Benefits

Contributed by Danny Shaw and Dianne Anagnos and current to 1 September 2005

NEWSTART ALLOWANCE

To receive newstart allowance, a person must be:

• between 21 and age pension age;
• an Australian resident and in Australia (although payment can be made for up to 13 weeks of a temporary absence); and
• unemployed.

They must also either:

• satisfy the relevant activity test (s.593); or
• be exempt from the activity test (see below).

The activity test

Essentially, the activity test requires a person to show a commitment to finding employment through job search, study or training.

WHAT THE ACTIVITY TEST CONSISTS OF

There are three separate parts to the activity test. To satisfy the test, the person must:

• actively seek and be willing to undertake suitable paid work (s.601(1));
• where required, take reasonable steps to undertake a mutual obligation activity such as work for the dole, or an approved course or Job Network placement;
• where required, enter into and comply with the terms of a preparing for work agreement.

There may be different requirements for people aged 50 and over who receive newstart allowance (see ‘People who are 50 or more’ on opposite page).

Centrelink generally assesses a person’s efforts to find work from the form they are required to lodge with Centrelink every fortnight.

When a person undertakes an activity to satisfy the test, they must take reasonable steps to do what is required or a breach may be imposed.

The activity must be ‘reasonable’ and ‘suitable’ given the person’s particular characteristics and labour market conditions in the area where they live.

EXEMPTIONS

The Act allows exemptions from the activity test in certain situations (ss.602-603C), including illness and special circumstances such as:

• personal crisis
• homelessness
• temporary carer duties
• jury duty
• refugee or humanitarian entrant status, or
• a community service order of more than 20 hours per week.

Incurring a breach while exempt

It is quite common for a person to incur a breach when they should be exempt from the activity test. In such cases an appeal to an authorized review officer should be lodged asking for the breach to be revoked on the grounds that the person was not required to satisfy the activity test for that period.

THE JOB NETWORK

The Department of Employment and Workplace Relations has contracted various community and private agencies, and one government-owned organisation (Employment National), to provide services to people seeking work, particularly those getting newstart allowance. These agencies make up the Job Network. The network provides three levels of assistance:

• job matching
• job search training
• intensive employment assistance.

Job Network members cannot impose a breach, but they can recommend that Centrelink do so if, for example, a person fails to respond to a letter advising them to contact their Job Network member, or to comply with the terms of a preparing for work agreement that includes attending the Job Network member’s office every week.

A breach imposed in such situations can be appealed.

Mutual obligation requirements

People receiving newstart allowance may be required to undertake a mutual obligation activity in order to satisfy the activity test. Generally, all jobseekers between 18 and 49 claiming newstart allowance must nominate a mutual obligation activity while negotiating their preparing for work agreement (see below).

WHAT IS A MUTUAL OBLIGATION ACTIVITY?

The term ‘mutual obligation’ refers to a menu of activities, in addition to regular job searches, from which a person may choose, or be required to choose, to continue to satisfy the activity test. Activities may include:

• literacy and numeracy courses
• part-time work
• voluntary work
• a work for the dole program.

FAILURE TO MEET THE REQUIREMENTS

A person who fails to meet mutual obligation requirements may incur an activity test breach.

EXEMPTION FROM THE REQUIREMENTS

A person who is exempt from the activity test is not required to undertake a mutual obligation activity. Other exemptions also apply.

Preparing for work agreements

Centrelink can require a person receiving newstart allowance to enter into a preparing for work agreement (previously called newstart activity agreements), and comply with its terms (s.604(1)). All activity agreements are now considered to be preparing for work agreements.

See The Independent Social Security Handbook for a more detailed discussion of the activity test, Job Network and related issues.

People who are 50 or more

How a person who is 50 or over can meet activity test requirements depend on whether they are regarded by Centrelink as having ‘recent workforce experience’.

What is recent workforce experience?

Recent workforce experience is defined by Centrelink as employment of 20 hours or more per week for a total of 13 weeks or more at any time during the 12 months immediately before the claim is lodged.

If the person has recent workforce experience

A person of 50 or more with recent workforce experience registers with the Job Network at the initial interview in the same way as other people claiming newstart allowance, and must satisfy the same activity test, although with some additional support.

If the person has no recent workforce experience

A person of 50 or more without recent workforce experience is not required to undertake Job Network Intensive Support. The person must still negotiate a participation agreement, but it should contain requirements that concentrate on improving the person’s level of community engagement as a way of increasing their employment prospects.

WHAT ARE PREPARING FOR WORK AGREEMENTS?

The agreement is a written plan that a person must negotiate and agree to comply with. It requires a person to undertake one or more of a list of activities that are terms of the agreement.

TERMS

The terms may require a person to:

• search for work, and give Centrelink evidence of this including a regularly completed jobseeker diary and employment contact certificates;
• undertake a vocational training course;
• participate in a Job Network program, or a mutual obligation activity such as a work for the dole program;
• undertake activities such as part-time study or voluntary work.

FACTORS TO BE TAKEN INTO ACCOUNT

In deciding on the terms of an agreement, consideration should be given to:

• the person’s education, experience, skills range and physical condition;
• the nature of the labour market in the area where they live;
• any other relevant factors.

WHERE PROPER ASSESSMENT IS NOT MADE

Proper consideration of a person’s circumstances often does not occur. The question of a person’s capacity to comply with the terms of an agreement may become important if the person is breached for failure to do so.

FAILURE TO MEET REQUIREMENTS

A person may be breached for failing to negotiate or sign an agreement.

YOUTH ALLOWANCE

Youth allowance provides unemployment and study-related payments for people aged 16 to 24 (some 15-year-olds also qualify) (s.543A).

Eligibility

To qualify for youth allowance a person must:

• be of the appropriate age;
• meet the residence requirements; and
• meet activity test requirements.

UNEMPLOYED PEOPLE

Unemployed people aged 15 to 20 may qualify for youth allowance. (Those aged 21 or over may receive newstart allowance.)

FULL-TIME STUDENTS

Full-time students aged 15 to 24 may qualify for youth allowance. Those aged 25 or over are generally not eligible, unless they were receiving the allowance immediately before turning 25 and remain in the same course they were studying before turning 25. Generally, full-time students 25 or over should apply for Austudy.

Who is a full-time student?

For youth allowance purposes, a full-time student is someone undertaking full-time study at a secondary school, TAFE, university or college or other approved educational institution (s.541B).

YOUNG PEOPLE WHO ARE NOT ELIGIBLE

A person aged 15, 16 or 17 who did not complete secondary school education will not be regarded as having reached the minimum age for youth allowance unless they are:

• engaged in full-time education or training; or
• exempted from these requirements.

Activity test obligations

Youth allowance recipients who are not fulltime students must satisfy the same activity test as newstart allowance recipients, and may be required to enter into a preparing for work agreement. They may also be exempted from the activity test (s.542).

FAILURE TO MEET REQUIREMENTS

Penalties may be imposed on recipients who do not satisfy the activity test. The penalty system for youth allowance is the same as for newstart allowance.

Income and assets tests

Youth allowance is subject to:

• a parental income and assets test, unless the applicant is classified as independent; and
• a personal income and assets test.

INDEPENDENCE CRITERIA

Under s.1067A, someone is independent if:

• they are a member of a youth allowance couple;
• they have a dependent child;
• they have reached the age of 25;
• they are an orphan;
• their parents cannot exercise their responsibilities;
• they are a refugee;
• they are a ward of the state;
• it is unreasonable for them to live at home; or
• they have been self-supporting through paid work for a certain period.

There is more about the complex rules and requirements for youth allowance in The Independent Social Security Handbook.

SICKNESS ALLOWANCE

A person is eligible for sickness allowance if:

• they are unable to work at least eight hours per week due to illness or injury;
• their inability to work is temporary;
• they have employment or study to return to when the incapacity ends;
• they are an Australian resident; and
• they are aged between 21 and age pension age (s.666).

Sickness allowance is usually reviewed every 13weeks, and can be extended if a new medical certificate is provided.

WIDOW ALLOWANCE

To qualify for the widow allowance a woman must be:
• over 50;
• not a member of a couple;
• widowed, divorced or separated (including separated de facto) since turning 40; and
• without recent workforce experience.

Residence requirements

The woman meets the residence requirements for widow allowance if:

• she has 10 years’ qualifying Australian residence; or
• she has a qualifying residence exemption for widow allowance; or
• she and her partner were Australian residents when she was widowed, divorced or separated; or
• if she entered Australia before 1 April 1996, she has been an Australian resident for a continuous period of 26 weeks immediately before the claim was lodged; or
• if she entered Australia on or after 1 April 1996, she has been an Australian resident for a total of 104 weeks before the claim was lodged (s.408BA).

MATURE AGE ALLOWANCE

No new grants of mature age allowance have been made since 20 September 2003. However, people granted mature age allowance before that date will continue to receive the payment so long as they remain eligible.

PARTNER ALLOWANCE

No new grants of partner allowance have been made since 20 September 2003. However, people who were granted partner allowance before that date will continue to receive the payment so long as they remain eligible.

SPECIAL BENEFIT

Special benefit is the social security safety net payment. Only a person who is ineligible for all other income support payments (except family assistance payments) may be considered for it. The basic qualifications for special benefit (s.729) are:

• being unable to earn a sufficient livelihood for themselves and their dependents because of age, physical or mental disability, domestic circumstances or any other reason;
• not qualifying for another social security benefit or pension; and
• being an Australian resident (s.7) or holding a specified class of temporary visa (currently 309, 310, 447, 451, 785, 786, 820 or 826).

The available funds test

Applicants for special benefit must satisfy either:

• the short term available funds test; or
• the long term available funds test.

Generally, people likely to receive special benefit for less than 13 weeks must satisfy the short term available funds test, while those likely to receive it for more than 13 weeks must satisfy the long term available funds test.

THE SHORT TERM TEST

Under the short term available funds test, a person will generally not receive special benefit unless they have less than the equivalent of a fortnight’s social security payment at the maximum applicable rate.

THE LONG TERM TEST

Under the long term test, special benefit is generally not paid if a person has available funds of $5000 or more.

APPEALING AN AVAILABLE FUNDS TEST DECISION

The available funds test is Centrelink policy rather than a provision of the Social Security Act, and a person may be eligible for special benefit even if their available funds exceed the specified amounts. People in these circumstances may appeal the decision if their claim has been rejected on this ground.

Newly arrived residents who have suffered a ‘substantial change in circumstances beyond their control’

Newly arrived residents who are subject to the two-year waiting period for social security payments, and who are not family members of an Australian resident may be able to receive special benefit during this period where they have suffered ‘a substantial change in circumstances beyond their control’ (s.739A(7)). The Federal Court cases Secretary, Department of Social Security v Calin-Al Secara, Alina-Anca Secara and Vlad Secara [1998] FCA 1510; (89 FCR 151; 51 ALD 481) and Zandieh-Nadem v Secretary, Department of Family and Community Services (2000) (FC00/1422, unreported) explain what is meant by this phrase.

Essentially what is required is that the person has suffered a change of circumstances that is substantial in the sense that it affects their capacity to be self-sufficient, and was beyond their control to the extent that there was nothing that they could do about it.

Rate of payment

The rate of payment of special benefit is at the discretion of the Secretary of the Department of Family and Community Services, but the maximum rate payable usually cannot exceed the rate of newstart allowance, youth allowance or austudy otherwise payable to the person (s.746).

DEDUCTIONS FOR INCOME RECEIVED

Centrelink policy is to apply a direct dollar for dollar deduction to any income received while a person is receiving special benefit.

DEDUCTIONS FOR ‘IN KIND’ SUPPORT

Centrelink may pay special benefit at a rate less than the newstart allowance rate where the person is receiving ‘in kind’ support from another source (for example, free board and lodging).

APPEALING AGAINST DEDUCTIONS

Note that the in kind support and dollar for dollar deduction rules are departmental policy only. It may be possible to argue that the newstart allowance income test (which is much more generous) should be applied in certain circumstances. If a person is not receiving the maximum rate of special benefit they should appeal to an authorised review officer.

Activity testing for special benefit Some applicants may be required to satisfy an activity test in order to receive special benefit (s.731A). A special activity test currently applies to holders of visas with subclass numbers 447,451, 695, 785, 786 and the Criminal Justice Stay visa, who are of workforce age (16 to age pension age). Thirteen weeks after the commencement of the payment, Centrelink may require these recipients to enter into a special benefit activity agreement, unless they are given an exemption (ss. 731E-731K).

KIND OF ACTIVITY REQUIRED

Generally, a person will not be required to participate in an activity other than an English literacy or numeracy course, or a vocational training course, unless Centrelink is satisfied that the person could be ‘reasonably’ expected to undertake another activity (731M(1A)).

CARER ALLOWANCE

The carer allowance is a small supplementary payment intended to help people caring for an adult or child with a disability. The allowance is neither income nor assets tested.

Carer allowance (child)

For a person to qualify for the carer allowance (child), the child being cared for must:

• be a dependent child of the person;
• be an Australian resident;
• have a physical, intellectual or psychiatric disability;
• be likely to suffer from the disability permanently or for an extended period;
• receive care on a daily basis from the claimant or their partner in the home of that person and the child; and
• be diagnosed by a treating health professional as having a recognised disability, or have their functional ability, emotional state, behaviour and special needs tested under the child disability assessment tool (s.953).

THE CHILD DISABILITY ASSESSMENT TOOL

The child disability assessment tool uses a set of questionnaires to assess the child’s functional ability, emotional state, behaviour and special care needs. Where a child has a recognized disability (that is, a manifest condition) they can qualify for the allowance without having the assessment tool completed.

INTERRUPTIONS IN CARE

Carer allowance (child) may continue to be paid during periods of hospitalisation or respite for up to 63 days in any calendar year (s.955).

BACKDATING PAYMENT

The allowance can be backdated for up to 12 months before the claim was made if it can be established that the person was eligible for the allowance over that period (Social Security (Administration) Act Schedule 2 cl.16).

Carer allowance (adult)

Qualification for carers who reside with the person receiving care

A person who provides care for an adult may qualify for Carer Allowance (adult) where:

• both the carer and care receiver are Australian residents; and
• the person receiving care is a family member of the person providing the care (sometimes a person other than a family member can qualify); and
• the care is provided in the home of the care receiver, which is also the home of the carer; and
• the person receiving care has a score of at least 30 under the Adult Disability Assessment Tool (ADAT); and
• the care is provided on a daily basis because of the disability; and
• the care is required permanently, or for a minimum of 12 months (unless the condition is terminal).

There are special rules that apply where the person receiving care is hospitalised or goes overseas.

Qualification for carers who do not reside with the person receiving care

Since 1 September 2004, Carer Allowance (adult) is payable to carers who do not reside with the person receiving care where the following additional qualification requirements are met:

• the carer is not qualified for Carers Allowance (adult) as a co-resident; and
• the carer is not receiving award wages or above for the care provided; and
• the care is provided in a private home; and
• the care and attention are provided daily, total 20 hours per week and relate to “sustaining life” and the “bodily functions” of the person receiving care.

Examples of care relating to “sustaining life and bodily functions” include feeding, dressing, showering, providing assistance with hygiene, mobility and communication and protecting the care receiver from undertaking harmful, damaging, aggressive or other inappropriate behaviour.

BACKDATING PAYMENT

The allowance may be backdated for up to six months before the claim was made if it can be established that the disability had an acute onset (Social Security (Administration) Act cl.17).

CRISIS PAYMENT

Crisis Payment is a one-off social security payment intended to assist people who have recently experienced a crisis or extreme circumstance. It is made in addition to any other social security entitlement a person may have. Crisis payment is available in two situations:

• in extreme circumstances forcing departure from home; and
• on release from gaol or psychiatric confinement

What are extreme circumstances?

Extreme circumstances include such things as a natural disaster, a house fire, domestic violence, child abuse, sexual assault, emotional abuse, financial or psychological abuse, and assault.

EXTREME CIRCUMSTANCES FORCING DEPARTURE FROM HOME

For a person to qualify for crisis payment where extreme circumstances such as family violence have forced them from their home, they must:

• be eligible for a social security payment; and
• be in severe financial hardship; and
• have left their home and/or be unable to return due to the extreme circumstances; and
• have established or intend to establish a new home; and
• have been in Australia when the circumstances occurred; and
• make the claim in Australia within seven days of the event; and
• have not received more than three other crisis payments in this category in the 12 months before the date of the claim (s.1061JH).

RELEASE FROM JAIL OR PSYCHIATRIC CONFINEMENT

Someone who has been released from jail or psychiatric confinement can qualify for crisis payment where they:

• have spent at least 14 days in jail or psychiatric confinement because they were charged with an offence; and
• claim crisis payment within seven days of their release; and
• are eligible for a social security payment; and
• are in Australia on the day of the claim; and
• are in severe financial hardship.

There is no limit on the number of crisis payments a person in this category can receive (s1061.JG)

WAITING PERIODS

A range of waiting periods applies to some social security allowances. These are:

• a standard one week ‘ordinary’ waiting period for newstart and sickness allowance
• the income maintenance period
• the liquid assets test waiting period
• the seasonal workers’ preclusion period
• the newly arrived residents’ waiting period.

Ordinary waiting period for newstart and sickness allowance

A waiting period of seven days applies to new claims for newstart and sickness allowances, except where the person is transferring from another social security payment.

EXEMPTION

Under s.19C, a person can be exempted from the waiting period if they:

• have received social security support within the last 13 weeks, or
• are suffering severe financial hardship.

The income maintenance waiting period

An income maintenance waiting period may apply where a person receives a lump sum leave payment on termination of their employment. The person may receive no social security payment for a time, or payment at a reduced rate.

The payment taken into account must be for:

• annual leave
• sick leave
• long service leave or
• maternity leave.

Other components of a redundancy payment are not considered.

HOW LONG IS THE WAITING PERIOD?

The length of the income maintenance period depends on the period to which the leave relates. If, for example, a person leaving a job receives one month’s full pay of annual leave, the income maintenance period is one month. There is no limit on the possible length of the income maintenance waiting period.

AFFECTED PAYMENTS

The waiting period applies to:
• newstart allowance
• youth allowance
• sickness allowance
• partner allowance
• parenting payment
• widow allowance
• austudy
• mature age allowance.

WAIVING OR REDUCING THE WAITING PERIOD

The waiting period can be reduced or waived where the person is in ‘severe financial hardship’ because they have incurred ‘unavoidable or reasonable expenditure’ during the period (s.19C).

The liquid assets test waiting period

A waiting period of up to 13 weeks can apply to a person who, at the time of making a claim for newstart allowance, youth allowance or sickness allowance, has ‘liquid assets’ in excess of specified amounts.

WHAT ARE LIQUID ASSETS?

Liquid assets means cash and readily realizable assets, and includes:
• shares
• debentures in a public company
• deposits in or lent to banks (whether or not the money can be withdrawn immediately)
• amounts due and able to be paid by a former employer (apart from eligible termination payments) (s.14A(1)).

THRESHOLDS

Currently the liquid assets thresholds are:
• $2,500 for single people without dependents; and
• $5,000 for all others.

CALCULATING THE WAITING PERIOD

The excess over these thresholds is divided by:

• $500 for single people without dependents; and
• $1,000 for all others

The result of this calculation is the number of weeks the liquid assets waiting period applies, up to a maximum of 13 weeks.

WAIVING OR REDUCING THE WAITING PERIOD

The period can be waived or reduced where the person is in ‘severe financial hardship’ because they have incurred ‘unavoidable or reasonable expenditure’ during the period (s.19C).

How the waiting periods relate to each other

The liquid assets waiting period is in addition to an ordinary waiting period, but runs concurrently with an income maintenance waiting period.

The seasonal workers’ preclusion period

People affected by the seasonal workers preclusion period are those claiming:
• newstart allowance
• widow allowance
• mature age allowance
• youth allowance (except full-time students)
• partner allowance
• parenting payment (partnered)
• special benefit (only for holders of nominated temporary protection visas).

WHAT IS SEASONAL WORK?

Seasonal work is work that is available for a period at around the same time each year. The preclusion period particularly affects workers in fishing, fruit picking, and shearing; contract teachers and locums; and workers affected by Christmas shut-downs.

CALCULATING THE WAITING PERIOD

The Social Security Act provides a formula for working out the length of the preclusion period. The formula is too complicated to detail here.

WHO IS NOT AFFECTED?

Seasonal workers must earn above average weekly ordinary time earnings before they are affected by the preclusion period (s.16A).

WAIVING THE WAITING PERIOD

The seasonal workers preclusion period can be waived where there is ‘severe financial hardship’ because the worker has incurred ‘unavoidable or reasonable expenditure’ during the period.

The newly arrived residents’ waiting period

Migrants who either arrived in Australia or were granted permanent residence (whichever is the later) on or after 4 March 1997 may be subject to a two-year waiting period for:

• newstart allowance
• sickness allowance
• youth allowance
• special benefit
• partner allowance
• mature age allowance
• carer payment
• widow allowance
• health care card
• commonwealth seniors health card
• mobility allowance.

EXEMPTIONS

Some people are exempt from the waiting period. A general exemption for all payments applies to:

• holders of an 832 or 833 visa;
• refugee and special humanitarian migrants and their family members (see IMMIGRATION and REFUGEES )
• family members of long-term Australian residents (meaning people who have been living in Australia as citizens or permanent residents for at least two years).

There are other exemptions to the waiting period – check with Centrelink or with the Independent Social Security Handbook.

IMMIGRANTS FROM NEW ZEALAND

The situation for New Zealanders depends on whether the person took up residence in Australia before or after 26 February 2001. The rules about New Zealanders are complex. It is advisable to seek advice from the Welfare Rights Centre or another community legal centre where the residence status in Australia of a New Zealander is at issue.

CARER PAYMENT

For carer payment only, an exemption applies to:

• special need relatives
• holders of a carer visa.

WHERE THERE IS FINANCIAL HARDSHIP

Migrants who are suffering financial hardship because of a substantial change in circumstances beyond their control may be eligible for special benefit during the waiting period. A person should exercise their appeal rights in relation to a Centrelink decision to reject a claim for special benefit on this ground.

PENALTY PERIODS

Penalty periods apply to:
• newstart allowance
• youth allowance
• some recipients of parenting payment and special benefit.

The rules for penalty periods vary for each payment. They are described below.

Newstart allowance and youth allowance

Where a person lodges a claim for, or is receiving, newstart allowance or youth allowance, they may face a breach, and the penalty of a rate reduction or non-payment, if they have:

• failed to comply with the relevant activity test (including a newstart or youth allowance activity agreement or preparing for work agreement);
• failed to enter into an activity agreement or preparing for work agreement;
• failed to attend a Centrelink or Job Network provider’s office, contact the office or provide information when requested;
• become unemployed due to a voluntary act or misconduct as a worker;
• failed to accept a suitable offer of employment;
• failed to give Centrelink certain information requested in general or specific notices;
• reduced their employment prospects by moving;
• failed to declare correct earnings without reasonable excuse.

Administrative and activity test breaches – Newstart and youth allowance

The legislation makes a distinction between administrative breaches and breaches of the activity test, which attract more severe penalties.

ADMINISTRATIVE BREACHES

An administrative breach applies when a person fails to attend an interview, fails to provide a tax file number or fails to give a statement about a matter that affects their payment. Every breach results in a 16% reduction of a person’s payment for 13 weeks.

In some circumstances, the penalty can be reduced to a 16% reduction for eight weeks where a person complies with the initial requirement within eight weeks of the start of the reduction period (s.644B).

ACTIVITY TEST BREACHES

An activity test breach relates more to employment issues (like failing to meet the terms of a preparing for work agreement). The penalties are:

• for the first activity test breach in a two-year period, an 18% reduction for 26 weeks;
• for the second, a 24% reduction for 26 weeks;
• for the third, an eight week non-payment period.

In some circumstances, a first activity test breach penalty can be reduced to an 18% reduction for eight weeks where a person complies with the initial requirement at the earliest opportunity within eight weeks of the start of the reduction period. This penalty reduction is generally available where a person has:

• failed to, or unreasonably delayed, entering into a preparing for work agreement, or
• failed to take steps to comply with it (s.644AA).

Where the person is 50 or more

For activity test breaches where a person who is 50 or over subsequently complies with a requirement to enter into or comply with a preparing for work agreement, the remainder of the period is waived. This applies to first, second and third breaches.

For a first or second breach, the person must comply with the requirement within 26 weeks. For a third breach, they must comply within eight weeks (s.644AA).

Where a person who is 50 or over has an administrative breach imposed for failing to comply with a requirement to attend a particular place for a particular purpose, and the person complies within 13 weeks of the start of the reduction period, the remainder of the penalty period is waived (s.644B).

Parenting payment

Both single and partnered parents whose youngest child has turned 13 and who are receiving parenting payment may be required by Centrelink to:

• enter into a participation agreement; and
• undertake a range of activities (s.501).

Failure to take reasonable steps to comply with the terms of a participation agreement may lead to a breach penalty being imposed (s.503B). Administrative breaches do not apply to parenting payment.

Penalties

Penalties for breaches are the same as for newstart allowance (ss.503E(1), 500ZA) (see above).

WHERE THE BREACH IS RECTIFIED

Unlike newstart and youth allowance recipients, a person on parenting payment who complies or makes reasonable efforts to comply within 13 weeks of

the breach notification should not only have the payment restored, but be paid full arrears of any loss or deduction.

Where the person complies after 13 weeks, payment should be restored to the full rate from the date of compliance, but arrears of any loss or deduction will not be paid.

These options are available for a first, second or third breach.

Special benefit

Certain categories of people receiving special benefit are subject to the special benefit activity test. Penalties for failure to satisfy either this test or administrative requirements are the same as for newstart allowance (ss.748,752).

Reduction in penalty

For some categories of a first special benefit activity test breach in a two-year period, if the person rectifies the breach at the earliest opportunity within eight weeks of its imposition the 26 week period is reduced to eight weeks.

WHERE THE PERSON IS 50 OR MORE

Activity test breach

Where a person aged 50 or over is subject to a special benefit activity test breach for:

• failing or unreasonably delaying entering into a special benefit activity agreement, or
• failing to take reasonable steps to comply with the terms of an agreement but complies within eight weeks from the start of the penalty period, the remainder of the period is waived.

Administrative test breach

If the person rectifies an administrative breach within 13 weeks, the rest of the breach period is waived.

Appealing against breaches

Many decisions to breach and impose penalty periods are made on very subjective criteria, and such decisions are often overturned on appeal.

Clients facing penalty periods should appeal to an authorised review officer.

Payment pending the outcome of an appeal

In the case of a third breach and the consequent non-payment period penalty, there is a discretion in the Social Security Act for payment of newstart allowance and youth allowance to be made pending the outcome of the review (Social Security (Administration) Act ss.131,145). It is important for the person to request this while their appeal is being dealt with.

See The Independent Social Security Handbook for more information. The Welfare Rights Centre can offer advice and assistance with appeals.