Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

This bill seeks to amend the current income management arrangements. It will abolish the 'vulnerable' measure of income management—the measure that identifies the most vulnerable people who may benefit from income management. It will cut away much-needed support from these vulnerable people—support provided by Centrelink social workers.

This bill will also abolish the matched savings and voluntary incentive payments—matched savings payments of up to $500 for people on income management who have completed a financial literacy course and can demonstrate a savings pattern; and voluntary incentive payments of $250 paid to people who volunteer for income management for every 26 continuous weeks. Let me clear: Labor does support income management when it is targeted to those most in need. Income management ensures that money is available for life's essentials. It provides a tool to stabilise people's circumstances and ease immediate financial stress. Income management works to make sure that income support payments are spent in the best interests of children and families. It means more money goes to food, clothes and rent, and less money to buying alcohol and gambling.

In 2008 in Perth and in the East and West Kimberley, Labor trialled child protection income management, making income management available to child protection workers to assist families at risk of child abuse and neglect. In 2010, following widespread consultation, the Labor government introduced a new, non-discriminatory model of income management in the Northern Territory. This took it from a blanket, discriminatory program that had been designed by the Howard government to a tailored income management approach applying it to at-risk and vulnerable income support recipients, to support people with a high risk of social isolation, those with poor money management skills and those likely to participate in risky behaviours.

In 2012, Labor introduced income management in five disadvantaged locations across Australia as part of our Building Australia's Future Workforce reforms: Playford in South Australia, Greater Shepparton in Victoria, Bankstown in New South Wales, and Rockhampton and Logan in Queensland. This was to help families in those locations stabilise their lives so that they could prepare and look for work.

Following calls for income management and after consultation with families, the Labor government agreed to implement income management in the APY lands in South Australia, to help families in those APY lands make sure that less money was spent on alcohol and gambling and more money was available for food, clothing and other life essentials. In 2013, Labor introduced income management in Laverton and the Ngaanyatjarra lands in Western Australia, to provide families in Laverton and the Ngaanyatjarra lands with an important tool to help families budget in the best interests of their children. We also worked with the Northern Territory government to provide income management to help deal with people who came before the Northern Territory Alcohol Mandatory Treatment Tribunal, making less money available to spend on alcohol. And right now, across Australia, it is possible for child protection workers to use income management as a tool to support families at risk of child neglect. Unfortunately most states do not use this provision.

I know from my own experiences, from what people have told me, that income management is making a difference to people's lives. Mildred Inkamala, from the Northern Territory community of Hermannsburg, said:

For my people, it's done a very good thing. Kids are going to school, they're healthier, people are not spending all their money on grog.

In Perth, I visited a money management service where young women on child protection income management told me it was helping them stabilise their lives and, in particular, their housing circumstances. These women told me that income management helped them budget and pay their bills. And, as their lives improved, they were able to spend more time with their children.

Income management was part of the Labor government's reforms to build an income support system based on the principles of engagement, participation and responsibility. It was Labor that worked to progressively reform the income support and family payment system to foster responsibility and self-respect; to ensure income support is spent where it is intended, on the essentials of life and in the interests of children; and, importantly, to make sure that income support payments support those who need it most. Labor showed that it is possible to be financially responsible at the same time as supporting Australia's most vulnerable. We showed what it means to be fair.

In 2008 Labor introduced means-testing to family tax benefit part B. We also means-tested the baby bonus, to make sure that support was going to those who needed it most. As part of Labor's Building Australia's Future Workforce package, we introduced new measures to promote long-term economic participation in 10 of the nation's most disadvantaged communities; extra responsibilities and more assistance for teenage parents on income support, jobless families and other vulnerable groups; new requirements for teenage parents who are receiving parenting payment to meet an individually crafted participation plan; plans focused on education pathways, including school completion, foundation skills or certificate-level qualifications; support for children and families and help for parents to enter or return to the workforce. Labor introduced compulsory participation requirements for parents who are disengaged from the workforce and receiving income support to attend interviews with Centrelink caseworkers. Interviews with Centrelink caseworkers help to make sure that children are ready for school and help the parents to address any prevocational barriers to future employment.

Through these reforms to our income support system, Labor showed what it is to be fair, making sure that everyone has a decent standard of living at the same as supporting the most vulnerable, helping people take responsibility for their own lives. We know that very vulnerable people and families need more assistance than the quarantining of income support payments and the tightening of participation requirements. We strengthened the relationship between money management services and Centrelink, to make sure that people on income management are receiving help to build their financial literacy, including budgeting, banking, savings and awareness of the risks of payday loans.

Labor provided financial literacy support to people on income management. We also provided additional family support services in regions where income management applied and other disadvantaged locations. We made sure that people on income management met regularly with Centrelink social workers, to help them budget, make sure their priority needs were met and address other issues in their lives that were impacting on their wellbeing.

Centrelink social workers meet regularly with people on income management to help them budget effectively and to allocate their income managed funds to priority needs like rent, utilities, food or household items. Unfortunately, that is what this government wants to take away in this bill. It wants to take away some of the support to people on income management. This government, through this bill, wants to take away support from families and people who need it most, and we will not agree to that.

Labor believes income management should be targeted. We do not believe that everyone on income support should be on or would benefit from income management. The vast majority of people on income support are perfectly able to manage their own money. Income management is also not a punishment, and that is why the vulnerable measure of income management is so important. The vulnerable measure of income management aims to identify and help vulnerable and at-risk individuals and their families. A Centrelink social worker has determined that income management can help them or their family. They have been assessed by a Centrelink social worker to be in financial hardship or experiencing financial exploitation. The person may be homeless or at risk of homelessness, or they may not be taking care of themselves or their children. The Centrelink social worker aspect of the vulnerable measure is a very important way in which those who most need help are identified and supported, so Labor will not support the abolishment of this measure. We do not support the removal of this vital role of Centrelink social workers.

In government, Labor was firm in its commitment to protecting and providing for children and vulnerable people, and our commitment continues. That is why we will not support this government's attempt to take away support for these very vulnerable people. We will oppose the parts of this bill that see social worker interaction and assistance stripped from those who need it most. We will not support changes to income management that take away help for budgeting and prioritising money that makes sure that that money is directed to rent, food and support for children. Labor will continue to support income management as a tool targeted towards the vulnerable that actually helps vulnerable people, a tool carefully targeted towards vulnerable Australians to help them better manage their income support and family assistance payments and to help people stabilise their lives.

We will not oppose the parts of the bill that abolish the matched savings and incentive payments. We are focused on supporting those who need it most. We also seek to be fiscally responsible, so we will oppose the cuts that will take much needed support away from vulnerable families. We will oppose the changes that take away the ability to identify those people that may need our support the most. This demonstrates that only Labor can be trusted to reform the income support system, so that it is fiscally responsible and can better support the nation's most vulnerable.

Alan Tudge (Aston, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

I rise also to speak on the Social Services Legislation Amendment (No.2) Bill 2015, which is before the House at present. This bill does a number of things. Most importantly, it extends the operation of income management for another two years in all locations across Australia. Most people who are on income management are located in the Northern Territory, but there are also trial sites of income management in other states as well. This bill commits $146.7 million to extend the operation of the income management regime, but in a more streamlined version, which I will get to in a minute.

The income management regime has been in place now for a number of years, and I commend the Labor government for continuing on with this and introducing it in many places. It is a system that has been shown to work for many people. It takes people's welfare payments and provides some structured support around those welfare payments. In essence, it helps people to set up individual accounts for typically 50 per cent of their welfare payments, which go into various things such as rent, food, whitegoods and into other accounts they may want to set up. By and large, the evaluations have shown that the 50 per cent of the welfare payments put aside for income management actually was spent on the things it was supposed to be spent on. We do not know much about what occurred for the other 50 per cent of the welfare payments, but for those under income management, the evaluations certainly showed that by and large it was spent on things that it was supposed to be spent on. That indeed was the whole purpose of it—to ensure that there is at least some money there to pay for things like rent, to pay for things like food and to pay for some of the basics, and in doing so to minimise child neglect and to ensure that money is being spent for the purpose which it was provided.

There are other ways that we could assess how successful the income management regime has been. You can ask people what they thought of it, and indeed in the evaluations that was done. When they did that, around two-fifths of people on the income management system thought that it had actually made things better for them. The anecdotal evidence bears this out, with many saying that it assisted in terms of putting food on the table and ensuring that there was money available across the payment fortnight, and a further third thought that there was little difference. So, almost three-quarters of people who were on the compulsory income management actually provided a very positive view of income management, or thought that it did not make much difference.

Perhaps the most telling figure though is the proportion of people who came off compulsory income management but decided to stay on it in a voluntary way. Almost two-thirds of people actually chose to stay on it in a voluntary capacity despite no longer being compelled to be on the income management regime. I think that is perhaps the most telling figure because it says that most people actually appreciate and enjoy the structured support that the income management system provides.

I know from my time in the communities where this operates and from speaking to many people about it that it is by and large—but not universally—supported, particularly from the women. They are often the ones that are left to ensure that the household budget is maintained and that there is food on the table, and this can very much support them in that role.

As well as providing the extension of income management for a further two years, this bill makes a number of amendments to streamline the operation of the income management system. This streamlined program includes the removal of social worker assessments through the vulnerable welfare recipient measure, as this was underutilised and resource intensive. The removal of this will allow social workers to better service their vulnerable clients. While participants remain able to adjust how they use their funds to meet priority needs at any time, they will no longer be required to discuss these arrangements with Centrelink every eight weeks. There will be a phased removal of the matched savings payments, which offer people on the compulsory measures up to $500 in matched savings if they complete an approved money management course and have demonstrated an approved savings pattern over a 13-week period. These will cease from 31 December 2015, as they were largely unsubscribed to and costly to administer. Indeed, the evaluation found that only 31 people had obtained a matched savings payment—31 out of, from memory, 27,000 people who were on income management.

The phased removal of the voluntary incentive payments, which offer individuals a payment of $250 for every continuous period of 26 weeks, will cease on 31 December 2015, as evaluations have shown that incentive payments are not the main driver for commencing income management and that they can create a dependency on the program.

The BasicsCard Merchant Approval Framework will also undergo administrative and policy changes that will simplify the model, improve the customer experience and remove unnecessary customer contact. These streamlined arrangements will achieve savings of approximately $36 million over two years. These changes will maintain service continuity for individuals using the BasicsCard and will take small steps to reduce the ongoing cost.

As well as those streamlining amendments the bill also makes amendments to reflect the two measures relating to aged care which were included in the 2014-15 Mid-Year Economic and Fiscal Outlook announcement. From 1 July 2015 the bill will cease payments of residential care subsidies to residential aged care providers for holding a place for up to seven days before a care recipient enters care. This will ensure the subsidy is appropriately targeted to people actually receiving care. Currently this subsidy is paid to providers at a reduced rate of 30 per cent of the full residential care subsidy that will be payable once the care recipient enters care. When the subsidy is ceased under this measure, the provider will not be able to recoup any lost residential care subsidy from the care recipient. However, the provider will still be able to charge the care recipient the standard residential contribution for the pre-entry period. Lastly, the bill will reflect the government's decision to abolish the Aged Care Planning Advisory Committees as part of the Smaller Government initiative.

That is a quick summary of the operation of this bill. As I said, most important is the extension of income management for a further two years so that that structured support can continue and the benefits can continue, but alongside that there is some streamlining to remove things that frankly either were not working or were not being taken up but nevertheless were quite expensive—I think that is a sensible streamlining and cost saving measure. There are also some important measures relating to aged care incorporated into this bill. I commend the bill to the House.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The Social Services Legislation Amendment (No. 2) Bill 2015 introduces measures from the 2015 budget related to income management and aged care. This bill abolishes matched savings and voluntary incentive payments for people who volunteer for income management within the prescribed location. It amends the 'vulnerable measure' relating to the social worker assessment process and requirements, reducing interactions between the Department of Human Services and participants. Currently there are two groups of income management participants under the vulnerable measure: participants are assessed by a Centrelink social worker on a case-by-case basis, and there is an automatic trigger applying to a class of people—currently a youth-related trigger.

It is assumed that the measures in this bill would apply to the social worker assessment component only, and it is to be hoped that that is the case. Approximately 253 people are currently on income management through being identified by a Centrelink social worker. Evidence from evaluations suggests that the participants who are most likely to benefit from income management are those identified through Centrelink social worker assessment, or through child protection measures. It is of some concern that this is not a move by the government to prevent this taking place. We believe it is vitally important that people be properly identified. Participants placed on income support management through this measure receive regular social worker support that would be reduced under this bill. That is what we do not support—the cuts. The one thing this government is good at doing is cutting services and cutting support to those people who are very vulnerable. It is extremely difficult to understand the performance of this government in the area of providing support to those people that are most vulnerable in our community.

Labor supports income management; we can see how income management can assist people to stabilise their lives and to move forward—it is a way of addressing intergenerational unemployment and extreme disadvantage, and we can see the benefit of it. But we also know that people undertaking income management need support, they need the proper programs to help them move forward—programs that change their life circumstances. It should not just be a move by the government of the day to save money. That is what I have always feared—that this is just another example of cost-cutting and saving. A saving of $11.6 million is projected. When taking a wider view of how you save money into the future, you save money into the future by giving people the right sort of support for them to change their circumstances. I fear that that is not the intent of this government. Income management ensures that income support payments are spent in the best interests of children and families. It ensures that money is available for life essentials and helps to ease immediate financial stress. Labor in government extended income management to five communities across Australia as part of Building Australia's Future Workforce. In responding to calls to help after consultation, Labor introduced income management to help families in the APY Lands. The work of Centrelink social workers is essential in ensuring that income management is appropriately targeted and best supports those in need.

We on this side of the House oppose cuts to vulnerable families. This government is not about providing support for people who need support. It is vitally important that the government not walk away from the fact that if you really want to change a person's life, income management is part of it but you also have to have the proper supports in place; have Centrelink social workers who can identify the problem and change a person's life.

The other component of this legislation relates to aged care. I will share with the House a conversation I had recently with some aged-care providers in the Shortland electorate. They are particularly disappointed about the performance of the Abbott government in the area of aged care—for example, there is no minister responsible for aged care or ageing. That is very disappointing. They are also disappointed that this government constantly changes the rules in relation to aged care.

I find it extremely disappointing that part of this legislation is actually doing away with aged-care planning advisory committees. Planning is imperative when it comes to aged care. We have an ageing population in Australia, and we need to plan for the future of that ageing population. We need to make sure that the proper resources are in place, that the proper facilities are in place and that the proper packages are in place. We need to be able to look at it holistically and we need to know that as a country we are going in the right direction.

I do not have confidence in this government, and what I am hearing from aged-care providers in my electorate is that they are finding it difficult to keep up with constant changes that are being put upon them by the Abbott government. To be quite honest, it is really not good enough.

Part of this legislation also relates to when a person receives an offer of admission into an aged-care facility; it can be very short notice and a timely decision will need to be made about whether to accept the offer or not. Whether or not to accept an offer and move into care is a big decision for a family and for an individual. It is giving up a lot of their independence, and there are a lot of dynamics within a family and a household that need to be addressed. So I was quite concerned when I learnt that up to seven days of social leave could be used as pre-entry. This pre-entry leave gave people time to consider, immediately before they enter a service, all the issues that I just mentioned. It has already been reduced, and the simple fact that the government is looking at reducing it again shows that they are not looking at the big picture. They are not looking at all the issues. They do not care about people that are vulnerable. They do not care about frail aged people that are looking to move into aged care. They are targeting them right at that time; not giving them time to consider all the issues that are involved. It is yet another surprise attack on vulnerable people.

The Abbott government really has shown that older Australians are on their own; they have shown their contempt for older Australians and the aged-care system over the past 12 months. Instead of delivering their promises in the area of aged care, they have reneged on those promises and they have let so many people down. The $10 million cut comes hot on the heels of Minister Fifield's heartless decision to axe the dementia and severe behaviour supplement. This supplement was something that people relied on. It was something that aged-care facilities relied on. And axing this supplement has left elderly people—people who are extremely vulnerable, people who are living with dementia—on their own, without the support that they need.

This is just further evidence that the Abbott government has completely dropped the ball when it comes to aged care. They are ripping millions of dollars out of the system—at a time when we should be making sure it is strong and sustainable for the future, at a time when we should be investing in aged care, at a time when we should be investing in planning, at a time when we need to be looking at planning our aged-care system. We need to be going ahead with the changes to aged care that were introduced under the previous government and making sure that those frail aged people have the support of government. They should not be in a situation where they are feeling insecure. They need to know they have a government that will support them as they move forward; not a government that completely ignores their needs and drops the ball when it comes to aged care, not a government that shows their lack of care and compassion for older Australians.

Comments by the Treasurer last week showed his total lack of understanding of issues around ordinary Australian families when he said, 'If you want to buy a house, then you need to get a good job'. A lot of people have good jobs; they work very long hours; they work weekends. They rely on penalty rates to be able to pay for their house. Saying that it is purely an individual's fault that they do not have the money to put a deposit on a house that costs $1 million-plus in Sydney shows what an out-of-touch Treasurer and an out-of-touch government this is.

Coming back to the legislation before us right now, that example I just gave is an example of the attitude of a government that does not care about vulnerable people, an attitude that leads to a government that is constantly placing cuts on those people that are most vulnerable. This is a government that really does not understand issues surrounding aged care and older Australians. This is a government that is prepared to cut planning and to walk away from people that look to it for solutions.

So, whilst we support the income management, we also oppose cuts to vulnerable Australians.

Debate interrupted.