In clause 15, new section 236D(2)(b), replace “at the end of the prescribed search period” (page 22, line 32) with “on the first day after the end of the prescribed search period”.

Clause 15B: new section 236F

In clause 15B, new section 236F(5)(a)(ii)(A), after “in” (page 26, line 36), insert “or after”.

In clause 15B, new section 236F(6), replace “from the end of” (page 27, line 9) with “on and after the first day after”.

Clause 15B: new section 236I

In clause 15B, new section 236I(5)(a)(ii)(A), after “in” (page 30, line 38), insert “or after”.

In clause 15B, new section 236I(6), replace “from the end of” (page 31, line 11) with “on and after the first day after”.

Clauses 20 to 23

Replace clauses 20 to 23 (page 33, line 26 to page 35, line 2) with:

20 Sections 245 to 248 replaced and amended

(1)

Replace sections 245 to 248 with:

244A Meaning of default amount of main benefit payable

In sections 245 to 248, default amount of main benefit payable, for a spouse or partner or sole parent, means any amount of a main benefit payable to them in accordance with the following (applied before, and disregarding, all variations under sections 245 to 248):

(a)

the applicable rate of the main benefit payable to them (before any reduction on account of income):

(b)

the appropriate income test applying to that rate:

(c)

regulations made under section 442(2)(e) (regulations: payments: apportionment) for the purposes of section 337 (how benefits are paid):

(d)

all other legislation that affects (for example, that requires deductions from) any amount of the main benefit payable to them.

245 Variation for breach of specified obligation by 1 spouse or partner

When this section applies

(1)

This section applies if—

(a)

a main benefit is payable at a work-test couple rate; and

(b)

the rate of the benefit is reduced (by half or to zero), or the benefit is money managed, suspended, or cancelled, under any 1 or more of sections 227, 232, 233A, 236, 236A, 236C, and 236D; and

(c)

the reduction of the rate of benefit (by half or to zero), or the money management, suspension, or cancellation of the benefit, results from—

(i)

the failure of one spouse or partner (P) to comply with 1 or more specified obligations under this Act; or

(ii)

the application to one spouse or partner (P) of section 227.

Reduction (by half or to zero) of rate of benefit, or money management, suspension, or cancellation of benefit

(2)

For the period that the rate of benefit is reduced (by half or to zero), or the benefit is money managed, suspended, or cancelled, under any 1 or more of sections 227, 232, 233A, 236, 236A, 236C, and 236D,—

(a)

the reduction of the rate of benefit (by half or to zero), or the money management, suspension, or cancellation, applies only to any default amount of main benefit payable to P; and

(b)

the other spouse or partner is entitled to receive any default amount of main benefit payable to them.

(3)

Any amount remaining after a reduction by half, or money management, is applied under subsection (2)(a) is payable to P.

246 Variation for breach of specified obligation by both spouses or partners

When this section applies

(1)

This section applies if—

(a)

a main benefit is payable at a work-test couple rate; and

(b)

the benefit or the rate of the benefit is, under any 1 or more of sections 227, 232, 233A, 236, 236A, 236C, and 236D, subject to a reduction (by half or to zero), money management, a suspension, or cancellation (sanction A) because of—

(i)

the failure of one spouse or partner (P) to comply with 1 or more specified obligations under this Act; or

(ii)

the application to one spouse or partner (P) of section 227; and

(c)

(i)

the failure of the other spouse or partner to comply with 1 or more specified obligations under this Act; or

(ii)

the application to the other spouse or partner of section 227; and

(d)

the couple have no dependent children.

Reduction (by half or to zero) of rate of benefit, or money management, suspension, or cancellation of benefit

(2)

For the period that sanction A and sanction B both apply,—

(a)

sanction A applies only to any default amount of main benefit payable to P; and

(b)

sanction B applies only to any default amount of main benefit payable to the other spouse or partner.

(3)

Any amount remaining after a sanction is applied under subsection (2)(a) or (b) is payable to the spouse or partner referred to in that paragraph.

247 Variation for reduction of rate of benefit (by half or to zero), or money management, suspension, or cancellation of benefit, or non-entitlement period, affecting couple with 1 or more dependent children

When this section applies

(1)

This section applies if—

(a)

a main benefit is payable at a work-test couple rate; and

(b)

either—

(i)

(A)

the failure of one spouse or partner (P) to comply with 1 or more specified obligations under this Act; or

(B)

the application to one spouse or partner (P) of section 227; or

(ii)

under sections 225 and 227, one spouse or partner (P)—

(A)

has not been granted a main benefit; and

(B)

is not entitled for a period of 13 weeks (non-entitlement period A) to a work-tested benefit that would be payable at the work-test couple rate; and

(c)

either—

(i)

(A)

the failure of the other spouse or partner to comply with 1 or more specified obligations under this Act; or

(B)

the application to the other spouse or partner of section 227; or

(ii)

under sections 225 and 227, the other spouse or partner—

(A)

has not been granted a main benefit; and

(B)

is not entitled for a period of 13 weeks (non-entitlement period B) to a work-tested benefit that would be payable at the work-test couple rate; and

(d)

the couple have 1 or more dependent children.

Reduction (by half or to zero) of rate of benefit, or benefit subject to money management, suspension, cancellation, or non-entitlement period

(2)

For the period that sanction A or non-entitlement period A, and sanction B or non-entitlement period B, applies,—

(a)

sanction A or non-entitlement period A applies,—

(i)

if it is a reduction by half or money management, only to any default amount of main benefit payable to P; or

(ii)

if it is a reduction to zero, a suspension, or cancellation, or a non-entitlement period, only to half of any default amount of main benefit payable to P; and

(b)

sanction B or non-entitlement period B applies,—

(i)

if it is a reduction by half or money management, only to any default amount of main benefit payable to the other spouse or partner; or

(ii)

if it is a reduction to zero, a suspension, or cancellation, or a non-entitlement period, only to half of any default amount of main benefit payable to the other spouse or partner.

(3)

Any amount remaining after a sanction or a non-entitlement period is applied under subsection (2)(a) or (b) is payable to the spouse or partner referred to in that paragraph.

248 Variation for reduction to zero of rate of main benefit, or suspension or cancellation of main benefit, or non-entitlement period, affecting sole parent

When this section applies

(1)

This section applies if,—

(a)

under any 1 or more of sections 227, 232, 233A, 236, 236A, 236C, and 236D, for a main benefit of a person (P) who is a sole parent, the rate of the benefit is reduced to zero, or the benefit is suspended or cancelled; or

(b)

under sections 225 and 227, a sole parent (P)—

(i)

has not been granted a main benefit; and

(ii)

is not entitled for a period of 13 weeks to a work-tested benefit.

Reduction to zero of rate of benefit, or benefit subject to suspension, cancellation, or non-entitlement period

(2)

For the period of the reduction to zero, suspension, cancellation, or non-entitlement,—

(a)

the reduction to zero, suspension, cancellation, or non-entitlement applies only to half of any default amount of main benefit payable to P; and

(b)

P is entitled to receive half of any default amount of main benefit payable to P.

(2)

In sections 245(1)(b) and (2), 246(1)(b) and (c), 247(1)(b)(i) and (c)(i), and 248(1)(a), replace “and 236D” with “236D, 236F, 236G, 236I, and 236J”.

Clause 47: new section 334(5)

In clause 47, new section 334(5), replace “subsection (1)” (page 45, line 7) with “this section”.

Clause 50: new section 340A

In clause 50, new section 340A(2)(d)(ii), replace “card).” (page 46, line 16) with “card):”.

In clause 50, after new section 340A(2)(d) (page 46, after line 16), insert:

(e)

require, if P dies while money management imposed on P has effect, that the prescribed proportion of an instalment of P’s main benefit that is an instalment payable to P, or specified arrears that MSD must pay, and that are arrears that relate to a period while money management imposed on P has effect, and that are arrears that relate to a suspension unrelated to a sanction for failure to comply with P’s obligations under section 233, must be paid under—

(i)

section 346 (required manner of payment: payment on death of beneficiary); or

(ii)

any applicable regulations made under section 442 for the purposes of section 337 (how benefits are paid).

Clause 50: new section 340B

In clause 50, replace new section 340B(1)(a) (page 46, line 19) with:

(a)

money management—

(i)

is imposed on P, and has effect, when P dies; or

(ii)

was, but is no longer, imposed on P (whether or not P has died); and

In clause 50, replace new section 340B(2) (page 46, lines 26 to 29) with:

(2)

An application to MSD to have MSD pay the amount standing to the credit of P on the card to, or on account of, P under section 339 may be made by,—

(a)

if P is alive, P or a person acting on P’s behalf; or

(b)

if P has died and has a surviving spouse or partner, P’s surviving spouse or partner; or

(c)

if P has died and has no surviving spouse or partner but has a surviving dependent child, the person who has the care of the child; or

(d)

if P has died and has no surviving spouse, partner, or dependent child, P’s personal representative.

(3)

An application made under this section may be made—

(a)

orally or in writing; and

(b)

in any form, and using any wording, that is reasonable for the purpose.

(4)

On an application made under this section, MSD may pay the amount standing to the credit of P on the card to, or on account of, P under section 339.

New clause 50A

After clause 50 (page 46, after line 29), insert:

50A Section 346 amended (Required manner of payment: payment on death of beneficiary)

(1)

In section 346, replace “that instalment” with “the instalment” in each place.

(2)

After section 346(b), insert:

(ba)

if the instalment and the beneficiary were subject to money management, in the manner in which the instalment would have been paid if—

(i)

the beneficiary had not died; and

(ii)

the instalment and the beneficiary had not been subject to money management; or

Clause 58

In clause 58(1), after the new definition of community work experience (page 49, after line 6), insert:

default amount of main benefit payable, for a spouse or partner or sole parent, is defined in section 244A for the purposes of sections 245 to 248

After clause 58(2) (page 50, after line 6), insert:

(3)

In Schedule 2, replace the definition of prescribed circumstances with:

prescribed circumstances is defined in section 334(5) for the purposes of section 334

Clause 67: new regulation 192A

In clause 67, new regulation 192A(5)(a), after “paid to” (page 62, line 24), insert “, or on account of,”.

In clause 67, new regulation 192A(5A)(b), after “paid to” (page 62, line 31), insert “, or on account of,”.

In clause 67, after new regulation 192A(5A) (page 62, after line 31), insert:

(5B)

However, if P dies while money management imposed on P has effect, arrears to which subclause (5A) applies must (despite that subclause) be paid under—

(a)

section 346 of the Act (required manner of payment: payment on death of beneficiary); or

(b)

regulation 192 (payment on death of beneficiary).

In clause 67, new regulation 192A(6)(a), after “from” (page 62, line 36), insert “, or on account of,”.

In clause 67, after new regulation 192A(6) (page 62, after line 37), insert:

Exception: if P dies while money management has effect

(7)

However, if P dies while money management imposed on P has effect, the prescribed proportion of an instalment of P’s main benefit that is an instalment payable to P must (despite the rest of this regulation) be paid under—

(a)

section 346 of the Act (required manner of payment: payment on death of beneficiary); or

(b)

regulation 192 (payment on death of beneficiary).

Explanatory note

This Amendment Paper sets out amendments to the Social Security Amendment Bill, which proposes to amend the Social Security Act 2018 (the Act). The amendments are as follows:

new section 230(1)(ba) ensures that section 230 of the Act (which sets out how a non-entitlement period, etc, affects supplementary benefits, and a spouse or partner) also applies to a reduction of the rate of a main benefit to zero under new section 236, 236A, 236C, 236F, or 236I:
new sections 236C, 236D, 236F, and 236I, which relate to sanctions for non-compliance, are amended to clarify when, and the circumstances in which, a reduction of the rate of a person’s main benefit takes effect:
new sections 244A to 248 replace sections 245 to 248 of the Act, which provide for variations to the ordinary sanctions rules for couples and sole parents, to align them with MSD’s operational practice:
new section 334(5), and the definition of prescribed circumstances in Schedule 2 of the Act, are amended and replaced to correct wrong cross-references:
new sections 340A and 340B, section 346, and new regulation 192A are amended to clarify arrangements for when a beneficiary dies while on money management.