Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Hansard source

I thank colleagues for their contributions to this debate on the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015. As has been well canvassed, this bill will implement the government's 2015 budget measure that will provide more consistent and more generous support for families with dependent young people who qualify for certain youth income support payments. With a financial commitment from the government of $262.7 million over the forward estimates, the bill will bring extra support to families as their children move into young adulthood, particularly rural and regional families whose children continue to study beyond year 12.

From 1 January 2016 this will include removing the family assets test and the family actual means test from the youth allowance parental means test arrangements. This will result in a more consistent level of support for families as young people move from family tax benefit part A to an individual income support payment. The parental income test exemptions for youth allowance will also be aligned with existing arrangements for family tax benefit part A. Removing the family assets test for youth allowance will allow around 4,100 additional dependent youth allowance claimants to qualify for the first time, accessing average annual payments of more than $7,000 per year. Removing the family actual means test will see around 1,200 more people receiving youth allowance for the first time as well as increasing payments for around 4,860 existing students by approximately $2,000 a year. The changes will reduce the significant regulatory burden on around 30,000 families who are subject to the family actual means test and around 200,000 families who are subject to the family assets test. The changes mean that farming families will not have farm assets counted towards the means test for their dependent children claiming youth allowance.

A further component of this budget measure will apply from 1 January 2016 to expand the family pool for the youth parental income test to include a notional maximum rate of family tax benefit part A for all of the children for whom the parents have financial responsibility. This will apply to families that have dependent children receiving individual youth payments that are parentally income tested and also younger dependent siblings, and will result in a lower rate of reduction to the dependent child's youth allowance than is currently the case.

Including all FTB children in the family pool for the youth parental income test will allow around 13,700 families with dependent children in both the family tax benefit part A and youth streams to become eligible for an average increase in payment of around $1,100 a year. Around 5,800 families who currently miss out on payments due to the combined higher taper rates will also become eligible for an average payment of around $1,300 a year. Additionally, in a two-stage process, from 1 January 2016 maintenance income will be removed from the youth allowance parental income test assessment. From 1 January 2017 a separate maintenance income test for the treatment of child support will be applied, like the test that currently applies to family tax benefit part A.

This bill seeks to boost assistance for working families, smoothing the transition to individual payment for young people and better supporting them into study to build their careers, develop economic opportunities and contribute to our economy.

The bill was considered by the Senate Community Affairs Legislation Committee, and I am pleased to say that in its report, tabled on 9 November, the committee recommended that the bill be passed without alteration. In the committee report, the Australian Greens provided additional comments around the adequacy of youth payments and proposed there be a review of the measures in two years to ensure there are no adverse outcomes as a result of removing the family assets test. Removing the family assets test is consistent with arrangements for family tax benefits, where no assets test applies. There is no rationale for applying a family assets test for youth payments that does not apply to family tax benefit. Personal assets testing will continue to apply across the social security system for income support payments.

The government commissioned a review of Australia's welfare system, which resulted in the McClure report, and also instituted a review, through the interdepartmental committee on access to higher education for regional and remote students, of the challenges regional students face in accessing higher education. Both of these initiatives include a focus on the adequacy of income support payments, and the government will consider the issues raised by community organisations and the Australian Greens as part of the process of working through the recommendations of the McClure report and the interdepartmental committee review.

While the government does not propose to agree to a formal review after two years, the government does monitor the effectiveness of its programs on an ongoing basis, and the outcomes of the measures in the bill will be considered as part of that continuous process of policy review.

The committee noted that, by removing complex and unnecessary means tests, the bill facilitates the objective of providing more consistent support for families with dependent young people who qualify for youth payments. The committee also noted that this initiative is consistent with the findings of the recent review by the interdepartmental committee on access to higher education for regional and remote students. With those remarks, I commend the bill to the Senate.