Anne Ruston (SA, Liberal Party, Minister for Families and Social Services) Share this | Hansard source

The Social Services and Other Legislation Amendment (Simplifying Income Reporting and Other Measures) Bill 2020 will improve the process for reporting employment income to Centrelink. From 1 July 2020, social security recipients will report their employment income to Centrelink when it's paid by their employer instead of when it's earned. Assessing employment income when paid will make it easier to report income correctly. This will better support people receiving the right amount of income support each time it is paid, no more and no less than they are eligible for, reducing the likelihood of overpayment. It will also pave the way for future prefilling of employment income using the Single Touch Payroll information system, supporting easier reporting arrangements for recipients. I thank the Community Affairs Legislation Committee for their report, which was released on 20 February this year, and for recommending that this bill be passed.

I note that recommendation 1 calls for further targeted consultation and user testing to be undertaken prior to commencement. The government accepts this recommendation. User experience testing with customers and staff across a number of products and services related to the simplification of employment income reporting is already well under way, with more to be undertaken prior to the changes taking effect. Consultations have occurred across a number of locations with customers who reflect the diversity of our population, including people who live with disability, Indigenous Australians and people from culturally and linguistically diverse backgrounds.

Services Australia, who deliver Centrelink social security payments and services to Australians, will continue to listen and act on the feedback from customers and use this to inform the design of key communication products such as bulk mail-out letters and changes to the online reporting support tools.

I also note recommendation 2 of the report, which calls for the initiation of an implementation review within 12 months of commencement and that the review be tabled in parliament. The government accepts this recommendation. The government does not believe this needs to be included in the legislation to ensure that the review can be undertaken at an appropriate time. Setting the hard date for the completion of review would be restrictive, given the dependencies on the rollout of the Single Touch Payroll system and given that it is not known what employer take-up will be by 1 July 2021, but I do give my commitment to the Senate and the community that a review will be initiated by July 2021.

I acknowledge that a number of other recommendations have been made by Labor and the Greens, concerning user testing and providing further guidance about the operation of the measure. User testing and further guidance will be done prior to the implementation to ensure income support recipients and the staff of Centrelink have a clear understanding of the changes. I'm also aware that questions on details of the legislation were raised through the committee process. Some parties have sought clarification on certain terms within the legislation, including terms like 'employment period', and guidance on how the secretary will determine whether or not an employment period can be identified—that is, whether employment income is or is not paid in respect of a particular period.

In relation to what constitutes an employment period, if the employment pay period is specified on a recipient's payslip, this will be the pay period in the majority of circumstances. However, in a limited number of circumstances, a recipient may provide supplementary evidence and the secretary may record a different period reflective of that employment. 'Pay period' is not defined in legislation, so we can make sure that we provide flexibility. It will be addressed in the guide to social policy law, which is publicly available.

In determining whether payments are paid in respect of a particular period, consideration will be given to a number of factors, including the nature of the recipient's employment, the payment frequency and particular individual circumstances. A person can be paid weekly, fortnightly, monthly or paid in respect of intermittent work. It is not desirable to prescribe those specific rules as it would limit the application of the term 'employment period'. In drafting the legislation we've avoided defining some terms in order to provide that level of flexibility for unique circumstances and to allow the legislation to adapt to the changing nature of work. Including specific provisions in the legislation could limit the ability to take into account a person's specific circumstances.

Setting out how the legislation operates in the social services guide enables the legislation to be interpreted in a beneficial manner, provides clarity to stake-holders and enables flexibility to respond to any unanticipated issues that may arise. This is because the social security guide supports decision-making under the legislation by assisting in understanding the social security law and policy and its application. Importantly, decision-makers must base their decisions on the social security law having regard to Australian government policy and intent, which is reflected in the social security guide. It is open for tribunals for refer to the social security guide to assist in making decisions in accordance with the legislation.

Assessing employment income when paid will contribute to the simplification and delivery of modernisation of Australia's social security system by allowing the use of technology to prevent overpayments before they happen, but without reducing the responsibility of the individual to ensure that they do report correctly. This bill will also help to ensure that Australia's welfare system remains sustainable into the future. I commend the bill to the Senate.