Budget 2018: “Encouraging lawful behaviour of income support recipients”

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In the 2018 Budget, the Government announced a new measure called “Encouraging lawful behaviour of income support recipients” to commence from 1 March 2019. This measure has two components, both requiring cooperation with the states and territories. The measure affects those with court-imposed fines and those with outstanding arrest warrants.

1 – The measure: Compulsory deductions of court imposed fines from social security payments

The Government intends to compulsorily deduct amounts from a person’s social security payments for the purposes of paying off any outstanding state and territory court-imposed fines incurred by a social security recipient who has failed to enter a repayment arrangement.

The Government has outlined the steps of the measure as being:

  • A social security recipient with an outstanding court-imposed fine will be encouraged to voluntarily pay off this fine through Centrepay.
  • If they do not voluntarily enter a repayment arrangement, they will be encouraged to repay the fine directly with the relevant state or territory.
  • If the recipient fails to enter into a repayment arrangement with the relevant state or territory, amounts from their social security payment will be compulsorily deducted to pay for these fines. (DSS, 2018)

The Department of Social Services have stated that this would not affect people who are repaying debts to the Commonwealth, such as Centrelink debts. Please see their factsheet for more information.

Analysis

The NSSRN opposes this measure. We do not support any policy that challenges the absolute inalienability of social security payments. As stated in the Guide to Social Security Law, the protection of social security payments pursuant to s60 of the Social Security (Administration) Act 1999, “gives legal force to the intention that payments are designed to provide income support”. As the current rate of many social security payments are below the level required to meet basic living costs, this measure will cause additional financial hardship by obstructing the ability for social security recipients to meet their basic needs.

A Parliamentary Library research paper on this measure has identified that some groups within our society are “particularly vulnerable to accumulating unpaid fines” (Arthur, 2018). These include people experiencing homelessness, people with mental illness or people with intellectual disabilities. Additionally, leading Indigenous groups, such the National Aboriginal and Torres Strait Islander Legal Services (NATSILS) and the National Congress of Australia’s First Peoples, have spoken out about the impact this measure will have on Indigenous people who are also disproportionately impacted by fines (Arthur, 2018).

The states and territories have distinct and jurisdiction-specific frameworks for recovering unpaid court fines. It is not clear how the Government will reconcile these various frameworks, or whether they will gain support from all states and territories to implement the measure, especially given that the Commonwealth will likely pass on the cost of administering any new debt recovery system to the states and territories. We understand that consultation with the states and territories to secure their cooperation is at an early stage.

In summary, we oppose this measure on the basis that:

  • social security payments are inalienable and should not be used for purposes other than income support;
  • some groups in our community will be disproportionately affected, causing further financial hardship;
  • the framework will impose compulsory deductions without considering the reasons why some people have not paid their outstanding court fines;
  • there is a risk that the measure will undermine positive developments in state and territories which already offer alternative measures to settling outstanding court fines;
  • reconciling the various state and territory frameworks is complex and costly, and it is an unnecessary measure.

 

2 The measure: Cancellation of social security payments for those who have outstanding arrest warrants for indictable crimes

The Government also intends on working with the states and territories to compel social security recipients to clear any outstanding arrest warrants. From 1 March 2019, any recipient with an outstanding arrest warrant for an indictable criminal offence will have their payments suspended until the arrest warrant is cleared. If the recipient has dependent children, their payments will be reduced by half as opposed to suspended in full. If the arrest warrant is not cleared within 4 weeks, then the payment will be cancelled.

The Department of Social Services has also outlined new requirements of people claiming for social security payments from 1 March 2019. The person will be required to disclose any outstanding arrest warrants and agree to police checks. If an outstanding arrest warrant is not cleared within 7 days, their claim for payment will be rejected (Department of Social Services, 2018).

Analysis

The NSSRN opposes this measure. It is punitive and inappropriately leverages the provision of social security for the purpose of assisting policing agencies to undertake their work.

The Parliamentary Library research paper mentioned above noted that similar measures had been implemented in international jurisdictions. In some cases where there was only one level government, these measures were implemented with relative ease. However, in the case of multiple jurisdictions, many issues arose (Arthur, 2018).  We anticipate that implementation of this system within Australia will be complex given the various state and territories.

International experience also demonstrates that adverse consequences are common amongst schemes that broadly pursue any person with any type of outstanding warrant. For example in 2009, a class action was initiated in the US District Court in the Northern District of California joined by approximately 200,000 social security recipients. In this case, Martinez v. Astrue, the lead plaintiff’s disability payments were suspended on the basis of a 30 year old outstanding arrest warrant which had been erroneously recorded in her name. The other plaintiffs had also had their social security payments cancelled due to outstanding arrest warrants that were very old, erroneous, or for minor infringements. This case resulted in a settlement with the US Social Security Administration  for benefits totalling around $500 million to be repaid to the plaintiffs.

There is limited information available about how the scheme will work. However, we anticipate a number of issues and adverse consequences arising from this measure, including:

  • issues with data sharing between states/territories, and the Commonwealth government, causing delays in information being updated once a person has an outstanding warrant executed (we note that some states/territories, such as Victoria, already experience delays disseminating arrest warrant information within their own jurisdictions (Cowan, 2014));
  • many outstanding warrants may be long-standing, and may require a person, who is living in another jurisdiction, to travel back to the issuing state or territory to have the warrant executed. In many cases, a person may not have the financial resources to return to the issuing state or territory;
  • the matching of data between state/territories and with the Commonwealth government, will require rigorous scrutiny, and should not be automated given the risk that an individual’s details may be incorrectly matched with another individual;
  • many individuals may not be aware that they have an outstanding warrant;
  • the outstanding arrest warrant may relate to a minor offence and where a person is unaware of its existence, may only remain outstanding because policing agencies do not consider it to be a priority;
  • in many instances, the outstanding warrant will relate to unproven allegations and many individuals, who are presumed to be innocent, will be penalised by this measure.

 

References

Arthur, D. (2018) Extending mutual obligation—court-ordered fines and arrest warrants. (Research Publication, Parliamentary Library). Retrieved from https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201819/ExtendingMutualObligation

Australian Government (2018) 8.4.3 Protection of Payment, Guide to Social Security Law (Version 1.244 – Released 7 May 2018), Retrieved from http://guides.dss.gov.au/guide-social-security-law/8/4/3

Cowan, P (2014, March 11), ‘Victoria Police invests $2.5m into LEAP stop-gap’, ITnews. Retrieved from https://www.itnews.com.au/news/victoria-police-invests-25m-into-leap-stop-gap-374736

Department of Social Services (2018) ‘Encouraging lawful behaviour of income support recipients: 2018 Budget’ (Briefing document). Retrieved from https://www.dss.gov.au/sites/default/files/documents/05_2018/d18_13637_budget_2018-19_-_factsheet_-_encouraging_lawful_behaviour_of_income_support_recipients.pdf

National Senior Citizens Law Centre (US) (2010, September) Understanding the Martinez Settlement. Retrieved from http://www.justiceinaging.org/wp-content/uploads/2015/03/Martinez-Advocate-Guide.pdf