction period or non-payment period for an activity test
breach. The definition is significant because it ensures that customers with
previous activity test breaches are given a 'clean slate' upon commencement of
the new regime by not having regard to any activity test breaches the customer
may have had before that date.
Item 5 inserts a definition of
"activity test breach rate reduction period" into subsection 23(1). This
new term will mean a period that applies under section 644AA of the Social
Security Act or the equivalent, section 136AA, in the SYA Act.
Item 6
inserts a definition of "activity test penalty" into subsection 23(1) of the
Social Security Act. This term will mean an activity test non-payment period or
an activity test breach rate reduction period as defined.
Subsections
615(2B) and (3A) give certain concessions to persons who are subject to an
administrative breach rate reduction period. These provisions effectively allow
the backdating of the person's provisional commencement day and therefore the
earliest day on which the person can be paid newstart allowance (even if at a
reduced rate).
Item 7 addresses the potential overlap in the
operation of subsections 615(2B) and (3A) by ensuring that subsection 615(2B)
prevails in this situation.
Item 8 amends paragraph 615(3A)(e) to
cover a person who claims newstart allowance more than 14 days after the
allowance ceases to be payable but within 14 days after registering with the
CES.
Sections 624, 625, 626, 628, 629, 630 and 630AA of the Social
Security Act outline the situations in which a person is, under the current
rules, subject to an activity test deferment period (eg, where the person fails
to enter into a newstart activity agreement or fails to comply with the activity
test). These provisions make newstart allowance not payable for the duration of
the deferment period.
Notably, sections 628 and 629 apply to preclude
payment of newstart allowance to people whose unemployment is due to a voluntary
act or misconduct. These breaches occur at a time when the person is not a
newstart allowance customer. By contrast, the other activity test breach
provisions are applicable to current newstart allowance customers who fail to
comply with certain obligations placed them under the Social Security
Act.
Under the new regime, the notion of deferment of payment as a result
of an activity test breach will be replaced with either rate reduction or
non-payment. This new penalty structure necessarily involves changes to those
provisions in the Social Security Act that apply to impose a penalty for
activity test breaches.
Where a customer has an activity test breach
(ie, an acts or omissions covered by sections 624, 625, 626, 630 and 630AA
of the Social Security Act), newstart allowance will not be payable to the
person. If newstart allowance becomes payable to the person at a later stage,
then either an activity test breach rate reduction period or an activity test
non-payment period will apply to the person. An activity test breach rate
reduction period will be applicable if the person's breach is the first or
second activity test breach (as defined in subsection 23(1) of the Social
Security Act) in the 2 years before the day after the current breach. An
activity test non-payment period will apply if the person's breach is the third
or subsequent activity test breach in the 2 years before the day after the
current breach.
The concept of an activity test breach will be defined in
subsection 23(1) of the Social Security Act (inserted by item 4).
Notably, activity test breaches that occurred prior to the date of commencement
of the new activity test penalty regime will not be relevant for the purposes of
the new 2 year rule described above, due to the operation of the definition of
"activity test breach".
Items 10, 13 and 16 achieve the above
effect by amending sections 624, 625 and 626 while item 19
replaces existing sections 630 and 630AA with new provisions that have a
similar effect.
This is consistent with the approach and structure taken
in relation to administrative breaches (see sections 630C and 631 of the Social
Security Act).
Where a person who is not a DSS customer has an activity
test breach (ie, an act or omission covered by sections 628 or 629 of the Social
Security Act), the person will be subject to a rate reduction period or
non-payment period (as appropriate) upon claiming newstart allowance. This rule
is reflected in new sections 628 and 629, inserted by
item 19.
As with the other activity test breaches discussed
above, an activity test breach rate reduction period will apply if the person's
breach is the first or second activity test breach (as defined in subsection
23(1) of the Social Security Act) in the 2 years before the day after the
current breach, while an activity test non-payment period will apply if the
person's breach is the third or subsequent activity test breach in that 2 year
period. This 2 year rule will not take account of activity test breaches that
occurred before the date of commencement of the new regime.
Items 11,
12, 14, 15, 17 and 18 make consequential changes to sections 624, 625 and
626 of the Social Security Act to reflect the terminology used under the new
activity test penalty provisions and to omit superfluous notes.
Item
19 also inserts a new section 630A into the Social Security Act. The new
provision sets the duration an activity test non-payment period (if applicable)
at 13 weeks. The rules relating to activity test breach rate reduction periods
are located in new sections 644AA to 644EA (as inserted by item 32).
These new provisions are discussed in detail below.
As indicated above in
the "Summary of proposed changes", multiple activity test/administrative
breaches will be served concurrently instead of consecutively (as is currently
the case). The changes made by items 22, 25 and 27 achieve this
result.
Item 22 repeals subsections 630B(3), (4) and (5) of the
Social Security Act. These provisions deal with multiple activity test
deferment periods and provide for their consecutive service. The existing rules
are replaced with new subsection 630B(3) which ensures that where multiple
activity test non-payment periods apply to a person, the non-payment periods
are, in effect, served concurrently. This effectively means that if a person is
subject to an activity test non-payment period and another activity test
non-payment period applies to the person during that time, then the first
penalty will be superseded by the second. This is because both breaches attract
a 13 week non-payment period.
Item 27 repeals existing section
630BB which covers the situation where a person is subject to an activity test
deferment period that overlaps with a waiting period. The current rule provides
that the deferment period is suspended during the waiting period and resumes at
the end of the waiting period. This is not to be the case under the new
regime.
Existing section 630BB is replaced with new sections 630BBA and
630BB.
New section 630BBA deals with the interaction of activity test
non-payment periods and activity test rate reduction periods. Where an activity
test non-payment period overlaps with an activity test breach rate reduction
period, the periods will operate concurrently for the period of overlap with the
non-payment penalty applying during that period. Any activity test rate
reduction period that would otherwise apply at the end of the activity test
non-payment period will, in effect, be waived (see new subsection
630BBA(4)).
New section 630BB deals with the interaction of activity test
non-payment periods and waiting periods. In situations where these periods
overlap, they will be served concurrently with the waiting period applying
during the period of overlap. Any remaining activity test non-payment period
will then resume application after the period of overlap.
For the
purposes of new section 630BB, a 'waiting period' includes the liquid assets
test waiting period under section 598 of the Social Security
Act.
Items 20, 21, 23, 24, 26, 28 and 29 make consequential
changes to a number of provisions relating to activity test penalty periods,
necessary as a result of the new terminology adopted for the purposes of the new
activity test penalty regime.
Subsection 641(2) of the Social Security
Act currently allows the Secretary to grant a claim for newstart allowance if,
among other things, newstart allowance would be payable to the person apart from
the application of an activity test deferment period. The reference to an
activity test deferment period will be obsolete under the new activity
test penalty regime. Item 30 therefore replaces this reference with a
reference to an activity test non-payment period. Item 31 also
amends subsection 641(2) by inserting a new paragraph (iia) to enable newstart
allowance to be granted to a person if, in addition to the condition set out in
subparagraph (a), the allowance would not be payable apart from the application
of an activity test breach rate reduction period where the rate reduction
reduces the rate of allowance payable to the person to nil.
Item 32
inserts a new Subdivision AA into Division 4 of Part 2.12 of the Social
Security Act. The new Subdivision provides the rules that will apply in
relation to activity test rate reduction periods under the new activity test
penalty regime. These new rules are modelled on the administrative breach rate
reduction rules.
New Subdivision AA will comprise new sections 644AA to
644AE inclusive.
New section 644AA provides that if an activity test
breach rate reduction period applies to a person under Part 2.12 of the Social
Security Act, then the rate reduction period applicable to the person is 26
weeks.
New section 644AB provides for the commencement of an activity
test breach rate reduction period.
The general proposition is that an
activity test breach rate reduction period commences on the day on which a
person is given notice informing the person of the commencement of the rate
reduction period (by operation of new subsections 644AB(1) and (2)). However,
where multiple activity test breach rate reduction periods apply to a person at
the one time, then the second activity test rate reduction period will prevail
over the first (see new subsection 644AB(3)). This is consistent with the
notion of concurrent service of penalty periods. In addition, new subsection
644AB(4) provides that where newstart allowance ceases to be payable to a person
before the day on which an activity test breach rate reduction period would
commence by operation of new subsection 644AB(1), then the activity test breach
rate reduction period commences on the day on which newstart allowance ceases to
be payable to the person.
New section 644AC deals with the situation
where an event occurs at a time when the person was not qualified for newstart
allowance (eg, where a person becomes voluntarily unemployed - see section 628
of the Social Security Act) and that event would have resulted in the
application of an activity test breach rate reduction period. Where this
happens and the person claims newstart allowance before the end of the activity
test breach rate reduction period that would have resulted, then the activity
test breach rate reduction period is taken to have commenced on the day after
the day on which the event occurred. If, on the other hand, the person claims
newstart allowance after the end of the activity test breach rate reduction
period that would have resulted, then the activity test breach rate reduction
period is taken to have been served without the need for the Secretary to notify
the person of the commencement of the rate reduction period under new subsection
644AB(1).
New section 644AD deals with the interaction of activity test
breach rate reduction periods and waiting periods. In situations where these
periods overlap, they will be served concurrently with the waiting period
applying during the period of overlap. Any remaining activity test breach rate
reduction period will then resume application after the period of
overlap.
For the purposes of new section 644AD, a 'waiting period'
includes the liquid assets test waiting period under section 598 of the Social
Security Act.
This is consistent with relationship between activity test
non-payment periods and waiting periods discussed above.
New section
644AE sets out how to work out a persons rate of newstart allowance for the
activity test breach rate reduction period.
New subsection 644AE(1)
provides that if an activity test breach rate reduction applies to a person and
the person qualifies for newstart allowance and an amount is payable to the
person, then the person rate of newstart allowance is determined in accordance
with the new method statement provided.
Under step 1 of the new method
statement, the 'maximum payment rate' is worked out by reference to Table B of
Module B of Benefit Rate Calculator A or Table B of Module B of Benefit Rate
Calculator B (whichever applies to the person).
Under step 2, the 'rate
reduction amount' is worked out in one of two ways. If the activity test breach
is the person's first breach in a 2 year period (as defined in new
subsection 644AE(3)) then the rate reduction amount is worked out by
multiplying the maximum payment rate (worked out under step 1) by 0.18. If the
activity test breach is the person's second breach in the 2 year period then the
rate reduction amount is worked out by multiplying the maximum payment rate
(worked out under step 1) by 0.36. These calculation processes are contained in
new subsection 644AE(2).
The 2 year period referred to in step 2 will not
take account of activity test breaches that occurred prior to the date of
commencement of the new activity test penalty regime.
Under step 3, the
person's activity test breach reduced rate is the rate of newstart allowance
worked out under the relevant rate calculator applicable to the person minus the
rate reduction amount.
A note at the end of the method statement
indicates to the reader that the person's rate of newstart allowance can be
reduced to nil.
Items 33 to 36 modify certain provisions relating
to administrative breach rate reduction periods. These amendments are
consistent with the new concurrent treatment of breach penalties and waiting
periods.
Item 34 repeals subsections 644C(3), (4) and (5) of the
Social Security Act. These subsections, which provide for the consecutive
service of multiple administrative breach rate reduction periods, are replaced
with a new subsection 644C(3).
Under new subsection 644C(3), where
multiple administrative breach rate reduction periods apply to a person at the
one time, then the second administrative breach rate reduction period will
prevail over the first. This is consistent with the notion of concurrent
service of penalty periods.
Item 33 omits references to repealed
provisions from subsection 644C(2) of the Social Security Act.
Item 36
repeals sections 644D and 644E and replaces these provisions with new
sections 644D, 644E and 644EA. The repealed provisions provide for the
consecutive treatment of administrative and activity test breach penalties and
waiting periods.
New section 644D deals with the interaction between
administrative breach rate reduction periods and activity test non-payment
periods. It provides that where there is an overlap in these periods, they are
to operate concurrently with the non-payment penalty applying during the period
of the overlap. Any administrative breach rate reduction period remaining after
the period of overlap will then continue.
New section 644E deals with the
interaction between administrative breach rate reduction periods and activity
test breach rate reduction periods. It provides that where there is an overlap
in these periods, they are to operate concurrently with the highest percentage
rate reduction amount applying during the period of the overlap. Any
administrative or activity test breach rate reduction period remaining after the
period of overlap will then continue.
New section 644EA deals with the
interaction between administrative breach rate reduction periods and waiting
periods. It provides that where there is an overlap in these periods, they are
to operate concurrently with the waiting period applying during the period of
the overlap. Any administrative breach rate reduction period remaining after
the period of overlap will then continue.
For the purposes of new section
644EA, the reference to a 'waiting period' includes a reference to the liquid
assets test waiting period under section 598 of the Social Security
Act.
Item 35 makes a minor amendment to subsection 644C(6) that is
consequential upon the amendments made by item 36.
Paragraph
729(2)(d) precludes qualification for special benefit from certain persons who
qualify for newstart allowance but to whom newstart allowance is not payable
because of the operation of a non-payment/deferment period. Paragraph
729(2)(db) is a similar provision that precludes qualification for special
benefit by reference to the application of certain non-payment/deferment
provisions in the SYA Act.
The list in paragraphs 729(2)(d) and (db) are
incomplete. The list does not take account of the following activity test
breaches that can also attract a period of non-payment, albeit only for a third
or subsequent 'offence' within a 2 year period -
· section 625 of
the Social Security Act - failure to enter into newstart activity
agreement;
· section 626 of the Social Security Act - failure to
comply with a newstart activity agreement;
· section 104 of the SYA
Act - failure to enter into youth training activity agreement; and
· section 105 of the SYA Act - failure to comply with a youth
training activity agreement.
Items 37 and 38 complete the lists in
paragraphs 729(2)(d) and (db) of the Social Security Act.
Subsection
771HA(4) (first occurring) provides that a person is not qualified for partner
allowance if an administrative breach rate reduction period (whether under Part
2.12 of the Social Security Act or Part 8 of the SYA Act) applies to the person.
Item 39 repeals this provision and substitutes new subsection 771HA(3A)
and (3B).
New subsection 771HA(3B) is the same as the repealed subsection
771HA(4).
New subsection 771HA(3A) provides that a person is not
qualified for partner allowance if an activity test breach rate reduction period
(whether under Part 2.12 of the Social Security Act or Part 8 of the SYA Act)
applies to the person.
Sections 1241 and 1251 of the Act enable the
Secretary to determine that payment of newstart allowance is to continue pending
review by the Secretary or the Social Security Appeals Tribunal of an adverse
decision to impose a "deferment" period. The reference to "deferment" in each
of these provisions is replaced by a reference to "activity test non-payment",
in line with the new terminology used in relation to activity test penalty
periods. This is achieved by items 40 and 41.
Item 42
inserts a new clause 102A into Schedule 1A of the Social Security Act. The
new clause sets out the application and transitional provisions that will apply
in relation to the new activity test penalty period regime.
Subclause
102A(1) provides that the amendments made by Schedule 1 apply to events that
occur on or after the commencement of new clause 102A (the date of
Proclamation).
The exceptions to this general application rule are
covered in subclauses 102A(2) to (5).
Under subclause 102A(2), if,
immediately before the commencement of the new activity test penalty period
regime, a person was subject to an activity test deferment period that would end
after the date of commencement, then the old rules continue to apply in relation
to that deferment period.
Subclauses 102A(3) and (4) deal the transition
from consecutive to concurrent service of multiple breach
penalties.
There will be situations where a person is serving an activity
test deferment period or an administrative breach rate reduction period when the
new regime commences but, because the person has multiple breaches, there is a
line of penalties waiting to be served consecutively under the current regime.
Where this occurs, the breach penalty being served at the commencement date (the
current penalty) will continue to run as if under the old rules. Those
penalties that would, but for the amendments made by the Bill, start at the end
of the current penalty period will instead start to run on the date of
commencement concurrently with the current penalty. The nature of the penalty
will also be determined under the new rules.
During any period of
overlap, a non-payment or deferment period applicable to the person will apply
for that period.
Subclause 102A(5) deals with the situation where an
activity test or administrative breach occurs prior to the date of commencement
but no action/decision is taken in relation to that breach until after the
commencement date. In this situation, the new rules will apply to set the
penalty of the activity test breach, its commencement, duration
etc.
Student and Youth Assistance Act
The amendments
described above in relation to newstart allowance and the implications of
activity test and administrative breaches on a person's newstart allowance
payments are repeated in relation to youth training allowance under the SYA Act.
Items 43 to 71 have this effect.
5. Commencement
The changes made by Schedule 1 to the Social Security Act and the SYA
Act commence on a day to be fixed by Proclamation. If the commencement is not
fixed by Proclamation published in the Gazette within 6 months of the day the
Bill receives Royal Assent, then Schedule 1 commences on the first day
after the end of the 6 month period (clause 2 refers).
SCHEDULE 2 - TECHNICAL AMENDMENTS
Schedule 2 makes technical amendments to the Social Security Act,
the SYA Act and the Social Security Legislation Amendment (Budget and
Other Measures) Act 1996.
The changes are as
follows.
Part 1 of Schedule 2 repeals and reinserts clause 98 into
Schedule 1A of the Social Security Act. Clause 98 provides application and
transitional provisions for the amendments made by Parts 3 and 4 of Schedule 5
of the Social Security Legislation Amendment (Budget and Other Measures)
Act 1996 (the Budget and Other Measures Act).
This amendment is
not one of substance but rather a technical change required because of
amendments made to the commencement date of Parts 3 and 4 of Schedule 5 of the
Budget and Other Measures Act during the course of its passage through the
Senate. The Senate agreed to amendments that changed the commencement date of
Parts 3 and 4 of Schedule 5 of the Budget and Other Measures Act from 1 January
1997 to 20 March 1997. Similar amendments were not made to the
application and transitional provisions that operate in respect of Parts 3 and
4. Part 1 of Schedule 2 of the Bill effectively changes the commencement
date of these application and transitional provisions from 1 January to 20 March
1997.
Similar amendments are made to the SYA Act by Part 2 of Schedule
2 of the Bill.
Part 3 of Schedule 2 makes a number of minor
technical amendments to the Budget and Other Measures Act.