In the course of analysing the data, we have considered policy changes that may have impacted the past experience, and where possible taken these into account in setting assumptions for the model. The following table summarises the most material policy changes we have considered, noting that this is not an exhaustive list as we are also aware of a large number of other policy changes.
Our general approach to these has been to ask questions when we have observed discontinuities, features or trends in the experience, to see if there are any policy changes that could explain these.
Table 18: Policy changes which may have impacted past experience
Amendment Year Description
Changes to FTB income test Family Assistance, Social Security and Veterans' Affairs Legislation Amendment (2005 Budget and Other Measures) Act 2006
2006
From 1 July 2006, the lower income threshold for Family Tax Benefit Part A was increased from $33,361 to $37,500.
Welfare to Work and Other Measures Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Act 2005
2006 From 1 July 2006 there were multiple changes to the work test and eligibility for allowances for new and recent Disability Support Pension (DSP) applicants.
The eligibility and activity requirements for Parenting Payment recipients changed.
From 1 July 2006 Taper rates and income thresholds for many payments were altered.
Changes were made to the qualification for Pensioner Education Supplement (PES).
A higher rate of Mobility Allowance was made available for some people.
Age Pension assets test taper rate Tax Law Amendment (Simplified Superannuation) Act 2007
2007
Age Pension 'assets test' taper rate halved.
Secure and Sustainable Pension Reform package
Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009
2009 There was a one-off increase to the rate of many pensions, and changed indexation arrangements.
The Pension Supplement was introduced as part of reform package and took effect from 20 September 2009.
The ‘income test’ taper rate increased.
The Pension Bonus Scheme was closed to new registrations from 1 July 2014.
The Commonwealth Seniors Health Card income test was modified.
A Carer Supplement was introduced for Carer Payment recipients.
Indexation was changed for certain FTB payments.
This Act introduces a new Work Bonus into the social security law, which allows for a certain amount of employment income that is earned, derived or received in an instalment period by a pensioner who is of age pension age to be disregarded for the purposes of the income test.
Training Incentives
Social Security Amendment (Training Incentives) Act 2009
2009
The introduction of a training supplement was made available to recipients of Newstart Allowance and Parenting Payment.
Carer Payment
Social Security Legislation Amendment (Improved Support for Carers) Act 2009
2009
Eligibility changed for individuals providing care for children with a disability.
Parenting Payment transitional arrangement
Social Security Amendment (Parenting Payment Transitional Arrangement) Act 2011
2011
Changed ability to access transitional arrangements.
Work rule for Disability Support Pension Social Security and Other Legislation Amendment (Disability Support Pension Participation Reforms) Act 2012
2012
From 1 July 2012, all Disability Support Pension recipients can work up to 30 hours a week without having their payment suspended or cancelled.
Policy changes
Amendment Year Description
Changes to the eligibility criteria for Youth Allowance (other) and Newstart Allowance
Social Security and Other Legislation Amendment (Income Support and Other Measures) Act 2012
2012
The age of qualification and income free test for these payments changed.
Clean Energy Advance (CEA) 2012 The Clean Energy Advance (CEA) was introduced in May 2012.
Clean Energy Supplement and other measures
Clean Energy (Household Assistance Amendments) Act 2011
2012-2013
From 1 July 2013, the normal payment indexing arrangements and the Clean Energy Supplement (CES) began to deliver assistance related to carbon pricing.
In addition, amendments were introduced for the Low Income Supplement, Essential Medical Equipment Payment, Single Income Family Supplement and aged care.
Family Tax Benefit and Youth Allowance Family Assistance and Other Legislation Amendment Act 2011
2012 The maximum age limit for a young person to qualify as a dependent child for Family Tax Benefit Part A (FTB-A) changed from aged under 25 to aged 21.
This change aligns with the age of independence recognised in Youth Allowance. As at 1 January 2012, a young person is considered independent for Youth Allowance purposes once they turn 22.
Removal of the grandfathering provisions and other measures Social Security Legislation Amendment (Fair Incentives to Work) Act 2012
2013 Grandfathering provisions for some Parenting Payment recipients were removed.
For certain Newstart recipients there were changes to the eligibility for certain supplements and allowances, and to income taper rates.
New Income Support Bonus Social Security and Other Legislation Amendment (Income Support Bonus) Act 2013
2013 The Act creates a new Income Support Bonus to be paid to recipients of Newstart Allowance, Youth Allowance, Parenting Payment, Sickness Allowance, Austudy Payment, Special Benefit, ABSTUDY Living Allowance, Exceptional Circumstances Relief Payment, Transitional Farm Family Payment.
Austudy 2013 The maximum length of temporary absence was reduced.
Age/study rules for children for family assistance payments
Social Security and Other Legislation Amendment (2012 Budget and Other Measures) Act 2012
2013
The maximum age of eligibility for FTB Part A is further reduced to 17 for children who have completed secondary education or a vocational equivalent.
Children still in secondary study can continue to access FTB Part A until the end of the calendar year they turn 19.
Austudy 2014 The residence requirements changed for Austudy in Jan 2015 and temporary absence is no longer included.
Family Tax Benefit Part B 2014 The FTB B higher income earner test changed to $100,000 from 1 July 2015.
Families with one parent earning over $100,000 are not eligible for FTB B.
Disability Support Pension Various
2014
The tightening of eligibility criteria including, but not limited to, the 'Program of Support' rule in September 2011 and the revised Impairment Tables in January 2012.
From 1 July 2014, DSP recipients under age 35 years, granted between 1 January 2008 and 31 December 2011, are subject to review of their impairment (using the revised Impairment Tables) and capacity to work. People with a severe or manifest disability will not be reassessed.
People who have some capacity to work now or in the future will be helped to do this through programmes, services and activities.
Under this reform, recipients under 35 will have a participation plan which includes activities that will genuinely assist in labour market participation.
These activities could include Work for the Dole, job search, work experience, education and training, and connection with Disability Employment Services.
Seniors Supplement Cessation Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Act 2014
2014 The Budget 2014 – 15 measure on the cessation of the Seniors Supplement – Commonwealth Seniors Health Card holders commenced on 20 June 2015.
The Seniors Supplement for Commonwealth Seniors Health Card (CSHC) holders will no longer be paid beyond the June 2014 quarterly payment. From this date CSHC holders will continue to receive only the Energy Supplement each quarter.
Energy Supplement (ES) 2014 In September 2014, The Energy Supplement (ES) replaced the CES and indexing was removed.
Other Measures
Social Security Amendment (Supporting More Australians into Work) Act 2013
2014 From 20 March 2014, the income free area that applied for certain payments was increased.
From 1 January 2014, eligibility for the Pensioner Education Supplement (PES) was extended.
Policy changes
The following table contains the legislated future policy changes of which we are aware.
Table 19: Legislated future policy changes
Amendment Year Description
Repeal of the income support bonus and the schoolkids bonus
Minerals Resource Rent Tax Repeal and Other Measures Act 2014
2016
The final instalment of the Schoolkids Bonus will be paid in July 2016.
The Income Support Bonus will continue until December 2016 with the last instalment paid in September 2016.
Changes to assets test
Social Services Legislation Amendment (Fair and Sustainable Pensions) Act 2015
2017
Increases made to the assets test free areas for pensions and allowances.
Age Pension 'assets test' taper rate doubled (reversing the 2007 change).
Changes to the treatment of defined benefit income streams
Social Services Legislation Amendment (Defined Benefit Income Streams) Act 2015
2017
This introduces a 10% cap on the amount of a superannuant’s defined benefit income that is excluded when applying the social security income test.
Qualifying age for the age pension Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures)
2017 to 2023
The Age Pension age will be increased from age 65 to age 67, at a rate of six months every two years, beginning in 2017. Note prior to this the Age Pension age for females was increased from 60 to 65 over the period from 1995 to 2013.