Government to be commended on withdrawal of legislation to close off special benefit for people serving an Income Maintenance Period

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The National Welfare Rights Network has been campaigning for reform of social security rules imposing a non-payment period (called an “income maintenance period”) on people receiving a redundancy or leave payment.  Our members see many clients who were not aware they were subject to this waiting period, which in some cases can run for up to one year or more, and have spent their payout before the end of the period.  Often they have been unsuccessful in returning to work.  Many are older workers, facing discrimination in the labour market, or have developed health problems or disabilities which prevent them returning to the workforce.

We believe that the rules allowing the income maintenance period to be shortened in some cases are too narrow and do not permit waiver of the period in cases where this should occur.  Given the narrowness of the rules, one of the few options people in severe poverty during an income maintenance period have is to claim Special Benefit, a discretionary last resort payment for people who are not entitled to any other income support payment.  Over the last few years, our members have successfully represented many people in appeals against Centrelink’s decision to reject claims for Special Benefit in these circumstances.  There is more information about our concerns and reform proposals in our submission here.

However, this process has demonstrated Centrelink’s unwillingness to consider Special Benefit in any case for someone subject to an income maintenance period, no matter their circumstances.  This concerning approach led us to advocate to the Commonwealth Ombudsman about this issue.  The Ombudsman recently released a report critical of Centrelink’s handling of these cases, as well as aspects of its policy.  Although Centrelink has made changes in this area, there is more work to be done.

Unfortunately, the Government’s response to this issue was to introduce legislation to Parliament seeking to bar a person from receiving Special Benefit during an income maintenance period, instead of seeking to reform the income maintenance period rules.  The Government is to be commended for agreeing two weeks ago to withdraw this proposal which would have prevented income support being paid to a small number of people in absolute poverty.  The National Welfare Rights Network hopes to work constructively with the Department of Social Services and whichever party wins the next election to continue with reform in this area.