Dan Tehan (Wannon, Liberal Party, Minister for Social Services) Share this | Hansard source

I move:

That this bill be now read a second time.

This bill is to introduce an income test for carer allowance and for the carer allowance (child) healthcare card only.

In 2017-18, the government expects to spend $8.5 billion on payments for carers. This includes $5.4 billion on carer payment, $1.7 billion on carer allowance for those caring for an adult and almost $600 million for those caring for a child.

Unlike most other social security payments, which are income tested and targeted to those most in need, there is currently no income test associated with carer allowance.

The carer payment, the age pension, and family benefits are all subject to an income test. This bill will keep our welfare system strong and sustainable into the future.

Carer allowance is an income supplement for people who provide daily care and attention in a private home to a person with a disability or severe medical condition. The current payment is $127.10 per fortnight.

Carers caring for a child under 16 years with disability or a medical condition get a healthcare card for that child with their carer allowance.

Those caring for children under 16 years who do not provide the qualifying level of care required for carer allowance but who provide at least 14 hours a week care are provided with a healthcare card in the name of the child.

There is currently no assessment of financial need to qualify for carer allowance and the healthcare card.

This bill will introduce an income test with a high threshold of $250,000 per annum to both carer allowance and carer allowance (child) healthcare card from 20 September 2018.

From 20 September 2018, eligibility for the carer allowance payment and the carer allowance healthcare card will be restricted to carers whose own income, and that of their partner, if applicable, is below $250,000. This will be based on adjusted taxable income from the previous financial year.

The income test will apply to new recipients and those who are receiving carer allowance or who have a child healthcare card only on 20 September 2018.

Carer allowance adjusted taxable income, or ATI, includes taxable income, employer provided fringe benefits, foreign income, net investment loss, reportable superannuation contributions, tax free superannuation income, tax free pension or benefit, and paid parental leave income.

It will exclude deductible child maintenance expenditure. Income from long-term financial assets will also be included in the income test for people who receive tax-free income streams.

In most cases, the ATI of the carer and partner (when applicable) from the previous financial year would be used by Centrelink to assess the claimant's eligibility for carer allowance. However, a carer would be able to provide an estimate of current year ATI if they have experienced a change in financial circumstances.

The Department of Human Services, Centrelink, will provide current carer allowance recipients and new claimants of carer allowance information on the income test prior to 20 September 2018.

The $250,000 per annum income limit will apply to both singles and couples. The income test will be a fixed limit with no indexation.

Around 6,500 carer allowance recipients will be affected by income testing in the 2018-19 financial year because their own income combined with that of their partner's, when applicable, is above $250,000.

An estimated 400 people with a carer allowance (child) health care card only will be affected by the income test.

To put this in perspective, as at September, 608,873 people received carer allowance, 16,579 people received a carer allowance health care card only, and 264,157 people received carer payment.

As we announced earlier this year, the Australian government will invest the $85.6 million raised through this measure to introduce a range of new early-intervention and tailored services to ensure carers get early support to manage the stresses their role places on them.

Carers Australia, the peak body for carers, has worked with the government over a two-year consultative process to design a new and improved model to deliver support services for carers.

The integrated carer support service will provide a national integrated approach to service provision for carers as opposed to the current fragmented system.

Carers Australia supports the introduction of a $250,000 income test threshold for carer allowance to finance reforms to carer support services. The introduction of the integrated carer support service represents the biggest reform for carers in over a decade.

Welfare expenditure on carers in the form of payments and services is an important part of the Australian welfare system. In addition to the $8.5 billion the government expects to spend on payments to carers in 2017-18, the government will also provide around $162 million for the delivery of programs and services that assist and support carers.

The government recognises the very significant contribution carers make to the lives of the people they care for and to the broader community.

Their dedication in overcoming what can be daily challenges is an inspiration. Many of us would personally know someone who provides care to a relative or friend; care that can enable social participation and independence for the person receiving that care.

The need for carers is increasing so it is essential we get the balance right in the welfare system between financial support and availability of services.

The introduction of the integrated carer support service will focus on providing early-intervention, prevention and skill-building support, aimed at helping carers before they reach crisis point.

We value the immense contribution carers make to our community, and understand the challenges they face in helping others, in their homes and in their communities.

The introduction of a generous threshold for income-testing carer allowance makes the introduction of these new services possible.

This bill allows the government to provide financial assistance to those who most need it and increase support services for carers in need.

Debate adjourned.

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