Government looks at pension deduction

August 7, 1991
Issue 

By Ainslie Hannan

CANBERRA — Pensioners and beneficiaries risk losing access to and control of their entitlements as a result of moves by the Department of Social Security to allow other agencies to make deductions from benefits.

The move is driven by state housing authorities, which want access to tenants' benefits for the deduction of rents. This flies in the face of the principle of inalienability of benefits, which is set down in the Social Security Act.

As recently as May 1988, the then minister, Brian Howe, stated in a letter to a welfare organisation, "... social security legislation provides that social security payments are inalienable. This is in recognition of the welfare nature of these payments."

Howe went on to say that amending legislation to allow deductions would "open the door" to requests for deductions for other purposes.

Following the transfer of the ministry to Graham Richardson in 1990, direct deduction arrangements were given a push by the ACT Alliance government at the Housing Ministers' Conference that year. The ACT Housing Trust argued that "significant benefits would flow to public housing authorities if rents could be deducted from pensions/benefits and remitted direct to the relevant housing authorities".

The conference resolved to ask the minister to "work toward an arrangement whereby public housing tenants can enter into a voluntary arrangement to have their rents deducted at source by the Department of Social Security."

The irony was that the minister responsible for housing was now Brian Howe. Having previously rejected the proposal, Howe now decided that benefits would arise from this arrangement, for tenants as well as housing authorities.

The somersaulting Howe also claimed that direct debiting of rents would enhance the security of tenure of low income households and avoid the financial trauma of rent arrears.

To add weight to the case, a number of state governments told Richardson that if the arrangements were not permitted, they would not exempt the Commonwealth's $2.50 Pharmaceutical Benefits Allowance, introduced in the 1990 budget, from state charges.

Arrangements for direct deductions are still being negotiated

between the states and the Commonwealth. The Commonwealth is attempting to negotiate some federal standards for concessions for pensioners: for example, on land rates discounts.

The dismantling of the Social Security system has gone by without a comment from Howe, leading to claims in some quarters that Howe was in fact the architect of the demolition and Richardson simply the project manager.

The direct deductions arrangement will erode beneficiaries' control over income by leading to claims by state electricity authorities, Telecom and other service providers for their cut of people's benefits. Next will come creditors such as banks and other lenders.

The claim that the arrangement will lead to improved security of tenure is pathetic. While it is definitely a tenant's responsibility to pay rent, a number of states do not provide a high level of security of tenure, and have been tardy in ensuring improvements in this area: for example, through appropriate practices to deal with payment difficulties and appropriate public tenancy appeals mechanisms.

Lastly, how "voluntary" is an arrangement to allow deductions from your income when you are threatened with eviction if you do not agree? This is a particularly critical issue when the arrangement is sought for rent arrears, disputed debts or debts not related to rents, which housing authorities should pursue through a civil court action.

It is simple to arrange for deductions from bank accounts, and this ensures the voluntary nature of any agreement for deductions. Although a fee applies for such deductions, housing authorities could finance this arrangement where it has been mutually agreed with a debtor because of payment difficulties.

In extreme cases where a person is constantly in arrears, at risk and generally unable to manage her/his affairs, state public advocates should assist through trusteeship and guardianship arrangements. Public advocacy has proven very effective in Victoria.

Removing from people the control of their income is yet another attempt by governments to control people, and as usual this move targets the already disadvantaged.

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