The Social Security and Other Legislation Amendment (Technical Changes No. 2) Bill 2025 retrospectively validates the use of income apportionment by Services Australia for employment income earned between 1 July 1991 and 6 December 2020, and sets out three clear methods for calculating such income in future decisions. It also reforms the debt waiver framework—expanding special-circumstances waivers, raising and indexing the small-debt threshold to $250, and granting a one-off waiver for undetermined small debts—and establishes an Income Apportionment Resolution Scheme with a new standing appropriation.
Schedule 1 inserts a new Part 3.11 into the Social Security Act 1991, with three divisions: Division 1 defines key terms and sets out general, youth-training and farm-support income apportionment method statements; Division 2 retrospectively validates any use of income apportionment in rate or debt calculations before 7 December 2020; and Division 3 prescribes a hierarchy of three approaches—direct allocation when the earnings period is known, income apportionment when only the payroll period is known, and attribution on the payment date when neither period is known—for future assessments of employment income for periods before 7 December 2020.
Schedule 2 amends the Social Security Act, the A New Tax System (Family Assistance) (Administration) Act 1999, the Student Assistance Act 1973 and the Paid Parental Leave Act 2010 by: (a) expanding the special-circumstances waiver to allow broader consideration of factors such as coercion, family violence or natural disasters; (b) introducing a uniform small-debt waiver for debts under $250 (indexed annually to CPI) and removing inconsistent thresholds; and (c) providing a one-off waiver of undetermined debts below $250 recorded at commencement.
Schedule 3 establishes the Income Apportionment Resolution Scheme—implemented by legislative instrument—under which persons whose debts were affected by income apportionment between 20 September 2003 and 6 December 2020 may accept a resolution payment in exchange for releasing the Commonwealth from related claims. Schedule 4 creates a new special appropriation to fund validated apportionment adjustments and resolution payments.
1. Restoring Rule of Law and Legal Certainty
The Bill corrects a long-standing administrative misunderstanding by validating good-faith uses of income apportionment. It eliminates legal uncertainty for over 3 million people and confirms that past debts and payments are final, while preserving any accrued general-law rights.
2. Fairness and Minimising Harm
By setting out clear, prospectively binding methods for calculating employment income, the Bill ensures consistent treatment of future reviews and provides debtors with transparent and predictable outcomes [Judgment]. Expanding special-circumstances waivers to cover coercion, family violence and other hardships reduces unnecessary distress for vulnerable individuals.
3. Efficient Use of Public Resources
Raising and indexing the small-debt threshold to $250 will eliminate the disproportionate administrative cost of pursuing trivial debts, freeing up Services Australia to focus on significant cases. The one-off waiver of undetermined small debts prevents costly investigations of aged, low-value claims, aligning government practice with principles of proportionality and stewardship of public funds.
4. Balanced Compensation through the Resolution Scheme
The Resolution Scheme provides a targeted, capped form of redress for those materially affected by income apportionment without requiring full recalculation of every historical debt—a responsible compromise between compensating individuals and protecting taxpayer interests.
1. Retrospective Lawmaking and Ex Post Facto Concerns
By validating past administrative errors through retrospective legislation, the Bill undermines the constitutional principle against ex post facto laws and risks setting a precedent for retroactive fixes to other agency mistakes. Citizens lose the ability to challenge past determinations, weakening access to judicial review.
2. Complexity and Administrative Burden
The three-tiered income-assessment hierarchy and multiple definitions across schedules introduce significant complexity. Decision makers will require extensive training, and the risk of misapplication or further litigation remains high [Judgment]. This complexity may negate the intended efficiency gains.
3. Risk of Uneven Discretion in Waivers
While intended to increase fairness, the expanded special-circumstances waiver grants broad, subjective discretion to officials. This may produce inconsistent outcomes and potential inequities between debtors, and may disadvantage those unable to articulate or evidence their circumstances.
4. Fiscal Cost and Uncertain Savings
The indexed small-debt threshold and one-off waivers could forgo considerable recoveries. The financial impact statement estimates $286.4 million over four years, but the long-term fiscal effect of ongoing higher thresholds and expanded waivers is unclear and risks greater strain on the welfare budget.
2025-09-04
House of Representatives
Before House of Representatives
Unspecified
Social Services
Social Support / Welfare, Discrimination / Human Rights, Consumer Protection