Bills Digest no. 52 2008–09
Families, Housing, Community Services and Indigenous Affairs and
Other Legislation Amendment (Further 2008 Budget and Other Measures)
Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Families,
Housing, Community Services and Indigenous Affairs and Other Legislation
Amendment (Further 2008 Budget and Other Measures) Bill 2008
Date introduced:
18 September 2008
House: House
of Representatives
Portfolio: Families,
Housing, Community Services and Indigenous Affairs
Commencement: The provisions
of this Bill are to commence at a variety of times as set out in proposed
section 2.
Links:
The relevant
links to the Bill, Explanatory Memorandum and second reading speech
can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills
have been passed they can be found at ComLaw, which is at http://www.comlaw.gov.au/.
- To provide for the payment of Maternity Immunisation Allowance (MIA)
in two instalments as children progress through the National Immunisation
Program.
- To provide for the payment of MIA to children adopted from overseas
up until they turn 16 years of age.
- To end eligibility for Partner Service Pension (PSP) for people under
age pension age who are separated from their veteran spouse.
- To set an eligibility age of 50 years for PSP for partners of veterans
in receipt of a disability pension at less than the special rate but
above the general rate.
- To make minor amendments to the child support legislation especially
with regard to a formula that commenced in July 2008.
Schedule 3 of the Bill has been referred to Senate Community affairs
Committee for inquiry and report by 10 November 2008. The committee has
decided to take submissions on Schedule 2 as well. Details of the inquiry
are at the Committee’s webpage.[1]
The 1997 Budget included a package of measures
under the label “Comprehensive National Immunisation Strategy” with the
objective of significantly boosting child immunisation rates in Australia.
Part of the strategy involved changes to Maternity Allowance.
From January 1998, a portion of Maternity
Allowance was renamed Maternity Immunisation Allowance (MIA). It was
paid in respect of children who had reached the age of 18 months and who
had received age-appropriate immunisation (unless the child was exempt
from that requirement). MIA was also paid in respect of children who
were stillborn or died before reaching the age of 18 months. The rate
of MIA at that time was $200.
In July 2004 MIA was made income test free at the same time that Maternity
Allowance was reformed and renamed Maternity Payment (later renamed Baby
Bonus).
Certain of the changes provided for in this Bill were announced in the
2008 Budget. The media release issued at the time by Ministers Macklin
and Roxon indicated that:[2]
"The object of the change is to bring the MIA
in line with the National Immunisation Program and provide an incentive
for parents to ensure their four-year-old children also receive recommended
boosters before they start school," Ms Macklin said.
"From 2009, the MIA will be divided equally into
two payments for around 270,000 families who receive the entitlement
each year," Ms Roxon said. "Both instalments will be indexed
twice yearly."
"Under the change, the first MIA instalment will
be made when the child is aged between 18 months and 2 years. The second
will be paid when the child is aged between 4 years, 3 months, and 5
years."
Vaccinations for four-year-olds as recommended in
the National Immunisation Program currently include:
- diphtheria, tetanus and whooping cough
- measles, mumps and German measles
- polio.
The Bill also includes changes to MIA to allow
it to be paid to children adopted from overseas who arrive in Australia
before turning 16 years of age.
The rate of MIA as at October 2008 is a lump sum of $243.30. In the
2007-08 year, MIA was paid in respect of 265 000 children to 260 000 families.[3]
In the 2007-08 year, the MIA is estimated to cost $61 853 000 and in
the 2008-09 year MIA is estimated to cost $50 229 000.[4]
The changes to MIA will save $81.9 million over four years due to the
delay in the payment of part of the MIA.
The government announced changes to the qualification for the Partner
Service Pension (PSP) in the 2008–09 Budget.[5] The changes will cease eligibility for PSP for
those partners who are separated but not divorced from their veteran partner
and who have not reached Age Pension age[6]
or Age Service Pension age.[7]
Eligibility for PSP will cease 12 months after separation or immediately
if the veteran enters into another marriage-like relationship.
The other change to PSP presented in the Bill is to set the eligible
age for PSP at age 50 for the partner of a veteran who is in receipt of
a relevant disability pension or who has at least 80 impairment points
under the Military Rehabilitation and Compensation Act 2004. The
two disability pension rates paid above the General rate and below the
Special rate are the Intermediate rate[8]
and the Extreme Disablement Adjustment (EDA) rate.[9]
The Financial Impact Statement in the Explanatory Memorandum details
there will be some savings attached to this proposed tightening of the
qualification requirements for the Partner Service Pension. These savings
are estimated to be $4.0 million in 2008–09, $10.6 million in 2009–10,
$12.1 million in 2010–11 and $13.9 million in 2011–12.
The Budget papers said:
This measure is expected to provide savings of $77.8
million over four years. Some affected partners will transfer to other
income support payments, resulting in net savings of $33.9 million over
four years.[10]
Most of these savings will arise from lesser number of persons being
able to access the PSP, which is paid at the higher pension rate[11] and also has the more generous
pension means testing (income and assets tests). See ‘How will claimants
be affected’ below.
A PSP can be paid to an eligible:
- partner of a veteran with qualifying service,
- former partner of a veteran with qualifying service, or
- widow or widower of a veteran who had qualifying service.
Eligibility to Partner Service Pension for current partners
A person is eligible for PSP if:
- they are legally married to and living with a veteran, or living in
a marriage–like relationship with a veteran, and
- the veteran is receiving, or is eligible to receive, an Age Service
Pension, or
- an Invalidity Service Pension,
- or the veteran is registered as a member of the pension bonus
scheme, and
the person meets the age and other eligibility requirements– see below.
A person is also eligible if they are a member of a couple and their
partner is a veteran who has rendered qualifying service and the person
is eligible for an Age Pension – see age requirement for Age Pension below.
Eligibility to Partner Service Pension for former partners
PSP may be paid to former partners who are legally married to, but separated
from a veteran. They are eligible if they:
- are the former partner of a veteran who is receiving or is eligible
to receive the Service Pension; and
- meet the age and other eligibility requirements – see below.
Eligibility to Partner Service Pension for widows or widowers
If a person was receiving the PSP immediately before a veteran's death,
they continue to be eligible for PSP. In certain circumstances, a person
may also be eligible for the PSP if:
- immediately before the veteran's death they were receiving a Centrelink
pension or were registered as a member of the pension bonus scheme with
Centrelink or the Department of Veterans’ Affairs (DVA), or
- before the veteran's death they had made a claim for PSP which had
not been determined at the time of their veteran partner’s death.
Eligibility to Partner Service Pension - age and other eligibility requirements
A person must also meet one of the following criteria for PSP. This
does not apply if the person needs to be eligible for an Age Pension.
The person:
- must be qualifying age,[12]
- must have a dependent child when the claim is made,
- their veteran partner is receiving the Special rate disability pension,[13]
or
- their veteran partner is receiving, or eligible to receive, a Special
Rate Disability Pension (SRDP) under the Military Rehabilitation
and Compensation Act 2004.
What is qualifying age for Partner Service Pension?
Qualifying age for PSP is equivalent to veteran Age Service Pension age.[14]
The qualifying age is 60 years for males and currently 58.5 years for
females.
Age requirement for age pension
Some PSP claimants need to be eligible for an Age Pension provided under
the Social Security Act 1991 (SSA). This applies to a person who
is the partner of a person who has rendered qualifying war or warlike
service. To be eligible for an Age Pension under the SSA a person must
be of Age Pension age.[15]
What is a marriage-like relationship?
The changes presented in this Bill to PSP qualification will cease access
to the PSP immediately where a person has separated from a veteran and
the veteran enters into another marriage-like relationship. A marriage-like
relationship is where a couple lives in a marriage-like situation but
are not legally married. Some of the factors considered when deciding
whether two people are living in a marriage-like relationship are whether
they:
- think of themselves as a couple,
- share financial and household responsibilities,
- undertake joint social and leisure activities, and
- appear as a couple to the general community.
This Bill proposes to tighten the access to the PSP to cease eligibility
for those partners who are separated but not divorced from their veteran
partner and who have not reached Age Pension age or Age Service Pension
age. See ‘Eligibility to Partner Service Pension for former partners’
above. Where the partner is aged less than Age Pension age and separated
from the veteran, qualification to PSP will cease 12 months after separation
or immediately if the veteran enters into another marriage-like relationship.
There have been recent changes to the qualification requirements for
the PSP which took effect from 1 July 2008.[16] Those changes saw the raising of the PSP qualification
age from age 50 to Age Service Pension or Age Pension qualification age.
This raised qualification age did not to apply where the person is a partner
of a Special rate disability pensioner[17]
or has a dependent child. This Bill slightly undoes those changes and
restores the age 50 qualification age and access to PSP, where their partner
is a veteran and is in receipt of:
- the Intermediate rate[18]
disability pension,
- the EDA rate disability pension,[19] or
- who has at least 80 impairment points under the Military Rehabilitation
and Compensation Act 2004.
There is no explanation provided in the Explanatory Memorandum or in
the Minister’s second reading speech, when presenting the Bill, as to
why these changes to access to the PSP, that were made earlier this year,
are being made when earlier this year different options were taken. Where
the partner is providing full-time care to the disability pensioner they
may be able to access Carer Payment[20]and
this would obviate the need to access the PSP. Perhaps it was felt the
restrictions to accessing PSP for partners of disability pensioners on
higher rates of payment (which apply when their impairment is significant)
had gone too far. Some partners may not be providing full-time care so
they would not qualify for Carer Payment, but they may still be providing
significant levels of care. Therefore their capacity to qualify for Newstart
Allowance (NSA) and meet work search, work participation and Mutual Obligation
requirements may be limited.
The persons who will not be able to access the PSP will be those who
are married to a veterans’ service pension recipient, are separated for
more than 12 months but not divorced. Most of these persons not able
to access the PSP will be required to access some other form of income
support, mainly Newstart Allowance (NSA).[21]
NSA is paid at the lower allowance rate of payment[22] and has tighter means testing
than PSP, which is paid at the higher pension rate.[23]
Also, on NSA a Health Care Card (HCC) is issued, which basically only
provides access to concessional pharmaceuticals under the Pharmaceutical
Benefits Scheme (PBS). This contrasts with the PSP which qualifies the
recipient to the Pensioner Concession Card (PCC) and access to associated
concessions.[24] NSA has activity test, work search and Mutual
Obligation requirements. PSP has no Mutual Obligation requirements.
A few persons may be able to access a pension rate payment like the Carer
Payment[25] or Parenting
Payment–Single[26] but
most will be required to access NSA.
There is no detail provided in the Budget papers, the Explanatory Memorandum
or in the Minister’s second reading speech when presenting the Bill as
to the numbers of PSP claimants and recipients estimated to be affected
by the reduced access to the PSP for separated partners. In a submission
to the Senate Community Affairs Committee by the Partners of Veterans
Association of Australia Inc it was claimed there are 1 170 separated
wives receiving the PSP – see below.
A total of 1170 Separated wives receive Partners Service
Pension and 420 of these are the Partners of TPI veterans.
DVA has indicated that 590 who are of aged pension
age (63 yrs) will be retained by DVA. The remaining 580 Separated wives
are made up as follows:
265 wives are aged between 58.5yrs and 63urs,
240 wives are aged between 50 yrs and 58.5yrs
75 wives are under 50 years of age.
Total 580
It is of great concern to PVA to note that 362 of
these separated wives are married to veterans who have PTSD as an accepted
disability by the Department of Veteran Affairs.[27]
The source of this information is only indirectly indicated as being
the Department of Veterans’ Affairs (DVA), which is probable, being the
only source that could provide this data. However, this information has
not been published by the Government or DVA.
PSP is a pension rate income support payment that qualifies the person
where they are the partner of a veteran. This is somewhat like the other
partner based income support payments provided under the Social Security
Act 1991, such as the Wife Pension[28] and the Widow Allowance.[29]
There have been no more new grants of Wife
Pension since 1 July 1995. The then government started to phase out
the payment on the grounds that persons of working age should qualify
for an income support payment in their own right, not just because they
are partnered to a person who qualifies for an income support payment.
Interestingly, there has never been a male counterpart of the wife pension,
which is different to PSP where the male partner of a female veteran can
qualify for PSP.
The then government contradicted the logic of the phase out of the Wife
Pension a bit with the introduction of the Widow Allowance from January
1995. Widow Allowance was paid to women who were no longer partnered,
who became separated, divorced or widowed after turning 50 years of age
and who had little or no recent workforce experience. The Widow Allowance
was paid under the same rates and conditions and under the same income
and assets tests as NSA. Widow Allowance was not activity tested and
no job searching was required. However, recipients were eligible for
certain labour market assistance, employment entry payment and education
entry payment.
The Widow Allowance was originally to be phased out from July 2005 by
raising the age of eligibility by one year in each subsequent year. Widow
Allowance arose from the then government concerns about asking older aged
women, who had been dependent on a male partner for a prolonged period
and had no recent attachment to the workforce, to claim NSA and satisfy
the work search and work acceptance requirements. From March 1997, qualification
was extended to women aged 50 years or more who had been widowed after
turning 40 years of age rather than 50 years of age.
Most of the other formerly passive income support programs (that is,
those having no Mutual Obligation) have been modified or curtailed in
the past few years. There have been no more new grants for Widow
Pension since 20 September 1997 and no more new grants of Partner
Allowance or Mature
Age Allowance since 20 September 2003. There have been no more new
grants of Widow
Allowance after 1 July 2005, unless the woman was born on or before
1 July 1955 and new claimants are now required to attend an annual interview.
As said above, the emphasis has been that persons of working age should
qualify for an income support payment in their own right, not just because
they are the partner of a person who qualifies for a payment. Also, the
other emphasis has been for persons of working age to support themselves
from their own employment where they can be reasonably expected to do
so. This was an underlying emphasis in the Welfare to Work and the associated
Mutual Obligation changes of 1 July 2006, which saw access to Parenting
Payment – Partnered and Parenting Payment – Single modified. From July
2006, Parenting Payment – Partnered qualification ceases where the youngest
child is aged 6 or more and also for Parenting Payment – Single, where
the youngest child is aged 8 or more. Where the youngest child is above
these ages, the person is provided with NSA, with its associated requirement
to look for and accept work and Mutual Obligation requirements.
PSP, with its pension rate of payment and pension means test arrangements,
is welfare assistance. In the context of the changes to other comparable
welfare assistance payments, it now seems anomalous a person of working
age can qualify for an income support payment in their own right, just
because they are the partner, or former partner of a veteran.
A major reworking of the Child Support Scheme was introduced from July
2007. This Bill includes a series of small amendments to the new scheme
that address anomalies that have come to light since July 2007.
Item 2 inserts new subsection 39(2A) into the A New
Tax System (Family Assistance) Act 1999 which allows for eligibility
for MIA for children aged between four and five years of age.
Item 6 adds new subsections 39(5) to 39(10) which provide
for the eligibility of children adopted from overseas for MIA up to the
age of 16 years. Older adopted children must meet the immunisation requirements
within two years of their arrival in Australia.
Item 8 adds new subsections 67(2) to 67(5) which provide
for the rate of MIA to be divided into two payments or paid as one payment
under various circumstances.
Items 1 and 2 make amendments to the basic qualification provisions
in the VEA for PSP expanding access to partners of a disability pensioner
aged 50 or more where the disability pensioner is:
- on the Intermediate rate,
- on the EDA rate, or
- is a recipient of a Military Rehabilitation and Compensation Act
2004 Special rate pension with 80 impairment points or more.
Item 5 inserts new provisions into section 38 to cease qualification
to PSP where a PSP recipient is separated from the veteran and the veteran
either enters into another marriage-like relationship or 12 months has
elapsed after separation from the veteran. Item 7 proposes to
insert application provisions referring to the 12 month separation period.
It essentially provides for the counting of the end of the 12 month separation
period to apply in a manner that is not retrospective. The end of the
12 month period cannot be before the commencement of the application of
these provisions which is 1 January 2009.
The schedule makes minor amendments to the child support legislation
that deal with anomalies in the reforms to the formula that commenced
in July 2007.
The amendments to the Partner Service Pension (PSP) qualification allowing
access to PSP for partners of disability pensioners with more significant
levels of impairment is perhaps an indication that the changes to the
PSP access rules went too far earlier this year. However, there is no
actual explanation provided as to why this back–tracking is being done.
The changes to PSP qualification for separated partners of veterans where
the veteran enters into a marriage-like relationship or 12 months after
separation may be appropriate. However, these changes raise the whole
issue of access to PSP for partners of veterans where the partner is of
working age. The question which arises is whether there should still
be such generous access to a passive income support payment for people
merely because they are, or were, partnered with a veteran.
[2]. The Hon. J Macklin MP, Minister
for Families, Housing, Community Services and Indigenous Affairs, and
the Hon. N Roxon MP, Minister for Health and Aging, “Maternity Immunisation
Allowance – eligibility change”, Media Release, 13 May 2008.
[5].
Australian Government, Budget Paper No. 2: Budget Measures 2008–09, Commonwealth
of Australia, Responsible Economic Management — Partner Service Pension
— cease payment to married partners who are separated but not divorced,
Canberra, 13 May 2008, p. 410, http://www.budget.gov.au/2008-09/content/bp2/html/expense-11.htm
, accessed on 30 September 2008.
[6].
The age pension age for a male is age 65. For a female, the age is being
raised by six months every two years so that by 1 January 2014, female
and male pension ages will be the same. The table below show when females
qualify.
Date of Birth
Qualifying age
Before 1 July 1949 Eligible
1 July 1949 to 31 December 1950 58.5
1 January 1951 to 30 June 1952 59
1 July 1952 to 31 December 1953 59.5
[7].
For males, the age service pension age is 60. For female veterans with
qualifying service and female ISS qualifying age, the age is being raised
by six months every two years so that by 1 January 2014, female and male
age service pension ages will be the same. The table below show when females
qualify.
Date of Birth
Qualify at
Born before 31 December 1947
now
1 January 1948 to 30 June 1949
58
1 July 1949 to 31 December 1950
58.5
1 January 1951 to 30 June 1952
59
1 July 1952 to 31 December 1953
59.5
[13]. Special rate disability
pension is more commonly known as the Totally and Permanently Incapacitated
pension (T&PI) and is payable where the person has an impairment of
70% of more and is unable to work for at least 8 hours a week.
[20]. A person may get Carer
Payment (adult) if they provide constant care in the home of the person
they care for and the caree is a person aged 16 or over with a severe
disability or medical condition.
[24]. Concessions from state
and local government authorities may include:
- reductions in property and water rates,
- reductions in energy bills,
- a telephone allowance,
- reduced fares on public transport,
- reductions on motor vehicle registration, or
- one or more free rail journeys within the state each year.
[29]. Widow
allowance is payable to a female person was born on or before 1 July 1955,
is not a member of a couple, has become widowed, divorced or separated
(including separated de facto) since turning 40 and has no recent workforce
experience.
Dale Daniels and Peter Yeend
31 October 2008
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
This work is copyright. Except to the extent of uses permitted by the
Copyright Act 1968, no person may reproduce or transmit any part of this
work by any process without the prior written consent of the Parliamentary
Librarian. This requirement does not apply to members of the Parliament
of Australia acting in the course of their official duties.
This work has been prepared to support the work of the Australian Parliament
using information available at the time of production. The views expressed
do not reflect an official position of the Parliamentary Library, nor
do they constitute professional legal opinion.
Feedback is welcome and may be provided to: web.library@aph.gov.au.
Any concerns or complaints should be directed to the Parliamentary Librarian.
Parliamentary Library staff are available to discuss the contents of publications
with Senators and Members and their staff. To access this service, clients
may contact the author or the Library’s Central Entry Point for
referral.
|
