Wednesday, 11 September 2019
Social Services Legislation Amendment (Payment Integrity) Bill 2019; Second Reading
That this bill be now read a second time.
The government is committed to ensuring our welfare system is sustainable into the future so that we can afford the essential services that Australians rely on.
This bill reintroduces three measures designed to improve the integrity and sustainability of the welfare payment system:
Together, the measures in the bill are estimated to improve the budget bottom line by $291.5 million over the forward estimates. Enhanced Residency Requirement for Australian Pensions
From 1 January 2020, the first measure in this bill will strengthen the residency requirements for the aged pension and disability support pension, (DSP).
Currently, to qualify for the aged pension or DSP, a person must be an Australian resident for a total of 10 years, with at least five of those years being continuous. However, there is no requirement for those 10 years to be during a person's working life—that is, between 16 years of age and age-pension age—or for a person to demonstrate self-sufficiency during that time.
Under this measure, to qualify for the age pension or DSP, a person needs to have 10 years continuous Australian residence and either five years of this residence during their working life; or greater than five cumulative years residence while not in receipt of an activity tested income support payment.
The community reasonably expects that people choosing to migrate to Australia, including those who come later in life, should be self-sufficient to the greatest extent possible. It is estimated that less than one per cent of the people applying for the aged pension or DSP will be impacted by this measure.
This measure is expected to result in savings of $32.3 million over forward estimates (DSS administered impacts only).
Changes to the payment of the pension supplement for permanent departure overseas and temporary absences
The second measure in the bill will cease payment of the basic amount of the pension supplement. The pension supplement is designed to alleviate the cost-of-living pressures for income support recipients living in Australia.
Currently, if a recipient goes overseas, their pension supplement is reduced to the basic amount after six weeks temporary absence from Australia, or immediately for permanent departures.
The basic amount of pension supplement is equivalent to the former GST supplement, which was introduced to compensate recipients for increases in the cost of living as a result of the GST. Income support recipients who are outside of Australia for more than six weeks, or who leave Australia permanently, do not need to receive this ongoing compensation.
This measure will provide savings of $154.4 million over the forward estimates based on a 1 January 2020 start date.
Increase to the liquid asset s test waiting p eriod to increase self-reliance
The final measure in this bill will increase the maximum liquid assets test waiting period from 13 weeks to 26 weeks for new income support claimants from 1 January 2020.
The liquid assets test waiting period is the period of time that a person claiming youth allowance, Austudy, Newstart allowance or sickness allowance is expected to use their liquid assets—such as cash, bank deposits, shares—for self-support before relying on taxpayer funded income support.
The liquid assets test waiting period may be between one and 13 weeks, depending on the amount of liquid assets the person has. The length of the waiting period increases by one week for every $500 held above the threshold for single people with no children, or $1,000 for couples and people with children.
For example, a single person with no children and $5,500 in liquid assets would serve a one-week liquid assets test waiting period. A person with $6,000 would serve two weeks. This ensures that the liquid assets test waiting period better reflects the current profile of claimants and their capacity to support themselves.
Claims lodged on or after 1 January 2020 will be subject to the new maximum length of the liquid assets test waiting period. Claimants already serving a liquid assets test waiting period on 1 January 2020 will not have their liquid assets test waiting period extended.
This measure is expected to result in savings of $104.8 million over the forward estimates.
We have a duty to taxpayers and recipients alike to make sure that Australia's welfare payment system is fair and sustainable.
Together, the measures in the bill will make sensible changes to safeguard the long-term sustainability of our welfare payment system while still ensuring appropriate support for those who need it.