Social Security (Australia)

Social Security (Australia)

Social Security, in Australia, refers to a system of social welfare payments provided by Commonwealth Government of Australia. These payments are administered by a Government body named Centrelink. In Australia, most benefits are subject to a means test.


Legal framework

Social security payments and other benefits are currently made available under the following acts of parliament:

Payments made under the Social Security Act and the Student Assistance Act

  • ABSTUDY - offers a range of allowances to assist Indigenous students and New Apprentices.
  • Age Pension - for people planning for retirement or who are already retired.
  • Assistance for Isolated Children - for families with a child who cannot attend school locally because of distance or special needs.
  • Austudy Payment - for full-time students and New Apprentices aged 25 years or over.
  • Carer Allowance - for people who care for an minors 16-17 and adults over 18 years with a disability.
  • Carer Allowance (Child) - for people who care for a child under 16 years with a disability.
  • Carer Payment - for people who provide full-time care for someone with a disability
  • Disability Support Pension - for people unable to work for 2 years due to illness, injury or disability.
  • Double Orphan Pension - for people who are raising children who have lost both parents.
  • Newstart Allowance - for people who are looking for employment.
  • Maternity Payment - for help with those extra costs after the birth of a new baby.
  • Parenting Payment - for parents or guardians to help with the cost of raising children.
  • Pensioner Education Supplement - for people on Pensions with education expenses.
  • Special Benefit - for people who are in financial hardship, have no way of supporting themselves and are not entitled to another payment (normally due to residency requirements)
  • Youth Allowance - for full-time students or New Apprentices aged 15 (under some circumstances) 16 to 24 and people aged under 21 who are undertaking job search or a combination of approved activities.

Income support

All Centrelink Income support payments are payable fortnightly, usually by direct deposit into the recipient's bank account. They are also subject to a means test which calculates the recipient (and their partner's) fortnightly income and assets and affects the rate of their payment accordingly. As such, people on lower incomes may be entitled to part-payment of their allowance (subject to other qualification requirements). The assessment of income and assets is very similar between different social security payments but the effect that income and assets have on each payment differs in that they have different income thresholds (i.e. how much income one can earn before it affects their payment) and different taper rates (the amount the payment drops by per dollar above these thresholds).

Age pension

The Age pension was the first payment issued from the Commonwealth Government and dates back to 1909. It is available to men aged 65 years and over. The age for women to become eligible is being progressively phased upward from 60 to 65 years, in line with males. Women currently become eligible for the Age pension at 63 years and 6 months. Unlike pension payments of many other countries, workers do not contribute to a pension or insurance within Australia, and the payment is available subject to means testing. This ensures that only those that require assistance receive it.

Newstart Allowance

Newstart Allowance is an unemployment benefit, colloquially known as The Dole, which is paid in the form of a payment for people between 21 (22 in 2012) and 64 and is given to those who apply for the benefit and are unemployed and are seeking work.

It is paid on the basis of a 'mutual agreement' between the customer and Centrelink, where Centrelink will continue to pay fortnightly payments to the customer, for so long as the customer attempts to find employment and fulfills the mutual obligation requirements. These mutual agreements are negotiated between Centrelink, the Job Seeker and their Job Services Australia provider or Disability Employment Services provider, and are recorded into an Employment Pathway Plan or 'EPP". Activities which a job seeker may have to agree to engage in, in order to continue receiving Newstart Allowance include applying for a specific number of jobs (usually ten) per fortnight and recording these applications in a Centrelink issued diary [1], undertaking vocational education or training, paid work experience, participation in a labour market program or Work for the Dole project, and other activities, such as voluntary work if considered appropriate by Centrelink.[2] For example, more elderly customers who have been made redundant and are approaching the pension age, and who may face considerable difficulties re-entering the labour market, are often permitted to fulfil their plan by engaging in voluntary activities alone. A job seeker has to nominate and engage in one activity (for example, either a vocational education activity or Work for the Dole activity) in any one mutual obligation period (lasting six months at a time).

Clients are not expected to engage in the more intensive of these activities as soon as their receipt of the allowance commences. The amount of activity required on behalf of the client in order to continue receiving his/her benefit is usually staggered as follows:

  • Ordinarily, during the first three months of unemployment, a job seeker has no other obligations but to submit a fortnightly Application For Payment form at the local office. The form asks the applicant a number of questions about his circumstances and for the basic details of four positions for which the job seeker applied in the last fortnight. Customers may also be required to make up to 10 'Job Search Contacts' per fortnight (dependent on the local labour market and their personal circumstances) and record the details of these jobs within a specifically issued Job Seeker Diary for a given period of time. The job seeker then takes the Application For Payment form personally to the local Centrelink Office. He will then attend a short one-on-one interview with a Centrelink officer. The interview is usually for the purposes of checking that the application form is in order and that the applicant is aware of any appointments that may need to be attended, and obligations that may need to be met. The client at this stage also has the opportunity to talk to a Centrelink officer about any problems the client may be encountering without having to make a prior appointment first.
  • If after an initial three months of unemployment, during which the job seeker has only to hand in the fortnightly application form and record the Job Seeker Diary, the client remains unemployed; the client will be required to attend appointments with a Job Network agent whose responsibility it is to assist the client to re-enter the work force. The job seeker also has to attend a two week training course which focusses on job searching skills such as writing resumes and attending interviews.
  • If the customer remains unemployed for twelve months, they are then subject to the Work Experience Phase of their Employment Pathway Plan, which consists of more intensive assistance involving the activities listed above, such as, Work for the Dole, accredited study, part-time work, volunteer work or a combination of these. A Job Network Provider may require a Newstart recipient to do voluntary work (up to 15 hours a week), for which clients receive a supplement to their benefit of $10.40 per week. The supplement is also paid to Work for the Dole participants.[3] They must also continue to apply for 4 or more positions at the same time to meet their mutual obligations.
  • If the client becomes long-term unemployed (24 months or longer), the client's activity requirements will usually consist of another Work Experience Phase style activity for six months in any twelve month period. (Australia's unemployment benefits do not have a time limit: it is, in theory, possible to remain on unemployment benefits for the whole of one's working life).

As at the 12th January, 2010, the basic Newstart rate for a single unemployed person without children is A$456.00 per fortnight. However, this basic rate does not include supplement payments which can include Rent Assistance of up to A$111.80 per fortnight, and other supplements, such as Pharmaceutical Allowance, Telephone Allowance, Remote Area Allowance, Training Supplement and the Work For The Dole Supplement; which are paid depending on personal circumstances and activity.[4] Rates differ for married couples, de-facto couples and couples in a gay/lesbian relationship and persons with children.

On 1 March 2010, the Australian Government introduced changes to Disability Employment Services. Multiple existing programs were streamlined into two clearly distinct programs, making assessment and referral processes less complex.

All eligible job seekers with disability have access to individually tailored services which meet their needs including capacity building, training, work experience and other 'interventions' to help participants obtain and maintain suitable employment. DES providers support and manage a participant’s condition in the workplace, along with providing ongoing support in the workplace for as long as it is required.

New compliance rules were introduced on 1 July 2011, dealing with client meetings with a DES provider and payment suspension.

Youth Allowance

Youth Allowance is an income support payment available to full-time students and Australian Apprentices aged 16–24, and to job seekers and those undertaking a combination of other activities leading to employment aged 16–20.

Youth Allowance recipients are considered to either be dependent on their parents, or independent. The underlying philosophy of Youth Allowance is that parents are responsible for supporting their children where they have the means and the young person has not lived independently from them.

Dependent recipients are subject to the Parental Income Test[5] and Family Assets Test, unless a parent is in receipt of a specified income support payment themselves. A dependent Youth Allowance recipients may be exempt from the Parental Income Test if their parent is in receipt of an income support payment themselves. A dependent recipient's rate of payment will be reduced as a result of parental income above the parental income free area, although the parental income free area can be increased by sibling concessions.

Dependent Youth Allowance recipients may also be subject to the Family Actual Means Test (FAMT)[6] which applies where the parent is self employed, involved in a trust or company or several other categories. The rationale behind the FAMT is that the taxable income on which Youth Allowance is normally based may not accurately reflect the true financial means of parents in these categories. It asks for details of the family's spending on living expenses during the relevant tax year and extrapolates an equivalent notional taxable income from this. Sole traders involved in primary production and parents receiving drought assistance such as Exceptional Circumstances Relief Payment are exempt.

Independent Youth Allowance recipients are not subject to the Parental Income Test, Family Assets Test or Family Actual Means Test. Some of the independence criteria[7] for Youth Allowance purposes include where a young person:

  • has supported themselves through paid work for a certain period of time, or
  • is, or has been, partnered (includes married or in a registered relationship, or living in a de facto relationship as a member of a couple for at least 12 months), or
  • has, or has had, a dependent child, or
  • is an orphan or is refugee without parents in Australia, or
  • is unable to live with their parents due to relationship breakdown or because the parent is incarcerated or missing.

All Youth Allowance recipients are subject to the Personal Income Test, which takes into account any income they may earn through part-time or casual work. If an independent Youth Allowance customer has a partner, then their income will be included under the Partner Income Test.

Youth Allowance has differing payment rates for recipients who live with a parent or guardian and those who live away from home. Recipients who live 'away from home' receive a higher rate of payment and may be eligible for Rent Assistance.

15-year-olds can also receive Youth Allowance if they are defined as independent and are over the school leaving age in the state of residence. The school leaving age is 17 in all states and territories of Australia, except Victoria where it is 16 (It will also be 17 from 1 January 2010).[8]

Youth Allowance was introduced from July 1998 and replaced Youth Training Allowance and Newstart Allowance for job seekers under 21 and AUSTUDY for students under 25.

In 2009 a number of significant changes to Youth Allowance were announced in the Federal Budget. Some of the proposed changes included introducing new scholarships for university students, and changes to the independence criteria and Parental Income Test. These changes were passed by Parliament on 17 March 2010. The changes will be implemented over a number of years, beginning with the introduction of new scholarships from 1 April 2010.[9]

In the 2011-12 Budget, the Australian Government announced that from 1 July 2012, Youth Allowance (other) will be extended to 21 year olds (currently 21 year olds are eligible for Newstart Allowance). 21 year olds who are on Newstart Allowance, or who have applied for it, by 1 July 2012 will not be affected by the change.[10]

Austudy Payment

Austudy Payment was originally known as the AUSTUDY Scheme, an all-ages study allowance, but since the introduction of Youth Allowance (see above) it has been reserved for the over 25s. To qualify, one must be an Australian resident, over 25, and studying full time at an approved education institution. However, students who were receiving Youth Allowance prior to turning 25 and are still pursuing the same course of study continue to receive Youth Allowance until they finish (or otherwise terminate) their course.

Unlike Youth Allowance, Austudy customers are considered to be independent and are not subject to the Parental Income Test, Family Assets Test and the Family Actual Means Test. As part of the 2007 Federal Budget Announcement on 8 May 2007 Austudy Payment recipients are eligible for Rent Assistance from the 1 January 2008. Prior to the 1 January 2008, Rent Assistance was not payable with Austudy. Like most Centrelink payments, Austudy Payment is subject to a personal and/or partner income and assets test.


ABSTUDY (The Aboriginal and Torres Strait Islander Study Assistance Scheme) is a welfare payment for Indigenous Australians undergoing some form of study. All Indigenous students at secondary or tertiary institutions, as well as those studying by correspondence, and primary students who turned 14 prior to January 1 of their current year of study. To qualify as Indigenous, a student must be of Aboriginal or Torres Strait Islander descent by Centrelink standards and be a current Australian citizen. ABSTUDY is tailored according to income tests, and the status of partners, guardians, and dependent children.

Whilst this payment is administered through Centrelink, the payment is made under ABSTUDY Policy. The responsibility for ABSTUDY Policy rests with the Minister of Education and the Department of Education, Employment and Workplace Relations, and is not contained within the Social Security Act 1991.

Disability Support Pension

Provides income support for people who suffer a long-term disability, which in the opinion of an assessor they will not recover from in the next two years, and which will render themselves unable to work or participate in a training activity enabling them to work. The basic rate for a single person is A$671.90 (as at January 2010); different rates apply to persons under 18 with no children, and to couples, married, de-facto or in a gay relationship. The payment is income and assets-tested. However, if you are permanently blind, you can receive DSP without income and assets tests, and without needing to prove any inability to work, etc. DSP can take a while to process, so as a temporary measure claimants are placed on another payment (e.g. Newstart with a medical certificate to cover the activity tests) while the payment is being assessed; once granted it is backdated to the claim date at the higher DSP rate.

Sickness Allowance

A payment for those who are currently suffering an Illness / Injury / Disability (Short Term i.e. less than 2 years), are employed, and have no access to leave or have used all their leave. Paid Under the Newstart System without an Activity Test.

Carer Payment

A payment for those providing full time care to someone who is ill, injured or has a disability.

Parenting Payment

A payment for those who are principal carers of dependent children under the age of 6 for partnered customers and children under the age of 8 for single customers granted payments after 1 July 2006. Those customers granted Parenting Payment prior to 1 July 2006 are eligible to remain on the Parenting Payment until their youngest child turns 16 with compulsory participation requirements from 1 July 2007 or when their youngest child turns 7, whichever occurs later. Parenting Payment Partnered is classified as an allowance and Parenting Payment Single is classified as a pension.

Parenting Payment Partnered uses an individual and a partner income test to determine the rate of payment with benefit withdrawal rates of 60 cents in the dollar (as of 1 July 2007) on income over the legislated limits. A partner's gross earnings are assessed as shared, regardless of individual tax already paid. If, for example, the breadwinner is currently paying 30 per cent personal tax, the effective marginal tax rate (EMTR) after benefit withdrawal is 90 percent of earnings above the legislated limit (the EMTR prior to 1 July 2007 is 100% as the benefit withdrawal rate is 70% of the partner's earnings above the legislated income limit).

Additional and Supplementary Payments

Rent Assistance

Income support recipients who are classed as non-homeowners and pay more than a required amount of board or rent for accommodation are eligible for Rent Assistance payments. This payment is paid as part of the income support payment. Verification of the rent details are required either a lease or by completing a Rent Certificate every six months. The amount of rent assistance a recipient is eligible for depends on the amount of rent one is paying. The basic rate for a single person with no children and not sharing accommodation is as follows. As at the 28th of January, 2010; Rent Assistance begins to be paid when a renter's fortnightly rent is in excess of A$99.40. For every dollar in excess of this amount, Rent Assistance pays A$0.75, up to a maximum of A$111.80 per fortnight. The maximum amount payable is lower for those sharing accommodation, in which case it is A$74.53. Different rates apply to couples, couples separated by illness, couples temporarily separated and singles and couples with dependent children.[11]

Pharmaceutical Allowance

A small payment of A$6.00 per fortnight for those receiving Centrelink payments, to help cover the cost of prescription medicines. The amount covers the cost of one prescription per fortnight for a concession card holder eligible for the concessional rate of medicines (A$5.40 per script from the 1st of January, 2010)[12] which are covered under the Pharmaceutical Benefits Scheme, which covers most prescription medicines. available.[13]

Telephone Allowance

A payment issued quarterly to eligible customers receiving Pension payments, to help cover the cost of telephone bills. Eligible customers must have a telephone service subscribed in their name to be eligible for Telephone Allowance. There are two rates payable: a basic rate of A$23.40 and a higher rate of A$35.20.[14]

Pensioner Education Supplement

"The Pensioner Education Supplement (PES) helps [recipients] with the costs of full-time or part-time study."[15] It is an additional payment for those on a pension. It only applies to approved courses of study. Bachelor's degrees and many TAFE courses are approved courses of study, but generally postgraduate study is not. You are still eligible for PES for study even if you have completed previous studies.

Payments made under the A New Tax System (Family Assistance) Act

  • Family Tax Benefit Part A - for parents or carers to help with the cost of raising children.
  • Family Tax Benefit Part B - for single income families or sole parents.
  • Maternity Immunisation Allowance - for fully immunised children or those exempt from immunisation
  • Child Care Benefit - for families to help with the cost of child care.

Family Tax benefit

Family Tax Benefit is a payment made, through the tax system, to the caretakers of children. Entitlement to this benefit is based on the family's taxable income in the given financial year. Payment can be made after a person has lodged a tax return or in advance based on an estimate of taxable income during the financial year. If payments are received in advance, they are reconciled at the end of the financial year when the amount received is compared to the amount that should have been received based on actual income according to tax returns.

Family tax benefit part A is paid based on the combined taxable income of the recipient and their partner (if applicable). Family Tax benefit Part B is paid based on the lower of the recipient and their partner's income, or, for a single parent, at the highest rate.

Maternity Immunisation Allowance

Maternity Immunisation Allowance is paid to parents whose children who have received all immunisations specified by the national immunisation schedule by the time they are 2 years old. Alternatively, if the parents object to immunisation on any grounds and inform Centrelink of this, they may also receive this allowance.

Child Care Benefit

Child Care Benefit assists Australian parents with the cost of approved and registered child care. It is a means tested payment and is based on the recipient's taxable income; low income families receive the highest rate of Child Care Benefit.

The Australian Government spent approximately $2.1 billion on Child Care Benefit to assist families with the cost of child care in the financial year ending 30 June 2011.[16]

Concession cards

The following concession cards are issued by Centrelink:

  • Health Care Card - primarily entitles holder to PBS medications at the concession rate. Most recipients of a payment are entitled to this as well as people receiving the maximum rate of Family Tax Benefit part A. This card has secondary benefits, including cheaper public transport in some states.
  • Commonwealth Seniors Health Card- a HCC issued to senior citizens
  • Pensioner Concession Card - this offers additional benefits to the Pensioner, including pensioner transportation fares (in some areas), and a certain number of free country rail journeys within the holder's state.

Prisons and psychiatric hospitals

Persons imprisoned or admitted to a psychiatric institution are not eligible to receive benefits for the duration of imprisonment or admission. (However, it may be payable if a psychiatric stay is classed as rehabilitation.) The benefits resume upon release or discharge. However, upon release or discharge from imprisonment or psychiatric hospitalisation of more than two weeks, the claimant is entitled to an additional payment equal to seven days of their regular payment, to help with adjustment.

Review of Social Security Decisions

Every decision made under social security law is to be in writing and given sufficient notice, usually in a letter.[17] Applications for review of such decisions may be lodged at any time, but depending on the decision remedial action may only be taken if the review is received within 13 weeks of receiving notice, for decisions made under the Social Security act, or 52 weeks for decisions made under Family assistance law. At the bottom of each letter informing customers of a Centrelink decision, a “your rights” box informs individuals of potential avenues for review.

Internal Review

Legislation ultimately governs the decision making process, and Centrelink policy guidelines provide the lens through which legislation is interpreted by Centrelink Customer Service Advisers (CSAs). However, notwithstanding legislation and policy, there are still many areas in which significant discretion is afforded to the decision maker, which may be subject to internal and external review.

Original Decision Maker (ODM) Review

Centrelink possesses a prescribed two-tiered system of internal review. The initial stage is the ODM Review, where the matter is brought back to the CSA for reconsideration.[18] This is a wholly intra-office process and functions as an initial check on the decision, and the appeal progresses further from the ODM only if necessary. Many reviews are due to legislative changes, administrative errors, provision of new customer documentation, or customer disagreement with the decision. There is also the opportunity for the customer to make a formal written complaint. However, many individuals may not wish to have the same CSA make another decision, which may even lead to confusion as to whether internal review has actually taken place.

Once the ODM review has been completed it should contain the relevant legislative provisions, any new information considered, and a determination stating whether the original decision has been set aside, affirmed or varied.

Authorised Review Officer (ARO) Review

If the individual is not satisfied, an Authorised Review Officer (ARO), an officer delegated review powers from the Secretary for the purposes of social security law, may affirm, vary, or set aside the original decision.[19] Although an employee of the Centrelink, an ARO is not to defend ODM decisions as it is a strong principle that the ARO is independent of the situation and has no previous involvement in the case. Nevertheless, AROs also look at legislation with the same policy guidelines as CSAs.

External Review

The Social Security Appeals Tribunal – SSAT

A customer dissatisfied with an internal review of a decision may apply to the Social Security Appeals Tribunal (SSAT) [20] to review a decision affirmed, varied or set aside by internal review, subject to some exceptions. The SSAT generally has the same powers as the Secretary, and may affirm, vary, set aside and substitute a decision or return the matter to Centrelink with recommendations. SSAT hearings are generally informal, confidential and not bound by the Laws of Evidence.

Experience has indicated that at the SSAT more weighting goes towards the legislation as opposed to policy guidelines[citation needed]. Welfare advocacy groups such as the Welfare Rights Centre are often involved in providing legal help to individuals affected by Centrelink decisions.

The AAT and the Courts

A decision must have been reviewed by the SSAT before it can be heard at the AAT. However, the Secretary or a delegated person on behalf of the Secretary may appeal a decision from the SSAT. Only 17% of decisions are overturned at the AAT. Further appeals (on questions of law only) are available to the Federal Court and High Court.

The Ombudsman

The Commonwealth Ombudsman does not conduct a merits review (as would the ARO, SSAT or AAT), but considers the administrative decision making process employed by Centrelink to reach the decision or carry out the action complained of.

Where the Ombudsman concludes that there has been a deficiency in Centrelink's action (for examples [21]) the Ombudsman may make recommendations to Centrelink for remedial action. This may result in Centrelink changing their decision, or providing a better explanation of their decision.

Investigations by the Ombudsman are usually result from a complaint about a decision or action of Centrelink, and in the process of an investigation the Ombudsman is entitled to view Centrelink records and ask questions of Centrelink staff. While the Ombudsman does not have coercive powers to make Centrelink change a decision or act in a certain way, recommendations made by the Ombudsman are rarely rejected.

See also


  1. ^ Dole Diary
  2. ^ Employment Pathway Plan. Accessed 12th January 2010
  3. ^ Work For The Dole. Accessed 12th January 2010
  4. ^ Newstart Allowance - payment rates. Accessed 12th January 2010
  5. ^ [1]
  6. ^ [2]
  7. ^ [3]
  8. ^ Victorian Minimum School Leaving Age
  9. ^ [4]
  10. ^ [5]
  11. ^ Rent Assistance. Accessed 28th January 2010
  12. ^ Overview of the PBS Safety Net - Medicare Australia Accessed 28th January 2010
  13. ^ Pharmaceutical Allowance Accessed 28th January 2010
  14. ^ Telephone Allowance Accessed 28th of January, 2010
  15. ^ "Pensioner Education Supplement". Centrelink payments. Australian Government. 2010. Retrieved 29 October 2010. 
  16. ^ "DEEWR Budget Statements - Outcomes and Performance - Outcome 1". DEEWR Portfolio Budget Statements. Department of Education, Employment and Workplace Relations. Retrieved 27 September 2011. 
  17. ^ Social Security (Administration) Act 1999 (CTH) s237
  18. ^ Centrelink Information – A Guide to Payments and Services, Chapter 14 – Reviews and appeals, p 137
  19. ^ Social Security (Administration) Act 1999 (CTH) ss 125-126
  20. ^ Social Security (Administration) Act 1999 (Cth) s142(1)(a)
  21. ^ Ombudsman Act 1976 (CTH) s 15

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