Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006 seeks to amend the social security law and the Veterans’ Entitlements Act 1986 to implement a range of measures, most of which were contained in the 2005 federal budget. The bill deals with a number of areas including assistance for carers, family tax benefit and the allocation of child-care places. On behalf of Labor, I will be taking the opportunity during the debate to move amendments in all three of those areas.

The bill will, from 1 July this year, increase the family tax benefit Part A income threshold from the current $33,361 to $37,500. Over 530,000 families in receipt of an FTB part A payment will be eligible for a bigger payment—up to $828 a year, depending on their circumstances—as a result of this change to the income threshold. Labor is happy to support this provision of financial assistance to families. The bill will also make minor amendments to the portability of benefits allowing people travelling overseas to continue to receive relevant social security payments and FTB. It makes minor amendments to the treatment of income streams for pensioners. The bill also seeks to restrict the period for backdated claims for carer’s allowance to allow for a maximum backdating period of 12 weeks prior to the claim lodgement date. I know my colleague Senator McLucas will be speaking on that particular issue and moving an amendment. I note that these changes were the significant issue in the inquiry into this bill with every relevant submission strongly opposed to those changes.

The bill also makes changes to the administration of child care. It will allow for the child-care benefit debts to the Commonwealth to be recovered through tax refunds, as is already the case with family tax benefit debts. It will allow the departmental secretary to, in certain circumstances, use a default estimate to calculate the rate of CCB a family should receive. The bill also gives the secretary the power to take allocated but unfilled child-care places from a provider. The government’s justification for this is that it will allow the reallocation of places from areas of low demand to high demand but it is unlikely that is the way it will work in practice.

Child-care allocation under this government is slow and unresponsive. Centres and family day carers will have to wait two years to get back places taken from them by the department. The fact is that this government does not even know where places are needed. During recent questioning by Labor senators, officials admitted that the department does not have any measures of demand at the regional level, does not know how many places are currently being utilised, has only ‘some sense of the numbers’ and has not yet decided on a definition of excess places. That is all quite extraordinary, even for this government. It is asking the parliament to approve a new power to allow it to redistribute places which are ‘consistently underused’ but it is not even certain what consistently underused means.

Labor’s concerns with the changes are: the absence of any guarantee that child-care places removed from one service will in fact be reallocated; the slow, rigid and unresponsive system for reallocation; and the government’s poor performance in assessing unmet need for places. Labor’s amendment will temper the secretary’s new power and improve the allocation system by: limiting the power to reduce the allocation of places to a service unless (a) it has been continually vacant for one year and (b) it will be reallocated to another service within one week; obliging the secretary to assess applications for additional places to meet demand from child-care providers throughout the year; and requiring the government to include in the annual departmental report to parliament the number and location of services which have been subject to an involuntary removal of places, the services to which those places have been reallocated, and the services which have had requests for more places declined. We think that will add to the accountability and effectiveness of the system and we hope the government supports those sensible amendments.

As I indicated earlier, I will also be moving an amendment on behalf of the Labor opposition which will impose a family income threshold on the payment of family tax benefit part B. Labor’s amendment will mean that FTB B will no longer be available where family income is greater than $250,000. Family tax benefit part B gives us a critical insight into the Howard government’s ideology when it comes to welfare. Family Tax Benefit B provides a non means tested, obligation free, taxpayer funded bonus to some of Australia’s wealthiest families. Some of our wealthiest families are on welfare. It is paid to these families at the same time as the poorest families in the country are seeing dramatic cuts to their already meagre incomes, either through the Welfare to Work package or the new industrial relations legislation.

Because the rules governing the payment of FTB B ignore total family income, families earning more than $1 million a year can receive this welfare payment. On the latest available figures, 70 families earning over $1 million are receiving $3,300 a year in welfare benefits courtesy of the taxpayer. The same figures show that more than 3,000 families earning in excess of a quarter of a million dollars a year are receiving the payment. There can be no argument that these millionaires and wealthy families actually need the additional money. We know that the more a family earns, the more it will spend on discretionary items that fall well beyond the necessities of running a home and raising a family. And there can be no argument that families on low incomes need the same money to buy school books and clothes for the children.

Over the last 10 years our welfare system has been abused for party political ends and to mould Australian families so they fit the Prime Minister’s social agenda. The allocation of welfare is no longer based on need. I thought we had moved to a needs basis many years ago. The Howard government seeks to influence votes and cover over the flaws in its payments system at election time with lump sum bonuses and cheques in the mail. At the same time it rewards mums for staying at home and not working. That is obviously part of John Howard’s philosophy of how Australia used to be and should be.

The government does not have the courage to stand up and defend the FTB B payment on the grounds of public policy. It has never mounted a defence for FTB B as promoting families or assisting married women. Neither has it defended it as good public policy—because it is indefensible. Instead the government has argued that it would not be cost effective to stop the payments going to wealthy families saying that means testing and better targeting of payments would be prohibitively expensive. I am sure all the single mothers about to be hit by the welfare changes would be astonished to hear that.

And yet this is the argument it makes in relation to FTB B. Why is FTB B the only welfare payment that cannot be effectively means tested? The government will spend a great deal of resources chasing down small debts from single parents or age pensioners, even when the debt arose because of a Centrelink error. It sends Centrelink officers out with police to pull over taxi drivers and check if they are working illegally while collecting welfare. But at the same time it claims that it is not cost effective to stop millionaires receiving welfare payments. The figures that I quoted from earlier are evidence that family income information on FTB B recipients is already being collected. It cannot be beyond the capacity of the federal government to use that information to better target family tax benefit B payments. The reality is that while it would be easy to impose an income test, the government does not want to—certainly the Prime Minister does not want to. It wants the payments to continue.

The other defence the Prime Minister has tried to argue is that the payment compensates single-income families for not accessing two tax-free thresholds. Again, this is plainly untrue, because families can access a second tax-free threshold and collect FTB B. Under the arrangements put in place by the Howard government, the second income earner in a millionaire family can earn $6,000 a year, the total tax-free amount, and continue to receive almost the entire FTB B payment. So they can have it both ways—two tax-free thresholds and their welfare payment.

The government’s defence for paying welfare to millionaires is simply not credible. Putting aside the government’s agenda and its flimsy justifications, these payments force us to question our ideas about welfare. Do we as a community support paying $3,300 in welfare payments to millionaire families? Do the people who are paying taxes on very low incomes support that approach? Do we support welfare without need? I do not think so.

The Howard government talks long and loud about the need for mutual obligation and the dangers of passive welfare. The FTB B payment is exactly that—passive welfare without mutual obligation. The FTB B is a payment largely to women who stay at home in families where there is a high income, and the only obligation that that family has to meet for that $127 a fortnight is that the stay-at-home partner has to guarantee that they will not look for work.

There is no sit-down money for single mums. From 1 July this year, single mums on welfare will be forced to look for work and will have their fortnightly payments cut by $55.50. The hypocrisy in approach, the difference in treatment, is startling. The government is supporting those that have high incomes but penalising single parents who want to stay at home with their children. The double standards are absolutely staggering.

One of the government’s other justifications for its welfare cuts for single parents is the need to encourage workforce participation. What incentives lie in the payment of FTB B payments? We all know that we need to expand our workforce and encourage people back into the workforce. There is no way that FTB B to rich families can be defended on that basis. They will be paid not to work, irrespective of whether they need the money, under the current arrangements. It is madness, it is discriminatory, it is unfair and it ought to be stopped.

The combination of FTB A and FTB B, along with their interaction with tax rates, means the government is clawing back 60c to 70c in every dollar earned by low- and middle-income families. The combination of FTB A and FTB B creates a massive financial hurdle for low- and middle-income families when moving from welfare to work or from a low-paid job to a higher paid position. From 1 July this year the income tax rate for an individual will be 30c in the dollar up until an income level of $70,000 per annum. But the reality for families earning between $200 and $1,200 a week will be an effective marginal tax rate of between 60c and 75c in the dollar. This is due in part to the reduction in FTB payments over this income range.

While the government is happy to talk about considering changes to taxation, the Prime Minister has ruled out any changes to FTB that would address these crippling effective marginal tax rates. Because the government has been keen to push welfare payments up the income scale, even families on $90,000 a year face very high effective marginal tax rates. The skills shortage and the ageing of the population means the system should be encouraging increased participation by ensuring there is a real reward for work. The Howard government’s family payments system provides the opposite effect: it provides tangible disincentives.

Under Prime Minister Howard, the welfare system is becoming a $100 billion pork barrel. That is bad public policy and over the long term it is unsustainable. There needs to be a debate about who gets welfare and why. That is part of putting our system on a sustainable footing for the future by containing payments. The Howard government seems to believe that the only welfare spending that needs to be contained is that paid to the poor, to single parents and to the disabled.

Australia’s targeted system of benefits has been eroded by this government. We need a simple, streamlined, integrated system which is transparent, user-friendly and well administered. Our system is becoming more and more complex, inefficient and unwieldy as the government backflips and applies bandaid after bandaid—quick political fixes for deep systemic problems. Our welfare system should interact effectively with other regimes, such as taxation, to meet meaningful social goals, to provide real incentive for hard work, to encourage workforce participation and to help families tackle disadvantage and really get ahead. Our system should be built on the principles of fairness and equity. It must provide a decent system of support, not punishment, to families, children and individuals who have fallen on hard times.

We cannot start to reform our welfare system today unless we make those changes. Labor urges the government to support our amendment and end the farce of millionaires on welfare. It seems exactly the wrong signal to our community when we pay welfare to very-high-income families and it is the height of hypocrisy for the government to punish those least able to defend themselves in our community—single parents, people unable to work because of disability—while at the same time it directs taxpayers’ money from hardworking families to support millionaires on welfare. It has got to stop and I urge the Senate to support Labor’s amendment and put an end to this totally hypocritical practice.

Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate a speech by Senator Siewert.

Leave granted.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

The incorporated speech read as follows—

As I expressed in the Australian Greens and the Australian Democrats minority report into this bill – I am very concerned by schedule 6 - which proposes to change the backdating provisions for carers’ allowance.

If passed - schedule 6 will substantially reduce the maximum backdating period for carers of both children and adults – from 52 weeks for children and 26 weeks for adults – down to a flat 12 weeks.

The Community Affairs legislation committee report into the bill does acknowledge that the changes proposed will not be reasonable in all circumstances. The report provides a recommendation that discretion should be applied during the assessment of the application for carers allowance to determine if the applicant should be entitled to the full back pay provision.

While I am encouraged by the committees’ recommendation– I do not believe that it goes far enough to protect carers and I am proposing an amendment to delete schedule six for the bill.

The Australian Greens believe carers are the backbone of our nation. They provide loving care to the most vulnerable people in our community. A recent report by Access Economics concluded that carer’s annually contribute $30.5 billion dollars of care to the community.

They do this at there own expense. Often having to give up full paid employment or drop to part-time hours so they can be available to provide care when it is needed.

So not only are carers providing their services at no cost they are also foregoing the opportunity to earn a well paid living in their own right.

And our government’s response to this sacrifice – limitations on the amount of back pay a carer can claim. The departments stated reason for this legislative change –

“The measure will standardise the backdating period available....” and

“The measure will rationalise.....”

The Government is proposing to standardise and rationalise payments at the expense of carers who provide so much selfless support and care in our community.

The department estimates that these measures will save the government $107.6 million over 4 years – hardly significant compared to the $30.5 billion they currently save when family members provide the necessary care to their loved one.

And this is not the first time they have tried to implement this change – the government first announced an intention to reduce the backdating payment provision for carers allowance in the 1996-97 budget and it had a second attempt in 1997-98 budget.

A 10 year campaign to reduce the backdating provisions for carers’ allowance shows how doggedly determine the government is when it comes to implementing its social security policy agenda.

The back pay carers receive is used to support the person needing care. It provides for the costs of diagnosis, transport, pharmaceuticals, nappies and the necessary modifications to their home. Medical care is expensive and trying to provide for someone with high care needs without a full time wage is a real struggle in Australia today.

Carers’ organisations have condemned schedule 6 and believe it should be withdrawn. There are many reasons why carers need generous backdating provisions.

These include:

• A person providing care does not always identify themselves as a carer. Initially they don’t see that they are doing something other than what is required of them - so often they do not look into financial provisions which may be available - until they are facing a financial obstacle they can not over come themselves.
• They are focused on addressing the crisis at hand. Often a person needing care requires it very quickly and without the necessary planning that may go into other decisions people make affecting their life. A carer usually just gets on with the immediate job at hand and looks after seconding things such as, financial provisions, when the person in need of care has reached a place beyond the initial crisis.
• It takes time for people to come to terms with the changing circumstances in their life. Often so much has happened in such a short period of time that both the person providing care and the person in need of care - need time to fully assess the changed circumstances of their life. It can take a while for people to admit to themselves that they need additional assistance.
• The information provided for carers is not easy to understand or access. Carers need to be aware that the allowance is available to them. Often they do not find out the types of benefits available until well after they have began caring for a family member. It again takes time to access networks and support organisations that provide information to carers.
• They are often just overwhelmed by the demands of on going care provision. It is all they can do each day just to meet the needs of the people they care for – they do not need the added burden of government imposed timeframes placed on the assistance available to them.
• There can often be delays in diagnosing the needs of the person in care. The full extent of their needs can take time to be revealed and even then it is not always clear just how much or how little they will be able to do for themselves. It can take a long time to access medical specialists - especially in the public hospital system. Carers should not be penalised for the time taken by the medical profession to complete the documentation necessary for the assessment of eligibility for a carers’ allowance. Nor should the medical profession be placed under additional pressure by placing specific timeframes on the turn around of information.
• Carers also have great personal strength and commitment. They often do not seek outside assistance at all. Only turning to alternative means of support as a last resort and when there personal financial circumstances have reached crisis point.
• This government has prided itself on promoting public policy that encourages citizens to help themselves before asking the government for assistance – well here is the model example of people doing just that! – Why further penalise them when they have already done everything they can to help themselves and there family.

Carers Australia highlight in there submission that the proposed changes will

“._further disadvantage and marginalise carers. The 2003 ABS Survey of Disability, Ageing and Carers indicates that carers are over-represented in the lower household income quintiles. These carers are identified as being at particular risk of low wellbeing in the Australian Wellbeing Index Survey 2005”

The majority committee report’s recommendation for departmental discretion is not good enough – carers should have certainty in the backdating provision. As Vision Australian presented in their submission

“Standardising backdating periods should not mean reducing time periods in such a way that individuals and families facing massive emotional and physical challenges are also then deprived of their rightful financial assistance. We propose that if standardisation is the purpose of these changes then the carer allowance backdating provisions be standardised to 52 weeks.”

The Australian Greens amendment proposes the deletion of schedule 6 all together and that the current backdating provisions stand. We also encourage the department to look at streamlining access to carers’ allowance – particularly for people under increased stress.

I further believe that the issues raised during the committee hearing in relation to Schedule 5 – Reducing the allocation of child care places be followed up.

I am concerned about childcare particularly in regional areas. I do not believe the department of Family and Children’s services (FaCS) have a true assessment of the needs of regional communities - that accurately determines the number of child care places needed. Nor do they have a robust method for acquiring this information.

I encourage FaCS to develop an assessment process which allows them to model the future needs of regional communities demand for child care places. And that FaCS looks at designing a forward planning process to address the identified future needs of child care in regional areas.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006. This bill gives effect to a number of measures announced in the 2005 and 2006 budgets, as well as a number of other measures relating to family assistance, carer allowance and income streams. From 1 July this year the lower income thresholds for family tax benefit part A will be increased from the current $33,361 to $37,500. According to the explanatory memorandum accompanying this bill, the new amount will be indexed in accordance with the movement in the consumer price index on 1 July each year. The financial impact of this measure will see around 400,000 families receive an increase of, on average, $24 and, perhaps more importantly, an extra 40,000 families will become newly eligible for a health care card.

Other measures contained in this bill include indexing income estimates made by claimants for family tax benefit part A and family tax benefit part B and for child-care benefit. This amendment aims to reduce the likelihood of payments being made to claimants based on inaccurate estimates. The bill modifies the definition of ‘returns to paid work’ as described in the Family Assistance Act for the family tax benefit part B. The bill provides for the recovery of child-care benefit debts from the claimant’s tax refunds as currently is provided for in the recovery of family tax benefit debts from tax refunds. The amendment proposes to tap into tax refunds to clear child-care benefit debts caused by an underestimate of income.

The bill also provides for the movement of unallocated child-care places from area to area. The proposed change would provide flexibility to respond to changes in demand and use by allowing approvals for unused places to be transferred to other providers with excess demand. The bill also aims to allow for the extension of fixed term income streams and other minor changes to the treatment of income streams in line with similar tax treatment changes for income streams.

The provisions for carer allowance will be standardised under this bill from 1 July this year to allow for a maximum backdating period of 12 weeks prior to the claim lodgement date by carers of both children and adults. This bill would also clarify the circumstances in which payments may be extended beyond 13 weeks to a person temporarily overseas seeking life saving medical treatment.

As a member of the committee assigned to review this bill, I would like to raise several aspects which were of concern to members of the committee. The majority of submissions received by the inquiry related to the proposed changes to carer allowance payments. At the moment the commencement date for payment of carer allowance for caring for a child can be backdated up to 52 weeks prior to the date of a claim. Similarly, the commencement date for the start of payment of carer allowance for caring for an adult can be backdated up to 26 weeks prior to the claim.

The majority of submissions received by the committee as part of the inquiry into this bill raised concerns about the limiting of backdating to claims. Throughout the course of the inquiry, no arguments were put forward as to why carers should be denied the current rates of backdating in the future. Currently in Australia, 95,000 new people receive carer allowance payments each year. This equates to around 72,000 new adult recipients and 23,000 child recipients every year. The Department of Families, Community Services and Indigenous Affairs stated as part of the inquiry that 72 per cent of the 23,000 new recipients of carer allowance child and 36 per cent of the 72,000 new recipients of carer allowance adult receive backdated payments.

If this bill is passed, the maximum backdated payment for new carer allowance recipients would be 12 weeks, regardless of whether they are claiming for care of a child or adult. Annual savings for the government as a result of this measure are expected to be almost $35 million. Labor senators agree that this proposal to cut carer allowance backdating is wholly about savings for the government—savings that the government wants to make at the expense of 95,000 carers every year.

Carers Australia recently commissioned a report by Access Economics which found that in 2005, 2.6 million people—or one in eight Australians—were providing informal care to a family member or friend. Given the huge impact and contribution carers make to the Australian economy every year, these cuts do seem to be extremely unfair and un-Australian. The report also estimated that these carers provided around 1.2 billion hours of care a year. If this time was replaced with services by formal care providers, the value would be almost $31 billion. As part of this bill, the government wants to save itself $35 million a year for services rendered by carers in the community with a value to the tune of $30.9 billion.

According to Carers Australia, carers can be anyone: parents, partners, brothers, sisters, grandparents, friends, even children. Carers look after their loved ones 24 hours a day. To replace the level of care that they provide would be an even greater toll on our economy than $30-odd billion dollars. There is also the problem of finding professional carers to take on the huge amount of work that is done by people who have a rightful claim to carer allowance.

I note that the chair of the Community Affairs Legislation Committee, Senator Humphries, has made a recommendation that the legislation be amended to allow a discretion for the backdating of carer allowance for a period of 12 weeks where it would have been unreasonable in all the circumstances for a claimant to have made an earlier claim for the carer allowance and a failure to backdate would occasion significant financial hardship. Also of note is the evidence the committee heard from groups that many people are unaware of their ability to claim carer allowance, explaining why many may not claim immediately when beginning to care for a loved one. The department admitted that the government does not make an attempt to identify people who may be eligible for carer payments and let them know of their eligibility.

Senator Humphries has also taken this into account in the committee report and recommendation 1 advises that an effort should be made to promote the availability of carers allowance. However, so far the government is yet to commit to implementing such a campaign.

A point raised by Carers Tasmania on their website that should be noted is that caring is a difficult and time-consuming task. It would no doubt be a common occurrence that many carers are left so tired and energy sapped that searching for help and assistance would be the last thing on their minds. Caring is a demanding and time-consuming task. It is not like a normal nine to five job; it often involves 24-hour care. In the midst of all of that hard work, can we really expect carers to take the time out within that first 12-week period to lodge a claim?

Labor will be proposing amendments to this bill to ensure that these cuts do not adversely affect the thousands of carers throughout the country who are currently entitled to carers allowance but who have not yet claimed, and those who may be entitled to claim in the future. With Australia’s inevitably ageing population, it is of the utmost importance that we support these people who are prepared to care for their loved ones, should the need arise.

The government should be doing everything in its power to support these people, but instead it sees fit to take away what small benefits they are entitled to. This is such a familiar tune played by this government. This is another example of an arrogant and out of touch government that has no real understanding of the enormous contribution that carers make to our community.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

The Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006 deals with family assistance and social security matters. A lot of them are what might be called minor or technical changes. Some raise income tests thresholds and index income estimates and other sorts of things to do with the family tax benefit part A and B and the child-care benefit.

Having participated in the brief Senate Community Affairs Legislation Committee inquiry into this legislation, it is clear that the almost total area of concern about the legislation concerns the changes regarding the curtailing of the backdating available for new claimants of carers allowance. Having sat through that inquiry and read the submissions, particularly the very valuable, as ever, submission of the Welfare Rights Centre, and listened to the evidence from the department and read their own submission, it totally baffles me as to why the government has put forward this measure to reduce the amount that people claiming carers allowance can get in initial payments from backdating.

It is the sort of measure that you could imagine some sort of razor gang, desperately trying to cut back a multibillion dollar deficit, might slice away at in a desperate bid to try to save $30 million or so here and there, to try and pull the balance back towards the black. But it is the sort of measure that is absolutely unfathomable at a time when we have record budget surpluses—over $10 billion. We get different estimates all the time, and who knows what the final figure for the final budget surplus will be when the financial year ends, because the estimates are always out by so much, but there is no doubt that, at the most conservative end, it will be well and truly over $10 billion.

How we can possibly justify tearing money away from carers at a time when we have billions and billions of dollars in surplus is simply unfathomable. I just cannot see any possible reason. Also, from the evidence given by the department, there seemed to me to be no particular reason. There was no evidence given about what the actual impact would be on certain groups of carers. There were no particular arguments advanced, as far as I could see, as to why carers should be denied the current rates of backdating in the future. It has to call into question some of the statements made by some members of the government over the years about their commitment to carers.

I do not mean to reflect negatively on some of the work of the former Minister for Family and Community Services, Senator Patterson, because she did achieve some positive gains for carers in her time in the ministry—she was still a minister, of course, when the budget went through and this measure was announced. But to see this sort of clawback in this area of entitlements available to a group of carers is simply extraordinary, and it is very hard to comprehend what the rationale could be. Nonetheless, it is being done. I would hope that some members of the Liberal and National parties in the Senate—one or two is all it would take—will vote to knock that schedule out of the legislation. I think there is no justification for it to be in there.

The Senate committee report and the majority recommendation of the government members of the committee—chaired by Senator Humphries—recommended an amendment to allow some discretion for backdating for a longer period if there are issues such as significant financial hardship, and that is welcome. I have not as yet seen a government amendment to reflect that recommendation and I hope there is one. I do not believe it goes far enough. As I said, I do not see any justification at all for removing backdating. It should not be about carers having to demonstrate that they are in a position of significant financial hardship before they get access to the backdating that has been available—at least with regard to caring for children—for a very long period. At a minimum, some modification or amendment such as that should be put in place. My understanding is that an amendment along those lines has been circulated by the ALP.

The Democrats’ position is that the measure is unnecessary, it is unfair, it is unreasonable and it will impact on a group in the community that I think would have to be in the upper echelon of groups that really deserve every bit of extra help they can get. So the Democrats’ position is that this part of the bill—schedule 6, the schedule that contains this measure—should simply be removed. I will move in the committee stage to take that measure out of the legislation. We support the rest of the legislation, although there are other comments that I have made as additional comments in the committee’s report regarding one or two other matters. But that section of the legislation dealing with carers allowance should be removed. As a fallback, we would expect to support the ALP amendments, subject to any issues that may be raised or that may be brought forward in the committee stage of the debate.

I emphasise again the detail of carers allowance and how it operates. It is a payment that, as was clear from the evidence before the committee inquiry, a lot of people are not aware of. People may be aware of carers payment or what is often thought of as ‘carers pension’, but carers allowance is a separate payment. It is quite a small payment. I think it is around $90 or so a fortnight, from memory, or a little more than that. It is not a huge amount; it is a supplement. It is not an income support payment; it is a supplement to recognise the significant extra costs involved in caring. It is not just straight-out expenditure but costs in terms of lost earning opportunities or other lost opportunity costs on the part of the carer.

A lot of people are not aware of that extra payment. I can speak from my own experiences, a long time ago now, when I worked in the then Department of Social Security as a social worker. I think most of, if not all, the claims for the then child disability allowance, which was the forerunner of the carers allowance, would go past the social worker to do an assessment, because it is not just a medical assessment of the condition; it is an assessment of the amount of extra care that is required because of the condition that a child—or, under carers allowance, an adult—brings to bear on a family member. It was a fact even at that stage that a lot of people who applied for a child disability allowance—and the same applies now to carers allowance—are not aware that the payment exists. Many people who could claim would have been providing significant extra care for their child for quite a long period of time, years in some cases, before they became aware that there was this extra payment that could assist them. Evidence was provided to the inquiry that that is clearly still the case.

It is a payment that is not income tested. I think the department actually provided some statistics in regard to this. A percentage of people on carers allowance receive not only no income support payments but also no other payments at all from Centrelink. Many people who are in that circumstance, who are in the higher income earning situation, just would not realise that this sort of payment through Centrelink would be available to them, because they would assume their income would disqualify them. So there are many people who are not aware of their potential eligibility for this payment.

I welcome the recommendations in the report from all the senators, including government senators, that there should be a comprehensive education campaign aimed at medical practitioners and others charged with assessing the care needs of individuals to improve awareness of the availability of assistance for carers and emphasising the existence of the carers allowance entitlement. That is welcome, and I think that should be implemented as a matter of urgency. It was clear from the evidence to the committee that there was no budget or plan to do that, but I believe it is important that that is done.

This is not just an ordinary income support payment; this is a payment to assist a group of people in the community who, quite frankly, save the taxpayer enormous amounts of money. The amount of money that will be saved if this measure goes ahead is, according to the department’s figures, not much over $30 million a year. That is less than half the amount this government saw fit to spend last year on promoting their own industrial relations policy. They are happy to grab that amount of money straight from the taxpayer to promote their own policies and overcome political difficulties, yet they cannot see fit to provide even half that amount to assist people who provide significant care for their children. I think that sends a very strong and very negative message to the community about how carers are recognised. I again urge all coalition members to rethink this matter.

I also indicate another reason many people should be eligible for backdating. The fact is that this level of backdating has been in place since the old days of the child disability allowance. The child disability allowance was merged with another payment which related to adults, which I acknowledge did not have backdating at that time, to create the carers allowance. Currently people can be eligible for backdating of up to 12 months if they are caring for a child or children and up to six months if they are caring for an adult who has had acute onset of their condition. So it is not as though it is just some recent piece of generosity that is now being wound back again; it has been in place for a long period of time and it has been there for very good reasons, some of which I have outlined. But also, as the evidence clearly showed, when you are talking about children, particularly young children, it takes quite a period of time for many conditions before parents become aware of precisely what condition their children may have. So they spend more of their time trying to get diagnoses and trying to get assessments, and they are not thinking of themselves as having additional caring burdens at that stage.

By the time they get around to applying for carers allowance, they may well have already been putting in enormous amounts of extra hours for years before recognising that this is an ongoing reality that they are going to have to live with for a prolonged period of time. To deny them that little bit of extra assistance up front by way of backdating when they first get around to claiming carers allowance is, I think, miserly in the extreme and really sends a message back not only that caring is not being valued but that there is a lack of recognition of the reality of the experience that many carers go through, particularly when it involves children with extra needs, the nature of which takes a while to ascertain.

The amount that recipients of carer allowance child will lose potentially will be close to $1,900. Many people—on the department’s own figures, about 40,000 people a year—will lose access to that $1,900 when they first apply for carer allowance. That is not a fortune by any means. As Labor senators pointed out, there are people who get much more than that under the family tax benefit B, which is also not means tested. Millionaire families can be paid up to $3,300 a year under family tax benefit part B, but for some reason or other paying $1,900 by way of backdating carer allowance, recognising the caring that people have already done, is seen as unacceptable. The best they could come up with for excuses or rationale was that it would standardise or rationalise the backdating period available. It does not particularly standardise it. It certainly does not standardise it with any other payments to bring it back down to 12 weeks maximum. I am not sure how you can apply the word ‘rationalise’, either, in regard to what is being done here. What is being done is simply a withdrawal of entitlement to claim backdated payment for carer allowance, a withdrawal that will cost up to 40,000 people each year $1,800 or $1,900. It is unsatisfactory and demonstrates a lack of recognition of what it is like to be in the shoes of many parents in particular who find themselves in this situation with their children.

When we pass legislative measures in this place, it is particularly important to think about the circumstances of the men, women and children—the families—that these measures will affect, to put ourselves in the shoes of people who are caring for children or other adults, to put ourselves in the shoes of parents who have become aware that their child may have special needs but are not able to nail down precisely what those needs are. Examples were given during the Senate committee inquiry in relation to a condition that is becoming far more prevalent and much more recognised in recent times—autism spectrum disorder. Many times this disorder is diagnosed when children become three, four or five years old. It can take quite a long time before it is clearly diagnosed. It has different characteristics for different people and different children. So the nature of it, the level of care and the type of care that may be required can take a very long time to specify and, I might say, can also require quite a lot of expenditure. All parents are willing to assist their children but most parents do not immediately think, ‘Is there some payment for me as a result of my needing to do this?’ It is not until a long way down the track that those sorts of things might spring to mind when they realise how much expense, time and extra activity can be involved in dealing with children with, for example, an autism related condition.

More and more young people are being diagnosed with this condition as awareness of its nature and variety becomes apparent and more skill is developed in the professions that look for these sorts of conditions. These cases relate precisely to the sorts of things that carers allowance can provide for. I recall a couple of cases in particular back in the late 1980s with applications for disability allowance for children with an autism related condition. That sort of condition is not as straightforward as a physical disability, in some respects therefore making it all the more difficult to assess precisely how much extra care is required and the nature of that care. Failure to recognise that conditions like autism spectrum conditions involve a lot of extra time, care, attention and cost can add to the difficulty and trauma for parents trying to deal with the situation. That to me is a broader concern with measures like this—a lack of recognition of the nature of what many parents are going through, a lack of recognition of the seriousness of the situation and, I might say, a lack of recognition of just how important it is that children with extra needs get that care.

It is always possible and it does occur with some parents, whether through financial necessity or lack of awareness, where they just let things go. If extra assistance is not provided at an early age, 10 years down the track the child, in particular, and the family and society as a whole will pay the price. Measures like this can be false economies and we will pay the price for them. The simple fact is that carers will pay the price straightaway if this measure goes through. I urge all coalition senators to think carefully before they allow it to become a reality.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Link to this | Hansard source

In tonight’s contribution, I will confine my comments to schedule 6 of the Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006, which seeks to restrict the period of backdated claims for the carer allowance. From 1 July 2006, the backdating provisions for carer allowance will be restricted to allow for a maximum backdating period of 12 weeks prior to the claim lodgment date. The measure will significantly reduce payments made to carers when first applying for the allowance, with the government estimating a saving of approximately $35 million in the first year. The carer allowance is currently $94.70 a fortnight.

In evidence to the Senate Community Affairs Legislation Committee inquiry into the bill, the Department of Families, Community Services and Indigenous Affairs explained that the reasoning behind the proposal was that the 52-week rule was a remnant provision of the previous child disability allowance, which existed up until 1999 and which depended very much on a medical diagnosis. Under those arrangements, considerable time might be taken by families in confirming the medical diagnosis of their child in order to put in that claim.

The bill’s explanatory memorandum states:

... assessment methods are based on functional ability or care needs. As a result, qualification can generally be established quickly, which removes the need for long backdating periods. 

In my comments tonight, I take issue with that explanation. The conclusion was refuted by individuals and groups who provided evidence to the legislation inquiry. Mr Michael Raper, President of the National Welfare Rights Network, said:

... in our experience, the reality within Centrelink is that most people in Centrelink would not accept those claims without the medical evidence. Be it right or wrong, without that medical evidence they will not accept the claim.

Carers Australia described the situation where a disability service officer recently visited a family whose second child has a very rare disability. The child is 18 months old and the final diagnosis was made after numerous tests and visits to doctors and specialist clinics. As the child was only recently diagnosed, the mother has just received the carer allowance, which has been backdated for the current 52-week period. This is the only extra assistance that this family has had since the birth of their child 18 months ago. As Carers Australia put it:

The bureaucratic delays in having a child diagnosed, particularly with a rare syndrome, can take a considerable period of time. When they are already facing a lifetime of care, support and additional expenses, it is totally unnecessary to further penalise these families in very stressful situations by reducing further a small amount of income that does not even cover the costs involved in caring.

It is obvious from that comment to the committee that carers still believe that a diagnosis is required. The decision to slash the current backdated period from 52 weeks and 26 weeks to 12 weeks for child and adult payments respectively, with no consultation with carers organisations or welfare groups, to my mind was a purely political decision taken by the Howard government. The argument that the government is simply bringing this backdating provision into line with other payments is plainly a furphy.

When I asked carer groups whether they had been consulted about the proposal to reduce the backdating period to 12 weeks, Carers Australia said that they had not been consulted in an in-depth way and Mr Raper, the President of the National Welfare Rights Network, said that his organisation had not been consulted at all. Ironically, both groups said that they were consulted about other measures contained in the budget—measures that were more positive in terms of their effect on carers. Carers Australia said that they had welcomed the one-off carer bonus in the 2005-06 budget. They also said that they were very concerned about changes to the backdating arrangements.

In my view, in this budget carers were given a sweetener—the changes to the one-off payment and the other more technical changes to the payment system—but there is a sting in the tail, and it is a sting in the tail that carers are going to have to carry. The government is repeating a pattern that we saw in Welfare to Work. If this proposal is adopted, carers who are currently receiving payments will not be disadvantaged, but the carers who come on line after 1 July will face considerable disbenefit. The pattern is to quarantine people who are currently receiving payment and then hurt those who come on line after 1 July and who will probably not know what they have missed out on.

The majority of the submissions to the inquiry for this omnibus type bill were concerned with the backdating provisions of the carer allowance. By the department’s own admission, a majority of the 42,000 carers who annually apply for carer payment will be adversely affected, some losing up to $1,894. That does not sound like a lot of money, but if you have just had your child diagnosed with a severe illness or if you are having to modify your house or having to find money for extra medication, $1,894 would be extremely beneficial to you, and that is what the evidence to the committee told us.

No evidence was provided by the department or the government on the impact these cuts would have on carers. The department provided evidence that 72 per cent of applicants for carer allowance child and 36 per cent of applicants for carer allowance adult are currently backdated for the full period that they are eligible for—that is, 72 per cent of applicants for the child payment get 52 weeks back pay and 36 per cent of carer allowance adult get 26 weeks back pay.

The cuts in payments to carers as a result of the proposed measure, totalling $35 million a year, are significant. They contrast with the Howard government’s policy of paying $3,300 a year to millionaire families in receipt of family tax benefit B. They are also in contrast to my being told at Senate estimates last July that ‘Not many people would be affected’.

The committee heard from a number of groups that many people were not aware of their entitlement to carer allowance, and therefore did not apply for it immediately. The department indicated that the government makes no attempt to proactively identify those people who may be eligible for carer allowance and inform them of their entitlement. Many other reasons exist as to why carers do not apply in a timely way. The fact that the government makes no attempt to proactively identify those people who may be eligible for carer allowance and inform them of their entitlement was confirmed by Centrelink, which advised the committee that they have not been specifically funded to publicise these proposed changes to customers.

The only publicity of the carer allowance that the committee was advised of is a booklet available at Centrelink service centres, fact sheets available on the Centrelink website—including the disability and carer payment rates fact sheet—and a small section in the A Guide to Australian Government Payments booklet. They are mailed directly to people who already receive the carer allowance and the carer payment, and to relevant community organisations. There is very little work done by either the department of families or Centrelink to ensure that people who are potential customers, potentially recipients of carer allowance, are aware that the payment actually exists.

I move now to the application forms for carer allowance. I mentioned earlier in my contribution to this debate that you do not need a medical diagnosis to apply for a carer allowance because it is not a medical assessment but an assessment of need, and I made the point then that I was going to come back to this. Because, if you go to the actual forms that a person has to fill in, unless they have heard that information from the department—and many have not—they will be absolutely convinced that their child who has a disability requires a medical diagnosis first. If you look at the treating doctor’s report, the first question that the doctor really has to answer is ‘please provide your diagnosis of the condition’. The pages then go through cerebral palsy, epilepsy and syndromes that I cannot pronounce and have not heard of.

This is a medical form; no-one can say that this is an assessment of care needs. There are pages and pages of medical diagnoses, yet the government and the department are saying, ‘No, this is an assessment of care needs.’ A few pages further on, the treating doctor’s report says ‘please indicate if the child has any of the following medical conditions’, and then we get another list of medical conditions. Then there are a few pages at the back—and I have to say I found it extremely difficult to work out how they would indicate care needs—which ask the doctor to describe the abilities of that child. That is meant to indicate the care needs of that child. Then you go to the 13 pages that you as the applicant have to fill in. The question ‘Do you personally provide care on a daily basis because of the disability or medical condition?’ is the only question in those 13 pages that asks what care you provide.

So I truly understand the evidence from the National Welfare Rights Network and from Carers Australia where they say that many applicants honestly believe that they have to get a medical diagnosis before they can actually get a payment. They also said that GPs often incorrectly fill in the forms or do not fill them in unless they can absolutely identify clinically what is wrong with that person. So the government has a big job to do to shift community understanding of what entitles a person to carer allowance.

The department also stated in the inquiry that they do not collect information on why people delay applying for so long. This is why we have to ensure that people do not miss out on their entitlement for a variety of reasons. So the situation is that on average 42,000 people are new applicants for carer allowance every year. Seventy-two per cent of applicants for carer allowance child and 36 per cent of applicants for carer allowance adult will be affected; we know that. We also know that the proportion of people who get carer allowance child is much higher compared to the people who get carer allowance adult. We know there is no proactive strategy for identifying potential claimants by the department or by Centrelink, there is no strategy to inform a potential claimant of their eligibility and there is no intention to revise the application form to acknowledge that it is care needs, not clinical diagnosis, that are relevant in dealing with the application.

I acknowledge that the chair of the Senate Community Affairs Legislation Committee, Senator Humphries, has attempted to address in his recommendations the problem of information dissemination. However, to date the government has made no commitment to implement such an education campaign. Recommendations by the legislation inquiry were twofold: first, to implement an education campaign and, second, to amend the legislation to allow the secretary to exercise discretion to backdate the carer allowance if there were reasonable reasons why the person had not claimed and if there were going to be financial implications for the person if the claim could not be backdated.

In response to that, Labor have drafted an amendment which picks up on that government senator recommendation and puts it into effect. Our amendment will provide a discretionary power to the secretary to extend backdated carer allowance claims in cases where there are genuine reasons for the delayed application. There are a range of reasons and they are not exclusive. But the amendment is quite explicit about when a person should be able to backdate for up to 26 weeks with carer allowance adult and 52 weeks with carer allowance child. Labor’s amendment recognises that there are a range of reasons why people currently are not aware of the carer allowance or do not apply for it in a timely way. The amendment allows for the secretary to use discretion if an applicant does not apply because they fall into one of these categories, which are not exhaustive.

The amendment inherently, though, puts the onus back on the government to become more proactive, to use its systems to identify potential claimants and to ensure that there is a strong promotion of the carer allowance more broadly in the community and with specific groups—carers, GPs, community health workers and neighbourhood groups, for example. You will recall that the government spent over $50 million advertising its industrial relations reforms last year. I would be surprised if $100,000 is being spent annually to advertise carer allowance and carer payment to the whole of Australia.

The amendment also puts the onus on the government to change this onerous application form. If passed, the amendment turns the tables and puts the responsibility back onto the government to ensure carers get their applications in in a timely way. Given that the Liberal members of the legislation committee have recommended that discretion should be allowed, I urge Senators Humphries, Adams and Barnett to take this opportunity to support this amendment—which is fair, reasonable and in accordance with their recommendation.

A recent report by Access Economics, commissioned by Carers Australia, found that in 2005 about 2.6 million people—one in eight Australians—were estimated to be providing informal care to a family member or friend. The report estimated that informal carers will provide a total of 1.2 billion hours of care in 2005—a figure that none of us can contemplate. If informal care were replaced with services purchased from formal care providers and provided in the home, the replacement value would be $30.9 billion. That is a lot of money. It is a lot of money that these people save from our economy for our community, and $30 billion a year is what they are going to have stripped from the contribution that is being made to that care. These carers look after family members or friends day in, day out, 365 days a year. We cannot ignore the fact that providing informal care comes at a cost to carers in terms of their wellbeing, their quality of life, their financial security and their opportunity to be in the paid workforce. The contribution carers make is not only to the people they care for but also to the community and, as I said, the economy more broadly.

Labor understands the pressure that Australian families are under, particularly those caring for the most vulnerable members of our community, and supports carers in their efforts to have their voices heard and their needs recognised by this government. In conclusion, I think we should hear from the carers themselves:

Carers Australia strongly believes that there is no sound rationale for the proposed amendments in the bill, which are estimated to reduce expenditure by over $100 million over four years. They are not related to eligibility, financial hardship or the amount of care that the carer provides. The amount of care that carers provide our community with is really at the foundation of our health and community care systems.

       …         …         …

Carers Australia believes that the proposed changes to the backdating measures for carer allowance recipients will further disadvantage and marginalise our family carers.

By passing Labor’s amendment, we can protect carers from the excesses of this Howard government.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I thank senators for their contributions to the debate on the Family Assistance, Social Security and Veterans’ Affairs Legislation Amendment (2005 Budget and Other Measures) Bill 2006. Whilst this concludes the second reading debate, the committee stage will follow and there are amendments which have been foreshadowed. In this bill, the government continues its support to family assistance, social security and veterans entitlements customers. Families and Australians helping to support themselves in retirement will particularly benefit from the measures which come from last year’s budget and current initiatives.

Australian families will have higher rates of family tax benefit when the bill increases the lower income threshold for family tax benefit part A from July this year. The current threshold of $33,361 will rise substantially to $37,500. Importantly, the increased threshold will keep its value because it will be indexed annually according to CPI from July 2007. To ensure more families receive the correct payment of family tax benefit and child-care benefit, the bill will introduce an improved way of handling customers’ estimates of income. From July this year, a customer’s income estimate will be updated if the customer has not given Centrelink a reasonable estimate for the current year. Income estimates will be updated at the start of each income year and also in certain circumstances when actual income becomes known for the most recent income year. Customers will still be able to provide a reasonable estimate to be used in their entitlement calculation instead of the automatically updated amount.

The bill makes amendments in two areas relating to child care. Firstly, unused child-care places will be distributed more efficiently by allowing child-care places to be transferred from areas with lower demands to areas where places are needed. Secondly, child-care benefit debts will now be recoverable in the same way as the family tax benefits. In particular, a customer’s child-care benefit debt will be recoverable by applying the customer’s or a consenting person’s tax refund. From July this year, the backdating provisions applying to care allowance will be standardised. It will be possible to backdate a claim for a maximum period of 12 weeks prior to the claim lodgment date.

Australian retirees have benefited from the Australian government’s response to the review of pension provision by small superannuation funds. As part of that response, this bill will now ensure that retired social security and veterans entitlements customers can better manage their own income needs and give greater confidence that they will not outlive their retirement savings. These beneficial amendments are backdated to 1 January this year.

Finally, the bill amends the provisions in social security law and family assistance law that relate to payments being made overseas. This deals with the area of portability. A discretion will be provided to extend the normal 13-week portability period if the person is seeking life-saving medical treatment overseas, or if the person needs to accompany someone who is seeking such treatment, and if the financial assistance is payable for the treatment under the medical treatment overseas program administered by the Minister for Health and Ageing. These are important measures and, of course, this bill reflects the ongoing response by the Howard government in relation to family assistance, social security and veterans affairs. I commend the bill to the Senate.

Debate (on motion by Senator Ellison) adjourned.