SSLA (Activity Test Penalty Periods) Bill 1997

Social Security Legislation Amendment (Activity Test Penalty Periods) Act 1997

No. 106, 1997

An Act to amend the law relating to social security, and for related purposes

[Assented to 30 June 1997]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Social Security Legislation Amendment (Activity Test Penalty Periods) Act 1997.

2 Commencement

(1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

(2) Subject to subsection (3), Schedule 1 commences on a day to be fixed by Proclamation.

(3) If Schedule 1 does not commence under subsection (2) within the period of 6 months beginning on the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period.

(4) Schedule 2 commences, or is taken to have commenced, on 20 October 1997.

(5) Items 1 and 2 of Schedule 3 are taken to have commenced on 20 March 1997, immediately after the commencement of Parts 3 and 4 of Schedule 5 to the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

(6) Item 3 of Schedule 3 is taken to have commenced on 1 January 1997, immediately after the commencement of Part 2 of Schedule 5 to the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

(7) Items 4, 5, 6 and 7 of Schedule 3 are taken to have commenced on 20 March 1997, immediately after the commencement of Part 3 of Schedule 5 to the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

(8) Item 8 of Schedule 3 is taken to have commenced on 20 March 1997, immediately after the commencement of Schedule 12 to the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

(9) Item 9 of Schedule 3 commences, or is taken to have commenced, on 1 July 1997, immediately after the commencement of Schedule 14 to the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

(10) Item 10 of Schedule 3 commences, or is taken to have commenced, on 1 October 1997, immediately after the commencement of Schedule 18 to the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

3 Schedule(s)

Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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—Amendments relating to activity test penalty periods

Social Security Act 1991

1 Section 3 (index)

Omit:

activity test deferment period

23(1)

2 Section 3 (index)

Insert the following entries in their appropriate alphabetical position, determined on a letter-by-letter basis:

activity test breach	23(1)
activity test breach rate reduction period	23(1)
activity test non-payment period	23(1)
activity test penalty period	23(1)
administrative breach rate reduction period	23(1)

3 Subsection 23(1) (definition of activity test deferment period)

Repeal the definition, substitute:

activity test non-payment period means:

(a) a period worked out under section 630A; or

(b) a period worked out under section 109 of the Student and Youth Assistance Act 1973.

4 Subsection 23(1)

Insert:

activity test breach means a failure, misconduct or any other act to which any of the following provisions, as in force on or after the commencement of this definition, apply:

(a) subsection 624(1), 625(1), 626(1), 630(1) or 630AA(1), or section 628 or 629;

(b) subsection 103(1), 104(1), 105(1), 108(1) or 108A(1) or section 106 or 107 of the Student and Youth Assistance Act 1973.

5 Subsection 23(1)

Insert:

activity test breach rate reduction period means:

(a) a period that applies under section 644AA; or

(b) a period that applies under section 136AA of the Student and Youth Assistance Act 1973.

6 Subsection 23(1)

Insert:

activity test penalty period means:

(a) an activity test non-payment period; or

(b) an activity test breach rate reduction period.

7 Subsection 615(3A)

Omit “If”, substitute “Subject to subsection (2B), if”.

8 Paragraph 615(3A)(e)

After “newstart allowance”, insert “more than 14 days after that allowance ceases to be payable to the person but”.

9 Subdivision F of Division 1 of Part 2.12 (heading)

Repeal the heading, substitute:

Subdivision F—Activity test breaches

10 Subsection 624(1)

Repeal the subsection, substitute:

(1) Subject to subsection (2), if a person fails to satisfy the activity test (the failure), a newstart allowance is not payable to the person.

(1A) If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(a) if the failure is the person’s first or second activity test breach in the 2 years immediately before the day after the failure—an activity test breach rate reduction period applies to the person; or

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

Note: The heading to section 624 is replaced by the heading “Activity test penalties for failure to satisfy activity test”.

11 Subsection 624(2)

Omit “activity test deferment period”, substitute “activity test penalty period”.

12 Section 624 (notes 1 and 2)

Repeal the notes, substitute:

Note: For “Employment Secretary” see section 23.

13 Subsection 625(1)

Repeal the subsection, substitute:

(1) Subject to subsection (2), if:

(a) a person is required to enter into a Newstart Activity Agreement in order to qualify, or to continue to qualify, for a newstart allowance; and

(b) the person fails to enter into a Newstart Activity Agreement (the failure);

a newstart allowance is not payable to the person because of the failure.

(1A) If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

Note: The heading to section 625 is replaced by the heading “Activity test penalties for failure to enter Newstart Activity Agreement”.

14 Subsection 625(2)

Omit “activity test deferment period”, substitute “activity test penalty period”.

15 Section 625 (note 2)

Repeal the note.

16 Subsection 626(1)

Repeal the subsection and note, substitute:

(1) Subject to subsection (2), if:

(a) a person is required to take reasonable steps to comply with the terms of a Newstart Activity Agreement in order to qualify, or to continue to qualify, for a newstart allowance; and

(b) the person fails to take reasonable steps to comply with the terms of the Newstart Activity Agreement (the failure);

a newstart allowance is not payable to the person because of the failure.

(1A) If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

Note: The operation of this section is modified for participants in the case management system by section 45 of the Employment Services Act 1994.

Note: The heading to section 626 is replaced by the heading “Activity test penalties for failure to comply with Newstart Activity Agreement”.

17 Subsection 626(2)

Omit “activity test deferment period”, substitute “activity test penalty period”.

18 Section 626 (note 2)

Repeal the note.

19 Sections 628, 629, 630, 630AA and 630A

Repeal the sections, substitute:

628 Unemployment due to voluntary act

If:

(a) a person’s unemployment is due, either directly or indirectly, to a voluntary act of the person (the voluntary act); and

(b) the Secretary is not satisfied that the person’s voluntary act was reasonable;

then:

(c) if the voluntary act is the person’s first or second activity test breach in the 2 years immediately before the day after the voluntary act—an activity test breach rate reduction period applies to the person; or

(d) if the voluntary act is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the voluntary act—an activity test non-payment period applies to the person.

629 Unemployment due to misconduct

If a person’s unemployment is due to the person’s misconduct as a worker (the misconduct), then:

(a) if the misconduct is the person’s first or second activity test breach in the 2 years immediately before the day after the misconduct—an activity test breach rate reduction period applies to the person; or

(b) if the misconduct is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the misconduct—an activity test non-payment period applies to the person.

630 Refusal of job offer

(1) If a person has refused or failed, without reasonable excuse, to accept a suitable offer of employment (the failure), a newstart allowance is not payable to the person.

(2) If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

630AA Failure to provide information etc.

(1) If a person:

(a) refuses or fails, without reasonable excuse, to provide information in relation to a person’s income from remunerative work (the failure); or

(b) knowingly or recklessly provides false or misleading information in relation to the person’s income from remunerative work (the provision of information);

when required to do so under a provision of this Act, a newstart allowance is not payable to the person.

(2) If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(a) if the failure or the provision of information is the person’s first or second activity test breach in the 2 years immediately before the day after the failure or the provision of information—an activity test breach rate reduction period applies to the person; or

(b) if the failure or the provision of information is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure or the provision of information—an activity test non-payment period applies to the person.

630A Activity test non-payment periods

If an activity test non-payment period applies to a person under this Part, the period applicable to the person is 8 weeks.

20 Subsections 630B(1) and (2)

Omit “deferment” (wherever occurring), substitute “non-payment”.

Note: The heading to section 630B is altered by omitting “deferment” and substituting “non-payment”.

21 Subsection 630B(2)

Omit “Subject to sections 630BA and 630BB”, substitute “Subject to section 630BA”.

22 Subsections 630B(3), (4) and (5)

Repeal the subsections, substitute:

(3) If, at the time of the commencement of an activity test non-payment period under this Part, the person is already subject to an activity test non-payment period (the pre-existing non-payment period), the pre-existing non-payment period is taken to end immediately before the commencement of the activity test non-payment period under this Part.

23 Subsection 630B(6)

Omit “deferment”, substitute “non-payment”.

24 Subsection 630BA(1)

Repeal the subsection, substitute:

(1) Subject to section 630BB, if:

(a) at a time when the person was not qualified for a newstart allowance, an event occurred that would have resulted in an activity test non-payment period applying to the person under:

(i) section 624 because the person would have been taken to have failed the activity test under subsection 601A(2); or

(ii) section 628 or 629;

had the person made a claim for a newstart allowance; and

(b) before the end of that period (assuming that the period had commenced on the day on which the event occurred), the person made a claim for a newstart allowance;

the activity test non-payment period is taken to have commenced on the day after the day on which the event occurred.

Note: The heading to section 630BA is altered by omitting “deferment” and substituting “non-payment”.

25 Subsection 630BA(2)

Repeal the subsection.

26 Subsection 630BA(3)

Repeal the subsection, substitute:

(3) Subject to section 630BB, if:

(a) at a time when the person was not qualified for a newstart allowance, an event occurred that would have resulted in an activity test non-payment period applying to the person under:

(i) section 624 because the person would have been taken to have failed the activity test under subsection 601A(2); or

(ii) section 628 or 629;

had the person made a claim for a newstart allowance; and

(b) the person made a claim for a newstart allowance after the end of that period (assuming that the period had commenced on the day on which the event occurred);

then:

(d) the Secretary is not obliged to give the person a written notice under subsection 630B(1) in respect of the activity test non-payment period.

27 Section 630BB

Repeal the section, substitute:

630BBA Activity test non-payment periods—interaction with activity test breach rate reduction periods

(1) This section applies if, under this Part:

(a) an activity test non-payment period applies to a person; and

(b) during the whole or part of that period, the whole or part of an activity test breach rate reduction period also applies to the person (the overlap period).

Note: Other periods such as an administrative breach rate reduction period may also apply—see section 644D.

(2) Subject to subsection (4), if this section applies, the activity test non-payment period and the activity test breach rate reduction period are to run concurrently during the overlap period.

(3) If this section applies, then, subject to section 630BB, only the non-payment restriction relating to the activity test non-payment period is to apply to the person during the overlap period.

(4) If, at the time of the commencement of an activity test non-payment period under this Part, the person is already subject to an activity test breach rate reduction period (the pre-existing reduction period), the pre-existing reduction period is taken to end immediately before the commencement of the activity test non-payment period under this Part.

630BB Activity test non-payment periods—interaction with waiting periods

(1) This section applies if, under this Part:

(a) an activity test non-payment period applies to a person; and

(b) during the whole or part of that period, the whole or part of a waiting period also applies to the person (the overlap period).

Note: Other periods such as an administrative breach rate reduction period may also apply—see section 644D.

(2) If this section applies, the activity test non-payment period and the waiting period are to operate concurrently during the overlap period.

(3) If this section applies, then, despite any other provision of this Act, only the restriction on payment relating to the waiting period is to apply to the person during the overlap period.

(4) A reference in this section to a waiting period includes a reference to a liquid assets test waiting period under section 598.

Note: For waiting period see subsection 23(1).

28 Section 630BC

Omit “deferment”, substitute “non-payment”.

29 Section 630BD

Repeal the section, substitute:

630BD Where one event may give rise to both an activity test penalty and an administrative breach rate reduction period

If, but for this section, an event would result in an activity test penalty period and an administrative breach rate reduction period both applying to a person under this Act, only the provision imposing the activity test penalty period is to apply to the person.

30 Subparagraph 641(2)(b)(ii)

Omit “deferment”, substitute “non-payment”.

31 After subparagraph 641(2)(b)(ii)

Insert:

(iia) the application of an activity test breach rate reduction period where the activity test breach rate reduction reduces the rate of newstart allowance payable to the person to nil; or

32 After Subdivision A of Division 4 of Part 2.12

Insert:

Subdivision AA—Activity test breach rate reductions

644AA Activity test breach rate reduction periods

If an activity test breach rate reduction period applies to a person under this Part, the period applicable to the person is 26 weeks.

644AB Commencement of activity test breach rate reduction periods

(1) Subject to section 644AC, if an activity test breach rate reduction period applies to a person under this Part, the Secretary must give to the person a written notice informing the person of the commencement of the activity test breach rate reduction period applicable to the person.

(2) Subject to section 644AC, the activity test breach rate reduction period commences on the day on which the notice is given to the person.

(3) If, at the time of the commencement of an activity test breach rate reduction period under this Part, the person is already subject to an activity test breach rate reduction period (the pre-existing reduction period), the pre-existing reduction period is taken to end immediately before the commencement of the activity test breach rate reduction period under this Part.

(4) Subject to section 644AC, if, on or before the day on which the period referred to in subsection (1) would (apart from this subsection) have commenced, newstart allowance ceases to be payable to the person, the period commences on the day on which newstart allowance ceases to be payable to the person.

Note: For activity test breach rate reduction period see subsection 23(1).

644AC Application of activity test breach rate reduction periods before claims for newstart

(1) Subject to subsection (2), if:

(a) at a time when the person was not qualified for a newstart allowance, an event occurred that would have resulted in an activity test breach rate reduction period applying to the person under:

(i) section 624 because the person would have been taken to have failed the activity test under subsection 601A(2); or

(ii) section 628 or 629;

had the person made a claim for a newstart allowance; and

(b) before the end of that period (assuming that the period had commenced on the day on which the event occurred), the person made a claim for a newstart allowance;

the activity test breach rate reduction period is taken to have commenced on the day after the day on which the event occurred.

(2) If:

(a) at a time when the person was not qualified for a newstart allowance, an event occurred that would have resulted in an activity test breach rate reduction period applying to the person under:

(i) section 624 because the person would have been taken to have failed the activity test under subsection 601A(2); or

(ii) section 628 or 629;

had the person made a claim for a newstart allowance; and

(b) the person makes a claim for a newstart allowance after the end of that period (assuming that the period had commenced on the day on which the event occurred);

then:

(c) the activity test breach rate reduction period is taken to have commenced and to have ended before the claim was made; and

(d) the Secretary is not obliged to give the person a written notice under subsection 644AB(1).

644AD Activity test breach rate reduction periods—interaction with waiting periods

(1) This section applies if, under this Part:

(a) an activity test breach rate reduction period applies to a person; and

(b) during the whole or part of that period, the whole or part of a waiting period also applies to the person (the overlap period).

Note: Other periods such as an administrative breach rate reduction period may also apply—see section 644E.

(2) If this section applies, the activity test breach rate reduction period and the waiting period are to run concurrently during the overlap period.

(3) If this section applies, then despite any other provision of this Act, only the restriction on payment relating to the waiting period is to apply to the person during the overlap period.

Note: For activity test breach rate reduction period see subsection 23(1).

(4) A reference in this section to a waiting period includes a reference to a liquid assets test waiting period under section 598.

Note: For waiting period see subsection 23(1).

644AE Rate of newstart allowance where activity test breach rate reduction period applies

(1) If:

(a) an activity test breach rate reduction period applies to a person under this Part; and

(b) the person qualifies for a newstart allowance; and

the person’s rate of newstart allowance for the activity test breach rate reduction period is worked out as follows:

Newstart allowance rate calculator for activity test breach rate reduction period

This is how to work out a person’s rate of newstart allowance for an activity test breach rate reduction period that applies to the person.

Method statement

Step 1. Work out the person’s maximum basic rate of newstart allowance specified in:

(a) Table B of Module B of Part 3.5 (Benefit Rate Calculator A); or

(b) Table B of Module B of Part 3.6 (Benefit Rate Calculator B):

the result is called the maximum payment rate.

Step 2. Work out the rate reduction amount in accordance with subsection (2).

Step 3. Take the rate reduction amount away from the rate of benefit worked out in accordance with Benefit Rate Calculator A in section 1067 or Benefit Rate Calculator B in section 1068, as the case requires:

the result is called the activity test breach reduced rate.

Note: An activity test breach reduced rate may be a nil rate.

(2) A person’s rate reduction amount is worked out as follows:

(a) if the activity test breach is the person’s first breach in the 2 year period:

(b) if the activity test breach is the person’s second breach in the 2 year period:

(3) In this section:

2 year period means the 2 years immediately before the day after the activity test breach.

33 Subsection 644C(2)

Omit “Subject to subsections (3), (4) and (6) and sections 644D and 644E”, substitute “Subject to subsections (3) and (6)”.

34 Subsections 644C(3), (4) and (5)

Repeal the subsections, substitute:

(3) If, at the time of the commencement of an administrative breach rate reduction period under this Part, the person is already subject to an administrative breach rate reduction period (the pre-existing reduction period), the pre-existing reduction period is taken to end immediately before the commencement of the administrative breach rate reduction period under this Part.

35 Subsection 644C(6)

Omit “Subject to sections 644D and 644E, if”, substitute “If”.

36 Sections 644D and 644E

Repeal the sections, substitute:

644D Administrative breach rate reduction periods—interaction with activity test non-payment periods

(1) This section applies if, under this Part:

(a) an administrative breach rate reduction period applies to a person; and

(b) during the whole or part of that period, the whole or part of an activity test non-payment period also applies to the person (the overlap period).

Note: Other periods such as a waiting period may also apply—see section 644EA.

(2) If this section applies, the activity test non-payment period and the administrative breach rate reduction period are to run concurrently during the overlap period.

(3) If this section applies, then, subject to section 630BB, the non-payment penalty relating to the activity test non-payment period is to apply to the person during the overlap period.

644E Administrative breach rate reduction periods—interaction with activity test breach rate reduction periods

(1) This section applies if, under this Part:

(a) an administrative breach rate reduction period applies to a person; and

(b) during the whole or part of that period, the whole or part of an activity test breach rate reduction period also applies to the person (the overlap period).

Note: Other periods such as a waiting period may also apply—see section 644EA.

(2) If this section applies, the administrative breach rate reduction period and the activity test breach rate reduction period are to run concurrently during the overlap period.

(3) If this section applies, then, subject to sections 630BBA, 630BB, 644AD and 644AE, only the higher of the percentage rate reduction amounts that relate to the activity test breach rate reduction period and the administrative breach rate reduction period respectively is the only percentage rate reduction amount that is to apply to the person during the overlap period.

Note 1: For rate reduction amount in relation to an activity test breach rate reduction period see subsection 644AC(1).

Note 2:` For rate reduction amount in relation to an administrative breach rate reduction period see subsection 644H(1).

644EA Administrative breach rate reduction periods—interaction with waiting periods

(1) This section applies if, under this Part:

(a) an administrative breach rate reduction period applies to a person; and

(b) during the whole or part of that period, the whole or part of a waiting period also applies to the person (the overlap period).

Note: Other periods such as activity test breach rate reduction period may also apply—see section 644E.

(2) If this section applies, the administrative breach rate reduction period and the waiting period are to run concurrently during the overlap period.

(3) If this section applies, then, despite any other provision of this Act, only the restriction on payment relating to the waiting period is to apply to the person during the overlap period.

(4) A reference in this section to a waiting period includes a reference to a liquid assets test waiting period under section 598.

Note: For waiting period see subsection 23(1).

37 Subparagraph 729(2)(d)(i)

Repeal the subparagraph, substitute:

(i) section 625 (person failing to enter into a Newstart Activity Agreement);

(ia) section 626 (person failing to comply with a Newstart Activity Agreement);

38 Subparagraph 729(2)(db)(i)

Repeal the subparagraph, substitute:

(i) section 104 of that Act (person failing to enter into a Youth Training Activity Agreement);

(ia) section 105 of that Act (person failing to comply with a Youth Training Activity Agreement);

39 Subsection 771HA(4) (first occurring)

Repeal the subsection, substitute:

Person subject to an activity test breach rate reduction period

(3A) If an activity test breach rate reduction period applies to a person under Part 2.12 or Part 8 of the Student and Youth Assistance Act 1973, the person is not qualified for partner allowance throughout the period.

Person subject to an administrative breach rate reduction period

(3B) If an administrative breach rate reduction period applies to a person under Part 2.12 or Part 8 of the Student and Youth Assistance Act 1973, the person is not qualified for partner allowance throughout the period.

40 Subparagraph 1241(1)(b)(ii)

Omit “deferment”, substitute “activity test non-payment”.

41 Subparagraph 1251(1)(b)(ii)

Omit “deferment”, substitute “activity test non-payment”.

42 At the end of Schedule 1A

Add:

102A Application and transitional provisions: amendments relating to simplifying the penalty periods that apply to newstart allowance

(1) Subject to subclauses (2), (3), (4) and (5), this Act, as amended by Schedule 1 to the amending Act, applies to events occurring on or after the commencement.

(2) If, immediately before the commencement, a person was subject to an activity test deferment period that would end on or after the commencement, then, despite the amendments made by Schedule 1 to the amending Act, this Act, as in force immediately before the commencement, continues to apply to the person in relation to that period.

(3) If:

(a) an event occurs before the commencement that would, apart from this subclause, result in a person being subject to an activity test deferment period or an administrative breach rate reduction period; and

(b) the period referred to in paragraph (a) has not commenced before the commencement; and

(c) an action has occurred or a decision has been taken under this Act in relation to the application of the activity test deferment period or the administrative breach rate reduction period to the person;

then:

(d) this Act, as amended by Schedule 1 to the amending Act, applies to the event referred to in paragraph (a) from the commencement; and

(e) despite the fact that the event occurred before the commencement, the period or periods are to begin on the commencement.

(4) If subclauses (2) and (3) both apply, then, despite any other provision of this Act, only the restrictions on payments relating to the activity test deferment period are to apply to the person during the period of overlap.

(5) If:

(b) the period referred to in paragraph (a) has not commenced before the commencement; and

(c) before the commencement, neither an action has occurred, nor a decision been taken, under this Act relating to the application of the activity test deferment period to the person;

this Act, as amended by Schedule 1 to the amending Act, applies to the event referred to in paragraph (a) as if the event occurred on the commencement.

(6) In this clause:

amending Act means the Social Security Legislation Amendment (Activity Test Penalty Periods) Act 1997.

commencement means the commencement of this clause.

Student and Youth Assistance Act 1973

43 Subsection 58(1) (definition of activity test deferment period)

Repeal the definition

44 Subsection 91(3A)

Omit “If”, substitute “Subject to subsection (2B), if”.

45 Paragraph 91(3A)(e)

After “youth training allowance”, insert “more than 14 days after that allowance ceases to be payable to the person but”.

46 Subdivision F of Division 2 of Part 8 (heading)

Repeal the heading, substitute:

Subdivision F—Activity test breaches

47 Subsection 103(1)

Repeal the subsection, substitute:

(1) Subject to subsection (2), if a person fails to satisfy the activity test (the failure), a youth training allowance is not payable to the person.

(1A) If a youth training allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

Note: The heading to section 103 is replaced by the heading “Activity test penalties for failure to satisfy activity test”.

48 Section 103 (note)

Repeal the note.

49 Subsection 104(1)

Repeal the subsection, substitute:

(1) Subject to subsection (2), if:

(a) a person is required to enter into a Youth Training Activity Agreement in order to qualify, or to continue to qualify, for a youth training allowance; and

(b) the person fails to enter into a Youth Training Activity Agreement (the failure);

a youth training allowance is not payable to the person because of the failure.

(1A) If a youth training allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

Note: The heading to section 104 is replaced by the heading “Activity test penalties for failure to enter Youth Training Activity Agreement”.

50 Section 104 (note)

Repeal the note.

51 Subsection 105(1)

Repeal the subsection and note, substitute:

(1) Subject to subsection (2), if:

(a) a person is required to take reasonable steps to comply with the terms of a Youth Training Activity Agreement in order to qualify, or to continue to qualify, for a youth training allowance; and

(b) the person fails to take reasonable steps to comply with the terms of the Youth Training Activity Agreement (the failure);

a youth training allowance is not payable to the person because of the failure.

(1A) If a youth training allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

Note: The operation of this section is modified for participants in the case management system by section 45 of the Employment Services Act 1994.

Note: The heading to section 105 is replaced by the heading “Activity test penalties for failure to comply with Youth Training Activity Agreement”.

52 Section 105 (note)

Repeal the note.

53 Sections 106, 107,108, 108A and 109

Repeal the sections, substitute:

106 Unemployment due to voluntary act

If:

(a) a person’s unemployment is due, either directly or indirectly, to a voluntary act of the person (the voluntary act); and

(b) the Secretary is not satisfied that the person’s voluntary act was reasonable;

then:

107 Unemployment due to misconduct

If a person’s unemployment is due to the person’s misconduct as a worker (the misconduct), then:

108 Refusal of job offer

(1) If a person has refused or failed, without reasonable excuse, to accept a suitable offer of employment (the failure), a youth training allowance is not payable to the person.

(2) If a youth training allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

108A Failure to provide information etc.

(1) If a person:

(a) refuses or fails, without reasonable excuse, to provide information in relation to a person’s income from remunerative work (the failure); or

(b) knowingly or recklessly provides false or misleading information in relation to the person’s income from remunerative work (the provision of information);

when required to do so under a provision of this Act, a youth training allowance is not payable to the person.

(2) If a youth training allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(b) if the failure or provision of information is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure or the provision of information—an activity test non-payment period applies to the person.

109 Activity test non-payment periods

If an activity test non-payment period applies to a person under this Part, the period applicable to the person is 8 weeks.

54 Subsections 110(1) and (2)

Omit “deferment” (wherever occurring), substitute “non-payment”.

Note: The heading to section 110 is altered by omitting “deferment” and substituting “non-payment”.

55 Subsection 110(2)

Omit “sections 111 and 112”, substitute “section 111”.

56 Subsections 110(3), (4) and (5)

Repeal the subsections, substitute:

57 Subsection 110(6)

Omit “deferment”, substitute “non-payment”.

58 Subsection 111(1)

Repeal the subsection, substitute:

(1) Subject to section 112:

(a) at a time when the person was not qualified for a youth training allowance, an event occurred that would have resulted in an activity test non-payment period applying to the person under:

(i) section 103 because the person would have been taken to have failed the activity test under subsection 75A(2); or

(ii) section 106 or 107;

had the person made a claim for a youth training allowance; and

(b) before the end of that period (assuming that the period had commenced on the day on which the event occurred), the person made a claim for a youth training allowance;

the activity test non-payment period is taken to have commenced on the day after the day on which the event occurred.

Note: The heading to section 111 is altered by omitting “deferment” and substituting “non-payment”.

59 Subsection 111(2)

Repeal the subsection.

60 Subsection 111(3)

Repeal the subsection, substitute:

(3) Subject to section 112, if:

(a) at a time when the person was not qualified for a youth training allowance, an event occurred that would have resulted in an activity test non-payment period applying to the person under:

(i) section 103 because the person would have been taken to have failed the activity test under subsection 75A(2); or

(ii) section 106 or 107;

had the person made a claim for a youth training allowance; and

(b) the person made a claim for a youth training allowance after the end of that period (assuming that the period had commenced on the day on which the event occurred);

then:

(d) the Secretary is not obliged to give the person a written notice under subsection 110(1) in respect of the activity test non-payment period.

61 Section 112

Repeal the section, substitute:

111A Activity test non-payment periods—interaction with activity test breach rate reduction periods

(1) This section applies if, under this Part:

(a) an activity test non-payment period applies to a person; and

(b) during the whole or part of that period, the whole or part of an activity test breach rate reduction period also applies to the person (the overlap period).

Note: Other periods such as an administrative breach rate reduction period may also apply—see section 136C.

(2) Subject to subsection (4), if this section applies, the activity test non-payment period and the activity test breach rate reduction period are to run concurrently during the overlap period.

(3) If this section applies, then, subject to section 112, only the non-payment restriction relating to the activity test non-payment period is to apply to the person during the overlap period.

112 Activity test non-payment periods—interaction with waiting periods

(1) This section applies if, under this Part:

(a) an activity test non-payment period applies to a person; and

(b) during the whole or part of that period, the whole or part of a waiting period also applies to the person (the overlap period).

Note: Other periods such as an administrative breach rate reduction period may also apply—see section 136C.

(2) If this section applies, the non-payment period and the waiting period are to run concurrently during the overlap period.

(3) If this section applies, then, despite any other provision of this Act, only the restriction on payment relating to the waiting period is to apply to the person during the overlap period.

(4) A reference in this section to a waiting period includes a reference to a liquid assets test waiting period under section 72.

62 Section 113

Omit “deferment”, substitute “non-payment”.

63 Section 113A

Repeal the section, substitute:

113A Where one event may give rise to both an activity test penalty and an administrative breach rate reduction period

If, but for this section, an event would result in an activity test penalty period and an administrative breach rate reduction period applying to a person under the provisions of this Act, only the provision imposing the activity test penalty period is to apply to the person.

64 Subparagraph 133(2)(b)(ii)

Omit “deferment”, substitute “non-payment”.

65 After subparagraph 132(2)(b)(ii)

Insert:

(iia) the application of an activity test breach rate reduction period where the activity test breach rate reduction reduces the rate of youth training allowance payable to the person to nil; or

66 After Subdivision A of Division 5 of Part 8

Insert:

Subdivision AA—Activity test breach rate reductions

136AA Activity test breach rate reduction periods

If an activity test breach rate reduction period applies to a person under this Part, the period applicable to the person is 26 weeks.

136AB Commencement of activity test breach rate reduction periods

(1) Subject to section 136AC, if an activity test breach rate reduction period applies to a person under this Part, the Secretary must give to the person a written notice informing the person of the commencement of the activity test breach rate reduction period applicable to the person.

(2) Subject to section 136AC, the activity test breach rate reduction period commences on the day on which the notice is given to the person.

(4) Subject to section 136AC, if, on or before the day on which the period referred to in subsection (1) would (apart from this subsection) have commenced, youth training allowance ceases to be payable to the person, the period commences on the day on which youth training allowance ceases to be payable to the person.

136AC Application of activity test breach rate reduction periods before claims for youth training

(1) Subject to subsection (2), if:

(a) at a time when the person was not qualified for a youth training allowance, an event occurred that would have resulted in an activity test breach rate reduction period applying to the person under:

(i) section 103 because the person would have been taken to have failed the activity test under subsection 75A(2); or

(ii) section 106 or 107;

had the person made a claim for a youth training allowance; and

(b) before the end of that period (assuming that the period had commenced on the day on which the event occurred), the person made a claim for a youth training allowance;

the activity test breach rate reduction period is taken to have commenced on the day after the day on which the event occurred.

(2) If:

(i) section 103 because the person would have been taken to have failed the activity test under subsection 75A(2); or

(ii) section 106 or 107;

had the person made a claim for a youth training allowance; and

(b) the person makes a claim for a youth training allowance after the end of that period (assuming that the period had commenced on the day on which the event occurred);

then:

(c) the activity test breach rate reduction period is taken to have commenced and to have ended before the claim was made; and

(d) the Secretary is not obliged to give the person a written notice under subsection 136AB(1).

136AD Activity test breach rate reduction periods—interaction with waiting periods

(1) This section applies if, under this Part:

(a) an activity test breach rate reduction period applies to a person; and

(b) during the whole or part of that period the whole or part of a waiting period also applies to the person (the overlap period).

Note: Other periods such as an administrative breach rate reduction period may also apply—see section 136D.

(2) If this section applies, the activity test breach rate reduction period and the waiting period are to run concurrently during the overlap period.

(3) If this section applies, then despite any other provision of this Act, only the restriction on payment relating to the waiting period is to apply to the person during the overlap period.

(4) A reference in this section to a waiting period includes a reference to a liquid assets test waiting period under section 72.

136AE Rate of youth training allowance where activity test breach rate reduction period applies

(1) If:

(a) an activity test breach rate reduction period applies to a person under this Part; and

(b) the person qualifies for a youth training allowance; and

the person’s rate of youth training allowance for the activity test breach rate reduction period is worked out as follows:

Youth training allowance rate calculator for activity test breach rate reduction period

This is how to work out a person’s rate of youth training allowance for an activity test breach rate reduction period that applies to the person.

Method statement

Step 1. Work out the person’s maximum basic rate of youth training allowance specified in Table B of Module B of Schedule 1:

the result is called the maximum payment rate.

Step 2. Work out the rate reduction amount in accordance with subsection (2).

Step 3. Take the rate reduction amount away from the rate of benefit worked out in accordance with Schedule 1:

the result is called the activity test breach reduced rate.

Note: An activity test breach reduced rate may be a nil rate.

(2) A person’s rate reduction amount is worked out as follows:

(a) if the activity test breach is the person’s first breach in the 2 year period:

(b) if the activity test breach is the person’s second breach in the 2 year period:

(3) In this section:

2 year period means the 2 years immediately before the day after the activity test breach.

67 Subsection 136B(2)

Omit “Subject to subsections (3), (4) and (6) and sections 136C and 136D”, substitute “Subject to subsection (6)”.

68 Subsections 136B(3), (4) and (5)

Repeal the subsections, substitute:

(3) If, at the time of the commencement of an administrative breach rate reduction period under subsection (1), the person is already subject to an administrative breach rate reduction period (the pre-existing reduction period), the pre-existing reduction period is taken to end immediately before the commencement of the administrative breach rate reduction period under subsection (1).

69 Subsection 136B(6)

Omit “Subject to sections 136C and 136D, if”, substitute “If”.

70 Sections 136C and 136D

Repeal the sections, substitute:

136C Administrative breach rate reduction periods—interaction with activity test non-payment periods

(1) This section applies if, under this Part:

(a) an administrative breach rate reduction period applies to a person; and

(b) during the whole or part of that period, the whole or part of an activity test non-payment period also applies to the person (the overlap period).

Note: Other periods such as a waiting period may also apply—see section 136DA.

(2) If this section applies, the activity test non-payment period and the administrative breach rate reduction period are to run concurrently during the overlap period.

(3) If this section applies, then, subject to section 112, the non-payment penalty relating to the activity test non-payment period is to apply to the person during the overlap period.

136D Administrative breach rate reduction periods—interaction with activity test breach rate reduction periods

(1) This section applies if, under this Part:

(a) an administrative breach rate reduction period applies to a person; and

(b) during the whole or part of that period, the whole or part of an activity test breach rate reduction period also applies to the person (the overlap period).

Note: Other periods such as a waiting period may also apply—see section 136DA.

(2) Subject to subsection (3), if this section applies, the administrative breach rate reduction period and the whole or part of the activity test breach rate reduction period are to run concurrently during the overlap period.

(3) If this section applies, then, subject to sections 111A, 112, 136AD and 136AE, the higher of the percentage rate reduction amounts that relate to the activity test breach rate reduction period and the administrative breach rate reduction period respectively is the only percentage rate reduction amount that is to apply to the person during the overlap period.

Note 1: For rate reduction amount in relation to an activity test breach rate reduction period see subsection 136AC(1).

Note 2:` For rate reduction amount in relation to an administrative breach rate reduction period see subsection 136G(1).

136DA Administrative breach rate reduction periods—interaction with waiting periods

(1) This section applies if, under this Part:

(a) an administrative breach rate reduction period applies to a person; and

(b) during the whole or part of that period the whole or part of a waiting period also applies to the person (the overlap period).

Note: Other periods such as an activity test breach rate reduction period may also apply—see section 136E.

(2) If this section applies, the whole or part of the administrative breach rate reduction period and the whole or part of the waiting period are to run concurrently during the overlap period.

(3) If this section applies, then despite any other provision of this Act, only the restriction on payment relating to the waiting period is to apply to the person during the overlap period.

(4) A reference in this section to a waiting period includes a reference to a liquid assets test waiting period under section 72.

71 At the end of Schedule 5

Add:

6A Application and transitional provisions: amendments relating to simplifying the penalty periods that apply to youth training allowance

(1) Subject to subclauses (2), (3), (4) and (5), this Act, as amended by Schedule 1 to the amending Act, applies to events occurring on or after the commencement.

(3) If:

(b) the period referred to in paragraph (a) has not commenced before the commencement; and

then:

(d) this Act, as amended by Schedule 1 to the amending Act, applies to the event referred to in paragraph (a) from the commencement; and

(e) despite the fact that the event occurred before the commencement, the period or periods referred to in paragraph (a) are to begin on the commencement.

(5) If:

(b) the period referred to in paragraph (a) has not commenced before the commencement; and

(c) before the commencement, neither an action has occurred, nor a decision been taken, under this Act relating to the application of the activity test deferment period to the person;

this Act, as amended by Schedule 1 to the amending Act, applies to the event referred to in paragraph (a) as if the event occurred on the commencement.

(6) In this clause:

amending Act means the Social Security Legislation Amendment (Activity Test Penalty Periods) Act 1997.

commencement means the commencement of this clause.

Schedule 2—Amendments relating to relief from activity tests

Social Security Act 1991

1 At the end of subsection 603A(3)

Add “, unless the Secretary determines otherwise, having regard to the continued existence, or likely continued existence, of the special circumstances on which the last preceding determination was based”.

2 After section 603A

Insert:

603AAA Pre-natal and post-natal relief from activity test

(1) A pregnant woman is not required to satisfy the activity test for the period that starts 6 weeks before the woman’s expected date of confinement and ends on the day on which the woman gives birth to the child (whether or not the child is born alive).

(2) If a woman gives birth to a child (whether or not the child is born alive), the woman is not required to satisfy the activity test for the period that starts on the day on which she gives birth to the child and ends 6 weeks after that day.

Student and Youth Assistance Act 1973

3 At the end of subsection 78(3)

4 After section 78

Insert:

78AA Pre-natal and post-natal relief from activity test

Schedule 3—Technical amendments

Part 1—Amendment of the Social Security Act 1991

1 Clause 98 of Schedule 1A

Repeal the clause, substitute:

98 Application and transitional provisions: amendments relating to tightening the activity test administration and simplifying the penalty periods that apply to youth training allowance

(1) Subject to subclauses (2), (3) and (4), this Act, as amended by Parts 3 and 4 of Schedule 5 to the amending Act, applies to events occurring on or after 20 March 1997.

(2) Subject to subclause (4), if, immediately before 20 March 1997, a person was subject to an activity test deferment period or an administrative breach deferment period that would end on or after 20 March 1997, then, despite the amendments made by Parts 3 and 4 of Schedule 5 to the amending Act, this Act, as in force immediately before 20 March 1997 continues to apply to the person in relation to that period.

(3) If:

(a) immediately before 20 March 1997, a person was subject to an administrative breach deferment period that would end on or after 20 March 1997; and

(b) an activity test deferment period or an administrative breach rate reduction period applies to the person on or after 20 March 1997;

then, despite the amendments made by Part 3 of Schedule 5 to the amending Act, the activity test deferment period or administrative breach rate reduction period commences the day after the end of the administrative breach deferment period.

(4) If:

(a) an event occurs before 20 March 1997 that results in a person being subject to an activity test deferment period or an administrative breach deferment period; and

(b) the period referred to in paragraph (a) has not commenced before 20 March 1997;

this Act applies as if the amendments made by Parts 3 and 4 of Schedule 5 had commenced the day before the event referred to in paragraph (a) occurred.

(5) In this clause:

amending Act means the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

Part 2—Amendment of the Student and Youth Assistance Act 1973

2 Clause 2 of Schedule 5

Repeal the clause, substitute:

2 Application and transitional provisions: amendments relating to tightening the activity test administration and simplifying the penalty periods that apply to youth training allowance

(1) Subject to subclauses (2), (3) and (4), this Act, as amended by Parts 3 and 4 of Schedule 5 to the amending Act, applies to events occurring on or after 20 March 1997.

(3) If:

(a) immediately before 20 March 1997, a person was subject to an administrative breach deferment period that would end on or after 20 March 1997; and

(b) an activity test deferment period or an administrative breach rate reduction period applies to the person on or after 20 March 1997;

(4) If:

(a) an event occurs before 20 March 1997 that results in a person being subject to an activity test deferment period or an administrative breach deferment period; and

(b) the period referred to in paragraph (a) has not commenced before 20 March 1997;

then, this Act applies as if the amendments made by Parts 3 and 4 of Schedule 5 had commenced the day before the event referred to in paragraph (a) occurred.

(5) In this clause:

amending Act means the Social Security Legislation Amendment (Budget and Other Measures) Act 1996.

Part 3—Amendment of the Social Security Legislation Amendment (Budget and Other Measures) Act 1996

3 Item 11 of Schedule 5 (heading)

Omit “84”, substitute “75”.

4 Item 79 of Schedule 5 (heading)

Omit “period”, substitute “provision”.

5 Item 98 of Schedule 5

Repeal the item, substitute:

98 Subsection 110(1)

Omit “a youth training allowance automatic deferment provision of this Subdivision applies to a person”, substitute “an activity test deferment period applies to a person under this Part”.

6 Item 99 of Schedule 5

Repeal the item, substitute:

99 Subsection 110(3)

Omit “automatic deferment provision”, substitute “activity test deferment period”.

7 Item 117 of Schedule 5

Omit “Insert in Division 4”, substitute “Insert in Division 5”.

8 Item 48 of Schedule 12

Repeal the item, substitute:

48 After subsection 228(2)

Insert:

Person member of a couple—payment received on or after 20 March 1997

(2A) If:

(a) a person receives or claims a youth training allowance; and

(b) the person is a member of a couple; and

(c) the person receives a lump sum compensation payment (whether before or after the person receives or claims the youth training allowance) on or after 20 March 1997;

no youth training allowance is payable to the person for the lump sum preclusion period.

9 Item 2 of Schedule 14

Repeal the item, substitute:

2 After paragraph 4D(1)(b)

Insert:

10 Item 107 (heading) of Schedule 18

Omit “287(2)”, substitute “287(3)”.

(55/97)

[Minister’s second reading speech made in—

House of Representatives on 26 March 1997

Senate on 16 June 1997]

I HEREBY CERTIFY that the above is a fair print of the Social Security Legislation Amendment (Activity Test Penalty Periods) Bill 1997 which originated in the House of Representatives and has been finally passed by the Senate and the House of Representatives.

Clerk of the House of Representatives

IN THE NAME OF HER MAJESTY, I assent to this Act.

Governor-General

1997