Background

5.5 Social security in Australia is funded from general taxation revenue and provides flat-rate, means-tested income support payments to those not expected to work (retired people, lone parents and carers), unable to work (people with disabilities and the sick), or unable to find work (the unemployed).^[1] Supplementary payments are also available in certain circumstances, such as Rent Assistance.

Legislative framework

5.6 The legislative basis of the social security system is the Social Security Act 1991 (Cth)and the Social Security (Administration) Act 1999 (Cth).

5.7 The Social Security Act governs all social security payments, while the Social Security (Administration) Act determines how all social security payments are administered—for example, how payments can be claimed, how and what information can be collected by Centrelink, and the operation of the review process. The Social Security (International Agreements) Act 1999 (Cth) governs agreements relating to social security between Australia and other countries.

5.8 The Social Security Act is ‘beneficial’ legislation—that is, it provides benefits to people. As such, ‘if there is an ambiguity in a piece of legislation which is beneficial in character, then the ambiguity should be resolved in a way that is most favourable to the people the Act is intended to benefit’.^[2]

5.9 In some circumstances, the Ministers of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and the Department of Education, Employment and Workplace Relations (DEEWR) have the power to make determinations—either in writing or by legislative instrument—which, in effect, have the same legal force as if they were in social security legislation itself.^[3] The head of FaHCSIA and DEEWR (the Secretary, in each case) are occasionally given similar powers to make directions by social security legislation.^[4]

Policy framework

5.10 While legislation governs and sets out the decision-making framework, the Guide to Social Security Law provides the lens through which the legislation is to be implemented by providing guidance to decision makers.

5.11 The Guide to Social Security Law is updated monthly to reflect changes in government policy and legislative interpretation and is publicly available online.^[5] Although not binding in law, it is a relevant consideration for the decision maker^[6] and, as such, is a significant aspect of the ‘legal frameworks’ being considered in this Inquiry.

5.12 A further element of the policy framework is the electronic guidelines referred to as the ‘e-reference’ used by Centrelink. The ‘e-reference’ is not, however, generally available to the public.

Administrative arrangements

5.13 Social security law is administered by the Department of Human Services (DHS) through Centrelink. Policy responsibility is spread between DEEWR, which carries responsibility for work age payments, such as Newstart Allowance and Youth Allowance, and FaHCSIA, which carries responsibility for all other payments, such as Disability Support Pension and Age Pension.

5.14 Centrelink customer service advisers are usually the first point of contact for people visiting a Centrelink office. Certain customers are referred to a Centrelink social worker in specific situations, including:

• young people aged under 18 who are unable to live at home because of severe family breakdown, abuse or other exceptional circumstances;

• customers who are experiencing, or are at risk of, family or domestic violence; and

• customers who are claiming a payment in respect of a child who is considered to be ‘at risk of harm’.^[7]

5.15 Centrelink social workers can make an assessment about a person’s personal circumstances to assist with determinations for qualification and payability of social security payments. Centrelink social workers also exercise delegations for the Youth Allowance—Unreasonable to Live At Home payment^[8] and have specific requirements for Parenting Payment, Carer Payment and Special Benefit.^[9]

Review of decisions

5.16 The review process within the social security system consists of the following steps:

• review either by the original decision maker or by a Centrelink Authorised Review Officer (ARO);^[10]

• application to the Social Security Appeals Tribunal (SSAT) after review by an ARO;^[11]

• appeal to the Administrative Appeals Tribunal (AAT).

5.17 In considering what improvements can be made to the social security legislative framework to protect the safety of those experiencing family violence, consideration of systemic reforms to the role or powers of the SSAT and AAT are beyond the scope of the Terms of Reference for this Inquiry.

Underlying principles of social security law

5.18 The social security system forms part of a wider structure that presumes a strong commitment by government to high levels of employment and includes social protections provided outside the social security system—such as a mandatory system of private superannuation, worker’s compensation, a national health care system, paid sick leave and other cash and in-kind welfare benefits and services such as personal tax concessions.^[12]

5.19 Several principles underpin the social security framework in Australia. First, the Australian social security system is based on the recognition of government and community responsibility to assist those in need. Accordingly, an entitlement to social security is viewed as a right based on need, rather than as something to be ‘bought’ by paying a financial contribution akin to social insurance (which is the model in many other countries).^[13] Need is measured by reference to the income and assets of the applicant through income and assets tests. In this way, social security acts primarily as a safety net.

5.20 Secondly, the concept of ‘mutual obligations’ refers to the general principle that it is fair and reasonable to expect unemployed people receiving income support to do their best to find work, undertake activities that will improve their skills and increase their employment prospects and, in some circumstances, contribute something to their community in return for receiving social security payments and entitlements.^[14] This concept builds upon the notion that unemployed people have an obligation to seek work in return for social security payments—an enduring aspect of the Australian social security system.^[15]

5.21 Thirdly, despite welfare reform that has focused on ‘mutual obligations’ of the individual, ‘it remains the bedrock of Australian social security law that a client’s relationship status determines eligibility and rates of payment’.^[16] This is reflected, for example, in the concept of ‘member of a couple’. The rationale behind this principle was provided by the Minister of Social Security in 1974:

The reason for granting a higher rate of pension to a single person is that a married couple can share the costs of day-to-day living whereas a single person needs a relatively higher rate in order to enjoy the same living standard.^[17]

5.22 Finally, because payments are not contributory, coverage of the system is universal, subject to a range of residence requirements. Some scholars have suggested that these requirements are considered necessary to preserve scarce social security resources for those ‘settled’ within the Australian community,^[18] reflecting the theme of ‘fairness’ identified in Chapter 2.

Qualification and payability

5.23 Section 37 of the Social Security (Administration) Act provides that a claim for a social security payment must be granted if the person is qualified and the payment is payable, creating a two stage process—qualification and payability.

5.24 A person is qualified to receive a payment where they meet all the qualification criteria set out in the Social Security Act.^[19] Qualification criteria may include age and residence requirements and practical issues such as whether a person has made a claim.

5.25 Once a decision is made that a person qualifies for a payment, then there is the separate issue of whether it is payable, and if so, the rate at which it is payable. Payability may be affected by a number of factors including income and assets tests, waiting periods, or whether a person is receiving another social security payment.