Commonwealth: Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Act 2003 (Cth)

Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Act 2003 Act No. 35 of 2003 as amended This compilation was prepared on 21 December 2005 [This Act was amended by Act No. 122 of 2003; No. 154 of 2005] Amendments from Act No. 122 of 2003 [Schedule 7 (item 2) repealed Part 1 of Schedule 6 Schedule 7 (item 4) amended heading to item 11E of Schedule 5 Schedule 7 (item 2) commenced on 19 September 2003 Schedule 7 (item 4) commenced on 20 September 2003] Amendment from Act No. 154 of 2005 [Schedule 23 (item 6) repealed section 4 Schedule 23 (item 6) commenced on 14 December 2005] Prepared by the Office of Legislative Drafting and Publishing, Attorney‑General's Department, Canberra Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Parenting Payment Participation Agreements Part 1A—Amendment of the A New Tax System (Family Assistance) Act 1999 A New Tax System (Family Assistance) Act 1999 Part 1—Amendment of the Social Security Act 1991 Social Security Act 1991 Part 2—Amendment of the Social Security (Administration) Act 1999 Social Security (Administration) Act 1999 Schedule 1A—Amendments in relation to administrative penalties Social Security Act 1991 Schedule 2—Language, literacy and numeracy supplement Part 1A—Amendment of the A New Tax System (Family Assistance) Act 1999 A New Tax System (Family Assistance) Act 1999 Part 1—Amendment of the Social Security Act 1991 Social Security Act 1991 Part 2—Amendment of the Social Security (Administration) Act 1999 Social Security (Administration) Act 1999 Part 3—Amendment of the Income Tax Assessment Act 1997 Income Tax Assessment Act 1997 Schedule 3—Personal Support Programme Part 1—Amendment of the Social Security Act 1991 Social Security Act 1991 Part 2—Amendment of the Social Security (Administration) Act 1999 Social Security (Administration) Act 1999 Schedule 4—Closure of access to mature age allowance and partner allowance Part 1—Closure of access to mature age allowance Social Security Act 1991 Part 2—Closure of access to partner allowance Social Security Act 1991 Schedule 5—Flexible participation requirements for mature age newstart allowees Social Security Act 1991 Schedule 6—Working credit Part 2—Amendment of the Social Security Act 1991 Social Security Act 1991 Part 3—Amendment of the Social Security (Administration) Act 1999 Social Security (Administration) Act 1999 Schedule 7—Miscellaneous amendments Part 1—Amendment of the Social Security (Administration) Act 1999 Social Security (Administration) Act 1999 Part 2—Amendment of the A New Tax System (Family Assistance) (Administration) Act 1999 A New Tax System (Family Assistance) (Administration) Act 1999 An Act to amend the law relating to social security, and for related purposes [Assented to 24 April 2003] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Act 2003. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 4 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent 24 April 2003 2. Schedules 1, 1A and 2 20 September 2003 20 September 2003 3. Schedule 3 The 28th day after the day on which this Act receives the Royal Assent 22 May 2003 4. Schedules 4, 5 and 6 20 September 2003 20 September 2003 5. Schedule 7 The day on which this Act receives the Royal Assent 24 April 2003 Note: This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table is for additional information that is not part of this Act. This information may be included in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Parenting Payment Participation Agreements Part 1A—Amendment of the A New Tax System (Family Assistance) Act 1999 A New Tax System (Family Assistance) Act 1999 1A Subsection 3(1) (definition of receiving) Repeal the definition, substitute: receiving: (a) in relation to a social security payment—has the same meaning as in subsections 23(2) and (4) of the Social Security Act 1991; and (b) for the purpose of construing references to a person receiving a social security pension or a social security benefit in clauses 1 and 17 of Schedule 1, and in clause 7 of Schedule 2, to this Act—is taken to include the meaning provided in subsection 23(4A) of the Social Security Act 1991 as if those clauses were specified in provisions of that Act referred to in subsection 23(4AA) of that Act; and (c) for the purpose of construing references to a person receiving a social security pension or social security benefit in clauses 1 and 17 of Schedule 1, and in clause 7 of Schedule 2, to this Act where those references relate to a person: (i) to whom parenting payment would be payable if not for a determination that a participation agreement breach non‑payment period applies in relation to the person; or (ii) to whom parenting payment would be payable if not for a determination that a participation agreement breach rate reduction period applies in relation to the person; has effect as if that determination had not been made. Part 1—Amendment of the Social Security Act 1991 Social Security Act 1991 1 Subsection 23(1) Insert: approved program of work for income support payment means a program of work that is declared by the Employment Secretary, under section 28, to be an approved program of work for income support payment. 2 Subsection 23(1) (definition of approved program of work for unemployment payment) Repeal the definition. 3 Subsection 23(1) (definition of approved program of work supplement) Repeal the definition, substitute: approved program of work supplement means: (a) an amount payable under section 503A to a person receiving parenting payment; or (b) an amount payable under section 556A to a person receiving youth allowance; or (c) an amount payable under section 644AAA to a person receiving newstart allowance. 4 Subsection 23(1) Insert: participation agreement means a participation agreement entered into in accordance with a requirement under section 501A. 5 Subsection 23(1) Insert: participation agreement breach non‑payment period, in relation to a person, means a participation agreement breach non‑payment period applying to a person in accordance with the terms of section 500ZA. 6 Subsection 23(1) Insert: participation agreement breach rate reduction period, in relation to a person, means a participation agreement breach rate reduction period applying to the person in accordance with section 503B. 7 Subsections 28(1) and (2) Omit "for unemployment payment", substitute "for income support payment". Note: The heading to section 28 is altered by omitting "for unemployment payment" and substituting "for income support payment". 8 After paragraph 500(1)(b) Insert: (c) the person satisfies any requirement to enter into a participation agreement that applies to the person under Division 2; and 9 At the end of section 500 Add: (4) If: (a) a person ceases to be qualified for parenting payment because of a failure to comply with a requirement to enter into a participation agreement; and (b) the Secretary, under section 80 of the Administration Act, cancels or suspends the person's parenting payment because of that loss of qualification; and (c) within 13 weeks after the date of effect of the action taken by the Secretary, the person enters into a participation agreement; the person's qualification for parenting payment is taken, for the purposes of paragraph 500(1)(c) of this Act, never to have ceased. 10 Subdivision B of Division 1 of Part 2.10 (heading) Repeal the heading, substitute: Subdivision B—General principles relating to payability 11 At the end of Division 1 of Part 2.10 Add: Subdivision C—Payability in circumstances of participation agreement breach 500ZA Third and subsequent participation agreement breach consequences (1) Parenting payment is not payable to a person who is qualified for parenting payment while a participation agreement breach non‑payment period applies to the person. (2) A participation agreement breach non‑payment period applies to a person if: (a) the person commits a participation agreement breach (the latest breach); and (b) the latest breach is the third or subsequent participation agreement breach within the 2 years immediately before the day after the latest breach. 500ZB Participation agreement breaches A person has committed a participation agreement breach if the person fails to take reasonable steps to comply with the terms of a participation agreement that is in force in respect of the person. 500ZC Length of participation agreement breach non‑payment period Basic rule (1) Subject to subsections (2) and (3), the length of a participation agreement breach non‑payment period is 8 weeks. Pre‑existing non‑payment period (2) If, at the time of the commencement of a participation agreement breach non‑payment period, the person is already subject to a participation agreement breach non‑payment period (pre‑existing non‑payment period), the pre‑existing non‑payment period is taken to end immediately before the commencement of the participation agreement breach non‑payment period. Effect on non‑payment period of complying with terms of agreement within 13 weeks (3) If: (a) a participation agreement breach non‑payment period applies to a person (or would apply to a person apart from this subsection); and (b) not more than 13 weeks after the start of the period, the person takes reasonable steps to comply, or resume compliance, with the terms of: (i) a participation agreement that is in force in respect of the person; or (ii) if there is no participation agreement in force in respect of the person—the participation agreement that was in force in respect of the person immediately before the commencement of the non‑payment period; this Subdivision has effect, for the purpose only of determining the payability of parenting payment in relation to the person: (c) as if the non‑payment period had never started; and (d) if a prior breach penalty period had started not more than 13 weeks before the person took those reasonable steps—as if that prior breach penalty period had also never started. (4) In subsection (3): breach penalty period means a participation agreement breach rate reduction period or a participation agreement breach non‑payment period. 500ZD Start of participation agreement breach non‑payment period Notice of start of period (1) If a participation agreement breach non‑payment period applies to a person, the Secretary must give the person a written notice telling the person of the start of the period. (2) A notice under subsection (1) must contain reasons why the participation agreement breach non‑payment period applies to the person. General rule (3) Subject to subsection (4), the participation agreement breach non‑payment period starts on the 14th day after the day on which the notice is given to the person. Parenting payment ceasing to be payable (4) If: (a) on or before the day on which a person's participation agreement breach non‑payment period would (apart from this subsection) have started, parenting payment ceases to be payable to the person; and (b) it has not ceased to be payable because of the application of a participation agreement breach non‑payment period; the participation agreement breach non‑payment period starts on the day on which parenting payment ceases to be payable to the person. 500ZE Interaction with participation agreement breach rate reduction periods Application of section (1) This section applies if: (a) a participation agreement breach non‑payment period applies to a person; and (b) during the whole or a part of that period, the whole or a part of a participation payment breach rate reduction period (overlap period) applies to the person. Overlap period (2) Subject to subsection (4), the participation agreement breach non‑payment period and the participation agreement breach rate reduction period are to run concurrently during the overlap period. Which restriction is to apply (3) Only the non‑payment restriction relating to the participation agreement breach non‑payment period is to apply to the person during the overlap period. Pre‑existing participation agreement breach rate reduction period (4) If, at the time of the commencement of a participation agreement breach non‑payment period under this Act, the person is already subject to a participation agreement breach rate reduction period (pre‑existing reduction period), the pre‑existing reduction period is taken to end immediately before the commencement of the participation agreement breach non‑payment period under this Part. 12 After Division 1 of Part 2.10 Insert: Division 2—Parenting Payment Participation Agreements 501 General requirements relating to participation agreements General (1) The requirements that apply to a person in respect of parenting payment participation agreements are as follows: (a) the person must enter into a participation agreement when the person is required by the Secretary under section 501A to do so; (b) while the agreement is in force the person must take reasonable steps to comply with its terms; (c) at any time while the agreement is in force the person must be prepared to enter into another such agreement, instead of the existing agreement, if required to do so by the Secretary. What are reasonable steps? (2) For the purposes of paragraph (1)(b), a person is to be regarded as taking reasonable steps to comply with the terms of a participation agreement if the Secretary is satisfied: (a) that the person has attempted in good faith and to the best of his or her ability to comply with those terms; or (b) that the terms: (i) have never been appropriate; or (ii) because of a change in the person's circumstances since entry into the agreement, have become inappropriate; for compliance by that person. Appropriate terms (3) In determining whether the terms of an agreement have always been, or have become, inappropriate for compliance by a person, the Secretary is to have regard to the person's capacity to comply with the terms and to the person's needs. Capacity to comply with agreement, and person's needs (4) In having regard to a person's capacity to comply with the terms of a participation agreement and the person's needs, the Secretary is to take into account, but is not limited to, the following matters: (a) the person's education, experience, skills, age, disability, illness, mental and physical condition; and (b) the state of the local labour market and the transport options available to the person in accessing that market; and (c) the participation opportunities available to the person; and (d) the family and caring responsibilities of the person, (including those arising from any significant adverse effect on a PP child of a person that would result from the person's compliance with the terms of the agreement); and (e) current court proceedings in the Family Court or criminal courts or current child welfare concerns, such as drugs or school truanting; and (f) the length of travel time required for compliance with the agreement; and (g) the financial costs of compliance with the agreement, such as travel costs, and the capacity to pay for such compliance; and (h) any other matters that the Secretary or the person considers relevant in the circumstances. Secretary must contact person before determining failure to comply with terms (5) The Secretary must not determine that a person has failed to take reasonable steps to comply with the terms of a participation agreement unless the Secretary: (a) is satisfied that the terms of the agreement were intended to assist the person over time in gaining employment or undertaking study or training; and (b) has made reasonable attempts to contact the person in relation to the requirement to comply with the terms of the agreement (and has documented each attempt to contact); and (c) if contact was able to be made, has had regard to the reasons, if any, provided by the person for not complying with the terms of the agreement; and (d) has confirmed the adequacy of the support that the Secretary agreed to provide under the agreement. 501A Parenting payment participation agreements—requirement Requirement to enter into agreement (1) Subject to this section, if: (a) a person is claiming or receiving parenting payment; and (b) the PP child or, if more than one, the youngest PP child, of the person has turned 13 years; and (c) the person is not an exempt person within the meaning of subsection (2) or (2A); the Secretary may require the person to enter into a participation agreement. Exempt persons (2) For the purposes of subsection (1), a person is an exempt person if the person has: (a) a PP child who is a profoundly disabled child within the meaning of section 197; or (b) two or more PP children; (i) who are disabled children; and (ii) who, in the Secretary's opinion, require a level of care at least equivalent to the level of care required by a profoundly disabled child; or (c) a PP child who suffers from a physical, intellectual or psychiatric disability that is specified in a determination made under subsection 38D(3) to be a recognised disability for the purposes of section 953. Exempt persons‑periodic exemptions (2A) For the purposes of subsection (1), a person is an exempt person for a particular period determined by the Secretary under this subsection if: (a) the person has one or more PP children: (i) who suffer from a physical, intellectual or psychiatric disability or illness; and (ii) whose care needs are such that the person could not be reasonably expected at that time to comply with the terms of a participation agreement; or (b) a critical event occurs that was not within the person's control (eg family or personal crisis, the Secretary is satisfied the person has separated from his or her partner on a permanent or indefinite basis in the past 26 weeks, person's house burning down, evidence of domestic violence, serious illness of PP children or an accumulation of stressful personal circumstances which the Secretary is satisfied would, in combination, require full‑time effort to address) and, as a result, the person is temporarily unable to comply with the terms of a participation agreement. (2B) At any one time the maximum period for which the Secretary may determine that a person is an exempt person under subsection (2A) is: (a) if paragraph (2A)(a) applies to the person—12 months; (b) if paragraph (2A)(b) applies to the person—26 weeks. (2C) The Secretary may make more than one determination under subsection (2A) in respect of a person. Requirement to enter into another agreement (3) The Secretary may require a person who is a party to a participation agreement that is in force to enter into another such agreement instead of the existing one. Reasons for revocation or revocation and replacement (4) Without limiting the generality of the grounds on which the Secretary may take action under subsection (3), those grounds include: (a) the Secretary's satisfaction that the person has breached the requirements of the agreement that is in force; or (b) the Secretary's satisfaction that a term or terms of the agreement that is in force are inappropriate, having regard to the person's circumstances and needs at the time it was entered into; or (c) the Secretary's satisfaction that the person's circumstances or needs have so changed that the agreement that is in force should no longer continue in force. Notice of requirement (5) The Secretary is to give a person who is required to enter into a participation agreement notice in writing of: (a) the requirement; and (b) the places and times, being places and times which are reasonable in all the circumstances, at which the agreement is to be negotiated; and (c) the effect of failure by the person to comply with the requirement set out in the notice. 501B Participation agreement—nature and terms Form of agreement (1) A participation agreement is a written agreement between the Secretary and another person, in a form approved by the Secretary, under which the person agrees to undertake, during each period of 26 weeks that the agreement is in force, approved activities anticipated to take 150 hours or such lesser number of hours as are agreed between them. Participation agreements will set out the support that the Secretary undertakes to provide to assist the person to meet his or her participation requirements in the negotiated agreement. Approved activities (2) For the purposes of a particular participation agreement, approved activities constitute such particular activities, comprising one or more of the following activities, as are approved by the Secretary: (a) job search; (b) a vocational or pre‑vocational training course; (c) training that would help in searching for work; (d) paid work; (e) measures designed to eliminate or reduce any disadvantage the person has in relation to obtaining work; (f) subject to subsection (7)—voluntary participation in an approved program of work for income support payment; (g) participation in a labour market program; (h) participation in the PSP; (i) participation in a rehabilitation program as defined in section 23 of the Social Security Act 1991; (j) a course of education; (k) another activity that the Secretary regards as suitable for the person, including voluntary work, and that is agreed to between the person and the Secretary. Secretary's considerations concerning approval of terms (3) In considering what terms of a participation agreement with a person to approve, the Secretary is to have regard to the person's capacity to comply with the terms of the proposed agreement and to the person's needs. Capacity to comply with agreement, and person's needs (4) In having regard to a person's capacity to comply with the terms of a participation agreement and to the person's needs, the Secretary is to take into account, but is not limited to, the following matters: (a) the person's education, experience, skills, age, disability, illness, mental and physical condition; and (b) the state of the local labour market and the transport options available to the person in accessing that market; and (c) the participation opportunities available to the person; and (d) the family and caring responsibilities of the person, (including those arising from any significant adverse effect on a PP child of a person that would result from the person's compliance with the terms of the agreement); and (e) current court proceedings in the Family Court or criminal courts or current child welfare concerns such as drugs or school truanting; and (f) the length of travel time required for compliance with the agreement; and (g) the financial costs of compliance with the agreement, such as travel costs, and the capacity to pay for such compliance; and (h) any other matters that the Secretary or the person considers relevant in the circumstances. Variation, suspension, cancellation and review (5) A participation agreement with a person: (a) may be varied (in negotiation with the person) or suspended by the Secretary; and (b) if another participation agreement is made with the person—may be cancelled by the Secretary; and (c) may be reviewed from time to time by the Secretary at the request of either party to the agreement; and (d) may be cancelled by the Secretary after a review under paragraph (c). Cooling‑off period (5A) Within 14 days of the terms of the participation agreement being approved, those terms may be varied by the person with the approval of the Secretary. Requirement to notify (5B) The Secretary must advise the person of the effect of subsection (5A). Avoidance of doubt (5C) To avoid doubt, subsection (5A) does not prevent the person at any time from requesting a review of an agreement under paragraph (5)(c). Circumstances preventing or affecting compliance (6) The party to a participation agreement other than the Secretary must tell the Secretary of any circumstances preventing or affecting the party's compliance with the agreement. Situations in which participation in an approved program of work for income support payment cannot be required (7) A participation agreement with a person must not provide for participation in an approved program of work for income support payment if: (a) in the Secretary's opinion: (i) it has been established that there is medical evidence that the person has an illness, disability or injury that would be aggravated by the conditions in which the work would be performed; or (ii) performing the work in the conditions in which the work would be performed would constitute a risk to health or safety or would contravene a law of the Commonwealth, a State or Territory relating to occupational health and safety; or (b) the program of work requires the person to move from a home in one place to a home in another place. Effect of participation in an approved program of work for income support payment (8) A person is not to be taken, merely by participating in an approved program of work for income support payment in accordance with the terms of a participation agreement under this section, to be: (a) an employee within the meaning of section 9 of the Occupational Health and Safety (Commonwealth Employment) Act 1991; or (b) an employee within the meaning of section 5 of the Safety, Rehabilitation and Compensation Act 1988; or (c) an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992; or (d) an employee for the purposes of the Workplace Relations Act 1996. 501C Participation agreements—failure to negotiate Failure to enter agreement (1) If: (a) a person has been given notice under subsection 501A(5) of a requirement to enter into a participation agreement; and (b) the Secretary is satisfied, because of the person's failure to: (i) attend the negotiation of the agreement; or (ii) respond to correspondence about the agreement; or (iii) agree to the reasonable terms of the agreement proposed by the Secretary; or for any other reason, that the person is unreasonably delaying entering into the agreement; then: (c) the Secretary may give the person notice that the person is taken to have failed to enter the agreement; and (d) if the notice is given—the person is taken to have so failed. Form of notice (2) A notice under paragraph (1)(c) must: (a) be in writing; and (b) set out the reasons for the decision to give the notice; and (c) include a statement describing the rights of the person to apply for the review of the decision. 13 After the heading to Division 4 of Part 2.10 Insert: Subdivision A—Rate of parenting payment 14 After section 503 Insert: 503A Approved program of work supplement If a person: (a) is receiving a parenting payment; and (b) is participating in an approved program of work for income support payment; the rate of the person's parenting payment is increased by an amount of $20.80, to be known as the approved program of work supplement, for each fortnight during which the person participates in the program. 503AA Approved program of work supplement not payable in certain circumstances An approved program of work supplement is not payable to a person in respect of a fortnight if pensioner education supplement under Part 2.24A or under ABSTUDY is payable to the person in respect of a day in the fortnight. Subdivision B—Rate reductions relating to participation agreement breaches 503B Participation agreement breach rate reduction period (1) A participation agreement breach rate reduction period applies to a person if: (a) the person fails to take reasonable steps to comply with the terms of the person's participation agreement (latest breach); and (b) the latest breach is only the first or second breach committed by the person within the 2 years immediately before the day after the latest breach. (2) In this section, breach means a failure to take reasonable steps to comply with the terms of a participation agreement. 503C Length of participation agreement breach rate reduction period Length of breach rate reduction period (1) Subject to subsections (2) and (3), the length of a participation agreement breach rate reduction period is 26 weeks. Pre‑existing breach rate reduction period (2) If, at the time of the commencement of a participation agreement breach rate reduction period under this Part (the current breach period), the person is already subject to a participation agreement breach rate reduction period (pre‑existing rate reduction period), the pre‑existing rate reduction period is taken to end immediately before the commencement of the current breach period. Effect on breach rate reduction period of complying with the terms of an agreement within 13 weeks (3) If: (a) a participation agreement breach rate reduction period applies to a person (or would apply to a person apart from this subsection); and (b) not more than 13 weeks after the start of the period, the person takes reasonable steps to comply, or to resume compliance, with the terms of a participation agreement that is in force in respect of the person; this Act has effect, for the purpose only of working out the rate of parenting payment payable to the person: (c) as if the period had never started; and (d) if a prior breach penalty period had started not more than 13 weeks before the person took those reasonable steps—as if that prior breach penalty period had also never started. Effect on breach rate reduction period of complying with the terms of agreement after 13 weeks (4) If: (a) a participation agreement breach rate reduction period applies to a person (or would apply to a person apart from this subsection); and (b) more than 13 weeks after the start of the period, the person takes reasonable steps to comply, or to resume compliance, with the terms of a participation agreement that is in force in respect of the person; the breach rate reduction period applicable to the person ceases with effect from the day on which the person took those reasonable steps. (5) In this section: breach penalty period means a participation agreement breach rate reduction period or a participation agreement breach non‑payment period. 503D Start of participation agreement breach rate reduction period Notice of start of period (1) If a participation agreement breach rate reduction period applies to a person under this Part, the Secretary must give to the person a written notice telling the person of the start of the period. Notice to contain reasons (1A) A notice under subsection (1) must contain reasons why the participation agreement breach rate reduction period applies to the person. General rule (2) Subject to subsection (3), the participation agreement breach rate reduction period starts on the 14th day after the day on which the notice is given to the person. Parenting payment ceasing to be payable (3) If, on or before the day on which the person's participation agreement breach rate reduction period would (apart from this subsection) have started, parenting payment ceases to be payable to the person, the period starts on the day on which parenting payment ceases to be payable to the person. 503E Rate of parenting payment where participation agreement breach rate reduction period applies Participation agreement breach reduced rate (1) If a participation agreement breach rate reduction period applies to a person under this Part, the person's rate of parenting payment for the reduction period is worked out as follows: Method statement Step 1. Work out the person's maximum payment rate as follows: (a) if the person is not a member of a couple, the person's maximum payment rate will be the sum of the person's maximum basic rate of parenting payment as determined under Module B of the Parenting Payment Rate Calculator in section 1068A and the person's pension supplement as determined under Module BA of the Parenting Payment Rate Calculator in section 1068A; (b) if the person is a member of a couple, the person's maximum payment rate is the rate worked out using Module C of the Parenting Payment Rate Calculator in section 1068B. Step 2. Work out the rate reduction amount as follows: (a) if the participation agreement breach is the person's first breach in the 2 year period: (b) if the participation agreement breach is the person's second breach in the 2 year period: Step 3. Take the rate reduction amount away from the rate of parenting payment worked out in accordance with the Parenting Payment Rate Calculator in section 1068A or 1068B, as the case may be. The result is the participation agreement breach reduced rate. Meaning of 2 year period (2) In this section: 2 year period means the 2 years immediately before the day after the participation agreement breach. Subdivision C—Accumulation of parenting payments by CDEP Scheme participants 15 Paragraph 541(2)(b) Omit "for unemployment payment", substitute "for income support payment". 16 Subsection 541(2) (note) Repeal the note. 17 Paragraph 541A(e) Omit "for unemployment payment", substitute "for income support payment". 18 Subsection 541E(1) Omit "for unemployment payment", substitute "for income support payment". Note: The heading to subsection 541E(1) is altered by omitting "for unemployment payment" and substituting "for income support payment". 19 Subsection 541E(2) Omit "for unemployment payment", substitute "for income support payment". 20 Subsection 541E(3) Omit "for unemployment payment", substitute "for income support payment". Note 1: The heading to subsection 541E(3) is altered by omitting "for unemployment payment" and substituting "for income support payment". Note 2: The heading to section 541E is altered by omitting "for unemployment payment" and substituting "for income support payment". 20A After subsection 544(2) Insert: Secretary must contact person before determining failure to comply with terms (3) The Secretary must not determine that a person has failed to take reasonable steps to comply with the terms of a youth allowance activity agreement unless the Secretary: (a) is satisfied that the terms of the agreement were intended to assist the person over time in gaining employment or undertaking study or training; and (b) has made reasonable attempts to contact the person in relation to the requirement to comply with the terms of the agreement (and has documented each attempt to contact); and (c) if contact was able to be made, has had regard to the reasons, if any, provided by the person for not complying with the terms of the agreement; and (d) has confirmed the adequacy of the support that the Secretary agreed to provide under the agreement. 21 Paragraph 544B(1)(f) Omit "for unemployment payment", substitute "for income support payment". 21A Subsection 544B(4) Repeal the subsection, substitute: (4) In having regard to a person's capacity to comply with an agreement, the Secretary is to take into account, but is not limited to the following matters: (a) the person's education, experience, skills, age, disability, illness, mental and physical condition; and (b) the state of the local labour market and the transport options available to the person in accessing that market; and (c) the participation opportunities available to the person; and (d) the family and caring responsibilities of the person; and (e) the length of travel time required for compliance with the agreement, by reference to what constitutes unreasonably difficult commuting for the purposes of paragraph 541D(1)(g); and (f) the financial costs of compliance with the agreement, such as travel costs, and the capacity to pay for such compliance; and (g) any other matters that the Secretary or the person considers relevant in the circumstances. 21B Paragraph 544B(5)(a) After "varied", insert "(in negotiation with the person)". 21C After subsection 544B(5) Insert: Cooling off period (5A) Within 14 days of the terms of the agreement being approved, those terms may be varied by the person with the approval of the Secretary. Requirement to notify (5B) The Secretary must advise the person in writing of the effect of subsection (5A). Avoidance of doubt (5C) To avoid doubt, subsection (5A) does not prevent the person at any time from requesting a review of an agreement under paragraph (5)(c). 22 Subsection 544B(7) Omit "for unemployment payment", substitute "for income support payment". Note: The heading to subsection 544B(7) is altered by omitting "for unemployment payment" and substituting "for income support payment". 23 Subsection 544B(7) (note) Repeal the note. 24 Subsection 544B(8) Omit "for unemployment payment", substitute "for income support payment". Note: The heading to subsection 544B(8) is altered by omitting "for unemployment payment" and substituting "for income support payment". 24A Subparagraph 544C(1)(b)(iii) After "agree to", insert "the reasonable". 24B Subsection 550C(2) Repeal the subsection, substitute: General rule (2) Subject to subsection (3) and to sections 550D and 550E, the activity test non‑payment period starts on the 14th day after the day on which the notice is given to the person. 25 Paragraph 556A(b) Omit "for unemployment payment", substitute "for income support payment". 26 Section 556A (note) Repeal the note. 26A Subsection 557B(2) Repeal the subsection, substitute: General rule (2) Subject to subsection (3) and to section 557C, the activity test breach rate reduction period starts on the 14th day after the day on which the notice is given to the person. 26B Subsection 558B(2) Repeal the subsection, substitute: General rule (2) Subject to subsection (3), the administrative breach rate reduction period starts on the 14th day after the day on which the notice is given to the person. 26C After subsection 593(2A) Insert: (2B) The Secretary must not determine that a person has failed to take reasonable steps to comply with the terms of a Newstart Activity Agreement unless the Secretary: (a) is satisfied that the terms of the agreement were intended to assist the person over time in gaining employment or undertaking study or training; and (b) has made reasonable attempts to contact the person in relation to the requirement to comply with the terms of the agreement (and has documented each attempt to contact); and (c) if contact was able to be made, has had regard to the reasons, if any, provided by the person for not complying with the terms of the agreement; and (d) has confirmed the adequacy of the support that the Secretary agreed to provide under the agreement. 27 Subparagraph 601(2)(a)(ia) Omit "for unemployment payment", substitute "for income support payment". 28 Subsections 601(2E) and (2F) Omit "for unemployment payment", substitute "for income support payment". 29 Paragraph 601A(3)(a) Omit "for unemployment payment", substitute "for income support payment". 30 Paragraph 606(1)(ec) Omit "for unemployment payment", substitute "for income support payment". 30A Subsection 630B(2) Repeal the subsection, substitute: (2) Subject to subsection (3) and (6) and to sections 630BA and 630BB, the activity test non‑payment period starts on the 14th day after the day on which the notice is given to the person. 31 Subdivision GA of Division 1 of Part 2.12 (heading) Repeal the heading, substitute: Subdivision GA—Participation in an approved program of work for income support payment 32 Paragraph 631B(1)(b) Omit "for unemployment payment", substitute "for income support payment". Note: The heading to section 631B is altered by omitting "for unemployment payment" and substituting "for income support payment". 33 Section 631C Omit "for unemployment payment", substitute "for income support payment". Note: The heading to section 631C is altered by omitting "for unemployment payment" and substituting "for income support payment". 34 Paragraph 644AAA(b) Omit "for unemployment payment", substitute "for income support payment". 34A Subsection 644AB(2) Repeal the subsection, substitute: (2) Subject to section 644AC, the activity test breach rate reduction period starts on the 14th day after the day on which the notice is given to the person. 34B Subsection 644C(2) Repeal the subsection, substitute: (2) Subject to subsections (3) and (6), the administrative breach rate reduction period starts on the 14th day after the day on which the notice is given to the person. 35 After paragraph 729(2)(bb) Insert: (bc) the person is not disqualified from parenting payment for the period solely because of a failure to meet the requirement of paragraph 500(1)(c) (requirement to enter into a participation agreement); and (bd) if the person is qualified for parenting payment but the payment is not payable to the person for the period—that result is not produced because of the operation of section 500ZA (person failing to comply with a participation agreement); and 36 Subparagraph 1223(7)(b)(iv) Repeal the subparagraph, substitute: (iv) if the person was receiving parenting payment, youth allowance or newstart allowance—the rate of the person's parenting payment, youth allowance or new start allowance was increased by an approved program of work supplement when that rate should not have been so increased; 37 Subsection 1223(7) (note) Repeal the note. Part 2—Amendment of the Social Security (Administration) Act 1999 Social Security (Administration) Act 1999 38 After subsection 37(1) Insert: (1A) The Secretary must determine that a claim for parenting payment is to be granted if the Secretary is satisfied that: (a) the claimant is qualified, or is expected to be qualified, for the payment; and (b) the payment would be payable apart from: (i) the application of a participation agreement breach non‑payment period; or (ii) the application of a participation agreement breach rate reduction period where the rate reduction reduces the claimant's rate of parenting payment to nil. 39 Paragraph 127(2)(b) Omit "for unemployment payment", substitute "for income support payment". 40 After subparagraph 131(1)(b)(i) Insert: (ia) would result in the application of a participation agreement breach non‑payment period; or 41 Subsection 131(7) Insert: participation agreement breach non‑payment period, in relation to a person who is the subject of an adverse decision, means a period that is determined under section 500ZA of the 1991 Act to be a participation agreement breach non‑payment period applicable to that person. 42 Paragraph 132(1)(a) After "persons who are subject to", insert "a participation agreement breach non‑payment period or to". 43 After section 132 Insert: 132A Automatic payment if review of section 501C terms decision sought (1) This section applies to a decision to give a notice under section 501C of the 1991 Act because of a person's failure to agree to terms of a participation agreement proposed by the Secretary. (2) If: (a) a person applies under section 129 for review of a decision to which this section applies; and (b) the person makes the application within 14 days after being notified of the decision; the following provisions have effect: (c) payment of parenting payment is to be made, pending the determination of the review, as if the participation agreement had not been required; (d) if payment of the parenting payment had ceased for a period before the person applied for the review—arrears of parenting payment are payable to the person for the period in spite of section 118; (e) the social security law (other than this Division) applies as if the participation agreement had not been required. (3) Subsection (2) ceases to have effect if the application for review is withdrawn. (4) Subsection (2) ceases to have effect when the review of the decision is determined. 44 After paragraph 140(1)(a) Insert: (aa) a decision under section 501B of the 1991 Act to the extent to which it relates to the terms of a participation agreement that is in force; and 45 Before subsection 143(1) Insert: (1A) The SSAT may only review a decision under section 501B of the 1991 Act (to the extent to which it relates to the terms of a participation agreement that is in force) if the application is expressed to be an application for review of that decision. 46 After subparagraph 145(1)(b)(i) Insert: (ia) would result in the application of a participation agreement breach non‑payment period; or 47 Paragraph 146(1)(a) Repeal the paragraph, substitute: (a) is to set guidelines for the exercise of the Secretary's power to make a declaration under subsection 145(1): (i) affecting payments to persons who are subject to a participation agreement breach non‑payment period; or (ii) affecting payments to persons who are subject to an activity test non‑payment period; and 48 After section 146 Insert: 146A Automatic payment if review of decision under section 501C of the 1991 Act sought (1) If: (a) a decision has been made to give a notice under section 501C of the 1991 Act because of a person's failure to agree to terms of a participation agreement proposed by the Secretary; and (b) the person applies to the Social Security Appeals Tribunal under section 142 for review of the decision; and (c) the person makes the application within 14 days after being notified of the decision; the following provisions have effect: (d) payment of parenting payment is to be made, pending the determination of the review, as if the participation agreement had not been required; (e) if payment of parenting payment had ceased for a period before the person applied for the review—arrears of parenting payment are payable to the person for the period, in spite of section 118; (f) the social security law (other than this Division) has effect as if the participation agreement had not been required. (2) Subsection (1) ceases to have effect if: (a) the application for review is withdrawn; or (b) the review of the decision is determined. 49 Before paragraph 149(5)(a) Insert: (aa) a decision under section 501B of the 1991 Act to the extent to which it relates to the terms of a participation agreement that is in force; or 50 Before paragraph 150(a) Insert: (aa) a decision under section 501B of the 1991 Act to the extent to which it relates to the terms of a participation agreement that is in force; or 51 Before paragraph 151(4)(a) Insert: (aa) a decision under section 501B of the 1991 Act to the extent to which it relates to the terms of a participation agreement that is in force; or 52 Before paragraph 152(6)(a) Insert: (aa) a decision under section 501B of the 1991 Act to the extent to which it relates to the terms of a participation agreement that is in force; or 53 Before paragraph 153(1)(a) Insert: (aa) a decision under section 501B of the 1991 Act to the extent to which it relates to the terms of a participation agreement that is in force; and Schedule 1A—Amendments in relation to administrative penalties Social Security Act 1991 1 Subsection 557A(1) Omit "subsections (2) and (3)", substitute "subsections (2), (3), (4) and (7)". 2 At the end of section 557A Add: (4) Subject to subsection (3), if: (a) an activity test breach rate reduction period is applicable to a person because of an activity test breach other than: (i) a breach for failing to take reasonable steps to comply with a requirement of the Secretary to undertake particular paid work as set out in a notice under subsection 541(2); or (ii) a breach of paragraph 541A(c) or 550A(c), (e), (f) or (g); or (iii) a breach of paragraph 550A(d) where the Secretary is satisfied that the person has acted with an intention of obtaining a social security advantage; or (iv) a breach because of a failure to take reasonable steps to comply with a job search requirement of a Youth Allowance Activity Agreement as described in subsection (6); and (b) the activity test breach is the first activity test breach of any kind that is applicable to the person in the period of 2 years ending immediately before the day after the activity test breach; and (c) the Secretary notifies the person, either orally or in writing, of an activity or activities that, if undertaken by the person, would satisfy the Secretary that the activity test breach rate reduction period should be modified in accordance with this subsection; and (d) at the earliest opportunity available to the person but in no case later than 8 weeks after the start of the activity test breach rate reduction period, the person undertakes the activity or each of the activities; the activity test breach rate reduction period applicable to the person is 8 weeks rather than 26 weeks. (5) For the purposes of subparagraph (4)(a)(iii), a person has an intention of obtaining a social security advantage if the person has an intention of: (a) obtaining, or enabling the person to obtain, a social security payment that the person would not otherwise obtain; or (b) obtaining, or enabling the person to obtain, a social security payment at a higher rate than that which would otherwise be payable; or (c) ensuring that the person would be qualified for fringe benefits for the purposes of this Act or the Veterans' Entitlements Act. (6) For the purposes of subparagraph (4)(a)(iv), a job search requirement of a Youth Allowance Activity Agreement is a requirement that the person to whom the agreement relates: (a) undertake a certain number of job searches per fortnight; and (b) keep a record of the person's job searches in a document referred to in the agreement as a job seeker diary; and (c) return the job seeker diary to the Department at the end of the period specified in the agreement. (7) If: (a) under paragraph (4)(c), the Secretary has notified a person of an activity or activities; and (b) the person has not: (i) undertaken the activity or any one or more of the activities referred to in paragraph (a); or (ii) if another activity or other activities is notified to the person in substitution for the activity or activities so referred to (or for any previously substituted activity or activities)—undertaken that other activity or any one or more of those other activities; before the end of 8 weeks after the start of the activity test breach rate reduction period applicable to the person; and (c) the Secretary is satisfied that the failure to undertake the activity or any one or more of the activities referred to in paragraph (a) and any substituted activity or activities was for reasons outside the person's control; the Secretary may determine that the activity test breach rate reduction period applicable to the person is 8 weeks rather than 26 weeks. 3 Subsection 558A(1) Omit "subsections (2) and (3)", substitute "subsections (2), (3), (4) and (5)". 4 At the end of section 558A Add: (4) Subject to subsection (3), if: (a) an administrative breach rate reduction period is applicable to a person because the person has refused or failed to comply with a requirement made of the person under section 63, 64, 67, 68, 75 or 192 of the Administration Act; and (b) the refusal or failure is the first refusal or failure in the period of 2 years ending immediately before the day after the refusal or failure; and (c) the Secretary notifies the person, either orally or in writing, of an activity or activities that, if undertaken by the person, would satisfy the Secretary that the administrative breach rate reduction period should be modified in accordance with this subsection; and (d) at the earliest opportunity available to the person but in no case later than 8 weeks after the start of the administrative breach rate reduction period applicable to the person, the person undertakes the activity or each of the activities; the administrative breach rate reduction period applicable to the person is 8 weeks rather than 13 weeks. (5) If: (a) under paragraph (4)(c), the Secretary has notified a person of an activity or activities; and (b) the person has not: (i) undertaken the activity or any one or more of the activities referred to in paragraph (a); or (ii) if another activity or other activities is notified to the person in substitution for the activity or activities so referred to (or for any previously substituted activity or activities)—undertaken that other activity or any one or more of those other activities; before the end of 8 weeks after the start of the administrative breach rate reduction period applicable to the person; and (c) the Secretary is satisfied that the failure to undertake the activity or any one or more of the activities referred to in paragraph (a) and any substituted activity or activities was for reasons outside the person's control; the Secretary may determine that the administrative breach rate reduction period applicable to the person is 8 weeks rather than 13 weeks. 5 At the end of section 644AA Add: (1A) If: (a) an activity test breach rate reduction period is applicable to a person because of an activity test breach other than: (i) a breach for failing to take reasonable steps to comply with a requirement of the Secretary to undertake particular paid work as set out in a notice under subsection 601(2); or (ii) a breach of subsection 601A(1), of section 628, 629 or 630 or of paragraph 630AA(1)(b); or (iii) a breach of paragraph 630AA(1)(a) where the Secretary is satisfied that the person has acted with an intention of obtaining a social security advantage; or (iv) a breach because of a failure to take reasonable steps to comply with a job search requirement of a Newstart Allowance Activity Agreement as described in subsection (1C); and (b) the activity test breach is the first activity test breach of any kind that is applicable to the person in the period of 2 years ending immediately before the day after the activity test breach; and (c) the Secretary notifies the person, either orally or in writing, of an activity or activities that, if undertaken by the person, would satisfy the Secretary that the activity test breach rate reduction period should be modified in accordance with this subsection; and (d) at the earliest opportunity available to the person but in no case later than 8 weeks after the start of the activity test breach rate reduction period applicable to the person, the person undertakes the activity or each of the activities; the activity test breach rate reduction period applicable to the person is 8 weeks rather than 26 weeks. (1B) For the purposes of subparagraph (1A)(a)(iii), a person has an intention of obtaining a social security advantage if the person has an intention of: (a) obtaining, or enabling the person to obtain, a social security payment that the person would not otherwise obtain; or (b) obtaining, or enabling the person to obtain, a social security payment at a higher rate than that which would otherwise be payable; or (c) ensuring that the person would be qualified for fringe benefits for the purposes of this Act or the Veterans' Entitlements Act. (1C) For the purposes of subparagraph (1A)(a)(iv), a job search requirement of a Newstart Allowance Activity Agreement is a requirement that the person to whom the Agreement relates: (a) undertake a certain number of job searches per fortnight; and (b) keep a record of the person's job searches in a document referred to in the agreement as a job seeker diary; and (c) return the job seeker diary to the Department at the end of the period specified in the Agreement. (1D) If: (a) under paragraph (1A)(c), the Secretary has notified a person of an activity or activities; and (b) the person has not: (i) undertaken the activity or any one or more of the activities referred to in paragraph (a); or (ii) if another activity or other activities is notified to the person in substitution for the activity or activities so referred to (or for any previously substituted activity or activities)—undertaken that other activity or any one or more of those other activities; before the end of 8 weeks after the start of the activity test breach rate reduction period applicable to the person; and (c) the Secretary is satisfied that the failure to undertake the activity or any one or more of the activities referred to in paragraph (a) and any substituted activity or activities was for reasons outside the person's control; the Secretary may determine that the activity test breach rate reduction period applicable to the person is 8 weeks rather than 26 weeks. 6 At the end of section 644B Add: (1A) If: (a) an administrative breach rate reduction period is applicable to a person because the person has refused or failed, without reasonable excuse, to comply with a requirement made of the person under section 63, 64, 67, 68, 75 or 192 of the Administration Act; and (b) the refusal or failure is the first refusal or failure in the period of 2 years ending immediately before the day after the refusal or failure; and (c) the Secretary notifies the person, either orally or in writing, of an activity or activities that, if undertaken by the person, would satisfy the Secretary that the administrative breach rate reduction period should be modified in accordance with this subsection; and (d) at the earliest opportunity available to the person but in no case later than 8 weeks after the start of the administrative breach rate reduction period applicable to the person, the person undertakes the activity or each of the activities; the administrative breach rate reduction period applicable to the person is 8 weeks rather than 13 weeks. (1B) If: (a) under paragraph (1A)(c), the Secretary has notified a person of an activity or activities; and (b) the person has not: (i) undertaken the activity or any one or more of the activities referred to in paragraph (a); or (ii) if another activity or other activities is notified to the person in substitution for the activity or activities so referred to (or for any previously substituted activity or activities)—undertaken that other activity or any one or more of those other activities; before the end of 8 weeks after the start of the administrative breach rate reduction period applicable to the person; and (c) the Secretary is satisfied that the failure to undertake the activity or any one or more of the activities referred to in paragraph (a) and any substituted activity or activities was for reasons outside the person's control; the Secretary may determine that the administrative breach rate reduction period applicable to the person is 8 weeks rather than 13 weeks. 7 After subsection 729(2C) Insert: (2CA) The Secretary must not determine that a person has failed to take reasonable steps to comply with the terms of a Special Benefit Activity Agreement unless the Secretary: (a) is satisfied that the terms of the agreement were intended to assist the person over time in gaining employment or undertaking study or training; and (b) has made reasonable attempts to contact the person in relation to the requirement to comply with the terms of the agreement (and has documented each attempt to contact); and (c) if contact was able to be made, has had regard to the reasons, if any, provided by the person for not complying with the terms of the agreement; and (d) has confirmed the adequacy of the support that the Secretary agreed to provide under the agreement. 8 After subsection 731M(1) Insert: (1AA) If the person is at least 50 years of age but less than 60 years of age, the particular number of job vacancies shall not exceed 24 per 12 weeks in the period specified in the notice. (1AB) If the person is at least 60 years of age, the particular number of job vacancies shall not exceed 12 per 12 weeks in the period specified in the notice. (1AC) Subsection (1AA) does not apply unless the person has been receiving an income support payment for a continuous period of at least 9 months and the person satisfies the Secretary that the person has no recent workforce experience. 9 Subsection 731M(5) Repeal the subsection, substitute: (5) In having regard to a person's capacity to comply with an agreement, the Secretary is to take into account, but is not limited to, the following matters: (a) the person's education, experience, skills, age, disability, illness, and mental and physical condition; (b) the state of the local labour market and the transport options available to the person in accessing that market; (c) the participation opportunities available to the person; (d) the family and caring responsibilities of the person; (e) the length of travel time required for compliance with the agreement, by reference to what constitutes unreasonably difficult commuting for the purposes of paragraph 731B(1)(g); (f) the financial costs of compliance with the agreement, such as travel costs, and the capacity to pay for such compliance; (g) any other matters that the Secretary or the person considers relevant in the circumstances. 10 Paragraph 731M(6)(a) After "varied", insert "(in negotiation with the person)". 11 After subsection 731M(6) Insert: (6A) Within 14 days of the day of the agreement being approved, those terms may be varied by the person with the approval of the Secretary. (6B) The Secretary must advise the person in writing of the effect of subsection (6A). (6C) To avoid doubt, subsection (6A) does not prevent the person at any time from requesting a review of an agreement under paragraph (6)(c). 12 Subparagraph 731N(1)(b)(iii) After "agree to", insert "the reasonable". 13 Subsection 745C(2) Repeal the subsection, substitute: (2) Subject to subsection (4) of this section and to section 745D, the activity test non‑payment period starts on the 14th day after the day on which the notice is given to the person. 14 At the end of section 748 Add: (1A) If: (a) an activity test breach rate reduction period is applicable to a person because of an activity test breach other than: (i) a breach for failing to take reasonable steps to comply with a requirement of the Secretary to undertake particular paid work as set out in a notice under subsection 731A(7); or (ii) a breach of subsection 731C(1), of section 743, 744 or 745 or of paragraph 745A(1)(a); or (iii) a breach of paragraph 745A(1)(b) where the Secretary is satisfied that the person has acted with an intention of obtaining a social security advantage; or (iv) a breach because of a failure to take reasonable steps to comply with a job search requirement of a Special Benefit Activity Agreement as described in subsection (1C); and (b) the activity test breach is the first activity test breach of any kind that is applicable to the person in the period of 2 years ending immediately before the day after the activity test bre