Social Security and Veterans’ Affairs Legislation Amendment Act 1995

No. 1 of 1996

An Act to amend the law relating to social security and veterans’ affairs, and for related purposes

[Assented to 9 January 1996]

The Parliament of Australia enacts:

Short title

1. This Act may be cited as the Social Security and Veterans’ Affairs Legislation Amendment Act 1995.

Commencement

2.(1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

(2) Part 1 of Schedule 8 is taken to have commenced on 1 January 1995.

(3) The following provisions commence, or are taken to have commenced, on 20 March 1996:

(a) Schedules 2 and 3;

(b) Part 1 of Schedule 10.

(4) The following provisions commence, or are taken to have commenced, on 1 July 1996:

(a) Part 2 of Schedule 1;

(b) Schedule 6 and Part 1 of Schedule 9;

(c) Part 2 of Schedule 10;

(d) Part 1 of Schedule 11;

(e) Part 2 of Schedule 16.

(5) The following provisions commence, or are taken to have commenced, on 20 September 1996:

(a) Schedules 4 and 5;

(b) Part 2 of Schedule 9;

(c) Part 3 of Schedule 10;

(d) Division 1 of Part 2 of Schedule 11;

(e) Schedules 12, 13, 14 and 15.

(6) Division 2 of Part 2 of Schedule 11 commences on 1 July 1997.

(7) Subject to subsection (8), Schedule 7 and Schedule 17 commence on a day or days to be fixed by  Proclamation.

(8) If Schedule 7 or Schedule 17 does not commence under subsection (7) within 6 months after the day on which this Act receives the Royal Assent, that Schedule commences on the first day after the end of that period.

Amendments

3.(1) The Social Security Act 1991 is amended in accordance with the applicable items in Schedules 1, 2, 3, 4, 5, 6,7 and 8 and the other items in those Schedules have effect according to their terms.

(2) The Veterans' Entitlements Act 1986 is amended in accordance with Schedules 9, 16 and 17.

(3) The National Health Act 1953 is amended in accordance with Schedule 10.

(4) The Income Tax Assessment Act 1936 is amended in accordance with Schedule 11.

(5) The Childcare Rebate Act 1993 is amended in accordance with Schedule 12.

(6) The Health Insurance Act 1973 is amended in accordance with Schedule 13.

(7) The Farm Household Support Act 1992 is amended in accordance with Schedule 14.

(8) The Disability Services Act 1986 is amended in accordance with Schedule 15.

___________

SCHEDULE 1 Subsection 3(1)

AMENDMENTS OF THE SOCIAL SECURITY ACT 1991 RELATING TO EXTENDED DEEMING

PART 1—AMENDMENTS COMMENCING ON ROYAL ASSENT

1. Paragraph 1074A(1)(a):

Omit the paragraph, substitute:

“(a) an accruing return investment that was made or acquired before 1 January 1988; or”.

2. Sections 1075, 1076, 1077, 1079:

Repeal the sections.

3. Schedule 1A:

Add at the end:

Provisions regarding the treatment of returns from the realisation of certain investments

“81 A.(1) If:

(a) before the commencement of this clause, a person realised an investment; and

(b) section 1075 of this Act, as in force immediately before the commencement of this clause, applied to the person as a result of the realisation of the investment; and

(c) the period of 12 months commencing on the day on which the investment was realised had not expired when this clause commenced;

sections 1075 and 1076 of this Act, as in force immediately before the commencement of this clause, are taken to continue to apply to the person in relation to the realisation of the investment until:

(d) the end of the period referred to in paragraph (c); or

(e) the end of 30 June 1996;

whichever is the earlier.

“(2) If:

(a) before the commencement of this clause, a person realised an investment; and

(b) section 1077 of this Act, as in force immediately before the commencement of this clause, applied to the person as a result of the realisation of the investment; and

SCHEDULE 1—continued

(c) the period of 12 months commencing on the day on which the investment was realised had not expired when this clause commenced;

sections 1077 and 1079 of this Act, as in force immediately before the commencement of this clause, are taken to continue to apply to the person in relation to the realisation of the investment until:

(d) the end of the period referred to in paragraph (c); or

(e) the end of 30 June 1996;

whichever is the earlier.”

6. Subsection 8(1) (definition of available money):

Omit paragraph (c), substitute:

“(c) is not the subject of a loan made by the person;”.

7. Subsection 8(1) (definition of income):

Omit Notes 1, 2 and 3, substitute:

"Note 1: See also sections 1074 and 1075 (business income), sections 1076-1084 (deemed income from financial assets) and sections 1095-1099 (income from retirement funds and annuities).''.

8. Subsection 8(1) (definition of income) (Note 4):

Omit “4”, substitute “2”.

9. Subsection 8(1) (definition of income) (Note 5):

Omit “5”, substitute “3”.

10 Subsection 8(1) (definition of ordinary income):

Omit Note 3, substitute:

“Note 3: For provisions affecting the amount of a person’s ordinary income see sections 1072 and 1073 (ordinary income concept), sections 1074 and 1075 (business income), sections 1076-1084 (deemed income from financial assets) and sections 1095-1099 (income from retirement funds and annuities).".

SCHEDULE 1—continued

11. Subsection 9(1) (definition of friendly society):

Omit all words after paragraph (b).

12. Subsection 9(1) (definition of return):

Omit “investment (including an investment in the nature of superannuation)”, substitute “investment in the nature of superannuation”.

13. Subsection 9(1) (definitions of accruing return investment, annual rate of return, eligible investment, investment product, market-linked investment, statutory rate of return):

Omit the definitions.

14. Subsection 9(1):

Insert:

“financial asset means:

(a) a financial investment; or

(b) a deprived asset.

Note: For deprived asset see subsection 9(4).

financial investment means:

(a) available money; or

(b) deposit money; or

(c) a managed investment; or

(d) a listed security; or

(e) a loan that has not been repaid in full; or

(f) an unlisted public security; or

(g) gold, silver or platinum bullion.

pensioner couple means a couple, one or both of the members of which are receiving a social security pension, a service pension or a rehabilitation allowance.

unlisted public security means:

(a) a share in a public company; or

(b) another security;

that is not listed on a stock exchange.”.

15. Paragraph 9(1C)(e):

Omit the paragraph, substitute:

“(e) a loan;”.

16. Subsection 9(1C) (Note 3):

Omit the Note, substitute:

“Note 3: For provisions relating to when a loan is taken to be made see subsection (2).”.

SCHEDULE 1—continued

17. Subsections 9(3) and (4):

Omit the subsections, substitute:

“(2) The following rules apply for the purposes of this Act:

(a) the acquisition by a person of debentures, bonds or other securities is treated as the making of a loan by the person;

(b) a person is not treated as having made a loan merely because:

(i) the person has an account with a financial institution; or

(ii) the person has paid an entry contribution.

Note: For entry contribution see section 1147.

“(3) Subsection (2) does not limit the meaning of the word loan in this Act.

“(4) For the purposes of this Act, an asset is a deprived asset if:

(a) a person has disposed of the asset; and

(b) the value of the asset is included in the value of the person’s assets by section 1124A, 1125, 1125A or 1126.”.

18. Paragraph 9(10)(b):

Omit the paragraph.

19. Section 22 (definition of SSAT rate of return decision):

Omit the definition.

20. Section 1064 (Pension Rate Calculator A—point 1064-E1—Note 2):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

21. Section 1066 (Pension Rate Calculator C—point 1066-El—Note 2):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

SCHEDULE 1—continued

22. Section 1066A (Pension Rate Calculator D— point 1066A-F1—Note 2):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

23. Section 1067 (Benefit Rate Calculator A—point 1067-H1— Note 3):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

24. Section 1067E (Sickness Allowance Rate Calculator— point 1067E-G1—Note 2):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

25. Section 1068 (Benefit Rate Calculator B—point 1068-G1— Note 3):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

26. Section 1068A (Parenting Allowance Rate Calculator— point 1068A-D1—Note 3):

Omit “• investment income (sections 1073 to 1099);”, substitute:

“• the general concept of ordinary income (sections 1072 and 1073);

• business income (sections 1074 and 1075);

• deemed income from financial assets (sections 1076 to 1084);

• income from retirement funds and annuities (sections 1095 to 1099);”.

SCHEDULE 1—continued

27. Section 1071 (Seniors Health Card Ordinary Income Test Calculator—point 1071-1—Note):

Omit the Note, substitute:

“Note: The application of the ordinary income test is affected by the following provisions:

• sections 1072 and 1073 (the general concept of ordinary income);

• sections 1074 and 1075 (business income);

• sections 1076-1084 (deemed income from financial assets);

• sections 1095-1099 (income from retirement funds and annuities).”.

28. Division 1AA of Part 3.10:

Repeal the Division, substitute:

“Division 1—Ordinary income concept

General meaning of ordinary income

“1072. A reference in this Act to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.

Note 1: For ordinary income see subsection 8(1). See also point 1068A-D4 (Parenting Allowance Rate Calculator).

Note 2: For other provisions affecting the amount of a person's ordinary income see sections 1074 and 1075 (business income), sections 1076 to 1084 (deemed income from financial assets) and sections 1095 to 1099 (income from retirement funds and annuities).

Certain amounts taken to be received over 12 months

“1073. If a person receives, whether before or after the commencement of this section, an amount of income that:

(a) is not income within the meaning of Division 1B or 1C of this Part; and

(b) is not:

(i) income in the form of periodic payments; or

(ii) ordinary income from remunerative work undertaken by the person;

the person is, for the purposes of this Act, taken to receive one fifty-second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.

“Division 1A—Business income

Ordinary income from a business—treatment of trading stock

“1074.(1) If:

SCHEDULE 1—continued

(a) a person carries on a business; and

(b) the value of all the trading stock on hand at the end of a tax year is greater than the value of all the trading stock on hand at the beginning of that tax year;

the person’s ordinary income for that tax year in the form of profits from the business is to include the amount of the difference in values.

“(2) If:

(a) a person carries on a business; and

(b) the value of all the trading stock on hand at the end of a tax year is less than the value of all the trading stock on hand at the beginning of that tax year;

the person’s ordinary income for that tax year in the form of profits from the business is to be reduced by the amount of the difference in values.

Permissible reductions of business income

“1075.(1) Subject to subsection (2), if a person carries on a business, the person’s ordinary income from the business is to be reduced by:

(a) losses and outgoings that relate to the business and are allowable deductions for the purposes of section 51 of the Income Tax Assessment Act; and

(b) depreciation that relates to the business and is an allowable deduction for the purposes of subsection 54(1) of that Act; and

(c) amounts that relate to the business and are allowable deductions under subsection 82AAC(1) of that Act.

“(2) If, under Division 1B, a person is taken to receive ordinary income on a financial investment, that ordinary income is not to be reduced by the amount of any expenses incurred by the person because of that investment.

“Note: For financial investment see subsection 9(1).".

29. Heading to Division 1 of Part 3.10:

Omit the heading, substitute:

“Division 1B—Deemed income from financial assets".

30. Subdivisions A, AA and B of Division 1 of Part 3.10:

Repeal the Subdivisions, substitute:

Deemed income from financial assets—persons other than members of couples

“1076.(1) This section applies to a person who is not a member of a couple.

SCHEDULE 1—continued

“(2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.

“(3) This is how to work out the ordinary income the person is taken to receive:

EXAMPLE OF HOW DEEMED INCOME OF A PERSON WHO IS NOT A MEMBER OF A COUPLE IS WORKED OUT

(using rates in force on 1 July 1996)

Facts:

Elaine, a single pensioner, has $36,500 worth of financial assets. $1,500 is in a cheque account not earning any interest. $25,000 is earning 6% in interest and $10,000 is earning 8% in interest. The below threshold rate is 5%. The above threshold rate is 7%.

Application:

Step 1. Elaine’s deposit concession money amounts to $1,500 (see section 1079) which earns no interest. Under this Step, $1,500 is multiplied by 0%, giving a nil amount.

SCHEDULE 1—continued

Step 2. Elaine’s deeming threshold is $30,000 (see subsection 1081(1)). Her deposit concession money totals $1,500. The difference is $28,500.

Step 3. The amount of $28,500 is multiplied by the below threshold rate (5%):

Step 4. Elaine’s deeming threshold of $30,000 is subtracted from the total value of her financial assets ($36,500). The remainder is $6,500.

Step 5. The amount of $6,500 is multiplied by the above threshold rate (7%):

Step 6. The amounts worked out at Steps 1, 3 and 5 are added together:

The ordinary income Elaine is deemed to receive per year from her financial assets is $1,880.

“(4) The person is taken, for the purposes of this Act, to receive one fifty-second of the amount calculated under subsection (3) as ordinary income of the person during each week.

Deemed income from financial assets—members of pensioner couples

“ 1077.(1) This section applies to the members of a pensioner couple.

“(2) If one or both of the members of a couple have financial assets, the members of the couple are taken, for the purposes of this Act, to receive together ordinary income on those assets in accordance with this section.

"(3) This is how to work out the ordinary income the couple is taken to receive:

SCHEDULE 1—continued

EXAMPLE OF HOW DEEMED INCOME OF A PENSIONER COUPLE IS WORKED OUT

(using rates in force on 1 July 1996)

Facts:

Maree and Peter, a pensioner couple, have $68,500 worth of financial assets. They have $3,500 in a savings account earning interest at 2.8% and deposits of $25,000 and $40,000 earning 5% p.a. and 8% p.a. in interest respectively. The below threshold rate is 5%. The above threshold rate is 7%.

Application:

Step 1. The couple’s deposit concession money amounts to $3,500 (see section 1079) earning interest at 2.8%. The interest amounts to $98.

Step 2. The couple’s deeming threshold is $50,000 (see subsection 1081(2)). Their deposit concession money amounts to $3,500. The remainder is $46,500.

Step 3. The amount of $46,500 is multiplied by the below threshold rate (5%):

SCHEDULE 1—continued

Step 4. The couple’s deeming threshold of $50,000 is subtracted from the total value of their financial assets ($68,500). The remainder is $18,500.

Step 5. The amount of $18,500 is multiplied by the above threshold rate (7%):

Step 6. The amounts worked out at Steps 1, 3 and 5 are added together:

The ordinary income Maree and Peter are deemed to receive per year from their financial assets is $3,718. (Subsection (4) shows how this amount is divided between Maree and Peter.)

“(4) Each member of the couple is taken, for the purposes of this Act, to receive, as ordinary income during each week, an amount calculated according to the formula:

Deemed income from financial assets—members of non-pensioner couples

“ 1078.(1) This section applies to a person who is a member of a couple, other than a pensioner couple.

“(2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.

“(3) This is how to work out the ordinary income the person is taken to receive:

SCHEDULE 1—continued

EXAMPLE OF HOW DEEMED INCOME OF A MEMBER OF A NON-PENSIONER COUPLE IS WORKED OUT

(using rates in force on 1 July 1996)

Facts:

Kerry, who is married and receiving newstart allowance, has $1,200 worth of financial assets. Her spouse, Robert, is not receiving a pension. Kerry has a cheque account containing $200 on which no interest is paid. The remaining $1,000 is held in a savings account on which interest is paid at 3%. The below threshold rate is 5%.

Application:

Step 1. Kerry’s deposit concession money amounts to $1,200 (section 1079). Of that amount, $200 earns no interest. The remaining $1,000 earns interest at less than the below threshold rate. Amounts are worked out as follows:

• $200 × 0% = $0

• $1,000× 3% = $30.

Step 2. As Kerry has no financial assets other than deposit concession money, the result of this Step is a zero remainder. Kerry’s deeming threshold is $25,000.

SCHEDULE 1—continued

Step 3. Because of the outcome of Step 2, Steps 3 to 5 have no application, and no income is assessed under those Steps.

Step 6. The only amount of income worked out is the amount of $30 under Step 1. Therefore, the ordinary income Kerry is deemed to receive per year from her financial assets is $30.

“(4) The person is taken, for the purposes of this Act, to receive one fifty-second of the amount calculated under subsection (3) as ordinary income of the person during each week.

Deposit concession money

“1079.(1) This is how to work out which money constitutes, at a particular time, the deposit concession money of a person who is not a member of a couple:

“(2) This is how to work out which money constitutes, at a particular time, the deposit concession money of a pensioner couple:

SCHEDULE 1—continued

Note: For pensioner couple see subsection 9(1).

“(3) This is how to work out which money constitutes, at a particular time, the deposit concession money of a person who is a member of a couple other than a pensioner couple:

SCHEDULE 1—continued

“(4) For the purposes of this section:

(a) the available money of a pensioner couple is the total of the available money of the members of the couple; and

(b) the deposit money of a pensioner couple that does not attract interest is the total of the deposit money of the members of the couple that does not attract interest; and

(c) the deposit money of a pensioner couple that attracts interest at a particular rate is the total of the deposit money of the members of the couple that attracts interest at that rate.

“(5) For the purposes of subsections (1), (2) and (3) if available money or deposit money is to be set off against an amount, only so much of the money as does not exceed the amount can be set off against the amount.

“(6) In this section:

available money does not include money specified in a determination under subsection 1084(1).

Note: For available money see subsection 8(1).

deposit money does not include money specified in a determination under subsection 1084(1).

Note: For deposit money see subsection 8(1).

Meaning of money that attracts interest

“1080. A reference in any of sections 1076 to 1079 to money that attracts interest is a reference to money on which interest accrues, whenever the interest is paid.

Deeming threshold

“1081.(1) The deeming threshold for a person who is not a member of a couple is $30,000.

"(2) The deeming threshold for a pensioner couple is $50,000.

“(3) The deeming threshold for a member of a couple, other than a pensioner couple, is an amount equal to one-half of the amount fixed by subsection (2).

Note: The amounts fixed by subsections (1) and (2) are indexed every 1 July. See sections 1190-1192.

Below threshold rate, above threshold rate

“1082.(1) For the purposes of this Division, the below threshold rate is the rate determined by the Minister to be the below threshold rate for the purposes of this Division.

SCHEDULE 1—continued

“(2) For the purposes of this Division, the above threshold rate is the rate determined by the Minister to be the above threshold rate for the purposes of this Division.

“(3) A rate determined under this section must be in the form of a specified percentage.

“(4) A determination under this section:

(a) must be in writing; and

(b) is a disallowable instrument.

Actual return on financial assets not treated as ordinary income

“1083.(1) Subject to subsection (2), any return on a financial asset that a person actually receives is taken, for the purposes of this Act, not to be ordinary income of the person.

“(2) If, because of a determination under subsection 1084(1), a financial investment is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078, subsection (1) does not apply to any return on the investment that the person actually receives.

Certain money and financial investments not taken into account

"1084.(1) The Minister may determine that:

(a) specified financial investments; or

(b) a specified class of financial investments;

are not to be regarded as financial assets for the purposes of section 1076, 1077 or 1078.

“(2) Money that constitutes a financial investment to which a determination under subsection (1) applies is not to be taken into account under section 1079.

"(3) A determination under subsection (1) must be in writing.

“(4) A determination under subsection (1) takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination.

Valuation and revaluation of certain financial investments

‘‘1084A. The total value of a person’s listed securities and managed investments (being listed securities and managed investments that fluctuate depending on the market) (the relevant investments) is determined in accordance with the following:

(a) an initial total valuation is to be given to the relevant investments on 1 July 1996, or when a new claim is determined, by the method set out in departmental guidelines;

SCHEDULE 1—continued

(b) that total valuation continues in effect until the relevant investments are revalued by the method set out in departmental guidelines, and that revaluation must occur:

(i) on 20 March in each calendar year after 1996; and

(ii) on 20 September in each calendar year after 1996; and

(iii) when the person requests a revaluation of one or more of the person’s listed securities and managed investments; and

(iv) following an event that affects the relevant investments and is the subject of a recipient notification notice.”.

31. Subdivision D of Division 1 of Part 3.10:

Repeal the Subdivision, substitute:

“Division 1C—Income from retirement funds and annuities

“Subdivision A—Investments taken into account on realisation

Treatment of superannuation fund investments before pension age

“1095. If:

(a) a person has an investment in:

(i) a superannuation fund; or

(ii) an approved deposit fund; or

(iii) a deferred annuity; and

(b) the person has not reached pension age; and

(c) the person has not commenced to receive a pension or annuity from the investment;

the investment is treated as follows:

(d) the return on the investment is not treated as ordinary income (see paragraph 8(8)(b));

Note: The investment is also disregarded for the purposes of the assets test (see paragraph 1118(1)(f)).

(e) if the investment is realised, the return is spread across the following 12 months (see section 1096).

Early withdrawal from superannuation fund

“1096. If:

(a) a person realises an investment in a superannuation fund, approved deposit fund or deferred annuity before the person reaches pension age; and

SCHEDULE 1—continued

(b) the amount is not rolled over into:

(i) a superannuation fund; or

(ii) an approved deposit fund; or

(iii) a deferred annuity; or

(iv) an immediate annuity;

the person is taken to receive one fifty-second of the assessable growth component of that amount as ordinary income of the person during each week in the period of 12 months commencing on the day on which the person realises the investment.

Note: For assessable growth component see subsection 9(1).

Adjustment of ordinary income for investment losses

“1097.(1) If:

(a) a person realises an investment to which section 1096 applies; and

(b) the investment is realised at a loss;

the person’s ordinary income is taken to be reduced during each week in the 12 months commencing on the day on which the person realises the investment by the amount worked out using the formula:

where:

assessable loss is so much (if any) of the amount of the loss as is attributable to the person’s assessable period.

Note: For assessable period see subsection 9(1).

“(2) The reduction under subsection (1) in a person’s rate as at a particular day is not to exceed the increase to be made under section 1096 in working out the person’s rate as at that day.”.

32. Heading to Subdivision E of Division 1 of Part 3.10:

Omit “Subdivision E”, substitute “Subdivision B"

33. Divisions 1A, 1B and 1C of Part 3.10:

Repeal the Divisions.

34. Section 1190 (Table):

Add at the end the following heading and items:

SCHEDULE 1—continued

”

35. Subsection 1191(1) (CPI Indexation Table):

Add at the end the following heading and items:

“

”

36. Section 1192:

Add at the end:

“(7) The first indexation of amounts under items 35 and 36 of the CPI Indexation Table in subsection 1191(1) is to take place on 1 July 1997.”.

37. Subsection 1283(4) (Note):

Omit the Note.

38. Schedule 1A:

Add at the end (after proposed clause 87 added by item 81 of Schedule 6):

Saving: Determinations under repealed sections 1099E and 1099L

“88. A determination in force under section 1099E or 1099L immediately before the commencement of this clause continues to have effect after that commencement as if:

SCHEDULE 1—continued

(a) section 1084 of this Act, as in force immediately after the commencement of this clause, had been in force when the determination was made; and

(b) the determination had been made under that section as so in force; and

(c) any reference in the determination to section 1099B, 1099J or 1099K were a reference to sections 1076 to 1078 of this Act.

Saving: Benefit rates

“89. If a social security benefit (including parenting allowance) is payable to a person for a fortnightly period that starts before 1 July 1996 and ends after that day, the rate of the person’s payment for that period is to be worked out in accordance with this Act as in force immediately before 1 July 1996.”.

______________

SCHEDULE 2 Subsection 3(1)

AMENDMENTS OF THE SOCIAL SECURITY ACT 1991 TO END TRANSFERS FROM JOB SEARCH ALLOWANCE AND NEWSTART ALLOWANCE TO SICKNESS ALLOWANCE

PART 1—AMENDMENTS OF SICKNESS ALLOWANCE PROVISIONS

1. After paragraph 666(l)(c):

Insert:

“(ca) either of the following applies:

(i) immediately before the incapacity occurred the person was in employment (whether the person was self-employed, or was employed by another person, on a full-time, part-time, casual or temporary basis) and the Secretary is satisfied that, when the incapacity ends, the employment will be again available to the person (whether or not the same kind of work will be available);

(ii) immediately before the incapacity occurred the person was in full-time education and was receiving payments under the AUSTUDY scheme or the ABSTUDY scheme and the Secretary is satisfied that the person is committed to resuming full-time study under that scheme when the incapacity ends;”.

2. Paragraph 666(1)(d):

Omit, substitute:

“(d) the person satisfies the Secretary that the person has suffered, or is likely to suffer, a loss of salary, wages or other income of a similar nature because of the incapacity: or”.

3. After paragraph 666(1A)(d):

Insert:

“(da) immediately before the incapacity occurred the person was in employment (whether the person was self-employed, or was employed by another person, on a full-time, part-time, casual or temporary basis) and the Secretary is satisfied that, when the incapacity ends, the employment will be again available to the person (whether or not the same kind of work will be available):”.

4. Subparagraphs 666(1A)(e)(ii) and (iii):

Omit.

SCHEDULE 2—continued

5. Subsections 666(2) and (3):

Omit, substitute:

“(2) In this section:

work, in relation to a person, means work that the person has contracted to perform under a contract of employment that:

(a) the person had immediately before the person becomes incapacitated; and

(b) continues after the person becomes incapacitated.”.

6. Subsections 666(7) and (8):

Omit.

7. Subsection 666(9):

After “obtaining” insert “job search allowance, newstart allowance, youth training allowance,”.

8. Subsection 666(10):

Omit.

9. Paragraph 667(3)(a):

Omit, substitute:

“(a) immediately before the rehabilitation period began the person was receiving sickness allowance in respect of a period; and”.

10. Paragraph 667(3)(d):

Omit “benefit or”.

11. Subsection 667(5):

After “obtaining” insert “job search allowance, newstart allowance, youth training allowance,”.

12. Paragraphs 677(l)(c) and (ca):

Omit.

13. Paragraph 677(l)(m):

Omit “721”, substitute “720”.

14. Sections 682, 683 and 684:

Repeal.

15. Subsection 686(1):

Add at the end “, a job search allowance, a newstart allowance or a youth training allowance”.

SCHEDULE 2—continued

16. Sections 690, 691 and 692:

Repeal.

17. Paragraph 694(1)(b):

Omit.

Note: The heading to subsection 694(1) is omitted.

18. Subsection 694(2):

Omit.

19. Paragraph 695(2)(b):

Omit “an unemployment benefit,”, substitute “a”.

20. Paragraph 696(6)(b):

Omit “an unemployment benefit,”, substitute “a”.

21. Sections 711 and 712:

Repeal.

22. Paragraph 728N(b):

Omit “pension” (wherever occurring), substitute “allowance”

SCHEDULE 2—continued

PART 2—AMENDMENTS OF JOB SEARCH ALLOWANCE PROVISIONS

23. After paragraph 513(1)(ba):

Insert:

“Note: A person who, under Subdivision BAA, is not required to satisfy the activity test is not to be required to enter into a Job Search Activity Agreement (see subsection 525A(1A)).”.

24. Subparagraph 513(1)(c)(iii):

Before “is” insert “subject to subsection (1B),”.

25. Subsection 513(1) (Note 12):

Omit.

26. After paragraph 513(1A)(ca):

Insert:

“Note: A person who, under Subdivision BAA, is not required to satisfy the activity test is not to be required to enter into a Job Search Activity Agreement (see subsection 525A(1A)).".

27. Subparagraph 513(1A)(f)(iv):

Before “is” insert “subject to subsection (1B),”.

28. Subsection 513(1A) (Note 12):

Omit.

29. After subsection 513(1A):

Insert:

“(1B) For the purposes of subparagraphs (1)(c)(iii) and (1A)(f)(iv), if:

(a) a person is, under Subdivision BAA, not required to satisfy the activity test; and

(b) the person is temporarily absent from Australia; and

(c) the person is absent in order to seek medical treatment of a kind that is not available in Australia;

the person is taken to be in Australia during:

(d) if the period is not more than 3 months—the whole of the period; or

(e) if the period is more than 3 months—the first 3 months of the period.”.

30. Section 514:

Repeal.

SCHEDULE 2—continued

31. Subsection 519(3):

Omit “subsection (4)”, substitute “subsections (3AA) and (4)”.

32. After subsection 519(3):

Insert:

“(3AA) Subject to subsection (4), if the person:

(a) is not a member of a couple; and

(b) is, under Subdivision BAA, not required to satisfy the activity test;

the liquid assets test waiting period in relation to the claim starts on the day on which the person became incapacitated.”.

33. Subsection 519(3A):

Omit “subsection (4)”, substitute “subsections (3B) and (4)”.

34. After subsection 519(3A):

Insert:

“(3B) Subject to subsection (4), if the person:

(a) is a member of a couple; and

(b) is, under Subdivision BAA, not required to satisfy the activity test;

the liquid assets test waiting period in relation to the claim starts on the last occurring of the following days:

(c) the day on which the person became incapacitated for work;

(d) if, when the claim is made, the person’s partner is unemployed—the day on which the person’s partner became unemployed;

(e) if, when the claim is made, the person’s partner is incapacitated for work—the day on which the person’s partner became incapacitated for work.”.

35. Section 521:

Add at the end:

“(3) A person is qualified for job search allowance in respect of a period determined by the Secretary if:

(a) immediately before the start of the period, the person:

(i) was receiving job search allowance; and

(ii) was incapacitated for work; and

(iii) was, under Subdivision BAA, not required to satisfy the activity test; and

(b) in the Secretary’s opinion:

SCHEDULE 2—continued

(i) the person will comply with the requirements of this Act during the period; and

(ii) the person may reasonably be expected to be qualified for job search allowance in respect of the period; and

(iii) job search allowance may reasonably be expected to be payable to the person in respect of the period.”.

36. After Subdivision B of Division 1 of Part 2.11:

Insert:

“Subdivision BAA—Exemption from activity test—people temporarily  incapacitated for work

Interpretation

“525AB. A reference in this Subdivision to a person being exempt from the activity test, or ceasing to be exempt from the activity test, under, or under a provision of, this Subdivision is a reference to a person not being required to satisfy the activity test, or becoming required to satisfy the activity test, as the case may be, because of the operation of, or the operation of that provision of, this Subdivision.

Incapacitated person not required to satisfy activity test

“525AC.(1) Subject to this Subdivision, a person is not required to satisfy the activity test in respect of a period if:

(a) throughout the period the person is incapacitated for work because of sickness or an accident; and

(b) the incapacity is caused wholly, or virtually wholly, by a medical condition arising from the sickness or accident; and

(c) the incapacity is, or is likely to be, of a temporary nature; and

(d) if this Subdivision had not been enacted and paragraphs 513(1)(b), (ba), (bb) and (be) were disregarded, the person would qualify for job search allowance; and

(e) the person has, whether before or after the commencement of this section, given the Secretary a certificate of a medical practitioner, in a form approved by the Secretary, stating:

(i) the medical practitioner’s diagnosis; and

(ii) the medical practitioner’s prognosis; and

(iii) that the person is incapacitated for work; and

(iv) the period for which the person is incapacitated for work; and

SCHEDULE 2—continued

(f) the Secretary is satisfied that the incapacity has not been brought about with a view to obtaining an exemption from the activity test.

“(2) In this section:

work, in relation to a person, means work (whether full-time, part-time, permanent or casual) that:

(a) is of a kind that the person could, in the Secretary’s opinion, be reasonably expected to do; and

(b) is for at least 8 hours per week at award wages or above.

Person cannot obtain exemption from activity test in respect of same medical condition within 2 years

“525AD.(1) Subject to subsection (2), if a person who, because of an incapacity resulting from a medical condition, was exempt, under section 525AC, from the activity test ceases to be so exempt because of the operation of section 525AG or 525AH, section 525AC does not apply to the person again during the period of 104 weeks after the person ceased to be exempt.

“(2) Subsection (1) does not apply to a person:

(a) if the person’s incapacity for work is caused by a medical condition that is different from, or significantly more serious than, the medical condition referred to in subsection (1); or

(b) if:

(i) the medical condition referred to in subsection (1) is a chronically relapsing condition; and

(ii) the person’s incapacity for work is caused by a relapse of the condition; or

(c) if:

(i) the person is undergoing a program of counselling, treatment or therapy for drug or alcohol abuse; and

(ii) the person’s participation in the program is not likely to extend beyond 78 weeks; and

(iii) the program is approved by the Secretary in writing for the purposes of this section; or

(d) if:

(i) the person’s incapacity for work is caused by a medical condition (whether the same as or different from the medical condition referred to in subsection (1)); and

(ii) arrangements have been made for the person to undergo surgery in respect of the condition; and

SCHEDULE 2—continued

(iii) the surgery is expected to result in the person’s incapacity for work ceasing within 104 weeks from the date on which the person became exempt from the activity test in respect of the incapacity.

Refusal to attend interview etc. may result in person being required to satisfy activity test

“525AE.(1) A person ceases to be exempt, under this Subdivision, from the activity test if:

(a) the Secretary is of the opinion that the person should:

(i) contact a particular officer of the Department; or

(ii) attend an interview at a particular place; or

(iii) complete a questionnaire; or

(iv) attend a medical, psychiatric or psychological examination; and

(b) the Secretary gives the person a written notice stating that the person is required, within a period stated in the notice, to:

(i) contact the officer; or

(ii) attend the interview; or

(iii) complete the questionnaire; or

(iv) attend the examination; or

(v) if the person has undergone an examination—give the Secretary a report on the examination in the approved form; and

(c) the Secretary is satisfied that it is reasonable for this section to apply to the person; and

(d) the person does not take reasonable steps to comply with the requirement.

“(2) A notice under paragraph (l)(b) must inform the person to whom it is given of the effect of failure by the person to take reasonable steps to comply with the requirement set out in the notice.

Time limit for exemption from requirement to satisfy activity test

“525AF.( 1) A person ceases to be exempt, under this Subdivision, from the activity test if the person’s maximum exemption period ends.

“(2) Subject to this section, a person’s maximum exemption period is:

(a) if the person has, whether before or after the commencement of this section, given the Secretary a medical certificate for the purpose of enabling the Secretary to decide whether the person was required to satisfy the activity test—the lesser of the following periods:

SCHEDULE 2—continued

(i) the period stated in the certificate as the period for which the person would be incapacitated for work;

(ii) the period of 13 weeks that started or starts on the first day of the period so stated in the certificate; or

(b) otherwise—the period of 4 weeks that started or starts on the day determined by the Secretary to have been the day on which the person’s incapacity for work began.

“(3) If:

(a) a person is exempt, under this Subdivision, from the activity test; and

(b) the person has, whether before or after the commencement of this section, given the Secretary a certificate of a medical practitioner that states the matters listed in paragraph 525AC(1)(e) and is in accordance with the form approved under that paragraph; and

(c) the Secretary is satisfied that the person’s incapacity for work will continue after the end of the person’s maximum exemption period;

the Secretary may extend the person’s maximum exemption period by a period that is not more than the lesser of the following periods:

(d) a period equal to the period stated in the certificate as the period for which the person would be incapacitated for work;

(e) 13 weeks.

“(4) If:

(a) a person is exempt, under this Subdivision, from the activity test; and

(b) the person gives the Secretary written evidence (other than a certificate referred to in paragraph (3)(b)) that the person’s incapacity for work will continue after the end of the person’s maximum exemption period; and

(c) the Secretary is satisfied that:

(i) the person’s circumstances make it unreasonable to expect the person to obtain a certificate referred to in paragraph (3)(b) before the end of the maximum exemption period; and

(ii) the person’s incapacity for work will continue after the end of the person’s maximum exemption period;

the Secretary may extend the person’s maximum exemption period by not more than 4 weeks.

“(5) If:

(a) a person is exempt, under this Subdivision, from the activity test; and

SCHEDULE 2—continued

(b) the person has, whether before or after the commencement of this section, given the Secretary a certificate referred to in               paragraph (3)(b) before the end of the person’s maximum exemption period; and

(c) before the end of the person’s maximum exemption period, the Secretary does not satisfy himself or herself that the person’s incapacity for work will continue after the end of that period; and

(d) the sole or dominant cause of the Secretary failing so to satisfy himself or herself is an act or omission of an officer of the Department;

the Secretary may extend the person’s maximum exemption period by not more than 4 weeks.

Person ceases to be exempt from activity test after one year

“525AG. Subject to section 525AH, a person ceases to be exempt, under section 525AC, from the activity test if the person has been so exempt in respect of the immediately preceding period of 52 weeks.

If Secretary makes determination, person ceases to be exempt after 2 years

“525AH.(1) The Secretary may make a determination in writing that section 525AG does not apply to a person if the Secretary is satisfied that:

(a) the person’s incapacity for work will end during the next 52 weeks; or

(b) the medical condition that wholly, or virtually wholly, causes the person’s incapacity for work at the end of the period of 52 weeks referred to in section 525AG is different from, or significantly more serious than, the medical condition because of which the person was exempt, under section 525AC, from the activity test at the beginning of that period of 52 weeks; or

(c) the person’s incapacity is caused by a chronically relapsing medical condition; or

(d) all the following circumstances apply:

(i) the person is undergoing a program of counselling, treatment or therapy for drug or alcohol abuse;

(ii) the person’s participation in the program is not likely to extend beyond 78 weeks;

(iii) the program is approved by the Secretary in writing for the purposes of this section.

SCHEDULE 2—continued

“(2) If the Secretary makes a determination under subsection (1) in relation to a person, section 525AG does not apply to the person but the person ceases to be exempt, under section 525AC, from the activity test if the person has been so exempt in respect of the immediately preceding period of 104 weeks.

“(3) For the purposes of subsection (2), a person who has not been exempt, under section 525AC, from the activity test continuously in respect of the immediately preceding period of 104 weeks is taken to have been exempt, under that section, from the test in respect of that period if the period, or each period, during those 104 weeks in respect of which the person was not exempt was less than 6 weeks.”.

37. Subsection 525A(1):

Omit “If”, substitute “Subject to subsection (1A), if”.

38. After subsection 525A(1):

Insert:

“(1A) A person who, under Subdivision BAA, is not required to satisfy the activity test is not to be required to enter into a Job Search Activity Agreement.”.

39. After paragraph 526(1)(ha):

Insert:

“(hb) section 534B applies to the person and the person fails to comply with a requirement in a notice given to the person under that section; or”.

40. After paragraph 532(4)(b):

Insert:

“(ba) the scheme to provide an allowance known as the Adult Migrant Education Program Living Allowance; or

(bb) the scheme to provide an allowance known as the English as a Second Language Allowance to the extent that the scheme applies to full-time students; or”.

41. After subsection 533(1):

Insert:

“(1A) Subject to the following provisions of this section, if a person is, under Subdivision BAA, not required to satisfy the activity test, the person’s provisional commencement day is the day on which the person became incapacitated for work.”.

SCHEDULE 2—continued

42. Subsection 533(5):

Omit “If”, substitute “Subject to subsections (5A) and (5B), if”.

43. After subsection 533(5):

Insert:

“(5A) Subject to subsection (5B), if:

(a) a person is a transferee to job search allowance; and

(b) the person is, under Subdivision BAA, not required to satisfy the activity test; and

(c) the person claims the job search allowance within 4 weeks after the person’s transfer day;

the person’s provisional commencement day is the person’s transfer day.

“(5B) If:

(a) a person is, under Subdivision BAA, not required to satisfy the activity test; and

(b) the person is subject to an education leaver’s waiting period (see subsection 540(1)); and

(c) the person became incapacitated for work while undertaking the course of education;

the person’s provisional commencement day is the last day on which the person was undertaking the course.”.

44. Section 534:

Add at the end (before the Notes):

“(2) This section does not apply to a person who is, under Subdivision BAA, not required to satisfy the activity test.”.

Note: The heading to section 534 is replaced by “Commencement of job search allowance— person subject to activity test”.

45. After section 534:

Insert in Subdivision C of Division 1 of Part 2.11:

Commencement of job search allowance—person not subject to activity test

“534A.(1) If a person who is, under Subdivision BAA, not required to satisfy the activity test is qualified for job search allowance, the allowance is not payable to the- person before the day worked out in accordance with the following provisions of this section.

SCHEDULE 2—continued

“(2) If the person:

(a) claims the allowance within 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the person is not subject to a waiting period;

the allowance is not payable to the person before the person’s provisional commencement day.

Note 1: A waiting period is:

(a) an unused annual leave waiting period (see sections 535 to 537); or

(b) an ordinary waiting period (see sections 538 and 539); or

(c) an education leavers waiting period (see sections 540 to 541A); or

(d) a newly arrived resident’s waiting period (see sections 541B and 541C).

Note 2: For provisional commencement day see section 533.

“(3) If the person:

(a) claims the allowance within 5 weeks after the day on which the person becomes incapacitated for work; and

(b) The person is subject to a waiting period;

the allowance is not payable to the person before the first day after the end of the waiting period.

Note 1: If the person:

(a) is subject to an unused annual leave waiting period; and

(b) is subject to an ordinary waiting period;

the ordinary waiting period will follow the unused annual leave waiting period (see subsection 539(2)).

Note 2: If the person is subject to an education leavers waiting period and another waiting period, the education leavers waiting period runs concurrently with the other waiting period and the job search allowance will not be payable until the longest waiting period has ended.

Note 3: If the person is subject to a newly arrived resident’s waiting period and another waiting period, the newly arrived resident’s waiting period runs concurrently with the other waiting period and the job search allowance will not be payable until the longest waiting period has ended.

“(4) If:

(a) the person claims the allowance more than 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the Secretary is satisfied that the incapacity is the sole or dominant cause for the failure to claim the allowance within 5 weeks after that day;

the allowance is not payable to the person before the day determined by the Secretary.

“(5) The day determined under subsection (4):

(a) must not be more than 4 weeks before the day on which the person lodges the claim for the allowance; and

SCHEDULE 2—continued

(b) if the person is subject to a waiting period—must not be earlier than the first day after the end of the waiting period.

Note 1: If the person:

(a) is subject to an unused annual leave waiting period; and

(b) is subject to an ordinary waiting period;

the ordinary waiting period will follow the unused annual leave waiting period (see subsection 539(2)).

Note 2: If the person is subject to an education leavers waiting period and another waiting period, the education leavers waiting period runs concurrently with the other waiting period and the job search allowance will not be payable until the longest waiting period has ended.

Note 3: If the person is subject to a newly arrived resident’s waiting period and another waiting period, the newly arrived resident’s waiting period runs concurrently with the other waiting period and the job search allowance will not be payable until the longest waiting period has ended.

“(6) If:

(a) the person claims the allowance more than 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the Secretary is not satisfied that the incapacity is the sole or dominant cause of the failure to claim the allowance within 5 weeks after that day;

the allowance is not payable to the person before the day on which the claim is lodged.

Refusal to attend interview etc.

“534B.(1) A job search allowance is not payable to a person who is not required to satisfy the activity test if:

(a) the person is receiving a job search allowance; and

(b) the Secretary is of the opinion that the person should:

(i) contact a particular officer of the Department; or

(ii) attend an interview at a particular place; or

(iii) complete a questionnaire; or

(iv) attend a medical, psychiatric or psychological examination; and

(c) the Secretary gives the person a written notice stating that the person is required, within a period stated in the notice, to:

(i) contact the officer; or

(ii) attend the interview; or

(iii) complete the questionnaire; or

(iv) attend the examination; or

(v) if the person has undergone an examination—give the Secretary a report on the examination in the approved form; and

SCHEDULE 2—continued

(d) the Secretary is satisfied that it is reasonable for this section to apply to the person; and

(e) the person does not take reasonable steps to comply with the requirement.

“(2) A notice under paragraph (1)(c) must inform the person to whom it is given of the effect of failure by the person to take reasonable steps to comply with the requirement set out in the notice.”.

46. Paragraph 546C(1)(a):

After “person” insert “(other than a person who is not required to satisfy the activity test).”.

SCHEDULE 2—continued

PART 3—AMENDMENTS OF NEWSTART ALLOWANCE PROVISIONS

47. Paragraph 593(1)(b):

Omit, substitute:

“(b) throughout the period, or for each period within the period, the person either:

(i) satisfies the activity test; or

(ii) is not required to satisfy the activity test; and”.

48. Paragraph 593(1)(c):

Before “at all times” insert “if subsection 604(1) applies to the person,”.

49. Paragraph 593(1)(d):

Before “at all times” insert “if subsection 604(1) applies to the person,”.

50. Paragraph 593(1)(e):

Omit “when”, substitute “if”.

51. Subparagraph 593(1)(g)(iii):

Before “is” insert “subject to subsection (1A),”.

52. Subsection 593(1) (Note 14):

Omit.

53. After subsection 593(1):

Insert:

“(1A) For the purposes of subparagraph (1)(g)(iii), if:

(a) A person is, under Subdivision BA, not required to satisfy the activity test; and

(b) the person is temporarily absent from Australia; and

(c) the person is absent in order to seek medical treatment of a kind that is not available in Australia;

the person is taken to be in Australia during:

(d) if the period is not more than 3 months—the whole of the period; or

(e) if the period is more than 3 months—the first 3 months of the period.”.

54. Subsection 593(2) (Note 11):

Omit.

SCHEDULE 2—continued

55. Section 594:

Repeal.

56. Subsection 598(3):

Omit “subsection (4)”, substitute “subsections (3AA) and (4)”.

57. After subsection 598(3):

Insert:

“(3AA) Subject to subsection (4), if the person:

(a) is not a member of a couple; and

(b) is, under Subdivision BA, not required to satisfy the activity test;

the liquid assets test waiting period in relation to the claim starts on the day on which the person became incapacitated.”.

58. Subsection 598(3A):

Omit “subsection (4)”, substitute “subsections (3B) and (4)”.

59. After subsection 598(3A):

Insert:

“(3B) Subject to subsection (4), if the person:

(a) is a member of a couple; and

(b) is, under Subdivision BA, not required to satisfy the activity test;

the liquid assets test waiting period in relation to the claim starts on the last occurring of the following days:

(c) the day on which the person became incapacitated for work;

(d) if, when the claim is made, the person’s partner is unemployed—the day on which the person’s partner became unemployed;

(e) if, when the claim is made, the person’s partner is incapacitated for work—the day on which the person’s partner became incapacitated for work.”.

60. Section 600:

Add at the end:

“(3) A person is qualified for newstart allowance in respect of a period determined by the Secretary if:

(a) immediately before the start of the period, the person:

(i) was receiving newstart allowance; and

(ii) was incapacitated for work; and

SCHEDULE 2—continued

(iii) was, under Subdivision BA, not required to satisfy the activity test; and

(b) in the Secretary’s opinion:

(i) the person will comply with the requirements of this Act during the period; and

(ii) the person may reasonably be expected to be qualified for newstart allowance in respect of the period; and

(iii) newstart allowance may reasonably be expected to be payable to the person in respect of the period.”.

61. After Subdivision B of Division 1 of Part 2.12:

Insert:

“Subdivision BA—Exemption from activity test—people temporarily incapacitated for work

Interpretation

“603B. A reference in this Subdivision to a person being exempt from the activity test, or ceasing to be exempt from the activity test, under, or under a provision of, this Subdivision is a reference to a person not being required to satisfy the activity test, or becoming required to satisfy the activity test, as the case may be, because of the operation of, or the operation of that provision of, this Subdivision.

Incapacitated person not required to satisfy activity test

“603C.(1) Subject to this Subdivision, a person is not required to satisfy the activity test in respect of a period if:

(a) throughout the period the person is incapacitated for work because of sickness or an accident; and

(b) the incapacity is caused wholly, or virtually wholly, by a medical condition arising from the sickness or accident; and

(c) the incapacity is, or is likely to be, of a temporary nature; and

(d) if this Subdivision had not been enacted and paragraphs 593(1)(b), (d) and (e) were disregarded, the person would qualify for newstart allowance; and

(e) the person has, whether before or after the commencement of this section, given the Secretary a certificate of a medical practitioner, in a form approved by the Secretary, stating:

(i) the medical practitioner’s diagnosis; and

(ii) the medical practitioner’s prognosis; and

SCHEDULE 2—continued

(iii) that the person is incapacitated for work; and

(iv) the period for which the person is incapacitated for work; and

(f) the Secretary is satisfied that the incapacity has not been brought about with a view to obtaining an exemption from the activity test.

“(2) In this section:

work, in relation to a person, means work (whether full-time, part-time, permanent or casual) that:

(a) is of a kind that the person could, in the Secretary’s opinion, be reasonably expected to do; and

(b) is for at least 8 hours per week at award wages or above.

Person cannot obtain exemption from activity test in respect of same medical condition within 2 years

“603D.(1) Subject to subsection (2), if a person who, because of an incapacity resulting from a medical condition, was exempt, under section 603C, from the activity test ceases to be so exempt because of the operation of section 603G or 603H, section 603C does not apply to the person again during the period of 104 weeks after the person ceased to be exempt.

“(2) Subsection (1) does not apply to a person:

(a) if the person’s incapacity for work is caused by a medical condition that is different from, or significantly more serious than, the medical condition referred to in subsection (1); or

(b) if:

(i) the medical condition referred to in subsection (1) is a chronically relapsing condition; and

(ii) the person’s incapacity for work is caused by a relapse of the condition; or

(c) if:

(i) the person is undergoing a program of counselling, treatment or therapy for drug or alcohol abuse; and

(ii) the person’s participation in the program is not likely to extend beyond 78 weeks; and

(iii) the program is approved by the Secretary in writing for the purposes of this section; or

(d) if:

(i) the person’s incapacity for work is caused by a medical condition (whether the same as or different from the medical condition referred to in subsection (1)); and

SCHEDULE 2—continued

(ii) arrangements have been made for the person to undergo surgery in respect of the condition; and

(iii) the surgery is expected to result in the person’s incapacity for work ceasing within 104 weeks from the date on which the person became exempt from the activity test in respect of the incapacity.

Refusal to attend interview etc. may result in person being required to satisfy activity test

“603E.(1) A person ceases to be exempt, under this Subdivision, from the activity test if:

(a) the Secretary is of the opinion that the person should:

(i) contact a particular officer of the Department; or

(ii) attend an interview at a particular place; or

(iii) complete a questionnaire; or

(iv) attend a medical, psychiatric or psychological examination; and

(b) the Secretary gives the person a written notice stating that the person is required, within a period stated in the notice, to:

(i) contact the officer; or

(ii) attend the interview; or

(iii) complete the questionnaire; or

(iv) attend the examination; or

(v) if the person has undergone an examination—give the Secretary a report on the examination in the approved form; and

(c) the Secretary is satisfied that it is reasonable for this section to apply to the person; and

(d) the person does not take reasonable steps to comply with the requirement.

“(2) A notice under paragraph (1)(b) must inform the person to whom it is given of the effect of failure by the person to take reasonable steps to comply with the requirement set out in the notice.

Time limit for exemption from requirement to satisfy activity test

“603F.(1) A person ceases to be exempt, under this Subdivision, from the activity test if the person’s maximum exemption period ends.

SCHEDULE 2—continued

“(2) Subject to this section, a person’s maximum exemption period is:

(a) if the person has, whether before or after the commencement of this section, given the Secretary a medical certificate for the purpose of enabling the Secretary to decide whether the person was required to satisfy the activity test—the lesser of the following periods:

(i) the period stated in the certificate as the period for which the person would be incapacitated for work;

(ii) the period of 13 weeks that started or starts on the first day of the period so stated in the certificate; or

(b) otherwise—the period of 4 weeks that started or starts on the day determined by the Secretary to have been the day on which the person’s incapacity for work began.

“(3) If, immediately before the day on which a person became qualified for newstart allowance, the person was qualified for job search allowance and was, under section 525AC, not required to satisfy the activity test, the person’s maximum exemption period is the period that, immediately before that day, was the person’s maximum exemption period under section 525AF.

“(4) If:

(a) a person is exempt, under this Subdivision, from the activity test; and

(b) the person has, whether before or after the commencement of this section, given the Secretary a certificate of a medical practitioner that states the matters listed in paragraph 603C(1)(e) and is in accordance with the form approved under that paragraph; and

(c) the Secretary is satisfied that the person’s incapacity for work will continue after the end of the person’s maximum exemption period;

the Secretary may extend the person’s maximum exemption period by a period that is not more than the lesser of the following periods:

(d) a period equal to the period stated in the certificate as the period for which the person would be incapacitated for work;

(e) 13 weeks.

“(5) If:

(a) a person is exempt, under this Subdivision, from the activity test; and

(b) the person gives the Secretary written evidence (other than a certificate referred to in paragraph (4)(b)) that the person’s incapacity for work will continue after the end of the person’s maximum exemption period; and

SCHEDULE 2—continued

(c) the Secretary is satisfied that:

(i) the person’s circumstances make it unreasonable to expect the person to obtain a certificate referred to in paragraph (4)(b) before the end of the maximum exemption period; and

(ii) the person’s incapacity for work will continue after the end of the person’s maximum exemption period;

the Secretary may extend the person’s maximum exemption period by not more than 4 weeks.

“(6) If:

(a) a person is exempt, under this Subdivision, from the activity test; and

(b) the person has, whether before or after the commencement of this section, given the Secretary a certificate referred to in paragraph (4) (b) before the end of the person’s maximum exemption period; and

(c) before the end of the person’s maximum exemption period, the Secretary does not satisfy himself or herself that the person’s incapacity for work will continue after the end of that period; and

(d) the sole or dominant cause of the Secretary failing so to satisfy himself or herself is an act or omission of an officer of the Department;

the Secretary may extend the person’s maximum exemption period by not more than 4 weeks.

Person ceases to be exempt from activity test after one year

“603G. Subject to section 603H, a person ceases to be exempt, under section 603C, from the activity test if the person has been so exempt in respect of the immediately preceding period of 52 weeks.

If Secretary makes determination, person ceases to be exempt after 2 years

“603H.(1) The Secretary may make a determination in writing that section 603G does not apply to a person if the Secretary is satisfied that:

(a) the person’s incapacity for work will end during the next 52 weeks; or

(b) the medical condition that wholly, or virtually wholly, causes the person’s incapacity for work at the end of the period of 52 weeks referred to in section 603G is different from, or significantly more serious than, the medical condition because of which the person was exempt, under section 603C, from the activity test at the beginning of that period of 52 weeks; or

SCHEDULE 2—continued

(c) the person’s incapacity is caused by a chronically relapsing medical condition; or

(d) all the following circumstances apply:

(i) the person is undergoing a program of counselling, treatment or therapy for drug or alcohol abuse;

(ii) the person’s participation in the program is not likely to extend beyond 78 weeks;

(iii) the program is approved by the Secretary in writing for the purposes of this section.

“(2) If the Secretary makes a determination under subsection (1) in relation to a person, section 603G does not apply to the person but the person ceases to be exempt, under section 603C, from the activity test if the person has been so exempt in respect of the immediately preceding period of 104 weeks.

“(3) For the purposes of subsection (2), a person who has not been exempt, under section 603C, from the activity test continuously in respect of the immediately preceding period of 104 weeks is taken to have been exempt, under that section, from the test in respect of that period if the period, or each period, during those 104 weeks in respect of which the person:

(a) was not exempt under section 525AC or 603C from an activity test; and

(b) was not in receipt of sickness allowance;

was less than 6 weeks.”.

62. Subsection 604(1):

Omit “For”, substitute “Subject to this section, for”.

63. After subsection 604(1):

Insert:

“(1A) Subsection (1) does not apply to a person who, under Subdivision BA, is not required to satisfy the activity test.”.

64. Subsection 605(1):

Omit “If a person”, substitute “Subject to this section, if a person”.

65. Subsection 605(2):

Omit “The Secretary”, substitute “Subject to this section, the Secretary”.

SCHEDULE 2—continued

66. After subsection 605(2):

Insert:

“(2A) Subsections (1) and (2) do not apply to a person who, under Subdivision BA, is not required to satisfy the activity test.”.

67. After paragraph 608(1)(ha):

Insert:

“(hb) section 616B applies to the person and the person fails to comply with a requirement in a notice given to the person under that section; or”.

68. After paragraph 614(4)(b):

Insert:

“(ba) the scheme to provide an allowance known as the Adult Migrant Education Program Living Allowance; or

(bb) the scheme to provide an allowance known as the English as a Second Language Allowance to the extent that the scheme applies to full-time students; or”.

69. After subsection 615(1):

Insert:

“(1A) Subject to the following provisions of this section, if a person is, under Subdivision BA, not required to satisfy the activity test, the person’s provisional commencement day is the day on which the person became incapacitated for work.”.

70. Subsection 615(5):

Omit “If”, substitute “Subject to subsections (6) and (7), if”.

71. Section 615:

Add at the end:

“(6) Subject to subsection (7), if:

(a) a person is a transferee to newstart allowance; and

(b) the person is, under Subdivision BA, not required to satisfy the activity test; and

(c) the person claims the newstart allowance within 4 weeks after the person’s transfer day;

the person’s provisional commencement day is the person’s transfer day.

SCHEDULE 2—continued

“(7) If:

(a) a person is, under Subdivision BA, not required to satisfy the activity test; and

(b) the person is subject to an education leaver’s waiting period (see subsection 622(1)); and

(c) the person became incapacitated for work while undertaking the course of education;

the person’s provisional commencement day is the last day on which the person was undertaking the course.”.

72. Section 616:

Add at the end (before the Notes):

“(2) This section does not apply to a person who is, under Subdivision BA, not required to satisfy the activity test.”.

Note; The heading to section 616 is replaced by “Commencement of newstart allowance—person subject to activity test".

73. After section 616:

Insert in Subdivision D of Division 1 of Part 2.12:

Commencement of newstart allowance—person not subject to activity test

“616A.(1) If a person who is, under Subdivision BA, not required to satisfy the activity test is qualified for newstart allowance, the allowance is not payable to the person before the day worked out in accordance with the following provisions of this section.

“(2) If the person:

(a) claims the allowance within 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the person is not subject to a waiting period;

the allowance is not payable to the person before the person’s provisional commencement day.

Note 1: A waiting period is:

(a) an unused annual leave waiting period (see sections 617 to 619); or

(b) an ordinary waiting period (see sections 620 and 621); or

(c) an education leavers waiting period (see sections 622 and 623); or

(d) a newly arrived resident’s waiting period (see sections 623A and 623B)

Note 2: For provisional commencement day see section 615.

SCHEDULE 2—continued

“(3) If the person:

(a) claims the allowance within 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the person is subject to a waiting period;

the allowance is not payable to the person before the first day after the end of the waiting period.

Note 1: If the person:

(a) is subject to an unused annual leave wailing period; and

(b) is subject to an ordinary waiting period;

the ordinary waiting period will follow the unused annual leave waiting period (see subsection 621(2)).

Note 2: If the person is subject loan education leavers waiting period and another wailing period, the education leavers waiting period runs concurrently with the other waiting period and the newstart allowance will not be payable until the longest waiting period has ended.

Note 3: If the person is subject to a newly arrived resident’s waiting period and another waiting period, the newly arrived resident's waiting period runs concurrently with the other waiting period and the newstart allowance will not be payable until the longest wailing period has ended.

“(4) If:

(a) the person claims the allowance more than 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the Secretary is satisfied that the incapacity is the sole or dominant cause for the failure to claim the allowance within 5 weeks after that day;

the allowance is not payable to the person before the day determined by the Secretary.

“(5) The day determined under subsection (4):

(a) must not be more than 4 weeks before the day on which the person lodges the claim for the allowance; and

(b) if the person is subject to a waiting period—must not be earlier than the first day after the end of the waiting period.

Note 1: If the person:

(a) is subject to an unused annual leave waiting period; and

(b) is subject to an ordinary waiting period;

the ordinary waiting period will follow the unused annual leave waiting period (see subsection 621(2)).

Note 2: if the person is subject to an education leavers waiting period and another waiting period, the education leavers waiting period runs concurrently with the other waiting period and the newstart allowance will not be payable until the longest waiting period has ended.

Note 3: If the person is subject to a newly arrived resident's waiting period and another waiting period, the newly arrived resident’s waiting period runs concurrently with the other waiting period and the newstart allowance will not be payable until the longest waiting period has ended.

SCHEDULE 2—continued

“(6) If:

(a) the person claims the allowance more than 5 weeks after the day on which the person becomes incapacitated for work; and

(b) the Secretary is not satisfied that the incapacity is the sole or dominant cause of the failure to claim the allowance within 5 weeks after that day;

the allowance is not payable to the person before the day on which the claim is lodged.

Refusal to attend interview etc.

“616B.(1) A newstart allowance is not payable to a person who is not required to satisfy the activity test if:

(a) the person is receiving a newstart allowance; and

(b) the Secretary is of the opinion that the person should:

(i) contact a particular officer of the Department; or

(ii) attend an interview at a particular place; or

(iii) complete a questionnaire; or

(iv) attend a medical, psychiatric or psychological examination; and

(c) the Secretary gives the person a written notice stating that the person is required, within a period stated in the notice, to:

(i) contact the officer; or

(ii) attend the interview; or

(iii) complete the questionnaire; or

(iv) attend the examination; or

(v) if the person has undergone an examination—give the Secretary a report on the examination in the approved form; and

(d) the Secretary is satisfied that it is reasonable for this section to apply to the person; and

(e) the person does not take reasonable steps to comply with the requirement.

“(2) A notice under paragraph (1)(c) must inform the person to whom it is given of the effect of failure by the person to take reasonable steps to comply with the requirement set out in the notice.”.

74 Paragraph 630C(1)(a):

After “person” insert “(other than a person who is not required to satisfy the activity test).”.

SCHEDULE 2—continued

PART 4—AMENDMENTS OF OTHER PROVISIONS

75. Subsection 94(6):

Add at the end:

“or with a view to obtaining an exemption, because of the person’s incapacity, from the requirement to satisfy the activity test for the purposes of job search allowance, newstart allowance or youth training allowance”.

76. Subsection 95(2):

Add at the end:

“or with a view to obtaining an exemption, because of the person’s blindness, from the requirement to satisfy the activity test for the purposes of job search allowance, newstart allowance or youth training allowance”.

77. Subsection 409(7):

Add at the end:

“or with a view to obtaining an exemption, because of the person’s incapacity, from the requirement to satisfy the activity test for the purposes of job search allowance, newstart allowance or youth training allowance”.

78. Subsection 410(2):

Add at the end:

“or with a view to obtaining an exemption, because of the person’s blindness, from the requirement to satisfy the activity test for the purposes of job search allowance, newstart allowance or youth training allowance”.

79. Subparagraph 729(2)(d)(i):

Omit “subsection 546C(4) or 630C(4)", substitute “section 534B, subsection 546C(4), section 616B or subsection 630C(4);”.

80. Point 1067-D2 (excluding the Note):

Omit, substitute:

Incapacity for work

“1067-D2. This point applies to a person if:

(a) the person is incapacitated for work; and .

(b) if the person is receiving job search allowance—the person is, under Subdivision BAA of Division 1 of Part 2.11, exempt from the activity test.”.

81. Point 1067-F14:

After “allowance” insert “or sickness allowance”.

SCHEDULE 2—continued

82. Point 1067-H4:

Omit, substitute:

Friendly society amounts

“1067-H4. The ordinary income of a person:

(a) to whom, or to whose partner, sickness allowance is payable; or

(b) to whom, or to whose partner, job search allowance is payable and who, or whose partner, under Subdivision BAA of Division 1 of Part 2.11, is not required to satisfy the activity test;

is not to include any amount received by the person or partner from an approved friendly society in respect of the incapacity because of which the person or partner is qualified for the sickness allowance or is not required to satisfy the activity test, as the case may be.”.

83. Point 1068-D2:

Omit, substitute:

Incapacity for work—job search allowance and newstart allowance

“1068-D2. This point applies to a person if:

(a) the person has reached the age of 18 years; and

(b) the person is incapacitated for work; and

(c) if the person is receiving job search allowance—the person is, under Subdivision BAA of Division 1 of Part 2.11, exempt from the activity test; and

(d) if the person is receiving newstart allowance—the person is, under Subdivision BA of Division 1 of Part 2.12, exempt from the activity test.”.

84. Point 1068-F16:

Omit, substitute:

Fortnightly rent

“1068-F16. Fortnightly rent means the fortnightly rent paid or payable by the person whose widow allowance, job search allowance, newstart allowance, sickness allowance or partner allowance is being calculated.".

85. Point 1068-G4:

Omit, substitute:

Friendly society amounts

“1068-G4. The ordinary income of a person:

(a) to whom, or to whose partner, sickness allowance is payable; or

SCHEDULE 2—continued

(b) to whom, or to whose partner, job search allowance is payable and who, or whose partner, under Subdivision BAA of Division 1 of Part 2.11, is not required to satisfy the activity test; or

(c) to whom, or to whose partner, newstart allowance is payable and who, or whose partner, under Subdivision BA of Division 1 of Part 2.12, is not required to satisfy the activity test;

is not to include any amount received by the person or partner from an approved friendly society in respect of the incapacity because of which the person or partner is qualified for the sickness allowance or is not required to satisfy the activity test, as the case may be.”.

86. Subsection 1163(5):

Omit “sickness allowance and partner allowance”, substitute “an allowance excluded by subsection (5A)”.

87. After subsection 1163(5):

Insert:

“(5A) The following allowances are excluded from the operation of subsection (5):

(a) sickness allowance;

(b) partner allowance;

(c) job search allowance if, under Subdivision BAA of Division 1 of Part 2.11, the recipient of the allowance is not required to satisfy the activity test;

(d) newstart allowance if, under Subdivision BA of Division 1 of Part 2.12, the recipient of the allowance is not required to satisfy the activity test.”.

88. Section 1211:

After Note 1 insert:

“Note 1A: Subsection 513(1B) provides that a person is taken to be in Australia for the purposes of subsections 513(1) and (1A) (qualification for job search allowance) if the person is, because of incapacity, not required to satisfy the job search activity test and is temporarily absent from Australia for a period of 3 months or less.

Note 1B: Subsection 593(1A) provides that a person is taken to be in Australia for the purposes of subsection 593(1) (qualification for newstart allowance) if the person is, because of incapacity, not required to satisfy the newstart activity test and is temporarily absent from Australia for a period of 3 months or less.”.

89. Schedule 1A:

Add at the end:

SCHEDULE 2—continued

Application of legislative changes made to end transfers from job search allowance or newstart allowance to sickness allowance

“84.(1) The amendments made by Part 1 of Schedule 2 to the Social Security and Veterans' Affairs Legislation Amendment Act 1995 apply to claims for sickness allowance lodged on or after 20 March 1996.

“(2) The amendments made by Part 2 of Schedule 2 to the Social Security and Veterans’ Affairs Legislation Amendment Act 1995 apply in respect of job search allowance for any fortnight starting on or after 20 March 1996.

“(3) The amendments made by Part 3 of Schedule 2 to the Social Security and Veterans’ Affairs Legislation Amendment Act 1995 apply in respect of newstart allowance for any fortnight starting on or after 20 March 1996.”.

__________

SCHEDULE 3 Subsection 3(1)

AMENDMENTS OF THE SOCIAL SECURITY ACT 1991 RELATING TO EARNINGS CREDITS

1. Paragraph 1115A(1)(a):

After "special benefit” insert or partner allowance received by a partner of a person who is receiving special benefit”.

2. Paragraph 1115A(1)(d):

Omit.

3. Paragraphs 1115A(1)(f) and (g):

Omit, substitute:

“(f) if the person’s earnings credit account balance is equal to or more than the amount earned—the part of the amount earned that is not more than $100;

(g) if the person’s earnings credit account balance is less than the amount earned—the part of the amount earned that is not more than the lesser of:

(i) the earnings credit account balance; or

(ii) $100.”.

4. Subsection 1115A(3):

Omit “subsection (1)” (first occurring), substitute “subsection (2)”.

5. Subsection 1115B(1):

After “special benefit” insert “, or partner allowance received by a partner of a person who is receiving special benefit”.

6. Section 1115C (Earnings Credit Account Balance Calculator B— Module C):

Omit, substitute:

“MODULE C—EARNINGS CREDIT

When earnings credit arises

“1115C-C1.(1) A person has an earnings credit for an earnings credit accounting period if the person’s fortnightly rate of ordinary income for that period is less than the person’s ordinary income free area.

Amount of credit

“(2) The amount of the earnings credit is the amount by which that fortnightly rate of ordinary income is less than that ordinary income free area.

SCHEDULE 3—continued

Meaning of fortnightly rate of ordinary income

“(3) If subsection 1115A(1) applies in relation to the application of an ordinary income test to a person for an earnings credit accounting period, a reference in subsection (1) or (2) to the person’s fortnightly rate of ordinary income for the period is taken to be a reference to:

(a) if the person is a member of a couple and the person’s partner is receiving a social security pension—the rate worked out using the formula:

(b) In any other case-the person’s reduced income rate;

where:

person’s reduced income rate means the person’s fortnightly rate of ordinary income for the period after taking into account any application of subsection 1115A(1) in relation to amounts of money that the person has earned for remunerative work.

partner's income rate means the partner’s fortnightly rate of ordinary income for the period.

Note: For ordinary income free area see points 1067-H12 (Benefit Rate Calculator A), 1067E-G15 (Sickness Allowance Rate Calculator), 1068-G12 (Benefit Rate Calculator B) and 1068A-D16 (Parenting Allowance Rate Calculator).”.

7. Section 1115C (Module D of Earnings Credit Account Balance Calculator B):

Omit, substitute:

“MODULE D—DRAWING ACCOUNT

Drawing on account (recipient account)

“1115C-D1. Subject to point 1115C-D2, if, under point 1115A, an amount is disregarded in applying an ordinary income test to a person or a person’s partner, the person is taken to draw the disregarded amount on an account established under section 1115B.

If social security benefit rate is nil—account not taken to be drawn

“ 1115C-D2. If:

(a) because a person earned an amount of money from remunerative work done by the person during an earnings credit accounting period, the person would, apart from this point, be taken under point 1115C-D1 to have drawn an amount on the person’s earnings credit account established under section 1115B; and

SCHEDULE 3—continued

(b) the rate of social security benefit payable to the person for the period is nil;

the person is taken not to have drawn that amount on the account.”.

8. Schedule 1A:

Add at the end (after proposed clause 84 added by item 89 of Schedule 2):

Application of legislative changes relating to earnings credits

“85. The amendments made by Schedule 4 to the Social Security and Veterans’ Affairs Legislation Amendment Act 1995 apply:

(a) in respect of social security benefits (other than parenting allowance)—for any fortnight starting on or after 20 March 1996; or

(b) in respect of parenting allowance—for any fortnight starting on or after the first parenting allowance payday on or after 20 March 1996.”.

______________

SCHEDULE 4 Subsection 3(1)

AMENDMENT OF THE SOCIAL SECURITY ACT 1991 TO INCREASE FLEXIBILITY OF REPORTING REQUIREMENTS FOR RECIPIENTS OF NEWSTART ALLOWANCE

1. Section 600:

Repeal, substitute:

Prospective determinations for some allowance recipients

“600.(1) A person is qualified for newstart allowance for a period if:

(a) the person is receiving newstart allowance; and

(b) the Secretary considers at the start of the period that:

(i) the person may reasonably be expected to satisfy the qualification requirements for newstart allowance (sections 593 to 599) during the period; and

(ii) it is reasonable to expect that newstart allowance will be payable to the person for the period; and

(iii) the person will comply with the Act during the period; and

(c) the person is not indebted at the start of the period to the Commonwealth under or as a result of this Act; and

(d) one or more of subsections (3), (4), (5), (6) and (7) apply to the person at the start of the period.

“(2) The Minister:

(a) must determine in writing guidelines for making decisions under paragraph (1)(b); and

(b) may revoke or vary the determination.

If the Minister revokes a determination, the Minister must determine guidelines that take effect immediately after the revocation. A determination is a disallowable instrument.

“(3) This subsection applies to a person who has a Case Management Activity Agreement with a case manager if the Secretary has decided (either on the recommendation of the case manager or on the Secretary’s own initiative) not to give the person recipient statement notices under section 658 at intervals of a fortnight or less. For this purpose, Case Management Activity Agreement and case manager have the meanings that they have in the Employment Services Act 1994.

“(4) This subsection applies to a person who satisfies the activity test:

(a) under subsection 601(2) (except subparagraph 601 (2)(a)(1)); or

SCHEDULE 4—continued

(b) under subsection 601(4) by taking reasonable steps to comply with a Newstart Activity Agreement that requires the person to undertake full-time unpaid voluntary work proposed by the person and approved by the Secretary; or

(c) under section 603AA (which provides for a person to satisfy the activity test by engaging in full-time unpaid voluntary work).

“(5) This subsection applies to a person if:

(a) the person is incapacitated for work; and

(b) under Subdivision BA the person is not required to satisfy the activity test.

“(6) This subsection applies to a person if:

(a) the person has been receiving a social security pension, social security benefit or job search allowance in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this section); and

(b) the person is at least 50; and

(c) the Secretary considers that the person’s income from employment is not likely to increase during the period (whether as a result of a person becoming employed or otherwise).

“(7) This subsection applies to a person if the Secretary considers that the person should be qualified for new start allowance for the period because of one or more of the following:

(a) the place where the person lives;

(b) the person’s recent employment history;

(c) the state of the labour market;

(d) any other reason that the Secretary considers relevant.”.

______________

SCHEDULE 5 Subsection 3(1)

AMENDMENTS OF THE SOCIAL SECURITY ACT 1991 TO AMALGAMATE JOB SEARCH ALLOWANCE AND NEWSTART ALLOWANCE

1. Section 3 (Index of definitions):

Omit:

“approved organization  15(1)”.

2. Paragraph 5(10)(c):

Omit “, job search allowance”.

3. Subsection 5(10):

Omit “540, 541, 541A, 542,”.

4. Subparagraph 8(8)(r)(i):

Omit “job search or”.

5. Subsection 9(1) (definition of assessable period):

After paragraph (b), insert:

“(ba) a job search allowance; or”.

6. Paragraphs 11(10)(d), (e) and (f):

Omit, substitute:

“(d) if the person is a member of a couple and, immediately before the person and the person’s partner became members of that couple, the person was receiving a pension, benefit or payment referred to in paragraph (a), (b) or (c) or a job search allowance and the person’s partner was receiving such a pension, benefit or payment, a job search allowance or a youth training allowance—the period of 12 months beginning on the day on which they became members of that couple; or

(e) if:

(i) the person is a member of a couple but paragraph (d) does not apply; and

(ii) the person’s partner is receiving a pension, benefit or payment referred to in paragraph (a), (b) or (c), a job search allowance or a youth training allowance;

the period of 12 months beginning on the day on which:

(iii) the pension, benefit or payment referred to in paragraph (a), or (c) or the job search allowance first became payable to the person; or

SCHEDULE 5—continued

(iv) the pension, benefit or payment referred to in paragraph (a), (b) or (c), the job search allowance or the youth training allowance first became payable to the person’s partner;

whichever was the earlier; or

(f) otherwise—the period of 12 months beginning on the day on which a pension, benefit or payment referred to in paragraph (a), (b) or (c) or a job search allowance first became payable to the person;

and to each following and each preceding period of 12 months.”.

7. Paragraph 12C(5)(c):

Omit.

8. Subsections 14A(1) and (2):

Omit “2.11,”.

9. Subsection 14A(3):

Omit “job search allowance,” (wherever occurring).

10. Subparagraph 14A(3)(b)(ii):

Omit “job search allowance”.

11. Subsection 14A(6):

Omit “519,”.

12. Subsection 15(1) (definition of approved organisation):

Omit.

13. After paragraph 15(2)(aa):

Insert:

“(ab) a job search allowance;”.

Note: The heading to section 15 is altered by omitting “JSA and".

14. Subsection 15(2) (Note):

Omit “524”, substitute “603AA”.

15. Subsection 17(1) (definition of former payment type):

After paragraph (h) insert:

“(ha) a job search allowance; or”.

16. Subsection 23(1):

Insert:

“job search allowance means job search allowance under this Act as previously in force.

this Act means this Act as originally enacted or as amended and in force at any time.’’.

SCHEDULE 5—continued

17. Subsection 23(1) (definition of activity test deferment period):

Omit paragraph (a), substitute:

“(a) a period worked out under section 546A of this Act as previously in force in relation to the application of a JSA automatic deferment provision included in Subdivision E of Division 1 of Part 2.11 of this Act as previously in force; or”.

18. Subsection 23(1) (definition of administrative breach deferment period):

Omit paragraph (a), substitute:

“(a) a period worked out under section 547A of this Act as previously in force in relation to the application of a JSA automatic deferment provision included in Subdivision F of Division 1 of Part 2.11 of this Act as previously in force; or”.

19. Subsection 23(1) (definition of assurance of support debt):

Omit paragraph (d), substitute:

“(d) job search allowance; or”.

20. Subsection 23(1) (definition of Commonwealth funded employment program):

Omit “job search or”.

21. Subsection 23(1) (definition of compensation arrears debt):

Omit “589,”.

22. Subsection 23(1) (definition of education leavers waiting period):

Omit paragraph (b).

23. Subsection 23(1) (definition of income support payment):

After paragraph (a) insert:

“(aa) a job search allowance; or”.

24. Subsection 23(1) (definition of JSA automatic deferment provision):

After “means” insert “any of the following provisions of this Act as previously in force”.

25. Subsection 23(1) (definition of JSA discretionary deferment provision):

After “means” insert “any of the following provisions of this Act as previously in force”.

SCHEDULE 5—continued

26. Subsection 23(1) (definition of newly arrived resident’s waiting period):

Omit paragraph (a).

27. Subsection 23(1) (definition of ordinary waiting period):

Omit paragraph (b).

28. Subsection 23(1) (definition of partner allowance automatic deferment provision):

Omit “subsection 547(1)”, substitute “section 771HO”.

29. Subsection 23(1) (definition of recipient notification notice):

Omit paragraph (h).

30. Subsection 23(1) (definition of recipient statement notice):

Omit paragraph (h).

31. Subsection 23(1) (definition of social security benefit):

Omit paragraph (b).

32. Subsection 23(1) (definition of social security recipient status):

After “benefit,” insert “a job search allowance,”.

33. Subsection 23(1) (definition of unused annual leave waiting period):

Omit paragraph (b).

34. Subsection 23(1) (definition of waiting period):

Omit paragraphs (d), (e), (f) and (fa).

35. Subsection 23(4A):

Omit “2.11,”.

36. Subsection 23(4A) (Note):

(a) Omit “a job search allowance or”.

(b) Omit “those allowances”, substitute “that allowance”.

37. Subsection 23(10):

Omit “Part 2.11 (job search allowance),”.

38. Subsection 23(10) (Note 1):

Omit “536,”.

SCHEDULE 5—continued

39. Subsection 23(10) (Note 2):

Omit “539,”.

40. Subsection 23(10B):

Omit “519,”.

41. Section 28:

Repeal.

42. After subparagraph 82(5)(b)(iia):

Insert:

“(iib) was receiving a job search allowance; or”.

43. Subsection 103(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

44. After subparagraph 146F(5)(b)(iia):

Insert:

“(iib) was receiving a job search allowance; or”.

45. Subsection 151(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

46. Subsection 202(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

47. Subsection 258(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

48. Subsection 321(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

49. Subsection 368(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

SCHEDULE 5—continued

50. Paragraph 408QA(l)(b):

Omit, substitute:

“(b) the person has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 9 months see section 38B.".

51. Subsection 418(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

52. After subparagraph 469(6)(b)(iia):

Insert:

“(iib) was receiving a job search allowance; or”.

53. Paragraph 469(7)(a):

After “social security benefit,” insert “job search allowance”.

54. Part 2.11:

Repeal.

55. Subparagraph 593(1)(g)(i):

Omit “ is at least 18”, substitute “subject to subsection (2B), is at least 16 years of age”.

56. Paragraph 593(1)(h):

Omit.

57. Paragraph 593(1)(i):

Omit “a job search allowance or”.

58. Subsection 593(1) (Notes 11 and 12):

Omit, substitute:

"Note 12: A person could be in receipt of a youth training allowance during a period for which the person would qualify for a newstart allowance, if paragraph (i) was disregarded, because of section 67 of the Student and Youth Assistance Act 1973 (extension of youth training allowance to end of payment period).".

59. Subsection 593(1) (Note 17):

Omit.

SCHEDULE 5—continued

60. Paragraph 593(2)(c):

Before “at all times” insert “if subsection 604(1) applies to the person,”.

61. Paragraph 593(2)(d):

Before “at all times” insert “if subsection 604(1) applies to the person,”. 

62. Paragraph 593(2)(e):

Omit “when”, substitute “if”.

63. Paragraph 593(2)(h):

Omit.

64. Paragraph 593(2)(i):

Omit “a job search allowance or”.

65. Subsection 593(2) (Notes 8 and 9):

Omit, substitute:

“Note 9: A person could be in receipt of a youth training allowance during a period for which the person would qualify for a newstart allowance, if paragraph (i) was disregarded, because of section 67 of the Student and Youth Assistance Act 1973 (extension of youth training allowance to end of payment period).”.

66. After subsection 593(2A):

Insert:

“(2B) A person who is under the age of 18 years is not qualified for a newstart allowance at a particular time (the relevant time) unless:

(a) the person was in receipt of job search allowance immediately before 20 September 1996; and

(b) the person was in receipt of newstart allowance throughout the period (the test period) from and including that date until the relevant time other than any part of the test period that was not longer than 6 weeks.”.

67. Subsections 598(6) and (7):

Omit, substitute:

“(6) Subsection (1) does not apply to a person who becomes qualified for newstart allowance at the end of a continuous period in respect of which the person received income support payments (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this subsection).

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.”.

SCHEDULE 5—continued

68. Subsections 599(2) and (3):

Omit.

69. Section 599A:

Repeal.

70. Section 601 (Note):

After paragraph (c) insert:

“: (d) section 603AA (voluntary work).”.

71. Section 602:

Repeal, substitute:

Relief from activity test—certain people over 50 in employment

“602. If a person has received income support payments in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this section), the person is taken to satisfy the activity test if:

(a) the person is at least 50 years of age; and

(b) the person is in employment that began on or after 1 January 1990; and

(c) the person earns at least 35% of average male full-time weekly earnings from the employment.

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.

Note 3: For activity test see section 601.

Note 4: For average male full-time weekly earnings see section 15.”.

72. Subparagraph 603A(3)(a)(i):

Add at the end “of this Act as previously in force”.

73. After section 603A:

Insert:

Relief from activity test—people engaged in voluntary work

“603AA.(1) Subject to this section, a person is taken to satisfy the activity test in respect of a period(the relevant period) if:

(a) on each day in the relevant period the person is engaged in full-time unpaid voluntary work; and

SCHEDULE 5—continued

(b) if the person is under 50 years of age—the person has been a qualified beneficiary for:

(i) if the person is under 18 years of age—at least 3 months; or

(ii) if the person has reached 18 years of age—at least 6 months; immediately before the person starts working for the organisation.

“(2) Paragraph (1)(b) does not apply to a person in respect of the relevant period if the person has received income support payments in respect of a continuous period of at least 12 months immediately before the start of the relevant period (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this section).

“(3) Subsection (1) does not apply to a person in respect of a day if:

(a) in respect of a person who is under 50 years of age—there are already 30 days in the same calendar year on which the person is taken to satisfy the activity test because of that subsection; or

(b) in respect of a person who has reached 50 years of age—there are already 65 days in the same calendar year on which the person is taken to satisfy the activity test because of that subsection; or

(c) in respect of any person—having regard to the opportunities, or possible opportunities, for employment that become available to the person on or before the day, the Secretary considers that that subsection should not apply to the person in relation to that day.

Note 1: For activity test see section 601.

Note 2: For qualified beneficiary see section 15.

Note 3: For income support payment see subsection 23(1).

Note 4: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.”.

74. After subsection 604(1A):

Insert:

“(1B) Subsection (1) does not apply to a person who:

(a) is under 18 years of age; or

(b) has reached 18 years of age and has not been registered by the CES as unemployed for more than 12 months;

but the Secretary may require such a person to enter into a Newstart Activity Agreement.”.

75. Paragraph 604(2)(b):

Omit, substitute:

SCHEDULE 5—continued

“(b) immediately before that day, the person was a party to:

(i) a Youth Training Activity Agreement under Part 8 of the Student and Youth Assistance Act 1973; or

(ii) a Job Search Activity Agreement under this Act as previously in force; and”.

76. Subsection 605(1):

Omit “must”, substitute “may”.

77. Subsection 607A(2):

Omit, substitute:

“(2) For the purposes of subparagraph (1)(b)(ii), the person’s maximum basic rate is:

(a) if the person is under 18 years of age—the person’s maximum basic rate worked out under Module B of Benefit Rate Calculator A; or

(b) if the person has reached 18 years of age—the person’s maximum basic rate worked out under Module B of Benefit Rate Calculator B.”.

78. Subsection 607B(3):

Omit, substitute:

“(3) For the purposes of subparagraph (1)(b)(ii) and paragraph (2)(b), the person’s maximum basic rate is:

(a) if the person is under 18 years of age—the person’s maximum basic rate worked out under Module B of Benefit Rate Calculator A; or

(b) if the person has reached 18 years of age—the person’s maximum basic rate worked out under Module B of Benefit Rate Calculator B.”.

79. Before subparagraph 608(1)j)(i):

Insert:

“(ia) a period of non-payment was imposed on the person before 20 September 1996 under section 526 of this Act as in force before that date and the period extended beyond that date; or”.

80. Subsection 611(1):

Omit, substitute:

“(1) A newstart allowance is not payable to a person if:

(a) the person is not excluded from the newstart allowance assets test; and

SCHEDULE 5—continued

(b) the value of the person’s assets is more than the person’s assets value limit.

“(1A) A person is excluded from the newstart allowance assets test if the person:

(a) is under 18 years of age; and

(b) is not a member of a couple; and

(c) does not have a dependent child; and

(d) is not an independent young person; and

(e) is not a homeless person.”.

81. Subsection 614(2) (Note 2):

Omit “and ‘social security benefit’ includes job search allowance”.

82. Paragraph 615(1)(a):

Omit.

83. Paragraph 617(1)(b):

Omit “period; and”, substitute “period.”.

84. Paragraph 617(1)(c):

Omit.

85. Subsections 617(2) and (3):

Omit, substitute:

“(2) Subsection (1) does not apply to a person who becomes qualified for newstart allowance at the end of a continuous period in respect of which the person received income support payments (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this subsection).

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.”.

86. Paragraph 620(a):

Omit, substitute:

“(a) at some time in the 13 weeks immediately before the person’s provisional commencement day, the person received an income support payment; or

Note: For income support payment see subsection 23(1).”.

87. Subsection 621(6):

Omit, substitute:

SCHEDULE 5—continued

“(6) If:

(a) after the commencement of the subsection for which this subsection is substituted and before 20 September 1996, a person became unemployed and claimed job search allowance; and

(b) because of sections 538 and 539 of this Act as in force before that date (ordinary waiting period), job search allowance was not payable to the person for a period starting on the day (the applicable day) applicable to the person under subparagraph (i), (ii) or (iii), as the case may be:

(i) if the person was not subject to a job search allowance unused annual leave waiting period and was not disqualified for job search allowance under section 519 of this Act as so in force (liquid assets test)—the person’s job search allowance provisional commencement day; or

(ii) if the person was subject to a job search allowance unused annual leave waiting period and was not disqualified for job search allowance under section 519 of this Act as so in force (liquid assets test)—the day after the day on which the person’s job search allowance unused annual leave waiting period ended; or

(iii) if the person was disqualified for job search allowance under section 519 of this Act as so in force (liquid assets test)—the day after the day on which the person’s job search allowance liquid assets waiting period ended; and

(c) during that period the person claimed newstart allowance;

then, despite subsections (1), (2) and (3), the person’s ordinary waiting period is a period of 7 days starting on the applicable day.”.

88. Paragraph 622(1)(c):

Omit, substitute:

“(c) immediately before stopping the course, was not receiving an income support payment; and”.

89. Paragraph 622(1)(d):

Omit “a job search allowance or”.

90. Subsection 622(1):

Add at the end:

“; and (f) is not covered by subsection (6) (people otherwise qualified for special benefit).”.

SCHEDULE 5—continued

91. Subsections 622(2) and (3):

Omit, substitute:

“(2) Subsection (1) does not apply to a person who becomes qualified for newstart allowance at the end of a continuous period in respect of which the person received income support payments (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this subsection).

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.”.

92. After section 622(4):

Insert:

“(4A) Subsection (1) does not apply to a person if:

(a) the person is receiving a social security pension, a social security benefit or a youth training allowance; and

(b) the person stops receiving the pension, benefit or allowance on a particular day (the termination day); and

(c) the person undertakes a full-time course of education of at least 6 months duration; and

(d) the person stops the course; and

(e) the person’s provisional commencement day is within 12 months after the termination day.

Note 1: For social security pension and social security benefit see subsection 23(1).

Note 2: For provisional commencement day see section 615.”.

93. Section 622:

Add at the end:

“(6) A person is not subject to an education leavers waiting period if the Secretary is satisfied that special benefit would be payable to the person during the waiting period if the person were subject to the waiting period.

Note: For education leavers waiting period see subsection 23( 1).".

94. Section 623:

Repeal, substitute:

Duration of education leavers waiting period—non-secondary school leavers

People covered by this section

“623.(1) This section applies to a person unless section 623AA (secondary school leavers) applies to the person.

SCHEDULE 5—continued

General rule

“(2) Subject to this section, the education leavers waiting period starts on the person’s provisional commencement day and lasts for:

(a) 13 weeks if, on the person’s provisional commencement day, the person:

(i) has not reached the age of 21 years; and

(ii) is not a member of a couple; and

(iii) does not have a dependent child; or

(b) 6 weeks if, on the person’s provisional commencement day, the person:

(i) has reached the age of 21 years; or

(ii) is a member of a couple; or

(iii) has a dependent child.

Note 1: The duration of the education leavers waiting period may be modified by:

(a) subsections (3) and (4) (change of status during waiting period);

(b) subsection (6) (periods of employment or periods on special benefit);

(c) subsections (7) and (8) (periods of part-time employment);

(d) subsection (10) (previous periods of non-payment because of education leavers waiting period);

(e) subsection (11) (6 months ceiling).

Note 2: For provisional commencement day see section 615.

Change of status in first 6 weeks

“(3) Subject to subsection (5), if:

(a) a person who is covered by paragraph (1)(a):

(i) reaches the age of 21 years; or

(ii) becomes a member of a couple; or

(b) a young person becomes a dependent child of someone who is covered by paragraph (1)(a);

within 6 weeks from and including the person’s provisional commencement day. the education leavers waiting period starts on the person’s provisional commencement day and lasts for 6 weeks.

Note: For provisional commencement day see section 615.

Change of status after 6 weeks

“(4) Subject to subsection (5), if:

(a) a person who is covered by paragraph (1)(a):

(i) reaches the age of 21 years; or

(ii) becomes a member of a couple; or

(b) a young person becomes a dependent child of someone who is covered by paragraph (1)(a);

SCHEDULE 5—continued

in the period:

(c) starting at the end of 6 weeks from the person’s provisional commencement day; and

(d) lasting for 6 weeks;

the education leavers waiting period starts on the person’s provisional commencement day and ends on the day before the day on which the person is first covered by paragraph (a) or (b).

Note: For provisional commencement day see section 615.

Notification required

“(5) For the purposes of subsections (3) and (4):

(a) a person is not taken to have become a member of a couple; and

(b) a young person is not taken to have become a dependent child of someone;

until the person tells the Department that this is the case.

Reduction of waiting period for periods of special benefit and full-time employment

“(6) The waiting period imposed by subsection (2) or (3) is reduced by a period equivalent to:

(a) if the person is subject to a 13 week education leavers waiting period—any period during which the person was employed on a full-time basis after stopping the course; and

(b) if the person is subject to a 6 week education leavers waiting period—any period during which the person has been employed, at any time, on a full-time basis; and

(c) any period during which the person was paid special benefit after stopping the course.

Reduction of waiting period for periods of part-time work

“(7) The waiting period imposed by subsection (2) or (3) is reduced by the period worked out under subsection (8) if the person has had at least 35 hours of part-time work,

Note: For part-time work see subsection (12).

Calculation of part-time work reduction

“(8) If subsection (7) applies to the person, the waiting period reduction is:

(a) one week for the first 35 hours of part-time work the person has had; and

(b) one day for each complete additional 7 hours of part-time work the person has had.

SCHEDULE 5—continued

Date of part-time work

“(9) If the person is subject to a 13 week education leavers waiting period, only part-time work that the person has had since stopping the course of education is taken into account for the purposes of subsections (7) and (8).

Reduction of education leavers waiting period if already partially served

“(10) If:

(a) a person is subject to an education leavers waiting period; and

(b) the person started the course concerned at a time when a job search allowance, a youth training allowance, a newstart allowance or sickness allowance was not payable to the person because of an education leavers waiting period; and

(c) the person’s provisional commencement day is within 12 months after the person started the course concerned;

the duration of the education leavers waiting period is reduced by the number of days of the previous education leavers waiting period that the person had served immediately before starting the course.

Note 1: For provisional commencement day see section 615.

Note 2: For education leavers waiting period see section 23.

6 month ceiling

“(11) An education leavers waiting period that applies in respect of a course of study undertaken by a person is not to extend more than 6 months after the person has stopped the course.

Interpretation

“(12) In this section:

part-time work means work engaged in otherwise than on a full-time basis and includes such work engaged in on a casual basis.

Duration of education leavers waiting period—secondary school leavers

People covered by this section

“623AA.(1) This section applies to a person if the course of education that the person stops is a full-time course of education at a secondary school.

General rule

“(2) Subject to this section, the education leavers waiting period starts on the person’s waiting period start day and lasts for:

(a) 13 weeks if, on that day, the person:

(i) has not reached the age of 21 years; and

SCHEDULE 5—continued

(ii) is not a member of a couple; and

(iii) does not have a dependent child; or

(b) 6 weeks if, on that day, the person;

(i) has reached the age of 21 years; or

(ii) is a member of a couple; or

(iii) has a dependent child.

Note 1: The duration of the education leavers waiting period may be modified by:

(a) subsections (3) and (4) (change of status during waiting period);

(b) subsection (6) (15 February cut-off);

(c) subsection (7) (periods of full-time employment or periods on special benefit);

(d) subsections (8) and (9) (periods of part-time employment);

(e) subsection (11) (previous periods of non-payment because of education leavers waiting period).

Note 2: For waiting period start day see subsection (12).

Change of status in first 6 weeks “

“(3) Subject to subsection (5), if:

(a) a person who is covered by paragraph (2)(a):

(i) reaches the age of 21 years; or

(ii) becomes a member of a couple; or

(b) a young person becomes a dependent child of someone who is covered by paragraph (2)(a);

within 6 weeks from and including the person’s waiting period start day, the education leavers waiting period starts on the person’s waiting period start day and lasts for 6 weeks.

Note: For waiting period start day see subsection (12).

Change of status after 6 weeks

“(4) Subject to subsection (5), if:

(a) a person who is covered by paragraph (2)(a):

(i) reaches the age of 21 years; or

(ii) becomes a member of a couple; or

(b)    a young person becomes a dependent child of someone who is covered by paragraph (2)(a);

in the period:

(c) starting at the end of 6 weeks from the person’s waiting period start day; and

(d) lasting for 6 weeks;

the education leavers waiting period starts on the person’s waiting period start day and ends on the day before the day on which the person is first covered by paragraph (a) or (b).

Note: For waiting period start day see subsection (12).

SCHEDULE 5—continued

Notification required

“(5) For the purposes of subsections (3) and (4):

(a) a person is not taken to have become a member of a couple; and

(b) a young person is not taken to have become a dependent child of someone;

until the person tells the Department that this is the case.

Waiting period to end on 15 February

“(6) If, apart from this subsection, a person’s education leavers waiting period would end later than 15 February next after the person’s waiting period start day, then the waiting period ends on that 15 February.

Reduction of waiting period for periods of special benefit and full-time employment

“(7) The waiting period imposed by subsection (2) or (3) is reduced by a period equivalent to:

(a) if the person is subject to a 13 week education leavers waiting period—any period during which the person was employed on a full-time basis after stopping the course; and

(b) if the person is subject to a 6 week education leavers waiting period—any period during which the person has been employed, at any time, on a full-time basis; and

(c) any period during which the person was paid special benefit after stopping the course.

Reduction of waiting period for periods of part-time work

“(8) The waiting period imposed by subsection (2) or (3) is reduced by the period worked out under subsection (9) if the person has had at least 35 hours of part-time work.

Note: For part-time work see subsection (12).

Calculation of part-time work reduction

“(9) If subsection (8) applies to the person, the waiting period reduction is:

(a) one week for the first 35 hours of part-time work the person has had; and

(b) one day for each complete additional 7 hours of part-time work the person has had.

Date of part-time work

“(10) If the person is subject to a 13 week education leavers waiting period, only part-time work that the person has had since stopping the course of education is taken into account for the purposes of subsections (8) and (9).

SCHEDULE 5—continued

Reduction of education leavers waiting period if already partially served “

“(11) If:

(a) a person is subject to an education leavers waiting period; and

(b) the person started the course concerned at a time when a job search allowance, a youth training allowance, a newstart allowance or sickness allowance was not payable to the person because of an education leavers waiting period; and

(c) the person’s provisional commencement day is within 12 months after the person started the course concerned;

the duration of the education leavers waiting period is reduced by the number of days of the previous education leavers waiting period that the person had served immediately before starting the course.

Note 1: For provisional commencement day see section 615.

Note 2: For education leavers waiting period see subsection 23( 1).

Interpretation

“(12) In this section:

part-time work means work engaged in otherwise than on a full-time basis and includes such work engaged in on a casual basis.

waiting period start day, in relation to a person, means the day after the day on which the person stops a full-time course of education at a secondary school.”.

95. Subsections 630A(7) to (10):

Omit, substitute:

“(7) For the purposes of subsection (6), if the person:

(a) was receiving a job search allowance; and

(b) ceased for a period of not longer than 6 weeks to receive the allowance; and

(c) at the end of the period either:

(i) began again to receive a job search allowance; or

(ii) would, apart from this section, have begun again to receive a job search allowance;

the person is taken to have been continuously receiving the job search allowance during the period.

“(8) For the purposes of subsection (6), if the person:

(a) was receiving a job search allowance; and

(b) ceased for a period of not longer than 13 weeks to receive the allowance; and

SCHEDULE 5—continued

(c) at the end of the period either:

(i) began to receive a newstart allowance; or

(ii) would, apart from this section, have begun to receive a newstart allowance;

the person is taken to have been continuously receiving the newstart allowance during the period.

“(9) For the purposes of subsection (6), if the person:

(a) was receiving a newstart allowance; and

(b) ceased for a period of not longer than 13 weeks to receive the allowance; and

(c) at the end of the period either:

(i) began again to receive a newstart allowance; or

(ii) would, apart from this section, have begun again to receive a newstart allowance;

the person is taken to have been continuously receiving the newstart allowance during the period.

“(10) For the purposes of subsection (6), if the person:

(a) is in receipt of a newstart allowance; and

(b) has received income support payments in respect of a continuous period of less than 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this subsection); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.

(c) ceased for a period of not longer than 6 weeks to receive the newstart allowance; and

(d) at the end of the period either:

(i) began again to receive a newstart allowance; or

(ii) would, apart from this section, have begun again to receive a newstart allowance;

the person is taken to have been continuously receiving the newstart allowance during the period.

“(11) For the purposes of subsection (6), if the person:

(a) is in receipt of a newstart allowance; and

SCHEDULE 5—continued

(b) has received income support payments in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this subsection); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.

(c) ceased for a period of not longer than 13 weeks to receive newstart allowance; and

(d) at the end of the period either:

(i) began again to receive a newstart allowance: or

(ii) would, apart from this section, have begun again to receive a newstart allowance;

the person is taken to have been continuously receiving the newstart allowance during the period.

“(12) For the purposes of subsection (6), if:

(a) the person was receiving a job search allowance or a newstart allowance; and

(b) as a result of the application of an automatic deferment provision or a discretionary deferment provision, a job search allowance or a newstart allowance was not payable to the person for a period: and

(c) at the end of the period the person began to receive a newstart allowance;

the person is taken to have been continuously receiving the newstart allowance during the period.

Note: For automatic deferment provision and discretionary deferment provision see subsection 23(1).".

96 After subsection 635(1):

Insert:

“(1A) If:

(a) a person made a proper claim for job search allowance before 20 September 1996; and

(b) the claim was not withdrawn, and had not been determined, before that date:

then, despite any other provision of this Division, the claim is taken to be a proper claim made by the person for newstart allowance.

"(1B) Subsection (1) does not apply to a person if:

SCHEDULE 5—continued

(a) the person was in receipt of job search allowance immediately before 20 September 1996; or

(b) paragraph (a) does not apply but the person made a proper claim for job search allowance before that date and the claim was granted before that date.”.

97. Paragraph 635(3)(a):

Omit “a job search allowance or”.

98. Paragraph 635(4)(a):

Omit “job search”, substitute “newstart”.

99. Subsection 635(4) (Note):

Omit “519”, substitute “598”.

100. Section 643:

Repeal, substitute:

How to work out a person’s newstart allowance rate

“643. A person’s newstart allowance rate is worked out using:

(a) if the person is under 18 years of age—the Benefit Rate Calculator A at the end of section 1067; or

(b) if the person has reached the age of 18 years—the Benefit Rate Calculator B at the end of section 1068.

Note: For double payments on release from gaol see section 1161.”.

101. After section 644:

Insert in Division 4 of Part 2.12:

NSA recipient may ask Secretary to change appropriate tax year

“644A.(1) If:

(a) the maximum basic rate of a person’s newstart allowance has been reduced because of the parental income test provided in Module G of Benefit Rate Calculator A (see section 1067); and

(b) the person asks the Secretary to make a determination under this section; and

(c) the income of the person’s income test parent or parents for the tax year in which the request is made is 75% or less than 75% of the income of the income test parent or parents for the tax year that was the appropriate tax year immediately before the request is made;

SCHEDULE 5—continued

the Secretary must determine that the appropriate tax year, for the purposes of applying that Module to the person for the period:

(d) starting on the day on which the request is made; and

(e) finishing on the first anniversary of that day;

is the tax year in which the request is made.

“(2) A request under paragraph (1)(b) must be made in writing, in accordance with a form approved by the Secretary.

“(3) Expressions used in subsection (1) have the same meanings as in Module G of Benefit Rate Calculator A.

“(4) In this section:

income, in relation to a person’s income test parent, means the parent’s taxable income and the person’s parental adjusted fringe benefits value.”.

102. Paragraph 660L(7)(a):

Before “1068-G8A” insert “1067-H8A or”.

103. Paragraph 660L(8)(a):

Before “1068-G8A” insert “1067-H8A or”.

104.Subsection 660LA(4):

Omit “job search allowance”, substitute “newstart allowance”.

105. Paragraph 660W(1)(b):

Omit, substitute:

“(b) a person has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and”.

106. Subsection 660W(1):

Insert before the Note:

"Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.”.

107. Subsection 660W(1) (Note):

Renumber as Note 3.

108. After subparagraph 660XBA(1)(d)(ii):

Insert:

“(iia) a job search allowance;”.

SCHEDULE 5—continued

109. After paragraph 660XBA(1B)(b):

Insert:

“(ba) a job search allowance;”.

110. After subparagraph 660XKA(6)(b)(iia):

Insert:

“(iib) was receiving a job search allowance; or”.

111. Paragraph 660XKA(7)(a):

After “social security benefit,” insert “job search allowance,”.

112. After subparagraph 660YBA(3)(a)(ii):

Insert:

“(iia) a job search allowance;”.

113. Paragraph 660YCA(f):

Omit “job search allowance or”.

114. Paragraph 660YCI(a):

Omit “job search allowance or”.

115. Paragraph 660YC1 (Note 1):

Omit.

116. Paragraph 660YCA(1)(f):

Omit “job search allowance or”.

117. Paragraph 661(1)(c):

Omit, substitute:

“(c) immediately before the person commenced the employment:

(i) the person was receiving a job search allowance or a newstart allowance; and

(ii) the person had been receiving income support payments in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.”.

SCHEDULE 5—continued

118. Subsection 661(2):

Omit.

119. Paragraph 663(l)(c):

Omit, substitute:

“(c) immediately before the person commenced the employment:

(i) the person was receiving a job search allowance, a newstart allowance or a youth training allowance; and

(ii) the person had been receiving income support payments in  respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.".

Note: The heading to section 663 is altered by omitting “Job search” and substituting "Newstart".

120. Paragraph 663(2)(c):

Omit, substitute:

“(c) immediately before the person commenced the employment:

(i) the person was receiving special benefit or sickness allowance; and

(ii) the person’s partner was receiving a job search allowance, a newstart allowance or a youth training allowance; and

(iii) the partner had been receiving income support payments in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.”.

121. Paragraph 664I(1)(b):

Omit, substitute:

“(b) immediately before the person commenced the employment:

(i) the person was receiving partner allowance; and

SCHEDULE 5—continued

(ii) the person’s partner had been receiving income support payments in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.”.

122. Divisions 5 and 6 of Part 2.13A:

Repeal, substitute:

“Division 6—Former job search, youth training or newstart allowance recipients

Payment to recipient

“665U.(1) A person is qualified for an education entry payment under this section if:

(a) either:

(i) the Secretary is satisfied that the person intends to enrol in a full-time course of education that is an approved course under the AUSTUDY scheme or ABSTUDY scheme; or

(ii) the person is enrolled in such a course; and

(b) immediately before starting the course of education:

(i) the person is receiving a newstart allowance or a youth training allowance; and

(ii) the person had been receiving income support payments in respect of a continuous period of at least 12 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this section); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of whether a person received income support payments in respect of a continuous period of at least 12 months see section 38B.”.

(c) the person:

(i) ceases to be qualified for newstart allowance or youth training allowance because the person takes part in the course of education; or

SCHEDULE 5—continued

(ii) is not qualified for payments under the AUSTUDY scheme or ABSTUDY scheme because the person takes part in the course to satisfy the activity test under section 601 or to comply with a Newstart Activity Agreement; or

(iii) is not qualified for payments under the AUSTUDY scheme or ABSTUDY scheme because the person takes part in the course to comply with a Case Management Activity Agreement under the Employment Services Act 1994; or

(iv) is not qualified for payments under the AUSTUDY scheme or ABSTUDY scheme because the person takes part in the course to satisfy the activity test under section 75 of the Student and Youth Assistance Act 1973 or to comply with a Youth Training Activity Agreement under that Act; and

(d) the person has not, within the last 12 months, received a payment under this Part,

“(2) A person is also taken to be qualified for an education entry payment under this section if:

(a) immediately before 20 September 1996, the person:

(i) was qualified for an education entry payment under section 665Q of this Act, or under this section, as in force immediately before that date; or

(ii) would have been so qualified if the person had, before that date, duly made a claim for the payment; and

(b) the person has not received the payment.

Amount of section 665U payment

“665V. The amount of an education entry payment under section 665U is $200.

Need for a claim

“665W. A person is not qualified for an education entry payment under section 665U unless:

(a) the person has made a claim for the payment; and

(b) the claim is in writing and in a form approved by the Secretary.

Claim may be withdrawn

“665X.(1) A claimant for an education entry payment under this Division, or a person on behalf of a claimant, may withdraw a claim that has not been determined.

SCHEDULE 5—continued

“(2) A claim that is withdrawn is taken not to have been made.

“(3) A withdrawal may be made orally or in writing.”.

123. Subsection 666(9):

Omit “job search allowance,”.

124. Subsection 667(5):

Omit “job search allowance,”.

125. Paragraph 676(5)(b):

Omit, substitute:

“(b) either:

(i) the person became unemployed before 20 September 1996 and, because of section 519 (job search allowance liquid assets test disqualification) of this Act as in force before that date, the person was not qualified for job search allowance during the period of 4 weeks that started on the day on which the person became unemployed; or

(ii) the person became or becomes unemployed and, because of section 598 (newstart allowance liquid assets test disqualification) or because of section 72 of the Student and Youth Assistance Act 1973 (youth training allowance liquid assets test disqualification), the person was not or is not qualified for newstart allowance or for youth training allowance during the period of 4 weeks that started or starts on the day on which the person became or becomes unemployed; and”.

126. Paragraph 677(1)(c):

Omit “job search allowance or”.

127. Subsection 680(3) (Note 4):

Omit “job search or newstart”, substitute “sickness”.

128. Subsection 686(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

129. Subsection 692(2):

Omit, substitute:

SCHEDULE 5—continued

“(2) If:

(a) after the commencement of the subsection for which this subsection is substituted, a person became or becomes unemployed and:

(i) claimed job search allowance before 20 September 1996; or

(ii) claimed or claims newstart allowance or youth training allowance; and

(b) because of sections 535 to 537 of this Act as in force before 20 September 1996, sections 617 to 619 of this Act or sections 93 to 95 of the Student and Youth Assistance Act 1973 (unused annual leave waiting period), the allowance was not or is not payable to the person for a period starting on the day after the day on which the person’s employment ended; and

(c) during that period the person became or becomes temporarily incapacitated for work and claimed or claims sickness allowance;

the person’s unused annual leave waiting period is taken to have started on the day after the day on which the person’s employment ended.”.

130. Paragraph 693(a):

Omit, substitute:

“(a) at some time in the 13 weeks immediately before the person’s provisional commencement day, the person received an income support payment; or

Note: For income support payment see subsection 23(1).”.

131. Subsection 694(5):

Omit, substitute:

“(5) If:

(a) after the commencement of the subsection for which this subsection is substituted and before 20 September 1996, a person became unemployed and claimed job search allowance; and

(b) because of sections 538 and 539 of this Act as in force before 20 September 1996, (ordinary waiting period), job search allowance was not payable to the person for a period starting on the day (the applicable day) applicable to the person under subparagraph (i), (ii) or (iii), as the case may be:

(i) if the person was not subject to a job search allowance unused annual leave waiting period and was not disqualified for job search allowance under section 519 of this Act as in force before 20 September 1996 (liquid assets test)—the day that was the person’s job search allowance provisional commencement day; or

SCHEDULE 5—continued

(ii) if the person was subject to a job search allowance unused annual leave waiting period and was not disqualified for job search allowance under section 519 of this Act as so in force (liquid assets test)—the day after the day on which the person’s job search allowance unused annual leave waiting period ended; or

(iii) if the person was disqualified for job search allowance under section 519 of this Act as so in force (liquid assets test)—the day after the day on which the person’s job search allowance liquid assets waiting period ended; and

(c) during that period the person became temporarily incapacitated for work and claimed sickness allowance;

then, despite subsections (1), (2) and (3), the person’s ordinary waiting period is a period of 7 days starting on the applicable day.”.

132. Paragraph 695(1)(c):

Omit, substitute:

“(c) immediately before stopping the course was not receiving an income support payment; and

Note: For income support payment see subsection 23(1).".

133.Paragraph 695(3)(a):

After “benefit” insert “, job search allowance”.

134. Subsection 696(3A):

Omit, substitute:

“(3A) If:

(a) after the commencement of the subsection for which this section is substituted and before 20 September 1996, a person became unemployed and claimed job search allowance; and

(b) because of sections 540 and 541 of this Act as in force before 20 September 1996 (education leavers waiting period— non-secondary school leavers), job search allowance was not payable to the person for a period starting on the person’s provisional commencement day; and

(c) during that period the person claimed sickness allowance;

then, despite subsections (1), (2) and (3), the person’s education leavers waiting period is taken to have started on the day that was the person’s job search allowance provisional commencement day.”.

135. Subsection 728PA(4):

Omit “job search”, substitute “sickness”.

SCHEDULE 5—continued

136. Paragraph 728ZC(1)(b):

Omit, substitute:

“(b) the person has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); and

Note 1: For income support payment see subsection 23(1).

Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.”.

137. Paragraphs 729(2)(c) and (d):

Omit, substitute:

“(c) the person is not disqualified for a newstart allowance for the period solely because of the operation of one or more of the following:

(i) subparagraph 593(g)(iv) (is not registered by the CES as being unemployed);

(ii) section 596 (unemployment due to industrial action);

(iii) section 597 (move to area of lower employment prospects); and

(d) if the person is qualified for a newstart allowance but the allowance is not payable to the person for the period—that result is not produced solely by the operation of one or more of the following:

(i) subsection 630C(4) (person failing to comply with Secretary’s requirements);

(ii) section 624 (person failing to satisfy activity test);

(iii) section 628 (unemployment due to voluntary act);

(iv) section 629 (unemployment due to misconduct);

(v) section 630 (refusal of job offer);

(vi) section 631 (person failing to comply with notification requirement);

(vii) section 632 (person failing to continue CES registration);

(viii) section 633 (seasonal workers);

(ix) section 634 (move to area of lower employment prospects); and”.

138. Subsection 729(4):

Omit “job search allowance or”.

139. Subsection 732(2) (Note):

Omit “job search allowance or”.

SCHEDULE 5—continued

140. Subsection 735(2) (Note 2):

Omit “job search and newstart allowances”, substitute “newstart allowance”.

141. Subsection 746(2):

Omit “job search allowance,” (wherever occurring).

142. Subsection 768A(4):

Omit “job search”, substitute “newstart”.

143. Paragraph 771H(1)(b):

Omit, substitute: