Senate debates

Monday, 21 November 2011


Social Security and Other Legislation Amendment Bill 2011; Second Reading

12:25 pm

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Hansard source

I rise to speak on the Social Security and Other Legislation Amendment Bill 2011. This bill will make a number of amendments to the Social Security Act 1991 and also includes amendments to the Disability Services Act 1986 and the Veterans' Entitlements Act 1986.

Schedule 1 of the bill makes changes to allow for parenting payment recipients to access the bereavement allowance following the death of a partner. The original purpose of the legislation was that, following the death of a partner, the surviving partner would continue to receive parenting payment single. This was in lieu of transferring temporarily to the equivalent of the bereavement allowance and then back to parenting payment single. There has traditionally been no financial advantage in transferring between these payment types. Allowing parenting payment recipients to temporarily transfer to bereavement allowance will provide for additional assistance following a family tragedy. This measure is expected to cost less than $1 million over the forward estimates. The amendments in this schedule will commence on 1 January 2012.

Schedule 2 removes the family member exemption from the two-year newly arrived resident's waiting period before special benefit is paid. Special benefit is an income support payment for people in severe financial need due to circumstances beyond their control who are not eligible for other Centrelink pensions or benefits. At present, special benefit is payable to temporary visa holders on arrival in Australia if they are suffering hardship. Other migrants are subject to the newly arrived resident's waiting period and therefore must wait two years before special benefit is payable. However, exemptions do apply to individuals who can demonstrate financial hardship and a substantial change in circumstances beyond their control after arrival in Australia. An exemption from the newly arrived resident's waiting period is provided to a family member, which is defined as either a partner or dependent child, under paragraph 3(1)(e) or (g) of the Social Security Legislation Amendment (Newly Arrived Resident's Waiting Periods and Other Measures) Act. The effect of this schedule is to add a new paragraph, 739A(8), to the Social Security Act. The effect of this amendment is to remove the exemption from the need to demonstrate a substantial change in situation beyond their control that exists for provisional partner visa holders who are applying for special benefit. In other words, provisional partner visa holders will need to demonstrate they have had substantial changes of circumstances beyond their control after having arrived in Australia. This test is in addition to financial hardships tests they will need to satisfy in order to access the special benefit. This measure is expected to save $38.1 million over the forward estimates.

Schedule 3 is a matter of some public interest and has been subject to a Senate inquiry. This schedule removes the current impairment tables from 1 January next year and enables the minister to introduce new impairment tables via a legislative instrument. Placing the tables in the legislative instrument and removing them from the Social Security Act should provide greater ease in updating the tables regularly in response to developments in medical or rehabilitation practice.

The impairment tables are currently in schedule 1B of the Social Security Act and have been there since 1991. They are used in assessing a person's work related impairments to determine eligibility for the disability support pension. In the 2009-10 budget the government announced its intention to review and update the impairment tables and commissioned an advisory committee to oversee the review and to recommend changes. It is the view of the opposition that it is appropriate that the impairment tables are reviewed from time to time.

There has been substantial growth in the number of disability support pensioners. In 1990 there were around 320,000 people on the DSP. As at June this year, there were 818,850. That is growth of over half a million people on the DSP in a period of just over 21 years. Over the last four years, from June 2007 to June 2011, the number of DSP recipients grew by over 100,000 or 14.6 per cent. As at June 2011, there were about 290,000 more people on the DSP than on the Newstart allowance, and little more than one per cent of disability support pensioners move back into the workforce each year.

The current impairment tables consist of 22 tables that are mainly based on body systems. These tables have effectively remained unchanged since the reforms of 1997. The advisory committee that was charged with looking at the tables confirmed that they were, indeed, outdated, inappropriate for use and in need of significant reform. The committee made 12 recommendations, including the replacement of the current impairment tables with draft tables which were outlined in detail in the report.

The committee also found that there is a need to move from a medical diagnosis to an assessment based on the capacity of an individual to work or to undertake training. The opposition is of the view that that is a very positive move—away from a medical approach to one that is based more on the capacity of an individual to work. Hopefully, that change will see more Australians in the workforce.

The schedule will also provide an easier avenue than exists at the moment for future governments to revise and update the impairment tables, as I mentioned. This will accommodate advances in our knowledge of medicines and therapies. It should be noted that there will be a review of these tables in 18 months after they are implemented on 1 January and that the report recommended that the tables be reviewed regularly thereafter. We think that is a good idea. This is an appropriate reform. However, I note in passing, as I am duty-bound to do, that the current government does not have what you would call a terrific track record when it comes to implementing significant reform. But it is my earnest hope, Mr Acting Deputy President Fawcett, as I know it is yours, that this is one area where the government will surprise us all. But we shall wait and see.

The committee's inquiry into schedule 3 made several recommendations that addressed some concerns that stakeholders had. A number of stakeholders queried the consultation process for the impairment tables, and the committee recommended that the government find ways to expand consultation and evaluation of the revised impairment tables. This expanded consultation should include information for current DSP recipients about the impact of the tables when a medical review is conducted.

The second recommendation addresses concerns raised by stakeholders about interassessor reliability. The advisory committee reported a difference in 35 per cent of assessments conducted by different assessors. The committee found that this has the potential to create a degree of uncertainty for DSP applicants. It recommended that FaHCSIA regularly check the interassessor reliability as part of the department's quality assurance mechanism.

The committee also heard from several stakeholders about issues relating to specific tables. The committee heard from the National Council on Intellectual Disability, which raised issues with the impairment table for intellectual function. I understand that FaHCSIA asked NCID to prepare a proposal to establish a technical group to look at alternatives for that table as it applies to people with an assessed IQ between 70 and 79. I look forward to seeing the outcomes of those discussions in the revised impairment table for intellectual function.

The committee also heard from the Australian Pain Management Association and Painaustralia regarding the treatment of persistent pain under the tables. I understand that FaHCSIA has had discussions with these groups regarding the issues they raised. The Mental Health Council of Australia also raised concerns regarding the application of the impairment tables to co-occurring and episodic mental health conditions. These concerns have been addressed, to an extent, in the introduction to draft revised impairment table 5, which incorporates recurring psychiatric episodes.

The committee also heard that there were a number of concerns in the disability employment sector about the impact of the government's reforms combined with other reforms that came into effect on 3 September this year. The changes to the impairment tables will place additional pressure on disability employment providers from next year. During Senate estimates we found out that the Department of Education, Employment and Workplace Relations believe that an additional 13,000 people will be using employment services provided by the government. The department estimated that around 80 per cent of these would be using Disability Employment Services and the remaining 20 per cent would be using Job Services Australia. The government must ensure that disability employment providers are adequately equipped to accommodate the increased demand for their services.

Schedule 4 provides for the introduction of a third-party-certification quality assurance system for disability advocacy providers. In 2010-11 FaHCSIA provided nearly $16 million in funding to the National Disability Advocacy Program, to 62 advocacy providers. Under the proposed QA system, the compliance of these advocacy providers with the disability advocacy standards legislative instrument will be assessed by an independent, third-party certification process. This process will be based on the Joint Accreditation System of Australia and New Zealand that provides accreditation to certification bodies to undertake certification assessments of disability advocacy services.

The introduction of this schedule follows a consultation process which was initiated by the former government following a review of the National Disability Advocacy Program in 2005-06. In response to the conclusions of the report, the government provided an additional $12.2 million to NDAP. The previous government's budget measure included funding for the establishment of a national quality assurance regime for better disability advocacy services. It provided funding for the quality improvement strategy, a successful trial and an independent evaluation in consultation with the disability advocacy services sector. The evaluation recommended formal implementation, and this schedule effectively delivers on work that was undertaken by the previous government.

A key feature of the proposed new quality assurance system is the inclusion of 11 draft disability advocacy standards, 24 key performance indicators and certification of compliance against these standards by independent accredited certification bodies. I would like to add briefly that the third-party certification process for disability advocacy services, outlined in schedule 4, has been in place successfully with the other disability employment providers since 2002.

Schedule 5 makes some amendments aimed at improving the integrity of treatment of certain asset-test-exempt income streams. Lifetime and life expectancy income streams receive concessional treatment for the assets test under social security law provided they meet the relevant sections under the Social Security Act. This means that the asset value of the income stream is not taken into account when determining whether a social security payment is payable to a person. The Veterans' Entitlements Act 1986 provides a similar concessional treatment under its assets test when the equivalent requirements are met.

Over time, an inequity has arisen between social security recipients and veterans affairs pensioners. Inconsistencies in the treatment of self-managed superannuation funds and small APRA funds has led to some social security recipients and veterans affairs pensioners receiving concessions and a higher rate of entitlement payments without meeting their obligations under the act. The amendments in schedule 5 seek to improve on the existing rules by clarifying that self-managed super funds and small APRA funds may provide only one actuarial certificate for each financial year. They will also clarify that the certificate must be provided within 26 weeks of the beginning of the financial year. If a person does not provide the appropriate actuarial certificate in relation to the income stream by the end of the 26-week period the income stream will lose its asset test exemption. These changes are intended to improve the integrity of the current arrangement.

Schedule 6 makes a clarification that payments made by an employer to an employee in lieu of notice of termination are regarded as redundancy payments under social security law. When a person makes a claim for an income support payment, Newstart, the DSP or sickness allowance, for example, an income maintenance period may apply. During this period redundancy or leave payments are treated as income under the Social Security Act. People who have received a redundancy payment, for example, are expected to use that payment to support themselves before turning to the social security system for assistance. This schedule amends the definition of redundancy payment to include payments in lieu of notice. This will ensure that payments that are made in lieu of notice for the termination of employment are included for the purposes of receiving an income support payment.

In summary, this bill makes a number of sensible amendments to the Social Security Act, some of which will result in savings. The coalition will not be opposing this bill.


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