Sepuloni CarmelHon CARMEL SEPULONI (Minister for Social Development): I might take a different tack this time and not only respond to Simon O'Connor's questions but actually talk through what Part 2 does—so hopefully pre-empting some of the questions that the Opposition could have. So I'll take my time in explaining it this time right at the beginning and hopefully we can pre-empt some of those inquiries. Part 2 of the bill makes amendments to both the Child Support Act 1991 Subpart 1 and the Veterans' Support Act 2014 Subpart 2. Subpart 1 is the amendment to the Child Support Act 1991; so Subpart 1 of Part 2 of the bill amends the Child Support Act 1991 so that the Commissioner for Inland Revenue or the chief executive of the Ministry of Social Development (MSD) can decide whether a social security beneficiary is not required to apply for child support under section 9 of the Child Support Act 1991. Subpart 2 is the amendment to the Veterans' Support Act 2014. Subpart 2 of Part 2 of the bill repeals the definition of income test 3 and amends the Veterans' Support Act 2014 to remove the detail of the abatement thresholds for income-tested veterans' pensions from the Veterans' Support Act 2014 and creates a new regulation-making power. This regulation-making power will result in the detail of the abatement thresholds being shifted into the Veterans' Support Regulations 2014. This means that in the future changes to the veterans' pension abatement thresholds can be made through regulations by Orders in Council rather than by relying on amendments to the primary legislation which is why we didn't have to bring that whole policy proposal to the House today. Most of it can be done through Order in Council but the veterans' component couldn't be so hence why we're making the amendment.In terms of the clauses I know the member had questions about clause 16 but let's start with clause 15. Clause 15 of the bill sets out that Part 2 Subpart 1 of the bill amends the Child Support Act 1991. Clause 16 of the bill amends section 9(5B) of the Child Support Act. Section 9 of the Child Support Act sets the obligation for a person receiving a social security benefit as defined in the Social Security Act to apply for child support. The amendment at section 9(5B) will authorise the Commissioner of Inland Revenue as well as the chief executive of the Ministry of Social Development to decide whether a social security beneficiary is not required to apply for child support under section 9 of the Child Support Act. Currently only the chief executive of the Ministry of Social Development is authorised to make that decision under section 9(5B) of the Child Support Act. This change allows a client to have the conversation about whether they need to apply for child support with either the Inland Revenue Department or the Ministry of Social Development. Under current legislation only MSD can make the decision that a client is not required to apply as one of the exemptions applies. This can result in some clients having intrusive conversations as we discussed earlier about private matters with both and the Inland Revenue Department and MSD in order to be exempted from the obligation to apply for child support. Subpart 2 is the amendment to the Veterans' Support Act 2014. If we move to clause 17 this clause of the bill sets out that Part 2 Subpart 2 of the bill amends the Veterans' Support Act 2014. Clause 18 of the bill will repeal the definition of income test 3 under section 158(1) of the Veterans' Support Act. This has been done so that income test 3 can be defined in regulations which can then be changed more easily to incorporate future changes to the abatement thresholds. Clause 19 of the bill inserts new section 171 on the abatement of the veteran's pension into the Veterans' Support Act. Under new section 171 a veteran's pension payable under sections 161 and 164 is subject to income tests and abatement thresholds set out in that section. New section 171 instead makes a veteran's pension payable under section 161 or section 164 subject to abatement in accordance with regulations made under section 265 of the Veterans' Support Act. This will mean that the abatement thresholds will be defined in the regulations in the future. New sections 171(2) to (4) in clause 19 also make clear what may and must be done by the new regulations. Clause 20 of the bill enables the creation of regulations in relation to abatement thresholds under the Veterans' Support Act. This is because clause 20 amends section 265 of the Veterans' Support Act by inserting new section 265(1)(29A) which authorises regulations to be made for the purposes of new section 171. So you kind of need to refer back to clause 19 on that.Clause 21 of the bill will insert a new Part 4 in Schedule 1 of the Veterans' Support Act. This new Part 4 is set out in Part 2 of the Schedule of the bill and relates to the transitional arrangements for the repeal of the detail on abatement thresholds from 1 April 2020. This Schedule enables the regulation-making power to be exercised before 1 April 2020 but that the regulations will have effect only on or after 1 April 2020. Just talking to a few of the points in regards to the amendments to the Child Support Act with respect to enabling the Commissioner of Inland Revenue to determine whether a person is not required to apply for child support. As I briefly touched on currently only the chief executive of the Ministry of Social Development is also authorised to make that decision under section 9(5B) of the Child Support Act 1991. This change allows a client to have a conversation about whether they need to apply for child support with either the Inland Revenue Department or the Ministry of Social Development. Under current legislation only MSD can make the decision that a client is not required to apply as one of the exemptions applies. This can result in some clients having to have sensitive conversations—as I said private matters—with both the Inland Revenue Department and MSD in order to be exempted from the obligation to apply for child support. Just speaking to the amendments to the Veterans' Support Act 2014—specifically generic points on increases to abatement thresholds—under current policy settings people receiving a main benefit can earn up to a certain level of income per week known as the abatement threshold before their benefit begins to reduce which is known as the abatement rate". This Government has committed to increasing the minimum wage to $20 in 2021 and we want to make sure in anticipation of that that people getting main benefits could still continue to work the same number of hours before that benefit is reduced. Under the Budget 2019 income support changes abatement thresholds are set to increase by between $5 and $10 each year for the next four years to respond to the expected increases to the minimum wage over that same period. It'll benefit around 73000 low-income individuals and families by an average of $5 per week on 1 April 2020 increasing to $12 per week in 2023. Obviously that amount is more for those that work the maximum number of hours or earn up to the threshold. Increasing abatement thresholds of main benefits costs $97.1 million over four years; so that's the cost implication if anyone was going to ask.The changes to the Veterans' Support Act 2014 mean that future increases to the abatement thresholds can be made in regulation rather than amending the Act. So it's really just aligning it so that we're not in this position again where we would need to treat them separately so that it can actually be done by Order in Council as is the rest of what we're attempting to do with our commitment to raising abatement thresholds.This bill will remove the detail of the different abatement thresholds currently contained in sections 158 and 171 from the Veterans' Support Act 2014 and create a regulation-making power under section 265 of that Act to enable the detail of abatement thresholds to be included in the veterans' support regulations 2014. This approach makes adjusting the veterans pension abatement thresholds through regulations more legislatively efficient. It is also similar to the way abatement thresholds are increased for superannuitants and main beneficiaries which is generally done through Order in Council as I mentioned before.Hopefully that—actually I'm confident that that—responds to the questions that were put to me by Simon O'Connor and hopefully it pre-empts some of the questions that will come from the other side. Thank you Mr Chair."