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2002-2003
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
FAMILY
AND COMMUNITY SERVICES AND VETERANS’ AFFAIRS LEGISLATION AMENDMENT (2003
BUDGET AND OTHER MEASURES) BILL
2003
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the Minister for Family
and
Community Services,
Senator the Hon Amanda
Vanstone)
FAMILY AND COMMUNITY SERVICES
AND VETERANS’ AFFAIRS LEGISLATION AMENDMENT (2003 BUDGET AND OTHER
MEASURES) BILL 2003
This Bill gives effect to most of the Family and Community
Services and Veterans’ Affairs 2003 Budget measures that require
legislation. The Bill also gives effect to a 2001 Budget measure upon which the
2003 measure relating to recovery of overpayments arising from lump sum foreign
pension payments depends. Finally, the Bill makes a small number of non-Budget
minor policy or technical changes.
Currently, payments made under the laws of Germany or
Austria, by way of compensation to victims of National Socialist persecution,
are excluded from income under the social security and veterans’
entitlements income tests. More countries are now making such payments, eg,
France, the Netherlands and Belgium. This Bill will extend the current income
exclusion to any such payment, regardless of the country making it, so that this
beneficial treatment under the income test is available to all who receive the
payment.
(social
security) 2004-05 $0.1m
2005-06 $0.1m
2006-07 $0.1m
(veterans’ entitlements)
The main cause of incorrect social security payments
is failure to disclose income and assets, including in cases of serious fraud.
Most undisclosed earnings are detected by the comprehensive data matching
arrangements that are currently in place. Centrelink’s compliance
activities are to be enhanced under this Bill to allow limited access to newly
available data sources relating to taxation and financial transaction
activities, but only for the purpose of the administration of the social
security law.
2004-05 -$55.7m
2005-06 -$57.2m
(Note: Financial impact includes certain
non-legislative elements announced in the 2003-04 Budget. Total financial
impact is for increasing the number of data matching reviews by 125,000 each
year, and expanding the number of data sources used in data matching
reviews.)
Amendments are made to improve the operation of the
Assurance of Support Scheme and simplify arrangements for people who provide an
assurance of support.
Under the new
arrangements, the Department of Immigration and Multicultural and Indigenous
Affairs will continue to determine which new migrants are subject to an
assurance of support. However, once this determination is made, the assurance
of support will be issued under the social security law and Centrelink will
administer the Scheme, on behalf of the Department of Family and Community
Services. The new arrangement will enable Centrelink, as a single point of
contact, to provide people giving assurances with more comprehensive information
regarding the implications of their commitment to provide financial support to
the new migrant. Assurers will benefit from easy access to clear advice
provided in their preferred language through the Centrelink
network.
Improved administration of the Scheme
will result in fewer migrants claiming income support during their assurance of
support period and, if claims are made, in improved recovery of assurance of
support debts from the assurers.
2004-05 -$3.9m
2005-06 -$4.5m
Amendments are made to strengthen the arrangements for
ceasing payment to people travelling overseas who do not notify their
departure. Under the new rules, there would be capacity to suspend payment
where a person leaves Australia without notifying the departure and the
Secretary finds out about the departure before the end of the person’s
portability period. The person’s entitlement to payment would then be
reviewed and, depending on the outcome of the review, payment would be either
fully restored or cancelled.
This Bill also
amends the social security debt recovery provisions to allow for the full
recovery of overpayments that arise when a foreign pension payment is made as a
lump sum in arrears. Amendments are made to enable recovery from the person who
receives the lump sum foreign pension payment and from the person’s
partner (where relevant).
(2003
Budget 2004-05 -$0.2m
measures) 2005-06 -$2.0m
(2001
Budget 2005-06 -$4.6m
measure*) 2006-07 -$5.1m
(*The 2001 Budget measure refers to the
standardisation of recovery of overpayments of Australian pensions where people
receive their foreign pension in arrears. This measure was a component of the
‘Further Simplification of International Payments’ package. The
figures are an estimate of administered savings for that
component.)
This Bill reduces the allowable period of temporary
overseas absence for portable social security payments from 26 weeks to 13
weeks. The new portability period will also apply to disability support pension
although there will be capacity to grant an unlimited portability period to a
severely disabled disability support pensioner in defined
circumstances.
A person’s rate of family
tax benefit is subject to modification if the person or an FTB child of the
person is absent from Australia for longer than 26 weeks. Amendments are
made to reduce this allowable period of absence to 13 weeks.
2004-05
$0.1m
2005-06 -$3.5m
This Bill restores access by the Child Support Agency
(part of the Department of Family and Community Services) to financial
transaction information held in the AUSTRAC database. The Agency lost this
access when it ceased to be part of the Australian Taxation Office following the
1998 changes in administrative arrangements. The restored access is, as it was
previously, only for the administration of the child support legislation,
including in cases of substantial avoidance of child support
liabilities.
(Note: Financial impact includes negligible
Departmental costs and negligible Administered savings in family tax benefit
outlays. Financial impact beyond 2003-04 will depend on the outcome of a
current review into AUSTRAC charging arrangements for access by authorised
agencies to financial transaction information.)
This Bill also contains some minor technical
amendments, commencing at various times as appropriate. There is no financial
impact from these.
FAMILY AND COMMUNITY SERVICES AND
VETERANS’ AFFAIRS LEGISLATION AMENDMENT (2003 BUDGET AND OTHER MEASURES)
BILL 2003
Clause 1 sets out how the Act is to be cited, that
is, the Family and Community Services and Veterans’ Affairs
Legislation Amendment (2003 Budget and Other Measures) Act
2003.
Clause 2 provides a table
that sets out the commencement dates of the various sections in, and Schedules
to, the Act.
Clause 3 provides that each
Act that is specified in a Schedule is amended or repealed as set out in that
Schedule.
For ease of description, this
Explanatory Memorandum uses the following
abbreviations:
• ‘Social Security
Act’ means the Social Security Act
1991;
• ‘Social Security
Administration Act’ means the Social Security (Administration) Act
1999;
• ‘Family Assistance
Act’ means the A New Tax System (Family Assistance) Act
1999; and
• ‘Family Assistance
Administration Act’ means the A New Tax System (Family Assistance)
(Administration) Act 1999.
Schedule 1 – Excluding payments
for National Socialist persecution from income
Currently, payments made under the laws of Germany or
Austria, by way of compensation to victims of National Socialist persecution,
are excluded from income under the social security and veterans’
entitlements income tests. More countries are now making such payments, eg,
France, the Netherlands and Belgium. This Schedule will extend the current
income exclusion to any such payment, regardless of the country making it, so
that this beneficial treatment under the income test is available to all who
receive the payment.
This type of payment, made under the laws of Germany or
Austria, is currently excluded from income by paragraphs 8(8)(n) and (p) of the
Social Security Act, and by paragraphs 5H(8)(s) and (t) of the
Veterans’ Entitlements
Act 1986.
These current paragraphs
are repealed by items 1 and 3 respectively and substituted with a single
paragraph for each Act. The new paragraph excludes from income an amount paid,
under a law of, or applying in, a country or a part of a country, by way of
compensation for a victim of National Socialist persecution. To ensure that the
extended income exclusion applies consistently and securely in the future as
well as for the current state of affairs, the new paragraph is broad enough to
cover payments made in circumstances that are not necessarily envisaged at
present. The income exclusion will apply in relation
to:
• payments made by Germany or
Austria, as currently provided;
• payments
made by the national government (or equivalent) of any country, or by the
government (or equivalent) of any part of a country such as a state or a
province;
• payments made under a ‘law
of’ a country or part of a
country;
• payments made under a ‘law
applying in’ a country or part of a country (eg, made by a state of a
country under a national (or equivalent) law applying in that
state);
• payments made by an entity other
than a government, if made under a law of, or applying in, a country or part of
a country;
• payments made by Australia, or a
State or Territory of Australia.
Items 2 and
4 respectively ensure that the amendments described above apply to payments
made after the commencement of the
Schedule.
This measure was announced by the
Government on 13 May 2003 as part of the 2003 Budget. People to whom relevant
social security and veterans’ entitlement payments will be payable, or
people to whom such payments will be payable at a higher rate, under these
amendments have been paid on an ex-gratia basis since that date, pending
Parliament’s consideration of the amendments. The amendments themselves
will commence on Royal Assent.
Explanation of
changes
Item 1 repeals current paragraphs 8(8)(n) and (p)
of the Social Security Act and substitutes a new paragraph 8(8)(n). Item
2 provides for this amendment to apply to amounts paid after commencement of
this Schedule.
Item 3 repeals current
paragraphs 5H(8)(s) and (t) of the Veterans’ Entitlements Act
1986 and substitutes a new paragraph 5H(8)(s). Item 4
provides for this amendment to apply to amounts paid after commencement of this
Schedule.
Schedule 2 – Access to
information
The main cause of incorrect social security payments is
failure to disclose income and assets, including in cases of serious fraud.
Most undisclosed earnings are detected by the comprehensive data matching
arrangements that are currently in place. Centrelink’s compliance
activities are to be enhanced under this Schedule to allow limited access to
newly available data sources relating to taxation and financial transaction
activities, but only for the purpose of the administration of the social
security law.
This Schedule also restores
access by the Child Support Agency (the CSA – part of the Department of
Family and Community Services) to financial transaction information held in the
AUSTRAC database. The CSA lost this access when it ceased to be part of the
Australian Taxation Office following the 1998 changes in administrative
arrangements. The restored access is, as it was previously, only for the
administration of the child support legislation, including in cases of
substantial avoidance of child support liabilities.
Australia’s social security system is targeted
to those most in need. The income and assets tests ensure that people able to
support themselves do so. Nevertheless, some people continue to ignore their
reporting obligations or to defraud the system. Centrelink’s compliance
activities are in place to identify these people, recover debts and prosecute in
more serious cases of fraud.
Experience has
shown that a certain number of people seek to avoid detection through
involvement in the cash economy and/or the use of assumed or stolen identities.
Cases already detected sometimes reveal large debts, often exceeding $50 000 in
fraudulent payments.
The Australian Federal
Police generally deals with only the more serious suspected cases of social
security fraud. The alternative way to pursue these cases is for Centrelink to
investigate and refer suitable cases to the Director for Public Prosecutions.
However, there are currently protections against the disclosure, by other
agencies to Centrelink, of information from certain newly available data sources
that would enable Centrelink to conduct effective investigations into these
cases. These protections prevent Centrelink from acting fully to counter cash
economy and identity fraud and, therefore, to protect more effectively
Commonwealth social security outlays.
This
Schedule will allow Centrelink to take advantage of the additional available
data sources for the purpose of identifying and investigating these potentially
incorrect social security payments – that is, payments that have been paid
that should not have been paid, and payments that have been paid at too high a
rate.
Most of the newly available data sources
arise under taxation legislation. Information held in relation to Pay As You Go
Payment Summaries, for example, and information potentially highlighting
activities such as illegal tobacco and distillation industries, will help to
identify fraudulent social security payments. The Acts administered by the
Australian Taxation Office that are to be amended to allow Centrelink access to
information are:
• the Excise Act
1901 (the Excise Act);
• the
Fringe Benefits Tax Assessment Act 1986 (the Fringe Benefits
Act);
• the Product Grants and Benefits
Administration Act 2000 (the Product Grants Act);
and
• the Taxation Administration Act
1953 (the Taxation Administration
Act).
The last data source is the AUSTRAC
database, which contains information obtained under the Financial
Transaction Reports Act 1988 (the FTR Act). This ‘FTR
information’ is expected to reveal cash economy activity as well as large
transfers of funds out of Australia.
AUSTRAC
annual reports since 1998-99 suggest that approximately 5% of the Suspect
Transaction Reports generated each year under the FTR Act relate to suspected
social security fraud. This amounts to 400 cases, a relatively small number,
but still a valuable target for Centrelink compliance activity. Nevertheless,
due to the low volume of cases expected, and the sensitivity of the information
involved, access to the information within Centrelink will be restricted to
specialist investigative officers.
When the
amendments to the FTR Act provided by this Schedule commence, Centrelink will be
able to access AUSTRAC information that indicates cases highly likely to involve
fraud.
The CSA will resume access to FTR information only for the
purpose of better fulfilling its responsibilities under the child support
legislation. That is, in an individual parent’s child support case, the
resumed access will contribute to ensuring that the level of financial support
to be provided by the parent for their children is determined according to their
capacity to provide that support, and that the child support related debt is
paid in accordance with the parent’s capacity to
pay.
Information available from the AUSTRAC
database is usually information that the CSA is entitled to obtain from clients
or third parties under its own legislation. However, the limited access
proposed through AUSTRAC can identify additional lines of enquiry in a
relatively small number of complex cases. Many of these involve substantial
child support related debts, particularly those owed by people who travel
frequently and/or operate businesses outside Australia, people who deposit sums
of money from overseas into accounts at casinos within Australia, or people who
are involved in the cash economy.
There are two
strong public policy reasons for allowing for the disclosure of information that
will contribute to people fulfilling their child support obligations. The
disclosure will protect Australian Government outlays for family tax benefit,
which must increase if child support debts are not paid. Perhaps more
importantly, the disclosure will contribute to the important policy objective
that parents fulfill their financial responsibility to their
children.
The CSA’s past experience in using FTR information
has shown how valuable it is in locating debtors, and/or identifying potential
sources of income or assets belonging to payers, some with very large
debts.
It is proposed that, as in the past, the
CSA’s internal controls will allow access to FTR information only to
officers who can demonstrate to their managers a legitimate need to access
it.
The amendments made by this Schedule to the FTR Act in
particular mark a departure from the current access arrangements set up under
that Act. Historically, FTR information has been accessible only for law
enforcement, revenue and national security purposes. The Senate Standing
Committee on Legal and Constitutional Affairs, in its 1993 report,
‘Checking the Cash’, considered the possibility of the then
Department of Social Security being given access to FTR information. The report
stressed that ‘AUSTRAC was established to respond to major crime, not
lesser breaches of the law such as minor breaches of the Social Security
Act’ and that it should continue to have that focus.
The reasons for Centrelink and the CSA having access to
FTR information are set out above. For Centrelink in particular, the
information is in fact necessary to detect and prevent cases of serious social
security fraud. However, to allay any concerns that the access may cause,
consultations with key stakeholders have taken
place.
Both for the FTR Act amendments and the
taxation law amendments, the limited uses and disclosures provided for by this
Schedule will be further controlled
by:
• Memoranda of Understanding between
agencies;
• the existing internal structures
of all agencies that protect client privacy, such as the secrecy provisions of
the social security, child support and taxation law and the FTR Act;
• the Privacy Act 1988;
and
• the Public Service Code of
Conduct.
Lastly, the new arrangements will be
subject to occasional privacy audits conducted by AUSTRAC, the Privacy
Commissioner and the Australian National Audit
Office.
Technical
amendments
This Schedule also contains some
minor technical amendments loosely associated with the main amendments. These
amend the social security law definition of ‘officer’ and subsection
16(4) of the Income Tax Assessment Act 1936 (Income Tax
Assessment Act) to update current references to social security legislation and
programs to reflect the current concept of the ‘social security law’
introduced by the Social Security Administration Act. There is no policy change
from these purely modernising amendments.
All
amendments made by this Schedule commence on Royal Assent.
Explanation of
changes
Excise
Act
Items 1 and 2 amend section 159
of the Excise Act, which protects information obtained by a person in the course
of official employment under that Act, to add new subparagraphs to each of
existing paragraphs 159(3)(c) and (d). These new subparagraphs prevent an
offence arising against the main secrecy rule in the section if the Commissioner
of Taxation, a Deputy Commissioner or a person authorised by one of those office
holders discloses information to the Chief Executive Officer (CEO) of
Centrelink, or the Secretary of the Department of Family and Community Services
(FaCS), as long as the information is to be used for the purposes of the
administration of the social security law. Those purposes are described above
under Background.
Item 3 sets down how
these amendments are to apply. They apply to information obtained by the ATO
before, on or after commencement. In other words, when the amendments commence
(on Royal Assent), Centrelink will be able to access any protected information
held at that point in the ATO’s records in relation to the Excise Act,
even if it was obtained before
commencement.
This application rule is common
to all of the amendments made by this Schedule, apart from the technical social
security law amendments. The main reason for applying the amendments to
information obtained before commencement is a purely practical one. This
is that the ATO (or AUSTRAC in relation to the FTR Act amendments) computer
systems will not be able readily to separate information held in its records
that is obtained before commencement from that obtained after. Those computer
systems were not designed with a view to later amendments to the access
arrangements and the cost of modifying the systems would be
prohibitive.
FTR
Act
Items 4 to 12 amend the FTR Act,
to give Centrelink and the CSA limited access to FTR
information.
Items 4, 5 and 6 will set
up in subsection 3(1) of the FTR Act three new definitions that will be
needed in the following amendments. The newly defined terms are
‘Centrelink officer’, ‘Child Support Agency’ and
‘CSA officer’. Each of these takes its meaning from or in
relation to the relevant legislation.
Items
7 to 12 amend section 27 of the FTR Act. The basic secrecy rule in the FTR
Act is section 25. However, section 27 overrides section 25 to allow specified
agencies, and officers of those agencies, to have access to defined
FTR information. In all cases other than for taxation officers and the
Commissioner, this access is available only if the AUSTRAC Director gives a
written authorisation for the relevant agency. This authorisation must state
the FTR information, or class of FTR information, to which the agency is to have
access. If such an authorisation is given, then specified officers of the
agency are entitled to access that class of information. Centrelink and the
CSA, and their officers, are to join the agencies and officers currently covered
by this structure to allow access on the basis of an authorisation in relation
to a limited class of information. This requirement, together with the
Memoranda of Understanding that will be part of the arrangement, will give
appropriate control over access. Items 7 to 11 will make the amendments
necessary to add Centrelink and the CSA to the agencies and officers currently
covered by this structure.
Item 12
amends the provisions in section 27 that control how a specified officer of a
specified agency may use and/or disclose FTR information once it has been
disclosed to him or her, so that the controls are the same as for the officers
currently covered by those provisions (ie, all cases other than taxation
officers). Basically, a Centrelink officer or CSA officer must not, while
remaining such an officer, disclose the FTR information except as provided by
subsection 27(6). When the person is no longer such an officer, he or she must
not disclose the FTR information in any
circumstances.
However, that basic provision is
subject to subsections 27(7) to (11) and (12), allowing limited disclosure in
certain cases to do with legal, or court, proceedings or to the person or
company who is the subject or source of the information. These exceptions will
also apply to Centrelink and CSA officers handling FTR information. Any breach
of the section 27 rules is an offence under subsection
27(13).
Item 13 provides the common
application clause, as described above. That is, the amendments to the FTR Act
will apply to information obtained by AUSTRAC before, on or after
commencement.
Fringe Benefits
Act
Item 14 amends section 5 of the
Fringe Benefits Act, which protects information obtained by a person in the
course of official employment under that Act, to add new paragraphs to existing
subsection 5(5). These new paragraphs prevent an offence arising against the
main secrecy rule in the section if the Commissioner of Taxation, a Deputy
Commissioner or a person authorised by one of those office holders discloses
information to the CEO of Centrelink, or the Secretary of FaCS, as long as the
information is to be used for the purposes of the administration of the social
security law. Those purposes are described above under
Background.
Item 15 provides the common
application clause, as described above. That is, the amendments to the Fringe
Benefits Act will apply to information obtained by the ATO before, on or after
commencement.
Income Tax Assessment
Act
Items 16 and 17 make some minor
technical amendments, loosely associated with the main amendments, to the
secrecy provision of the Income Tax Assessment Act. These repeal and substitute
paragraphs 16(4)(e) and (eb) of that Act to replace the current references to
any law of the Commonwealth ‘relating to pensions, allowances or
benefits’ with the current concept of the ‘social security
law’ introduced by the Social Security Administration Act. The now
outdated name of the Department of Social Security is also amended in line with
the other amendments in this Schedule. There is no policy change from these
purely modernising amendments.
Item 18
provides the common application clause, as described above. That is, the
amendments to the Income Tax Assessment Act will apply to information obtained
by the ATO before, on or after
commencement.
Product Grants
Act
Items 19 and 20 amend section
47 of the Product Grants Act, which protects information obtained by a person in
the course of official employment under that Act, to add new subparagraphs to
existing paragraphs 47(3)(c) and (d). These new subparagraphs prevent an
offence arising against the main secrecy rule in the section if the Commissioner
of Taxation, a Deputy Commissioner or a person authorised by one of those office
holders discloses the agreed classes of information to the CEO of Centrelink, or
the Secretary of FaCS, as long as the information is to be used for the purposes
of the administration of the social security law. Those purposes are described
above under Background.
Item 21 provides
the common application clause, as described above. That is, the amendments to
the Product Grants Act will apply to information obtained by the ATO before, on
or after commencement.
Social Security Act
and Social Security Administration
Act
Items 22 and 23 make minor
technical amendments loosely associated with the main amendments. These amend
the social security law definition of ‘officer’ to reflect the
current concept of the ‘social security law’ introduced by the
Social Security Administration Act. The modification of the definition for the
purposes of the confidentiality provisions in the social security law is also
moved from the interpretation area of the Social Security Act to a more relevant
and accessible position, directly adjacent to the confidentiality provisions in
the Social Security Administration Act. There is no policy change from these
purely modernising amendments.
There is no need
for an application clause for these
amendments.
Taxation Administration
Act
Items 24 and 25 amend section
68 of the Taxation Administration Act, which protects information obtained by a
person in the course of official employment under an ‘indirect tax
law’, to add new subparagraphs to existing paragraphs 68(3)(c) and
(d). These new subparagraphs prevent an offence arising against the main
secrecy rule in the section if the Commissioner of Taxation, a Deputy
Commissioner or a person authorised by one of those office holders discloses the
agreed classes of information to the CEO of Centrelink, or the Secretary of
FaCS, as long as the information is to be used for the purposes of the
administration of the social security law. Those purposes are described above
under Background.
Item 26 provides the
common application clause, as described above. That is, the amendments to the
Taxation Administration Act will apply to information obtained by the ATO
before, on or after commencement.
Schedule 3 – Assurances of
support
This Schedule makes amendments to the Social Security
Act, the Social Security (Administration) Act and the Migration Act
1958 to provide for the transfer of the Assurance of Support Scheme from
the migration legislation to the social security
legislation.
These amendments are made to
improve the operation of the Assurance of Support Scheme and simplify
arrangements for people who provide an assurance of
support.
Under the new arrangements commencing
on 1 July 2004, the Department of Immigration and Multicultural and Indigenous
Affairs will continue to determine which new migrants are subject to an
assurance of support. However, once this determination is made, the assurance
of support will be given and accepted under the new provisions of the social
security law relating to assurances and Centrelink will administer the Scheme,
on behalf of the Department of Family and Community Services. The new
arrangement will enable Centrelink, as a single point of contact, to provide
people giving assurances with comprehensive information regarding the
implications of their commitment to provide financial support to the new
migrant. Both assurers and new migrants will benefit from easy access to clear
advice provided in their preferred language through the Centrelink network.
Centrelink will continue to be responsible for recovery of assurance of support
debts.
Improved administration of the Scheme
will result in fewer migrants claiming income support during their assurance of
support period and, if it occurs, in improved recovery of assurance of support
debts from the assurers.
An assurance of support is a form of legal undertaking
given by the assurer to repay to the Commonwealth income support payments made
to the migrant in respect of whom the assurance was given during the specified
period of the assurance (2 or 10 years depending on the migrant’s visa).
The Assurance of Support Scheme allows migrants who are at a higher risk of
needing to claim social security payments to come to Australia, while protecting
the Commonwealth from financial risk.
The
current responsibility for, and administration of, the Scheme is split between
the Department of Immigration, Multicultural and Indigenous Affairs (DIMIA) and
the Department of Family and Community Services (FaCS). DIMIA decides who must
obtain an assurance (by determining which visa needs an assurance as a condition
of its grant), makes a decision to accept or reject an assurance and, if the
assurance is accepted, transfers data about the assurer and any person covered
by the assurance to Centrelink. Centrelink is responsible (on behalf of FaCS)
for ensuring that any recoverable payment made to the migrant during the period
of the assurance is recovered from the
assurer.
The fragmentation of responsibilities
has resulted in complex administrative processes that provided opportunity for
assurers to claim that they did not fully understand their financial obligations
resulting from assurances.
To improve
administration of the Scheme, the Government has decided to transfer the
administration of the Scheme from DIMIA to FaCS. The transfer, facilitated by
the new legislative framework provided by the amendments in this Schedule and a
suite of disallowable instruments, will be assisted by the development of an
improved customer service system.
This Schedule contains three Parts: Part 1 –
Main amendment, Part 2 – Consequential amendments, and Part 3
–Application, transitional and saving
provisions.
Part 1 – Main
amendment
Item 1 inserts new
Chapter 2C containing new assurance of support provisions into the Social
Security Act.
New Chapter 2C –
Assurances of support
New Chapter 2C
contains five parts dealing with the following matters: giving of assurances,
acceptance of assurances, effect of accepted assurances, ministerial
determinations relating to assurances and assurances given by unincorporated
associations.
New Part 2C.1 – Giving
assurances
New section 1061ZZGA What
is an assurance of support?
An
assurance of support is given in connection with a visa applied for and the visa
applicants. In relation to certain visa subclasses, Migration Regulations 1994
require assurances of support to be given as a condition of grant of those visas
(mandatory assurances). Migration Regulations 1994 also include the power for
the Minister to request that an assurance of support be given as a condition of
grant of some other visa subclasses (discretionary assurances). The visa
applied for cannot be granted if an assurance of support has been requested in
connection with the visa is not provided and found to be acceptable. If the
assurance is given and accepted, and the visa is granted, the assurance is in
effect for a specified period (currently, two or 10 years depending on the visa
subclass). As a result, if specified income support payments are paid to the
persons identified in the assurance in respect of the period during which the
assurance is in effect, the paid amounts become a debt due to the Commonwealth
by the assurer.
New section 1061ZZGA defines
the term ‘assurance of support’ for the purposes of the new
Chapter.
It states that ‘assurance of
support’ means an undertaking made by a person under the new Chapter 2C
that the person will pay the Commonwealth an amount equal to the amount of a
social security payment received in respect of a period by a person identified
in the undertaking who becomes the holder of a visa granted in connection with
the undertaking. Subparagraph (a)(ii) of the definition makes it clear that the
undertaking to pay the amount in respect of a period extends throughout the
period irrespective of whether the person who was granted a visa in connection
with the undertaking continues to hold that visa throughout the period or not.
Therefore, the undertaking will cover the whole relevant period even if the
person is subsequently granted another visa during that period, or becomes a
citizen and does not hold any visa for the remainder of that
period.
The period to which the undertaking
applies, that is, the period in respect of which liability to pay the social
security amounts arises, is the period referred to in the context of new section
1061ZZGF (dealing with the period for which an assurance is in
force).
Paragraph (b) of the definition
specifies that the undertaking to repay social security amounts relates to those
social security payments that, when the payments are received, are specified in
a determination made by the Minister for that purpose under new subsection
1061ZZGH(1), table item 1. The social security payments that give rise to an
assurer’s liability, that are specified in the ministerial determination
in force at the time of payment, may be different to those specified at the time
of the undertaking.
New subsection 1061ZZGH(1)
makes it mandatory for the Minister to specify the social security payments, the
amounts of which assurers will have to repay. The determination under new
subsection 1061ZZGH(1) is a disallowable instrument (new subsection 1061ZZGH(4)
refers). Currently, the social security payments relevant to an assurer’s
liability are specified in the Migration Regulations 1994, regulation
2.38.
As a result of the statutory
interpretation rule in paragraph 23(b) of the Acts Interpretation Act
1901 (a word in the singular number include the plural), one assurance
may relate to 2 or more persons. Therefore, a Note to the definition clarifies
that an assurance may relate to social security payments received by 2 or more
persons.
New section 1061ZZGB Who may
give an assurance of support?
New
section 1061ZZGB provides that a ‘person’ may give an assurance of
support. ‘Person’ is defined in section 22 of the Acts
Interpretation Act 1901 as including a body politic or corporate, as
well as an individual. As a result of the operation of new section 1061ZZGI,
the social security law that relates to new Chapter 2C applies to an
unincorporated body or association as if it were a person. Therefore, an
unincorporated body may also give an assurance (new subsection 1061ZZGI provides
that it may be done by the action of a partner if the body is a partnership, or,
in any other case, by the action of a member of the committee of management of
the body).
Only a person who meets the
requirements for giving assurances specified in relation to a person in a
determination made by the Minister under new subsection 1061ZZGH(1), table item
2, may give an assurance. New subsection 1061ZZGH(1) makes it mandatory for the
Minister to specify requirements to be met in relation to persons for them to be
permitted by new section 1061ZZGB to give assurances of support. One example of
such a requirement is the current policy requirement for giving assurances that
an individual has to be an Australian resident and at least 18 years old.
Another current requirement is that the capacity to give assurances is limited
to the giving of assurances in respect of maximum two adults (persons over 18
years of age).
The ministerial determination
under new subsection 1061ZZGH(1), table item 2, is a disallowable
instrument (new subsection 1061ZZGH(4)
refers).
This section is intended to operate to
the effect that if there are no requirements specified in relation to a
particular class of persons, a person within that class would not be permitted
to give an assurance. For example, if the determination under new subsection
1061ZZGH(1) does not specify any requirements in relation to unincorporated
bodies, new section 1061ZZGB will prevent the body to give an
assurance.
For a person, or a body, to be able
to give an assurance under this section, the requirements for that kind of a
person, or body, to be permitted to give an assurance must be specified by the
Minister and the requirements must then be met by such a person, or
body.
Note 1 clarifies that an undertaking
given by a person who does not meet the requirements for giving an assurance is
not an assurance of support because it is not given under this Chapter. The
Secretary is therefore not required to accept or reject the purported
assurance.
Note 2 refers to the statutory
interpretation rule in paragraph 23(b) of the Acts Interpretation Act
1901 (a word in the singular number include the plural) in support of
the explanation that, under new section 1061ZZGB, 2 or more persons may give one
assurance of support only if all those persons meet the requirements for giving
assurances specified by the Minister in a determination under new subsection
1061ZZGH(1). It is intended, for example, that the determination will specify
requirements for giving one assurance by multiple assurers (eg jointly by 2
individuals).
New section 1061ZZGC How to
give an assurance of support
New
section 1061ZZGC specifies how an assurance of support is
given.
An assurance is given if it is delivered
in writing in accordance with a form approved by the Secretary (new paragraph
1061ZZGC(1)(a) refers). New subsection 1061ZZGC(2) provides that an assurance
of support form may include other undertakings in addition to the assurance. If
other undertakings are included in the assurance of support form, new subsection
1061ZZGC(2) ensures that the inclusion in the form of the other undertakings
does not affect the assurance of support. In other words, an assurance given in
accordance with the approved form is an assurance of support even though there
may be other undertakings included in the assurance of support
form.
New paragraph 1061ZZGC(1)(a) provides
that an assurance may be delivered
either:
• to a person apparently
performing duties at a place approved for this purpose by the Secretary;
or
• to a person approved for this purpose by
the Secretary; or
• in a manner, and to a
place, approved for this purpose by the
Secretary.
The Secretary may approve a place or
a person in Australia or out of Australia (new subsection 1061ZZGC(3)
refers).
New paragraph 1061ZZGC(1)(b) provides
that an assurance may also be given in a different manner than that specified
under new paragraph 1061ZZGC(1)(a) if the Secretary approves such a manner.
In approving such manner, the Secretary is not limited by any other provision of
this new section (new subsection 1061ZZGC(4)
refers).
New subsection 1061ZZGC(1) together
with new section 1061ZZGA operate to the effect that if a person
‘gives’ an assurance in a way different to that approved by the
Secretary, the person has not given an assurance (because it is not given unless
it is given in the approved way; and, if not given as required by the provisions
of new Chapter 2C, it does not fall into the definition of ‘assurance of
support’ in new section 1061ZZGA, so it is not an assurance). A note at
the end of new subsection 1061ZZGC(1) clarifies that, in such a situation, the
Secretary is not required to accept or reject the purported
assurance.
New subsections 1061ZZGC(1) to (4)
provide the Secretary with a high degree of flexibility in determining how
assurances are to be given, enabling the Secretary to take into account the
circumstances of various customer groups and to respond (if required) to a
changing technological environment. The Secretary’s powers relating to
determining how assurances are to be given are aligned with the powers currently
provided by the social security law in relation to determining how social
security claims are to be given.
Material to
accompany assurance of support
New
subsection 1061ZZGC(5) requires the person who gives an assurance to provide any
information specified in an assurance of support form and any document specified
by the Secretary. Under new subsection 1061ZZHC(6), if the person does not
provide the required information or document, the assurance is taken not to have
been given. (Consequently, the Secretary is not required to make a decision to
accept or reject an
‘assurance’.)
New Part 2C.2
– Acceptance of assurances
New
section 1061ZZGD Accepting or rejecting an assurance of
support
New subsection 1061ZZGD(1)
requires the Secretary to accept or reject an assurance that has been given as
provided for by new Chapter 2C.
Under new
subsection 1061ZZGD(2), the Secretary is permitted to accept an assurance if the
following conditions are met.
Requirements
for acceptance relating to a person giving the
assurance
The Secretary has to be satisfied
that the person who gave the assurance meets the requirements for acceptance
relating to the person specified in a determination made for this purpose by the
Minister under new subsection 1061ZZGH, table item 3 (new paragraph
1061ZZGD(2)(a) refers).
Note 1 at the end of
new subsection 1061ZZGD(2) clarifies that one assurance given by 2 or more
persons (that is, by multiple assurers) may be accepted only if the Secretary is
satisfied that the requirements that relate to all of them, as specified in the
ministerial determination, are met.
Primarily,
it is intended that the relevant requirements will relate to the financial
capacity of a person, or persons, giving an assurance to support a person, or
persons, identified in the assurance. The financial test applies to a person
who gives an assurance under the current Assurance of Support
Scheme.
Special requirements may apply to a
member of a couple who wants to give an assurance in respect of a person while
the partner gave or is giving assurance in respect of another person (new
subsection 1061ZZGH(2) authorises the Minister to specify requirements to be met
by assurers who are members of a couple).
The
determination under new subsection 1061ZZGH(1), table item 3, is a disallowable
instrument (new subsection 1061ZZGH(4)
refers).
Provision of a
security
In relation to certain visa
subclasses, the Migration Regulations 1994 require that an assurance of support
is given and accepted as a condition of grant of the visa (mandatory
assurances). Regulation 2.39 requires that if an assurance is given in respect
of a visa applicant who has turned 18, the person giving the assurance must
lodge a bond. The bond must be in the form approved by the Minister that
secures the payment to the Commonwealth, on demand, of any amount (up to the
bond amount), due to the Commonwealth as the result of the liability arising in
respect of social security payments paid to the visa applicant and his or her
dependants. Subregulation 2.39(4) specifies the applicable bond
amounts.
New paragraph 1061ZZGD(2)(b) specifies
the lodgement of a security as a condition of acceptance of a mandatory
assurance.
Note 2 at the end of new subsection
1061ZZGD(2) clarifies that the requirement to give a security does not apply to
a kind of visa in relation to which there is a discretion to request an
assurance (discretionary assurance).
If an
assurance is a mandatory assurance and the assurance relates to a visa applicant
who was at least 18 at the time of the application for the visa (an adult), the
Secretary may only accept the assurance if the requirements specified in new
subsection 1061ZZGD(3) that relate to the lodgement of a security are
met.
As clarified by subparagraph
1061ZZGD(2)(b)(ii), the requirement to lodge a security in respect of an
assurance that relates to an adult applies regardless of whether the assurance
relates also to a person who was under 18 at the time of the application for the
visa.
Under new subsection 1061ZZGD(3), a
person who gave an assurance, or at least one of the multiple assurers (if an
assurance is given by multiple assurers), has to give a single security for the
liability that may be incurred in connection with the assurance. This provision
reflects the requirement that a single security is to be given in respect of the
assurance, irrespective of how many persons are identified in the
assurance.
New subsection 1061ZZGD(3) specifies
further that the single security is intended for the liability that the person
who gave the assurance (or everyone who gave the assurance, if the assurance is
given by multiple assurers) may incur in connection with the social security
payment received by any person (whether an adult or not) identified in the
assurance. This indicates that the security may be used to discharge the
liability of an assurer (or assurers, if multiple assurers are involved) arising
out of social security payments of any of the persons identified in the
assurance.
The extent of the assurer’s
liability connected with an assurance is described in new section
1061ZZGG.
New subsection 1061ZZGD(3) also
requires that the security be given in a form approved by the Secretary and be
of a value specified by the Minister in a determination under new subsection
1061ZZGH(1), table item 4. Before making the determination, the Minister must
ask the Minister for Immigration, Multicultural and Indigenous Affairs for
comments and must consider the comments received (new subsection 1061ZZGH(3)
refers). The determination is a disallowable instrument (new subsection
1061ZZGH(4) refers).
Rejecting the
assurance
New subsection 1061ZZGD(4)
provides that the Secretary may reject an assurance. If the conditions of
acceptance of an assurance specified in new subsection 1061ZZGD(2) are not met,
the Secretary cannot accept the assurance and will reject
it.
One way of ensuring that the person giving
the assurance understands the consequences of the person’s commitment and
the extent of the possible financial obligations is by the provision to the
person of comprehensive information, in a way that is easy for the person to
understand. To achieve this, it is intended that the assurance of support
process will involve an obligatory interview, which the person giving an
assurance will be required to attend. New subsection 1061ZZGD(5) makes it clear
that an assurance may also be rejected under subsection 1061ZZGD(4) if the
person giving the assurance and requested by the Secretary to attend an
interview relating to the assurance fails to do
so.
New section 1061ZZGE Notices relating
to assurance of support
New subsection
1061ZZGE (1) provides for a notice of acceptance or rejection of an assurance to
be given to the person who gave the assurance and the Minister for Immigration,
Multicultural and Indigenous Affairs.
The
notice is to name the person, or persons, in respect of whom the assurance was
given.
New subsection 1061ZZGE(2) provides for
a notice to be given to the person who gave the assurance specifying the period
for which the assurance is in force in respect of the person for whom the
assurance was given.
A Note at the end of new
subsection 1061ZZGE(2) directs the reader to new section 1061ZZGF for an
explanation when an assurance of support is in
force.
An assurance of support cannot come into
force unless the visa, in connection with which the assurance was given, is
granted and the person in respect of whom the assurance was given is in
Australia.
New subsection 1061ZZGE(2) requires
the Secretary to give a notice of the assurance of support period if the
Secretary becomes informed that the person in respect of whom the assurance was
given was granted the visa and entered the ‘migration zone’ (that
term, which, generally, denotes Australia, is defined in section 5 of the
Migration Act 1958).
Given that
an assurance may be given in respect of more than one person and the assurance
of support in respect of some of those persons may come into force from a
different date, the assurance may therefore remain in force for different
periods, despite the fact that there is only one assurance of support. This
would occur when different members of migrating family covered by an assurance
of support arrive in Australia at different
times.
New subsection 1061ZZGE(3) requires the
Secretary to notify the assurer whose assurance has ceased to be in force at the
time specified in new subparagraph 1061ZZGF(1)(b)(ii) of the
cessation.
A Note at the end of new subsection
1061ZZGE(3) informs the reader that new subparagraph 1061ZZGF(1)(b)(ii) is about
cessation of an assurance of support if another assurance comes into force in
respect of the person covered by both
assurances.
New Part 2C.3 Effect of
accepted assurances
New section
1061ZZGF When an accepted assurance is in
force
New subsection 1061ZZGF(1)
specifies when an assurance of support comes into force and for how long it
remains in force in respect of a person for whom the assurance was
given.
An assurance of support cannot come into
force unless the visa in connection with which the assurance was given is
granted and a person in respect of whom the assurance was given is in
Australia.
New paragraph 1061ZZGF(1)(a)
operates to the effect that the assurance of support given in connection with a
particular visa comes into force in relation to a person specified in the
assurance:
• at the time the visa was
granted - if the person is in Australia at the time of the grant;
or
• at the time at which the person entered
Australia - if the person was not in Australia at the time of the grant of the
visa.
New subparagraph 1061ZZGF(1)(b)(i)
provides that the assurance remains in force for the period specified by the
Minister in a determination made under new section 1061ZZGH(1), table item 5,
unless the Secretary determines an earlier cessation of the assurance under new
subsection 1061ZZGF(2).
Currently, the period
for which an assurance remains in force is specified in the Migration
Regulations 1994, regulation 2.36 (10 years if the person is granted a
Contributory Parent (Migrant) (Class CA) visa or Contributory Aged Parent
(Residence) (Class DG) visa, and 2 years in the case of other kinds of
visas).
It is intended that the determination
made by the Minister under new section 1061ZZGH(1), table item 5, after the
commencement of new section 1061ZZGH enabling the Minister to make such an
determination, will specify the same assurance of support periods that apply
currently.
New subsection 1061ZZGH(3) requires
that, before making the determination under new section 1061ZZGH(1), table item
5, the Minister asks the Minister for Immigration, Multicultural and Indigenous
Affairs for comments and must consider the comments received (new subsection
1061ZZGH(3) refers).
The determination is a
disallowable instrument (new subsection 1061ZZGH(4)
refers).
New subparagraph 1061ZZGF(1)(b)(ii)
provides that if the Secretary determines under new subsection 1061ZZGF(2) the
time at which the period of an assurance ceases, and that time is earlier than
the end of the period specified for the assurance in a determination under new
subsection 1061ZZGH(1), the assurance remains in force until that earlier
time.
A Note at the end of new subsection
1061ZZGF(1) informs the reader that an assurance of support given in respect of
2 or more persons may be in force at different times in respect of each of those
persons. This may happen as a result of the cessation of the period, or because
the period has started at a different time in respect to each of those
persons.
New subsection 1061ZZGF(2) gives the
Secretary a discretionary power to determine that the assurance of support
ceases to be in force in respect of the person at the time when another
assurance comes into force in respect of the person. As a matter of policy,
there is no intention of using this power for earlier cessation of a 10-year
period. It is intended that, in rare cases where a person in respect of whom an
assurance of support is in force is granted a different visa for which another
assurance is required, and the two assurances would be in force during the same
time, the Secretary will be able to terminate the earlier 2-year assurance to
avoid concurrent liability of two different assurers that may arise in respect
of the same period.
New subsection 1061ZZGF(3)
specifies that an assurance of support under this new Chapter is in force in
respect of a person only in relation to the period that applies to the person
under new subsection 1061ZZGF(1). This subsection clarifies the meaning of the
references, in the provisions of the Social Security Act, other than new Chapter
2C (eg section 578B), to assurances of support being ‘in
force’.
New subsection 1061ZZGF(4)
provides that an assurance of support that came into force in respect of a
person under new subsection 1061ZZGF(1) remains in force in respect of the
person regardless of any change of circumstances that may occur. As a result of
the operation of this provision, the assurance cannot be withdrawn after the
assurance came into effect. This subsection replicates the current subsection
504(5) of the Migration Act 1958 that applies to the effect
of assurances of support given under that
Act.
New section 1061ZZGG Liability to
pay for social security payment
New
subsection 1061ZZGG(1) specifies when the assurer’s liability
arises.
The assurer’s liability arises
when an assurance is accepted under new Chapter 2.C and a person in respect of
whom the assurance was given receives a social security payment in respect of
the period during which the assurance is in force and, at the time the payment
is received, the payment is specified in a determination under new subsection
1061ZZGH(1), table item 1.
If these
circumstances occur, the assurer is liable to pay the Commonwealth the amount of
the social security payment (new subsection 1061ZZGG(2)
refers).
In relation to the effect of the
assurance given by more than 1 person, new subsection 1061ZZGG(3) provides that
the liability all of those persons is both joint and
several.
The determination specifying social
security payments for the purposes of new section 1061ZZGG is a disallowable
instrument (new subsection 1061ZZGH(4)
refers).
New Part 2C.4
Determinations
New section
1061ZZGH Determinations
New subsection
1061ZZGH(1) provides that the Minister must make determinations specified in the
Table of the determinations included in the new
section.
In the determinations, the Minister
must specify the following
things:
• social security payments
– for the purposes of new section 1061ZZGA (definition of ‘assurance
of support’) and new section 1061ZZGG
(liability);
• requirements to be met for a
person to be permitted by new section 1061ZZGB to give an assurance of
support;
• requirements to be met in relation
to a person giving an assurance for the Secretary to be permitted by new
subsection 1061ZZGD(2) to accept the
assurance;
• values of securities to be given
for the Secretary to be permitted by new paragraph 1061ZZGD(3)(b) to accept
mandatory assurances of support;
and
• periods for which assurances of support
that were accepted under new Chapter 2C remain in force under new paragraph
1061ZZGF(1)(b)(i) in respect of persons for whom the assurances were
given.
The relevance of the determinations to
the provisions for which they are needed was commented on in the context of
those provisions.
New subsection 1061ZZGH(2)
clarifies that a determination for the purposes of new subsection 1061ZZGD(2)
(requirements for acceptance of assurances) may specify particular requirements
relating to members of couples.
Note 1 at the
end of new subsection 1061ZZGH(1) clarifies that a determination may specify
matters and things by reference to classes and may make different provision with
respect to different matters or classes of
matters.
Note 2 clarifies further, in reliance
on the Acts Interpretation Act 1901, that the Minister may amend a
determination by another written
determination.
The Minister must consult with
the Minister for Immigration, Multicultural and Indigenous Affairs before
determining values of securities or periods for which assurances are in force
(new subsection 1061ZZGH(3) refers).
The
determinations are disallowable instruments for the purposes of section 46A
of the Acts Interpretation Act 1901 (new
subsection 1061ZZGH(4) refers).
Part
2C.5 Assurances by unincorporated
bodies
New section
1061ZZGI Application of social security law to unincorporated
bodies
A ‘person’ as
defined in the Acts Interpretation Act 1901 does not include an
unincorporated body.
A number of new provisions
relating to assurances of support are expressed to apply in relation to a
person. For example, a ‘person’ may give an assurance of support.
It is intended that these and other provisions should have the potential to
apply to unincorporated bodies as well as other
persons.
Therefore, new subsection 1061ZZGI(1)
provides that a ‘person’, for the purposes of new Chapter 2C
(dealing with assurances of support) and the social security law as far as it
relates to this Chapter, includes an unincorporated
body.
The provision also identifies individuals
within the unincorporated body who can act on behalf of the body (new subsection
1061ZZGI(2)), on whom obligations can be imposed and who can discharge those
obligations (new subsection 1061ZZGI(3)).
In
relation to offences committed by the body, new subsection 1061ZZGI(4) provides
that if the body would commit an offence (eg section 217 of the Social Security
Act relating to making a false or misleading statements applies to the body as
if it were a person), the body does not commit the offence (as a result of this
amendment, section 217, and other relevant sections relating to offences, will
not apply to the body). However, if an individual who represents a body makes
false or misleading statement, he or she may be responsible for an offence
committed under section 217, in his or her own right (not as a representative of
the body).
New subsection 1061ZZGI(5) limits
the scope of what can be done by an individual (eg a partner or a member of the
body’s management committee) on behalf of the body. It ensures that when
there are requirements relating to a body for giving assurances (requirements
under new section 1061ZZGB) or for accepting assurances (requirements under new
paragraph 1061ZZGD(2)(a)), the giving of an assurance or acceptance of the
assurance depends on the body meeting the requirements. The requirements
relating to the body cannot be met by the representatives of the body meeting
the requirements relating to them as
individuals.
New subsection 1061ZZGI(6)
provides that the determination made by the Minister under new section 1061ZZGH,
specifying requirements for a person who is an unincorporated body to be
permitted to give an assurance or to have the assurance accepted may specify
requirements relating to not only the body as such but also to the individuals
through which the body acts; that is, partners or members of the body or of its
committee of management.
Part
2 Consequential
amendments
Amendments to the
Migration Act 1958
Item 2 amends
section 504 of the Migration Act 1958 (the Migration Act). It
inserts new subsection 504(5A) that affects the operation of
paragraph 504(1)(g) and subsection
504(5).
Section 504 of the Migration Act
relates to making of regulations under that Act. Paragraph 504(1)(g) contains
the enabling provision for making regulations in relation to assurances of
support. Specifically, the power provides for making
regulations:
(a) ‘requiring assurances of
support to be given, in such circumstances as are prescribed or as the Minister
thinks fit, in relation to persons seeking to enter, or remain in,
Australia’;
(b) ‘providing for the
enforcement of assurances of support’;
and
(c) ‘the imposition on persons who give
assurances of liabilities in respect of maintenance of, and other expenditure in
connection with, the persons in respect of whom the assurances of support are
given’.
New subsection 504(5A) states
that regulations providing for the enforcement of assurances or imposition of
liabilities, made under paragraph 504(1)(g) of the Migration Act before, on or
after 1 July 2004, have effect only in relation to assurances that were
‘given before 1 July 2004 and are not assurances of support in relation to
which Chapter 2C of the Social Security Act applies or applied’. This
means that the regulations will continue to apply to assurances that were given
and accepted before 1 July 2004 but do not apply to assurances in respect of
which the Minister for Immigration had not decided before that day whether to
accept them or not (the latter assurances are the assurances to which Chapter 2C
applies as a result of the transitional arrangements provided for in an
amendment made by item 18,
paragraph (1)(c)).
The amendment also
has the following effect.
New subsection
504(5A) does not affect the regulation-making power under the Migration Act to
require assurances of support to be given (the power specified in paragraph (a)
above). After 1 July 2004, the existing Migration Regulations that specify
those visa subclasses for which an assurance of support is required or may be
requested will continue in force, and new regulations may be made for that
purpose under paragraph 504(1)(g) of the Migration
Act.
New subsection 504(5A) limits the
regulation-making power under the Migration Act to provide for the enforcement
of assurances and for the imposition of liabilities in connection with
assurances (the powers specified in paragraphs (b) and (c)
above).
The existing Migration Regulations
specify the extent of the liability of a person who gives an assurance of
support (regulation 2.38 of the Migration Regulation 1994, in connection with
regulation 2.39).
Currently, the enforcement of
assurances occurs under the Social Security Act and is administered by
Centrelink (on behalf of the Department of Family and Community Services). As a
result of new subsection 504(5A), these regulations will continue in force,
after 1 July 2004, but only in relation to assurances given before 1 July 2004.
Under the Social Security Act, the liability as defined in the Migration
Regulations constitute a debt recoverable under the Social Security Act (section
1227 of the Social Security Act refers). As the regulations relating to
liability will remain in effect for the purposes of the assurances given before
1 July 2004, the liability relating to those assurances will continue to be
recoverable under the Social Security Act (Centrelink will recover debts arising
in relation to those assurances).
The
enforcement of assurances given after 1 July 2004 and accepted under the Social
Security Act will also occur under that Act (amendments made by items
4 to 14 refer).
As the result of
the amendment, after 1 July 2004, the regulation-making powers relating to the
enforcement of assurances and imposition of liability may be exercised
effectively only in relation to assurances of support that were given before 1
July 2004 under the current Migration
Regulations.
Subsection 504(5) of the Migration
Act provides that any assurance of support given in accordance with the
regulations under paragraph 504(1)(g) continues to have effect in spite of any
change in circumstances. New subsection 504(5A) limits the operation of
subsection 504(5) so that it applies only to assurances given before 1 July 2004
under the Migration
Regulations.
Amendments to the Social
Security Act 1991
Definition of
‘assurance of support’ in subsection
23(1)
Item 3 amends the definition
of ‘assurance of support’ in subsection
23(1).
This definition is relevant to a number
of provisions in the Social Security Act dealing with qualification or
payability of certain social security payments (widow allowance, parenting
payment (partnered), youth allowance, austudy payment, newstart allowance,
mature age allowance, mature age partner allowance and crisis payment). These
provisions operate to the effect that if an assurance of support is in force in
respect of the social security claimant, and the assurer is willing and able to
provide an adequate level of support to the claimant, and it was reasonable for
the claimant to accept that support, the claimant is not qualified for the
payment or the payment is not payable to the
claimant.
Currently, assurance of support is
defined by reference to the Migration Regulations 1989 and the Migration
Regulations 1993.
Item 3 omits the
current definition and substitutes a new definition that includes a reference to
new Chapter 2C of the Social Security Act under which assurances of support will
be given after 1 July 2004.
The new definition
also includes a reference to Migration Regulations 1994 under which assurances
are given currently, inadvertently omitted from this
definition.
Definition of ‘assurance
of support debt’ –subsection 23(1) and section
1227
Item 4 amends the definition of
‘assurance of support debt’ in subsection 23(1). This definition is
relevant to Chapter 5 of the Social Security Act relating to overpayments and
debt recovery. Item 4 repeals the current full definition of the
‘assurance of support debt’ and substitutes a new definition that
cross-refers to the meaning given by subsection
1227(2).
Item 7 inserts new subsection
(2) into section 1227 (assurance of support debt). This new subsection
reproduces the definition of ‘assurance of support debt’ repealed by
item 4 and makes an amendment consequential on the introduction
(by item 1) of new assurance of support provisions in new Chapter
2C.
Generally, new subsection 1227(2) provides
that assurance of support debt means:
• a
debt due and payable by a person to the Commonwealth, or liability of a person
to the Commonwealth, because of the operation of the specified regulations of
the Migration Regulations 1989, 1993 and 1994 in respect of the payment to
another person of a social security payment specified in those regulations;
or
• a liability of a person to the
Commonwealth because of the operation of new section 1061ZZGG in new Chapter 2C
inserted by item 1.
Item 6
repeals the note at the end of section 1227, which refers the reader to
subsection 23(1) for the definition of ‘assurance of support debt’.
As item 7 imports the definition of ‘assurance of support
debt’ into section 1227, the note is no longer
needed.
Methods of recovery of a debt
– section 1230C
Item 8 inserts
new subsection (5) into section 1230C.
New
section 1061ZZGD(3), inserted by item 1, requires as a condition of
acceptance of certain assurances (mandatory assurances) that a security be given
for the liability that the assurer may incur in connection with the assurance.
Section 1240C specifies methods of recovery of debts. New subsection 1230C(5)
clarifies that this section does not prevent recovery of an assurance of support
debt by the enforcement of a security given in connection with the relevant
assurance of support. The security may be enforced at any time. New subsection
1230C(5) clarifies that the enforcement of a security may occur before or after
seeking to recover the debt by another method specified in this section, and
regardless of whether or not the enforcement involves legal proceedings (the
enforcement of a security may occur regardless of how it is carried
out).
As a consequence of the amendment made by
item 8, item 5 amends table item 14 in subsection 1222(2). This table
item specifies methods of recovery of assurance of support debts. Item 5
substitutes a new table item that includes a reference to the enforcement of
security as a method of recovery of assurance of support
debts.
Non-recovery of
debts
Item 14 inserts new section
1237AAE that imposes extra rules relating to waiver of assurance of support
debts.
New subsection 1237AAE(1) specifies that
the new section affects some waiver provisions in connection with an assurance
of support debt by setting out extra rules limiting the circumstances in which
waiver may occur and the extent of waiver.
New
subsection 1237AAE(2) affects waiver under section 1237AAD (waiver in special
circumstances). It prevents the waiver under section 1237AAD if the only reason
for waiver of an assurance of support debt under this section is that the
assurer (or assurers) were unaware of the effect of new section 1061ZZGG or of
the regulations made under Migration Act 1958 in connection with
the assurance. New section 1061ZZGG inserted by item 1 provides that an
assurer is liable to pay the Commonwealth the amount of the social security
payments specified in a determination made for that purpose by the Minister
under new section 1061ZZGH. The relevant regulations (eg regulation 2.38 of the
Migration Regulations 1994) specify that an assurer is liable, subject to that
regulation, to pay the Commonwealth an amount of support paid to another person
in connection with the assurance by way of specified social security
payments.
New subsection 1237AAE(3) affects
waiver under sections 1237AAA(waiver of small debts), 1237AAB (waiver in
relations to settlements) and 1237AAD (waiver in special circumstances) if a
security was given in connection with the assurance of support under new section
1061ZZGD(3). The only purpose for requiring a security in connection with the
assurance is to ensure the repayment of the liability that potentially may
arise. It is therefore contrary to the very concept of security that the
assurance of support debt be waived, on any ground, if there is an enforceable
security available. This new subsection prevents waiver of the amount of the
assurance of support debt that is equal to the amount of the security that can
be obtained by enforcing the security and applied to reduce the
debt.
A note to this subsection clarifies that
an amount that can be obtained by enforcing the security cannot be applied to
reduce the debt if it is applied to reduce another assurance of support debt
connected with the same assurance. The note contemplates that there may be a
number of debts relating to the same assurance (eg 3 debts relating to 3
different periods) and that that only a portion of the security may be obtained
to reduce the first debt. That portion (an amount) cannot be applied again to
reduce the other debts.
New subsection
1237AAE(4) affects waiver under section 1237AAD (waiver in special
circumstances) if there are multiple assurers. Multiple assurers are jointly
and severally liable for the same debt (new subsection 1061ZZGG(3) refers). In
that situation, new subsection 1237AAE(4) prevents the waiver of an amount of
the debt unless the Secretary is satisfied that the amount cannot be recovered
from any of the assurers.
New subsection
1237AAE(5) affects waiver under section 1237AAD (waiver in special
circumstances) if there are multiple assurers and the security is still
available in relation to the assurance. This new subsection provides that in
that situation, the amount of the assurance of support debt that may be waived
is the amount that is no greater than the amount (if any) that may be waived
taking into account both new subsections 1237AAE(3) and
(4).
Items 9, 10, 11, 12 and 13 make
amendments that are consequential on the amendment made by item
14.
Subsection 1236A(1) provides that the
existing waiver provisions apply to debts arising after 1 January 1996 and the
debts arising earlier and outstanding on that day. Item 9 amends this
subsection to include a reference to new
section1237AAE.
Subsection 1237(1) provides
that the Secretary may waive the right to recover a debt, or part of it, only in
circumstances described in sections 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or
1237AAD. Item 10 amends this subsection to clarify that, in relation to
assurance of support debts, the right to waive is subject to new section
1237AAE.
Sections 1237AAA (waiver of small
debts) and 1237AAB (waiver in relation to settlements) are affected by the
limitations on waiver under those sections imposed by new section 1237AAE in
relation to assurance of support debts. Item 11 inserts a Note at the
end of the affected sections to inform the reader that the waiver under these
sections is so affected.
Item 13 inserts
a new Note (Note 2) at the end of section 1237AAD (waiver in special
circumstances) to inform the reader that the waiver under this section is
subject to the limitations imposed by new section 1237AAE in relation to
assurance of support debts. Item 12 renumbers the existing Note as Note
1.
Amendments of the Social Security
(Administration) Act 1999
Section 144
of the Social Security Administration Act specifies decisions under the social
security law that are not reviewable by the Social Security Appeals Tribunal.
For example, subsection 144(f) makes non-reviewable the decisions under section
16 of the Social Security Administration Act relating to the form, place, person
and method of making claims for social security payments. As a matter of
consistency, item 15 inserts new paragraph (da) into section 144 to make
non-reviewable similar decisions made under new section 1061ZZGC relating to
form, person, place, and method of giving an assurance of
support.
Section 151 provides that the Social
Security Appeals Tribunal cannot exercise certain powers or discretions
conferred by the social security law, eg powers to approve the form and place of
lodgement of a claim. For consistency, item 16 inserts new paragraph
(ba) in subsection 151(2) to ensure that the Tribunal does not exercise powers
conferred by new section 1061ZZGC dealing with the form, place, manner etc
of giving an assurance of support.
Section 192
provides the Secretary with the power to require any person to provide
information, or a document, that the person possesses if the Secretary considers
it may be relevant to the consideration of matters under the social security law
specified in this section. Item 17 makes amendment to section 192 to
ensure that the Secretary may use the information-gathering power in this
section to obtain information or a document relevant to the question whether an
assurance of support given under new Chapter 2C should be accepted or
rejected.
The amendments made by item 18 include
application and transitional provisions relevant to the introduction, from 1
July 2004, of the new Assurance of Support Scheme under the social security
law.
These provisions have the following
effect.
All assurances of support given to the Department of
Immigration, Multicultural and Indigenous Affairs (DIMIA) under the current
Assurance of Support Scheme and not finalised by 1 July 2004 (the Minister for
Immigration had neither accepted nor decided not to accept) will be transferred
to Centrelink (acting on behalf of the Department of Family and Community
Services) for further processing under the new provisions of the social security
law relating to assurances of support (subitem 18(3)
refers).
The transfer of assurances will also
involve transfer of personal information collected by DIMIA in order to decide
whether the assurance is acceptable. This information is also relevant to a
decision under the Social Security Act whether to accept the transferred
assurances. Subitem 18(3) requires the disclosure of the information:
therefore, the disclosure is not prevented by the Privacy Act 1988
(a note at the end of this subitem makes that
clear).
Once these assurances are transferred
for processing under the social security law, the requirements of new Chapter 2C
(Assurances of support) will become relevant to decide whether the assurance may
be accepted. New subsection 1061ZZGD(3) requires, as a condition of acceptance
of certain assurances (mandatory assurances), that a single security be
given in relation to the assurance in a form approved by the Secretary. To
facilitate the decision–making process in relation to the transferred
mandatory assurances, subitem 18(4) provides that the requirements
relating to the lodgement of a security are taken to be met if, before 1 July
2004, the assurer lodged a bond, or bonds, in relation to the assurance in
compliance with regulation 2.39 of the Migration Regulations
1994.
A note at the end of subitem 184)
clarifies that this will allow the Secretary to accept the assurance even though
a security has not been given as required under new Chapter 2C of the Social
Security Act but was given as required by regulation 2.39.
Subitem 18(1) specifies the matters to which
the provisions of new Chapter 2C apply.
Chapter 2C applies to the giving of assurances given under
this Chapter after 1 July 2004, their acceptance and their effect
(subparagraphs 18(1)(a), (b) and (d)
refer).
Chapter 2C also applies to the
acceptance, after 1 July 2004, of the assurances given before that date under
the Migration Regulations 1994 and transferred for processing under the Social
Security Act in accordance with the transitional arrangements referred to in
subitem 18(3) (paragraph 18(1)(c)
refers).
To enable the application of Chapter
2C to assurances that were not given under that Chapter, subitem 18(2)
deems the transferred assurance to have been given under that
Chapter.
Part 2 makes amendments (items 4 to 14)
relevant to recovery of assurance of support debts. Subitem 18(5)
provides that these amendments apply in relation to debts arising before, on
or after the commencement of this Schedule (1 July
2004).
Subitem 18(5) also clarifies that
the application of the amendment to the definition of ‘assurance of
support’ made by item 3 is not limited to the area of debts (this
definition applies to qualification/ payability provisions of various income
support payments).
Schedule 4 amends the Family Assistance
Administration Act and the Social Security Administration Act to strengthen
notification arrangements for people travelling overseas who do not
notify their departure. Amendments are made to enable the Secretary to suspend
payment pending review of entitlement where a person leaves Australia without
notifying and the Secretary finds out about the departure before the end of the
person’s portability period. Payment would then be fully restored or
cancelled depending on the outcome of the review.
Social security customers who leave Australia are required
to notify Centrelink of their departure. This requirement arises under sections
67 and 68 of the Social Security Administration Act. Under these provisions,
the Secretary may require a claimant or recipient to inform the Department
(which can include Centrelink) if a specified event of change in circumstances
occurs or is likely to occur.
Similarly, people
who are receiving family tax benefit (FTB) by instalment are required under
section 25 of the Family Assistance Administration Act, to notify of a departure
from Australia.
While there is capacity in both
the social security and family assistance laws to end, or adjust the rate of,
payment to customers who have been overseas for longer than the relevant
portability period, there is currently no mechanism that would enable payment to
be suspended where a person fails to notify of a departure, the person leaves
Australia and the Secretary finds out about the departure before the end of the
person’s portability period.
The
amendments made by Schedule 4 provide such a mechanism to suspend
payments in defined circumstances.
Item 3 inserts two new variation provisions
into the Family Assistance Administration
Act.
New section 30A applies
where:
• a determination is in force
under which a claimant is entitled to be paid FTB by
instalment;
• the claimant leaves Australia
without notifying the Secretary about the departure;
and
• the Secretary finds out that the
claimant has left Australia less than 3 years after the
departure.
Where these conditions are met, the
Secretary would have the discretion to vary the claimant’s entitlement
determination so that it has the effect that the claimant is not entitled to be
paid FTB for any day after the end of the claimant’s last instalment
period.
However, this variation would be undone
when the Secretary obtains the information required to determine whether the
claimant was entitled to FTB while
overseas.
This new variation provision would
operate as an incentive for customers to notify when they go overseas and would
facilitate a review process to ensure that a customer remains entitled to
payment of FTB while overseas.
If, as a result
of the review process, the claimant remains entitled to FTB while overseas, then
no further action would be taken. If, however, the customer ceased to be
entitled to FTB while overseas (eg, the customer has left Australia
permanently), then section 31 of the Family Assistance Administration Act would
be used to vary entitlement to be paid FTB by instalment to take account of the
relevant event. A debt would be raised as
appropriate.
New section 30B is a similar rule
that deals with the situation where an FTB child leaves Australia and the
claimant (person who is entitled to be paid FTB by instalment in respect of that
child) does not notify the child’s departure from Australia and less than
3 years have passed after the FTB child left Australia. In this situation, the
Secretary may vary the claimant’s entitlement determination so that it has
the effect that the claimant is not entitled to be paid FTB in respect of the
child who is overseas. As with new section 30A, the variation would take effect
from the day after the end of the claimant’s last instalment
period.
The Secretary would then be required to
undo this variation when the Secretary obtains the information required to
determine whether the claimant was eligible for FTB (where the FTB child who is
overseas is the claimant’s only FTB child), or the rate of FTB (where the
claimant has more than one FTB child).
Again,
it is section 31 of the Family Assistance Administration Act that would be used
to make any relevant adjustment to payment where the child’s absence from
Australia has an impact on the claimant’s eligibility for, or rate of,
FTB.
Items 2 and 4 are consequential
amendments.
The amendments made by item
2 ensure that a person cannot avoid the effect of a variation under new
section 30A or 30B by reclaiming FTB.
The
amendments made by item 4 ensure that the effect of a variation made
under new section 30A or 30B cannot be negated by a variation made under other
specified provisions.
Item 1 ensures
that the amendments made to the Family Assistance Administration Act apply on or
after commencement (1 July 2004) in relation to departures from Australia
before, on or after that date.
• a person who is receiving a social security
payment has been given a notice under section 67 or 68 that requires the person
to notify of a departure; and
• the person
does not comply with this requirement;
and
• the person leaves Australia;
and
• the person’s portability period
for their payment has not ended.
The concept of
a person’s portability period for a payment is defined in
section 1217 of the Social Security Act.
A
note at the end of new subsection 81(3) informs the reader that the new
provision can be used to suspend payment and then to cancel the same payment.
The relevant enabling provision is section 33 of the Acts Interpretation
Act 1901.
The decision to suspend
payment under new subsection 81(3) would come into effect on the day on which
the determination is made or a later day specified in the determination (in
accordance with subsection 118(13) of the Social Security Administration Act).
The amendment made by item 7 ensures that a suspension decision under new
subsection 81(3) cannot have retrospective effect. It does this by precluding
the operation of subsection 118(7) to this
decision.
If a decision is made to suspend
payment under new subsection 81(3), a review of entitlement would
follow.
If the review shows that the person
concerned continues to meet the relevant qualification and payability rules
while overseas, then payments would be resumed under section 85 of the Social
Security Administration Act.
If the review
shows that the person is not qualified, or that an amount is not payable, then
payment would be cancelled. Cancellation would occur under either new
subsection 81(3) or the general cancellation provision in section 80 of the
Social Security Administration Act. Under new subsection 118(11A) as inserted
by item 8, this cancellation decision would take effect on a day
specified in the determination (which may be earlier that the day on which the
determination is made). This date of effect provision would enable payment to
be cancelled prospectively or retrospectively, from the date of the relevant
event or change in circumstances that lead to loss of qualification or
payability.
Item 5 makes a consequential
amendment to section 80 of the Social Security Administration Act by inserting a
new subsection 80(3). This new provision ensures that a cancellation decision
can be made under section 80 after a suspension decision under new subsection
81(3) and can take effect at some time after the suspension decision. By way of
example, a suspension decision is made under new subsection 81(3) because a
person leaves Australia without notifying the departure. Centrelink reviews the
person’s entitlement. Before the review is completed, the person’s
portability period ends. This event closes the door on cancellation under new
subsection 81(3). The outcome of the review is that the person was entitled to
their social security payment while overseas and until the end of the
person’s portability period. Section 80 enables payment to be cancelled
with effect from the end of the person’s portability
period.
Item 1 ensures that the
amendments made to the Social Security Administration Act apply on or after
commencement (1 July 2004) in relation to departures from Australia before, on
or after that date.
Schedule 5 – Comparable foreign
payment debt recovery
The amendments made by Schedule 5 allow for the
full recovery of overpayments that arise when a foreign pension payment is made
as a lump sum in arrears. This measure will ensure that the full amount of a
debt arising from that overpayment is recovered from the person who receives the
lump sum foreign pension payment and from the person’s partner (where
relevant).
Where a person receives a foreign pension payment as a
lump sum in arrears from a country with which Australia has a social security
agreement, the overpayment of Australian pension for the period covered by the
lump sum is recovered under the relevant agreement under so called embargo
provisions. In contrast, where the same type of payment is received from other
countries, no debt is incurred under the existing debt recovery provisions in
the social security law.
The amendments made by
Schedule 5 standardise the recovery of debts that result from the
overpayment of an Australian social security payment to a person who receives an
arrears payment of foreign pension by treating this source of income
consistently, irrespective of whether the payment is received from an agreement
or non-agreement country. Furthermore, the amendments ensure that the full
amount of the debt resulting from the overpayment is recovered, whether the
customer is single or partnered.
The amendments
made by Schedule 5 give effect to the 2001-02 Budget measure to
standardise the recovery of debts that result from the overpayment of Australian
pension to a person who receives a lump sum arrears payment of foreign income.
The amendments also give effect to the 2003-04 Budget measure by providing for
full recovery of the resulting overpayments.
Item 3 inserts a new section 1228A into the
Social Security Act. This new provision enables a debt to arise if:
• an amount was paid to a person by way of a social
security payment in respect of particular
period;
• the person or the person’s
partner receives a lump sum payment of arrears of a comparable foreign payment
in respect of the same period; and
• if that
lump sum were paid as periodical payment, it would reduce the social security
payments paid in respect of that period.
The
amount by which the social security payment would have been reduced over the
period represented by the lump sum arrears payment is a debt due to the
Commonwealth by virtue of new subsection 1228A(2).
New subsection 1228A(3) clarifies that section
1073 of the Social Security Act (that allows certain income amount to be
apportioned across 12 months) does not apply to the lump
sum.
Item 5 repeals superfluous notes at
the end of subsection 1221(1) of the Social Security
Act.
Item 2 inserts a new item (15A) in
the table in subsection 1222(2) of the Social Security Act to specify that
a debt under new section 1228A is recoverable by deductions, legal proceedings,
garnishee notice or repayment by
instalments.
Item 1 repeals superfluous
notes at the end of subsection 1221(1) of the Social Security
Act.
Item 4 provides for the application
of new section 1228A. This new provision applies to lump sums paid on or after
commencement (1 July 2004), irrespective of whether the lump sum relates wholly
or partially to a period occurring wholly or partly before
commencement.
Schedule 6 amends the Social Security Act to
reduce the allowable period of temporary overseas absence for portable social
security payments from 26 weeks to 13 weeks. The new portability period
will apply to disability support pension (DSP) without distinction (under the
current rules, severely disabled customers have unlimited portability for DSP)
although there will be capacity to grant an unlimited portability period to a
severely disabled disability support pensioner in defined
circumstances.
The changes will not affect age
pension and wife and widow B pension where the recipient is an ‘entitled
person’ These payments will retain an unlimited maximum portability
period.
A person’s rate of family tax
benefit (FTB) is subject to modification (reduction) if the person or an FTB
child of the person is absent from Australia for longer than 26 weeks.
Schedule 6 also amends the Family Assistance Act to reduce that period of
allowable absence to 13 weeks.
The
amendments made by Schedule 6 will commence on 1 July 2004 and apply in
relation to absences from Australia that start on or after that
date.
The rules relating to overseas portability of social
security payments are set out in Part 4.2 of the Social Security Act.
Certain pensions have indefinite portability - age pension, DSP for a severely
disabled person, bereavement allowance and wife and widow B pension for an
‘entitled person’ (defined in section 1212 of the Social
Security Act). All other portable social security payments have a maximum
portability period of 26 weeks (some conditional upon meeting specified
criteria). The table at the end of section 1217 of the Social Security Act sets
out the various portable social security payments and specifies the maximum
portability period that attaches to each relevant payment type and any
conditions that attach to the portability period. There is capacity under
section 1218C for a person’s portability period to be extended in
prescribed circumstances.
These rules are
amended to reduce to 13 weeks the maximum portability period for those social
security payments that are currently portable for 26 weeks. The exception is
DSP for a severely disabled person which currently has unlimited portability.
Under the new rules, DSP will be portable for up to 13 weeks although there will
be capacity to determine unlimited portability for severely disabled people with
a terminal illness.
These amendments are
intended to encourage people who are workforce age and on income support
payments to remain in Australia and be available to contribute through
employment or social participation.
For FTB,
the general rule is that an individual who has been absent from Australia for
more than 3 years cannot be eligible for FTB. Similarly, a child who has been
absent from Australia for more than 3 years cannot be an FTB child. This 3 year
maximum portability period will not
change.
However, absence from Australia by an
individual or FTB child can affect rate. An individual who has been overseas
for longer than 26 weeks is entitled only to the base rate of FTB
Part A and is not entitled to rent assistance or FTB Part B. An FTB
child who has been overseas for more than 26 weeks can only attract the base FTB
child rate for FTB Part A and is disregarded for FTB Part
B.
Schedule 6 ensures that these rate
modifications apply after an individual or FTB child has been absent from
Australia for more than 13 weeks.
There are residence requirements for both FTB and
child care benefit (CCB). A standard requirement across both payment types for
an individual who is the holder of a specified visa is that the individual is
either:
• in Australia;
or
• temporarily absent from Australia for
not more than 26 weeks and the absence is an ‘allowable absence’ for
special benefit.
The relevant provisions are
subsections 21(1A), 42(1A), 44(1A) and 45(1A) of the Family Assistance
Act.
Items 1 and 3 replace existing
references to ‘26 weeks’ in these provisions with references to
‘13 weeks’. This is consistent with changes to the portability
period for special benefit.
The general rule in
section 24 of the Family Assistance Act is that FTB is portable for 3 years.
This means that an individual’s eligibility for FTB ceases after the
individual has been absent from Australia for more than 3 years. Similarly, a
child who has been absent from Australia for more than 3 years cannot be an FTB
child. If an individual or FTB child has been absent from Australia for more
than 26 weeks but less than 3 years, then the 3 year portability period
continues to run despite short returns to Australia of less than 26 weeks. The
relevant rules are in subsections 24(2) and
(5).
Also, if an individual ceases to be
eligible for FTB because the individual has been overseas for longer than 3
years, returns to Australia and then leaves again within 26 weeks after
returning, then the individual is not eligible for FTB during that subsequent
absence. An individual does not get a ‘new’ portability period in
this situation. The relevant provision is subsection
24(6).
A similar rule applies in relation to an
FTB child (subsection 24(3) refers).
Item 2
changes all references to ‘26 weeks’ in section 24 of the Family
Assistance Act to ‘13 weeks’. The 3 year portability rule remains
unchanged.
Absence from Australia can also
affect an individual’s rate of
FTB.
Section 62 of the Family Assistance Act
modifies the way in which the rate of FTB is calculated for an ‘absent
overseas recipient’. The effect of the modification is that an absent
overseas recipient is entitled to be paid the base rate of FTB Part A but is not
entitled to rent assistance or FTB Part B. An individual is an absent overseas
recipient after having been absent from Australia for more than 26 weeks. If
the individual then returns to Australia and leaves again less than 26 weeks
after returning, this status applies immediately for the latest
absence.
Item 4 amends section 62 of the
Family Assistance Act by omitting all references to ‘26 weeks’ and
substituting references to ‘13
weeks’.
Section 63 of the Family
Assistance Act modifies the way in which an individual’s rate of FTB is
calculated where the individual is not an absent overseas recipient but an FTB
child of the individual is an ‘absent overseas FTB child’. The
effect is that an absent overseas FTB child can only attract the base FTB child
rate for FTB Part A and is disregarded for FTB Part B. An FTB child is an
absent overseas FTB child after having been absent from Australia for more than
26 weeks. If the child then returns to Australia and leaves again less than 26
weeks after returning, this status applies immediately for the latest
absence.
Item 4 also amends section 63
of the Family Assistance Act by omitting all references to ‘26
weeks’ and substituting references to ‘13
weeks’.
Item 5 makes a
consequential amendment to subsection 63A(1) of the Family Assistance Act. This
provision currently refers to the ‘26’ week period referred to in
subsections 62(2) and 63(2). This reference is changed to the
‘13’ week period.
Item 6
sets out the application rules for the amendments made by Schedule 6
to the Family Assistance Act.
Subitem
6(1) provides that the amendments apply to absences from Australia that
start on or after commencement (that is, 1 July
2004).
Subitem 6(2) clarifies that the
amendments made to subsections 24(2), (3), (5) and (6) and subsections 62(3) and
63(3) of the Family Assistance Act also apply to children and individuals who
come or return to Australia on or after 1 July
2004.
An example of how the application
provisions would work is set out as follows.
An
FTB child leaves Australia on 4 March 2004. The child is overseas when the
changes commence on 1 July 2004 (at this point the child has been overseas for
more than 17 weeks) and is therefore not subject to the new rules. On 2
September 2004 the child becomes an ‘absent overseas FTB child’
(having been overseas for more than 26 weeks). Section 63 would then apply with
the effect that the rate of FTB Part A for that child becomes the base FTB child
rate and the child cannot attract FTB Part
B.
The child returns to Australia 9 September
2004. At this point, the new rules would potentially apply in relation to the
child by virtue of subitem 6(2).
The
child leaves Australia again 18 weeks after returning. In this situation,
neither subsection 24(2) nor subsection 63(3) would apply because the child has
remained in Australia for longer than the threshold 13 weeks. This means that
the child would have a new portability period of 3 years in relation to the
child’s status as an FTB child and a new portability period of 13 weeks
before the rate of FTB for the child is affected under section
63.
However, if the child remains in Australia
for 10 weeks and then leaves Australia, subsections 24(2) and 63(3) would apply
with the effect that the child’s 3 year portability period would resume
(on leaving Australia, the child would be taken to have been overseas for more
than 37 weeks) and the new 13 week portability rule would ensure that the during
the subsequent absence, the child would only attract the FTB base rate of FTB
Part A and no FTB Part B.
The application
provisions would apply in a similar manner to individuals receiving
FTB.
The table at the end of section 1217 of the Social
Security Act sets out the portability arrangements for portable social security
payments.
Item 12 repeals existing items
2 and 3 of the table and replaces them with a single portability period of 13
weeks for DSP.
However, item 15
then inserts new section 1218AA that provides the Secretary with the
discretion to determine an unlimited maximum portability period for DSP if
certain conditions are met.
These conditions
are set out in new subsection 1218AA(1) and are satisfied if a
person:
• is a severely disabled person;
and
• is receiving DSP;
and
• has a terminal illness;
and
• is leaving Australia permanently to be
with or near a family member of the person or to return to the person’s
country of origin.
If a person has been granted
unlimited portability for DSP under this new rule but, during the period of
absence, ceases to meet one or more of the conditions set out above, then the
person would become subject to the standard 13 week maximum portability period.
The 13 week portability period would run from the day the person ceased to
meet the relevant condition for unlimited portability. These revocation rules
are in new subsections 1218AA(2) and
(3).
Items 13 and 14 omit all other
references to ‘26’ weeks in the table at the end of section 1217 and
substitute references to ‘13’ weeks. The effect is a new maximum
portability period of 13 weeks for all other payment types that currently have a
26 week maximum portability period.
The
remaining amendments to the Social Security Act are consequential upon, or
consistent with, the new portability periods set out in the table at the end of
section 1217.
Part 2.10 of the Social Security
Act sets out the rules relating to qualification and payability of parenting
payment (PP). One of the qualification conditions for PP is that the person has
a PP child. Sections 500F to 500H operate to modify the definition of PP child
in situations where a child is absent from Australia for more than 26 weeks and
where a child is born outside Australia. These provisions set up a portability
period of 26 weeks for a PP child.
Item
7 replaces existing references to ‘26’ weeks in these provisions
with references to ‘13’ weeks. The note changes the heading to
section 500F accordingly.
Part 2.24A of the
Social Security Act provides the qualification and payability conditions for the
pensioner education supplement (PES). As part of these conditions, a person
must be an Australian resident and, subject to section 1061PN, in
Australia.
Section 1061PN ensures that a person
who is undertaking qualifying study is taken to be in Australia if the absence
is related to the study or, in any other situation, the absence is for not more
than 26 weeks. Item 8 repeals this reference to ‘26’ weeks
and substitutes a reference to ‘13’
weeks.
This change to the portability rules for
PES is consistent with the broader reduction in portability from 26 to 13
weeks.
Section 1061Q of the Social Security Act
sets out the qualification rules for telephone allowance. Under subsection
1061Q(4A), a person qualifies for telephone allowance if, among other things,
the person is temporarily absent from Australia for a continuous period not
exceeding 26 weeks and was the holder of a seniors health card immediately
before leaving Australia. Consistent with the new portability period of 26
weeks, the reference to ‘26’ weeks in this provision is amended
by item 9 to read ‘13’
weeks.
Section 1061S of the Social Security Act
sets out the rate calculation process for telephone allowance. The table at the
end of subsection 1061S(1) sets out the different rates of telephone allowance
depending on the person’s situation. Of relevance is whether the
person’s partner is the holder of a seniors health
card.
Under subsection 1061S(3A), a
person’s partner is taken to be the holder of a seniors health card if the
partner is temporarily absent from Australia for a continuous period not
exceeding 26 weeks and was the holder of a seniors health card immediately
before leaving Australia. Consistent with the new portability period of 26
weeks, the reference to ‘26’ weeks in this provision is amended by
item 10 to read ‘13’
weeks.
Section 1218B of the Social security Act
ensures that a person’s parenting payment is not portable if, having
previously had parenting payment cease because of overseas absence, the person
returns to Australia for a continuous period of not less than 26 weeks. Item
16 makes a consequential amendment to paragraph 1218B(b) to omit the
existing reference to ‘26’ weeks and replace it with
‘13’ weeks.
Section 1220B of the
Social Security Act provides for the rate of DSP for a severely disabled person
to be calculated using the Pension Portability Rate Calculator after the person
has been continually absent from Australia for more than 26 weeks. This rule
does not apply to a person who qualified for DSP because of becoming unable to
work or permanently blind while an Australian
resident.
The amendment made by item 17
modifies this rule so that it applies in relation to a severely disabled person
who has been granted unlimited portability under new section
1218AA.
Item 18 amends clause 128 of
Schedule 1A to the Social Security Act. The effect is to modify the way in
which the current savings provision in clause 128
operates.
Clause 128 provides that the
amendments to sections 1213A, 1215, 1216, 1220A, 1220B and 1221 made by the
Social Security and Veterans’ Entitlements Legislation Amendment
(Miscellaneous Matters) Act 2000 (the amending Act) do not apply to
specified persons who were overseas on 20 September 2000 (commencement of
the amending Act) until they return to Australia for a continuous period of more
than 26 weeks.
Existing clause 128 has the
broad effect of preserving 12 month portability for certain social security
pensions (the amending Act standardised the portability period for social
security payments to 26 weeks) and ensuring that proportional portability
applies in relation to certain pensions after 12 months (instead of the
‘new’ 26 weeks).
By virtue of
existing clause 128, the current standard 26 week portability period does not
apply to disability support, widow B and wife pensioners who were overseas on
20 September 2000 and who have not returned to Australia for a
continuous period of longer than 26 weeks. These pensioners continue to have
either 12 month portability or, in the case of certain disability support
pensioners, unlimited portability.
To achieve a consistent policy position, the new
provisions in clause 128 ensure that the new 13 week portability rules will
apply to all disability support, widow B and wife pensioners once they return to
Australia on or after
1 July 2004.
However, the Secretary
will also have a discretionary power under new clause 135 of Schedule 1A
(as inserted by item 19) to allow DSP customers to continue to receive
their payment overseas if they currently have an unlimited portability period,
come back to Australia and do not become Australian residents
again.
The effect of clause 128, as it relates
to other payments with unlimited portability, that is, age pension, bereavement
allowance, widow B pension (entitled person) and wife pension (entitled person),
will not change.
Item 19 inserts a new
clause 135 into Schedule 1A to the Social Security Act. This new provision
enables the Secretary to determine unlimited portability for DSP where a
disability support pensioner with an unlimited portability period is absent from
Australia on 1 July 2004, comes to Australia after that date and does not become
an Australian resident again.
This provision
would enable the Secretary to determine that unlimited portability continues for
severely disabled DSP customers who would otherwise be subject to the new 13
week portability and for those DSP customers with unlimited portability
previously saved under clause 128 of Schedule 1A to the Social Security
Act. These circumstances are referred to in the notes at the end of new clause
135.
Item 20 sets out the application
rules for the amendments made by Schedule 6 to the Social
Security Act.
Subitem 20(1) provides
that the amendments apply to absences from Australia that start on or after
commencement (that is, 1 July 2004). The exception, set out in subitem
20(3), is the amendments to Schedule 1A (savings
provisions).
Subitem 20(2) clarifies
that the amendment to section 500H applies to children who come to Australia on
or after 1 July 2004.
Schedule 7 – Technical
corrections
This Schedule makes some minor technical amendments,
commencing at various times as appropriate.
The technical amendments made by this Schedule are to
correct misnumbering and otherwise misdescribed (ie, technically failed)
amendments that resulted from the delayed passage of the Family and
Community Services Legislation Amendment (Australians Working Together and other
2001 Budget Measures) Act 2003 (the AWT Act). In particular, the
technical deficiencies resulted from the interaction of the AWT Act with
other Family and Community Services legislation that was going through
Parliament at the same time and amending some of the same provisions, such as
the Family and Community Services Legislation Amendment (Special Benefit
Activity Test) Act 2002 (the Special Benefit Act). The aim of these
technical amendments is to ensure that Parliament’s clear intention is
given effect in relation to all of these similarly timed Acts, and given effect
on the correct date.
Explanation of
changes
Item 1 repeals subsection 63(5) of the Social
Security Administration Act and substitutes new subsections (5) and (5A). The
AWT Act contained an amendment to subsection (5) but, due to a prior amendment
to subsection (5) brought about by the earlier passage of the Special
Benefit Act, the AWT Act amendment was misdescribed. Accordingly,
subsection 63(5) is repealed and the two new subsections substituted so
that provision is made for the outcomes intended in both the Special Benefit Act
as well as the AWT Act.
Item 2 provides
for the repeal of Part 1 of Schedule 6 to the AWT Act. Both Schedule 1A and
Schedule 6 to the AWT Act contained an amendment to the term
‘receiving’. The two schedules originally had different
commencement dates and it was envisaged that the amendment in Schedule 1A
would operate to repeal the amendment provided for in Schedule 6. Due to
the delay in the passage of the AWT Act, the commencement dates for various
schedules were changed and Schedules 1A and 6 ended up with the same
commencement date. The effect of this was that the amendment in
Schedule 1A was repealed by the later occurring Schedule 6. The amendment
made by this item corrects that unintended
outcome.
Item 3 amends a reference to
the AWT Act that is contained in the Special Benefit Act. The commencement of
Schedule 2 to the Special Benefit Act was contingent upon passage of the AWT
Act. As debate on both Bills was occurring in the course of 2002, the
commencement table in the Special Benefit Act referred to the AWT Act
‘2002’. As the AWT Act ended up being Act Number 35 of 2003,
the reference in the Special Benefit Act is amended by this
item.
Item 4 corrects a reference in
Schedule 5 to the AWT Act. The reference is to subparagraph
‘607(1)(iii)’ when it should have been to a reference to
subparagraph
‘607(1)(b)(iii)’.
Items 5 to 7
as well as items 10 to 18 provide for some numbering corrections
arising as a result of the interaction between the AWT Act, the Special Benefit
Act and the Family and Community Services Legislation Amendment Act
2003.
Item 8 amends subsections 660YAB(1) and (2) and
771(1) and (2) of the Social Security Act to confirm that the AWT Act measure
closing access to mature age allowance and partner allowance is effective from
20 September 2003, as reflected in the commencement provision for the
measure.
Item 9 corrects a punctuation
error.
Item 19 renumbers subsection
1230C(3) of the Social Security Act as subsection (4).