Commonwealth of Australia Explanatory Memoranda

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SOCIAL SERVICES LEGISLATION AMENDMENT (BUDGET REPAIR) BILL 2015

                   2013-2014-2015-2016




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                         SENATE




     SOCIAL SERVICES LEGISLATION AMENDMENT
             (BUDGET REPAIR) BILL 2015




    SUPPLEMENTARY EXPLANATORY MEMORANDUM




  Amendments to be moved on behalf of the Government




              (Circulated by the authority of the
 Minister for Social Services, the Hon Christian Porter MP)
                   SOCIAL SERVICES LEGISLATION AMENDMENT
                           (BUDGET REPAIR) BILL 2015

              Amendments to be moved on behalf of the Government

OUTLINE

These Government amendments change the commencement dates for three of the
four Schedules to the Bill.

The Bill currently provides for Schedule 2 (Pensioner education supplement)
and Schedule 3 (Education entry payment) to commence on 1 January 2016. This is
now deferred in both cases to the first 1 January or 1 July to occur on or after Royal
Assent. The earliest commencement would therefore be 1 July 2016. Schedule 2
will cease the pensioner education supplement, which in broad terms is a payment
that assists students with the ongoing costs of full-time or part-time study.
Schedule 3 will cease the education entry payment, which broadly assists with
education expenses and is paid once a year to eligible recipients.

Some changes are also made to the application and saving provisions for the
cessation of the education entry payment as a result of the changed
commencement.

In relation to Schedule 4 (Indexation):

      The Bill currently provides for the implementation from 1 January 2016 of the
       amendments that maintain at level for three years the income free areas and
       other means test thresholds for student payments, including the student
       income bank limits. This is now deferred to 1 January 2017.
      The Bill currently provides for the implementation from 1 July 2016 of the
       amendments that maintain at level for three years the income free areas for
       all working age allowances (other than student payments) and for parenting
       payment single.      Recognising the potential for delays to the Bill,
       the implementation of this amendment is now amended to the first 1 July to
       occur on or after Royal Assent.

The commencement of Schedule 1 (Proportional payment of pensions outside
Australia) will remain at 1 January 2017.

Financial impact statement

MEASURE                                    ESTIMATED REVISED FINANCIAL IMPACT
                                           OVER THE FORWARD ESTIMATES (SAVINGS)
Pensioner education supplement             Saving of $214.8 million *
Education entry payment                    Saving of $53.1 million *
Indexation                                 Saving of $85.1 million *
* Note: Refers to administered funding for affected social security payments only and is not net of
implementation funding. Assumes a 1 July 2016 start date for all of the above measures other than
pauses to student payment thresholds.
                 SOCIAL SERVICES LEGISLATION AMENDMENT
                         (BUDGET REPAIR) BILL 2015


             Amendments to be moved on behalf of the Government

NOTES ON AMENDMENTS

Amendment 1 amends the commencement table in clause 2 of the Bill. Under the
amended table, Schedules 2 and 3 commence on the first 1 January or 1 July after
the day the Act receives the Royal Assent (instead of 1 January 2016).

Amendment 2 amends an application provision, relating to the cessation of
education entry payment, as a result of the changed commencement. Subitem 31(2)
of Schedule 3 to the Bill is modified so that Part 2.13A of the Social Security
Act 1991 (which provides for the education entry payment and is repealed on
commencement), continues to apply after commencement in relation to claims made
before commencement where the person was qualified for the payment before
commencement. Amendment 3 makes a similar amendment to subitem 31(5),
which relates to the cessation of education entry payment from the Veterans'
Entitlements Act 1986.

Amendment 4 recasts new subsection 1192(4AB) (as inserted by item 1 of
Schedule 4 to the Bill) so the relevant payment free areas are not indexed on 1 July
of the first financial year on or after Royal Assent and on 1 July of the next
two financial years.

Amendment 5 recasts new subsection 1192(5AAA) (as inserted by item 2 of
Schedule 4) so the pension free area for parenting payment single is not indexed on
1 July of the first financial year on or after Royal Assent and on 1 July of the next two
financial years.

Amendment 6 is a technical amendment that omits from subsection 1192(5AAB)
the reference to item 24 of the CPI indexation table. Item 24 (which referred to the
youth allowance assets value limit for a person who was not independent) no longer
exists, having been repealed on 1 January 2016 by Schedule 1 to the Social
Services Legislation Amendment (More Generous Means Testing for Youth
Payments) Act 2015.

Amendment 7 amends new subsection 1192(5AAB) (as inserted by item 2 of
Schedule 4) by omitting existing references to 1 January of 2016, 2017 and 2018.
These dates are replaced by 1 January 2017, 1 January 2018 and 1 January 2019.
The relevant free areas and income limits would not be indexed on those dates.