Social Security Legislation Amendment (Activity Test Penalty Periods) Act 1997, No. 106
Date of Royal Assent: 30 June 1997
- 2 Newstart Allowance penalty breaches restructured
- 3 Changes to Partner Allowance and Special Benefit
- 4 Exemptions to Newstart Allowance activity test extended
| Location in Act | Section 3 as set out in Schedules. Main changes are at items 1 to 36 and 40, 41, and 42 of Schedule 1. Correction of error in application and transitional provisions of the Social Security Legislation Amendment (Budget and Other Measures) Act 1996 is at Part 1 of Schedule 3. Minor technical amendments to the 1996 Act (not covered in the description) are at Part 3 of Schedule 3 |
| Date of commencement | Main changes were to commence on a day to be fixed by Proclamation, or if not within six months of the Date of Royal Assent, on the first day after the end of that period. The legislation was proclaimed on 10 July 1997. Corrections to errors in application and transitional provisions of the Social Security Legislation Amendment (Budget and Other Measures) Act 1996 were taken to have commenced on 20 March 1997, immediately after the commencement of Parts 3 and 4 of Schedule 5 to that Act. Minor technical amendments to the 1996 amending Act commenced variously on 1 January 1997, 20 March 1997, 1 July 1997 and 1 October 1997, in each case immediately after specified parts of that Act |
| Date of application | As for date of commencement |
| Payments affected | Newstart Allowance |
Penalties for breaches of the legislation by Newstart Allowance claimants and recipients were restructured to simplify them and assist administration. The changes related mainly to activity test breaches as the penalties for administrative breaches had been restructured earlier (refer to Record 22 of 1996) but some also pertained to administrative breaches.
The following changes were enacted:
- the period during which previous activity test breaches were taken into account when setting the penalty period for second and subsequent activity test breaches was reduced from three to two years;
- penalties for breaching activity tests were restructured. The penalty for a first breach (within the two year period) was an 18 per cent reduction in the maximum basic rate of allowance for 26 weeks and for a second breach it was 24 per cent for 26 weeks. For third and subsequent breaches within the two year period, a non-payment period of eight weeks applied. Previously, penalties had involved only non-payment periods with the length of the first period affected by the length of time a person had been unemployed;
- people with previous activity test breaches were given a 'clean slate' upon commencement of the new arrangements. This meant that any activity test breaches which the person had incurred before the date of the change were disregarded. Accordingly, the 'two-year' period effect would not fully apply until two years after the introduction of the changes;
- waiting periods and penalties for all types of breach were to be served concurrently rather than consecutively. This also involved a change to the rules for administrative breaches, as multiple administrative breaches had previously been served consecutively. When periods being served overlapped, a waiting period overrode any breach penalty period, an activity test breach non-payment penalty period overrode an activity test rate reduction period and any activity test breach penalty period overrode an administrative breach penalty period. Generally, residual penalty periods had to be served where a lesser, or earlier same level, breach or waiting period was not fully overridden by a later such period because the latter was shorter. However, where an activity test non-payment period had to be served, any existing activity test rate reduction period outstanding, irrespective of its length, was waived; and
- the 'concurrency rule' (as with multiple breaches) applied to periods during which a person's allowance was cancelled so that the end date of an activity breach penalty period remained unchanged. If the allowance was regranted before that end date, the person served the remainder of the penalty period while, if granted after it, the penalty period was considered served. [This contrasted with the provision for administrative breaches where a person could 'self-serve' a breach rate reduction period with a shorter non-payment period (refer to Record 22 of 1996).]
Transitional provisions covered situations where people were already serving breach penalties at the time of the changes.2
| Location in Act | Items 37, 38 and 39 of Schedule 1 |
| Date of commencement | 10 July 1997 |
| Date of application | 10 July 1997 |
| Payments affected | First change: Partner Allowance Second change: Special Benefit |
Following changes to Partner Allowance and Special Benefit to cover gaps in the legislation:
- a person could not qualify for a Partner Allowance for a period during which he/she was subject to an activity test breach rate reduction period in respect of Newstart Allowance or Youth Training Allowance; and
- a person could not qualify for Special Benefit where he/she (following a third or subsequent activity test breach) failed to enter into, or comply with, a Newstart Activity Agreement or Youth Training Activity Agreement (the latter was an equivalent agreement for Youth Training Allowance).
| Location in Act | Section 3 (as set out in items 1 and 2 of Schedule 2) |
| Date of commencement | Commenced, or was taken to have commenced, on 20 October 1997 |
| Date of application | Commenced, or was taken to have commenced, on 20 October 1997 |
| Payments affected | Newstart Allowance |
In an extension to the situations in which a person was not required to satisfy the Newstart Allowance activity test:
- the 13-week continuous period limitation on the Secretary's discretion to exempt a person from the test, where he/she was satisfied that special circumstances beyond the person's control made it unreasonable for the person to comply, was removed where the Secretary considered that those special circumstances continued or were likely to continue; and
- a pregnant woman was no longer required to satisfy the test during the period commencing six weeks before the expected date of her confinement and ending six weeks after the date her child was born. The exemption applied irrespective of whether the child was born alive. Previously, women incapable of complying with the activity test for this reason had been required to transfer to Special Benefit.