Changes to Work-Test from 1 April 1997

The Minister of Social Welfare, Hon Roger Sowry today confirmed that changes to the work-test announced last year will go ahead from 1 April 1997.

The work-test ensures that Unemployment Beneficiaries, and a number of newly work tested groups, meet their responsibilities to look for work or work-related training. The work-test is applied when a client fails to undertake a work or work-related training activity without having a good and sufficient reason.

Under the legislation, those who do not meet their responsibilities through actions such as not attending a scheduled interview, or turning down suitable employment, may be penalised by a reduction in their benefit. The penalties operate on a sliding scale from a minimum of a 20% reduction for at least one week, to a complete loss of benefit for up to 13 weeks. This is considered a more practical and fair approach than the current system which only allows for the suspension of the persons entire benefit for 26 weeks.

The Privacy Act requires a nine day delay before any benefit sanction can be actioned; a requirement that was not addressed in last years legislation.

Under current arrangements, the reduction in a persons benefit stands to occur anything up to one month after they are deemed to have failed the work-test.

This contradicts the intent of the new work-test policy in that the sanction for the work-test failure is likely to occur some considerable time after the client did not comply, says Mr Sowry.

An amendment to the Social Security Act is needed to waive the requirement under Section 103 of the Privacy Act which relates to the period of notice that is required before a benefit can be reduced or cancelled as a result of the client failing to meet their obligations.

The proposed amendment to the Social Security Act will allow for the sanction to be applied more appropriately at the time of the work-test failure, he says.

Mr Sowry said that in the interim a manual arrangement will operate which fully complies with the Privacy Act until the legislation is enacted.