The Turnbull Government backs its commitment to comprehensive reform of Australia’s welfare system by introducing the Social Services Legislation Amendment (Welfare Reform) Bill 2017.

The measures in this Bill will better support people into work and ensure the welfare system continues to provide a safety net for those who need it most.

The Bill delivers on the commitment we made in this year’s Budget – to create a welfare system that is easier to navigate and focussed on helping people move from welfare into work.

The Bill includes a number of measures that will, for the first time, address substance abuse amongst welfare recipients with the specific aim of helping them deal with their drug abuse issues and ultimately secure work.

This includes a two year drug testing trial in three locations for 5,000 new recipients of Newstart and Youth Allowance (Other).

For too long, the welfare system has all but abandoned people with substance abuse issues. Consecutive governments have simply pretended that this problem doesn’t exist, leaving those with drug issues even more vulnerable – they’ve been put in the too hard basket.

The drug testing trial we are seeking Parliament’s agreement to is not designed to stigmatise or penalise people. In fact our aim is the complete opposite; we want to identify those people with drug issues and help them so that they can ultimately enjoy the whole range of benefits that come from earning a living through work.

The Ministers stressed the drug testing trial was not about taking welfare payments off people who use drugs.

Job seekers who return an initial positive drug test will continue to receive the same amount in welfare payments.

However, their welfare payments will be quarantined to help them manage their payments to meet essential living costs and to limit their ability to fund drug abuse.

If a job seeker tests positive a second time they will be referred to a medical professional to assess their circumstances and identify appropriate treatment options which will then form part of their mutual obligations.

The locations of the drug testing trial will be announced in the near future.

The Bill also introduces a stronger job seeker compliance framework which aims to identify earlier those who need more assistance, but be tougher on those who are deliberately flouting the system. A demerit point scheme, similar to the drivers’ licence scheme, is at the heart of the new framework.

Other measures in the Bill reflect announcements in the 2017-18 Budget, including consolidating seven current working age payments into a single payment for job seekers and strengthening participation requirements for those aged between 55 and 59 years.

These measures are significant reforms, and have been coordinated across the Social Services, Employment and Human Services portfolios.

The objective of these measures is simple; to create a fairer welfare system that supports more people into work.

Taxpayers reasonably expect that those who can work should work, and the Bill we are introducing today represents a positive turning point for Australia’s welfare system to ensure it is focussed on this key objective.

Summary of measures

Drug Testing Trial

From 1 January 2018, in a two year trial, 5,000 new recipients of Newstart Allowance and Youth Allowance (Other) in three locations will be required to undertake random drug tests.

Removal of exemptions due to substance abuse

From 1 January 2018, job seekers will no longer be exempt from mutual obligation requirements solely due to drug or alcohol abuse.

Tighten reasonable excuses

From 1 January 2018, job seekers will no longer be able to repeatedly use drug or alcohol dependency as a reasonable excuse to avoid their mutual obligation requirements.

Amend the Impairment Tables for Disability Support Pension (by Regulation)

From 1 July 2017, Table 6 – Functioning Related to Alcohol, Drugs and Other Substance Use will be removed from the Impairment Tables used to assess eligibility for the Disability Support Pension.

Cease Newstart Allowance and introduce JobSeeker Payment

From 20 March 2020, a new JobSeeker Payment will be introduced as the main working age payment; consolidating or ceasing seven existing payments.

Work First, Faster Connection to Employment Services

From 1 January 2018, job seekers subject to RapidConnect will be more clearly encouraged to start looking for work as soon as possible, with their payments to commence from the date they attend their first appointment with their employment service provider.

Compliance Framework

From 1 July 2018, a new targeted compliance framework will strengthen penalties for persistent and deliberate non-compliance while providing additional help for genuine job seekers to meet their mutual obligation requirements.

Stronger Participation Requirements

From 20 September 2018, job seekers aged 55 to 59 years will only be able to satisfy 15 of their 30 hours of requirements per fortnight through volunteering alone.

Remove intent to claim

From 1 January 2018, welfare claimants will receive payments from the date they lodge their claim, rather than from the date they first contact Centrelink. A claim will be accepted when all documents within the applicant’s control are provided.

Streamline Tax File Number collection

From 1 January 2018, the Department of Human Services will collect Tax File Numbers from claimants before payments are approved.

Streamline prosecution referrals

From 1 January 2018, the process for progressing administrative investigations to criminal proceedings will be streamlined, helping ensure that welfare fraud can be quickly investigated and, where appropriate, prosecuted.

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