Social and Community Services Pay Equity Special Account legislation becomes law

The Social and Community Services Pay Equity Special Account Act 2012 (No. 150 of 2012) and its associated piece of legislation the Social and Community Services Pay Equity Special Account (Consequential Amendments) Act 2012 (No. 151 of 2012) received royal assent and became law yesterday (8 November 2011).

Purpose of the new laws

Together the two Acts establish a special account under the Financial Management and Accountability Act 1997 to provide for the Commonwealth’s agreement to fund pay increases awarded to employees in the social and community sector, and specify what programs or arrangements are to receive additional funding.

Background to the new laws

The new legislation came about as a result of the decision of Fair Work Australia on 1 February 20121 in relation to the wage rates of employees in the social and community services sectors and the substantially inequity of the pay rates. To address this the Government announced on 15 July 2012 that it would provide around $3 billion to supplement the community sector’s capacity to meet the costs of the decision, this being justified  because many of the services are partly Commonwealth funded.

Following that announcement, the Commonwealth undertook further analysis of the cost of providing supplementation to the social and community sector using data from the Social Policy Research Centre (SPRC) Survey of 2011. The final amount of supplementation arrived at from that process was $2.8 billion an in essence the legislation will transfer $2.8 billion to a special account within the meaning of the Financial Management and Accountability Act 1997, from which the funds are to then be drawn for the purpose supplementing the various programs funded in whole or in part by the Commonwealth.  T

he legislation provides three mechanisms through which monies are to be expended:

• specific programs listed in the Financial Management and Accountability Regulations 1976, made under s 32B of the FMA Act will receive additional funding

• grants to the states and territories through the COAG Reform Fund will be increased and

• programs established under specific Commonwealth legislation will receive supplementation.

LawOne subscribers can click here for more information on this legislation (including related material like the Bills, Second Speeches,  Explanatory Memorandum and more).

Not a LawOne subscriber then - Click here for product information or you can get a free trial or contact us.