Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

Back in April 2011, just a month ago, the OECD released a report called Doing better for families. It was a report into the condition of children in countries, and I have to say that the information on Australia did not make particularly pleasant reading. The sole parent employment rate was found to be one of the lowest in the OECD, which contributed to an above average number of children living in no-income households. In fact, around one in five children lived in such a household and it was projected that that number would increase by about 20 per cent over the next 25 years. In general the report found that too many single parents were benefit dependent and far too many children in both single and partnered families were living in no-income households.

As we know, joblessness among families is a significant social and economic problem facing this country. Australia has one of the highest proportions of children living in jobless families in the OECD. In February 2011 more than 640,000 families in Australia with dependent children were on income support. Some 40 per cent of these were jobless families with no reported incomes in the last 12 months, and around 70 per cent of jobless families were single parent families. All of us in our own electorates meet people in circumstances such as this. When I am doorknocking I quite frequently find families that are sometimes third and fourth generation jobless. Joblessness is associated with high rates of poverty, poorer health status and lower education attainment for both parents and their children.

Some parents spend a long time on income support and some spend their whole lives on it. For example, parents spend an average of between five and seven years on parenting payment and then they move onto other income support payment such as Newstart allowance. We all know that extended periods of income support reliance are associated with ongoing high levels of disadvantage. If there were ever a time to make a move on this, it is now. It was also the time during the mining boom mark 1 to move on this but now, as we enter mining boom mark 2, it is well and truly time for us as a nation to make serious inroads into joblessness among families.

We have a comprehensive plan to build Australia's future workforce, and the Social Security Amendment (Parenting Payment Transitional Arrangement) Bill is a very important part of that. We have a long way to go on this. There have been some improvements. Back in 1990, for example, the employment rate for mothers with a youngest child under six was only about 42 per cent, less than the OECD average of about 48 per cent. By 2002 we had increased slightly, from 32 per cent to 45 per cent over nearly 11 years, but the OECD had increased to 59 per cent. The OECD continued to increase, as have we, but we are still below the OECD average.

The previous coalition government took some steps to improve the situation in their Welfare to Work package, introduced on 1 July 2006. But when they introduced that, they wussed it. I do not know whether that is parliamentary language, but they definitely wussed it. They did something that they quite frequently did when they were in government—if they introduced a new set of rules, particularly in the welfare area, they tended to exempt for very long periods of time people who were already on the benefit. The grandfathering clauses, or the transitioning arrangements, which you might have expected to last a few years sometimes lasted for much longer than that—sometimes for the life of the recipient. This is one of those cases, and I am going to explain these grandfathering clauses. If you have not heard this before you might find it difficult to believe because, quite frankly, exactly what they did was unbelievable.

Prior to Welfare to Work changes, parents were entitled to parenting payment until their youngest child turned 16. When they introduced the Welfare to Work changes, which came into effect on 1 July 2006, when a parent had their first child and first came into contact with parenting payment they were eligible for that parenting payment until their child turned six, if they were a couple, or eight if they were single. If I had my first child after 1 July 2006, when I first came into contact with the parenting payment, there was quite a reasonable benefit period and I could have six or eight years on the parenting payment and as my a child got older I was expected to move off it. If I had a child before 1 July 2006, I was able to retain the existing arrangement until the child turned 16. So if I had a child already, prior to 1 July 2006, that new rule did not apply to me—I was able to keep my parenting payment as my child turned four or five or six or seven or eight, right up until they turned 16.

There was some justification for that, but they went further. They did not attach the grandfathering clause to the child—they actually attached it to the parent. If I had been receiving a parenting payment before 1 July 2006, no matter how many children I had, even 10 or 15 years into the future, for each of those children I would be entitled to keep the parenting payment until they turned 16. If I had had my first child in 2005, and then had another one in 2008 and one in 2010 and through to another one in 2015, I would still be entitled to the parenting payment until that last child turned 16. That is an extraordinary grandfathering clause. When I first read it, I had to read it three times—it really is absurd.

We are acting in this bill to introduce some sanity and some equity, but we are not doing it in a way that provides surprises for families. We also, in effect, are grandfathering people on the existing arrangement so they can transition over in a reasonable way, with a reasonable expectation of what the rules will look like as their child gets a bit older. The bill really aligns the eligibility of parents and children who were grandfathered with that of those who started receiving the parenting payment after the Welfare to Work changes came into effect on 1 July 2006.

This means that a single parent who has a new child after 1 July this year—in other words, if you are about to have a child and you have the child after 1 July this year—will only be able to receive the same parenting payment that parents who had their children after 1 July 2006 receive. That means that you will be eligible to receive the parenting payment until the child turns six if you are in a partnered couple and eight if you are in a single couple. That absolutely brings grandfathered parents into line with other parents who have children. That will apply from 1 July 2011, so it is not retrospective. That means that if you had your first child prior to 1 July 2006 and you have had a couple of children since then and are having another one, the new parenting payment will apply to that new child. That will expire when the child turns six or eight, depending on your circumstances.

In this bill we have also dealt with what happens to parents with children born prior to 1 July 2006. We are also bringing them into line over a period of years. We are giving parents essentially 18 months to get prepared for the change. A grandfathered parent will have their parenting payments cease when their youngest child is 12 or 13 as of January 2013. That means that if you had a child who was, say, six or so on 1 July 2006—and I know this is very complicated, because it was a very silly grandfathering clause—

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