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CLEAN ENERGY (HOUSEHOLD ASSISTANCE AMENDMENTS) BILL 2011


                                  2010-2011






               THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA





                                   SENATE











          CLEAN ENERGY (HOUSEHOLD ASSISTANCE AMENDMENTS) BILL 2011




                       REVISED EXPLANATORY MEMORANDUM
















                     (Circulated by the authority of the
 Minister for Families, Housing, Community Services and Indigenous Affairs,
                          the Hon Jenny Macklin MP)
          CLEAN ENERGY (HOUSEHOLD ASSISTANCE AMENDMENTS) BILL 2011





OUTLINE



The 2011 Clean Energy Legislative Package


The Clean Energy (Household Assistance Amendments) Bill 2011 is part of  the
Clean  Energy  Legislative  Package,  which  sets  up  the  carbon   pricing
mechanism (the mechanism) as part of the Government's climate  change  plan,
as set out in Securing a clean energy future:  the  Australian  Government's
climate change plan.


The full policy context and background to the mechanism is set  out  in  the
explanatory memorandum for the Clean Energy Bill  2011.   A  description  of
the Bills which will introduce the mechanism is set out below.


                The Clean Energy Bill 2011 and related Bills

|Main Bill   |The Clean Energy Bill 2011 creates the mechanism.  It  |
|            |sets out the structure of the mechanism and process for|
|            |its introduction.  These include:                      |
|            |entities and emissions that are covered by the         |
|            |mechanism;                                             |
|            |entities' obligations to surrender eligible emissions  |
|            |units;                                                 |
|            |limits on the number of eligible emissions units that  |
|            |will be issued;                                        |
|            |the nature of carbon units;                            |
|            |the allocation of carbon units, including by auction   |
|            |and the issue of free units;                           |
|            |mechanisms to contain costs, including the fixed charge|
|            |period and price floors and ceilings;                  |
|            |linking to other emissions trading schemes;            |
|            |assistance for emissions-intensive trade-exposed       |
|            |activities and coal-fired electricity generators;      |
|            |monitoring, investigation, enforcement and penalties;  |
|            |administrative review of decisions; and                |
|            |reviews of aspects of the mechanism over time.         |
|Statutory   |The Clean Energy Regulator Bill 2011 sets up the       |
|bodies      |Regulator, which is a statutory authority that will    |
|            |administer the mechanism and enforce the law.          |
|            |The responsibilities of the Regulator include:         |
|            |providing education on the mechanism, particularly     |
|            |about the administrative arrangements of the mechanism;|
|            |                                                       |
|            |assessing emissions data to determine each entity's    |
|            |liability;                                             |
|            |operating the Australian National Registry of Emissions|
|            |Units (the Registry);                                  |
|            |monitoring, facilitating and enforcing compliance with |
|            |the mechanism;                                         |
|            |allocating units including freely allocated units,     |
|            |fixed charge units and auctioned units;                |
|            |applying legislative rules to determine if a particular|
|            |entity is eligible for assistance in the form of units |
|            |to be allocated administratively, and the number of    |
|            |other units to be allocated;                           |
|            |administering the National Greenhouse and Energy       |
|            |Reporting System (NGERS), the Renewable Energy Target  |
|            |(RET) and the Carbon Farming Initiative (CFI); and     |
|            |accrediting auditors for the CFI and NGERS.            |

|            |The Climate Change Authority Bill 2011 sets up the     |
|            |Authority, which will be an independent body that      |
|            |provides the Government with expert advice on key      |
|            |aspects of the mechanism and the Government's climate  |
|            |change mitigation initiatives.                         |
|            |The Government will remain responsible for carbon      |
|            |pricing policy decisions.                              |
|            |This Bill also sets up the Land Sector Carbon and      |
|            |Biodiversity Board which will advise on key initiatives|
|            |in the land sector.                                    |
|Consequentia|The Clean Energy (Consequential Amendments) Bill 2011  |
|l amendments|makes consequential amendments to ensure:              |
|            |NGERS supports the mechanism;                          |
|            |the Registry covers the mechanism and the CFI;         |
|            |the Regulator covers the mechanism, CFI, the Renewable |
|            |Energy Target and NGERS;                               |
|            |the Regulator and Authority are set up as statutory    |
|            |agencies and regulated by public accountability and    |
|            |financial management rules;                            |
|            |that emissions units and their trading are covered by  |
|            |laws on financial services;                            |
|            |that activities related to emissions trading are       |
|            |covered by laws on money laundering and fraud;         |
|            |synthetic greenhouse gases are subject to an equivalent|
|            |carbon price applied through existing regulation of    |
|            |those substances;                                      |
|            |the Regulator can work with other regulatory bodies,   |
|            |including the Australian Securities and Investments    |
|            |Commission (ASIC), the Australian Competition and      |
|            |Consumer Commission (ACCC) and the Australian          |
|            |Transaction Reporting and Analysis Centre (Austrac);   |
|            |the taxation treatment of emissions units for the      |
|            |purposes of GST and income tax is clear; and           |
|            |the Conservation Tillage Refundable Tax Offset is      |
|            |established.                                           |
|Procedural  |Those elements of the mechanism which oblige a person  |
|Bills       |to pay money are implemented through separate Bills    |
|            |that comply with the requirements of section 55 of the |
|            |Constitution.                                          |
|            |These Bills are the Clean Energy (Unit Shortfall       |
|            |Charge-General) Bill 2011, Clean Energy (Unit Issue    |
|            |Charge - Fixed Charge) Bill 2011, Clean Energy (Unit   |
|            |Issue Charges - Auctions) Bill 2011, Clean Energy      |
|            |(Charges-Excise) Bill 2011, Clean Energy               |
|            |(Charges-Customs) Bill 2011, Clean Energy              |
|            |(International Unit Surrender Charge) Bill 2011, Ozone |
|            |Protection and Synthetic Greenhouse Gas (Manufacture   |
|            |Levy) Amendment Bill 2011 and Ozone Protection and     |
|            |Synthetic Greenhouse Gas (Import Levy) Amendment Bill  |
|            |2011.                                                  |
|Related     |Other elements of the Government's Climate Change Plan |
|Bills       |are being implemented through other legislation.  These|
|            |are:                                                   |
|            |the Clean Energy (Excise Tariff Legislation Amendment) |
|            |Bill 2011 and the Clean Energy (Customs Tariff         |
|            |Amendment) Bill 2011, which imposes an effective carbon|
|            |price on aviation and non-transport gaseous fuels      |
|            |through excise and customs tariffs;                    |
|            |the Clean Energy (Fuel Tax Legislation Amendment)      |
|            |Bill 2011, which reduces the business fuel tax credit  |
|            |entitlement of non-exempted industries for their use of|
|            |liquid and gaseous transport fuels, in order to provide|
|            |an effective carbon price on business through the fuel |
|            |tax system; and                                        |
|            |the Clean Energy (Household Assistance Amendments) Bill|
|            |2011, Clean Energy (Tax Laws Amendments) Bill 2011 and |
|            |the Clean Energy (Income Tax Rates Amendments) Bill    |
|            |2011, which will implement the household assistance    |
|            |measures announced by the Government on 10 July 2011.  |
|            |These Bills amend relevant legislation to provide      |
|            |payment increases for pensioners, allowees and family  |
|            |payment recipients and provide income tax cuts and     |
|            |establish new supplements for low and middle-income    |
|            |households.                                            |

This Bill needs to be read in the  context,  in  particular,  of  the  Clean
Energy Bill 2011.

Clean Energy (Household Assistance Amendments) Bill 2011

This Bill delivers on the Government's commitments to low and  middle-income
households to help Australians  adjust  to  a  low  emissions  economy,  and
assist with the cost impacts resulting from a carbon price.  This  household
assistance will provide higher  payments,  equivalent  to  a  1.7  per  cent
increase, to pensioners, veterans, self-funded retirees and families.   This
Bill also  establishes  new  supplements  for  low-income  families,  single
income families and certain households that have significantly  higher  than
average electricity costs due to a medical condition, ageing or disability.

Further household assistance measures made through  amendments  to  the  tax
laws are introduced separately.

Date of effect and application

The provisions in this Bill apply from various dates.  Generally, the  clean
energy advance provisions in the Bill  apply  from  14 May 2012,  with  most
payments being made over the period 14 May  to  30  June  2012.   The  clean
energy supplement provisions  apply  from  2013  after  the  relevant  clean
energy advance period.  Commencement of the whole  Bill  is  dependent  upon
commencement of the new Clean Energy Act 2011.

Proposal announced

The measures are based on the Government's announcement of its Clean  Energy
Future Plan on 10 July 2011 as set out in Securing Australia's clean  energy
future: the Australian Government's climate change plan.


Financial impact statement

The financial impact statement is included  in  the  explanatory  memorandum
for the Clean Energy Bill 2011.


Regulation impact statement

The Regulation Impact Statement  for  the  mechanism,  entitled  Australia's
plan for a clean energy future, is available  at  http://ris.finance.gov.au.
The Regulation Impact Statement was prepared by the  Department  of  Climate
Change and Energy Efficiency and  has  been  assessed  as  adequate  by  the
Office of Best Practice Regulation.


          CLEAN ENERGY (HOUSEHOLD ASSISTANCE AMENDMENTS) BILL 2011



NOTES ON CLAUSES


              Abbreviations used in this explanatory memorandum

    . 'Family Assistance Act' means the A New Tax System (Family Assistance)
      Act 1999


    . 'Family Assistance Administration Act' means  the  A  New  Tax  System
      (Family Assistance) (Administration) Act 1999

    . 'Farm Household Support Act' means the Farm Household Support Act 1992


    . 'FTB' means family tax benefit

    . 'Military Rehabilitation and  Compensation  Act'  means  the  Military
      Rehabilitation and Compensation Act 2004


    . 'Social Security Act' means the Social Security Act 1991


    .  'Social  Security  Administration  Act'  means  the  Social  Security
      (Administration) Act 1999


    . 'Veterans' Entitlements Act' means the Veterans' Entitlements Act 1986


Clause 1 sets out how the new Act is to be cited,  that  is,  as  the  Clean
Energy (Household Assistance Amendments) Act 2011.

Clause 2 provides a table that  sets  out  the  commencement  dates  of  the
various sections in, and Schedules to, the new Act.

Clause 3 provides that each Act that is specified in a Schedule  is  amended
or repealed as set out in that Schedule.

      Schedule 1 - Clean energy payments under the social security law


                                   Summary

The  Clean  Energy  Household  Assistance  Package  will  provide  financial
assistance  through  increased  Government  payments  to  assist   families,
veterans,  allowees,  pensioners,  carers,  and  self-funded  retirees   for
increases in the cost of living arising from the introduction  of  a  carbon
price on 1 July 2012.

The financial  assistance  provided  by  this  Schedule  will  be  delivered
through social security payments that are equivalent to permanent  increases
of 1.7 per cent to the rates of relevant payments.  The amendments  in  this
Schedule provide for assistance to be delivered in a lump sum  clean  energy
advance before commencement of the carbon pricing scheme, paid from  May  to
June 2012.  Ongoing, permanent clean energy supplements will  be  paid  from
the end of  the  clean  energy  advance  lump  sum  period,  as  a  distinct
component of the person's rate of social  security  payment,  in  line  with
regular payment cycles.

                                 Background

Clean energy advances

Part of the Schedule makes amendments to the social security law to  provide
for lump sum clean energy advances payable to people in  receipt  of  social
security payments before the commencement  of  the  carbon  pricing  scheme.
The clean energy advance period will cover a period  of  six  to  18 months,
depending on the type of social security payment received  and  which  clean
energy advance period applies.

Generally, the clean energy  advance  provisions  in  the  Bill  apply  from
14 May 2012, with most payments  being  made  over  the  period  14  May  to
30 June 2012.  The clean energy advance will include:

    . the expected additional Consumer Price Index impact of carbon  pricing
      (0.7 per cent); and


    . an additional increase amount above the Consumer  Price  Index  impact
      (one per cent).

The clean energy advance would  be  paid  in  respect  of  the  period  from
1 July 2012 until  the  normal  payment  indexation  arrangements  begin  to
deliver Consumer Price Index increases  related  to  carbon  pricing.   This
period differs for different social security payments:

    . For pensions (other than disability support pension for people who are
      under 21 and do not have dependent children), seniors  supplement  and
      most  qualified  allowances,  the   period   is   1   July   2012   to
      19 March 2013.  Pensioners (including those paid a  transitional  rate
      as part of the 2009 pension  reforms  but  not  including  pension  PP
      (single) recipients), part-pensioners, seniors  supplement  recipients
      (including self-funded retirees who are eligible  for  a  Commonwealth
      Seniors Health Card) and any social security  recipient  over  pension
      age will all receive the same clean energy advance.


    . For youth allowance, austudy and disability support pension for people
      who are under 21 and do not have dependent children, an initial  clean
      energy advance will cover the entire 2012-13 financial year.


    . For youth allowance, austudy and disability support pension for people
      who are under 21 and do not have dependent children,  a  second  clean
      energy advance will be provided in July 2013, in respect of the period
      1 July 2013 to 31 December 2013, as  Consumer  Price  Index  increases
      would only begin to reflect the impact of  carbon  pricing  for  these
      payments from 1 January 2014.


Clean energy supplements

Once normal indexation begins to deliver Consumer Price Index  increases  in
respect  of  carbon  pricing  for  a  particular  payment,  the   additional
increases  to  social  security  payments  will  be  paid  as  clean  energy
supplements.

Ongoing clean energy supplements will start to be paid from the end  of  the
clean energy advance lump sum period  for  each  payment  type.   The  clean
energy supplements will be a  distinct  component  of  a  person's  rate  of
social security payment, similar to  the  existing  pension  supplement  for
pensioners.  The clean energy supplements will be permanent, and indexed  by
the Consumer Price Index so they maintain their value  in  real  terms  over
time.

People will generally be able to  choose  whether  to  receive  their  clean
energy supplement fortnightly, or as a quarterly payment in  arrears.  Self-
funded retirees with a Commonwealth Seniors Health  Card  will  receive  the
clean energy supplement  quarterly,  in  line  with  the  payment  of  their
seniors supplement.

Indexation

The expected additional impact on  the  Consumer  Price  Index  from  carbon
pricing (0.7 per cent) will be permanently  included  in  the  clean  energy
supplement (plus an additional  one per cent  increase).   Part  4  contains
amendments to the Social Security Act that provide for the  expected  impact
of the carbon price on indexation (0.7 per cent) to be transferred from  the
indexation on maximum basic rate and pension supplement  of  certain  social
security payments to the clean energy supplement.  The  maximum  basic  rate
and the pension supplement will continue to be indexed  in  accordance  with
usual indexation arrangements.  The clean energy  supplement  will  also  be
indexed to maintain its real value over time.

                         Explanation of the changes

Part 1 - Clean energy advance

Division 1 - Main amendment

Amendments to the Social Security Act

Item 1 inserts a new Part 2.18A into Chapter 2 of the  Social  Security  Act
to provide for clean  energy  payments.   New  Part 2.18A  creates  two  new
social security payments, the clean energy  advance  and  the  clean  energy
supplement.  The new Part also sets out the  qualification,  payability  and
rate  rules  for  both  the  clean  energy  advance  and  the  clean  energy
supplement.

Division 1 - Clean energy advances

Subdivision A - Qualifying for clean energy advances

New section 914 sets out the qualification rules for people  in  receipt  of
social  security  payments  (other  than  austudy,   youth   allowance   and
disability support pension for people who are under 21 years of age and  who
do not have a dependent child) for the clean energy advance.

New subsection 914(1) provides that, if, on a day between  14 May  2012  and
30 June  2012,  a  person  receives  one  of  the  payments  listed  in  new
subsection 914(4), they reside  in  Australia,  their  rate  of  payment  is
greater than nil, and they are in Australia,  the  Secretary  may  determine
that the person is qualified for a clean energy advance.

New subsection 914(2) provides that, if, on a day  between  1 July 2012  and
19 March 2013,  a  person  receives  one  of  the  payments  listed  in  new
subsection 914(4), they reside  in  Australia,  their  rate  of  payment  is
greater than nil, and they are in Australia,  the  Secretary  may  determine
that the person is qualified for a clean energy advance.

New subsection 914(3) provides that, if the Secretary makes a  determination
under new subsection 914(2), the determination must specify  the  first  day
on which the person satisfies new paragraphs 914(2)(a), (b)  and  (ba),  and
the  first  day  during  the  period  that  the  person  is  in   Australia,
disregarding any temporary absence that is less than 13 weeks.

These provisions mean that  people  who  are  temporarily  overseas  at  the
commencement of the clean  energy  period  will  receive  the  clean  energy
advance when they return to Australia.  If they have been overseas for  less
than 13 weeks, they will be entitled to the full advance  amount.   However,
if they have been overseas for more than 13 weeks, they will receive a  pro-
rated advance amount, provided that they are an Australian resident.

The social security payments (the clean energy qualifying  payments)  listed
in new subsection 914(4) are:

    . age pension;

    .  benefit  PP  (partnered)  (otherwise  known  as   parenting   payment
      partnered);

    . bereavement allowance;

    . carer payment;

    . disability support pension (other than for a person who  is  under  21
      with no dependent children);

    . newstart allowance;

    . pension PP (single) (otherwise known as parenting payment single);

    . partner allowance;

    . seniors supplement;

    . sickness allowance;

    . special benefit, where the rate of that benefit is worked  out  as  if
      the person were qualified for newstart allowance;

    . widow allowance;

    . widow B pension;

    . wife pension.

New section 914A sets out the qualification rules for people in  receipt  of
austudy, youth allowance, disability support pension for  a  person  who  is
under the age of 21 without a dependent child,  and  special  benefit  where
the rate is determined by reference to youth allowance.

New subsection 914A(1) provides that, if, on a day between 14 May  2012  and
30  June  2012,  a  person  receives  one  of   the   payments   listed   in
subsection 914A(5), they reside in  Australia,  their  rate  of  payment  is
greater than nil, and they are in Australia,  the  Secretary  may  determine
that the person is qualified for a clean energy advance.

New subsection 914A(2) provides that, if, on a day between  1 July 2012  and
30 June 2013,  a  person  receives  one  of  the  payments  listed  in   new
subsection 914A(5), they reside in  Australia,  their  rate  of  payment  is
greater than nil, and they are in Australia,  the  Secretary  may  determine
that the person is qualified for the first clean energy advance.

New subsection 914A(3) provides that, if, on a day between  1 July 2013  and
31 December 2013, a person receives  one  of  the  payments  listed  in  new
subsection 914A(5), they reside in  Australia,  their  rate  of  payment  is
greater than nil, and they are in Australia,  the  Secretary  may  determine
that the person is qualified for the second clean energy advance.

New  subsection 914A(4)  provides   that,   if   the   Secretary   makes   a
determination under new subsections 914A(2) and (3), the determination  must
specify the first day on which the person satisfies new paragraphs (a),  (b)
and (ba) of the relevant subsection, and the first  day  during  the  period
the person is in Australia, disregarding any temporary absence that is  less
than 13 weeks.

The social security payments (the clean energy qualifying  payments)  listed
in new subsection 914A(5) are:

    . austudy payment;

    . disability support pension for a  person  who  is  under  21  with  no
      dependent children;

    . special benefit, where the rate of that benefit is worked  out  as  if
      the person were qualified for austudy payment or youth allowance;

    . youth allowance.

Generally, people receiving a nil rate of social  security  payment  at  the
commencement of the clean energy advance  period  will  not  qualify  for  a
clean energy advance.  People may, however, qualify for  a  pro-rated  clean
energy advance if their rate increases above nil at some  stage  during  the
2012-13 year.

New section 914B provides that, in certain  circumstances,  a  nil  rate  of
social security payment can  be  disregarded  when  determining  a  person's
qualification for a clean energy advance under new section 914 or 914A.

New subsection 914B(1) provides that, if, at the time the Secretary makes  a
determination under new sections 914  or  914A  regarding  qualification,  a
person's rate of clean energy qualifying payment is nil merely because  they
are receiving quarterly pension supplement or because they have received  an
advance of pharmaceutical  allowance,  the  person  is  not  precluded  from
qualifying for a clean energy advance.

New   subsection 914B(2)   provides    that,    for    the    purposes    of
sections 914 and 914A, if a social security payment is taken to  be  payable
to a person because of the operation of  subsection 23(1D),  the  person  is
deemed to have a payment rate that is greater than nil.  This  provision  is
inserted to ensure that people in receipt of Defence  Force  Income  Support
Allowance, who have a nil  rate  of  social  security  payment,  will  still
qualify for a clean energy advance under the social security law.

New section 914C provides that a person will only be able  to  be  paid,  at
most, two clean energy advances.  A person will qualify for only  one  clean
energy  advance  if  they   qualify   under   new   section   914   or   new
subsection 914A(1) or (2), no matter how  many  times  during  the  relevant
clean energy advance period (as  defined  in  subsection 23(1))  the  person
satisfies the qualification criteria.  A person will also only  qualify  for
one clean energy advance if they qualify under  new  subsection 914A(3),  no
matter how many times in the clean energy advance period)  they  meet  those
criteria.  A person may  qualify  for  a  clean  energy  advance  under  new
section 914   or   for   a   first   clean   energy   advance   under    new
subsection 914A(1) or (2) and then a second clean energy advance  under  new
subsection 914A(3).

This section provides that people  who  come  on  and  off  social  security
payments  during  the  2012-13  year  (for  example,  due   to   fluctuating
employment income), will not receive a new clean energy advance  every  time
they come back onto a payment.

As their clean energy supplement will not start until 1 January 2014,  there
are two clean  energy  advance  periods  for  people  in  receipt  of  youth
allowance, austudy or disability support pension for  people  under  21  and
without dependent children.  These people  will  receive  one  clean  energy
advance relating to the period 1 July 2012 to 30  June  2013  and  a  second
advance relating to the period 1 July 2013 to 30 December  2013.   A  person
who receives a clean energy advance for the first period and remains on,  or
transfers to, one of these payment types before or during the  second  clean
energy advance period will receive a second clean energy advance.

Note 1 advises the reader that additional limitations on the  payability  of
clean energy advance may apply as a result of new section 918.

Note 2 at the end of new section 914C  confirms  for  the  reader  the  fact
that, despite the rule against multiple clean  energy  advance  payments,  a
person may qualify for a top-up payment of clean energy advance if there  is
a change in their circumstances during  the  clean  energy  advance  period.
These top-up payments are set out in Subdivision C of the new Part 2.18A.

Subdivision B - Amount of a clean energy advance

New section 914D sets out how a clean energy advance  is  to  be  calculated
for a person, depending on their circumstances  and  the  particular  social
security payment that they receive.

New subsection 914D(1) provides that, when the Secretary determines  that  a
person is qualified for a clean energy advance (on the  decision  day),  the
Secretary must also determine the amount of clean  energy  advance  that  is
payable to the  person  (the  recipient).   The  note  at  the  end  of  new
subsection 914D(1) confirms for the reader that  the  clean  energy  advance
will be paid in a single lump sum  as  soon  as  is  reasonably  practicable
after the decision day, as provided for in new  section 47D  of  the  Social
Security Administration Act.  New section 47D is inserted  into  the  Social
Security Administration Act by item 23 of Schedule 10 to this Bill.

New subsection 914D(2) provides that the amount of the clean energy  advance
will be the clean energy advance daily rate  multiplied  by  the  number  of
advance days rounded up to the nearest  $10.   Clean  energy  advance  daily
rate means the rate as worked out for the person's circumstances  under  new
section 914E and the number of advance days means the number of days  worked
out under new section 914F.

New section 914E sets out the various  methods  of  calculating  a  person's
clean energy advance daily rate.  A  person's  clean  energy  advance  daily
rate will depend on the type of payment that the person receives.

New subsection 914E(1) provides that a person's clean energy  advance  daily
rate is worked  out  in  accordance  with  the  table  at  the  end  of  the
subsection.  The table cross-references the  various  clean  energy  advance
qualifying payments with the relevant subsection of new section 914E,  which
sets out how the clean energy advance daily rate is calculated for a  person
in receipt of that particular payment.

The note at the end of new subsection 914E(1) signposts the  definitions  of
recipient and decision day in new subsection 914D(1).

New subsection 914E(2) sets out the method for calculating the clean  energy
advance daily rate  for  people  in  receipt  of  age  pension,  bereavement
allowance, disability support pension (other than for a person who is  under
21 years and who does not have  a  dependent  child),  wife  pension,  carer
payment, widow B pension, seniors  supplement  and  any  payment  where  the
person is over pension age.  A person's clean energy advance daily  rate  is
worked out by calculating 1.7 per cent of  the  sum  of  twice  the  maximum
basic rate set out in Rate Calculator A for a person who  is  partnered  (as
at 1 July 2012) and the combined couple rate of pension  supplement  (as  at
1 July 2012).  This figure is then rounded up or down to the nearest  $5.20,
rounding up where the result is not a multiple of $5.20 but  is  a  multiple
of $2.60.   An  amount  of  $5.20  is  then  added  to  this  figure,  which
compensates for the lack of indexation  that  would  have  occurred  if  the
clean energy advance was paid as an increase to payments rather  than  as  a
lump sum.

The calculation produces an annual figure for a combined  couple,  which  is
then adjusted to take account of the particular  person's  circumstances  by
applying the percentages in the table at the end  of  new subsection 914E(2)
that correspond with  the  person's  relationship  status.   The  percentage
adjusted figure is then rounded up  or  down  to  the  nearest  multiple  of
$2.60, rounding up if the figure is  not  a  multiple  of  $2.60  but  is  a
multiple of $1.30.  The final figure is an  annual  figure,  which  is  then
divided by 364 to obtain a daily rate.

The reference in subparagraph 914E(2)(a)(i)  to  maximum  basic  rate  under
Pension Rate Calculator A for a person who is partnered  means  the  maximum
basic rate specified in table item 2 of the table at the end of  point 1064-
B1 in Rate Calculator A, as indexed.

The note at the end of new subsection 914E(2) confirms for the  reader  that
the subsection covers payments in Pension  Rate  Calculators  A,  B  and  C,
seniors supplement, recipients of other payments who are  over  pension  age
and people who have  their  rate  of  payment  calculated  by  reference  to
clause 146 of Schedule 1A to the Social Security Act.

New subsection 914E(3) sets out the method for calculating the clean  energy
advance daily rate for people who have not reached pension age  and  are  in
receipt of pension PP (single), or  in  receipt  of  newstart  allowance  or
youth allowance where that person's  rate  is  calculated  by  reference  to
pension PP (single).  A person's clean energy advance daily rate  is  worked
out by calculating 1.7 per cent of the sum of the  maximum  basic  rate  set
out in the Pension PP (Single) Rate Calculator (as at 1 July 2012)  and  the
pension supplement basic amount (as at 1 July 2012).  This  figure  is  then
rounded up or down to the nearest $2.60, rounding up  where  the  result  is
not a multiple of $2.60 but is a multiple of $1.30).  An amount of $5.20  is
then added to this figure to compensate for  the  lack  of  indexation  that
would have occurred if the clean energy advance was paid as an  increase  to
payments rather than as a lump sum.  The final figure is  an  annual  figure
which is then divided by 364 to obtain a daily rate.

New subsection 914E(4) sets out the method for calculating the clean  energy
advance daily rate for people who have not reached pension age  and  are  in
receipt of benefit PP (partnered), newstart allowance,  sickness  allowance,
partner allowance, special benefit related to newstart allowance,  or  widow
allowance.  A person's clean energy advance daily  rate  is  worked  out  by
calculating 1.7 per cent of the maximum basic rate  as  at  1 July 2012  set
out in the relevant rate calculator payable to  the  person  based  on  that
person's particular circumstances.  This figure is then rounded up  or  down
to the nearest 10 cents, rounding up where the result is not a  multiple  of
10 cents but is a multiple of 5 cents.  An amount of 20 cents is then  added
to this figure, which compensates for the  lack  of  indexation  that  would
have occurred if the clean  energy  advance  was  paid  as  an  increase  to
people's payments rather than  as  a  lump  sum.   The  final  figure  is  a
fortnightly figure, which is then divided by 14 to obtain a daily rate.

The reference to 'a person whose circumstances on that day would be or  were
the same as the recipient's circumstances on the advance qualification  day'
in subparagraph 914E(4)(a)(ii) is intended to reflect  the  various  maximum
basic rates that are set out in the different rate  calculators.   The  rate
calculators have  various  maximum  basic  rates  that  apply  to  a  person
depending on their living arrangements, age, relationship status and  length
of time they have  been  in  receipt  of  social  security  payments.   This
paragraph is inserted so that the calculation of  a  person's  clean  energy
advance daily rate is done with reference to the  maximum  basic  rate  that
applies for that person, on that day, taking into account all the  variables
available within the rate calculator.  The different rate  calculators  have
different variables, and consideration must  be  given  to  the  recipient's
circumstances as they are on the  advance  qualification  day  to  determine
which maximum basic rate applies to the recipient.

New subsection 914E(5) sets out the method for calculating the clean  energy
advance daily rate for people in receipt of disability support  pension  for
people who are under 21  years  who  do  not  have  a  dependent  child.   A
person's clean energy advance daily rate is worked out  by  calculating  1.7
per cent of  the  sum  of  the  maximum  basic  rate  and  youth  disability
supplement, as at 1 July 2012, set out in the relevant rate  calculator  and
rounding this figure up or down to the nearest $2.60, rounding up where  the
result is not a multiple of $2.60 but is a multiple of $1.30.  An amount  of
$5.20 is then added to this  figure,  which  compensates  for  the  lack  of
indexation that would have occurred if the clean energy advance was paid  as
an increase to people's payments rather than  as  a  lump  sum.   The  final
figure is an annual figure, which is then divided by 364 to obtain  a  daily
rate.

The reference to 'a person whose circumstances on that day would be or  were
the same as the recipient's circumstances on the advance qualification  day'
in subparagraph 914E(5)(a)(ii) is intended to reflect  the  various  maximum
basic rates that are set out in the different rate  calculators.   The  rate
calculators have  various  maximum  basic  rates  that  apply  to  a  person
depending on their living arrangements, age, and relationship status.   This
paragraph is inserted so that the calculation of  a  person's  clean  energy
advance daily rate is done with reference to the  maximum  basic  rate  that
applies for that person, on that day, taking into account all the  variables
available within the rate calculator.  Consideration must be  given  to  the
recipient's circumstances as they are on the advance  qualification  day  to
determine which maximum basic rate applies to the recipient.

New subsection 914E(6) sets out the method for calculating the clean  energy
advance daily rate for people in receipt  of  youth  allowance  (other  than
those whose rate has youth disability supplement  added  or  whose  rate  is
calculated by  reference  to  pension  PP  (single)),  austudy  and  special
benefit related to youth allowance.  A person's clean energy  advance  daily
rate is worked out by calculating 1.7 per cent of the  maximum  basic  rate,
as at 1 July 2012, set out in the relevant rate  calculator  based  on  that
person's particular circumstances.  This figure is then rounded  up  to  the
nearest 10 cents, rounding up where the result  is  not  a  multiple  of  10
cents but is a multiple of 5 cents.  An amount of 20 cents is then added  to
this figure, which compensates for the lack of indexation  that  would  have
occurred if the clean energy advance was paid as  an  increase  to  payments
rather than as a lump sum.  The final figure is a fortnightly figure,  which
is then divided by 14 to obtain a daily rate.

The reference to 'a person whose circumstances on that day would be or  were
the same as the recipient's circumstances on the advance qualification  day'
in subparagraph 914E(6)(a)(ii) is intended to reflect  the  various  maximum
basic rates that are set out in the different rate  calculators.   The  rate
calculators have  various  maximum  basic  rates  that  apply  to  a  person
depending on their living arrangements, age, relationship status and  length
of time they have  been  in  receipt  of  social  security  payments.   This
paragraph is inserted so that the calculation of  a  person's  clean  energy
advance daily rate is done with reference to the  maximum  basic  rate  that
applies for that person, on that day, taking into account all the  variables
available within the rate calculator.  The different rate  calculators  have
different variables, and consideration must  be  given  to  the  recipient's
circumstances as they are on the  advance  qualification  day  to  determine
which maximum basic rate applies to the recipient.

New subsection 914E(7) sets out the method for calculating the clean  energy
advance daily rate for  people  in  receipt  of  youth  allowance  who  also
receive youth disability supplement.  A person's clean energy advance  daily
rate is worked out by calculating 1.7 per cent of the  sum  of  the  maximum
basic rate and youth disability supplement, as at 1 July 2012,  set  out  in
the  relevant  rate   calculator   based   on   that   person's   particular
circumstances.  This figure is then rounded up  to  the  nearest  10  cents,
rounding up where the result is  not  a  multiple  of  10  cents  but  is  a
multiple of five cents.  An amount  of  20  cents  is  then  added  to  this
figure, which compensates  for  the  lack  of  indexation  that  would  have
occurred if the clean energy advance was paid as  an  increase  to  payments
rather than as a lump sum.  The final figure is a fortnightly figure,  which
is then divided by 14 to obtain a daily rate.

The reference to 'a person whose circumstances on that day would be or  were
the same as the recipient's circumstances on the advance qualification  day'
in subparagraph 914E(7)(a)(ii) is intended to reflect  the  various  maximum
basic rates that are set out in the different rate  calculators.   The  rate
calculators have  various  maximum  basic  rates  that  apply  to  a  person
depending on their living arrangements, age, relationship status and  length
of time they have  been  in  receipt  of  social  security  payments.   This
paragraph is inserted so that the calculation of  a  person's  clean  energy
advance daily rate is done with reference to the  maximum  basic  rate  that
applies for that person, on that day, taking into account all the  variables
available within the rate calculator.  The different rate  calculators  have
different variables, and consideration must  be  given  to  the  recipient's
circumstances as they are on the  advance  qualification  day  to  determine
which maximum basic rate applies to the recipient.

New section 914F sets out how the number of advance days is  worked  out  to
enable the clean energy advance to be calculated.  Where a person  qualifies
for a clean energy advance before 1 July 2012, the number  of  advance  days
is the number of days in the person's clean energy advance period  that  are
on or after 1 July 2012.  Where the person qualifies after 1 July 2012,  the
number of advance days is the number of days remaining in the  clean  energy
advance period on and from the  person's  advance  qualification  day.   The
term advance qualification day is defined by item 2 of this Schedule.

Subdivision C - Top-up payments of clean energy advance

New Subdivision C of new Part 2.18A provides for the Minister to  determine,
by legislative instrument, the circumstances in  which  top-up  payments  of
clean energy advance may be paid to people  where  they  have  a  change  of
circumstances during the clean energy advance period that  would  result  in
the person not being appropriately assisted for  the  anticipated  increased
energy costs.

The operation of this Subdivision will mean that, if the person's change  of
circumstance during the clean energy advance period results in:

    . the person starting to receive a  different  clean  energy  qualifying
      payment that is paid at a higher rate than their previous clean energy
      qualifying payment (for example, a  person  who  moves  from  newstart
      allowance to the age pension if they reach age pension age during 2012-
      13);

    . the person starting  to  receive  the  same  clean  energy  qualifying
      payment at a higher rate (for example, where a person  separates  from
      their partner during the year and moves from  a  partnered  to  single
      rate);

    . the person starting to receive a  different  clean  energy  qualifying
      payment that has a longer clean energy advance  period  (for  example,
      where a person changes from newstart allowance to austudy); or

    . the person not being able to receive the entire advance amount because
      of a multiple entitlement exclusion;

the person will  receive  an  additional  amount  of  clean  energy  advance
equivalent to the difference between the higher and  lower  advance  amounts
for the number of days remaining in the advance period.

This may happen more than once during a clean  energy  advance  period,  and
may result from people switching from, to  or  between  payments  under  the
Social  Security  Act,  Veterans'  Entitlements   Act   and   the   Military
Rehabilitation and Compensation Act.

Due to the numerous and complex interactions between the  relevant  payments
under the Social Security  Act,  Veterans'  Entitlements  Act  and  Military
Rehabilitation and Compensation Act, the circumstances under  which  top-ups
will be payable will be determined by  legislative  instrument.   This  will
reduce the complexity of the legislation, and will optimise the  ability  of
Centrelink  to  provide  timely  top-up  payments  for  a  wide   range   of
circumstances.  The legislative instrument will be made in writing,  by  the
Minister and will be subject to disallowance by the Parliament.

The terms entitled, entitlement, qualified and qualification  for  (and  any
variation of those words) used in new section 914G  are  intended  to  cover
the differing words used in the various Acts to express when  an  individual
meets the criteria for a clean energy advance  or  a  top-up  payment.   The
terms  are  not  intended  to  limit  the   authority   set   out   in   new
subsection 914G(1) only to those cases where  an  Act  or  scheme  specifies
that a person is 'entitled' to, or 'qualified' for, a clean  energy  advance
or top-up payment.  It is intended that  the  words  entitled,  entitlement,
qualified and qualification (or any variation of those words) used  in  this
section are to be given their ordinary and plain English meaning.

Division 5 - Multiple qualification exclusions

Division 5 of new Part 2.18A, containing new section  918,  provides  for  a
legislative instrument-making power to ensure that the clean energy  advance
is only paid to people who ought to receive it.  It  provides  the  Minister
with the ability to specify that people are not  able  to  receive  a  clean
energy bonus under the social security law if they have already  received  a
clean  energy  bonus  under  other  legislation,  such  as   the   Veterans'
Entitlements Act, or under an administrative scheme such as ABSTUDY.   Clean
energy bonus is defined by new subsection 918(3), mentioned below.

A definition of clean energy bonus is inserted into section 23(1) by item  2
below as any payment under any Act or scheme  that  uses  the  words  'clean
energy'.  This will include  the  clean  energy  advance  and  clean  energy
supplement.

For example, a person who  switches  from  a  payment  under  the  Veterans'
Entitlements Act to a payment under the Social Security  Act  would  qualify
for a further clean energy advance that would cover the  same  clean  energy
advance period.  This may  result  in  the  person  receiving  much  greater
assistance than is necessary.  It would be more appropriate to provide  this
person with a top-up payment rather than a further clean energy advance.

Similarly, a person who receives a clean energy  advance  because  they  are
receiving ABSTUDY (which is an administrative scheme and not  a  legislative
payment) and who switches to newstart  allowance  during  the  clean  energy
advance period, would qualify for a new  clean  energy  advance.   This  may
result in the person receiving much greater assistance  than  is  necessary.
It would be more appropriate to provide this person with  a  top-up  payment
rather than a further clean energy advance.

Additionally, there are some people who  may  receive  payments  under  more
than one Act and, if they receive a clean energy supplement under more  than
one Act, they may receive much greater assistance than is necessary.

Due to the numerous and complex interactions between the payments under  the
various Acts and schemes, the  circumstances  under  which  a  clean  energy
bonus will not be payable to a person  will  be  determined  by  legislative
instrument.

New subsection 918(1) provides that the  Minister  may  determine  that,  in
certain circumstances, people are not  entitled  to  a  clean  energy  bonus
under the social security law.

New subsection 918(2) provides that  the  circumstances  determined  by  the
Minister under subsection 918(1) must relate to a person's  entitlement  to,
or receipt of, one or more of the following payments:

   a) a clean energy bonus under the Social Security Act;

   b)  a  clean  energy  bonus  under  the   Military   Rehabilitation   and
      Compensation Act;

   c) a clean energy bonus under the Veterans' Entitlements Act;

   d) a clean energy bonus under a scheme (however  described),  whether  or
      not the scheme is provided for, by, or under an Act.


The terms qualified and  qualification  for  (and  any  variation  of  those
words) used in section 918 are intended to cover the  differing  words  used
in the various Acts to express when an individual meets the criteria  for  a
clean energy bonus.  The terms are not intended to limit the  authority  set
out in subsections 918(1) and (2) to  only  those  cases  where  an  Act  or
scheme specifies that a person is 'entitled' to a clean  energy  bonus.   It
is the intention that the words qualified and  qualification  for  (and  any
variation of those words) used  in  this  section  are  to  be  given  their
ordinary and plain English meaning.

New subsection 918(3) provides that any instrument made in  accordance  with
subsection 918(1) is to have effect according to its terms, irrespective  of
any other provision within the Social Security Act.

Division 2 - Other amendments

Amendments to the Social Security Act

Items  2,  3,  4,  5,  6,  7,  8  and  9   insert   new   definitions   into
subsection 23(1) of the Social Security Act.

Advance qualification day for a person who  qualifies  for  a  clean  energy
advance before 1 July 2012 means the day the determination is made.   For  a
person who qualifies after 1 July 2012, the advance qualification  day  will
be the day specified in the determination.  The  note  at  the  end  of  the
definition of advance qualification day confirms for  the  reader  that  the
advance qualification day for a person who qualifies after 1 July 2012  will
be the day the person first meets all the qualification criteria,  and  that
temporary absences from Australia (absences of less than 13 weeks)  will  be
disregarded for the purpose of determining qualification.

Clean energy advance means the lump sum payment that is calculated  for  the
person by applying the rules set out in Subdivisions A and C of  Division  1
of new Part 2.18A, which is inserted by item 1.

Clean energy advance daily rate means the rate calculated for the person  by
virtue of new section 914E.

There are three different clean  energy  advance  periods,  depending  on  a
person's circumstances.  The clean  energy  advance  period  for  people  in
receipt of social security payment, other than austudy, youth  allowance  or
disability support pension for a person who is under 21  with  no  dependent
children,  means  the  period  starting  on  1 July 2012   and   ending   on
19 March 2013.  For  people  in  receipt  of  austudy,  youth  allowance  or
disability support pension for a person who is under  21  without  dependent
children, there are two different clean energy advance periods.   The  first
commences on 1 July 2012 and ends on 30 June 2013, and the second  commences
on 1 July 2013 and ends on 31 December 2013.

Clean energy bonus is defined  as  any  payment  known  as  a  clean  energy
advance, or any increase, using the words  'clean  energy',  to  a  person's
rate of payment paid under either the Social Security Act, or any other  Act
or scheme administered by the Commonwealth.

A clean energy payment will include a clean energy advance.

A person's  clean  energy  qualifying  payment  means  the  social  security
payments listed in  new  subsections 914(4)  and  914A(5).   A  person  must
receive one of these payments on the advance qualification  day  to  qualify
for a clean energy advance.  The particular clean energy qualifying  payment
that a person receives will determine  the  person's  clean  energy  advance
period.

The number of advance days means the number of days remaining in  the  clean
energy period as determined in new section 914F.

Item 10 inserts a new section 1224 into Part 5.2 of Chapter 5 of the  Social
Security Act.  This new provision sets out when a clean energy advance is  a
debt to the Commonwealth.  In broad terms, a debt  would  only  arise  where
some or all of the clean energy qualifying  payment  was  incorrectly  paid,
and therefore some or all of the clean energy advance was incorrectly  paid,
because  a  relevant  individual  knowingly  made  a  false  or   misleading
statement or knowingly provided false or misleading  information.   This  is
similar to the debt rules for  the  economic  stimulus  payments  that  were
linked to certain social security payments in relation to  14 October  2008.
The relevant rules are set out in new subsections 1224(1), (2) and (3).

Where an individual is paid a clean energy advance, a low income  supplement
or an essential medical equipment payment because of  a  determination  made
under Part 3 of the Social Security Administration  Act,  the  determination
is  later  changed,  revoked,   set   aside   or   superseded   by   another
determination, and a reason for the determination needing to be changed  was
that a relevant individual knowingly made a false  or  misleading  statement
or knowingly provided false or misleading information, and  if,  apart  from
that statement or information, the payment would not have  been  paid,  then
the amount of the payment made is a debt.  The relevant rules  are  set  out
in new subsections 1224(1), (2) and (3).

New subsection 1224(4) states that, with the exception of section 1224AA  of
the Social Security Act (relating to misdirected cheques), other  provisions
in relation to the raising of social security debts do not  apply  to  clean
energy advances.

Amendments to the Social Security Administration Act

Item 11 inserts a new section 12K into the  Social  Security  Administration
Act to confirm that a person does not need to make a specific  claim  for  a
clean energy advance, and advances will be paid automatically  to  qualified
people.  Qualification for a clean energy  advance  depends  on  a  person's
circumstances and is based on information  that  is  already  known  to  the
Secretary.

Part 2 - Clean energy supplement

Division 1 - Supplement payable from 20 March 2013

Amendments to the Social Security Act

Item 12 inserts a new  section 20B  into  the  Social  Security  Act,  which
establishes the clean energy pension rate.  The clean  energy  pension  rate
is worked out by calculating 1.7 per cent of the total of twice the  maximum
basic rate under Pension Rate Calculator A for a  person  who  is  partnered
and the combined couple rate of pension supplement (as at  20  March  2013),
and rounding the result  up  or  down  to  the  nearest  multiple  of  $5.20
(rounding up if the result is not a multiple of $5.20 but is a  multiple  of
$2.60).

The reference to the maximum basic rate under Pension Rate Calculator A  for
a person who is partnered means the amount  set  out  at  table  item  2  in
Table B - maximum basic rates at the end of point 1064-B1  in  Module  B  as
indexed.

Note 1 at the end of new section 20B confirms for the reader that this  rate
will be  indexed  every  six  months  in  line  with  Consumer  Price  Index
increases as set out in sections 1191 to 1194.  Note 2 at  the  end  of  new
section 20B confirms that the clean energy pension rate is an annual rate.

Items 13, 14, 15 and 16 insert  definitions  into  subsection 23(1)  of  the
Social Security Act.

Clean energy pension rate means the rate  established  by  new  section 20B,
inserted by item 12 above.

Clean energy supplement for a  person  means  the  amount  of  clean  energy
supplement that is added to a person's rate  of  payment  according  to  the
relevant rate  calculator  for  that  person's  particular  social  security
payment.

Clean energy (under pension age) rate means the clean energy (under  pension
age)  rate  calculated  for  a  person  under  the  relevant  clean   energy
supplement Module of the person's rate calculator for  the  person's  social
security payment.

Clean energy (youth disability) rate means the rate calculated for a  person
under point 1067G-BA6 of the Youth Allowance Rate Calculator.

Item 17 repeals section 1061UB  and  substitutes  a  new  section 1061UB  to
provide for a new rate of seniors supplement, which includes a component  of
clean energy supplement equal to the rate of clean  energy  supplement  that
the person would have received if they were in receipt of age pension.

A person's daily rate of seniors supplement is calculated as follows:

   Step 1:  apply the applicable percentage in the table at the end  of  the
           section  to  the  combined  couple  rate  of   minimum   pension
           supplement;

   Step 2:  round the result of step 1 up or down to the nearest $2.60;

   Step 3:  work out the clean energy pension rate that  would  apply  to  a
           person if that person were receiving age pension and  apply  the
           applicable percentage in the table at the end of this section;

   Step 4:  round the result of step 3 up or down to the nearest $2.60;

   Step 5:  add the results of step 2 and step 4;

   Step 6:  divide the result of step 5 by 364 to calculate the daily rate.

Note 1 at the end of new section 1061UB is inserted to direct the reader  to
the definition of combined couple rate  of  minimum  pension  supplement  in
subsection 20A(2) of the Social Security Act.  Note 2  at  the  end  of  new
section 1061UB is inserted to direct the reader to the definition  of  clean
energy pension rate in new section 20B.

Item 18 inserts a new step 1B into the method  statement  immediately  after
step 1A at point 1064-A1, and item 19 inserts into  step  4  of  the  method
statement a reference to the new step 1B.  New step 1B provides for a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by Pension Rate Calculator A.

Item 20 inserts a new module C into Pension Rate Calculator  A,  which  sets
out how a person's clean energy supplement is to be calculated.

Point 1064-C1 provides that a clean energy supplement is to be  added  to  a
person's rate of pension if the person is in Australia,  or  is  temporarily
absent from Australia for a period of no more than 13 weeks.

Point 1064-C2 provides that the clean  energy  supplement  module  does  not
apply if the person has elected to receive  their  clean  energy  supplement
quarterly.

Point 1064-C3 provides that a person's clean  energy  supplement  is  worked
out by applying the percentage table at the  end  of  point 1064-C3  to  the
clean energy pension rate and rounding the result up or down to the  nearest
$2.60 (rounding up where the result is not a multiple  of  $2.60  but  is  a
multiple of $1.30).

The application of the percentage table at the end of the point  means  that
a person who is not a member of a couple receives an amount of clean  energy
supplement that is 66.33 per cent of the  clean  energy  pension  rate,  and
that a person who is partnered receives a clean energy  supplement  that  is
50 per cent of the clean energy pension rate.   Members  of  an  illness  or
respite care separated couple, or a person whose partner is  in  gaol,  will
receive a clean energy supplement that  is  66.33  per  cent  of  the  clean
energy pension rate (that is, the same rate as a single person).

The note at the end of  point 1064-C3  signposts  the  definition  of  clean
energy pension rate in new section 20B.

Item 21 inserts a new step 3 into the  method  statement  immediately  after
step 2A at point 1065-A1 and item 22 inserts  into  step  4  of  the  method
statement a reference to the new step 3.  New step 3 provides  for  a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by Pension Rate Calculator B.

Item 23 inserts a new module C into Pension Rate Calculator  B,  which  sets
out how a person's clean energy supplement is to be calculated.

Point 1065-C1 provides that a clean energy supplement is to be  added  to  a
person's rate of pension if the person is in Australia,  or  is  temporarily
absent from Australia for a period of no more than 13 weeks.

Point 1065-C2 provides that the clean  energy  supplement  module  does  not
apply if the person has elected to receive  their  clean  energy  supplement
quarterly.

Point 1065-C3 provides that a person's clean  energy  supplement  is  worked
out by applying the percentage table at the  end  of  point 1065-C3  to  the
clean energy pension rate and rounding the result up or down to the  nearest
$2.60 (rounding up where the result is not a multiple  of  $2.60  but  is  a
multiple of $1.30).

The application of the percentage table at the end of the point  means  that
a person who is not a member of a couple receives an amount of clean  energy
supplement that is 66.33 per cent of the  clean  energy  pension  rate,  and
that a person who is partnered receives a clean energy  supplement  that  is
50 per cent of the clean energy pension rate.   Members  of  an  illness  or
respite care separated couple, or a person whose partner is  in  gaol,  will
receive a clean energy supplement that 66.33 per cent of  the  clean  energy
pension rate (that is, the same rate as a single person).

The note at the end of  point 1065-C3  signposts  the  definition  of  clean
energy pension rate in new section 20B.

Item 24 inserts a new step 2 into the  method  statement  immediately  after
step 1A at point 1066-A1 and item 25 inserts  into  step  4  of  the  method
statement a reference to the new step 2.  New step 2 provides  for  a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by Pension Rate Calculator C.

Item 26 inserts a new module C into Pension Rate Calculator  C,  which  sets
out how a person's clean energy supplement is to be calculated.

Point 1066-C1 provides that a clean energy supplement is to be  added  to  a
person's rate of pension if the person is in Australia,  or  is  temporarily
absent from Australia for a period of no more than 13 weeks.

Point 1066-C2 provides that a person's clean  energy  supplement  is  worked
out by applying the percentage table at the  end  of  point 1066-C2  to  the
clean energy pension rate and rounding the result up or down to the  nearest
$2.60 (rounding up where the result is not a multiple  of  $2.60  but  is  a
multiple of $1.30).

The application of the percentage table at the end of the point  means  that
a person who is not a member of a couple receives an amount of clean  energy
supplement that is 66.33 per cent of the  clean  energy  pension  rate,  and
that a person who is partnered receives a clean energy  supplement  that  is
50 per cent of the clean energy pension rate.   Members  of  an  illness  or
respite care separated couple, or a person whose partner is  in  gaol,  will
receive a clean energy supplement that  is  66.33  per  cent  of  the  clean
energy pension rate (that is, the same rate as a single person).  As  people
who are in receipt of bereavement  allowance  or  widow  allowance  are  not
members of a couple, their rate of clean energy  supplement  will  be  66.33
per cent of the rate that two members of a couple would receive.

The note at the end of  point 1066-C2  signposts  the  definition  of  clean
energy pension rate in new section 20B.

Item 27 inserts a new step 1B into the method  statement  immediately  after
step 1A  at  point 1068-A1.   New  step  1B  provides  for  a  clean  energy
supplement to be added to a  person's  rate  of  payment  as  calculated  by
Benefit Rate Calculator B.

Item 28 inserts a new module C into Benefit Rate Calculator  B,  which  sets
out how a person's clean energy supplement is to be calculated.

Point 1068-C1 provides that a clean energy supplement is to be  added  to  a
person's rate of benefit if the person is in Australia,  or  is  temporarily
absent from Australia for a period of no more than 13 weeks.  New  module  C
will not apply to the calculation of a  person's  rate  if  that  person  is
receiving quarterly clean energy supplement.

Point 1068-C2 provides that, if a  person  has  reached  pension  age,  then
their clean energy supplement will be 1/26  of  the  amount  worked  out  by
applying the percentage table at the end of the point to  the  clean  energy
pension rate and rounding the result up or down to the nearest  multiple  of
$2.60 (rounding up if the result is  not  a  multiple  of  $2.60  but  is  a
multiple of $1.30).

The note at the end of new point 1068-C2 signposts the definition  of  clean
energy pension rate in new section 20B.

New point 1068-C3 provides that, if a person has not  reached  pension  age,
the person's clean energy supplement is the  person's  clean  energy  (under
pension age) rate as provided for in new point 1068-C4 below.

New point 1068-C4 provides that a person's clean energy (under pension  age)
rate is worked out by calculating 1.7 per cent of  the  maximum  basic  rate
that  applies  for  that  particular  person's   living   circumstances   on
20 March 2013, rounded up or down  to  the  nearest  multiple  of  10  cents
(rounding up where the result is not  a  multiple  of  10  cents  but  is  a
multiple of five cents).

The note at the end of  point 1068-C4  confirms  for  the  reader  that  the
various rates of clean energy supplement worked out under this  module  will
be indexed each six months in line with the Consumer  Price  Index,  as  set
out in sections 1191 to 1194.

The reference to 'a person whose circumstances on that day were the same  as
the recipient's current circumstances' in paragraph 1068-C4(a)  is  intended
to reflect the various maximum basic rates that are  set  out  in  the  rate
calculator.  The rate calculator has various maximum basic rates that  apply
to a person  depending  on  their  living  arrangements,  age,  relationship
status and length of time they have  been  in  receipt  of  social  security
payments.  This paragraph is inserted so that the calculation of a  person's
clean energy supplement is done with reference to  the  maximum  basic  rate
that applies for that person, on that  day,  taking  into  account  all  the
variables available within  the  rate  calculator.   Consideration  must  be
given to the recipient's circumstances as they are on the particular day  to
determine which maximum basic rate applies to the recipient.

Item 29 inserts a new step 1B into the method  statement  immediately  after
step 1A at point 1068A-A1, and item 30 inserts into step  4  of  the  method
statement a reference to the new step 1B.  New step 1B provides for a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by Pension PP (Single) Rate Calculator.

Item 31 inserts a new module BB into Pension PP  (Single)  Rate  Calculator,
which sets out how a person's clean energy supplement is to be calculated.

New point 1068A-BB1 provides that a clean energy supplement is to  be  added
to a person's rate  of  pension  if  the  person  is  in  Australia,  or  is
temporarily absent from Australia for a period of no  more  than  13  weeks.
New module BB will not apply to the calculation of a person's rate  if  that
person is receiving quarterly clean energy supplement.

Point 1068A-BB2 provides that, if a person has  reached  pension  age,  then
their clean energy supplement will be the amount worked out by applying  the
percentage table at the end of the point to the clean  energy  pension  rate
and rounding the result  up  or  down  to  the  nearest  multiple  of  $2.60
(rounding up if the result is not a multiple of $2.60 but is a  multiple  of
$1.30).

The note at the end of  new  point 1068A-BB2  signposts  the  definition  of
clean energy pension rate in new section 20B.

New point 1068A-BB3 provides that, if a person has not reached pension  age,
the person's clean energy supplement is the  person's  clean  energy  (under
pension age) rate as provided for in new point 1068A-BB4 below.

New point 1068A-BB4 provides that a person's  clean  energy  (under  pension
age) rate is worked out by calculating  1.7  per cent  of  the  sum  of  the
maximum basic rate and the pension  supplement  basic  amount  on  20  March
2013, rounded up or down to the nearest multiple of 10  cents  (rounding  up
where the result is not a multiple of 10 cents but is  a  multiple  of  five
cents).

The note at the end of point 1068A-BB4 confirms  for  the  reader  that  the
various rates of clean energy supplement worked out under this  module  will
be indexed each six months in line with the Consumer  Price  Index,  as  set
out in sections 1191 to 1194.

Item 32 inserts a new step 2B into the method  statement  immediately  after
step 2A at point 1068B-A2, and item 33  inserts  a  new  step  2B  into  the
method statement immediately after step 2A at point 1068B-A3.  New  step  2B
provides for a clean energy supplement to be added to  a  person's  rate  of
payment as calculated by Benefit PP (Partnered) Rate Calculator.

Item  34  inserts  a  new  module  DB  into  Benefit  PP  (Partnered)   Rate
Calculator, which sets out how a person's clean energy supplement is  to  be
calculated.

New point 1068B-DB1 provides that a clean energy supplement is to  be  added
to a person's rate  of  benefit  if  the  person  is  in  Australia,  or  is
temporarily absent from Australia for a period of no  more  than  13  weeks.
New module DB will not apply to the calculation of a person's rate  if  that
person is receiving quarterly clean energy supplement.

Point 1068B-DB2 provides that, if a person  has  reached  pension  age  then
their clean energy supplement will be 1/26  of  the  amount  worked  out  by
applying the percentage table at the end of the point to  the  clean  energy
pension rate and rounding the result up or down to the nearest  multiple  of
$2.60 (rounding up if the result is  not  a  multiple  of  $2.60  but  is  a
multiple of $1.30).

The note at the end of  new  point 1068B-DB2  signposts  the  definition  of
clean energy pension rate in new section 20B.

New point 1068B-DB3 provides that, if a person has not reached pension  age,
the person's clean energy supplement is the  person's  clean  energy  (under
pension age) rate as provided for in new point 1068B-DB4 below.

New point 1068B-DB4 provides that a person's  clean  energy  (under  pension
age) rate is worked out by calculating 1.7 per cent  of  the  maximum  basic
rate that applies for a  person's  particular  living  circumstances  on  20
March 2013, rounded  up  or  down  to  the  nearest  multiple  of  10  cents
(rounding up where the result is not  a  multiple  of  10  cents  but  is  a
multiple of five cents).

The note at the end of point 1068B-DB4 confirms  for  the  reader  that  the
various rates of clean energy supplement worked out under this  module  will
be indexed each six months in line with the Consumer  Price  Index,  as  set
out in sections 1191 to 1194.

The reference to 'a person whose circumstances on that day were the same  as
the recipient's current circumstances' in  subparagraph 1068B-DB4(a)(ii)  is
intended to reflect the various maximum basic rates that are set out in  the
rate calculator.  The rate calculator has various maximum basic  rates  that
apply to a person depending on their relationship  status.   This  paragraph
is inserted so that the calculation of a person's  clean  energy  supplement
is done with reference to the maximum  basic  rate  that  applies  for  that
person, on that day, taking into account all the variables available  within
the rate  calculator.   Consideration  must  be  given  to  the  recipient's
circumstances as they are on the particular day to determine  which  maximum
basic rate applies to the recipient.

Item    35    inserts    a    new    subparagraph    146(4)(a)(ia)     after
subparagraph 146(4)(a)(i) of Schedule 1A.   The  new  subparagraph  provides
that  the  provisional  annual  payment  rate  that  is   calculated   under
subclause 146(4)  is  to  include  a  clean  energy  supplement  amount   as
determined by new subclause 149(5), which is inserted by item 36 below.

Item  36  inserts   a   new   subclause   149(5)   after   subclause 149(4).
New subclause 149(5)  provides  that,  if  subclauses 147(1)  or   (2)   are
relevant to the calculation of a person's rate of payment,  then  an  amount
of clean energy supplement is to be added to the person's rate  of  payment.
The amount of clean energy supplement is to be calculated  by  reference  to
Module C of Pension Rate Calculator A as if the  person's  rate  of  payment
were calculated using that rate calculator.  It is intended  that  a  person
to whom clause 146 of Schedule 1A applies will  receive  the  same  rate  of
clean energy supplement as a person whose rate is calculated  under  Pension
Rate Calculator A.

Note 1  at  the  end  of  subclause 149(5)  confirms  that  a  clean  energy
supplement is to be added to a person's total rate of payment calculated  by
reference to paragraph 146(4)(a).

Note 2 at the end of subclause 149(5) confirms for the reader that  Division
2 of the new Part 2.18A in relation to quarterly clean energy supplement  is
to apply to a person to whom clause 146  applies.   That  is,  if  a  person
elects to receive their clean energy supplement on a quarterly  basis,  then
clean energy supplement is not to be  included  in  a  person's  fortnightly
instalment of pension.

Note 3 at the end of subclause 149(5) confirms that the order  of  reduction
in section 1210 is to  apply  to  a  person's  rate  of  pension,  and  that
section 43 of the Social Security Administration Act will also  apply.   The
effect of these two provisions for people to  whom  clause  146  applies  is
that, if their rate of pension would be reduced because of  the  application
of the income or assets test such that they  would  receive  less  than  the
full amount of clean energy supplement but more than zero, then the rate  of
clean energy supplement will be increased to the full amount.

Amendments to the Social Security Administration Act

Item 37 repeals subsection 48B(3) and substitutes a  new  subsection 48B(3).
New  subsection 48B(3)  provides  that  a  person's  instalment  of  seniors
supplement is worked out by calculating a daily rate for  each  day  in  the
test period that the person qualified for the payment  and  adding  all  the
qualifying days together to arrive at an instalment amount.

Division 2 - Supplement payable from 1 January 2014

Amendments to the Social Security Act

Item 38 inserts a new step 1A into the method  statement  immediately  after
step 1 at point 1066A-A1, and item 39 inserts into  step  5  of  the  method
statement a reference to the new step 1A.  New step 1A provides for a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by Pension Rate Calculator D for people in  receipt  of  disability  support
pension who are under 21 and who do not have a dependent child.

Item 40 inserts a new module BA into Pension Rate Calculator D,  which  sets
out how a person's clean energy supplement is to be calculated.

New point 1066A-BA1 provides that a clean energy supplement is to  be  added
to a person's rate  of  pension  if  the  person  is  in  Australia,  or  is
temporarily absent from Australia for a period of no  more  than  13  weeks.
New module BA will not apply to the calculation of a person's rate  if  that
person is receiving quarterly clean energy supplement.

New  point 1066A-BA2  provides  that  a  person's  rate  of   clean   energy
supplement is their clean energy (under pension age) rate as worked  out  by
new point 1066A-BA3 below.

New  point 1066A-BA3  provides  that  the  annual  clean  energy   rate   is
1.7 per cent of the sum  of  the  person's  maximum  basic  rate  and  youth
disability supplement, worked out for 1 January 2014, rounded up or down  to
the nearest $2.60 (rounding up where the amount is not a multiple  of  $2.60
but is a multiple of $1.30).  The  maximum  basic  rate  that  applies  will
depend on the person's circumstances as at 1 January 2014.

The note inserted at the end of point 1066A-BA3  is  to  advise  the  reader
that the clean energy rate is to be indexed every 12  months  in  accordance
with Consumer Price Index increases.  This is provided for in  sections 1191
to 1194 of the Social Security Act.

The reference to 'a person whose circumstances on that day were the same  as
the recipient's current circumstances' in  subparagraph 1066A-BA3(a)(ii)  is
intended to reflect the various maximum basic rates that are set out in  the
rate calculator.  The rate calculator has various maximum basic  rates  that
apply to a person depending on their living arrangements, age,  relationship
status and length of time they have  been  in  receipt  of  social  security
payments.  This paragraph is inserted so that the calculation of a  person's
clean energy supplement is done with reference to  the  maximum  basic  rate
that applies for that person, on that  day,  taking  into  account  all  the
variables available within  the  rate  calculator.   Consideration  must  be
given to the recipient's circumstances as they are on the particular day  to
determine which maximum basic rate applies to the recipient.

Item 41 inserts a new step 2A into the method  statement  immediately  after
step 2 at point 1066B-A1, and item 42 inserts into  step  5  of  the  method
statement a reference to the new step 2A.  New step 2A provides for a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by Pension Rate Calculator E for people in  receipt  of  disability  support
pension who are blind, under 21 and who do not have a dependent child.

Item 43 inserts a new module BA into Pension Rate Calculator E,  which  sets
out how a person's clean energy supplement is to be calculated.

New point 1066B-BA1 provides that a clean energy supplement is to  be  added
to a person's rate  of  pension  if  the  person  is  in  Australia,  or  is
temporarily absent from Australia for a period of no  more  than  13  weeks.
New module BA will not apply to the calculation of a person's rate  if  that
person is receiving quarterly clean energy supplement.

New  point 1066B-BA2  provides  that  a  person's  rate  of   clean   energy
supplement is their clean energy (under pension age) rate as worked  out  by
new point 1066B-BA3 below.

New  point 1066B-BA3  provides  that  the  annual  clean  energy   rate   is
1.7 per cent of the sum  of  the  person's  maximum  basic  rate  and  youth
disability supplement, worked out for 1 January 2014, rounded up or down  to
the nearest $2.60 (rounding up where the amount is not a multiple  of  $2.60
but is a multiple of $1.30).  The  maximum  basic  rate  that  applies  will
depend on the person's circumstances as at 1 January 2014.

The note inserted at the end of point 1066B-BA3  is  to  advise  the  reader
that the clean energy rate is to be indexed every 12  months  in  accordance
with Consumer Price Index increases.  This is provided for in  sections 1191
to 1194 of the Social Security Act.

The reference to 'a person whose circumstances on that day were the same  as
the recipient's current circumstances' in  subparagraph 1066B-BA3(a)(ii)  is
intended to reflect the various maximum basic rates that are set out in  the
rate calculator.  The rate calculator has various maximum basic  rates  that
apply to a person depending on their living arrangements, age,  relationship
status and length of time they have  been  in  receipt  of  social  security
payments.  This paragraph is inserted so that the calculation of a  person's
clean energy supplement is done with reference to  the  maximum  basic  rate
that applies for that person, on that  day,  taking  into  account  all  the
variables available within  the  rate  calculator.   Consideration  must  be
given to the recipient's circumstances as they are on the particular day  to
determine which maximum basic rate applies to the recipient.

Item 44 inserts a new step 1A into the method  statement  immediately  after
step 1  at  point 1067G-A1.   New  step  1A  provides  for  a  clean  energy
supplement to be added to a person's rate of payment as  calculated  by  the
Youth Allowance Rate Calculator.

Item 45 inserts a new module BA into Pension Rate Calculator E,  which  sets
out how a person's clean energy supplement is to be calculated.

New point 1067G-BA1 provides that a clean energy supplement is to  be  added
to a person's rate  of  benefit  if  the  person  is  in  Australia,  or  is
temporarily absent from Australia for a period of no  more  than  13  weeks.
New module BA will not apply to the calculation of a person's rate  if  that
person is receiving quarterly clean energy supplement.

New  point 1067G-BA2  provides  that  a  person's  rate  of   clean   energy
supplement is their clean energy (under pension age) rate as worked  out  by
new point 1066B-BA3 below.

New  point 1067G-BA3  provides  that  the  annual  clean  energy   rate   is
1.7 per cent  of  the  person's  maximum  basic   rate,   worked   out   for
1 January 2014,  that  applies  depending  on  the  person's   circumstances
rounded up or down to the nearest 10 cents (rounding up where the amount  is
not a multiple of 10 cents but is a multiple of five cents).

The note inserted at the end of point 1067G-BA3  is  to  advise  the  reader
that the clean energy rate is to be indexed every 12  months  in  accordance
with Consumer Price Index increases.  This is provided for in  sections 1191
to 1194 of the Social Security Act.

The reference to 'a person whose circumstances on that day were the same  as
the recipient's current circumstances' in  subparagraph 1067G-BA3(a)(ii)  is
intended to reflect the various maximum basic rates that are set out in  the
rate calculator.  The rate calculator has various maximum basic  rates  that
apply to a person depending on their living arrangements, age,  relationship
status and length of time they have  been  in  receipt  of  social  security
payments.  This paragraph is inserted so that the calculation of a  person's
clean energy supplement is done with reference to  the  maximum  basic  rate
that applies for that person, on that  day,  taking  into  account  all  the
variables available within  the  rate  calculator.   Consideration  must  be
given to the recipient's circumstances as they are on the particular day  to
determine which maximum basic rate applies to the recipient.

New point 1067G-BA4 provides that, if  a  person's  maximum  basic  rate  of
youth allowance is worked out by reference to the pension PP (single)  rate,
their clean energy supplement is to be worked out under  Module  BB  of  the
Pension PP (Single) Rate Calculator.

New point 1067G-BA5 provides that, if youth disability supplement  is  added
to a person's rate of payment, their rate of clean energy supplement  is  to
be worked out by point 1067G-BA6 below.

New  point  1067G-BA6  provides  that  a  person's  rate  of  clean   energy
supplement is 1.7 per cent of the sum of the  relevant  maximum  basic  rate
and youth disability supplement, rounded  to  the  nearest  multiple  of  10
cents (rounding up where the result is not a multiple of 10 cents but  is  a
multiple of five cents).

Item 46 inserts a new step 1B into the method  statement  immediately  after
step 1A at point 1067L-A1, and item 47 inserts into step  5  of  the  method
statement a reference to the new step 1B.  New step 1B provides for a  clean
energy supplement to be added to a person's rate of  payment  as  calculated
by the Austudy Rate Calculator.

Item 48 inserts a new module BB into Austudy  Rate  Calculator,  which  sets
out how a person's clean energy supplement is to be calculated.

New point 1067L-BB1 provides that a clean energy supplement is to  be  added
to a person's rate  of  benefit  if  the  person  is  in  Australia,  or  is
temporarily absent from Australia for a period of no  more  than  13  weeks.
New module BB will not apply to the calculation of a person's rate  if  that
person is receiving quarterly clean energy supplement.

Point 1067L-BB2 provides that, if a person has  reached  pension  age,  then
their clean energy supplement will be 1/26  of  the  amount  worked  out  by
applying the percentage table at the end of the point to  the  clean  energy
pension rate and rounding the result up or down to the nearest  multiple  of
$2.60 (rounding up if the result is  not  a  multiple  of  $2.60  but  is  a
multiple of $1.30).

The note at the end of  new  point 1067L-BB2  signposts  the  definition  of
clean energy pension rate in new section 20B.

New point 1067L-BB3 provides that, if a person has not reached pension  age,
the person's clean energy supplement is the  person's  clean  energy  (under
pension age) rate as provided for in new point 1067L-BB4 below.

New point 1067L-BB4 provides that a person's  clean  energy  (under  pension
age) rate is worked out by calculating 1.7 per cent  of  the  maximum  basic
rate that applies for  a  person's  particular  living  circumstances  on  1
January 2014, rounded up or  down  to  the  nearest  multiple  of  10  cents
(rounding up where the result is not  a  multiple  of  10  cents  but  is  a
multiple of five cents).

The note at the end of point 1067L-BB4 confirms  for  the  reader  that  the
various rates of clean energy supplement worked out under this  module  will
be indexed every 12 months in line with Consumer Price Index, as set out  in
sections 1191 to 1194.

The reference to 'a person whose circumstances on that day were the same  as
the recipient's current circumstances' in  subparagraph 1067L-BB4(a)(ii)  is
intended to reflect the various maximum basic rates that are set out in  the
rate calculator.  The rate calculator has various maximum basic  rates  that
apply to a person depending on their living arrangements, age,  relationship
status and length of time they have  been  in  receipt  of  social  security
payments.  This paragraph is inserted so that the calculation of a  person's
clean energy supplement is done with reference to  the  maximum  basic  rate
that applies for that person, on that  day,  taking  into  account  all  the
variables available within  the  rate  calculator.   Consideration  must  be
given to the recipient's circumstances as they are on the particular day  to
determine which maximum basic rate applies to the recipient.

Part 3 - Quarterly clean energy supplement

Division 1 - Main amendments

Amendments to the Social Security Act

Item 49 inserts Division 2 into new Part 2.18A, which was inserted  by  item
1 of this Schedule.  New Division 2 relates to payment  of  quarterly  clean
energy supplement.

New section 915  provides  that  a  quarterly  clean  energy  supplement  is
payable to a person for  each  day  that  an  election  is  in  force  under
subsection 915A(1) or subsection 1061VA(1) for the social  security  payment
that the person is receiving.  An election under subsection 1061VA(1) is  an
election by that person to receive the pension supplement quarterly.

New section 915A sets out how a person can elect to receive quarterly  clean
energy supplement instead of having their clean energy supplement  added  to
their fortnightly instalment of social security payment.

New subsection 915A(1) provides that  all  social  security  recipients  can
elect to receive their clean energy supplement quarterly  even  if  they  do
not receive the quarterly pension  supplement.  In  this  case,  the  person
would receive their clean energy supplement as a  separate  social  security
payment. The election is to be made in a  manner  or  way  approved  by  the
Secretary.

The note at the end of new subsection 915A(1) confirms for the reader  that,
where Part 2.25C applies to a person, they can make an election  to  receive
the pension supplement  quarterly,  which  will  cause  their  clean  energy
supplement to be payable quarterly.  A person who  has  elected  to  receive
the pension  supplement  quarterly  will  automatically  receive  the  clean
energy supplement quarterly.

New subsection 915A(2) provides that an election will  come  into  force  as
soon as practicable after it is made.

New subsection 915A(3) provides  that  an  election  to  receive  the  clean
energy supplement quarterly will cease if  a  person  ceases  to  receive  a
social security payment calculated using a rate calculator that has a  clean
energy supplement module.

New subsection 915A(4) provides that a person can revoke an election at  any
time in a manner or way approved by the Secretary and  the  revocation  will
come into effect as soon as practicable after it happens.

New  section 915B  provides  for  the  rate  of   quarterly   clean   energy
supplement.

New paragraph 915B(1)(a) provides that, where the rate  calculator  for  the
person's particular social security payment  (the  main  rate)  produces  an
annual figure, the person's daily rate of quarterly clean energy  supplement
will be 1/364 of the clean energy supplement as determined by  the  relevant
rate calculator.


New paragraph 915B(1)(b) provides that, where the rate  calculator  for  the
person's main rate produces a fortnightly figure, the  person's  daily  rate
of quarterly clean energy supplement  will  be  1/14  of  the  clean  energy
supplement as determined by the relevant rate calculator.

Subsection 915B(2)  provides  that  new  subsection 1210(3A)   inserted   by
item 79 of this Schedule may  apply  to  alter  a  person's  daily  rate  of
quarterly pension supplement.

Amendments to the Social Security Administration Act

Item 50 inserts a new section 48D after section 48C.

The following amendments provide that people  who  elect  to  receive  their
clean energy supplement quarterly will be paid in arrears for each quarter.
New subsection 48D(1) provides that quarterly clean energy supplement is  to
be paid by instalments.

New subsection 48D(2) provides that quarterly clean energy supplement is  to
be paid as soon as reasonably practicable on or after the  first  supplement
test day (the current test day) that follows a day on which  the  person  is
qualified for clean energy supplement.

The note after new subsection 48D(2) directs the reader to  new  section 915
of the Social Security Act for the determination  of  when  quarterly  clean
energy supplement is payable to a person.

New subsection 48D(3) provides that the amount of instalment is  worked  out
by calculating a daily rate of quarterly clean energy  supplement  for  each
day during the test period that the person is qualified for the payment  and
adding up all the rates as calculated for each day in the test  period  that
the person was qualified for the payment.

New subsection 48D(4)  defines  supplement  test  day  to  mean,  20  March,
20 June, 20 September and 20 December of each year.  Test period is  defined
as being the period:

   a) starting on the most recent supplement test  day  before  the  current
      test day; and


   b) ending on the day immediately before the current test day.

Division 2 - Other amendments

Amendments to the Social Security Act

Item 51 inserts a new paragraph (b) into  the  definition  of  clean  energy
bonus, which was inserted into subsection 23(1) by item 6 of this  Schedule.
 The new paragraph provides that a clean energy bonus includes clean  energy
supplement and quarterly clean energy supplement.

Item 52 inserts a new paragraph (b) into  the  definition  of  clean  energy
payment, which  was  inserted  into  subsection 23(1)  by  item  7  of  this
Schedule.  The new paragraph provides that a clean energy  payment  includes
quarterly clean energy supplement.

Item 53 inserts a definition  of  quarterly  clean  energy  supplement  into
subsection 23(1) of the Social Security Act, to  mean  the  social  security
payment described in Division 2 of new Part 2.18A  of  the  Social  Security
Act.

Items 54, 55 and 57 make technical amendments to several provisions  of  the
Social Security Act to  ensure  that  a  person's  social  security  payment
remains payable even if their rate is nil, where the person's  rate  is  nil
merely because they have received an advance  of  pharmaceutical  allowance,
or because they have elected to  receive  their  pension  supplement  and/or
their clean energy supplement on a quarterly rather than fortnightly basis.

Item 56 repeals subsection 547(2) and substitutes  a  new  subsection 547(2)
to ensure that a person's youth allowance  remains  payable  even  if  their
rate is nil, where the  person's  rate  is  nil  merely  because  they  have
received an  advance  of  pharmaceutical  allowance  or  because  they  have
elected to receive their clean energy supplement on a quarterly rather  than
fortnightly basis.

Amendments to the Social Security Administration Act

Item 58 inserts a new section 12DB to provide that a claim is  not  required
for quarterly clean energy supplement and it will be paid  automatically  to
qualified people.

Item 59 inserts a reference to section 48D into subsection 55(1)  to  ensure
that a payment of quarterly  clean  energy  supplement  is  to  be  paid  in
accordance with section 55.  Section 55 provides for the  Secretary  to  pay
social security payments into a person's bank account.

Part 4 - Indexation

Amendments to the Social Security Act

Item 60 inserts a number of new items into the indexed and adjusted  amounts
table at the end of subsection 1190(1).   This  item  identifies  the  clean
energy rates to be indexed and provides a convenient abbreviation  for  each
category of rates.

Item 61 makes a technical, consequential amendment to the note  at  the  end
of section 1190, as a second note is inserted by item  62.   That  new  note
confirms for the reader that the indexation  of  the  various  clean  energy
supplement rates will have a flow-on effect to the rate at  which  quarterly
clean energy supplement is paid and the amount of  seniors  supplement  that
is payable to a person.  As the clean energy supplement  rates  set  out  in
section 1190 are increased, the increase will flow  on  to  quarterly  clean
energy supplement and seniors supplement.

Item 63 inserts a number of new items into the CPI Indexation table  at  the
end of subsection 1191(1), which represent the new clean  energy  supplement
rates.  This item provides for the Consumer Price Index indexation of  these
rates.  The arrangements are similar to  the  indexation  arrangements  that
apply in relation to the maximum basic rate  of  the  same  social  security
payment, except that the rounding rule for the clean  energy  pension  (CEP)
rate is consistent with the rounding rule  for  indexation  of  the  pension
supplement as they both use a combined couple methodology that is  not  used
elsewhere in the social security law.

Item 64 adds Note 3 at the end of  subsection 1192(2)  to  confirm  for  the
reader that the indexation  of  certain  amounts  may  be  affected  by  new
Division 8 of Part 3.16 of the Social Security  Act  (as  inserted  by  item
68).

Item 65 amends section 1192 of the Social Security Act to specify  when  the
indexation arrangements for the various clean energy supplement rates  first
apply.  New  subsection 1192(3D)  provides  that  the  first  indexation  of
amounts  under  items  1D,  1E  and  1F  of  the  CPI  Indexation  Table  in
subsection 1191(1)  is  to  take  place   on   20   September   2013.    New
subsection 1192(3E) provides that  the  first  indexation  day  for  amounts
under items 1G, 1H and 1J of the CPI Indexation Table is to take place on  1
January 2015.  This item ensures that Consumer  Price  Index  increases  are
not  applied  to  the  clean  energy  supplement  amounts  until  the  first
indexation point after the supplements are  added  to  the  social  security
law.

Item 66 makes a technical, consequential amendment to the  note  at  end  of
section 1196(2), as a second note is inserted by item  67.   That  new  note
confirms for the reader that  the  indexation  of  certain  amounts  may  be
affected by new Division 8 of Part 3.16  of  the  Social  Security  Act  (as
inserted by item 68).

Item 68 inserts a new Division 8 into Part 3.16 of the Social Security  Act,
which provides for the adjustment of  indexation  arrangements  relating  to
clean energy household assistance.   The  additional  Consumer  Price  Index
impact of the carbon price is expected  to  be  0.7  per  cent.   The  clean
energy supplement will comprise the additional rise in  the  Consumer  Price
Index caused by the  introduction  of  the  carbon  price  (0.7  per  cent),
together with a further one per cent increase.  The expected impact  of  the
carbon price on indexation (0.7 per cent)  will  be  delivered  through  the
clean energy supplement,  rather  than  indexation  of  the  primary  social
security payment.  Regular indexation of the primary payment  will  continue
to apply, adjusted by the equivalent amount now being delivered through  the
clean energy supplement.

Special rules for indexation of certain rates on or after 20 March 2013

New section 1206GF sets out some special rules that apply to  indexation  of
specified amounts on or after 20 March 2013.  These  special  rules  provide
for the adjustment of  primary  payment  indexation  in  order  to  pay  the
expected increase in the Consumer Price Index due to the carbon  price  (0.7
per cent) through the clean energy supplement.  Regular  indexation  of  the
primary payment will continue to apply, adjusted by  the  equivalent  amount
now being delivered through the clean energy supplement.

The indexation factor is relevant in working  out  an  indexed  amount  (the
method statement in subsection 1192(2) refers) and is usually worked out  in
accordance with section 1193.

However, subsection 1206GF(1) sets out rules for  adjusting  the  indexation
factors that apply to certain amounts on or after 20 March 2013, to  reflect
the fact that the 0.7 per cent  expected  additional  Consumer  Price  Index
impact from carbon pricing  will  be  delivered  through  the  clean  energy
supplement, rather than indexation of the primary social  security  payment.
(This 0.7 per cent is the initial brought forward CPI indexation  amount  of
0.007.) This subsection also ensures that primary social  security  payments
will not be affected, should the relevant  CPI  indexation  factor  be  less
than one plus the brought forward CPI indexation amount.

The amounts  affected  by  subsection  1206GF(1)  are  then  listed  in  new
subsection 1206GF(2).  These are:

    . pension MBR (maximum basic rate);

    . PS (pension supplement) rate;

    . PS minimum rate;

    . PS basic rate;

    . benefit MBR (ordinary);

    . pension supplement component for pension bonus; and

    . maximum transitional pension rates.

The initial brought forward CPI indexation amount  is  0.007,  the  expected
additional increase in the Consumer  Price  Index  due  to  carbon  pricing,
which is being delivered through the clean energy  supplement,  rather  than
indexation of the primary social security payment.

The  brought   forward   CPI   indexation   amount   is   defined   in   new
subsection 1206GF(5) to mean:

    . zero, if subsection 1206GF(3) applies and the  brought  forward  PBLCI
      indexation amount in relation to that day is zero; or

    . 0.007 less any previous adjustment under subsection 1206GF(1).

The brought forward PBLCI indexation amount  is defined to mean:

    . zero, if the brought forward CPI indexation amount in relation to  the
      day is zero; or

    . 0.007 less any previous adjustment under subsection 1206GF(3).

The note at the end of subsection 1206GF(1) provides that, once the  brought
forward CPI indexation amount is zero, there is  no  further  adjustment  of
the indexation factor.  An example is also included to  provide  the  reader
with a clear picture of how the adjustment of indexation will apply.

New subsection 1206GF(3) provides some special rules that  modify  the  cost
of living indexation factor (worked out under section 1197) for pension  MBR
except to the extent that it covers the maximum basic  rate  of  pension  PP
(single).  These rules apply for each indexation after 20  March  2013,  and
have the effect of  adjusting  the  cost  of  living  indexation  factor  to
reflect the fact that the 0.7 per cent expected  additional  Consumer  Price
Index impact from carbon pricing will be delivered through the clean  energy
supplement, rather than indexation of the primary social  security  payment.
These rules also ensure that primary social security payments  will  not  be
reduced, should the relevant PBLCI indexation factor be less than  one  plus
the brought forward PBLCI indexation amount.  (The initial  brought  forward
PBLCI indexation amount is 0.007.)

The  brought  forward  PBLCI   indexation   amount   is   defined   in   new
subsection 1206GF(5), as described above.

The note at the end of subsection 1206GF(3) provides that, once the  brought
forward PBLCI indexation amount is zero, there is no further  adjustment  of
the indexation factor.  An example is also included to  provide  the  reader
with a clear picture of how the adjustment of indexation will apply.

New subsection 1206GF(5) provides that the adjustment rules  as  they  apply
to pension MBR do not affect a rate of payment worked out under  clause  146
of Schedule 1A or an amount worked out in relation to a pension  because  of
clause 149 of Schedule 1A. 

Special rules for indexation of certain rates on or after 1 January 2014

New section 1206GG modifies the indexation arrangements for AP  MBR  and  YA
MBR, which  are  indexed  on  1  January  2014.   New  subsection  1206GG(1)
requires that the indexation factor for these  amounts  on  1  January  2014
(and subsequent indexation days if required)  be  adjusted  by  the  brought
forward indexation amount, but also ensures that the relevant payments  will
not be adjusted, should the relevant CPI indexation factor be less than  one
plus the brought forward CPI indexation amount. 

The  brought  forward   indexation   amount   is   then   defined   in   new
subsection 1206GG(2) to mean 0.007 less any previous adjustment  under  this
section.

The note at the end  of  section 1206GG  provides  that,  once  the  brought
forward indexation amount is zero, there is no  further  adjustment  of  the
indexation factor.  An example is also included to provide the  reader  with
a clear picture of how the adjustment of indexation will apply.

Part 5 - Other amendments

Amendments to the Social Security Act

Item 69 repeals and substitutes  subsection  17(8).   New  subsection  17(8)
redefines the formula to work out the 'income cut-out amount' to  take  into
account the clean energy supplement component.   The  terms  'maximum  basic
rate' and 'ordinary free area  limit'  are  unchanged.   The  term  'pension
supplement component' is used to mean the amount previously referred  to  as
the 'Point  1064-BA3  amount'.   The  new  formula  adds  the  clean  energy
supplement component to  the  maximum  basic  rate  and  pension  supplement
component, multiplies this total by two, and then  adds  the  ordinary  free
area limit.  The total is then divided by 52 to give a  weekly  income  cut-
out amount.

Item 70 adds to subsection 1061ECA(2) (method statement, at the end of  step
2) the words 'and (c) the person's clean energy supplement (if any)'.   This
includes the clean energy supplement in the calculation  of  the  amount  of
advance payment of various pensions which may be paid to a person.

Items 71 to  74  make  technical  consequential  amendments  to  the  method
statements and rate calculators to omit references to items  or  steps  that
have been repealed.

Item 75 omits the word 'either' in paragraph 1210(1)(a) and substitutes  the
words 'one or more'.

Item 76 inserts  a  new  subparagraph 1210(1)(a)(ia)  into  section 1210  to
refer to the clean energy supplement module (the CE Module).   This  ensures
that that the clean energy supplement can be reduced  as  a  result  of  the
application of the income and assets tests.  However, items 83 and  84  will
ensure that people who are over  pension  age  and  in  receipt  of  a  part
pension due to their income or asset level will receive the full  amount  of
the clean energy supplement.

Item  77  inserts  a  new  item  4A  into  the   table   at   the   end   of
subsection 1210(1), which refers to the person's clean  energy  supplement. 
By inserting the clean energy supplement after  table  item  4,  a  person's
clean energy supplement will be reduced by the application of the income  or
assets test after any amount added for rent assistance (if  applicable)  but
before any amount of the person's pension supplement minimum amount.

Item 78 repeals the note at the end of subsection 1210(1)  and  inserts  two
new notes.  Note 1 provides that, for the  purposes  of  table  item  4A,  a
person's rate of clean energy supplement will be nil if they  are  receiving
quarterly clean energy supplement.  Similarly, Note 2  provides  that  table
item 5 will not apply if  a  person  is  in  receipt  of  quarterly  pension
supplement.

Item 79 inserts a new subsection 1210(3A)  after  subsection  1210(3).   New
subsection 1210(3A) provides that, if:

    . a quarterly clean energy supplement is payable to a person; and

    . if quarterly clean energy supplement were not payable to  the  person
      (that is, they had not elected  to  receive  quarterly  clean  energy
      supplement), their rate would have  included  a  component  of  clean
      energy supplement; and

    . their rate of social security payment would have been reduced by  the
      application of the income or assets test;

their rate of quarterly clean energy  supplement  is  reduced  to  the  same
extent that their rate of social security would have been  reduced  if  they
had not elected to receive their clean  energy  supplement  on  a  quarterly
basis.

The note at the end of new subsection 1210(3A) confirms for the reader  that
the reduction provided by the  subsection  may  be  disregarded  in  certain
circumstances, and refers the reader to new subsection 43(5B) of the  Social
Security Administration Act (inserted at item 84, below).

Item 80 repeals and substitutes subsection 1210(4).  This  sets  out  a  new
table detailing  the  Modules  that  are  relevant  to  the  application  of
section 1210.  New subsection 1210(4) sets out the  details  of  which  rate
calculators  include   payment   of   pension   supplement,   pharmaceutical
allowance, and clean energy supplement, and signposts  the  relevant  module
of the rate calculator.  In  addition,  the  table  signposts  the  relevant
income and assets test modules of the various rate calculators.

Amendments to the Social Security Administration Act

Items 81, 82, 83 and 84 amend section 43 to provide that, where  any  amount
of pension supplement minimum amount, clean energy supplement, or  quarterly
clean energy supplement is payable to a person after the application of  the
income or assets test, then the full amount is to be paid to that person.

For example, if, a person's employment income reduces their rate of  pension
so that they receive an amount that is less than  the  full  amount  of  the
pension supplement minimum amount (but more than nil), their daily  rate  of
pension will be increased to an amount that is equal to the  daily  rate  of
pension supplement minimum amount plus the daily rate of  the  clean  energy
supplement.

These provisions will ensure that people who are over  pension  age  and  in
receipt of a part pension due to their income or asset  level  will  receive
the full amount of the clean energy supplement.


                Schedule 2 - Clean energy payments under the
                            family assistance law


                                   Summary

The financial  assistance  provided  by  this  Schedule  will  be  delivered
through increases to family payments equivalent to 1.7 per cent.

This Schedule provides families with a new lump sum  clean  energy  advance,
with most payments to occur during May to June 2012 before  commencement  of
the carbon pricing scheme.   Ongoing,  permanent  clean  energy  supplements
will be paid from 1 July 2013, which  will  be  separate  components  of  an
individual's Part A and Part B rates of family tax  benefit.   Provision  is
also made for the payment  of  clean  energy  advances  and  supplements  to
approved care organisations where they receive family tax benefit.

                                 Background

Clean energy advances

Generally, the  clean  energy  advance  provisions  for  families  receiving
family tax benefit (Part A or Part B)  apply  from  14 May 2012,  with  most
payments being made over the  period  14  May  to  30 June  2012.   Eligible
families will be able to receive top-ups if their circumstances change  such
as having a new baby and their rate of family payment increases.

The annual value of the clean energy advance payment would be equivalent  to
a 1.7 per cent increase in family payments. The clean  energy  advance  will
include:

    .  the  expected  Consumer  Price  Index  impact   of   carbon   pricing
      (0.7 per cent); and


    . an additional increase amount above the Consumer  Price  Index  impact
      (one per cent).

Clean energy supplements

From  1  July  2013,  the  rate  of  FTB  would  be  increased  through  the
introduction  of  new  clean  energy  supplements  (Part  A  and  Part   B).
Consistent with the clean energy advance,  the  annual  rate  of  the  clean
energy supplements would be equivalent to a 1.7 per  cent  increase  in  the
standard rates and end of year supplements for FTB Part A and Part B.

The expected additional impact on  the  Consumer  Price  Index  from  carbon
pricing (0.7 per cent) will be permanently  included  in  the  clean  energy
supplement, rather than in the indexation on the FTB  child  rates  and  FTB
supplements.  An additional amount equivalent to a one per cent increase  to
the FTB child rates and FTB supplements will also  be  permanently  included
in the clean energy supplement.   Therefore,  the  expected  impact  of  the
carbon price on indexation (0.7 per cent) will  effectively  be  transferred
from the indexation of the relevant FTB child rates and FTB  supplements  to
the clean energy supplement.

Regular indexation of the relevant FTB child rates will continue  to  apply,
adjusted  by  the  equivalent  amount  transferred  to  the   clean   energy
supplement.  The clean energy supplements will be permanent, and indexed  by
the Consumer Price Index so they maintain their value  in  real  terms  over
time.

The new clean energy supplements would be available on an ongoing  basis  as
part of an individual's fortnightly  FTB  payments  or,  if  the  individual
chooses, on a quarterly basis.  The supplements can also be paid as part  of
an individual's end of year entitlement if the individual claims  their  FTB
for a previous income year.

An approved care organisation may currently receive FTB for the children  in
their care, paid at the same rate as the base standard rate of  FTB  Part  A
for  an  FTB  child  who  has  not  turned  18.   In  2010-11,   around   60
organisations received FTB for an estimated  3,000  children.   As  children
may be in the care of an approved care organisation for varying  periods  of
time, it would not be appropriate to provide a clean energy advance  in  the
same manner as that proposed for families.  The  Schedule  will  enable  the
determination of an administrative scheme for paying clean  energy  advances
to an approved care organisation, by way of a  legislative  instrument  made
by a Minister administering the family assistance law.

From 1 July 2013, the rate of FTB for an approved  care  organisation  would
include the clean energy supplement, which would be  indexed  annually  from
1 July 2014.  The annual rate of the clean energy supplement on 1 July  2013
would be equivalent to a 1.7 per cent increase in the standard rate  of  FTB
for an approved care organisation on 1 July 2013.  The Consumer Price  Index
indexation of the standard rate of FTB for  an  approved  care  organisation
would be adjusted in the same  way  as  the  indexation  adjustment  of  the
standard rate of FTB occurs for families.

The amendments made by this Schedule commence on 14 May 2012 (which  is  the
date from which clean energy advances will be  paid).  The  commencement  of
Schedule 2 is also conditional on  the  commencement  of  section 3  of  the
Clean Energy Act 2011.

                         Explanation of the changes

Part 1 - Clean energy advances for individuals

In broad terms, Part 1 of Schedule 2 to the Bill inserts  new  Part  8  into
the Family Assistance Act, which sets out the entitlement  rules  for  clean
energy advances and the method for calculating the  amount  of  an  advance.
The administrative framework supporting clean energy  advances  is  provided
by amendments to the Family Assistance  Administration  Act,  and  necessary
consequential amendments are made.

Amendments to the Family Assistance Act

Items 1 and 2 define terms which are used  in  new  Part  8  of  the  Family
Assistance Act, as inserted by item 3,  and  in  provisions  in  the  Family
Assistance Administration Act as relevant.

An absent overseas FTB child is defined by reference to section  63  of  the
Family Assistance Act.   An FTB child generally becomes an  absent  overseas
FTB child after the child has been absent from Australia for 13  weeks.   An
absent overseas recipient (a concept also used in new  Part  8)  is  already
defined in subsection 3(1) of the Family Assistance Act.

A clean energy advance is defined to mean an advance to which an  individual
is entitled under new Division 1 of Part  8  (entitlement  to  clean  energy
advance) or new Division 3 of  Part  8  (top-up  payments  of  clean  energy
advance).

Item 3 inserts new Part 8 into the Family Assistance Act.  New Part  8  sets
out the circumstances in which an individual is entitled to a  clean  energy
advance and a top-up and the method for calculating  an  individual's  clean
energy advance and clean energy daily rate.

New Part 8 - Clean energy advances

Division 1 - Entitlement to clean energy advances

Entitlement in normal circumstances

New section 103 sets out the conditions that need to  be  satisfied  for  an
individual  to  be  entitled  to  a   clean   energy   advance   in   normal
circumstances.

Clean energy advances will start being  paid  from  14  May  2012  and  many
families will receive their advance before 1 July 2012.  As the  advance  is
designed to cover the 2012-13 income year, there  are  some  differences  in
the entitlement  conditions  where  an  entitlement  determination  is  made
during the period 14 May  until  30  June  2011  or  is  made  on  or  after
1 July 2012.

Families who are entitled to FTB instalments during the  period  14  May  to
30 June 2012, will be entitled to the advance if  they  meet  conditions  on
the determination day.

However, some families elect to claim their FTB in a lump sum at the end  of
the financial year. These  families  will  not  have  claimed  FTB  in  this
period, so will not receive the clean energy advance for 2012-13 until  they
claim FTB for this year. This could be at the end of the  2012-13  year  for
lump sum  payment  of  FTB,  or  at  any  time  during  2012-13  to  receive
fortnightly instalments of FTB.  Families who have previously  received  FTB
as a lump sum can claim FTB as fortnightly  instalments  at  any  time.   If
they wish to receive their clean energy advance in May to June 2012  at  the
same time  as  instalment  recipients,  they  will  need  to  claim  FTB  as
fortnightly instalments prior to May 2012.

New  subsection  103(1)  enables  the  Secretary  to  make  an   entitlement
determination for an individual on  a  day  during  the  period  14  May  to
30 June 2012 if specified conditions are met on the determination day.

The individual must be entitled to payment  of  FTB  by  instalments  (under
section 16 of the Family Assistance Administration Act) or  because  of  the
death of a child (under section 18 of the Family  Assistance  Administration
Act because of eligibility under section 32 of the Family  Assistance  Act).


The individual must be in Australia on the day the determination is made.

The individual's rate of FTB on that day, worked out  under  Division  1  of
Part 4, but disregarding any FTB advance reduction,  must  be  greater  than
nil.  That rate must also take into account at least one FTB  child  of  the
individual who is in Australia on the determination day.

Finally, neither the individual nor their partner must  be  prevented  under
section 32AA or 32AD of the Family Assistance Administration Act from  being
paid FTB on the basis of an estimate on that day.

A note at the end of new subsection 103(1) indicates to the reader that  the
amount of the advance is then worked out under new sections 105 and 106.

New subsection 103(2) applies where  the  Secretary  makes  the  entitlement
determination on or after 1 July 2012.  Such  an  entitlement  determination
can be made where the following conditions are met on any day in  the  2012-
13 income year (the period covered by the advance).

As with new subsection 103(1), the  individual  must  have  a  determination
under section 16 or section 18 (because of  the  death  of  an  FTB  child).
However, an individual can also have a determination  under  section  17  of
the Family Assistance Administration Act (FTB entitlement  determination  in
respect of a past period) in relation to a day  during  the  2012-13  income
year.

The individual must not be an absent overseas  recipient,  disregarding  any
extension of the individual's FTB portability period under section 63A.

In broad terms, an individual becomes an  absent  overseas  recipient  after
13 weeks' absence from Australia (section 62 of the  Family  Assistance  Act
refers).  For FTB  purposes,  the  13-week  period  can  be  extended  under
section 63A.  However, for the purposes of  the  clean  energy  advance,  an
absent overseas recipient and an FTB recipient who is in an extended  period
under section 63A would be precluded from  entitlement  to  a  clean  energy
advance.

The individual's rate of FTB worked out under Division  1  of  Part  4,  but
disregarding any FTB advance reduction, must  be  greater  than  nil.   That
rate must also take into account at least one FTB child  of  the  individual
who is not an absent overseas FTB child, disregarding  section  63A  of  the
Family Assistance Act.  The concept of absent overseas FTB child is  defined
in subsection 3(1) of the Family Assistance Act (the definition is  inserted
by item 1).  For the purposes of the clean  energy  advance,  an  individual
would not be entitled to an advance if each FTB child of the  individual  is
an absent overseas FTB  child  or  an  FTB  child  who  is  in  an  extended
portability period under section 63A.

A note at the end of new subsection 103(2) indicates to the reader that  the
amount of the advance is worked out under new sections 105 and 106.

However, new subsection 103(3) provides that  an  entitlement  determination
under new subsection 103(2) cannot be made on a day before 1  July  2013  in
prescribed circumstances.   An entitlement determination cannot be  made  if
the individual is outside  Australia  on  the  day,  having  left  Australia
before 1 April 2013 and the individual is not an absent  overseas  recipient
(disregarding  section  63A)  on  that  day.   Similarly,   an   entitlement
determination cannot be made if each FTB child of the individual is  outside
Australia on the day, having left Australia before 1  April  2013  and  each
FTB child is not an absent overseas FTB child (disregarding section 63A)  on
that day.

The condition in paragraphs 103(1)(b) and (d)  for  the  individual  and  at
least one FTB child to be in Australia on the  determination  day,  and  the
condition in subsection 103(3) preventing a determination  under  subsection
103(2) if the individual or each FTB child is  outside  Australia  and  left
before 1 April 2013 but the absence  has  not  yet  exceeded  13  weeks,  is
intended to avoid paying clean energy advance  for  days  occurring  in  the
future during 2012-13 that may exceed the 13-week  FTB  portability  period.
The projected amount of clean energy  advance  for  days  occurring  in  the
future during 2012-13 will be based on the individual's rate of FTB  on  the
determination day.  Therefore, if entitlement  to  a  clean  energy  advance
under subsection 103(1) or (2) could arise on a day before the absence  from
Australia exceeds 13 weeks, this would fail  to  exclude  the  period  after
13 weeks' absence.  In contrast, a  determination  under  subsection  103(2)
can be made on a day when the absence has  exceeded  13 weeks,  because  the
amount of clean energy advance will exclude any days  during  2012-13  which
are known to have exceeded the 13-week FTB portability period.

Under new subsection 103(4), section 32 is disregarded for the  purposes  of
new paragraphs 103(1)(c) and (d) and 103(2)(c) and (d).

In broad terms, an FTB child who dies continues to be an  FTB  child  for  a
bereavement period of 14 weeks for FTB purposes (the period  is  reduced  in
certain circumstances, such as where the child would  have  reached  an  age
cut out).  For instalment cases or  cases  where  the  period  overlaps  two
income years, some or all of the amount for the deceased child may  be  paid
as a lump sum.  Where this happens, section 32 of the Family Assistance  Act
provides that the bereavement period is reduced by  the  period  covered  by
the lump sum payment.

Disregarding section 32 would ensure that a deceased child continues  to  be
an FTB child for the same period that would apply for  FTB  if  a  lump  sum
were not paid for the child, and would enable  an  individual  to  meet  the
entitlement rules for the clean energy advance.

New subsection 103(5) provides that an  individual  cannot  be  entitled  to
more than one advance under new section 103.

This rule does not prevent an individual, whose circumstances  change,  from
also being entitled to a top-up  under  new  section  108.   It  would  also
remain open for an individual to seek review of the amount  of  their  clean
energy advance as appropriate and, if the amount calculated  was  incorrect,
to be paid the difference.

This rule also does not prevent a new carer from being entitled to  a  clean
energy advance in respect of an FTB child where there is a  change  in  care
of the child.  For example, one parent initially has sole care  of  a  child
and is entitled to FTB, and is paid a clean energy advance  on  1 June  2012
for the full period of 1 July 2012 to 30 June  2013  (365 days).   The  sole
care changes to the other parent on 1 August 2012 and FTB  is  granted  from
that day.  The new carer would be entitled to a  clean  energy  advance  for
the period 1 August 2012 to 30 June 2013 (334 days), provided they meet  the
other entitlement conditions.

Entitlement where death occurs

An individual who has an FTB entitlement determination under section  18  of
the Family Assistance Administration Act because of  the  death  of  another
individual (who was caring for a child) can also  be  entitled  to  a  clean
energy advance in circumstances where the deceased individual was, or  would
have been, entitled to an advance but has not been paid  their  entitlement.
Subsection (1) of new section 104 covers this situation.

An example is where an individual has FTB children in  2012-13  and  usually
claims their FTB at the end of the year through a  past  period  claim.   If
the individual dies before making such  a  claim,  another  individual  (for
example the new carer of the children) can claim  and  be  entitled  to  the
deceased individual's FTB under existing  rules  and  clean  energy  advance
under new section 104.  The amount of the clean energy  advance  would  then
be the amount of clean energy advance that  the  deceased  individual  would
have been entitled to (new section 107 refers).

A note at the end of this provision refers the reader to  new  section  107,
which provides for rules for working out  the  amount  of  advance  in  this
situation.

New subsection 104(2) ensures that only one individual can  be  entitled  to
the unpaid clean energy advance of a deceased individual.

Division 2 - Amount of clean energy advance

Amount of the clean energy advance where entitlement under section 103

New section 105 sets out  the  rules  for  working  out  the  amount  of  an
individual's clean energy advance where  an  individual  is  entitled  to  a
clean energy advance under new section 103.

New subsection 105(1) provides that the amount  of  the  individual's  clean
energy advance must be worked out on the day that the  Secretary  determines
an individual is entitled to the advance (referred to as the decision day).

New subsection 105(2) applies where the decision day is before 1  July  2012
and provides for the amount of the advance to be worked  out  in  accordance
with a specified method statement.  This  amount  may  be  affected  by  new
subsection 105(5), which applies where there is a  percentage  determination
under section 28 or 29 of the Family Assistance Act in force in relation  to
the day.

The amount may also be affected by new  subsection  105(6),  which  provides
for a different method of calculation, to  be  specified  in  a  legislative
instrument, where an individual is entitled to a clean energy advance  under
section 103 in relation a child, but the  individual's  former  partner  was
previously entitled to an  advance  in  relation  to  that  child  when  the
individual and the former partner were a couple.

In this situation, the intention is to avoid duplication of  payment  for  a
child, subject  to  enabling  a  top-up  amount  for  the  child  where  new
circumstances result in a higher rate of FTB for the child.  Therefore,  for
the period in 2012-13 that the  individual  is  separated  from  the  former
partner and the individual is entitled to FTB for the child, it is  intended
that the individual would receive a daily amount for the child equal to  the
excess of the daily amount that would be payable if the former  partner  had
not previously been entitled for the child, above the daily amount  for  the
child that the former partner was previously entitled to when  they  were  a
couple.  It is intended that  no  daily  amount  would  be  payable  to  the
individual for the child if there is no excess amount.

An example is where a couple received the base rate of FTB Part A  only  for
a child (paid to the child's  father),  but  after  separation,  the  mother
receives the maximum rate of FTB Part A  and  Part B  for  the  child.   The
mother would be paid an amount of clean energy advance based on  the  amount
for maximum FTB Part A and Part B less the amount for the base rate  of  FTB
Part A.

The first step in the method statement in new subsection 105(2) is  to  work
out the individual's clean energy daily rate  on  the  decision  day  (which
will be based on the individual's FTB circumstances on that day)  and  using
the FTB rates that will apply from 1 July 2012, after indexation occurs.

The second step of the method  statement  is  to  multiply  the  daily  rate
worked out under step 1 by 365 which then  results  in  the  amount  of  the
individual's clean energy advance.

New subsection 105(3) applies where the  decision  day  is  in  the  2012-13
income year and provides for the amount of the advance to be worked  out  in
accordance with a specified method statement.  This amount may  be  affected
by new subsection 105(5) (where there is a  percentage  determination  under
section 28 or 29 of the Family Assistance Act)  and  new  subsection  105(6)
(which provides for  a  different  method  of  calculation  where  a  former
partner was previously entitled to an advance for the same  child  when  the
individual and the former partner were a couple).

The first step is to work out the clean energy daily rates for each  day  in
the period 1 July 2012 until the decision day.  The daily rates  are  worked
out under new section 106.  The daily rate for each of these days  would  be
based on the individual's  circumstances  on  each  day.   The  individual's
clean energy daily rate for one or more of these days could be nil  if,  for
example, the individual's only FTB child was an absent  overseas  FTB  child
on that day.  This is made clear in new subsection 106(2).

The second step is to multiply the individual's clean energy daily  rate  on
the decision day by the number of  days  remaining  in  the  2012-13  income
year.

The sum of the amounts worked out under steps 1 and 2 would  be  the  amount
of the individual's clean energy advance.

New subsection 105(4)  applies  where  the  decision  day  is  on  or  after
1 July 2013 and provides that the amount of the  individual's  clean  energy
advance is the sum of the daily rates for each day  in  the  2012-13  income
year.  The daily rate  for  each  of  these  days  would  be  based  on  the
individual's circumstances on each day and would have regard,  as  relevant,
to a  percentage  determination  under  section  28  or  29  of  the  Family
Assistance Act (new subsection 105(5) refers).  The daily  rate  could  also
be affected by new subsection 105(6), which provides for a different  method
of calculation where a former partner was previously entitled to an  advance
for the same child when  the  individual  and  the  former  partner  were  a
couple.

New subsection 105(5) ensures that a percentage determination under  section
28 or 29 of the Family Assistance Act in relation to  a  particular  day  is
reflected in an individual's clean energy daily rate.

New subsection 105(6) applies where an individual is  entitled  to  a  clean
energy advance under new section 103 in relation to a  child  and  a  former
partner of the individual was previously entitled to an advance in  relation
to the same child while the individual  and  their  former  partner  were  a
couple.  In these circumstances, the individual's clean energy advance  will
be worked out in accordance with a method specified by  the  Minister  in  a
legislative  instrument.   The   instrument   making   power   is   in   new
subsection 105(7).

Clean energy daily rate

New section 106 provides  for  the  calculation  of  an  individual's  clean
energy daily rate.

In broad terms, an individual's clean energy daily rate would include:

    . an amount relating to FTB Part A  if  the  individual's  Part  A  rate
      (disregarding any FTB advance reduction) exceeds nil; and


    . an amount relating to FTB Part B  if  the  individual's  Part  B  rate
      exceeds nil.

If an individual's FTB Part A or Part B rate is affected by  a  shared  care
percentage for a child, this will also affect the clean  energy  daily  rate
in the usual way.

An individual's clean energy daily rate  is  worked  out  using  the  method
statement in new subsection 106(1).

Step1 of the method statement provides a method for working  out  an  amount
relating to the individual's FTB Part A.

The amount relating to FTB Part A would  differ  depending  on  whether  the
individual's income and maintenance tested rate under method  1  exceeds  or
does not exceed the base rate  or,  where  method  2  applies,  whether  the
individual's Method 2 income and maintenance tested  rate  exceeds  or  does
not exceed the tapered base rate (the provisional Part A rate).

An individual's FTB Part A  rate  is  worked  out  under  Method  1  if  the
individual has at least one FTB child and either the  individual's  adjusted
taxable income does not exceed the individual's higher income free  area  or
the individual or their partner is receiving a  prescribed  social  security
or  veterans'  income  support  payment.    Method  2  applies   where   the
individual has at least one FTB child and the individual's adjusted  taxable
income exceeds the individual's higher income  free  area  and  neither  the
individual nor their partner is receiving a prescribed  social  security  or
veterans' income support payment.

Under step 1 of the method  statement  in  new  subsection  106(1),  if  the
individual's Part A rate is worked out using method 1  (under  clause  3  of
Schedule 1) and their income and maintenance tested rate exceeds their  base
rate (as defined in clause 4 of Schedule 1), then  the  amount  relating  to
FTB Part A is the sum  of  the  individual's  method  1  standard  rate  and
FTB Part A supplement (being the amounts  at  paragraphs  (a)  and  (ca)  of
step 1 of the method statement in clause 3 of Schedule 1).

If the individual's Part A rate is worked out using method 1  (under  clause
3 of Schedule 1) and their income and maintenance tested rate is  less  than
or equal to their base rate, then the amount relating to FTB Part A  is  the
sum of the individual's method 2 standard rate and  FTB  Part  A  supplement
(being the amounts at paragraphs (a)  and  (d)  of  step  1  of  the  method
statement in clause 25 of Schedule 1).

If the individual's Part A rate is worked out using method 2  (under  clause
25 of Schedule 1) and their Method 2 income and maintenance tested  rate  is
less than or equal to  their  provisional  Part  A  rate,  then  the  amount
relating to FTB Part A is the sum of  the  individual's  method  2  standard
rate and FTB Part A supplement (being the amounts at paragraphs (a) and  (d)
of step 1 of the method statement in clause 25 of Schedule 1).

If the individual's Part A rate is worked out using method 2  (under  clause
25 of Schedule 1) and their Method 2  income  and  maintenance  tested  rate
exceeds their provisional Part A rate, then the amount relating to FTB  Part
A is the sum of the individual's method 1  standard  rate  and  FTB  Part  A
supplement (being the amounts at paragraphs (a) and (ca) of step  1  of  the
method statement in clause 3 of Schedule 1).

In each  of  the  above  scenarios,  the  individual's  standard  rate  will
incorporate an amount for each FTB child (subject to new subsections  106(4)
and (6) explained below) and will have regard to any applicable shared  care
percentage.  The individual's FTB Part A supplement  would  be  included  in
calculating the Part A element of their clean energy advance, regardless  of
whether the individual has satisfied the FTB reconciliation  conditions  for
2012-13 (under section 32B of the  Family  Assistance  Administration  Act).
This is made clear by the amendment to section 32A of the Family  Assistance
Administration Act made by item 47.

The amount relating to FTB Part A will be an annual amount as  are  all  the
amounts referred to in step 1.

Step 2 of the method statement in new subsection 106(1)  provides  a  method
for working out an amount relating to the individual's FTB Part B.

The amount relating to FTB  Part  B  would  be  based  on  the  individual's
standard rate under Division 2 of Part 4 of Schedule  1  (having  regard  to
shared care  percentages  as  relevant)  and  the  individual's  FTB  Part B
supplement on the relevant day.  The  individual's  FTB  Part  B  supplement
would be included in calculating the Part B element of  their  clean  energy
advance,  regardless  of  whether  the  individual  has  satisfied  the  FTB
reconciliation conditions for 2012-13  (under  section  32B  of  the  Family
Assistance Administration Act).  This is made  clear  by  the  amendment  to
section 32A of the Family Assistance Administration Act made by item 47.

The result in step 2 relating to FTB Part B is also an annual amount.

Under step 3, the amounts at steps 1 and 2 are added together.   The  result
is then multiplied by 0.017 in step 4.  This is the equivalent of a 1.7  per
cent increase in the  relevant  annual  Part  A  and  Part  B  amounts,  and
includes:

    . the expected CPI impact of carbon pricing (0.7 per cent); and


    . an additional increase above CPI (one per cent).

Step 5 then requires the amount in step 4 to be converted to a daily  amount
by dividing by 365.  The daily amount would then be rounded to  the  nearest
cent (rounding 0.5 cents upwards).  The result  is  the  individual's  clean
energy daily rate for that day.  As is the case with FTB, an individual  can
have  different  daily  rates  on  different  days,   depending   on   their
circumstances.

New subsection 106(2) makes it clear that, if steps 1 and 2  of  the  method
statement do not apply in relation to a day,  then  the  individual's  clean
energy daily rate for that day is nil.

New subsection 106(3) also  provides  that  the  individual's  clean  energy
daily rate for  a  day  that  the  individual  is  an  absent  overseas  FTB
recipient (disregarding any FTB portability extension under section  63A  of
the Family Assistance Act) is nil.

New subsection 106(4) ensures that the calculation process set  out  in  the
method statement for a day does not have regard to an FTB child who  is,  on
that day, an absent overseas FTB child of the individual or in a  period  of
extended FTB portability period under section 63A of the  Family  Assistance
Act.  This rule disregards  the  child  for  the  purposes  of  working  out
whether an individual's rate of FTB consisted of, or included, a Part  A  or
Part B rate greater than nil, and in determining which of the paragraphs  in
steps 1 and 2 of the method statement apply.

New subsection 106(5) provides  that  the  calculation  of  an  individual's
clean energy daily rate is to be done disregarding section 32 of the  Family
Assistance Act.  The effect is that a deceased child would  continue  to  be
considered an FTB child of the individual for each day  in  the  bereavement
period (usually 14 weeks) even if the individual has been paid FTB  for  the
deceased child as a single lump sum.  Section 32 would otherwise operate  in
this situation  to  reduce  the  individual's  bereavement  period  for  the
deceased child.

New subsection 106(6) applies where the decision day is  before  1 July 2013
and an FTB child of the individual is outside Australia on the  day,  having
left Australia before 1 April 2013 and is not an absent overseas  FTB  child
(disregarding section 63A) on that day.  In these circumstances,  the  child
is disregarded for  the  purposes  of  calculating  the  individual's  clean
energy daily rate.

However, if the child returns to Australia before 1 July  2013,  the  return
is taken to be a change in circumstances for the purposes  of  invoking  the
operation of new section 108, which allows  for  top-up  payments  of  clean
energy advance.

If the child does not return before 1 July 2013, then there is taken  to  be
a trigger day on 30 June 2013 for the purposes of new section 108.  In  this
situation also, new section 108 will  allow  for  the  recalculation  of  an
individual's  clean  energy  advance  and  the  payment  of  a   top-up   as
appropriate.

These rules are in new subsections 106(7) and (8) respectively.

Amount of advance where entitlement under section 104

New section 107 applies where an individual is entitled to  a  clean  energy
advance because of  the  death  of  another  individual  (where  entitlement
arises under new subsection 104(1)).   An  example  is  where  the  deceased
individual was caring for a child in 2012-13 but died  before  claiming  FTB
for 2012-13.  The amount of the individual's clean energy  advance  in  this
situation is the amount that the deceased  individual  was,  or  would  have
been, entitled to be paid had they not died.

Division 3-Top-up payments of clean energy advance

Top-up payments of clean energy advance

An individual's FTB circumstances may change after they  are  paid  a  clean
energy advance (on the basis  of  an  entitlement  determination  under  new
section 103).  In broad terms, the intention is that new  FTB  circumstances
would result in a top-up to the original clean energy advance if the  change
in circumstances results in a person receiving a  higher  rate  of  payment,
for example, where a family has another FTB child, or a  separated  parent's
shared care percentage for a child increases.

New section 108 provides the entitlement rules for top-up payments of  clean
energy advance.

An individual is entitled to a top-up payment of  clean  energy  advance  if
the individual has been  paid  a  clean  energy  advance  on  the  basis  of
entitlement under new section 103 (where  the  amount  was  not  worked  out
under new subsection 105(6) in accordance  with  a  method  specified  in  a
legislative instrument), the decision day is before 1 July 2013  and,  after
the decision day and before 1  July  2013,  the  individual's  circumstances
change such that the amount of the original payment is less than the  amount
that would have been calculated if the decision day were the  day  on  which
the individual's circumstances changed (the trigger day).  This  allows  the
clean  energy  amount  to  be  calculated  having  regard  to  the   changed
circumstances and compared with the original amount.  The amount of the top-
up payment to which the individual is entitled  in  these  circumstances  is
the shortfall.

Where the individual has already been paid a top-up payment of clean  energy
advance and circumstances change again, then the relevant  consideration  is
whether the sum of the amount of  the  original  advance  payment  plus  any
previous top-up payment is less than the amount that would  have  been  paid
if the decision day were the day on which the latest circumstances  changed.
  The amount of the top-up payment to which the individual  is  entitled  in
these circumstances is the shortfall.

These rules are in new subsection 108(1).

However, under new subsection 108(2), if an individual  is  entitled  to  an
advance  under  new  section   103   which   is   worked   out   under   new
subsection 105(6) (in accordance with a method specified  in  a  legislative
instrument), the decision day is before  1 July 2013  and  the  individual's
circumstances change after the decision day and before  1  July  2013,  then
the individual's entitlement and amount of top-up payments are  also  to  be
worked out in accordance with  a  legislative  instrument.   New  subsection
108(3) provides the Minister with the relevant instrument making power.

For members of a couple in a blended family, new subsection 108(4) makes  it
clear that neither a change in a percentage determination under  section  28
of the Family Assistance Act nor the ending of such a  determination  is  to
be considered a change of circumstances for the  purposes  of  invoking  the
operation of new section 108.  For example, if a couple were each  receiving
50 per cent of FTB for their two children and were each paid a clean  energy
advance  on  that  basis,  and  then  the  couple  decide  to  change  their
percentages of FTB to 80 and 20 per cent, that change will not result  in  a
top-up.

Division 4 - General rules

New section 109 applies where an individual is entitled to  a  clean  energy
advance or top-up of clean energy advance in relation to a  child,  and  the
amount of the advance was not worked  out  having  regard  to  a  percentage
determination under section 28 or 29  of  the  Family  Assistance  Act.   In
these circumstances, new section 109 ensures that, while the  individual  is
a member of a couple, their partner cannot be entitled to an  advance  under
new section 103 or 108 in relation to the same child.

Amendments to the Family Assistance Administration Act

Item 4 inserts new  Division  4D  into  Part  3  of  the  Family  Assistance
Administration Act.  This new Division contains new section 65J  which  sets
out some payment rules for clean energy advances.

Where  an  individual  is  entitled  to  a   clean   energy   advance,   new
subsection 65J(1) provides that the payment must be paid as  a  single  lump
sum on the day that the Secretary considers to be the earliest day on  which
it is practicable to make the payment and in such manner  as  the  Secretary
considers appropriate.  In practice, a clean energy advance will usually  be
paid no later than the next FTB payment to the individual and  in  the  same
manner (deposit into a nominated account).

A note at the end of this provision informs the  reader  that  there  is  no
requirement for a claim for a clean  energy  advance  as  it  will  be  paid
automatically for eligible people.

New subsection 65J(2) applies where the decision day or the trigger  day  is
in the 2012-13 income year and, on that  day,  the  Secretary  is  prevented
from paying FTB to an individual  or  their  partner  on  the  basis  of  an
estimate because the relevant tax returns have not been lodged and there  is
an outstanding non-lodger FTB debt (sections 32AA and  32AD  of  the  Family
Assistance  Administration  Act  refer).   In   these   circumstances,   the
Secretary must not pay the individual a clean energy  advance  (an  original
advance or a top-up of a clean energy advance) until FTB is  also  paid  for
the decision day or the trigger day.

New subsection 65J(3)  applies  where  the  decision  day  is  on  or  after
1 July 2013 and the Secretary is prevented from paying FTB to an  individual
or their partner on the basis of an estimate because of the  application  of
section 32AA or 32AD of the Family Assistance Administration  Act,  for  one
or more days in the  2012-13  income  year.   In  these  circumstances,  the
Secretary must not pay the individual a clean energy advance  until  FTB  is
also paid for the day or days in the 2012-13 income year.

Item 5 amends subsection 66(1) with the effect that a clean  energy  advance
is inalienable, consistent with other family assistance payments.

An amount paid by way of clean energy advance will only be  a  debt  to  the
extent  that  a  provision  in  the  Family  Assistance  Administration  Act
expressly provides for it.  Item 6 makes an amendment to section 70  of  the
Family Assistance Administration Act to this effect.
 
Item 7 then inserts the relevant debt  provision,  new  section  71L,  which
sets out the circumstances in which a clean energy advance is a debt.

It is possible that a change in circumstances or a review  will  change  the
individual's FTB entitlement, resulting in FTB ceasing or an FTB debt.   For
example, the individual may cease to have care of an FTB child during  2012-
13, or the FTB reconciliation for  2012-13  may  result  in  the  individual
having a lower or nil FTB entitlement for 2012-13.

However, a debt for all or part of the clean energy advance due  to  an  FTB
reassessment would generally not occur.  A clean energy advance  debt  would
only arise if the FTB reassessment  was  because  the  individual  knowingly
made  a  false  or  misleading  statement,  or  knowingly   provided   false
information.  This is similar to the debt rules for  the  economic  stimulus
payments that were  linked  to  certain  FTB  entitlements  in  relation  to
14 October 2008 and 3 February 2009.

New subsection 71L(1) provides that this section applies  to  an  individual
who has been paid a clean energy advance.

New subsection 71L(2) defines a relevant  determination  as  the  underlying
FTB determination that must be in force in relation to  the  individual  for
the individual to be entitled to  a  clean  energy  advance.   The  relevant
determinations  are  mentioned   in   new   paragraphs   103(1)(a),   (2)(a)
and 104(1)(a) of the Family Assistance Act (as inserted by item 3).

If, after an advance is paid, the relevant determination, as it  relates  to
a day in the  2012-13  income  year,  is  changed,  revoked,  set  aside  or
superseded and a reason for this was that the individual  knowingly  made  a
false or misleading statement or knowingly provided false  information  and,
had the change, revocation etc occurred on or before  the  day  the  advance
was paid, the advance would not have been paid, then  the  amount  of  clean
energy  advance  paid  is  a  debt.   The  relevant   rules   are   in   new
subsection 71L(3).
 
Similar  rules,  set  out  in  subsection  71L(4),  would  apply  where   an
individual is paid in excess of the amount of their entitlement to  a  clean
energy  advance  because  of   a   subsequent   change   to   the   relevant
determination, except that the amount of the debt would  be  the  difference
between the amount of advance paid and the  amount  that  should  have  been
paid.
 
Section 74 of the  Family  Assistance  Administration  Act  deals  with  the
situation where certain payments under the family assistance  law  are  paid
by cheque and a person other  than  the  payee  obtains  possession  of  the
cheque and its value without the payee's endorsement.   In  this  situation,
there is a resultant debt owed to the Commonwealth by the  person.   Item  8
amends section 74 so that it also  applies  where  a  clean  energy  advance
cheque is misappropriated.

Section 82 of the Family Assistance Administration Act sets out the  methods
that can be used to recover a debt.  Item 9 amends the  definition  of  debt
in subsection 82(3) to include a clean energy advance so  that  the  methods
of recovery are also available in relation to a clean energy advance debt.

Section 93A of the Family  Assistance  Administration  Act  allows  for  the
recovery of a family assistance payment  from  a  financial  institution  in
prescribed circumstances.  Item 10 includes a  clean  energy  advance  as  a
family assistance payment for the purposes of this provision.

Where  the  Secretary  reviews  certain  decisions,  there  is   a   current
requirement for the Secretary to give notice of the review decision  to  the
person or people whose entitlement  or  possible  entitlement  to  specified
payments (such  as  family  assistance  or  an  economic  security  strategy
payment to families) is affected by the review  decision  (subsection 106(3)
of the Family Assistance Administration Act refers). 
 
Item 11 amends subsection 106(3) so that  the  same  rule  also  applies  in
relation to review decisions relating to clean energy advance.
 
As a general rule, an application for review of a decision must be  made  no
later than 52 weeks after the applicant has been notified of  the  decision.
There are exceptions, such as where the  Commissioner  of  Taxation  reviews
and  changes  a  person's  taxable  income.    Items   12   and   13   amend
subsection 109D(4)  and  paragraph 109D(5)(a)  of  the   Family   Assistance
Administration Act respectively to ensure that the exceptions also apply  to
applications for review of  decisions  relating  to  the  payment  of  clean
energy advances.
 
Item 14 inserts a reference to clean  energy  advance  at  the  end  of  the
definition of relevant benefit in section 219TA  of  the  Family  Assistance
Administration Act.  This would enable the Secretary to  appoint  a  payment
nominee who would be  paid  the  clean  energy  payment  on  behalf  of  the
entitled individual.
 
Part 2 - Clean energy supplement for individuals

In broad terms, Part 2 of Schedule  2  to  the  Bill  introduces  new  clean
energy supplement (Part A) and new clean energy  supplement  (Part  B)  into
the rate calculation process for FTB in Schedule 1 to the Family  Assistance
Act.  The clean energy supplement (Part A) will be a separate new  component
of an individual's Part A rate while the clean  energy  supplement  (Part B)
will be a separate new component of an individual's Part B rate.

While the new supplements will generally be paid fortnightly with  FTB,  the
amendments in Part 2 of this Schedule also provide the rules which allow  an
individual to elect to receive their supplements on a quarterly basis.

Part 2 also contains the indexation arrangements for  the  new  supplements.


Amendments to the Family Assistance Act

Item 15 inserts a new section 58A into the FTB rate provisions in Part 4  of
Division 1 of the Family Assistance Act.   New  section  58A  sets  out  the
rules that enable an individual  who  is  entitled  to  payment  of  FTB  by
instalments to elect to have their clean energy supplement disregarded  from
the FTB rate calculation process.  The supplements would  then  be  included
in rate at the end of the relevant quarter through the  process  of  review.
The effect of the election would be to allow individuals to  be  paid  their
supplement each quarter, rather than with  their  fortnightly  FTB  payment.
The individual would only need to make one  election  (not  an  election  in
relation to each relevant quarter) which  would  continue  to  be  in  force
until revoked by the  individual  or  until  the  individual  ceases  to  be
entitled to payment of FTB by instalments.

New subsection 58A(1) enables an individual who is entitled  to  payment  of
FTB by instalments in a quarter to  make  an  election  to  have  the  clean
energy supplements disregarded  in  calculating  their  rate  of  FTB.   The
election would need to be in a manner or way approved by the Secretary.

Note 1 clarifies that the Divisions referred to  in  new  subsection  58A(1)
relate to the  clean  energy  supplement  (Part  A)  and  the  clean  energy
supplement (Part B).

Note 2 informs  the  reader  that,  if  the  clean  energy  supplements  are
disregarded because of  an  election,  they  are  taken  into  account  when
entitlement  is  reviewed  under  section  105  of  the  Family   Assistance
Administration Act after the end of the quarter (because  new  section  105B
requires such a review to occur at this time). This means that families  who
choose to receive their clean energy supplements quarterly will be  paid  in
arrears.

New subsection 58A(2) provides that an election comes into force as soon  as
practicable after it is made.  In practice, the intention is  to  adjust  an
individual's fortnightly payment of  FTB  as  soon  as  possible  after  the
election is made so that  future  fortnightly  payments  exclude  the  clean
energy supplements.

Under new subsection 58A(3), an election  ceases  to  be  in  force  if  the
individual ceases to be entitled to payment of FTB by instalments.

An individual can also elect to revoke an  election.   Where  this  happens,
the  election  ends  as  soon  as  practicable  after  the  revocation.    A
revocation must be made in a  manner  or  way  approved  by  the  Secretary.
These rules are in new subsection 58A(4).

New subsection 58A(5) defines quarter as a period of three months  beginning
on 1 July, 1 October, 1 January or 1 April.  A note then refers  the  reader
to item 34 of Schedule 2 to this  amending  Act,  which  provides  that  new
section 58A (inserted by  item  15)  applies  in  relation  to  the  quarter
beginning 1 July 2013 and all later quarters.

Clean energy supplement (Part A) as a component of the Part A rate

An individual's  clean  energy  supplement  (Part  A)  will  be  a  separate
component of an individual's Part A rate.

The method statement in clause 3 of Schedule 1 to the Family Assistance  Act
sets out the possible components  of  an  individual's  maximum  rate  where
Method 1 applies to calculate their Part A rate.  These include  a  standard
rate (sum of  the  relevant  FTB  child  rates),  large  family  supplement,
multiple birth allowance, FTB Part A supplement and rent assistance.

Item 15A adds new subsection 62(5) to the Family Assistance Act.  Under  new
subsection 62(5), if an individual is an absent overseas recipient on a  day
(disregarding any extension in the portability  period  under  section 63A),
then clean energy supplement is not to be added to the individual's rate  of
FTB in relation to that day.

Item 15B adds new subsection 63(5) to the Family Assistance Act.  Under  new
subsection 63(5), if an FTB child of an individual  is  an  absent  overseas
FTB child on a day (disregarding any extension  in  the  portability  period
under section 63A), then the child is disregarded in working out the  amount
of clean energy supplement that is to be added to the individual's  rate  of
FTB in relation to that day.

Item 16 introduces  a new component of rate as new paragraph  (cb)  of  Step
1, being the individual's clean energy supplement (Part A) worked out  under
new clause 38AA of Schedule 1.

Item 17 inserts a new clause 6 into Schedule 1.  This provision  allows  the
Minister, by legislative instrument, to determine a method for  working  out
the extent to which a Part A rate is attributable to the components of  rate
set out in Step 1 of the method statement in  clause  3.   This  would,  for
example, enable the Minister to determine  a  method  for  working  out  the
order in which reductions in rate due to the income and  maintenance  income
tests affect  the  components  of  rate,  including  the  new  clean  energy
supplement (Part A).

The method statement in clause 25 of Schedule 1  to  the  Family  Assistance
Act sets out the possible components of an individual's Method 2  base  rate
where Method 2 applies to calculate their Part  A  rate.   These  include  a
standard  rate  (sum  of  the  relevant  FTB  child  rates),  large   family
supplement, multiple birth allowance and FTB Part  A  supplement.   Item  19
introduces a new component of rate at the end of step 1, new paragraph  (e),
being the individual's clean energy supplement (Part  A)  worked  out  under
new clause 38AF of Schedule 1.

Item 18 makes a minor technical change to paragraph (d) in  step  1  of  the
method  statement  in  clause  25  of  Schedule   1   to   accommodate   new
paragraph (e).

Item 20 inserts a new clause 25B into Schedule  1.   This  provision  allows
the Minister, by legislative instrument, to determine a method  for  working
out the extent to which a Part A rate is attributable to the  components  of
rate set out in step 1 of the method statement in clause 25.

Clean energy supplement (Part B) as a component of the Part B rate

Clause 29 of Schedule 1 sets  out  the  general  method  of  calculating  an
individual's Part B rate.

Subclause 29(1) applies to work out an individual's Part B  rate  where  the
individual  is  not  a  member  of  a  couple.   The  method  statement   in
subclause 29(2) applies to an individual who is a member of  a  couple.   In
each case, there are two components of rate: the individual's standard  rate
and FTB Part B supplement.

Item 21 adds a new component of rate, the clean energy supplement (Part  B),
into subclause 29(1) as new paragraph (c).

Item  23  makes  a  similar   amendment   to   the   method   statement   in
subclause 29(2) by adding the  clean  energy  supplement  (Part  B)  as  new
paragraph (c) in step 1.  Item 22 then makes a  minor  technical  change  to
paragraph (b) in step 1 of  the  method  statement  in  subclause  29(2)  to
accommodate new paragraph (c).

Item 25 inserts a new subclause 29(2A)  into  Schedule  1.   This  provision
allows the Minister, by legislative instrument, to determine  a  method  for
working out the extent to which  a  Part  B  rate  is  attributable  to  the
components of rate set out in step 1 of the method  statement  in  subclause
29(2).   This provision makes the order of reduction  rule  in  brackets  at
the end of Step 3 of the method statement in  subclause  29(2)  superfluous.
Item 24 therefore omits the rule in brackets.

Clause 29A of Schedule 1 sets out a method of working  out  an  individual's
Part B rate for an individual who returns to  work  after  the  birth  of  a
child.  An individual's Part  B  rate  is  worked  out  in  accordance  with
subclause  29A(2).   There  are  currently  two  components  of  rate:   the
individual's standard rate and  FTB  Part  B  supplement.   Item  26  amends
subclause 29A(2) by adding the clean energy supplement (Part B)  as  another
component of an individual's Part B rate.

Working out the amount of an individual's clean energy supplement (Part B)

Part 4 of Schedule 1 provides for the calculation of an individual's Part  B
rate.  Item 27 inserts a new Division 2B into  Part  4  which  contains  the
rules for working out the amount of an individual's clean energy  supplement
(Part B).

New clause 31B sets out the rules  for  working  out  the  amount  of  clean
energy supplement (Part B) that is to be added to  an  individual's  Part  B
rate.

There would be an amount for the family  situation  where  the  individual's
youngest child is under five years of age  and  an  amount  for  the  family
situation where the individual's youngest child is aged five years or  more.
 These are the two categories of family situation for the standard  rate  of
Part B in clause 30 of Schedule 1.

New subclause 31B(2) provides a method statement to be used to work out  the
'start up' amount of clean energy supplement (Part B) on  1  July  2013  for
each of these family situations.

The first step is to work out the amount  of  standard  rate  applicable  on
1 July 2013 for the  corresponding  item  in  the  table  in  clause  30  of
Schedule 1.

Step 2 is to work out the FTB (B) gross supplement amount  on  1  July  2013
under subclause 31A(2).

These amounts are then added at Step 3 and the result  multiplied  by  0.017
at Step 4.  The amount at Step 4 is then rounded in accordance with Step  5.


The result is an amount of clean energy supplement (Part B) for each  family
situation described in the table in subclause 31B(1).

These amounts  are  then  subject  to  indexation  in  accordance  with  the
Consumer Price Index  on  1 July 2014  and  each  subsequent  1  July.   The
indexation arrangements for the clean energy  supplement  (Part  B)  amounts
are provided for in new item 9B in the Indexed and  Adjusted  Amounts  table
in clause 2 of Schedule 4 and new item 9B in the  CPI  Indexation  table  at
the end of subclause 3(1) of Schedule 4 (as inserted  by  items  30  and  32
respectively).

New subclause 31B(3) provides that clause 31B does not apply in relation  to
a day in respect of which an  election  under  section  58A  of  the  Family
Assistance Act is in  force.   A  note  directs  the  reader  to  a  related
provision, new section 105B of  the  Family  Assistance  Administration  Act
(inserted by item 33), which enables the  clean  energy  supplements  to  be
paid to an individual at the end of a quarter on the assumption  that  their
election was not in force for the relevant days in the quarter.

New clause 31C applies where an individual has a shared care percentage  for
an  FTB  child.   Where  the  child  is  their  only  FTB  child,  then  the
individual's clean energy supplement (Part B) is  that  percentage  of  what
would otherwise be their clean energy supplement (Part B).  Where the  child
is not their only FTB child, then subclause 31C(2) requires a  clean  energy
supplement (Part B) to be worked out for each FTB child  of  the  individual
as if they were the individual's only child and having regard to any  shared
care percentage that applies in relation to  the  child.   The  individual's
clean  energy  supplement  (Part  B)  is  the  highest  of  the  amounts  so
calculated.

The rules in new clause 31C are  similar  to  the  rules  in  clause  31  of
Schedule 1 which affect an individual's standard rate of FTB Part B.

Working out the amount of an individual's clean energy supplement (Part A)

Part 5 of Schedule 1 sets out some common rules that apply  in  working  out
an individual's Part A rate of FTB.

Item 28 inserts a new Division 2AA into Part 5 which contains the rules  for
working out the amount of an individual's clean energy supplement (Part  A).


New Subdivision A sets out  the  rules  for  calculating  the  clean  energy
supplement (Part A-Method 1).

New Subdivision B sets out  the  rules  for  calculating  the  clean  energy
supplement (Part A-Method 2).

These new  provisions  align  with  the  rate  categories  for  the  maximum
standard rate of FTB Part A under Method 1 and the  base  standard  rate  of
FTB Part A under Method 2, and include the same  effect  of  a  shared  care
percentage for an FTB child.

Families who receive more than the base rate of FTB Part A under  Method  1,
or more than the tapered base rate under Method  2,  will  receive  a  Clean
Energy Supplement equivalent to a 1.7  per  cent  increase  in  the  maximum
standard rate and end of year supplements for FTB Part A.

Families who receive the base rate of FTB Part A  under  Method  1,  or  the
tapered base rate under Method 2, will receive  a  Clean  Energy  Supplement
equivalent to a 1.7 per cent increase in the base standard rate and  end  of
year supplements for FTB Part A.

Clean energy supplement (Part A-Method 1)

New clause 38AA sets out the rules for  working  out  the  amount  of  clean
energy  supplement  (Part  A)  that  is  to  be  added  in  working  out  an
individual's maximum rate under  clause  3  of  Schedule  1  to  the  Family
Assistance Act.

There would be an FTB clean  energy  child  amount  for  each  of  the  five
categories of FTB child for the standard rate of  Part  A  in  clause  7  of
Schedule 1, that is:

    . FTB child who is under 13 years of age;

    . FTB child who has reached 13, but is under 16, years of age;

    . FTB child who has reached  16  years  of  age  and  who  is  a  senior
      secondary school child;

    . FTB child who has reached 16, but is under 18, years of age and who is
      not a senior secondary school child;

    . FTB child who has reached 18, but is under 22, years of age and who is
      not a senior secondary school child.

The FTB clean energy child amount for each  category  would  be  worked  out
under new subclause 38AA(2).  The amount in respect of  a  particular  child
could be affected by new clauses 38AB to 38AE, which deal with shared  care,
the effect of  maintenance  rights  and  other  matters  (discussed  further
below).  An individual's clean energy supplement (Part A) is  then  the  sum
of the relevant FTB clean energy child amounts.

The method statement in new subclause  38AA(2)  is  used  to  work  out  the
'start up' FTB clean energy child amount on 1 July 2013 for each of the  FTB
child categories.

The first step is to work out the amount of FTB  child  rate  applicable  on
1 July 2013 under the corresponding  item  of  the  table  in  clause  7  of
Schedule 1.

Step 2 is to work out the FTB gross supplement amount on 1 July  2013  under
subclause 38A(3).

These amounts are then added at Step 3 and the result  multiplied  by  0.017
at step 4.  The amount at Step 4 is then rounded in accordance with step  5.


The result is the FTB  clean  energy  child  amount  for  each  category  of
FTB child.

These amounts  are  then  subject  to  indexation  in  accordance  with  the
Consumer Price Index  on  1 July 2014  and  each  subsequent  1  July.   The
indexation arrangements for the FTB clean energy child amounts are  provided
for in new item 8B in the Indexed and Adjusted Amounts table in clause 2  of
Schedule 4 and new item 8B in  the  CPI  Indexation  table  at  the  end  of
subclause 3(1) of Schedule 4 (as inserted by items 29 and 31 respectively).

New subclause 38AA(3) provides that  new  clause  38AA  does  not  apply  in
relation to a day in respect of which an election under new section  58A  of
the Family Assistance Act is in force.  A  note  directs  the  reader  to  a
related provision, new section 105B of the Family Assistance  Administration
Act (inserted by item 33), which enables the clean energy supplements to  be
paid to an individual at the end of a quarter on the assumption  that  their
election was not in force for the relevant days in the quarter.

New clauses 38AC and 38AD set out the circumstances in which  an  FTB  clean
energy child amount for an FTB child will  be  the  base  FTB  clean  energy
child amount.

The circumstances are where:

    . the individual or their partner are receiving a periodic payment under
      a law of the Commonwealth  or  under  a  scheme  administered  by  the
      Commonwealth, and that payment has been increased by reference to  the
      FTB child of the individual; or

    . the individual or their partner are entitled to apply for  maintenance
      in respect of the child, the Secretary considers it reasonable  to  do
      so, but neither has taken that action.

New clause 38AB defines the concept of a base FTB clean energy child  amount
to mean the amount that would be the FTB clean  energy  child  amount  under
new subclause 38AF(2) if the individual's clean energy supplement  (Part  A)
were being worked out under Subdivision B and the shared care  rule  in  new
clause 38AG did not apply.

These rules operate in a similar way to the rules in  clauses  8  to  10  of
Schedule 1, which restrict the FTB child rate for an FTB child to  the  base
FTB child rate in the circumstances described above.

Under new clause 38AE, an individual's FTB clean energy child amount  for  a
child in respect of whom the individual has  a  shared  care  percentage  is
that percentage of what would  otherwise  be  the  FTB  clean  energy  child
amount for the child.

This rule is similar to the rule in clause 11 of Schedule 1,  which  affects
an individual's Method 1 standard rate for an FTB child where  a  percentage
determination applies in relation to the child.

Clean energy supplement (Part A-Method 2)

New clause 38AF sets out the rules for  working  out  the  amount  of  clean
energy  supplement  (Part  A)  that  is  to  be  added  in  working  out  an
individual's Method 2 base rate under clause 25.

There would be an FTB  clean  energy  child  amount  for  each  of  the  two
categories of FTB child for the standard rate of Part A in  subclause  26(2)
of Schedule 1:

    . FTB child who has not turned 18, or who has turned 18  and  who  is  a
      senior secondary school child;


    . FTB child who has turned 18 and who is not a senior  secondary  school
      child.

The FTB clean energy child amount for each  category  would  be  worked  out
under new subclause 38AF(2).  The amount in respect of  a  particular  child
could be affected by new clause 38AG,  which  deals  with  situations  where
there is a shared care percentage in relation to a child.   An  individual's
clean energy supplement (Part A) is then the sum of the relevant  FTB  clean
energy child amounts.

The method statement in new subclause  38AF(2)  is  used  to  work  out  the
'start up' FTB clean energy child amount on 1 July  2013  for  each  of  the
FTB child categories.

The first step is to work out the amount of FTB  child  rate  applicable  on
1 July 2013, which will be the amount in paragraph 26(2)(a)  of  Schedule  1
for an FTB child who has not turned 18, or who has turned 18 and  who  is  a
senior secondary school, or the amount in paragraph 26(2)(b) of  Schedule  1
for an FTB child who has turned 18 and who is not a senior secondary  school
child.

Step 2 is to work out the FTB gross supplement amount on 1 July  2013  under
subclause 38A(3).

These amounts are then added at Step 3 and the result  multiplied  by  0.017
at step 4.  The amount at step 4 is then rounded in accordance with step  5.


The result is the FTB  clean  energy  child  amount  for  each  category  of
FTB child.

These amounts  are  then  subject  to  indexation  in  accordance  with  the
Consumer Price Index  on  1 July 2014  and  each  subsequent  1  July.   The
indexation arrangements for the FTB clean energy child amounts are  provided
for in new item 8B in the Indexed and Adjusted Amounts table in clause 2  of
Schedule 4 and new item 8B in  the  CPI  Indexation  table  at  the  end  of
subclause 3(1) of Schedule 4 (as inserted by items 29 and 31 respectively).

New subclause 38AF(3) provides that  new  clause  38AF  does  not  apply  in
relation to a day in respect of which an election under new section  58A  of
the Family Assistance Act is in force.  A  note  directs  the  reader  to  a
related provision, new section 105B of the Family Assistance  Administration
Act (inserted by item 33), which enables the clean energy supplements to  be
paid to an individual at the end of a quarter on the assumption  that  their
election was not in force for the relevant days in the quarter.

Under new clause 38AG, an individual's FTB clean energy child amount  for  a
child in respect of whom the individual has  a  shared  care  percentage  is
that percentage of what would  otherwise  be  the  FTB  clean  energy  child
amount for the child.

This rule is similar to the rule in clause 27 of Schedule 1,  which  affects
an individual's Method 2 standard rate for an FTB child where  a  percentage
determination applies in relation to the child.

Items 29 to 32 provide for the indexation of  the  clean  energy  supplement
(Part B) amounts and the FTB clean  energy  child  amounts  for  family  tax
benefit (Part A) as mentioned above.

Amendments to the Family Assistance Administration Act

Item  33  inserts  a  new  section   105B   into   the   Family   Assistance
Administration Act.

New section 105B applies where an individual who is entitled to be paid  FTB
by instalments has elected not to receive their clean energy  supplement  on
one or more days in a quarter.  In these  circumstances,  the  Secretary  is
required to review the individual's entitlement (under subsection 105(1)  of
the Family Assistance Administration Act) at the end of the quarter,  having
regard to the clean energy supplements as if the election were not in  force
for the relevant days in the quarter.  The effect of this provision is  that
an individual's FTB entitlement determination must be reviewed  at  the  end
of the quarter and their rate  recalculated  to  include  the  clean  energy
supplements that were disregarded due to the election.

A quarter is defined in new subsection 105B(3) to mean  a  period  of  three
months beginning on 1 July, 1 October, 1 January or 1 April.   A  note  then
refers the reader to item 34 of Schedule  2  to  this  amending  Act,  which
provides that new section 105B applies in relation to the quarter  beginning
1 July 2013 and all later quarters.

Item 34 provides for the application of the amendments  made  by  Part 2  of
Schedule 2.

The amendments made by items 15 and 33 apply  in  relation  to  the  quarter
beginning 1 July 2013 and all later quarters.  These  amendments  enable  an
individual to elect to have their clean energy  supplements  disregarded  in
calculating their rate of FTB and then require the individual's rate  to  be
reviewed after the end of a quarter to add back into the  individual's  rate
the clean energy supplements.  The relevant quarters  for  the  purposes  of
quarterly payment of clean energy supplements are the quarters beginning  on
1 July, 1 October, 1 January and 1 April, with the first quarter  being  the
quarter beginning on 1 July 2013.

The amendments made by items 15A to 28 apply  in  relation  to  the  2013-14
income year and later income years.   These  amendments  introduce  the  new
clean energy supplements.

The amendments made by items 29 to 32 apply in relation  to  the  indexation
day that is 1 July 2014 and all later  indexation  days.   These  amendments
set out the indexation arrangements for the new  clean  energy  supplements.
For 1 July 2013, the supplements are calculated  by  reference  to  existing
FTB child rates and supplements.  These start-up amounts  are  then  indexed
on 1 July 2014 and each subsequent 1 July.

From 1 January 2012, the maximum child age of eligibility for  FTB  will  be
21 (reduced from 24).   Schedule  1  to  the  Family  Assistance  and  Other
Legislation Amendment  Act  2011  (the  amending  Act)  makes  the  relevant
amendments to the Family Assistance Act.  However,  item  6  of  Schedule  1
preserves the existing rules for certain  students  aged  22  to  24  years.
Item 35 ensures that a child  who  continues  to  be  an  FTB  child  of  an
individual due to this saving  provision  would  also  be  counted  for  the
purposes of working out the individual's clean energy supplement Part  A  by
deeming that item 5 of the table in subclause 38AA(1) of Schedule 1  applies
for the relevant period as if the reference  in  that  item  to  22  were  a
reference to 25.

Part 3 - Clean energy advances for approved care organisations

Item 36 in Part 3  contains  provision  for  a  Minister  administering  the
Family Assistance Act to determine  a  scheme,  by  legislative  instrument,
under  which  clean  energy  advances  will  be  paid   to   approved   care
organisations.  The  Minister  may  vary  or  revoke  the  scheme,  also  by
legislative instrument.

Subitem 36(2) provides that the circumstances in which the  scheme  provides
for payments must be circumstances  occurring  in  relation  to  the  period
14 May 2012 to 30 June 2013.  Subitem 36(3) lists some of the  matters  that
may be dealt with  by  the  scheme,  such  as  the  circumstances  in  which
payments are to be paid, the amount  of  payment  and  other  administrative
matters.

Subitem  36(4)  provides  that  an  instrument  determining  or  varying  an
administrative scheme cannot take effect until the end of  the  disallowance
period.

Payments under the scheme are to be made out  of  the  Consolidated  Revenue
Fund, which is appropriated accordingly (subitem 36(5) refers).

Part 4 - Clean energy supplement for approved care organisations

In broad terms, Part 4 introduces a new clean  energy  supplement  into  the
FTB rate calculation process for an approved care organisation.   The  clean
energy supplement  would  be  a  separate  component  of  an  approved  care
organisation's rate of FTB and will  generally  be  paid  on  a  fortnightly
basis with FTB.

Part 4 also contains  indexation  arrangements  for  the  new  clean  energy
supplement for approved care organisations.

Amendments to the Family Assistance Act

Section 58 of the Family Assistance Act provides for the rate of  FTB.   For
an approved care organisation, the annual rate of FTB for an  individual  is
the amount specified in subsection 58(2).

Item 37 repeals subsection 58(2) and inserts  new  subsections  58(2),  (2A)
and (2B).

New subsection 58(2) provides that an approved  care  organisation's  annual
rate of FTB for an individual is the  sum  of  the  organisation's  standard
rate and their clean energy supplement.

New  subsection  58(2A)  sets  out  the   amount   of   an   approved   care
organisation's standard rate.  The current rate is $1,372.40.

New subsection 58(2B)  provides  a  method  statement  for  working  out  an
approved care organisation's clean  energy  supplement  for  an  individual.
The method involves working out the applicable standard rate as  at  1  July
2013, multiplying that amount by 0.017 (1.7 per cent) and then rounding  the
result to the nearest multiple of $3.65.  The result  is  the  clean  energy
supplement.

Current subsection 58(3) then provides the method for converting the  annual
rate of FTB into a daily rate.

Subitem   42(1)   provides   that   new   paragraph   58(2)(b)    and    new
subsection 58(2B) apply in relation to the 2013-14  income  year  and  later
income years.  This ensures that the  provisions  introducing  the  approved
care organisation clean energy supplement will only apply from 1 July  2013.


The indexed and adjusted amounts table in Clause 2  of  Schedule  4  to  the
Family Assistance Act describes the  amounts  that  are  to  be  indexed  or
adjusted under Schedule 4 and provides convenient  abbreviations  for  those
amounts.

The CPI indexation table in clause 3 of Schedule 4  then  provides  for  the
indexation of specified  amounts  in  accordance  with  the  Consumer  Price
Index.

Item 10 of the indexed and adjusted amounts table currently  refers  to  the
FTB approved care organisation rate in  subsection  58(2).   This  entry  is
updated by  item  38  to  refer  to  the  new  FTB  standard  approved  care
organisation rate in new subsection 58(2A).  Item 40 similarly  updates  the
relevant reference in the CPI indexation table.

Item 39 inserts a new entry into the indexed  and  adjusted  amounts  table.
New  item  10A  refers  to  the  approved  care  organisation  clean  energy
supplement under  new  subsection  58(2B).   Item  41  then  inserts  a  new
item 10A into the CPI indexation table relating to  the  new  approved  care
organisation clean energy supplement.

Subitem  42(2)  provides  that  the  new  indexation  arrangements  for  the
approved care organisation clean energy supplement apply in relation to  the
indexation day that is 1 July 2014 and all later indexation days.

Part 5 - Other amendments

Part 5 contains amendments to the Family Assistance Act that provide for  an
indexation adjustment for certain FTB child rates,  FTB  supplement  amounts
and the FTB standard approved care organisation rate.  The  expected  impact
of the carbon price on indexation (0.7 per cent) will be  delivered  through
the clean  energy  supplement  rather  than  indexation  of  these  amounts.
Regular indexation of the amounts will continue to apply,  adjusted  by  the
equivalent amount now being delivered through the clean energy  supplement..


There are other consequential amendments to the Family  Assistance  Act  and
the Family Assistance Administration Act.

Amendments to the Family Assistance Act

To be eligible for FTB, paragraph 21(1)(c)  of  the  Family  Assistance  Act
provides that an individual's rate of FTB, worked out under  Division  1  of
Part 4 but disregarding reductions  (if  any)  under  clause  5  or  25A  of
Schedule 1, must be greater than nil.  

If an election under new section 58A is in force and the  individual's  rate
of FTB would be greater than nil if the  election  was  not  in  force,  the
intention is that the individual should  satisfy  the  eligibility  rule  in
paragraph 21(1)(c).  Item 43 amends paragraph 21(1)(c) to this effect.

Item 45 pluralises the heading of  Part  4  of  Schedule  4  to  the  Family
Assistance Act and item 46 adds new clauses 10 and 11 into Part 4.

The indexation factor is relevant in working  out  an  indexed  amount  (the
method statement in subclause 4(2) of Schedule 4 to  the  Family  Assistance
Act refers) and is worked out under clause 5 of Schedule 4.

New clause 10 provides for  an  adjustment  to  the  indexation  factor  for
certain amounts on and after 1 July 2013.  These amounts, specified  in  new
subclause 10(1) are the FTB child rates under  Method  1  for  Part  A,  the
FTB child rates under Method 2 for Part A, the FTB  Part  B  standard  rates
and the FTB standard approved care organisation rate.

New subclause 10(2) provides that the indexation factor,  worked  out  under
clause 5 for each indexation day that is on or after 1 July 2013, is  to  be
adjusted by the brought forward indexation amount, but not below one.

New subclause 10(3) then defines the brought forward  indexation  amount  as
0.007, less any adjustment made for a previous indexation day.  The  brought
forward indexation  amount  is  initially  0.007,  the  expected  additional
increase in the Consumer Price Index due to carbon pricing  which  is  being
delivered through the clean energy supplement rather than indexation of  the
relevant child rates.

A note at the end of new subclause 10(3) provides  that,  once  the  brought
forward indexation amount is zero, there is no  further  adjustment  of  the
indexation factor.  An example is also included to provide the  reader  with
a clear picture of how the adjustment of indexation will apply.

New clause 11 provides for  an  adjustment  to  the  indexation  factor  for
certain amounts on and after 1 July 2014.  These amounts, specified  in  new
subclause 11(1), are the FTB gross supplement amount (A) and  the  FTB gross
supplement amount (B).    As the Consumer Price Indexation  of  the  end  of
year FTB Part A and Part B supplements will be paused on 1 July 2013,  there
would be no indexation adjustment on 1 July 2013.

New subclause 11(2) provides that the indexation factor,  worked  out  under
clause 5 for each indexation day that is on or after 1 July 2014, is  to  be
adjusted by the brought forward indexation amount, but not below  one.   The
FTB Part A and Part B supplements will not be affected, should the  relevant
CPI indexation factor be less than one plus the brought  forward  indexation
amount.

New subclause 11(3) then defines the brought forward  indexation  amount  in
relation to this clause as 0.007, less:

    . any adjustment made under new subclause 10(2) on 1 July 2013; and


    . any adjustment made under this clause for a previous indexation day.

The brought forward indexation  amount  is  the  amount  of  the  additional
increase in the consumer price index due to  carbon  pricing  that  will  be
transferred from the indexation on FTB Part A and Part B supplements to  the
clean energy supplement, to the extent indexation arrangements for  the  FTB
Part A and Part B supplements allow.  It can only be equal to or  less  than
the expected additional increase in the consumer price index due  to  carbon
pricing (0.7 per cent or 0.007).

A note at the end of new subclause 11(3) provides  that,  once  the  brought
forward indexation amount is zero, there is no  further  adjustment  of  the
indexation factor.  An example is also included to provide the  reader  with
a clear picture of how the adjustment of indexation will apply.

Item 44  makes  a  consequential  amendment  to  clause  5,  which   defines
indexation factor, so that its operation is subject  to  the  rules  in  new
clauses 10 and 11.

Amendments to the Family Assistance Administration Act

Section 32A of the Family Assistance Administration  Act  ensures  that  the
FTB Part A and  Part  B  supplements  are  disregarded  from  the  FTB  rate
calculation  process  unless  and  until  the  relevant  FTB  reconciliation
conditions are satisfied for one or more same-rate benefit periods.

The clean energy advance and  the  start  up  amount  of  the  clean  energy
supplements for individuals are calculated, in part,  by  reference  to  the
FTB Part A and Part B supplements.  Item 47 clarifies that the  FTB  Part  A
and Part B supplements can be included in those calculations, regardless  of
whether the individual has satisfied the FTB reconciliation conditions.


                Schedule 3 - Clean energy payments under the
                         Veterans' Entitlements Act


                                   Summary

The  Clean  Energy  Household  Assistance  Package  will  provide  financial
assistance to veterans, members, former  members  and  their  dependants  to
assist with increases in the cost of living arising  from  the  introduction
of a carbon price on 1 July 2012.

Financial assistance will be delivered through clean  energy  payments  that
are equivalent to permanent increases to the rates  of  relevant  pensions. 
The amendments in this Schedule provide for assistance to be provided  by  a
lump sum clean energy advance before  commencement  of  the  carbon  pricing
scheme, and for ongoing clean energy supplements to be paid from the end  of
the clean energy advance lump sum period.

                                 Background

Clean energy advances

Part of the Schedule makes amendments  to  provide  for  a  lump  sum  clean
energy advance, payable to people before  the  commencement  of  the  carbon
pricing scheme.  The clean energy advance period  will  cover  a  period  of
nine months.

The clean energy advance will start being paid to people from  14  May  2012
as a tax-free payment to  the  recipients  of  certain  payments  under  the
Veterans'  Entitlements  Act  targeted  under   the   Household   Assistance
Package.  The clean energy advance would include:

    .  the  expected  Consumer  Price  Index  impact   of   carbon   pricing
      (0.7 per cent); and


    . the additional increase amount above Consumer Price Index impact  (one
      per cent).

The clean energy advance  will  be  paid  in  respect  of  the  period  from
1 July 2012 until  the  normal  payment  indexation  arrangements  begin  to
deliver Consumer Price  Index  increases  related  to  carbon  pricing  from
20 March 2013. 


Clean energy supplements

Once normal indexation begins to deliver Consumer Price Index  increases  in
respect of carbon pricing from 20 March 2013, the additional  increase  will
be paid as clean energy supplements.

It is proposed that ongoing clean energy supplements will start to  be  paid
from the end of the clean energy advance lump sum period.  The clean  energy
supplement will be a separate payment from the  relevant  Veterans'  Affairs
pension.  The clean energy supplements will be  permanent,  and  indexed  by
the Consumer Price Index so they maintain their value  in  real  terms  over
time.

It is proposed that recipients  be  given  the  option  of  receiving  their
supplement as a quarterly payment  in  arrears  rather  than  a  fortnightly
payment.

Indexation

The expected additional impact on  the  Consumer  Price  Index  from  carbon
pricing (0.7 per cent) will be permanently  included  in  the  clean  energy
supplement (plus an additional  one per cent  increase).   Part  3  contains
amendments to the Veterans' Entitlements Act that provide for  the  expected
impact of the carbon price on indexation (0.7 per cent)  to  be  transferred
from the maximum basic rate and  pension  supplement  of  certain  veterans'
payments to the clean energy supplement.  The maximum  basic  rate  and  the
pension supplement will continue to be  indexed  in  accordance  with  usual
indexation arrangements.  The clean energy supplement will also  be  indexed
to maintain its real value over time.

The carbon price impacts will start  to  flow  through  to  primary  payment
indexation at the 20 March 2013 indexation point.

                         Explanation of the changes

Part 1 - Clean energy advances

Amendments to the Veterans' Entitlements Act

Item 1 inserts four new terms into the index of definitions.

Item 2 inserts a definition for clean energy advance  in  subsection  5Q(1).
Clean energy advance means an advance described in Subdivision  A  or  C  of
Division 1 of Part IIIE.

Item 3 inserts a definition for clean  energy  bonus  in  subsection  5Q(1).
Paragraph (a) of the definition provides that a clean energy bonus under  an
Act or a scheme is a payment known as a clean energy  advance  provided  for
by the Act or scheme.

Paragraph (c) of the definition provides that clean energy bonus is also  an
increase that is described using the phrase 'clean energy' and that  affects
the rate of another payment that is provided for by the Act or scheme.

Paragraph (b) of the definition will be inserted by item 11  of  Part  2  of
Schedule 3 when it commences on 20 March 2013.

Item 4 inserts a definition for clean energy  payment  in  subsection  5Q(1)
and contains paragraph (a) to include clean energy advance.

Item  5  inserts  a  definition  for  clean  energy  underlying  payment  in
subsection 5Q(1).  Clean energy underlying payment means:

    . a pension under Part II or  IV  at  a  rate  determined  under  or  by
      reference to Division 4 of Part II - this covers general rate, extreme
      disablement adjustment, intermediate  rate,  special  rate,  temporary
      special rate  and rates set by section 27; or

    . a pension under Part II or  IV  at  a  rate  determined  under  or  by
      reference to subsection  30(1)  -  this  covers  war  widow's  or  war
      widower's pension; or

    . service pension; or

    . seniors supplement.

Item 6 inserts a new Part IIIE into the  Veterans'  Entitlements  Act.   New
Part IIIE creates two new payments, the clean energy advance and  the  clean
energy supplement.  The new Part also sets out the  eligibility,  payability
and rate rules for both the  clean  energy  advance  and  the  clean  energy
supplement.

Part IIIE - Clean energy payments

Division 1 - Clean energy advances

Subdivision A - Eligibility for clean energy advances

New section 61A sets out the eligibility rules  for  people  in  receipt  of
clean energy underlying payments.  New subsection 61A(1) provides that,  if,
on a day between 14 May 2012 and 30 June 2012 (dates  inclusive),  a  person
receives a clean energy underlying payment, they reside in Australia,  their
rate of payment is  greater  than  nil,  and  they  are  in  Australia,  the
Repatriation Commission may determine that the  person  is  eligible  for  a
clean energy advance for the period from  1  July  2012  to  19 March  2013.
This provision will  provide  eligibility  for  persons  receiving  a  clean
energy underlying payment and who are in  Australia  on  a  day  during  the
period 14 May 2012 and 30 June 2012.

A note at the end of  the  section  advises  that  clean  energy  underlying
payment is defined in subsection 5Q(1).

New subsection 61A(2) provides that, if, on a day  between  1 July 2012  and
19 March 2013  (dates  inclusive),  a  person  receives   a   clean   energy
underlying payment, they reside in  Australia,  their  rate  of  payment  is
greater than nil, and they are in  Australia,  the  Repatriation  Commission
may determine that the person is eligible for a  clean  energy  advance  for
the  period  ending  on  19  March  2013.   This  provision   will   provide
eligibility for persons who begin  to  receive  a  clean  energy  underlying
payment on or after 1 July 2012 or  who  were  receiving  the  clean  energy
underlying payment prior to 1 July 2012 but who returned to Australia on  or
after 1 July 2012.

A note at the end of  the  section  advises  that  clean  energy  underlying
payment is defined in subsection 5Q(1).

New subsection 61A(3) provides that, if the Repatriation Commission makes  a
determination under new subsection 61A(2), the  determination  must  specify
the first day on which the person satisfies both  new  paragraphs 61A(2)(a),
(b) and (ba), and the day that is  the  first  day  during  the  period  the
person is in Australia, disregarding any  temporary  absence  that  is  less
than 13 weeks.

New subsection 61A(4) provides  that,  if,  at  the  time  the  Repatriation
Commission  makes  a  determination  under  new  subsection  61A(1)  or  (2)
regarding eligibility, a person's rate of clean  energy  underlying  payment
is nil merely because:

    . the rate is reduced, or  the  pension  is  not  payable,  due  to  the
      operation of a provision under Division 4, 5  or  5A  of  Part  II  or
      section 74; or


    . they are receiving quarterly pension supplement;

the person's rate is taken to be greater  than  nil  and  the  person  will,
therefore, meet the requirement in paragraphs 61A(1)(b) and 61A(2)(b).

New subsection 61A(5) prevents the Repatriation Commission from  determining
that a person is eligible for a clean energy advance  under  new  subsection
61A(2) if the  Repatriation  Commission  has  already  determined  that  the
person was eligible for a clean energy advance for  the  same  clean  energy
underlying payment under new subsection 61A(1) or 61A(2).

New section 61B provides that a person may be paid a  clean  energy  advance
for  each  clean  energy  underlying  payment  for  which  the  Repatriation
Commission determines that  the  person  is  eligible  for  a  clean  energy
advance.

A note at the end of the section explains that the  section  is  subject  to
the multiple entitlement exclusion provisions in new section 65A.

Subdivision B - Amount of clean energy advance

New section 61C sets out how a clean energy advance is to be calculated  for
a person.

New  subsection 61C(1)  provides  that,  when  the  Repatriation  Commission
determines that a person  is  eligible  for  a  clean  energy  advance  (the
decision day), the Repatriation Commission must also  determine  the  amount
of clean energy advance that is payable to the person (the recipient).

A note after the subsection explains that the advance  will  be  paid  as  a
lump sum as soon as is reasonably practicable after the decision day.

New subsection 61C(2) provides that the amount of the clean  energy  advance
will be the clean energy advance daily rate  multiplied  by  the  number  of
advance days, rounded up to the nearest $10.   Clean  energy  advance  daily
rate means the rate as worked out for the person's circumstances  under  new
section 61D and the number of advance days is the number of days worked  out
under new section 61E.

New section 61D sets out the  various  methods  of  calculating  a  person's
clean energy daily rate.  A person's clean energy advance  daily  rate  will
depend on the type of payment that the person receives.

New subsection 61D(1) sets out the formula for calculating the clean  energy
advance daily rate for a person whose clean energy underlying payment  is  a
rate determined under or by reference to general rate,  extreme  disablement
adjustment, intermediate rate or special rate  of  disability  pension.   In
these cases, the daily rate is calculated by working out  1.7  per  cent  of
the person's rate of disability pension on 1 July 2012, adding 20  cents  to
that amount (which compensates for the lack of indexation  that  would  have
occurred if the clean energy advance was paid as a clean  energy  supplement
rather than as a lump sum advance), rounding  the  resulting  amount  up  or
down to the nearest 10 cents and dividing that result by  14.   For  persons
on a percentage of general rate disability  pension,  for  the  purposes  of
this section,  their  rate  will  be  100  per  cent  of  the  general  rate
disability pension.

New subsection 61D(2) sets out the formula for calculating the clean  energy
advance daily rate for a person whose clean energy underlying payment  is  a
rate of disability pension determined under or by reference to  section  27.
In these cases, the daily rate is calculated by working out 1.7 per cent  of
the person's rate of disability pension on 1 July 2012 using  the  table  at
the  end  of  the  subsection,  adding  20  cents  to  that  amount   (which
compensates for the lack of indexation  that  would  have  occurred  if  the
clean energy advance was paid as a clean energy supplement rather than as  a
lump sum advance), rounding the resultant amount up or down to  the  nearest
10 cents and dividing that result by 14.

New subsection 61D(3) means, when using the table in new  subsection 61D(2),
the person's rate of disability pension is to be taken to be the  rate  that
the person would be receiving if subsections 23(5)  or  (6),  sections  25A,
26, Division 5A of Part II or section  74  were  not  applied  and  did  not
reduce the person's rate of disability pension.

New subsection 61D(4) sets out the formula for calculating the clean  energy
advance daily rate for a person whose clean  energy  underlying  payment  is
war widow's or war widower's pension.  In these cases,  the  daily  rate  is
calculated by working out 1.7 per cent of the person's rate of  war  widow's
or war widower's pension on 1 July 2012, adding  20  cents  to  that  amount
(which compensates for the lack of indexation that would  have  occurred  if
the clean energy advance was paid as a clean energy supplement  rather  than
as a lump sum advance), rounding the resultant amount  up  or  down  to  the
nearest 10 cents and dividing that result by 14.

New subsection 61D(5) sets out the formula for calculating the clean  energy
advance daily rate for people in  receipt  of  service  pension  or  seniors
supplement.  A person's clean energy advance daily rate  is  worked  out  by
calculating 1.7 per cent of the sum of  twice  the  maximum  basic  rate  on
1 July 2012 as set out under SCH6-B1 of the Rate  Calculator  for  a  person
who is partnered and the combined  couple  rate  of  pension  supplement  on
1 July 2012, and this figure is then rounded  up  or  down  to  the  nearest
multiple of $5.20.  An amount of $5.20 is then added to this  figure,  which
compensates for the lack of indexation  that  would  have  occurred  if  the
clean energy advance was paid as a clean energy supplement rather than as  a
lump sum advance.  The calculation produces an annual figure for a  combined
couple, which is then adjusted to take account of  the  particular  person's
circumstances by applying the relevant percentage in the table  at  the  end
of new subsection 61D(5)  that  corresponds  with  the  person's  particular
circumstances.  The percentage adjusted figure is then rounded  up  or  down
to the nearest multiple of $2.60,  rounding  up  if  the  figure  is  not  a
multiple of $2.60 but is a multiple  of  $1.30.   The  final  figure  is  an
annual figure which is then divided by 364 to obtain a daily rate.

The note at the end of new  subsection states  where  the  family  situation
terms used in the table are defined in the Veterans' Entitlements Act.

New subsection 61D(6) means that,  when  using  the  table  at  the  end  of
subsection 61D(5) for the purposes of paragraph  61(D)(5)(d),  the  person's
family situation is to be determined as at either:

    . the day the Repatriation Commission determines under subsection 61A(1)
      that the person is eligible ; or


    . the day specified in a determination under subsection 61A(2) that  the
      person is eligible.

New section 61E sets out how the number of advance days  is  worked  out  to
enable the clean energy advance to be calculated.   The  number  of  advance
days is the number of days in the person's clean energy  advance  period  to
be calculated starting on either:

    . 1 July 2012; or


    . if a determination under subsection 61A(2) applies to the person,  the
      day specified in the determination under subsection  61A(3)  that  the
      person is eligible;

and ending on 19 March 2013.

Subdivision C - Top-up payments of clean energy advance

This Subdivision, comprising new section 61F, provides for  top-up  payments
of clean energy advance to people where a  change  of  circumstances  during
the clean energy advance  period  would  result  in  the  person  not  being
appropriately compensated for the anticipated increased energy costs.

The  operation  of  this  Subdivision  will  mean  that,  if  the   person's
circumstantial change during the clean energy advance period results in:

    . the person starting to receive a  different  clean  energy  underlying
      payment that is paid at a higher rate than their previous clean energy
      underlying payment (for example, a person changes from partner service
      pension to war widow's or war widower's pension); or


    . the person starting  to  receive  the  same  clean  energy  underlying
      payment at a higher rate (for  example,  a  person  changes  from  the
      partnered rate of service  pension  to  the  single  rate  of  service
      pension);

then, where the person is not able to  receive  the  entire  advance  amount
because of a multiple entitlement exclusion,  the  person  will  receive  an
additional amount of clean  energy  advance  equivalent  to  the  difference
between the higher  and  lower  advance  amounts  for  the  number  of  days
remaining in the advance period.

This may happen more than once.

New  subsection 61F(1)  provides  that  the  Repatriation   Commission   may
determine, by legislative instrument, that persons  who  have  been  paid  a
clean energy advance (the  original  payment  for  the  original  underlying
payment) and whose circumstances change, are eligible for a  further  top-up
payment of clean energy advance.  The instrument will  further  specify  the
time period within which the change of circumstances must  occur,  the  type
of circumstance change and the method of calculating  the  additional  clean
energy advance amount.

New  subsection  61F(2)  enables  the  Repatriation  Commission  to  make  a
legislative  instrument  under   subsection   61F(1)   for   a   change   in
circumstances that involves persons becoming eligible for a higher  rate  of
the original underlying payment.

New  subsection  61F(3)  enables  the  Repatriation  Commission  to  make  a
legislative  instrument  under   subsection   61F(1)   for   a   change   in
circumstances that involves the person  beginning  to  receive  a  different
clean energy underlying payment.

New subsection 61F(4) provides, for the purposes of subsection (3),  that  a
multiple entitlement exclusion is an instrument providing that a  person  is
not entitled to a clean energy bonus because of the person's entitlement  to
or receipt of the original payment or the original payment or  the  original
underlying payment.

A multiple entitlement exclusion is also an instrument that  is  made  under
section 65A of the Veterans' Entitlements Act, section 424L of the  Military
Rehabilitation and Compensation Act, section  918  of  the  Social  Security
Act, or an instrument establishing entitlements  to  a  clean  energy  bonus
under a scheme.

New subsection 61F(5) enables an instrument under section 61F(1) to be  made
in relation to different periods of time for changes  in  circumstances  and
different ways of working out further amounts of clean energy advance.

Subdivision D - Payment of clean energy advance

Subsection (1) of new section 61G requires a  clean  energy  advance  to  be
paid in a single lump sum.  The amount is to be paid  on  the  earliest  day
that the Commission considers it reasonably practicable for  the  amount  to
be paid.

New subsection 61G(2) provides that a clean energy advance  is  not  payable
if the Commission is aware that the person has died.

Subdivision E - Debts

Subsection (1) of new section 61H provides that a clean energy advance is  a
debt due to the Commonwealth if the payment was made because  the  recipient
knowingly made a false or misleading statement or knowingly  provided  false
information.

Notes  1  and  2  at  the  end  of  the  subsection  provide   examples   of
determinations that directly and indirectly affect payability and amounts.

New subsections 61H(2) and (3) provide that an  advance  and  an  amount  by
which  an  advance  would  have  been  reduced  can  be  debts  due  to  the
Commonwealth.

New subsection 61H(4) provides that the other debt  creation  provisions  of
the Veterans' Entitlements Act do not apply  in  relation  to  clean  energy
advances.

New subsection 61H(5) provides that a debt is a  recoverable  amount  within
the meaning of subsection 205(8).

Division 5 - Multiple entitlement exclusions

New section 65A provides for  multiple  entitlement  exclusions  to  prevent
inappropriate double payments of clean energy advances.

New  subsection  65A(1)  enables  the  Repatriation  Commission  to  make  a
legislative instrument to determine the circumstances  under  which  persons
are not entitled to a clean energy bonus.

A note at the end of the subsection explains  that  the  term  clean  energy
bonus is defined in subsection 5Q(1).

New subsection 65A(2) requires that the circumstances, for the  purposes  of
the legislative instrument to be made  under  new  subsection  65A(1),  must
relate to a person's entitlement to, or receipt  of,  one  or  more  of  the
following:

    . another clean energy bonus under the Veterans' Entitlements Act; or

    .  a  clean  energy  bonus  under  the   Military   Rehabilitation   and
      Compensation Act; or

    . a clean energy bonus under the Social Security Act; or

    . a clean energy bonus under a scheme (however  described),  whether  or
      not the scheme is provided for by or under an Act.

As this section will involve  multiple  entitlement  exclusions  within  and
between a number of different Acts and schemes, the  term  'entitlement  to'
refers to a variety of concepts relating to a payment, amount or  rate  that
may be used in other  Acts  or  schemes,  including,  but  not  limited  to,
'qualification for', 'eligibility for' and 'the  Commonwealth  being  liable
to pay'.

New subsection 65A(3) provides that an instrument made under  subsection (1)
has effect according to its terms and despite any other  provision  of  this
Act.  This means that, if a person may otherwise appear to be  eligible  for
a payment,  a  multiple  entitlement  exclusion  instrument  precludes  that
eligibility.

Part 2 - Clean energy supplements and quarterly energy supplement

Amendments to the Veterans' Entitlements Act

Items 7 to 9 insert a number of new terms into the index of  definitions  in
section 5.

Item 10 inserts new section 5GB to  contain  the  definitions  required  for
clean energy supplement and quarterly clean energy supplement introduced  in
new Part IIIE.

New subsection 5GB(1) defines  the  term  CES  22(3)  rate  as,  subject  to
section 198,  the rate calculated by working out 1.7 per cent  of  the  rate
specified in subsection 22(3) on 20 March 2013  (including  any  indexation)
and rounding that result up or down to the nearest multiple of 10 cents.

A note at the end of the subsection explains that section 198  provides  for
the indexation of the rate.

New subsection 5GB(2) defines  the  term  CES  22(4)  rate  as,  subject  to
section 198,  the rate calculated by working out 1.7 per cent  of  the  rate
specified in subsection 22(4) on 20 March 2013  (including  any  indexation)
and rounding that result up or down to the nearest multiple of 10 cents.

A note at the end of the subsection explains that section 198  provides  for
the indexation of the rate.

New subsection 5GB(3) defines  the  term  CES  23(4)  rate  as,  subject  to
section 198, the rate calculated by working out 1.7 per  cent  of  the  rate
specified in subsection 23(4) on 20 March 2013  (including  any  indexation)
and rounding that result up or down to the nearest multiple of 10 cents.

A note at the end of the subsection explains that section 198  provides  for
the indexation of the rate.

New subsection 5GB(4) defines  the  term  CES  24(4)  rate  as,  subject  to
section 198, the rate calculated by working out 1.7 per  cent  of  the  rate
specified in subsection 24(4) on 20 March 2013  (including  any  indexation)
and rounding that result up or down to the nearest multiple of 10 cents.

A note at the end of the subsection explains that section 198  provides  for
the indexation of the rate.

New subsection 5GB(5) defines  the  term  CES  30(1)  rate  as,  subject  to
section 198, the rate calculated by working out 1.7 per  cent  of  the  rate
specified in subsection 30(1) on 20 March 2013  (including  any  indexation)
and rounding that result up or down to the nearest multiple of 10 cents.

A note at the end of the subsection explains that section 198  provides  for
the indexation of the rate.

New subsection 5GB(6) defines the term  clean  energy  pension  rate  for  a
person as, subject to sections 59B, 59C, 59D and  59E,  the  rate  of  clean
energy supplement worked out by calculating 1.7 per cent  of  the  total  of
twice the maximum basic rate under the Rate Calculator for a person  who  is
partnered and  the  combined  couple  rate  of  pension  supplement  (as  at
20 March 2013) and rounding the result up or down to  the  nearest  multiple
of $5.20 (rounding up if the result is not a multiple  of  $5.20  but  is  a
multiple of $2.60).

The reference to the maximum basic rate under  the  Rate  Calculator  for  a
person who is partnered means the amount set out at table item 2 in  Table B
- maximum basic rates at the end of point SCH6-B1 as indexed.

A note at the end of the subsection explains that  sections  59B,  59C,  59D
and 59E provide for indexation of the rate.

Item 11 inserts paragraph (b) into the definition of clean energy  bonus  in
subsection 5Q(1).  Paragraph (b) defines clean energy  bonus  to  include  a
payment known as a clean energy  supplement  or  a  quarterly  clean  energy
supplement.

Item 12 inserts paragraph (b) into the definition clean  energy  payment  in
subsection 5Q(1).  Paragraph (b) provides that the  following  payments  are
clean energy payments

    . clean energy supplement under 62A in respect  of  disability  pension;
      and

    . clean energy supplement under 62B in respect of  war  widow's  or  war
      widower's pension; and

    . quarterly clean energy supplement in respect of service pension.

Item  13  inserts   a   definition   of   clean   energy   supplement   into
subsection 5Q(1) as:

    . clean energy supplement  payable  under  section  62A  in  respect  of
      disability pension; and

    . clean energy supplement payable under 62B in respect of war widow's or
      war widower's pension; and

    . clean energy supplement added to the maximum  basic  rate  of  service
      pension under the rate calculator.

The clean energy supplement is  an  amount  that  is  added  to  a  person's
relevant rate of pension.

Item 14 inserts a definition  of  quarterly  clean  energy  supplement  into
subsection 5Q(1), in relation to service pension, as  the  separate  payment
described in new subsection 62E.

The quarterly clean energy supplement is an amount  that  is  added  to  the
person's quarterly rate of pension supplement.

Item 15 inserts a  new  subsection  58A(6)  after  subsection  58A(5).   New
subsection 58A(6) provides that, where either or both a  pension  supplement
that is more than the person's pension supplement  basic  amount  and  clean
energy supplement is added to a person's maximum basic rate of  pension  for
a particular day, the person has not elected to  receive  quarterly  pension
supplement, and, apart from this subsection, the person would  receive  less
than the equivalent of the daily rate for  the  amounts  in  paragraph  (a),
then their amount is to be increased to the daily rate.

Items 16 and 17 make technical amendments to subsection 58A(7).

Item 18 repeals subsection 58A(8).

Item 19 modifies the formula in paragraph 59Q(7)(b) to take account  of  the
new clean energy supplement.  This formula is used to calculate  a  person's
lump sum preclusion period during  which  a  compensation  affected  pension
will not be payable.

Item   20   inserts   a   definition   for   point   SCH6-BB3   amount    in
paragraph 59Q(7)(b).

Item  21  inserts  new  Division  2  in  new  Part  IIIE  of  the  Veterans'
Entitlements Act.

Division 2 - Clean energy supplements

Subdivision A - Clean energy supplements for pension under Parts II and IV

New section 62A provides for  clean  energy  supplement  for  recipients  of
disability pension.

New subsection 62A(1) provides that a person is eligible  for  clean  energy
supplement for a day if the following requirements are met:

    . the person receives disability pension for the day; and

    . the person's rate of disability pension for the day  is  greater  than
      nil; and

    . the person is residing in Australia on the day; and

    . on the day, either the person is in Australia or is temporarily absent
      for a period not exceeding 13 weeks.

The note at the end of new subsection 62A(1) explains that section  62C  may
affect whether a person meets the conditions in paragraph (1)(a) and (b)  of
this section.

New subsection 62A(2) provides that the Commonwealth is liable to pay  clean
energy supplement to the person for the  day  in  respect  of  the  person's
disability pension.

Note 1 explains that the clean energy supplement is a separate payment  from
the disability pension.

Note 2 explains that section 65A may affect the person's entitlement to  the
clean energy supplement.

New subsection 62A(3) provides for the  rate  of  clean  energy  supplement.
The rate is worked out by identifying in the  table  the  person's  rate  of
pension and applying the corresponding  rate  of  clean  energy  supplement.
For the purposes of identifying the person's rate of pension that is  worked
out under section 27, subsections  23(5)  and  (6),  sections  25A  and  26,
Division 5A of Part II and section 74 are to be ignored.   This  means  that
any compensation offsetting that would otherwise apply is to be ignored.

New section 62B provides for clean energy supplement for recipients  of  war
widow's or war widower's pension.

New subsection 62B(1) provides that a person is eligible for   clean  energy
supplement for a day if the following requirements are met:

    . the person receives war widow's or war widower's pension for the  day;
      and

    . the person's rate of that pension for the day is greater than nil; and

    . the person is residing in Australia on the day; and

    . on the day, either the person is in Australia or is temporarily absent
      for a period not exceeding 13 weeks.

The note at the end of new subsection 62B(1) explains that section  62C  may
affect whether a person meets the conditions in paragraph (1)(a) and (b)  of
this section.

New subsection 62B(2) provides that the Commonwealth is liable to pay  clean
energy supplement to the person for the day in respect of the  person's  war
widow's or war widower's pension.

Note 1 explains that the clean energy supplement is a separate payment  from
the war widow's or war widower's pension.

Note 2 explains that section 65A may affect the person's entitlement to  the
clean energy supplement.

New subsection 62B(3) provides that the fortnightly  rate  of  clean  energy
supplement is the CES 30(1) rate as defined in new subsection 5GB(5).

New section 62C  provides  that,  for  the  purposes  of  new  sections  62A
and 62B, a person is taken to receive a pension under Part II  or  IV  at  a
rate greater than nil even if the person's rate would otherwise  be  nil  or
the pension would not be payable under Division 4, 5 or 5A  of  Part  II  or
section 74.

New section 62D provides, for a person receiving disability or  war  or  war
widower's pension, an option to receive their clean energy supplement  on  a
quarterly basis.

New subsection 62D(1) provides that a person  receiving  disability  or  war
widow's or war widower's pension can elect to  receive  their  clean  energy
supplement  quarterly,  in  accordance  with   the   requirements   of   the
Repatriation Commission.

New subsection 62D(2) provides  for  when  an  election  comes  into  force,
ceases or may be revoked.

New subsections 62D(3) and (4) provide for when the quarterly  clean  energy
supplement is to be paid and the amount of the supplement.

Subdivision B - Quarterly clean energy supplement for service pension

Subsection (1) of new section 62E provides that  a  quarterly  clean  energy
supplement for service pension  is  payable  to  a  person,  as  a  separate
payment, for as long as the  person  elects  to  receive  quarterly  pension
supplement.

Note 1 at the end of the subsection explains that, as seniors supplement  is
paid quarterly, there is no need for a quarterly payment election.

Note 2 explains that section 65A may  affect  the  person's  entitlement  to
quarterly clean  energy  supplement.   Section  65A  provides  for  multiple
entitlement exclusions.

New subsection 62E(2)  specifies  when  an  instalment  of  quarterly  clean
energy supplement is paid.

New subsection 62E(3) specifies that the amount of  the  instalment  is  the
total amount payable to the person for the days in the period for which  the
election was in force.

New subsection 62E(4) provides  that  the  daily  rate  of  quarterly  clean
energy supplement is 1/364 of what would otherwise  be  the  person's  clean
energy supplement amount under the Rate Calculator.

New subsections 62E(5) and (6) provide for an exception to  a  reduction  of
quarterly pension supplement under subclause 4(5) of Schedule 6.

Items 22 and 23 make technical amendments.

Item 24 repeals section 118PB and substitutes a new section  118PB  to  deal
with  the  addition  of  clean  energy  supplement  to  a  person's  seniors
supplement.  This is achieved in new subsection  118PB(1)  by  changing  the
method for calculating seniors supplement daily rate  and  making  provision
for the addition of clean energy supplement to the  daily  rate  of  seniors
supplement.

Notes 1 to 3  refer  to  the  locations  of  the  definitions  used  in  the
subsection.

Note 4 explains that section 65A may affect the person's entitlement to  the
increase in rate of senior supplement.

Subsection 118PB(2) provides  that  an  additional  amount  is  added  to  a
person's rate of seniors supplement under paragraph  118PB(1)  if,  on  that
day, the person is residing in Australia and is in Australia or  temporarily
absent for a period not exceeding 13 weeks.

Item   25   repeals   subsection   118PC(3)   and    substitutes    a    new
subsection 118PC(3)  to  take  account  of  the  addition  of  clean  energy
supplement to seniors supplement.

Item 26 inserts a new subsection 121(6B).  New subsection  121(6B)  provides
that the rules in section 121 have effect subject to,  or  are  modified  to
take account of, situations where a person has elected to receive  quarterly
clean energy supplement.

Item 27 inserts a reference to clean energy supplement in the definition  of
pension in subsection 121(7).

Item   28   inserts   a   reference   to   clean   energy   supplement    in
subparagraph 4(a)(ia) of clause 30 of Schedule 5.   This  will  ensure  that
clean energy supplement is included in calculating the maximum payment  rate
for the purposes of a transitional rate of service pension.

Item 29 adds Note 7 at the end of subclause 30(4) of  Schedule  5.   Note  7
explains that section 65A may affect  the  inclusion  of  the  clean  energy
supplement in subparagraph (4)(a)(ia).

Item 30 inserts a new subclause 5 at the end of clause  34  of  Schedule  5.
New subclause 5 means that, if subclause 31(1) or (2) applies to  a  person,
the person's clean energy supplement will be included when working  out  the
rate of the person's service pension.

Item 31 inserts a  reference  to  clean  energy  supplement  in  note  1  to
subclause 1(1) of Schedule 6.

Item 32 inserts a reference to clean energy supplement under Module BB  into
the table in subclause 4(1) of Schedule 6.

Item  33  inserts  new  notes  1  and  2  immediately  after  the  table  in
subclause 4(1) of Schedule 6.

Note 1 explains that table item 4A will not apply  if  an  election  by  the
person under subsection 60A(1) is  in  force,  as  there  will  not  be  any
increase under Module BB.

Note 2 states that Table item 5 will not apply where a  person  has  elected
(under subsection 60A(1)) to receive a quarterly pension supplement  as  the
rate has already been reduced to nil.

Item 34 inserts new subclause (5) at the end of  clause  4  of  Schedule  6.
New subclause 4(5) provides that, where a person's rate of  service  pension
is to be reduced as described in subclause 4(1) and the person  has  elected
to receive quarterly pension supplement, a person's quarterly  clean  energy
supplement is reduced to the same extent (if any) that the component of  the
main rate that would correspond to  the  person's  clean  energy  supplement
would be reduced under subclause (1) were the election not in force.

Item 35 inserts Step 1B into method  statement  1  in  subpoint  SCH6-A1(2).
New Step 1B requires that an amount of clean  energy  supplement  be  worked
out for the purposes of the method statement.

Item 36 makes a technical amendment to step  4  of  method  statement  1  in
subpoint SCH6-A1(2).

Item 37 inserts a note at the end  of  step  4  of  method  statement  1  in
subpoint SCH6-A1(2).  The note explains that section 65A may affect  whether
the amount obtained in step 1B is added.

Item 38 inserts Step 2B into method  statement  2  in  subpoint  SCH6-A1(3).
New Step 2B requires that an amount of clean  energy  supplement  be  worked
out for the purposes of the method statement.

Item 39 makes a technical amendment to step  4  of  method  statement  2  in
subpoint SCH6-A1(3).

Item 40 inserts a note at the end  of  step  4  of  method  statement  2  in
subpoint SCH6-A1(3).  The note explains that section 65A may affect  whether
the amount obtained in step 2B is added.

Item 41 makes a technical amendment to step  1  of  method  statement  3  in
subpoint SCH6-A1(4).  This will  ensure  that  an  amount  of  clean  energy
supplement is not included when calculating the amount  of  service  pension
for a war widow/war widower - pensioner.  Clean energy supplement for a  war
widow/war widower - pensioner who receives a service pension  will  be  paid
through the war widow's or war widower's pension.

Item 42 inserts new Module BB into Schedule 6.  New Module BB sets  out  how
a person's clean energy supplement is to be calculated.

Point SCH6-BB1 provides that a clean energy supplement is to be added  to  a
person's rate of pension if the person is in Australia,  or  is  temporarily
absent from Australia for a period of no more than 13 weeks.

Point SCH6-BB2 provides that the clean energy  supplement  module  does  not
apply to the calculation of a person's  rate  of  service  pension  if  that
person is receiving quarterly clean energy supplement.

Point SCH6-BB3 provides that a person's clean energy  supplement  is  worked
out by applying the percentage table at the end of  point  SCH6-BB3  to  the
clean energy rate and rounding up or down to the nearest multiple of  $2.60.


Notes 1 and 2  refer  to  the  location  of  terms  used  in  the  table  in
point SCH6-BB3.

Part 4 - Indexation

Amendments to the Veterans' Entitlements Act 1986

Item 43 inserts a new item into the indexed and adjusted  amounts  table  at
the end of section 59A.  This item identifies the clean energy pension  rate
as an amount to be indexed under Division 18 of Part IIIB and the  provision
in which the amount is specified.

Item 44 makes a technical amendment to the note at the end of  section  59A.


Item 45 inserts a second note after section  59A,  which  confirms  for  the
reader that the indexation of the clean energy  pension  rate  will  have  a
flow-on effect to the rate at which quarterly  clean  energy  supplement  is
paid and the amount of seniors supplement that is payable to a  person.   As
the clean energy supplement rate is increased, the increase will flow on  to
quarterly clean energy supplement and seniors supplement.

Item 46 inserts a new item into the CPI  indexation  table  at  the  end  of
subsection 59B(1) which represents the  new  clean  energy  pension   rate. 
This item provides for the Consumer Price  Index  indexation  of  the  rate.
The  arrangements  are  similar  to  the  Consumer  Price  Index  indexation
arrangements that apply in relation to the maximum basic  rate  of  pension,
except that  the  rounding  rule  for  the  clean  energy  pension  rate  is
consistent with the rounding rule for indexation of the pension  supplement.


Item  47  inserts  new  subsection  59C(2AC)  to  specify  that  the   first
indexation of the  clean  energy  pension  rate  is  to  take  place  on  20
September 2013.  This item ensures that Consumer Price Index  increases  are
not  applied  to  the  clean  energy  supplement  amounts  until  the  first
indexation point after the supplements are added to the relevant pensions.

Items 48 and 49 amend subsections 59D(1) and 59EAB(1) respectively, to  make
it clear that the provisions are subject to new  sections  198MA  and 198MB.
New sections 198MA and 198MB provide for the  adjustment  of  indexation  of
the clean energy pension rate that will apply on or after 20 March 2013.

Item 50 amends the heading to section 198 to include a  reference  to  clean
energy supplements.

The initial brought forward CPI indexation amount  is  0.007,  the  expected
additional increase in the Consumer  Price  Index  due  to  carbon  pricing,
which is being delivered through the clean energy  supplement,  rather  than
indexation on the primary veterans' payment.

Item 51 inserts a definition for brought-forward CPI  indexation  amount  in
subsection 198(1).  The term means, in relation to a relevant period,  0.007
less any adjustment  made  under  paragraph  198(5)(c)  in  relation  to  an
earlier relevant period.

Item  52  adds  new  paragraph  198(5)(c)   to   subsection   198(5).    New
paragraph 198(5)(c) provides that, if  the  relevant  period  starts  on  or
after 20 March 2013 and the brought-forward CPI indexation  amount  for  the
period is more than zero - the brought-forward CPI indexation amount is  the
number worked out under paragraph (a) or (b) of this subsection adjusted  by
that amount, but not below one.

Item 53  inserts  new  subsections  198(9)  and  (9A)  to  provide  for  the
indexation  of  rates   affected   by   clean   energy   supplements.    New
subsection 198(9)  provides  that,  on  each  adjustment  day  on  or  after
20 September 2013, there are substituted for each of the following rates:

    . CES 22(3) rate;

    . CES 22(4) rate;

    . CES 23(4) rate;

    . CES 24(4) rate; and

    . CES 30(1) rate;

the rate worked out by multiplying the appropriate rate  immediately  before
that day by  the  factor  (the  CES  indexation  factor)  worked  out  under
subsection 198(9A).  This result is then rounded up or down to  the  nearest
$0.10 a fortnight.

New subsection  198(9A)  specifies  the  formula  for  calculating  the  CES
indexation factor.

Item 54 adds a new subsection 198(11) to provide that, if another rate  were
substituted on an adjustment day for a rate mentioned in  paragraph  (9)(a),
(b), (c), (d) or (e), the substitution  affects  each  instalment  of  clean
energy supplement due on or after that day, except  an  instalment  that  is
payable because of the grant of pension  after  that  day  that  has  effect
before that day and is for a period starting before that day.

This provision will prevent indexation increases from being  inappropriately
applied to certain backdated amounts of disability or  war  widow's  or  war
widower's pension.

Item 55 inserts a definition for brought-forward CPI  indexation  amount  in
subsection 198D(1).  The term means, for  a  year  commencing  on  or  after
20 September    2013,    0.007    less    any    adjustment    made    under
paragraph 198D(5)(d) for an earlier year.

Item  56  inserts  new  paragraph  198D(5)(d)  to  provide  the   indexation
adjustment arrangements for items 7 to 15 in the table in subsection  27(1).


Item 57 inserts new sections 198MA and 198MB to provide for  the  adjustment
of indexation arrangements relating to clean energy household assistance.

New section 198MA sets out some special rules that apply  to  indexation  of
specified amounts on or after 20 March 2013.

New subsection 198MA(1) provides that  new  section  198MA  relates  to  the
following payments on or after 20 March 2013:

    . a service pension;

    . seniors supplement;

    . disability and war widow's or war widower's pension;

    . Special Rate Disability Pension under the Military Rehabilitation  and
      Compensation Act; and

    . compensation under Division 2 of Part 2 of Chapter 5 of  the  Military
      Rehabilitation and Compensation Act.

Note 1 explains that the rate of Special Rate Disability Pension  under  the
Military Rehabilitation and Compensation Act is  set  by  reference  to  the
rate of special rate disability pension under section 24  of  the  Veterans'
Entitlements Act.  This means that indexation of the rate under  section  24
also affects the rate of Special Rate Disability Pension under the  Military
Rehabilitation and Compensation Act.

Note 2 explains that the payment rate under Division 2 of Part 2 of  Chapter
5 of the Military Rehabilitation and Compensation Act is  set  by  reference
to the rate of war widow's or war widower's pension under section  30(1)  of
the Veterans' Entitlements Act.  This means  that  indexation  of  the  rate
under war widow's  or  war  widower's  pension  also  affects  the  rate  of
compensation under Division 2 of  Part  2  of  Chapter  5  of  the  Military
Rehabilitation and Compensation Act.

New subsection 198MA(2) provides that an indexation factor  that  is  worked
out  under section 59D on a day that is on or after 20  March  2013  is  for
the purposes of the indexation  of  certain  amounts  on  that  day,  to  be
adjusted by the brought-forward CPI indexation amount, but not below one.

Paragraph (b)  of  new  subsection  198MA(2)  lists  the  amounts  that  are
directly or indirectly affected by the subsection.  As  a  result  of  this,
the payments that  may  be  directly  or  indirectly  affected  are  service
pension,  seniors  supplement,  disability  pension,  war  widow's  or   war
widowers pension, Special Rate Disability  Pension  and  compensation  under
Division 2 of Part 2  of  Chapter  5  of  the  Military  Rehabilitation  and
Compensation Act.

Note 1 explains that an indexation factor worked out under  section  59D  is
indirectly  relevant  to  the  indexation  of  an  amount  provided  for  by
subsection 22(3) or (4), 23(4) or 24(4)  or  paragraph  30(1)(b).   This  is
because section 198 provides for indexation of such an amount  by  reference
to the pension MBR factor  worked  out  under  section  59LA.   It  is  also
because the pension MBR  factor  depends  on  the  increase  in  the  single
pension rate MBR amount, which  in  turn  depends  (under  section  59G)  on
indexation of the pension MBR amount under section 59C, which  involves  the
indexation factor worked out under section 59D.

Note 2 explains that an indexation factor worked out under  section  59D  is
indirectly  relevant  to  the  indexation  of  an  amount  provided  for  by
paragraph 30(1)(a).  This is because that amount is affected  by  indexation
under section 59G, which in turn depends on indexation under section 59C.

Note 3  explains  that,  once  the  brought-forward  CPI  indexation  amount
becomes zero, there will be no further adjustment of the indexation factor.

New subsection 198MA(3) defines  the  term  brought-forward  CPI  indexation
amount for the purposes of the section  as  meaning,  for  a  relevant  day,
0.007 less any adjustment made under subsection (2) for an  earlier  day  or
zero if the brought-forward  PBLCI  indexation  amount  for  the  day  under
section 198MB is zero.

New section 198MB sets out further special  rules  that  may  apply  to  the
indexation of specified amounts on or after 20 March 2013.

New subsection 198MB(1) provides that  new  section  198MB  relates  to  the
following payments on or after 20 March 2013:

    . a service pension;

    . seniors supplement;

    . disability and war widow's or war widower's pension;

    . Special Rate Disability Pension under the Military Rehabilitation  and
      Compensation Act; and

    . compensation under Division 2 of Part 2 of Chapter 5 of  the  Military
      Rehabilitation and Compensation Act.

Note 1 explains that the rate of Special Rate Disability Pension  under  the
Military Rehabilitation and Compensation Act is  set  by  reference  to  the
rate of special rate disability pension under section 24  of  the  Veterans'
Entitlements Act.  This means that indexation of the rate under  section  24
also affects the rate of Special Rate Disability Pension under the  Military
Rehabilitation and Compensation Act.

Note 2 explains that the payment rate under Division 2 of Part 2 of  Chapter
5 of the Military Rehabilitation and Compensation Act is  set  by  reference
to the rate of war widow's or war widower's pension under section  30(1)  of
the Veterans' Entitlements Act.  This means  that  indexation  of  the  rate
under war widow's  or  war  widower's  pension  also  affects  the  rate  of
compensation under Division 2 of  Part  2  of  Chapter  5  of  the  Military
Rehabilitation and Compensation Act.

New subsection 198MB(2) provides some special rules that modify  the  living
cost indexation factor that is worked out under section 59EAB.  These  rules
apply for each indexation day on or after 20 March 2013 and have the  effect
of adjusting the living cost indexation factor to reflect the fact that  the
0.7 per cent expected additional Consumer Price  Index  impact  from  carbon
pricing will be delivered through the clean energy supplement,  rather  than
indexation of primary veterans' payments.   These  rules  also  ensure  that
primary veterans' payments will not be adjusted, should the  relevant  PBLCI
indexation  factor  be  less  than  one  plus  the  brought  forward   PBLCI
indexation amount.  (The initial brought forward PBLCI indexation amount  is
0.007.)

Paragraph (b)  of  new  subsection  198MB(2)  lists  the  amounts  that  may
directly or indirectly be affected by the subsection.  As a result of  this,
the payments that  may  directly  or  indirectly  be  affected  are  service
pension,  seniors  supplement,  disability  pension,  war  widow's  or   war
widowers pension, Special Rate Disability  Pension  and  compensation  under
Division 2 of Part 2  of  Chapter  5  of  the  Military  Rehabilitation  and
Compensation Act.

Note 1 explains that an indexation factor worked out under  section  59D  is
indirectly  relevant  to  the  indexation  of  an  amount  provided  for  by
subsection 22(3) or (4), 23(4) or 24(4)  or  paragraph  30(1)(b).   This  is
because section 198 provides for indexation of such an amount  by  reference
to the pension MBR factor  worked  out  under  section  59LA.   It  is  also
because the pension MBR  factor  depends  on  the  increase  in  the  single
pension rate MBR amount, which  in  turn  depends  (under  section  59G)  on
indexation of the pension MBR amount under section 59C, which  involves  the
indexation factor worked out under section 59EAB.

Note 2 explains that an indexation factor worked out under section 59EAB  is
indirectly  relevant  to  the  indexation  of  an  amount  provided  for  by
paragraph 30(1)(a).  This is because that amount is affected  by  indexation
under section 59G, which in turn depends on indexation under section 59C.

Note 3  explains  that,  once  the  brought-forward  CPI  indexation  amount
becomes zero, there will be no further adjustment of the indexation factor.

New subsection 198MB(3) defines the term  brought-forward  PBLCI  indexation
amount for the purposes of the section  as  meaning,  for  a  relevant  day,
0.007 less any adjustment made under subsection (2) for an  earlier  day  or
zero if  the  brought-forward  CPI  indexation  amount  for  the  day  under
section 198MA is zero.

Item 58 adds new clause 35 at  the  end  of  Part  5  of  Schedule  5.   New
clause 35 applies if clause 30 affects the rate at which service pension  is
payable to a person on or after 20 March 2013.


                Schedule 4 - Clean energy payments under the
                Military Rehabilitation and Compensation Act


                                   Summary

The  Clean  Energy  Household  Assistance  Package  will  provide  financial
assistance to members, former members and their dependants for increases  in
the cost of living arising from  the  introduction  of  a  carbon  price  on
1 July 2012.

Financial assistance will be delivered through increases to  payments.   The
amendments in this Schedule provide for assistance to be provided by a  lump
sum clean energy advance paid in May to June  2012  before  commencement  of
the carbon pricing scheme, and for ongoing clean energy  supplements  to  be
paid in 2013 from the end of the clean energy advance lump sum period.

                                 Background

Clean energy advances

Part of the Schedule makes amendments  to  provide  for  a  lump  sum  clean
energy advance payable to people  before  the  commencement  of  the  carbon
pricing scheme.  The clean energy advance period  will  cover  a  period  of
nine or 12 months.

The clean energy advance will start being paid to people from  14  May  2012
as a tax-free payment to the recipients of the certain  payments  under  the
Military Rehabilitation and Compensation Act targeted  under  the  Household
Assistance Package.  The clean energy advance would include:

    .  the  expected  Consumer  Price  Index  impact   of   carbon   pricing
      (0.7 per cent); and



    . the  additional  increase  amount  above  Consumer  Price  Index  (one
      per cent).

The clean energy advance  will  be  paid  in  respect  of  the  period  from
1 July 2012 until  the  normal  payment  indexation  arrangements  begin  to
deliver Consumer Price Index increases related to carbon pricing  on  either
20 March 2013  or  1 July  2013,  depending  on  the  payment  type  of  the
recipient. 


Clean energy supplements

Once normal indexation begins to deliver Consumer Price Index  increases  in
respect of carbon pricing for a particular payment, the additional  increase
will be paid as clean energy supplements.

It is proposed that ongoing clean energy supplements will start to  be  paid
from the end of the clean energy advance lump sum period.  The clean  energy
supplements would be fortnightly payments  indexed  by  the  Consumer  Price
Index and that will form part of a person's rate of pension.  Indexation  by
the Consumer Price Index would  mean  that  these  payments  would  maintain
their value in real terms over time.

It is proposed that recipients  be  given  the  option  of  receiving  their
supplement as a quarterly payment  in  arrears  rather  than  a  fortnightly
payment.

Indexation

The expected additional impact on  the  Consumer  Price  Index  from  carbon
pricing (0.7 per cent) will be permanently  included  in  the  clean  energy
supplement (plus an additional  one per cent  increase).   Part  3  contains
amendments to the Military Rehabilitation and Compensation Act that  provide
for the expected impact of the carbon price on indexation (0.7 per cent)  to
be transferred from indexation on the primary payment  of  certain  Military
Rehabilitation  and  Compensation  Act  payments   to   the   clean   energy
supplement.  The primary payment will continue to be indexed  in  accordance
with usual indexation arrangements.  The clean energy supplement  will  also
be indexed to maintain its real value over time.

The carbon price impacts will start  to  flow  through  to  primary  payment
indexation at the 20 March 2013 or 1 July 2013 indexation point.

                         Explanation of the changes

Part 1 - Clean energy advances

Amendments to the Military Rehabilitation and Compensation Act

Item 1 inserts a definition for clean energy  advance  in  subsection  5(1).
Clean energy advance means an advance  described  in  Division  1  or  3  of
Part 5A of Chapter 11.

Item 2 inserts a definition for  clean  energy  bonus  in  subsection  5(1).
Paragraph (a) of the definition provides that a clean energy bonus under  an
Act or a scheme is a payment known as a clean energy  advance  provided  for
by the Act or scheme.

Paragraph (c) of the definition provides that clean energy bonus is also  an
increase that is described using the phrase 'clean energy' and that  affects
the rate of another payment that is provided for by the Act or scheme.

Paragraph (b) of the definition will be inserted by item 10  of  Part  2  of
Schedule 4 when it commences on 20 March 2013.

Item 3 inserts a definition for clean energy  payment  in  subsection  5(1),
defined as a clean energy advance.

Item  4  inserts  a  definition  for  clean  energy  underlying  payment  in
subsection 5(1).  Clean energy underlying payment means:

    . weekly compensation for permanent impairment payable under Part  2  of
      Chapter 4  or  a  lump  sum  payment  of  compensation  for  permanent
      impairment paid or payable under Part 2 of Chapter 4; or

    . Special Rate Disability Pension; or

    . weekly compensation  payable  to  a  wholly  dependent  partner  under
      Division 2  of  Part  2  of  Chapter  5  or  a  lump  sum  payment  of
      compensation paid or payable  to  a  wholly  dependent  partner  under
      Division 2 of Part 2 of Chapter 5.

Item 5 inserts a reference to clean energy payments  in  the  definition  of
compensation in subsection 5(1).

Item 6 inserts a new section 345A in Chapter 8 so that the  existing  review
provisions can apply to a clean energy payment.

New subsection 345A(1) states that the modifications in section  345A  apply
to Chapter 8 in relation to a decision by the  Military  Rehabilitation  and
Compensation Commission that is only  about  a  person's  eligibility  to  a
clean energy payment.

New subsection 345A(2) provides that  Chapter  8  applies  to  a  person  in
relation to their entitlement to a clean energy payment in the same  way  as
it applies to a person who is a claimant.  This  modification  is  necessary
because no claim is required for a clean energy advance or  a  clean  energy
supplement, so the  person  would  otherwise  not  be  a  claimant  and  the
existing review provisions would not apply to  the  person  in  relation  to
their entitlement to  a  clean  energy  payment.   However,  the  provisions
listed  in  paragraphs 345A(2)(a)  to  (g)   are   not   affected   by   the
modification.

Item 7 inserts a reference to  section  424K  in  subsection  415(2).   This
means that the provisions  in  section  415  relating  to  the  recovery  of
overpayments will not apply as the recovery of overpayments of clean  energy
payment is provided for separately in new section 424K.

Item 8 amends note 2 after subsection 415(2) to explain that Chapter  6  and
Part 5A have their own recovery provisions and refers to section  315,  316,
317 and 424K.

Item  9  inserts  a  new  Part  5A  into  the  Military  Rehabilitation  and
Compensation Act.  New Part 5A creates two new payments,  the  clean  energy
advance and the clean energy supplement.  The new Part  also  sets  out  the
eligibility, payability and rate rules for both  the  clean  energy  advance
and the clean energy supplement.

Division 1 - Eligibility for clean energy advances

New section 424A sets out the eligibility rules for a clean  energy  advance
for  a  person  in  receipt  of  permanent  impairment  compensation.    New
subsection 424A(1)   provides   that   the   Military   Rehabilitation   and
Compensation Commission may, on a day (the  test  day)  between  14 May 2012
and 30 June 2012 (dates inclusive), determine that the  person  is  eligible
for a clean energy advance for the period 1 July 2012 to  30  June  2013  in
respect  of  their  permanent  impairment  compensation  if  the  person  is
residing in Australia, is in  Australia  on  the  test  day  and  meets  the
conditions specified in subsection (3) for the test day.

New  subsection 424A(2)  provides  that  the  Military  Rehabilitation   and
Compensation Commission may determine that a person is eligible for a  clean
energy advance for the period to 30 June 2013 in respect of their  permanent
impairment compensation if the  person  is  residing  in  Australia,  is  in
Australia on the test day and meets the conditions specified  in  subsection
(3) for the test day.  This determination would be made on or after  1  July
2012.

A determination under 424A(2) must  specify  the  first  day  on  which  the
person meets the  condition  in  subsection 424A(3)  and  is  in  Australia,
disregarding any temporary absence that is less than 13 weeks.

New  subsection  424A(3)  provides  that   a   condition   for   determining
eligibility is that either or both of  new  paragraphs  424A(3)(a)  and  (b)
apply.

New paragraph 424A(3)(a) specifies that, to be eligible for a  clean  energy
advance in respect of permanent impairment compensation,  the  person  must,
on the test day, either be receiving permanent  impairment  compensation  or
would  be  receiving  permanent   impairment   compensation   if   not   for
paragraph 398(3)(b) of the Military Rehabilitation and Compensation Act  and
subsection  13(4)  of   the   Military   Rehabilitation   and   Compensation
(Consequential and Transitional Provisions) Act 2004.

New paragraph 424A(3)(b) specifies that, to be eligible for a  clean  energy
advance in respect of permanent impairment compensation,  the  person  must,
before the  test  day,  have  received  a  lump  sum  payment  of  permanent
impairment compensation.

New  subsection  424A(4)  means  that  the   Military   Rehabilitation   and
Compensation  Commission  may  only  make   one   determination   about   an
individual's  eligibility  under  this  section.   That  is,  the   Military
Rehabilitation and Compensation Commission cannot make a determination  that
a person is eligible under both subsections 424A(1) and (2).

New section 424B sets out the eligibility rules for a clean  energy  advance
for  a  person  in  receipt  of  Special  Rate  Disability   Pension.    New
subsection 424B(1)   provides   that   the   Military   Rehabilitation   and
Compensation Commission may, on a day (the  test  day)  between  14 May 2012
and 30 June 2012 (dates inclusive), determine that the  person  is  eligible
for a clean energy advance for the period 1 July 2012 to 19  March  2013  in
respect of their Special Rate Disability Pension if the person  is  residing
in Australia, is in Australia on the  test  day  and  meets  the  conditions
specified in subsection (3) for the test day.

New  subsection 424B(2)  provides  that  the  Military  Rehabilitation   and
Compensation Commission may determine that a person is eligible for a  clean
energy advance in respect of their Special Rate Disability Pension  if  they
meet the conditions specified in subsection  (3)  for  a  test  day  in  the
period starting on 1 July 2012 and ending on 19 March 2013,  if  the  person
is residing in Australia, and  is  in  Australia  on  the  test  day.   This
determination would be made on or after 1 July 2012.

A determination under 424B(2) must  specify  the  first  day  on  which  the
person meets the condition in subsection 424B(3), is residing  in  Australia
and is in Australia, disregarding any temporary absence that  is  less  than
13 weeks.

New subsection 24B(3) specifies that, to be  eligible  for  a  clean  energy
advance in respect of Special Rate Disability Pension, the person  must,  on
the test day, either be receiving Special Rate Disability Pension  or  would
be receiving Special Rate Disability Pension  if  not  for  section  204  or
paragraph 398(3)(b).  Under section 204,  Special  Rate  Disability  Pension
may be reduced, including to nil, by compensation from a source  other  than
the Military Rehabilitation and Compensation Act or superannuation.

New  subsection  424B(4)  means  that  the   Military   Rehabilitation   and
Compensation  Commission  may  only  make   one   determination   about   an
individual's  eligibility  under  this  section.   That  is,  the   Military
Rehabilitation and Compensation Commission cannot make a determination  that
a person is eligible under both subsections 424B(1) and (2).

New section 424C sets out the eligibility rules for a clean  energy  advance
for a person in receipt of compensation  under  Division  2  of  Part  2  of
Chapter 5 - compensation for the wholly  dependent  partner  of  a  deceased
member.  New subsection 424C(1) provides that  the  Military  Rehabilitation
and  Compensation  Commission  may,  on  a  day  (the  test   day)   between
14 May 2012 and 30 June 2012 (dates inclusive), determine  that  the  person
is eligible for a clean energy  advance  for  the  period  1  July  2012  to
19 March 2013 in respect of compensation under  Division  2  of  Part  2  of
Chapter 5 if the person is residing in Australia, is  in  Australia  on  the
test day and meets the conditions specified in subsection (3) for  the  test
day.

New  subsection 424C(2)  provides  that  the  Military  Rehabilitation   and
Compensation Commission may determine that a person is eligible for a  clean
energy advance for the  period  starting  on  1  July  2012  and  ending  on
19 March 2013 in respect of compensation under  Division  2  of  Part  2  of
Chapter 5 if the person is residing in Australia, is  in  Australia  on  the
test day and meets the conditions specified in subsection (3) for  the  test
day.  This determination would be made on or after 1 July 2012.

A determination under 424C(2) must  specify  the  first  day  on  which  the
person meets the condition in subsection 424C(3), is residing  in  Australia
and is in Australia, disregarding any temporary absence that  is  less  than
13 weeks.

New paragraph 424C(3)(a) specifies that, to be eligible for a  clean  energy
advance in respect of compensation under Division 2 of Part 2 of Chapter  5,
the person must, on the test day, either  be  receiving  compensation  under
Division 2 of Part 2 of Chapter 5 or would be receiving  compensation  under
Division 2 of Part 2 of Chapter 5 if not for paragraph 398(3)(b).

New paragraph 424C(3)(b) specifies that, to be eligible for a  clean  energy
advance in respect of compensation under Division 2 of Part 2 of Chapter  5,
the person must, before the test day, have received a lump  sum  payment  of
compensation  under  Division  2  of  Part  2  of   Chapter   5   and   that
subsection 388(6) has not applied to the person before the test day.

New  subsection  424C(4)  means  that  the   Military   Rehabilitation   and
Compensation  Commission  may  only  make   one   determination   about   an
individual's  eligibility  under  this  section.   That  is,  the   Military
Rehabilitation and Compensation Commission cannot make a determination  that
a person is eligible under both subsections 424C(1) and (2).

New section 424D provides that a person may be paid a clean  energy  advance
for  each  clean  energy  underlying  payment   for   which   the   Military
Rehabilitation and Compensation Commission determines  that  the  person  is
eligible for a clean energy advance.

A note at the end of the section explains that the section operates  subject
to section 424L which provides for multiple entitlement exclusions.

Division 2 - Amount of clean energy advance

New section 424E sets out how and when an amount of clean energy advance  is
to be calculated for a person.

New subsection 424E(1) provides that, when the Military  Rehabilitation  and
Compensation Commission determines that a person is  eligible  for  a  clean
energy  advance  (the  decision  day),  the  Military   Rehabilitation   and
Compensation Commission must also  determine  the  amount  of  clean  energy
advance that is payable to the person.

The note at the end  of  new  subsection 424E(1)  explains  that  the  clean
energy advance will be paid in a single lump sum as soon  as  is  reasonably
practicable after the decision day.

New subsection 424E(2) provides that the amount of the clean energy  advance
will be the clean energy advance daily rate  multiplied  by  the  number  of
advance days rounded up to  the  nearest  multiple  of  $10.   Clean  energy
advance  daily  rate  means  the  rate  as  worked  out  for  the   person's
circumstances under new section 424F and the number of advance  days  is  as
worked out under new section 424G.

New section 424F sets out how to calculate a  person's  clean  energy  daily
rate.  A person's clean energy advance daily rate will depend  on  the  type
of payment that the person receives.

New subsection 424F(1) sets  out  the  formula  for  calculating  the  clean
energy advance daily  rate  for  a  person  whose  clean  energy  underlying
payment is a permanent impairment payment.  For these  payments,  the  clean
energy advance daily rate is the same as that for  general  rate  disability
pension under subsection 22(3) of the Veterans' Entitlements Act worked  out
under new subsection 61D(1) of the Veterans' Entitlements Act.

New subsection 424F(2) sets  out  the  formula  for  calculating  the  clean
energy advance daily  rate  for  a  person  whose  clean  energy  underlying
payment is Special Rate Disability Pension.  For these payments,  the  clean
energy advance daily rate is the same as that for  special  rate  disability
pension under subsection 24(4) of the Veterans' Entitlements Act worked  out
under subsection 61D(1) of the Veterans' Entitlements Act.

New subsection 424F(3) sets  out  the  formula  for  calculating  the  clean
energy advance daily  rate  for  a  person  whose  clean  energy  underlying
payment is a payment under Division 2 of Part 2 of  Chapter  5.   For  these
payments, the clean energy advance daily rate is the same as  that  for  war
widow's or war widower's pension under subsection  30(1)  of  the  Veterans'
Entitlements Act  worked  out  under  subsection  61D(4)  of  the  Veterans'
Entitlements Act.

New section 424G sets out how the number of advance days is  worked  out  to
enable the clean energy advance to be calculated.   The  number  of  advance
days is the number of days in the person's clean energy  advance  period  to
be calculated starting on either:

    . 1 July 2012; or


    . the day specified in a determination under subsection 424A(2), 424B(2)
      or 424C(2) that the person is eligible;

whichever is applicable, and ending on either:

    . 19 March 2013 if the clean energy underlying payment is  Special  Rate
      Disability Pension or compensation payable under Division 2 of Part  2
      of Chapter 5; or


    . 30 June 2013 if the clean energy underlying  payment  is  a  permanent
      impairment payment.

Division 3 - Top-up payments of clean energy advance

This Division provides for  top-up  payments  of  clean  energy  advance  to
people where they have a change of circumstances that would  result  in  the
person not being appropriately compensated  for  the  anticipated  increased
energy costs.

The  operation  of  this  Division  will  mean   that,   if   the   person's
circumstances change during the clean energy advance  period,  resulting  in
the person starting to receive a different clean energy  underlying  payment
that is paid at a higher rate than their previous  clean  energy  underlying
payment, then, where the person is not able to receive  the  entire  advance
amount because of a multiple entitlement exclusion, the person will  receive
an additional amount of clean energy advance as a top-up that is  equivalent
to the difference between the higher  and  lower  advance  amounts  for  the
number of days remaining in the advance period.

This may happen more than once.

Due to the numerous and complex interactions between the  relevant  payments
under the Social Security Act, Veterans' Entitlements Act and  the  Military
Rehabilitation and Compensation Act, the circumstances under  which  top-ups
will be payable will be determined by  legislative  instrument.   This  will
reduce the complexity of the legislation, and will optimise the  ability  of
Centrelink and the Department of Veterans' Affairs to provide timely  top-up
payments for a wide range  of  circumstances.   The  legislative  instrument
will be made in writing, by the  Military  Rehabilitation  and  Compensation
Commission, and will be subject to disallowance by the Parliament.

Subsection (1)  of   new   section   424H   provides   that   the   Military
Rehabilitation and Compensation Commission  may  determine,  by  legislative
instrument, that persons who have been paid  a  clean  energy  advance  (the
original  payment  for  the   original   underlying   payment)   and   whose
circumstances change, are eligible for a further  payment  of  clean  energy
advance.  The instrument will further specify the time period  within  which
the change of circumstances must occur, the type of circumstance change  and
the method of calculating the additional clean energy advance amount.

New subsection 424H(2) enables the Military Rehabilitation and  Compensation
Commission to make a legislative instrument under subsection 424H(1)  for  a
change in  circumstances that involves persons  becoming  eligible  for  the
original underlying payment for a longer period.

New subsection 424H(3) enables the Military Rehabilitation and  Compensation
Commission to make a legislative instrument under subsection 424H(1)  for  a
change in circumstances that involves the  person  beginning  to  receive  a
different clean energy underlying payment.

New paragraph 424H(4)(a) provides, for the purposes of subsection (3),  that
a multiple entitlement exclusion is an instrument providing  that  a  person
is not entitled to a clean energy bonus because of the person's  entitlement
to or receipt of the  original  payment  or  the  original  payment  or  the
original underlying payment.

A multiple entitlement exclusion is also an instrument that  is  made  under
section 65A of the Veterans' Entitlements Act, section 424L of the  Military
Rehabilitation and Compensation Act, section 918 of the Social Security  Act
or an instrument establishing entitlements to a clean energy bonus  under  a
scheme.

New subsection 424H(5) enables an instrument under  section  424H(1)  to  be
made in relation to different periods of time for changes  in  circumstances
and different ways of working out further amounts of clean  energy  advance.


Division 4 - Payment of clean energy advance

Subsection (1) of new section 424J requires a clean  energy  advance  to  be
paid in a single lump sum.  The amount is to be paid  on  the  earliest  day
that the Commission considers it reasonably practicable for  the  amount  to
be paid.

New subsection 424J(2) provides that a clean energy advance is  not  payable
if the Commission is aware the person has died.

Division 5 - Debts

Subsection (1) of new section 424K provides that a clean energy  advance  is
a debt due  to  the  Commonwealth  if  the  payment  was  made  because  the
recipient knowingly made  a  false  or  misleading  statement  or  knowingly
provided false information.

The note at the end of  the  section  explains  the  distinction  between  a
determination that directly and indirectly affects payability or an amount.

New subsections 424K(2) and (3) provide that an advance  and  an  amount  by
which  an  advance  would  have  been  reduced  can  be  debts  due  to  the
Commonwealth.

New  subsection  424K(4)  provides  that  a  debt  under  section  424K   is
recoverable in a court of competent jurisdiction.

New subsection 424K(5) provides that  a  debt  under  this  section  may  be
deducted from an amount that is payable to or for the benefit of the  person
under the Military Rehabilitation and Compensation Act.

Division 6 - Multiple entitlement exclusions

New section 424L provides for multiple  entitlement  exclusions  to  prevent
inappropriate double payments of clean energy advances.

New subsection 424L(1) enables the Military Rehabilitation and  Compensation
Commission to make a legislative instrument to determine  the  circumstances
under which persons are not entitled to a clean energy bonus.

A note at the end of the subsection explains  that  the  term  clean  energy
bonus is defined in subsection 5(1).

New subsection 424L(2) requires that the circumstances, for the purposes  of
the legislative instrument in new  subsection  424L(1),  must  relate  to  a
person's entitlement to, or receipt of, one or more of the following:

    . another clean energy  bonus  under  the  Military  Rehabilitation  and
      Compensation Act; or

    . a clean energy bonus under the Veterans' Entitlements Act; or

    . a clean energy bonus under the Social Security Act; or

    . a clean energy bonus under a scheme (however described) whether or not
      the scheme is provided for by or under an Act.

As this section will involve  multiple  entitlement  exclusions  within  and
between a number of different Acts and schemes, the  term  'entitlement  to'
refers to a variety of concepts relating to a payment, amount or  rate  that
may be used in  other  Acts  or  schemes  including,  but  not  limited  to,
'qualification for', 'eligibility for' and 'the  Commonwealth  being  liable
to pay'.

New  subsection   424L(3)   provides   that   an   instrument   made   under
subsection (1) has effect according to  its  terms  and  despite  any  other
provision of this Act.  This means that, if a person  may  otherwise  appear
to be eligible for a payment, a multiple  entitlement  exclusion  instrument
precludes that eligibility.

Part 2 - Clean energy supplements

Division 1 - Amendments commencing on 20 March 2013

Amendments to the Military Rehabilitation and Compensation Act

Item 10 inserts paragraph (b) into the definition of clean energy  bonus  in
subsection 5(1).  Paragraph (b) defines clean  energy  bonus  to  include  a
payment known as a clean energy  supplement  or  a  quarterly  clean  energy
supplement.

Item 11 inserts a reference to clean energy supplement into  the  definition
clean energy payment in subsection 5(1).

Item 12 defines clean energy supplement in subsection  5(1)  to  mean  clean
energy supplement payable under section 209A or 238A.

The clean energy supplement is  an  amount  that  is  added  to  a  person's
relevant rate of pension.

Item  13   inserts   a   reference   to   clean   energy   supplement   into
subsection 204(2) so the amount will not be used  to  reduce  an  amount  of
Special Rate Disability Pension.

Item 14 inserts new section 209A to provide for the payment of clean  energy
supplement to recipients of Special Rate Disability Pension.

New subsection 209A(1) provides that a person is eligible for  clean  energy
supplement for a day if the following requirements are met:

    . the person receives Special Rate Disability Pension for the day; or

    . the person would have received Special Rate Disability Pension for the
      day if not for section 204 and paragraph 398(3)(b); and

    . the person is residing in Australia on the day; and

    . on the day, either the person is in Australia or is temporarily absent
      for a period not exceeding 13 weeks.

The note to new subsection 209A(1) explains that new section 424L  (multiple
entitlement exclusions) may affect  a  person's  entitlement  to  the  clean
energy supplement.

New subsection 209A(2)  specifies  that  the  daily  rate  of  clean  energy
supplement in respect of Special Rate Disability  Pension  is  1/14  of  the
CES 24(4) rate under the Veterans' Entitlements Act.

Item 15 inserts new section 238A to provide for the payment of clean  energy
supplement to recipients of compensation under  Division  2  of  Part  2  of
Chapter 5.

New subsection 238A(1) provides that a person is eligible for  clean  energy
supplement for a day if the following requirements are met:

    . the person meets the condition in subsection 238A(2) for the day; and

    . the person is residing in Australia on the day; and

    . on the day, either the person is in Australia or is temporarily absent
      for a period not exceeding 13 weeks.


The note to new subsection 238A(1) explains that new section 424L  (multiple
entitlement exclusions) may affect  a  person's  entitlement  to  the  clean
energy supplement.

New subsection 238A(2) specifies that the condition to be met in  accordance
with paragraph 238A(1)(a) is that either or both of the following apply:

    . weekly compensation under Division 2 of Part 2 of Chapter 5:

         o is payable to the person for the day; or

         o would  be  payable  to  the  person  for  the  day  if  not  for
           paragraph 398(3)(b) applying to the person for the day;

    . before the day, the person received lump sum compensation  under  this
      Division and subsection 388(6) has not applied to  the  person  before
      the test day.

New subsection 238A(3)  specifies  that  the  daily  rate  of  clean  energy
supplement in respect of compensation payable under Division 2 of Part 2  of
Chapter 5 is 1/14 of the CES 30(1) rate  under  the  Veterans'  Entitlements
Act.

Item 16 inserts new subsection  430(3AA)  to  provide  that,  in  specifying
intervals under subsection  430(1)  for  making  payments  of  clean  energy
supplement, the Military  Rehabilitation  and  Compensation  Commission  may
take account of the person's choice  to  be  paid  clean  energy  supplement
quarterly.  However, this does not limit  the  Military  Rehabilitation  and
Compensation Commission's power under subsection 430(1).

Division 2 - Amendments commencing on 1 July 2013

Amendments to the Military Rehabilitation and Compensation Act

Item 17 makes a technical  amendment  to  the  definition  of  clean  energy
supplement in subsection 5(1).

Item 18 adds new section 83A to provide for  the  payment  of  clean  energy
supplement to recipients of permanent impairment payments.

New subsection 83A(1) provides that a person is eligible for   clean  energy
supplement for a day if the following requirements are met:

    . the person meets the condition in subsection 83A(2) for the day; and

    . the person is residing in Australia on the day; and

    . on the day, either the person is in Australia or is temporarily absent
      for a period not exceeding 13 weeks.

The note to new subsection 83A(1) explains that new section  424L  (multiple
entitlement exclusions) may affect  a  person's  entitlement  to  the  clean
energy supplement.

New subsection 83A(2) specifies that one condition to be met  in  accordance
with paragraph 83A(1)(a) is that either or both of the following apply:

    . weekly compensation under this Part (except this section):

         o is payable to the person for the day; or

         o would  be  payable  to  the  person  for  the  day  if  not  for
           paragraph 398(3)(b)   of   the   Military   Rehabilitation   and
           Compensation  Act  and  subsection   13(4)   of   the   Military
           Rehabilitation and Compensation (Consequential and  Transitional
           Provisions) Act 2004;

    . before the day, the person received lump sum compensation  under  this
      Part.

New subsection  83A(3)  specifies  that  the  daily  rate  of  clean  energy
supplement in respect of permanent impairment compensation is  1/14  of  the
CES 22(3) rate under the Veterans' Entitlements Act.

A note at the end of the subsection explains that section 404  provides  for
the indexation of the daily rate for each indexation  year  starting  on  or
after 1 July 2014.

Item 19 makes a technical amendment to the heading of section 404.

Item 20 repeals subsection 404(2) and substitutes  new  subsections  404(1A)
and (2).

New subsection 404(1A) provides that section 404 also applies to  the  daily
rate of clean energy supplement  for  permanent  impairment  for  indexation
years commencing on and after 1 July 2014.  The  daily  rate  of  supplement
for permanent impairment is specified in subsection 83A(4).

New subsection 404(2) provides that the indexation formula is  to  apply  to
both a dollar amount or a  rate  mentioned  in  section  404.   This  is  to
include the clean energy supplement amount that  is  expressed  as  a  daily
rate.

Part 3 - Indexation

Amendments to the Military Rehabilitation and Compensation Act

Item 21 inserts new subsection 404(5A).  This new  subsection  provides  for
the indexation adjustment  to  the  rate  of  permanent  impairment  payment
specified in subsection 74(1).  The additional Consumer Price  Index  impact
of the carbon price is expected to  be  0.7  per  cent.   The  clean  energy
supplement will comprise the additional rise in  the  Consumer  Price  Index
caused by the introduction of the carbon  price  (0.7  per  cent),  together
with a further one per cent increase.  The expected  impact  of  the  carbon
price on indexation (0.7 per cent)  will  be  delivered  through  the  clean
energy supplement, rather than indexation of  the  primary  social  security
payment.  Regular indexation of the primary payment will continue to  apply,
adjusted by the equivalent amount now  being  delivered  through  the  clean
energy supplement.

New subsection 404(5A) provides that, for the purposes of subsection  74(1),
in an indexation year starting on or  after  1  July  2013,  the  indexation
factor is adjusted by the brought-forward  CPI  indexation  amount  for  the
year, but not below one.

Item 22 inserts a definition for brought-forward CPI  indexation  amount  in
subsection 404(6).  The brought-forward CPI  indexation  amount  is  defined
for an indexation year starting on or after 1 July 2013 as  0.007  less  any
adjustment made under subsection (5A) for an earlier indexation year.


                Schedule 5 - Clean energy payments under the
                         Farm Household Support Act


                                   Summary

This Schedule provides for a lump sum clean energy advance  to  be  paid  to
recipients of the exceptional circumstances relief payment  under  the  Farm
Household Support Act.

                                 Background

As provided elsewhere  in  this  Bill,  a  lump  sum  clean  energy  advance
equivalent to 1.7 per cent increase in the payment will be paid from May  to
June 2012 to eligible social security recipients before commencement of  the
carbon pricing scheme.

Recipients of the exceptional circumstances relief payment  under  the  Farm
Household Support Act will also receive the clean energy advance.   However,
because these payments are not a qualifying social  security  benefit  under
the Social Security Act,  amendments  to  the  Farm  Household  Support  Act
provide  the  appropriate  mechanism  to  allow  recipients  access  to  the
advances.

The Farm Household Support Act regulates the provision of income support  to
qualifying recipients.  Centrelink administers the payments delivered  under
that Act and, where applicable, its operation mirrors the provisions of  the
Social Security Act and  the  Social  Security  Administration  Act.   These
amendments provide for the payment of the clean energy advance in  a  manner
similar to the arrangements for other social security benefits,  as  defined
in section 23 of the Social Security Act.

                         Explanation of the changes

Amendments to the Farm Household Support Act
Items 1 to 8 amend subsection  3(1)  of  the  Farm  Household  Support  Act,
inserting definitions to ensure that they have the same meaning  as  in  the
Social Security Act.
Items  9  amends  subsection  3(2)  to  insert  a  definition   of   advance
qualification day, to mean the day a person qualifies for the  clean  energy
advance, or the day on which the determination is made.
Item 10 amends subsection 3(2)  to  insert  a  definition  of  clean  energy
advance, to mean a clean energy advance as described in new section  8G,  8H
or 24F of the Farm Household Support Act.
Item 11 amends subsection 3(2)  to  insert  a  definition  of  clean  energy
advance daily rate, to mean the rate as defined in new section  24D  of  the
Farm Household Support Act.
Item 12 amends subsection 3(2)  to  insert  a  definition  of  clean  energy
advance period, to mean the period for which  a  person  qualifies  for  the
clean energy advance under new section 8G or new subsection  8H(1),  (2)  or
(3).
Item 13 amends subsection 3(2) to insert a definition of number  of  advance
days, to mean the same as in new section 24E.  The number  of  days  is  the
number of days in the recipient's clean energy advance period  that  are  on
or after 1 July 2012, or on or after the advance qualification day.
Item 14 amends subsection 3(2) to insert a definition of pension age, so  it
has the same meaning as in the Social  Security  Act,  otherwise  than  when
used in Part 3.14A or 3.14B of that Act in relation to a  person  who  is  a
veteran, within the meaning of the Veterans' Entitlements Act.
Item 15 amends subsection 3(2) to insert a  definition  of  youth  allowance
age so it has the same meaning as in Part 2.11 of the Social Security Act.
Item 16 amends subsection 3(2) to insert a definition  of  youth  disability
supplement, so it has  the  same  meaning  as  in  Module  D  of  the  Youth
Allowance Rate Calculator in the Social Security Act.
Item 17 repeals the heading to Part 2, substituting 'Part 2 -  Qualification
for and  payability  of  certain  support  and  payments'.   This  provision
reduces complexity within the legislation.
Item 18 inserts new Division 1C of Part 2.   This  new  Division  sets  out,
under new section 8G, the  qualification  periods  for  individuals  not  of
youth allowance age, and, under new section 8H,  for  individuals  of  youth
allowance  age.   These  provisions  allow   the   Secretary   to   make   a
determination regarding an individual's qualification for the advance.
New Division 1C also contains new section 8J, which  limits  the  number  of
advances for which an individual may qualify.  If an individual  is  not  of
youth allowance age, they may qualify for one advance under new section  8G.
 If an individual is of youth allowance age,  the  Secretary  may  determine
that they qualify for one advance under new subsection 8H(1) or (2),  and  a
second advance under new subsection 8H(3).
Item 19 inserts a note after subsection  14(1)  in  Part  3,  stating  that,
where an individual is already in receipt of a specified payment,  they  are
not required to lodge a claim to receive the clean energy advance.
Item 20 inserts new Part 4A.  The provisions in the new Part  determine  the
amount of clean energy advance payable and ensure that  the  calculation  of
rates is the same as for other  social  security  benefits,  as  defined  in
section 23 of the Social Security Act.
Item 21 repeals the heading to Part 5, substituting 'Part  5  -  Payment  of
certain support and payments'.  This  provision  reduces  complexity  within
the legislation.
Item 22 inserts a new subsection 25(4), to specify  when  the  clean  energy
advance will be payable where an individual qualifies for the advance  under
new section 8G, 8H or 24F, and to confirm  that  the  clean  energy  advance
will not be payable where the Secretary is aware that a person has died.
Item 23 inserts new section 26C, to specify how  the  clean  energy  advance
will be paid to an individual.  A note  mentions  that,  should  a  debt  be
identified under section 56 of the Farm Household Support  Act,  the  amount
of advance payable may be reduced for the purpose of recovering the debt.
Item 24 inserts a reference  in  paragraph  54(1)(c)  to  the  clean  energy
advance,  to  authorise  the  Secretary  to  request  information  from   an
individual to support their qualification for the advance.
Item 25 repeals  the  heading  for  section  55,  substituting  the  heading
'Certain support and payments to be inalienable'.   This  provision  reduces
complexity within the legislation.
Item 26 inserts into section 55 a reference to the  clean  energy  advances,
to ensure that these payments are not transferable, whether by  way  of,  or
in consequence  of,  sale,  assignment,  execution,  charge,  bankruptcy  or
otherwise.
Item 27 adds new subsection 56(4).  This provision allows for some, or  all,
of the amount paid as a  clean  energy  advance,  to  be  recovered  by  the
Commonwealth should an overpayment to an individual occur.
Item 28 inserts a reference to the clean  energy  advance  in  the  note  to
section 56, to ensure that a debt due to the Commonwealth in respect of  the
clean energy advance may be recovered in accordance  with  provisions  under
sections 1227A and 1231A of the Social Security Act.
Item 29 inserts into subsection  57(3)  a  reference  to  the  clean  energy
advance,  to  allow  the  clean  energy  advance  to  be  paid  out  of  the
Consolidated Revenue Fund, and to be appropriated accordingly.
Amendments to the Social Security Act
Item 30 repeals the heading to section s1227A of the  Social  Security  Act,
substituting the heading 'Certain debts arising  under  the  Farm  Household
Support Act'.  This provision reduces complexity within the legislation.
Item 31 inserts into subsection 1227A(1A) a reference to  the  clean  energy
advance, so that a debt that is recoverable under section  56  of  the  Farm
Household Support Act in respect of clean energy  advance  is  also  a  debt
that is due to, and  recoverable  by,  the  Commonwealth  under  the  Social
Security Act.
Item 32 inserts new paragraph 1227A(2)(aa), to  allow  for  a  deduction  to
occur from the clean energy advance, should  the  qualifying  individual  be
liable to pay a debt due to the Commonwealth.
Item 33 inserts into subsection 1227A(3) a reference  to  the  clean  energy
advance, to give it the same meaning as in the Farm Household  Support  Act,
and to allow a reduction in the  rate  of  advance  to  recover  a  debt  in
respect of an exceptional circumstances relief payment or farm  help  income
support payment.
Item 34 repeals the heading  to  section  1231A,  substituting  the  heading
'Deductions from debtor's farm household payments or support'.
Item 35 amends paragraph 1231A(1)(b) to provide for how a deduction is  made
from a clean energy advance to recover debt due to  the  Commonwealth  under
section 56 of the Farm Household Support Act.
Item 36 amends paragraph 1231A(2) to provide for  the  Secretary  to  decide
the amount by which the clean energy advance is to be reduced, to recover  a
debt due to  the  Commonwealth  under  section  56  of  the  Farm  Household
Support Act.
Item 37 adds new subsection  1231A(5),  to  give  the  definition  of  clean
energy advance the same meaning as in the Farm Household  Support  Act,  and
to treat a lump sum payment of the advance as a single  instalment  of  that
advance.

                     Schedule 6 - Low income supplement


                                   Summary

This Schedule provides for an annual lump sum low income  supplement  to  be
paid to independent adults in low-income households who are  not  adequately
assisted through  the  tax  reform  package  and  the  household  assistance
measures set out in this Bill.

                                 Background

This Schedule introduces  a  new  low  income  supplement,  to  be  paid  to
individuals who meet residence, income and  tax  requirements  and  who  can
show that they have not received adequate assistance through the tax  system
or the other measures set out in this Bill.  The amount of  the  payment  is
to be $300 for each qualifying individual and is limited to one payment  per
year.

The low income supplement is to be paid, as an annual tax-exempt  lump  sum,
to adults in low-income households, based on the  household's  circumstances
from the previous income  year.   The  low  income  supplement  will  become
payable to qualifying individuals from 1 July 2012, with  reference  to  the
person's income in the previous financial year.  The reason  for  using  the
person's income from the  previous  financial  year  is  to  facilitate  the
timely payment of the low income supplement to people as  they  need  it  to
compensate them for the effect of the clean energy measures.   For  example,
a person's claim for the low income supplement for the 2012-13  income  year
will be assessed with reference to the claimant's  income  for  the  2011-12
financial year.

A person must make a new claim for the low income supplement each  financial
year, and only during the relevant financial year.  That  is,  a  claim  for
the  2012-13  financial  year  must  be  lodged  between  1  July  2012  and
30 June 2013, and a claim for the 2013-14  financial  year  must  be  lodged
between 1 July 2013 and 30 June 2014.   In  addition,  claims  for  the  low
income supplement in respect of more  than  one  financial  year  cannot  be
rolled into one claim.  Members of a couple cannot make  a  combined  claim,
and will have to make a claim for  the  low  income  supplement  separately.
The person, at the time the claim is lodged, must be an Australian  resident
or a special category visa holder residing in Australia and not  subject  to
a newly arrived resident's waiting period.  In addition, a  person  must  be
in Australia at the time of making a claim.

Qualification

Qualification for the low income  supplement  will  require  the  person  to
satisfy all  of  the  following  criteria  -  the  income  requirement,  the
excluded  payment  requirement,  the  tax  requirement,  and  the  remaining
requirements.

The purpose of the income requirement is to  identify  potential  candidates
for the low income supplement who  meet  the  income  threshold  through  an
assessment  of  their  adjusted  taxable  income.   The   excluded   payment
requirement identifies whether  a  claimant  has  received  some  government
assistance, either through  one  of  the  other  clean  energy  payments  or
through other welfare  payments.   The  remaining  requirements  set  out  a
number of other matters, such as residency, that must be met to qualify  for
the low income supplement.

Qualification under the tax requirement for the 2012-13  financial  year  is
to be based on an assessment of whether an individual had  a  tax  liability
(that is, tax paid excluding the Medicare levy, Medicare levy surcharge  and
the  one-year  flood  and  cyclone  reconstruction  levy)  in  the   2011-12
financial year of less than $300.  If an individual had a tax  liability  of
less than $300 in 2011-12, that person is assumed to be not able to  receive
adequate assistance through the tax reform  package  and,  therefore,  meets
the tax requirement  for  the  low  income  supplement.   A  claimant's  tax
liability  for  assessment  in  2012-13  is  easily  identifiable   on   the
claimant's 2011-12 tax assessment.

Due to the tax reform package, there will be an increase  in  the  statutory
tax-free threshold, and the maximum value of the low income tax offset  will
be decreased with effect from the 2012-13 financial year.   The  net  effect
of these changes will be an increase in the  effective  tax-free  threshold.
This means for low income supplement claims made in 2013-14  and  subsequent
years, assessing whether a person has met the tax requirement will  need  to
involve a notional assessment of how the person's tax liability compares  to
that from the tax system in 2011-12.

A person whose taxable income  is  less  than  $18,000  will  meet  the  tax
requirement of the low income supplement as the person  will  have  received
less than $300 in assistance through the tax reform package.   Generally,  a
person who meets the other qualification  requirement  with  taxable  income
equal to or above $18,000 will have received assistance equal  to  or  above
$300.

There are, however, a broad range of tax offsets  in  the  tax  system  that
mean a person can have taxable income higher than $18,000, yet  have  a  tax
liability of less than $300.  If all offsets a person  is  entitled  to  are
not accounted for, then the level of tax that would  have  been  paid  by  a
person based on the 2011-12 income year would be overestimated, which  would
in turn overestimate the level of tax  assistance  a  person  would  receive
under the changes to the tax system.

If the claimant's taxable income is above the statutory  tax-free  threshold
for the  relevant  income  year,  assessment  on  this  comprehensive  basis
requires the claimant to have lodged a tax return and have a tax  notice  of
assessment for the relevant income year, and will involve  Centrelink  using
the amount of the person's eligible tax offsets  to  calculate  whether  the
tax requirement is met.   If  the  person's  taxable  income  is  below  the
statutory tax-free threshold, the person may choose to provide  an  estimate
of their taxable income and any eligible tax offsets.  Where an estimate  is
not  allowed,  Centrelink  will  need  to  request  information   from   the
Australian Taxation Office on the claimant's eligible  tax  offsets  in  the
previous income year, exclusive of the low income tax offset.

The amendments made by this Schedule commence on 14 May 2012,  but  payments
will only be made from 1 July 2012.  Claims for the  low  income  supplement
will be accepted from 1 July 2012.

                         Explanation of the changes

Part 1 - Amendment of the social security law

Amendments to the Social Security Act

Item 1 inserts into the definition of  clean  energy  payment,  inserted  by
Schedule 1, reference to the low income supplement.

Item 2 inserts the definition  of  low  income  supplement  into  subsection
23(1) of the Social Security Act.

Item 3 adds new Division 3 at  the  end  of  new  Part  2.18A,  inserted  by
Schedule 1.  New section 916A sets out the definitions of income tax  return
and tax-free threshold, which are relevant to new Division 3.

New section 916B deals with  the  qualification  requirements  for  the  low
income  supplement.   Qualification  is  to  be  based   on   the   person's
circumstances from the previous  financial  year.   To  qualify  for  a  low
income supplement for an income  year,  the  person  must  satisfy  all  the
requirements set out in new paragraph 916B(a) for the previous income  year.
 That is, the person must satisfy the  income  requirement  in  new  section
916C, the  excluded  payment  requirement  in  new  section  916D,  the  tax
requirement in new section 916E,  and  the  remaining  requirements  in  new
section 916F.

New paragraph 916B(b) requires a person to lodge a claim for the low  income
supplement, and new paragraph 916B(c) provides that, at the time of  lodging
the claim for the low income supplement, the person must not be in  gaol  or
a psychiatric institution.  For the purposes of the low  income  supplement,
new  paragraph  916B(c)  overrides  section  35  of  the   Social   Security
Administration  Act  (which  allows  a  person  in  gaol  or  a  psychiatric
institution to make a claim in certain limited circumstances).

In addition, at the time  the  claim  is  lodged,  the  person  must  be  an
Australian resident and in Australia (see section 29 of the Social  Security
Administration Act) or a special category visa holder residing in  Australia
(see section 31A of the Social Security Administration Act).

The note at the end of new section 916B points the  reader  to  new  section
27C of the Social Security Administration Act, which provides a  time  limit
in which claims for the low income supplement can be made.

New section 916C sets out the income thresholds that will apply  for  people
claiming the low income supplement.  New subsection 916C(1)  states  that  a
person will satisfy the  income  requirement  for  an  income  year  if  the
person's qualifying income for the year is less than:

    . $30,000 for singles without a dependent child;


    . $45,000 for couples without a dependent child;

    . $60,000 for singles with a dependent child;

    . $60,000 for couples with a dependent child.

New subsection 916C(2) sets out a person's qualifying income for  an  income
year:

   a) if the person is a member of a couple at the time of claim, the sum of
      the person's and the  person's  partner's  accepted  adjusted  taxable
      income for the income year; or


   b) otherwise - the person's accepted  adjusted  taxable  income  for  the
      income year.


New subsection 916C(3) provides that a person's adjusted taxable income  for
an income year is the sum of:

   a) the person's adjusted taxable income (within the meaning of Schedule 3
      to the Family Assistance Act, disregarding clauses 3  and 3A  of  that
      Schedule, which relate to the adjusted taxable income of  members,  or
      certain former members, of a couple) for the income year; and


   b) any superannuation income stream benefits received by  the  person  in
      relation to the income year to the extent that they are non-assessable
      non-exempt income within the meaning of the Income Tax Assessment  Act
      1997.


The note at the end of new subsection 916C(3) makes the reader aware that  a
person's adjusted taxable income is made up  of  several  income  components
(see Schedule 3 to the Family Assistance Act).

New subsection 916C(4) sets out that  a  person  has  an  accepted  adjusted
taxable income if:

   a) the Commissioner of Taxation has made an assessment  of  the  person's
      taxable income for  the  income  year  and,  for  each  of  the  other
      components of the person's adjusted  taxable  income  for  the  income
      year, either or both of the following apply:


       i) the Commissioner holds information about the component;

      ii) to the extent that the  Commissioner  does  not  hold  information
          about the component - the Secretary accepts under  new  subsection
          916C(5) an estimate of the component; or


   b) the Secretary accepts under new subsection 916C(6) an estimate of  the
      person's adjusted taxable income for the income year.


The  purpose  of  this  subsection  is  to  enable  the  Secretary  to   use
information from the Commissioner of  Taxation  that  the  Commissioner  has
supplied to the Secretary  to  determine  whether  the  claimant  meets  the
income  requirement.   However,  if  the  Commissioner  does  not  hold  any
information in  relation  to  components  of  a  person's  adjusted  taxable
income, the Secretary can accept an estimate  from  the  person.   This  may
occur where a person is not required to lodge  an  income  tax  return,  for
example, because their taxable income is below the tax-free threshold.

The note after new subsection 916(4) makes it clear that, for  the  purposes
of new paragraph 916(4)(a), a person's taxable income is a component of  the
person's adjusted taxable income (see Schedule 3 to  the  Family  Assistance
Act).

New subsection 916C(5) provides that the Secretary may, for the purposes  of
new subparagraph 916C(4)(a)(ii), accept an estimate  of  a  component  of  a
person's adjusted taxable income for an income  year  if  the  Secretary  is
satisfied that the estimate is reasonable.

New subsection 916C(6) provides that the Secretary may, for the purposes  of
new paragraph 916C(4)(b), accept an estimate of a person's adjusted  taxable
income for the income year if:

   a) the person's estimated taxable income is not more  than  the  tax-free
      threshold for the income year; and


   b) the Secretary is satisfied on each of these points:  the  estimate  of
      each of the components of the  person's  adjusted  taxable  income  is
      reasonable; the Commissioner of Taxation has not made an assessment of
      the person's taxable income for the income year; and  the  person  has
      not lodged, and is not required to lodge, a tax return.  With  respect
      to an estimate of a person's adjusted taxable income,  a  person  must
      provide an estimate  of  each  component  of  their  adjusted  taxable
      income.  To accept the estimate, the Secretary must also be  satisfied
      that the person has not lodged, and is not required to lodge under tax
      law, an income tax return for the income year.  If a person has lodged
      an income tax  return,  even  if  not  required  under  the  tax  law,
      paragraph 916(4)(a) will apply to the person.  That is, the  Secretary
      will  use  information  obtained  by  the  Commissioner  of   Taxation
      concerning components of adjusted taxable income and,  to  the  extent
      that  the  Commissioner  does  not  hold  information   concerning   a
      component, an estimate may be accepted.


New subsection 916C(7) provides a definition of the term claim time used  in
this section.  It is intended that, for the purposes of assessing whether  a
person satisfies the income  requirement,  information  about  the  person's
partner's adjusted taxable income (or estimate  of  the  person's  partner's
adjusted taxable income) will  relate  to  information  about  the  person's
partner at the time the claim is made.

      Example
      On 1 November 2012, Mary makes a claim for the low  income  supplement
      based on her circumstances  for  the  2011-12  income  year.   She  is
      currently a member of a couple, although she and  her  partner,  John,
      only moved in together in August 2012.  However, for the  purposes  of
      assessing whether Mary meets the income  requirements,  details  about
      John's adjusted taxable income for the 2011-12 financial year will  be
      taken into consideration.

New section 916D sets out the excluded payment  requirements  that  must  be
satisfied for a claimant to qualify for  the  low  income  supplement.   New
subsection 916D(1) provides that a person satisfies this requirement for  an
income year if:

   a) there were at least 92 days  during  the  year  in  respect  of  which
      relevant clean energy payments were not  paid  (in  other  words,  the
      person would satisfy the excluded payment requirement if they did  not
      receive a relevant clean energy payment for 91 days or less during the
      income year); and


   b) the requirements of new  subsection  916D(2)  are  satisfied  for  the
      income year; and


   c) the person did not  receive  any  of  the  payments  set  out  in  new
      subsection 916D(3) for at least 13 weeks during the year.


The  note  at  the   end   of   new   subsection   916D(1)   signposts   new
subsection 916D(5), which provides a definition  of  relevant  clean  energy
payment.

New subsection 916D(2)  sets  out  the  excluded  payment  requirement  with
respect to family tax benefit.  A person satisfies this subsection if  there
were at least 13 weeks during the income year for which the person  did  not
have an FTB child.

However, if there were fewer than 13 weeks during the income year for  which
the  person  did  not  have  an  FTB   child,   a   person   satisfies   new
subsection 916D(2) if all the following apply:

   a) the Secretary made a determination under paragraph 19(b) of the Family
      Assistance Administration Act that the  person  was  not  entitled  to
      family tax benefit for a past period; and


   b) because of that determination, there were at least 13 weeks during the
      income year for which the  person  was  not  entitled  to  family  tax
      benefit; and


   c) the determination was not made because of section  26  of  the  Family
      Assistance Act.


The intention is to require a person to test their  entitlement  for  family
tax benefit at the end of the 13-week period during the  income  year.   For
example, if a determination is made under paragraph  19(a)  or  a  variation
under section 31 of  the  Family  Assistance  Administration  Act  that  the
person is not entitled to be paid family tax benefit, it  is  intended  that
the person should, after 13  weeks,  make  a  past  period  claim  to  check
whether they continued to be not entitled to family  tax  benefit  for  that
period.

The requirement that  the  determination  not  have  been  made  because  of
section 26 of the Family Assistance Act is to address the situation where  a
person is not  receiving  family  tax  benefit  during  the  13-week  period
because their partner at the time was receiving family tax benefit  instead.
 This rule is intended to  prevent  unintended  access  to  the  low  income
supplement simply because a couple swapped receipt  of  family  tax  benefit
during the year (for example, 26 weeks for one member of  a  couple  and  26
weeks for the other).

New subsection 916D(3) sets out the list of payments  for  the  purposes  of
new paragraph 916D(1)(c).

New subsection 916D(4) deems, for the purposes of new  paragraph 619D(3)(g),
that, if a person has received a lump sum compensation payment as  mentioned
in new paragraph 619D(3)(g), the person is taken to be receiving the  weekly
amount that would have been payable had the person  not  chosen  to  receive
that compensation as a lump sum.

This provision applies whether the lump sum was paid  before,  on  or  after
the commencement  of  this  Division.   For  example,  where  a  person  has
received a lump sum two years ago, which is intended to compensate a  person
for the future, this subsection deems that person  to  be  receiving  weekly
compensation payments.  Therefore, if a person is deemed to  receive  weekly
payments for, say, 38  weeks  during  the  income  year,  the  person  would
satisfy the excluded payment requirement.   If  the  person  was  deemed  to
receive payments for, say, 40 weeks during the income year, they  would  not
satisfy this requirement.

New subsection 916D(5) provides for the meaning  of  relevant  clean  energy
payment for the purposes of new paragraph 916D(1)(a).

New section 916E sets out the tax requirements that  must  be  satisfied  to
qualify for the low income supplement.  Essentially,  if  the  person's  tax
liability would be less than $300 under the 2011-12 tax system,  the  person
would not receive adequate assistance through the changes to the tax  system
starting in 2012-13 and, therefore, the person  meets  the  tax  requirement
for the low income supplement.

New subsection 916E(1) provides that a person satisfies the tax  requirement
for the income year if the person's accepted taxable income for  the  income
year is:

   a) less than $18,000; or


   b) $18,000 or more but less than the person's LIS  threshold  amount  for
      the income year.


New subsection 916E(2) provides  that  a  person  has  an  accepted  taxable
income for an income year if  the  Commissioner  of  Taxation  has  made  an
assessment of the person's  taxable  income  for  the  income  year  or  the
Secretary accepts an estimate of the person's taxable income for the  income
year under new subsection 916E(3).

New subsection 916E(3) provides rules for when the Secretary may  accept  an
estimate of a person's taxable income for an  income  year.   The  Secretary
may accept an estimate if:

   a) the estimate is not more than the tax-free threshold  for  the  income
      year; and


   b) the Secretary is  satisfied  that  the  estimate  is  reasonable,  the
      Commissioner of Taxation has not made an assessment  of  the  person's
      taxable income for the income year, and the person has not lodged  and
      is not required under the tax law to lodge an income  tax  return  for
      the income year; and


   c) if the estimate is $18,000  or  more,  the  person  has  provided  the
      Secretary with an  estimate  of  the  person's  eligible  tax  offsets
      (within the meaning of new subsection 916E(4)) for the income year and
      the Secretary is satisfied that the estimate is reasonable.


New subsection 916E(4) provides the following calculation for working out  a
person's LIS threshold amount:

      [pic]

A person's eligible tax offsets for an income  year  are  the  person's  tax
offsets (if any) for the income year, disregarding any tax  offset  for  low
income earners under section 195N of the Income  Tax  Assessment  Act  1936.
Tax offset has the same meaning as in the Income Tax Assessment Act 1997.

The claimant's eligible tax offsets are divided by 0.15 to give amount  (a).
 Amount (a) is then added to $18,000 to give amount (b).  If amount  (b)  is
greater than the person's taxable income, they meet the tax requirement  for
the low income supplement.

Tax offsets are targeted benefits that reduce the amount of tax a person  is
liable to pay.  Most tax offsets only allow a person to reduce their  income
tax liability to zero, not provide a net payment.  For the purposes  of  new
subsection  916E(4),  a  person's  eligible  tax  offsets  are   considered,
including amounts not utilised because the person does not  have  an  income
tax liability.

      Example
      In his 2012-13 tax return, William was entitled to $445 in  low income
      tax offset and also claimed $500 under the net  medical  expenses  tax
      offset and a further $338  in  zone  tax  offset  as  he  lives  in  a
      designated remote area.  William's total offsets  excluding  the  low-
      income tax offset amount to $838 ($500 + $338).  Thus his  amount  (a)
      is $5,587 ($838 / 0.15) and his particular LIS  threshold  (or  amount
      (b), that is, $18,000 + $5,587)  is  $23,587.   If  William's  taxable
      income was $23,000 in 2012-13, he would be entitled to claim  the  low
      income supplement in 2013-14.  If William's taxable income was $25,000
      in 2012-13,  he  would  not  be  entitled  to  claim  the  low  income
      supplement in 2013-14, but would have still benefited  from  tax  cuts
      which would have reduced his tax liability by around $500.

New section 916F sets out the remaining requirements that must be met for  a
person to qualify for the low  income  supplement.   To  qualify,  a  person
must, at all times during the year:  have been an Australian resident  or  a
special  category  visa  holder  living  in  Australia;  have  remained   in
Australia for at least 39 weeks of the year; and not have been subject to  a
newly arrived resident's waiting period at any time during the year.

Additionally:  the claimant must not have been a dependent child of  another
person for more than 25 weeks of the year; the claimant must not  have  been
in gaol or a psychiatric institution for more than 25  weeks  of  the  year;
and no other person must have been eligible for family tax benefit  for  the
claimant for more than  25  weeks  of  the  year.   (The  claimant  in  this
instance refers to a child of the other person.)

New section 916G specifies that a person cannot receive more  than  one  low
income supplement for an income year.

New section 916H provides for  special  rules  to  restrict  the  unintended
consequence of a  person,  who  has  been  paid  a  low  income  supplement,
becoming entitled because of this to other benefits.  It provides  that,  if
a provision  provides  a  benefit  (whether  a  pension,  benefit,  payment,
supplement  or  any  other  sort  of  benefit),  a  person  meets  specified
criteria, and one of the criteria is that the person is receiving  a  social
security payment, or is a recipient of a social security payment, then,  for
the purposes of the provision, a person is  not  taken  to  be  receiving  a
social security payment, or to be a recipient of a social security  payment,
merely because the person receives a low income supplement.

New section 916J sets out that the amount of the low income  supplement  for
an income year is $300.

Amendments to the Social Security Administration Act

Item  4  makes  a  minor  technical  amendment  to  subsection  16(3)  as  a
consequence of the amendment made by item 5.

Item 5 inserts new subsection 16(3A), providing that a  claim  by  a  person
for the low income supplement for an income year must not be  combined  with
any other claim.  In  effect,  claims  for  the  low  income  supplement  in
respect of more than one financial year cannot be rolled into one claim.

Item 6 inserts a new  Subdivision  FC  into  Division  1  of  Part  3.   New
Subdivision FC provides rules that impose a time limit for a person to  make
a claim for the low income supplement.  The new  Subdivision  comprises  new
section 27C, which provides that a claim for the low income  supplement  for
an income year must be made  during  that  income  year  (that  is,  between
1 July and 30 June of the relevant income year).  However, a claim  will  be
accepted after the end of that income year if  the  Secretary  is  satisfied
that there are special circumstances that affected the person being able  to
lodge the claim within the prescribed time limit, and if the claim  is  made
within a reasonable period having regard to the circumstances affecting  the
person. 

Item 7 inserts new section 204B into Division 3 of Part 5.   The  effect  of
new section 204B is to allow tax information about  people  in  relation  to
claims for the low income supplement and tax file  numbers  to  be  used  to
verify that a person meets the income and tax requirement for  qualification
for the payment.

New subsection 204B(1) provides that  the  Secretary  may,  in  relation  to
claims for the low income supplement, require the Commissioner  of  Taxation
to provide the Secretary with information about people, including  tax  file
numbers.  The information that the Secretary can seek under  this  provision
must be information in the possession of the Commissioner  that  relates  to
taxable  income,  tax  offsets  (within  the  meaning  of  the  Income   Tax
Assessment Act 1997), adjusted taxable income (within  the  meaning  of  the
Family Assistance Act) and income tax (within  the  meaning  of  Income  Tax
Assessment Act 1997) for an  income  year.   In  addition,  the  information
provided by the Commissioner must not be information that the  Secretary  is
able to require the Commissioner to provide under section 204A.

New subsection  204B(2)  limits  the  purposes  for  which  the  information
provided pursuant to new subsection 204B(1) may be used.  The  purposes  are
limited to ascertaining whether a person is or was  qualified  for  the  low
income supplement for an income year.

Part 2 - Application and transitional provisions

Item 8 is an application provision which provides that the  amendments  made
by Part 1 of this Schedule  to  the  Social  Security  Act  and  the  Social
Security Administration Act apply in  relation  to  claims  for  low  income
supplement made on or after 1 July 2012.

Item 9 provides the tax-free threshold for the  2011-12  income  year.   For
the purposes of applying new subsections 916C(6) and 916E(3) of  the  Social
Security Act (as inserted by this  Schedule)  in  relation  to  the  2011-12
income year, the definition of tax-free threshold in new section  916A  does
not apply and the tax-free threshold is $6,000.

Item 10 provides the tax requirement that must be met if a  person  makes  a
claim for the low income supplement for the 2012-13 income  year.   A  claim
for  the  2012-13  income  year  will  be  assessed   on   the   household's
circumstances for the 2011-12 financial year.

Subitem 10(1) provides that new subsection 916E(1) of  the  Social  Security
Act (as inserted by this Schedule) does not apply in  relation  to  a  claim
that is made for low income supplement for the 2012-13 income year  and  the
person  is  taken  to  satisfy  the  tax  requirement  referred  to  in  new
subparagraph 916B(a)(iii) of that Act for the 2011-12  income  year  if  the
person satisfies the requirement in subitem 10(2).

A person satisfies subitem 10(2) if:

   a) for the 2011-12 income year, the person has an accepted taxable income
      (within the meaning of new subsection 916E(2) of the  Social  Security
      Act, as inserted by this Schedule); and


   b) the amount of income tax owed by the person  for  the  2011-12  income
      year (as worked  out  under  subsection  4-10(3)  of  the  Income  Tax
      Assessment Act 1997 by reference  to  the  person's  accepted  taxable
      income) is less than $300.  That is, if a person's  tax  liability  is
      less than $300 for the 2011-12 income year, the person would not  have
      received adequate assistance through the tax system and,  accordingly,
      would meet the tax requirement for the low income supplement.


Part 3 - Other amendments

Amendments to the Income Tax Assessment Act 1936

Item 11 inserts new paragraph 202(haa) into section 202 of  the  Income  Tax
Assessment Act 1936 (ITAA 1936) to  facilitate  the  administration  of  new
Division 3 of new Part 2.18A of the Social Security Act  (which  deals  with
payment of low income supplement).

Amendments to the Taxation Administration Act 1953

Items 12 and 13 make minor technical amendments to  paragraphs 8WAA(1AA)(b),
8WB(1A)(a) and 8WB(1A)(b) of the  Taxation  Administration  Act  1953  as  a
consequence of the amendment made by item 11.


              Schedule 7 - Essential medical equipment payment


                                   Summary

This Schedule provides for an annual indexed  payment  of  $140  to  certain
households where a person, for medical reasons, must use  essential  medical
equipment, resulting in higher than  average  energy  use.  The  payment  is
sufficient to cover the expected change in running  costs  for  the  highest
energy use machine expected to be covered by this payment.

                                 Background

There is a proportion of the population who have significantly  higher  than
average electricity costs due to a medical condition  or  disability.   This
includes people using essential medical equipment, as  well  as  people  who
are unable to self-regulate  their  body  temperature  and,  therefore,  use
additional energy for heating and cooling.

These people will require further assistance  in  addition  to  the  general
cash assistance they may receive through the broader Clean Energy  Household
Assistance Package.

This Commonwealth assistance is sufficient to cover the expected  change  in
energy costs as a  result  of  the  introduction  of  the  carbon  price  in
addition to assistance already provided  by  States  and  Territories.   The
scope of State and Territory schemes already supporting such individuals  at
30 June 2011 will guide the scope of Commonwealth assistance.

The essential medical equipment payment will be administered  by  Centrelink
and the Department of Veterans' Affairs. A  cash  payment  gives  households
greater  freedom  to  adjust  and  spend  assistance  how  they   see   fit.
Centrelink customers who claim the essential medical equipment payment  will
be able to use  the  Centrepay  service  to  apply  part  or  all  of  their
assistance payments directly to their energy bills.

Qualification

An essential medical equipment  payment  will  be  available  to  households
within Australia, where a person has a medical condition requiring  the  use
of essential medical equipment or is  unable  to  self-regulate  their  body
temperature, and who, therefore, has to use additional  energy  for  heating
and cooling. To be eligible, the  person  with  the  disability  or  medical
condition, or their carer must hold a concession card  or  be  listed  on  a
concession card.

A medical practitioner must certify  that  the  relevant  condition  exists,
that the equipment is required, and is being used unless  the  Secretary  or
Repatriation Commission is otherwise  satisfied  this  requirement  is  met.
The Secretary or Repatriation Commission may  otherwise  be  satisfied,  for
example, where the equipment user can show that a State or Territory  energy
authority has accepted their medical condition and is giving a rebate.   The
types of medical  equipment  to  be  covered,  and  the  nature  of  medical
conditions resulting in the inability to regulate body temperature  will  be
specified by legislative instrument.

Where the essential medical equipment is being used by  a  dependent  child,
the child's carer may be qualified to receive the  payment  based  upon  the
child's medical need  for  the  equipment,  or  for  additional  heating  or
cooling.  More generally, if a  carer  provides  care  and  attention  on  a
regular and ongoing basis for a person they  live  with,  including  a  non-
dependent adult with medical needs, the  carer  may  be  qualified  for  the
payment.

No priority in qualification as between a carer and a person with a  medical
condition is imposed by the provisions.  However, a claim by  a  person  who
cares for a non-dependent young person or adult  with  a  medical  condition
must be signed by the person with the medical condition, ensuring  that  the
equipment user is  aware  that  the  payment  has  been  claimed.   Existing
arrangements for a person who is limited in dealing  with  such  formalities
would also apply to the new claim process  -  for  example,  many  of  these
people would already have a nominee who would act on their behalf.

The payment will be focused primarily on electricity usage, as this  is  the
most common energy source for  medical  equipment  used  in  private  homes.
However, other types of energy use  may  also  be  expanded  by  legislative
instrument, as required.

The essential medical equipment payment will be limited generally  to  being
paid only once in relation to the same medical  equipment  in  a  particular
residence for an income year (ending on  30  June).   An  essential  medical
equipment payment will be available for each piece of equipment  used  in  a
residence, whether used by one or by a number of users.  In some  instances,
such as shared care arrangements  of  children,  payment  of  the  essential
medical equipment payment may be made  in  relation  to  each  household  in
which the equipment using person lives, although limited to two  households.


People will only need to claim the essential medical  equipment  payment  in
the first year, and then payments will made on the anniversary of  the  date
of claim, provided nothing has changed which renders the claimant no  longer
qualified at that time.  Like all  social  security  and  Veterans'  Affairs
recipients, the claimant is subject to an obligation  to  inform  Centrelink
or the Department of Veterans' Affairs of the occurrence  of  any  event  or
change which might affect the payment.  In general,  the  types  of  medical
condition resulting in the need for medical equipment are stable, such  that
loss of qualification is unlikely.  However, the Secretary  or  Repatriation
Commission will have discretion to seek  further  information,  including  a
recertification by a medical practitioner where necessary.

The essential medical equipment payment will be $140 in 2012-13 and will  be
indexed.

The amendments made by this Schedule commence on 14 May 2012,  but  payments
will only be made from 1 July 2012.
Provisions with the same effect as those for  the  purposes  of  the  social
security  law  will  be  inserted  into  the  Veterans'  Entitlements   Act.
Households holding concession cards under  the  Veterans'  Entitlements  Act
may be entitled to an essential medical equipment payment  paid  under  that
Act.  Generally, an essential medical equipment payment cannot  be  received
under both Acts.

                         Explanation of the changes

Part 1 - Amendment of the social security law

Items 1 to 10 amend the Social Security Act.

Item 1 inserts the essential medical equipment payment into  the  definition
of clean energy payment inserted by Schedule 1.


Items 2, 3, 4,  and  5  insert  definitions  of  EMEP  residence,  essential
medical equipment payment, medical equipment and person with medical  needs,
all by reference to new section 917A (inserted by item 6, below).

Item 6 adds new Division 4 after Division 3 of new Part 2.18A,  inserted  by
Schedule 1.
New  section  917B  deals  with  qualification  for  the  essential  medical
equipment payment.  Essential medical equipment payment is  defined  at  new
section 917A to  mean  a  payment  under  new  Division  4  (except  in  new
section 917F, where  it  has  the  meaning  given  by  that  section).   New
subsection 917B(1) provides that a person  is  qualified  for  an  essential
medical equipment payment for an income year if the Secretary  is  satisfied
that, on the EMEP test day (defined in new subsection  917B(3)  below),  the
claimant satisfies the medical needs requirement in new  section  917C,  the
concession card requirement in new  section  917D  and  the  energy  account
requirement in new section 917E.

Additionally, the person must not be prevented from receiving  an  essential
medical equipment payment by new section 917F, and must be in  Australia  on
the EMEP test day.  The claimant must also  not  be  a  dependent  child  of
another person on the EMEP test  day.   This  restricts  dependent  children
from claiming the payment in their own right.  However, a claim may be  made
by the parent or carer of a dependent child with medical needs if all  other
requirements are met.

Additionally, a medical practitioner must have  certified  (subject  to  new
subsection (2)) that the claimant or  another  specified  person  meets  the
medical needs requirement under new subsection 917C(1) on  a  day.   Medical
practitioner is defined in section 23 of the Social Security Act to  mean  a
person registered and licensed as a medical practitioner under  a  State  or
Territory law that provides for the registration  or  licensing  of  medical
practitioners.  This does not require that the certification be  in  respect
of the EMEP test day.  However, the  certification  must  confirm  that  all
elements of new subsection 917C(1) are present on a day and more  generally.


New subsection 917B(2) provides  an  exception  to  the  requirement  for  a
medical certification, where the Secretary is otherwise satisfied  that  the
claimant or another specified person meets the medical needs requirement  in
new section 917C.  The Secretary may otherwise be  satisfied,  for  example,
where the  equipment  user  can  show  that  a  State  or  Territory  energy
authority has accepted their medical condition and is giving a rebate for  a
type of equipment specified for the essential medical equipment payment.

The EMEP test day is defined in new subsection 917B(3).  In the income  year
of claim, this day is the day on which the claimant makes the claim for  the
payment.  In subsequent income years, the EMEP test day is  the  anniversary
of the day on which  the  claimant  made  the  claim  in  a  previous  year,
provided that, since the claimant made the  claim,  the  Secretary  has  not
determined that the claimant has ceased to be  qualified  for  the  payment.
If the Secretary has determined that the claimant  is  no  longer  qualified
and cancelled the payment, the person may reclaim.

A note highlights that section 11 of the Social Security Administration  Act
requires that a person make a claim for a social security payment  in  order
to be paid the payment.

A second note highlights that additional rules relating to  claims  for  the
essential medical equipment payment are provided by new  section 19  of  the
Social Security Administration Act (inserted by item 10 below).

New subsection  917B(4)  allows  the  Secretary  to  act  on  the  basis  of
documents and information in his or her possession when determining  whether
a person is qualified for an essential  medical  equipment  payment  for  an
income year after  the  income  year  in  which  the  claim  is  made.   The
Secretary  is  additionally  not  required  to  conduct  any  inquiries   or
investigations into the matter or to require the giving of  any  information
or the production of any document for this  purpose.   Any  person  who  has
made a claim for or received a social security payment  or  concession  card
has an obligation to inform  the  Department  of  any  event  or  change  of
circumstances that might affect payment or qualification  (see  section  66A
of the Social Security Administration Act).

The Secretary has general information-seeking powers under  Part  5  of  the
Social  Security  Administration  Act,  if  the  Secretary   considers   the
information may be relevant to matters such as qualification for a  payment.
 Additionally, new subsection 917B(5) makes it clear that the Secretary  may
require a further certification from a medical practitioner,  or  a  further
document for the purposes of new subsection (2) in an income year after  the
income year in which the claim is made.  This further certification  may  be
required where the medical condition may change over time, for  example,  in
situations  where  the  person  is  likely  to  recover  from  the   medical
condition.

The  medical  needs  requirement  is  set  out  in  new  section 917C.   New
subsection 917C(1) deals  with  the  person  who  has  a  medical  condition
meeting the medical needs requirement.  New paragraph  917C(1)(a)  covers  a
person who uses specified essential  medical  equipment.   The  person  will
meet the requirement if the person has a medical condition on that day  that
requires the use of specified essential medical  equipment  in  a  residence
that is the person's home, the residence is either a private residence or  a
specified residence, and the person uses that equipment in  that  residence.
It is not necessary that  the  equipment  be  used  by  the  person  on  the
particular day provided the conditions are met more generally.

New paragraph 917C(1)(b) covers a person who is unable to  regulate  his  or
her body temperature because of a specified medical condition.   The  person
will meet the requirement if the person has a specified  medical  condition,
additional heating or cooling  is  required  in  a  residence  that  is  the
person's home to manage the person's condition, the residence  is  either  a
private residence or a specified residence, and the person  uses  additional
heating or cooling in that residence.  It is not necessary  that  additional
heating or cooling is used by the person on  the  particular  day,  provided
the conditions are met more generally.

For both cases, the EMEP residence is the residence  that  is  the  person's
home, and is either a private residence  or  a  specified  residence.   This
term is defined in new section 917A by reference to new  subsection 917C(1).


Medical equipment is defined in new section 917A in  relation  to  a  person
who has a specified medical  condition  and,  as  a  result,  is  unable  to
regulate his or her body temperature, as  meaning  the  heating  or  cooling
system of  the  residence  that  is  the  person's  home  described  in  new
paragraph 917C(1)(b).   Medical  equipment  also  includes  specified  free-
standing medical equipment used by a person such as an external heart  pump,
or a dialysis machine.

New subsection 917C(2) allows a carer for a person  with  medical  needs  to
satisfy the medical needs requirement on a day in  their  own  right,  based
upon the person with medical needs satisfying the medical needs  requirement
under new subsection 917C(1) on the day (including being  specified  in  the
required  certification  or  otherwise  satisfying  the  Secretary  of   the
requirements).  A person with medical needs is defined in new  section  917A
by reference to new paragraph 917C(2)(b).

To be a carer for a person with medical needs, the carer must  provide  care
and attention on a regular and ongoing basis for  the  person  with  medical
needs.  The carer's home must also be the EMEP residence that  is  the  home
of the person with medical needs.  A parent  or  person  responsible  for  a
dependent  child  who  has  medical  needs  would  meet  this   requirement,
including a foster carer of such a child.

New  subsection  917C(3)  provides  that  the  Minister  may   specify,   by
legislative instrument, essential medical equipment for the purposes of  new
paragraph 917C(1)(a),  medical  conditions   for   the   purposes   of   new
paragraph 917C(1)(b),    and    residences    for    the     purposes     of
paragraphs 917C(1)(a) and  (b).   A  specified  residence  which  is  not  a
private  residence  may  be,  for  example,  a  supported  disability  group
residence.   Allowing  these  matters  to  be   specified   by   legislative
instrument provides flexibility in the nature of equipment,  conditions  and
types of residence covered.

New section 917D sets out the concession card requirement for  the  purposes
of new section 917B.  (Concession card is defined for the  purposes  of  the
Social Security Act in section 6A to mean a  pensioner  concession  card,  a
health care card  or  a  seniors  health  card.)   A  person  satisfies  the
concession card requirement on a  day  if  the  person  is  a  holder  of  a
concession card, or the person's name is  included  on  a  concession  card.
Sections 240A and 240B of  the  Social  Security  Administration  Act  allow
dependants of the holder of a concession card to be listed on  the  card  in
many instances (which will generally include the person's  partner  and  any
dependent children - section 6A of the Social Security Act).

A person will also meet the concession card requirement if the person  cares
for a person who has medical needs, and the person  with  medical  needs  is
the holder of, or included on, a concession card on that day.

New section 917E sets out the energy account requirement on a  day  to  meet
new section 917B.  A person satisfies the energy account requirement if  the
energy account for the relevant EMEP  residence  is  in  the  name  of  that
person or the person's partner.  Alternatively, the person will satisfy  the
energy account requirement if the  person  contributes  (whether  wholly  or
partly) to paying the energy account for the relevant EMEP residence.   This
would potentially  give  rise  to  qualification  in  situations  where  the
account is held within the household by someone other  than  the  person  or
the person's partner.

For situations where the claim is being made by the  carer  for  the  person
with medical needs, and the carer or their partner does not hold the  energy
account, the carer may none  the  less  be  qualified  if  the  person  with
medical needs contributes (whether wholly or partly) to  paying  the  energy
account for the relevant EMEP residence.

The word, account, is  to  take  its  ordinary  meaning.   This  will  cover
households who can supply some  or  all  of  their  own  energy  needs,  for
example,  with  solar  panels,  provided  the  household   has   a   service
relationship with an energy supplier.

An energy account means any account for electricity, or any  other  form  of
energy specified for the purposes of  this  provision  by  the  Minister  by
legislative instrument.

New section 917F sets out the rules around  the  availability  of  payments.
New subsection 917F(1) provides that no essential medical equipment  payment
may be made for an income year in relation  to  medical  equipment  that  is
used in an EMEP residence if an  essential  medical  equipment  payment  has
already been made for that income year in relation  to  the  same  equipment
and the same residence.

   Example
   If Susan has two children, Jane and Martha, where Jane  uses  a  dialysis
   machine, and Martha a sleep apnoea monitor, then  Susan  may  receive  an
   essential medical equipment payment in respect of Jane's machine, and  an
   essential medical equipment  payment  in  respect  of  Martha's  monitor.
   However, if Susan's partner, Chris, claims an essential medical equipment
   payment in relation to Jane or Martha's equipment when Susan has  already
   been paid for that equipment for that income year, no  essential  medical
   equipment payment may be paid to Chris.


However, an exception is made for situations in which an equipment user  has
a number of homes, and the medical equipment is used at each of  the  homes.
In this case, no more than two essential medical equipment payments  may  be
made in relation to the same medical equipment for  one  income  year.   New
subsection 917F(2)  provides  that  no  more  than  two  essential   medical
equipment payments may be made in relation to  the  same  medical  equipment
for an income  year  (subject  to  new  subsection  917F(1)).   Because  new
subsection 917F(1) limits payments within a particular residence to one  per
piece of medical equipment per residence, this  results  in  more  than  one
payment being available only if the same equipment is used in  a  number  of
residences, that is, where  the  user  has  a  number  of  homes.   However,
essential medical equipment payments for an income year may not be made,  in
relation to a person with medical needs, in relation to more than  two  EMEP
residences (new subsection 917F(3)).

   Example
   In the example above, if Susan and Chris  separate,  but  share  care  of
   Martha and Jane, who take their equipment from one  home  to  the  other,
   Susan and Chris may each be paid an essential medical  equipment  payment
   in an income year for  each  of  Martha's  monitor  and  Jane's  dialysis
   machine.

New subsection 917F(4) provides that  essential  medical  equipment  payment
for the purposes of this section, means such a payment  under  new  Division
4, or under new Division 3 of Part IIIE of the Veterans'  Entitlements  Act,
inserted  by  this  Schedule.   In  other  words,  the  same  rules   apply,
regardless of whether an essential medical equipment payment is  paid  under
the Social Security Act or the Veterans' Entitlements Act.

New section 917G provides that the amount of an essential medical  equipment
payment for an income year is $140.00.  However, a note  alerts  the  reader
that the payment is indexed on each 1 July  by  reference  to  sections 1190
and 1191 of the Social Security Act.

New section 917H provides for  special  rules  to  restrict  the  unintended
consequence of a person who has been paid  an  essential  medical  equipment
payment becoming entitled because of this to other  benefits.   It  provides
that, if a  provision  provides  a  benefit  (whether  a  pension,  benefit,
payment supplement  or  any  other  sort  of  benefit)  if  a  person  meets
specified criteria, and one of the criteria is that the person is  receiving
a social security payment, or is a recipient of a social  security  payment,
then, for the purposes of the  provision,  a  person  is  not  taken  to  be
receiving a social security payment, or  to  be  a  recipient  of  a  social
security payment, merely because the person receives  an  essential  medical
equipment payment.

Items 7, 8 and  9  amend  sections  1190,  1191  and  1192  to  provide  for
indexation by the Consumer Price Index of the  essential  medical  equipment
payment, with the first  indexation  taking  place  on  1  July  2013.   The
indexed payment will be rounded to the nearest dollar.

Item 10 amends the Social  Security  Administration  Act  by  inserting  new
section 19, in relation  to  claims  for  the  essential  medical  equipment
payment.  New subsection 19(1) provides that an essential medical  equipment
payment claim must include a statement by the person making the  claim  that
the medical equipment to which the claim relates is  used  in  the  relevant
EMEP residence.

New subsection 19(2) provides that,  if  a  person  who  provides  care  and
attention for a person with medical needs makes a  claim  for  an  essential
medical equipment payment, and the  person  with  medical  needs  is  not  a
dependent child of that or any other person, then the claim must  be  signed
by the person with medical needs.  This  ensures  administratively  that  an
adult person with medical needs is aware  when  a  claim  for  an  essential
medical equipment payment is made in respect of the equipment they use.

Part 2 - Amendment of the Veterans' Entitlements Act

Items 11 to 34 amend the Veterans' Entitlements Act.

Items 11 to 15 insert new terms into the index of definitions.

Item 16 inserts a reference to the essential medical equipment payment  into
the definition of clean energy payment in subsection 5Q(1).

Items 17 to 21 insert  definitions  of  EMEP  residence,  essential  medical
equipment payment, income year, medical equipment and  person  with  medical
needs into subsection 5Q(1).

Item 22 makes a technical amendment to paragraph (b) of  the  definition  of
tax year in subsection 5Q(1).

Item 23 adds new Divisions 3 and 4 after Division 1 of new Part IIIE.

Division 3 - Essential medical equipment payment

Subdivision A - Definitions

New section 63A defines terms used in new Division 3.

Subdivision B - Eligibility for essential medical equipment payment

New section 63B deals with eligibility for the essential  medical  equipment
payment.   Essential  medical  equipment   payment   is   defined   at   new
section 63A,  to  mean  a  payment  under  this  Division  (except  in   new
section 63F, where it has the meaning given by that section).  A  person  is
eligible for an essential medical equipment payment for an  income  year  if
the Repatriation Commission is satisfied that, on the  EMEP  test  day,  the
claimant satisfies  the  medical  needs  requirement  in  section  63C,  the
concession  card  requirement  in  section  63D  and  the   energy   account
requirement in section 63E.

Additionally, the person must not be prevented from receiving  an  essential
medical equipment payment by new section 63F, and must be  in  Australia  on
the EMEP test day.  The claimant must also  not  be  a  dependent  child  of
another person on the EMEP test  day  (defined  in  subsection  (3)).   This
restricts dependent children from claiming the payment in their  own  right.
However, a claim may be made by the parent or carer  of  a  dependent  child
with medical needs if all other requirements are met.

Additionally,  a  medical  practitioner  must  have  certified  (subject  to
subsection 63B(2)) that the claimant or another specified person  meets  the
medical needs requirement under subsection 63C(1) on a day.  This  does  not
require that  the  certification  be  in  respect  of  the  EMEP  test  day.
However, the certification must confirm that all elements of new  subsection
63C(1) are present on a day and more generally.

Subsection 63B(2) provides an exception to the  requirement  for  a  medical
certification, where the  Repatriation  Commission  is  otherwise  satisfied
that the claimant or  another  specified  person  meets  the  medical  needs
requirement in section 63C. The Repatriation  Commission  may  otherwise  be
satisfied, for example, where the equipment user can show that  a  State  or
Territory energy authority has  accepted  their  medical  condition  and  is
giving a rebate for a type of equipment specified for the essential  medical
equipment payment.

The EMEP test day is defined in subsection 63B(3).  In the  income  year  of
claim, this day is the day on which the claimant makes  the  claim  for  the
payment.  In subsequent income years, the EMEP test day is  the  anniversary
of the day on which  the  claimant  made  the  claim  in  a  previous  year,
provided  that,  since  the  claimant  made  the  claim,  the   Repatriation
Commission has not determined that the claimant has ceased  to  be  eligible
for the payment.  If the Repatriation Commission  has  determined  that  the
claimant is no longer eligible and cancelled the  payment,  the  person  may
reclaim.

A note advises that claims for the essential medical equipment  payment  are
provided by new sections 63J to 63P in Subdivision C.

Subsection 63B(4) allows the Repatriation Commission to act on the basis  of
documents and information in his or her possession when determining  whether
a person is qualified for an essential  medical  equipment  payment  for  an
income year after  the  income  year  in  which  the  claim  is  made.   The
Repatriation  Commission  is  additionally  not  required  to  conduct   any
inquiries or investigations into the matter or to require the giving of  any
information or the production of any document for this purpose.

Additionally,  subsection  63B(5)  makes  it  clear  that  the  Repatriation
Commission may require a further certification from a medical  practitioner,
or a further document for the purposes of subsection (2) in an  income  year
after  the  income  year  in  which  the  claim  is  made.    This   further
certification may be required where the medical condition  may  change  over
time, for example, in situations where the person is likely to recover  from
the medical condition.

The  medical  needs  requirement  is   set   out   in   new   section   63C.
Subsection (1) deals with the person who has  a  medical  condition  meeting
the medical needs requirement.  Paragraph  (a)  covers  a  person  who  uses
specified  essential  medical  equipment.   The   person   will   meet   the
requirement if the person has a medical condition on that day that  requires
the use of specified essential medical equipment in a residence that is  the
person's home, and if the person uses that equipment in that residence.   It
is not necessary that the equipment be used by the person on the  particular
day provided the conditions are met more generally.

Paragraph (b) covers a person who is unable to  regulate  his  or  her  body
temperature because of a specified medical condition.  The person will  meet
the requirement if the person has a specified medical condition,  additional
heating or cooling is required in a residence that is the person's  home  to
manage the person's condition, and the person  uses  additional  heating  or
cooling in that residence.  It is not necessary that additional  heating  or
cooling is used by the person on the particular day provided the  conditions
are met more generally.

For both cases, the EMEP residence is either the private residence  that  is
the person's home or  a  specified  residence.   A  specified  residence  is
defined at new subsection 63C(3)below.

Medical equipment is defined in new section 63A in relation to a person  who
has a specified medical condition and, as a result, is  unable  to  regulate
his or her body temperature, as meaning the heating  or  cooling  system  of
the residence that is the person's home.

Subsection 63C(2) allows a carer for a person with medical needs to  satisfy
the medical needs requirement on a day in their own right,  based  upon  the
person with medical needs satisfying the  medical  needs  requirement  under
subsection (1) on  the  day  (including  being  specified  in  the  required
certification or otherwise satisfying the  Repatriation  Commission  of  the
requirements).  To meet this requirement, the carer must  provide  care  and
attention on a regular and ongoing basis for the person with medical  needs.
 The carer's home must also be the EMEP residence that is the  home  of  the
person with medical needs.  A parent or person responsible for  a  dependent
child who has medical needs would meet this requirement, including a  foster
carer of such a child.

Subsection 63C(3) provides that, for the purposes  of  section  63C  of  the
Veterans' Entitlements Act, specified essential medical equipment means  any
medical equipment that is specified by the Minister for  Families,  Housing,
Community Services and Indigenous Affairs in a legislative instrument  under
subsection 917C(3) of the Social Security Act.

Subsection 63C(3) further provides that, for the purposes of section 63C  of
the Veterans' Entitlements Act, a  specified  medical  condition  means  any
medical condition that is specified by the Minister for  Families,  Housing,
Community Services and Indigenous Affairs in a legislative instrument  under
subsection 917C(3) of the Social Security Act.

Subsection 63C(3) also provides that, for the purposes  of  section  63C  of
the Veterans' Entitlements Act, a specified residence  means  any  residence
that is specified by the Minister for Families, Housing, Community  Services
and Indigenous Affairs in a legislative instrument under subsection  917C(3)
of the Social Security Act.

Allowing these matters to be specified by  legislative  instrument  provides
flexibility in the nature of equipment and  conditions  covered,  and  using
the legislative instrument made  by  the  Minister  for  Families,  Housing,
Community Services and Indigenous Affairs  for  the  Veterans'  Entitlements
Act, will ensure the requirements remain consistent under the two Acts.

New section 63D sets out the concession card requirement  for  the  purposes
of new section 63B.

Subsection 63D(1) provides that  a  person  satisfies  the  concession  card
requirement on a day if the person is a holder of a concession card, or  the
person's name is included on a concession card.  Dependants  of  the  holder
of a concession card are listed on the card in many  instances  (which  will
generally include the person's partner and any dependent children).

A person will also meet the concession card requirement if the person  cares
for a person who has medical needs, and the person  with  medical  needs  is
the holder of, or included on a concession card on that day.

Subsection 63D(2) specifies that the following cards are, for  the  purposes
of subsection (1), a concession card:

    . a pensioner concession card issued under section 53 of  the  Veterans'
      Entitlements Act (section 53 provides for fringe  benefits  under  the
      Veterans' Entitlements Act, one of which  is  a  pensioner  concession
      card);


    . a seniors health card issued under  section  118ZG  of  the  Veterans'
      Entitlements Act;


    . a Repatriation Health Card - For All Conditions - this  card  is  also
      known as the Gold Card and is issued to persons who are eligible to be
      provided with  treatment  for  all  injuries  or  diseases  under  the
      Veterans'  Entitlements  Act  or  the  Military   Rehabilitation   and
      Compensation Act; and


    . a Repatriation Health Card - For Specific Conditions -  this  card  is
      also known as the White Card and is issued to persons who are eligible
      to be provided with treatment for specific injuries or diseases  under
      the Veterans' Entitlements Act  or  the  Military  Rehabilitation  and
      Compensation Act.


New section 63E sets out the energy account requirement on  a  day  to  meet
new section 917B.  A person satisfies the energy account requirement if  the
energy account for the relevant EMEP  residence  is  in  the  name  of  that
person or the person's partner.  Alternatively, the person will satisfy  the
energy account requirement if the  person  contributes  (whether  wholly  or
partly) to paying the energy account for the relevant EMEP residence.   This
would potentially  give  rise  to  qualification  in  situations  where  the
account is held within the household by someone other  than  the  person  or
the person's partner.

For situations where the claim is being made by the  carer  for  the  person
with medical needs, and the carer or their partner does not hold the  energy
account, the carer may none  the  less  be  qualified  if  the  person  with
medical needs contributes (whether wholly or partly) to  paying  the  energy
account for the relevant EMEP residence.

Account is to take its ordinary meaning.  This  will  cover  households  who
can supply some or all of their own energy needs, for  example,  with  solar
panels, provided the household has a service  relationship  with  an  energy
supplier.

An energy account means any account for electricity, or any  other  form  of
energy specified by the Minister for Families, Housing,  Community  Services
and Indigenous Affairs in a legislative instrument under subsection  917E(3)
of the Social Security Act.

Allowing  this  to  be  specified   by   legislative   instrument   provides
flexibility  in  the  types  of  energy  used,  and  using  the  legislative
instrument made by the Minister for Families,  Housing,  Community  Services
and Indigenous Affairs, for the purposes of the essential medical  equipment
payment  under  the  Veterans'  Entitlements  Act,  will  ensure  that   the
specified types of energy will remain consistent under the two Acts.

New section 63F sets out the rules  around  the  availability  of  payments.
Subsection (1) provides that no essential medical equipment payment  may  be
made for an income year in relation to medical equipment that is used in  an
EMEP residence if an essential medical equipment payment  has  already  been
made for that income year in relation to the same  equipment  and  the  same
residence.

However, an exception is made for situations in which an equipment user  has
a number of homes, and the medical equipment is used at each of  the  homes.
In this case, no more than two EMEP payments may be made in relation to  the
same medical equipment for one income year.  Subsection  (2)  provides  that
no more than two  essential  medical  equipment  payments  may  be  made  in
relation to the same medical  equipment  for  an  income  year  (subject  to
subsection  (1)).   Because  subsection  (1)  limits   payments   within   a
particular residence to only one payment per piece of medical equipment  per
residence, this results in more than one payment  being  available  only  if
the same  equipment  is  used  in  a  number  of  residences,  that  is,  to
situations where the  user  has  a  number  of  homes.   However,  only  two
payments may be made in this circumstance.

Subsection 63F(4) provides that essential medical equipment payment for  the
purposes of this section, means such  a  payment  under  this  Division,  or
under Division 4 of Part 2.18A of the Social Security Act.  In other  words,
the same rules apply regardless of whether an  essential  medical  equipment
payment is paid under the Veterans' Entitlements Act or the Social  Security
Act.

New section 63G provides that the amount of an essential  medical  equipment
payment for an income year is $140.00.  However, a  note  advises  that  the
payment is indexed on each 1  July  under  new  section  198E  (inserted  by
item 34).

New section 63H provides that an essential medical equipment  payment  is  a
debt due to the Commonwealth if the payment was made because  the  recipient
knowingly made a false or misleading statement or  knowingly  provide  false
information.

Subsection (2) provides that the  other  debt  creation  provisions  of  the
Veterans' Entitlements Act do not apply in relation to an essential  medical
equipment payment.

Subdivision C - Claim for essential medical equipment payment

New section 63J requires that a person make a proper claim for an  essential
medical equipment payment.

New section 63K  sets  out  the  special  requirements  for  claims  for  an
essential medical equipment  payment.   Subsection  (1)  requires  that  the
person making the claim must include a statement that the medical  equipment
is used in the relevant EMEP residence.

Subsection (2) requires that, where  a  carer  is  making  a  claim  for  an
essential medical equipment payment and the person with  the  medical  needs
is not a dependent child of that carer, the person with  the  medical  needs
must sign the claim.

New section 63L requires that a claim must be made by either the person  who
wants to be paid the  essential  medical  equipment  payment  or,  with  the
approval of that person, another person on their behalf.

Subsection (2) ensures that, where a person is  unable  to  approve  another
person to make a claim  on  their  behalf  because  of  physical  or  mental
incapacity, the Repatriation Commission may approve another person  to  make
the claim.

New section 63M sets  out  the  requirements  making  a  proper  claim.   In
accordance with subsection (1), to be a proper claim, a claim must  be  made
in  writing  in  accordance  with  a  form  approved  by  the   Repatriation
Commission.  It must also be accompanied by any relevant evidence  available
to the claimant and be lodged at an office of the  Department  in  Australia
in accordance with section 5T of the Veterans' Entitlements Act.

Subsection (2) provides that a claim lodged in accordance  with  section  5T
is taken to have been made on a day determined under that section.

New section 63N further requires that, to be  a  proper  claim,  the  person
making the claim, or on whose behalf the claim is being  made,  must  be  an
Australian resident on the day the claim is lodged.

A note at the end  of  the  section  advises  that  Australian  resident  is
defined in section 5G of the Veterans' Entitlements Act.

New section 63P sets out the conditions that apply to the  withdrawal  of  a
claim.

New subsections (1) and (2) provide that, if  the  claimant  or  the  person
representing  the  claimant  seeks  to  withdraw  a  claim  before   it   is
determined, then the claim will not be taken to have been made.

Under new subsection 63P(3), the withdrawal of the claim can be made  orally
or in writing.  A written withdrawal must be lodged  at  an  office  of  the
Department in Australia.

In accordance with new subsection 63P(4), an oral withdrawal  must  be  made
to a person in an office of the Department in Australia.

New subsections 63P(5) and (6) sets out the additional safeguards  for  oral
withdrawals.  The Secretary is required to provide a written  acknowledgment
of the oral withdrawal and give the person 28 days to reconsider his or  her
decision to withdraw the claim.  If the person advises the Secretary  within
28 days of receiving the acknowledgment notice that  he  or  she  wishes  to
continue with the claim, the oral withdrawal  is  taken  not  to  have  been
made.

The note after subsection 63P(6)  advises  that  the  person's  decision  to
revoke the oral withdrawal will reactivate the claim without  affecting  the
commencement date of the claim.

Subdivision D - Investigation of claim

New section 63Q requires  the  Secretary  of  the  Department  of  Veteran's
Affairs  to  investigate  the  claim  and  submit  it  to  the  Repatriation
Commission.

Subsections (1) and (2) provide that, where  a  person  has  made  a  proper
claim for  an  essential  medical  equipment  payment,  the  Secretary  must
investigate matters relating to the claim.  The Secretary will  then  submit
the claim to the Repatriation Commission for determination.

Subsection (3) requires that the claim  be  submitted  to  the  Repatriation
Commission with all the evidence the claimant has  provided,  all  documents
or other evidence obtained by the Department in its investigations  and  any
other documents under the control of the Department  that  are  relevant  to
the claim.

Subdivision E - Consideration and determination of claim

New section 63R describes the  duties  of  the  Repatriation  Commission  in
relation to the claim.

Subsection (1)  requires  that  the  Repatriation  Commission  consider  all
matters relevant to the claim and that it make  a  determination  about  the
claim.

In accordance with subsection (2),  the  Repatriation  Commission  must,  in
considering the claim, satisfy itself with respect to all  matters  relevant
to the claim.  It must also determine all matters relevant to the claim.

As specified by subsection (3), the Repatriation  Commission  must  consider
the evidence submitted with the claim under  section  63Q  and  any  further
evidence that is submitted in relation to the claim.

Under new section 63S, if the Repatriation Commission is satisfied that  the
person is eligible for the essential  medical  equipment  payment,  it  must
determine that the person is entitled to the payment.

Division 4 - Review of decisions

New section 64A provides for the review of  decisions  of  the  Repatriation
Commission about clean energy payments.

Subsection (1) enables a person who is dissatisfied with a decision  of  the
Repatriation Commission in relation to a clean  energy  payment  to  request
the Repatriation Commission to review the decision.

New section 64B sets out the requirements for an application for review.

Subsection (1) requires that a request for a review under section  64A  must
be made in writing, within three months of  notification  of  the  decision.
It must also set out the grounds for the review and be lodged at  an  office
of the Department in Australia in accordance with section 5T.

Subsection (2) provides that a request lodged in accordance with section  5T
is taken to have been made on a day determined under that section.

Subsection (3) requires the Repatriation Commission to review  its  decision
if a request for such a review has been made in accordance  with  subsection
(1).

Subsection (4) means that, where the Commission delegated its  powers  under
this section to the person who made the decision under review,  that  person
must not undertake the review of the decision.

New section 64C sets out the Repatriation Commission's review  powers.   The
Repatriation Commission must affirm or set aside the decision under  review.
 If the decision  is  set  aside,  then,  subject  to  subsection  (3),  the
Repatriation Commission must substitute a new  decision.   If  the  decision
set aside was a decision that a person ceases to  be  entitled  to  a  clean
energy  payment,  then  the  Repatriation  Commission  does  not   need   to
substitute another decision.

A note at the end of the section advises that the Repatriation  Commission's
evidence gathering powers are in section 64G.

New section 64D sets out  the  date  of  effect  requirements  for  reviews.
Under subsection (1), if the Repatriation Commission sets aside  a  decision
and substitutes a decision that a person  is  entitled  to  a  clean  energy
payment, the substituted decision takes effect from a date specified by  the
Repatriation Commission.

Subsection (2) requires that the specified date cannot be earlier  than  the
date of effect that would  have  applied  had  the  Repatriation  Commission
initially determined  that  the  person  was  entitled  to  a  clean  energy
payment.

New section 64E requires the  Repatriation  Commission  to  make  a  written
record of its decision upon review.  The written record  must  set  out  the
Repatriation Commission's findings  on  material  questions  of  fact,  must
refer to the evidence or material on  which  the  findings  were  based  and
include reasons for the decision.

New section 64F requires that the Repatriation Commission must give  to  the
person who requested the review, a copy of  its  decision  and  a  statement
about the decision.  However, if the statement contains any matter that,  in
the opinion of the Repatriation Commission, is of a confidential  nature  or
might be prejudicial to the physical or mental health or well-being  of  the
person who requested the review, that information is to be removed from  the
statement.   If  the  person  has  a  further  right  of   review   to   the
Administrative Appeals Tribunal, the Repatriation Commission must  give  the
person particulars of that right.

New section 64G sets out the  Repatriation  Commission's  evidence-gathering
powers in relation to reviews of clean energy payments.  In accordance  with
subsections (1) and (2), the Repatriation Commission or  its  delegate,  may
take evidence on oath or affirmation and adjourn a hearing.   The  presiding
member of the Repatriation Commission or the delegate may  summon  a  person
to appear at a review hearing to give evidence  or  produce  documents,  may
require that person to take an oath  or  to  make  an  affirmation  and  may
administer an oath or affirmation to the person.

Under subsection (3), for  the  purposes  of  the  review,  the  person  who
applied for the review is a competent and compellable witness.

Subsection (4) makes it clear that the oath or affirmation  is  an  oath  or
affirmation that the evidence that the person will give will be true.

Under subsection (5), the Repatriation Commission's power to  take  evidence
on oath or affirmation may  be  exercised  on  behalf  of  the  Repatriation
Commission by the presiding member, the delegate  or  another  person.   The
oath or affirmation may be exercised within or  outside  Australia,  and  is
subject to any limitation specified by the Repatriation Commission.

Subsection (6) provides that, where a person is authorised to take  evidence
for the purposes of taking evidence for the review, the person has  all  the
powers of the Repatriation Commission  under  subsection  (1)  and  all  the
powers of the presiding member under subsection (2).

Subsection  (7)  defines,  for  the  purposes  of  the  section,  the   term
Commission delegate to mean a person to  whom  the  Repatriation  Commission
has delegated its powers under section 64B and who is conducting the  review
in question.

New section 64H  sets  out  the  circumstances  under  which  a  person  may
withdraw a request for review.  This may be done  at  any  time  before  the
review is determined and must be in writing.   A  person  may  make  another
request for review in accordance with section 64A.

Item 24 includes a reference to an essential medical  equipment  payment  in
paragraph 127(1)(b).

Item 25 inserts a new subsection 175(2A).   New  subsection  175(2A)  grants
jurisdiction to  the  Administrative  Appeals  Tribunal  in  relation  to  a
decision of the Repatriation  Commission  under  section  64C  to  affirm  a
decision or set aside and substitute another decision.

Items 26 to 30 renumber subsections of section 175.

Items 31 to 33 make technical amendments to sections 176 and 177 to  include
references to relevant  new  review  provisions  relating  to  clean  energy
payments.  Sections 176 and 177 relate to the review  of  decisions  by  the
Administrative Appeals Tribunal.

Item 34 inserts new section 198E  after  section  198D.   New  section  198E
provides for the indexation of the amount of an essential medical  equipment
payment by the Consumer Price Index.  The first indexation is to take  place
on 1 July 2013.  The indexed payment will be rounded to the nearest dollar.

Part 3 - Application and transitional provisions

Item 35 provides  that  the  amendments  made  by  this  Schedule  apply  in
relation to the 2012-13 and later income years.

Item 36 provides transitional rules to allow for claims  for  the  essential
medical equipment payment to be made from  18  June  2012,  for  payment  on
1 July 2012.  Subitem  36(1)  allows  a  person  to  make  a  claim  for  an
essential medical equipment payment under either the Social Security Act  or
the Veterans' Entitlements Act for the  2012-13  income  year  on  or  after
18 June 2012.

A note alerts the reader that a claim for  an  essential  medical  equipment
payment for the 2012-13 income year must be made before 1 July 2013.

Subitem 36(2) provides that, for the purposes of the  Social  Security  Act,
the Social Security Administration Act and the Veterans'  Entitlements  Act,
a person who made a claim for the 2012-13 income year before 1 July 2012  is
taken to have made the claim on 1 July 2012.


                Schedule 8 - Single income family supplement


                                   Summary

This  Schedule  introduces  a  new  payment,  the   single   income   family
supplement, into the family assistance law.  The  payment  is  part  of  the
Household Assistance Package.  It will provide up to $300 a year  to  single
income families with primary earner income  between  $68,000  and  $150,000,
,recognising  that,  unlike  dual  income  families,  these  single   income
families only get one tax cut.

                                 Background

The single income family supplement will provide assistance  to  individuals
who have a qualifying child where the main income earner (if partnered,  the
member of the couple with the highest taxable income) has a  taxable  income
between $68,000 and $150,000, and may be subject to  the  partner's  taxable
income (if any).

A qualifying child will be an  FTB  child  who  has  not  been  absent  from
Australia for more than 13 weeks.  A qualifying child will  also  include  a
child who has not been absent from Australia for more than 13 weeks and  who
would be an FTB child except that the  child  (or  someone  on  the  child's
behalf) is receiving an 'at home' rate of one of the  following  payments  -
disability  support  pension,  youth  allowance,  special  benefit,  ABSTUDY
living allowance, or an education allowance  under  the  Veterans'  Children
Education  Scheme  or  the  Military  Rehabilitation  and  Compensation  Act
Education and Training Scheme.

If the main income earner's taxable income  is  greater  than  $68,000,  the
rate increases from nil at $68,000  by  2.5  cents  for  each  dollar  above
$68,000 until the taxable income reaches $80,000 and the  rate  reaches  the
maximum of $300.  The rate will stay at  $300  for  taxable  income  between
$80,000 and $120,000, and will then reduce  by  one  cent  for  each  dollar
above $120,000 until the supplement cuts out  when  taxable  income  reaches
$150,000.  If the claimant is a member of a couple, the rate  payable  based
on the main income earner's taxable income will also be subject to  the  low
income earner's taxable income (the member of the  couple  with  the  lowest
taxable  income).   If  the  low  income  earner's  taxable  income  exceeds
$16,000, the rate will  be  reduced  by  15  cents  for  each  dollar  above
$16,000, until the rate reaches nil.

This Schedule commences on 1 July 2012,  with  the  first  payments  of  the
supplement being made from 1 July 2013.

                         Explanation of the changes

Amendments to the Family Assistance Act

Item 1 amends the definition of family assistance in subsection 3(1) of  the
Family Assistance Act to include the single income family supplement.   This
ensures that single income family supplement will come  within  the  various
rules that apply to family assistance payments (such as the review and  debt
recovery provisions in the Family Assistance Administration Act).

Item 2 amends the definition of FTB child in the Family  Assistance  Act  to
include the meaning of an FTB child for the purpose  of  the  single  income
family supplement.  An FTB child for single income  family  supplement  will
have the same meaning as  for  family  tax  benefit  (FTB).   However,  when
applying Subdivision D of Division 1 of Part 3 (Determination of  percentage
of care) in a case where a claim for  single  income  family  supplement  is
required, the reference in Subdivision D to a claim for payment  of  FTB  is
to be read as a reference to a claim for payment  of  single  income  family
supplement.

Item 3 inserts into subsection  3(1)  a  new  definition  of  single  income
family supplement.

Item 4 adds new Division 6 at the end of  Part  3.   New  Subdivision  A  of
Division 6 sets out the  rules  that  apply  to  determine  an  individual's
eligibility for single income family supplement in normal circumstances.

New section 57G sets out the eligibility criteria for single  income  family
supplement.  Firstly, the individual must have a qualifying  child,  as  set
out in new subsection 57G(3).  Secondly, the individual must also  meet  the
residency requirements as provided for in new paragraph  57G(1)(b)  and  new
subsection 57G(2).  Thirdly, the individual must not be an  absent  overseas
recipient (disregarding section 63A, relating to the effect on  rate  of  an
FTB child's absence from Australia).  Finally, their rate of  single  income
family supplement, worked out under new Division  4B  of  Part  4,  must  be
greater than nil.

New paragraph 57G(1)(b) and new subsection  57G(2)  set  out  the  residency
requirements for the supplement.  These provisions are consistent  with  the
residency  requirements  for  FTB  as  set  out  in  paragraph 21(1)(b)  and
subsection 21(1A) of the Family Assistance Act.

Qualifying child, for the purpose of single  income  family  supplement,  is
defined in new subsection 57G(3).  For an  individual  to  be  a  qualifying
child of another individual (the adult), they must meet  one  of  the  seven
categories of qualifying child set out in new subsection 57G(3).

New paragraph 57G(3)(a) is the  first  category  of  qualifying  child,  and
provides that an individual is  a  qualifying  child  of  an  adult  if  the
individual is an FTB child of the adult and the individual is not an  absent
overseas FTB child  (disregarding  section  63A).   Determining  whether  an
individual is an absent overseas FTB child  relies  on  section  63  of  the
Family Assistance Act.  In broad terms,  an  FTB  child  becomes  an  absent
overseas FTB child after 13 weeks' absence from Australia.   The  discretion
in section 63A to extend the 13-week period would be disregarded for  single
income family supplement.  Therefore, neither an absent overseas  FTB  child
nor an FTB child  who  is  in  an  extended  FTB  portability  period  under
section 63A  would  be  a  qualifying  child  for   single   income   family
supplement.

For single income family  supplement,  an  FTB  child  will  have  the  same
meaning as for FTB, due to the amendment made by item 2.

New paragraphs 57G(3)(b) to (g) set out  the  remaining  six  categories  of
qualifying child that apply if an individual would be an FTB  child  who  is
not an absent overseas  child  (disregarding  an  extended  FTB  portability
period under section 63A) except that the individual (or someone  on  behalf
of the individual) is receiving an income support payment  at  an  'at home'
rate for a person who is  not  independent.   The  relevant  income  support
payments and 'at home' rates are as follows:

    . disability support pension (aged  under  21)  under  Part 2.3  of  the
      Social Security Act if the individual's maximum basic rate  is  worked
      out under item 1 or 3 of Table B in point 1066A-B1 or item 1 or  3  of
      Table B in point 1066B-B1 of that Act;

    . youth allowance under Part 2.11 of the  Social  Security  Act  if  the
      individual's maximum basic rate is worked out under  item 1  or  2  of
      Table BA in point 1067G-B2 or item 1 of Table BC in point 1067G-B4  of
      that Act;

    . special benefit  under  Part 2.15  of  the  Social  Security  Act  if,
      assuming youth allowance were payable, the individual's maximum  basic
      rate would be worked out under item 1 or 2 of Table BA in point 1067G-
      B2 or item 1 of Table BC in point 1067G-B4 of that Act;

    . ABSTUDY living allowance paid at the standard (at home) rate (provided
      the individual is a dependent student aged 16 or more and under 21);

    . education allowance  under  section  3.3  of  the  Veterans'  Children
      Education Scheme (provided the child is aged 16 or more);

    . education allowance under section 3.3 of the  Military  Rehabilitation
      and Compensation Act Education and Training Scheme (provided the child
      is aged 16 or more).

New section 57GA provides that the Secretary will determine who is  eligible
for the supplement where both members of an intact couple  may  be  eligible
for the supplement.  This is  consistent  with  section  26  of  the  Family
Assistance Act for FTB, ensuring that only one member of the  intact  couple
will be paid the new supplement.

New sections  57GB  and  57GC  provide  rules  for  blended  families.   New
section 57GB is similar to section 27 of  the  Family  Assistance  Act,  and
provides that, where two individuals are members of a couple and  either  or
both have a child from a previous relationship, then  any  qualifying  child
is deemed to be a qualifying child of both individuals.   Therefore,  either
individual can be eligible for the single income family supplement  for  the
child, although generally only one will be determined  as  eligible  by  the
Secretary because of the application of new section 57GA.  New section  57GC
is similar to section 28 of the Family  Assistance  Act  and  gives  certain
blended families an alternative to the rule in new section 57GA.

The  alternative  in  new  section  57GC  acknowledges  that  there  may  be
occasions when it is more appropriate that each  member  of  the  couple  is
eligible for single income family supplement and the rate of  single  income
family supplement for the family unit is apportioned between the couple. 

New section 57GC covers members of a couple (person A and B) where A has  at
least one child from a previous relationship, and at least one of the  other
children is a child of the relationship between A and B  or  a  child  of  a
previous relationship of B.  In this scenario, where A and B would  both  be
eligible for single income family supplement for the children  but  for  new
section 57GA, then the Secretary has a discretion to determine that  both  A
and B are to be  eligible  for  single  income  family  supplement  for  the
children and the  percentage  of  each  individual's  single  income  family
supplement for the children.

New subsection 57GC(2) sets out that  this  rule  cannot  apply  to  a  past
period where either individual has already been paid  single  income  family
supplement for the period.  New subsection 57GC(3)  defines  terms  used  in
this provision, consistent with the terms used in subsection  28(3)  of  the
Family Assistance Act.

New section 57GD is similar to section 29 of the Family Assistance Act,  and
deals with situations where two individuals who are not members of a  couple
claim single income family supplement for a past period  during  which  they
were members of the same couple with a qualifying child.   Given  that  both
individuals would be eligible for the single income  family  supplement  but
for new section 57GA, the Secretary has the  discretion  to  determine  that
both individuals are eligible for the single income  family  supplement  for
the qualifying child and the Secretary may determine the percentage of  each
individual's single income family supplement.

New Subdivision B of Division 6 of Part 3 deals with eligibility for  single
income family supplement where a  qualifying  child  dies  or  the  eligible
individual dies.

New section 57GE sets out that an individual will continue  to  be  eligible
for single income family supplement for 14  weeks  if  they  only  have  one
qualifying  child  and  that  child  dies.   This  rule  applies  where  the
individual only has one  qualifying  child,  because  single  income  family
supplement eligibility is paid irrespective  of  the  number  of  qualifying
children that an individual has, and, if the individual has  more  than  one
qualifying child, they will continue to be  eligible  for  the  past  period
because of the other child(ren).  New subsection 57GE(2) provides  that,  if
new section 57GE applies,  the  individual  continues  to  be  eligible  for
single income family supplement based on  the  rate  worked  out  under  new
Division 4B of Part 4 for each day in the 14-week period  beginning  on  the
day the child died.

New subsection 57GE(3) provides that the  14-week  period  will  be  reduced
when a child would have turned 22 if the child was aged 21  and  undertaking
full-time study or studying overseas full-time when they died,  or,  in  any
other case, when the child would have been aged 21.

New section 57GF sets out  the  rules  that  apply  if  the  14-week  period
determined in new subsection 57GE(2) extends  over  two  income  years.   In
this situation, the individual is eligible for a  single  amount  of  single
income family supplement for the period falling in the second  income  year,
and the taxable  income  (for  the  individual  and,  if  applicable,  their
partner) for the second income year is deemed to be the same as the  taxable
income for the first income year.

The rule in new section 57GF for an individual for whom the  14-week  period
extends over two  income  years  enables  the  eligibility  for  the  period
falling in the second income year to  be  paid  at  the  same  time  as  the
eligibility falling in the first income year.  This avoids a need  to  claim
for the period falling in the second income  year  after  the  end  of  that
year.

New section 57GG sets out  what  occurs  where,  due  to  the  death  of  an
eligible individual, there is an  unpaid  amount  of  single  income  family
supplement.

This section applies where an individual would have  been  eligible  for  an
amount of single income family supplement, but  died  before  receiving  the
amount of the supplement.  In these  circumstances,  if  another  individual
makes a claim for the payment,  stating  that  they  would  like  to  become
eligible for the amount of the supplement that had not been paid because  of
the death of the individual, the Secretary may  make  a  determination  that
the individual is eligible for the amount of the supplement.

If the Secretary makes such a determination, no-one else is, or can  become,
eligible for or entitled to be paid that amount.

Item 5 inserts after Division 4A of Part 4 of the Family  Assistance  Act  a
new Division 4B.  New Division 4B sets out how  to  determine  the  rate  of
single income family supplement.

New section 84G provides the  rules  for  determining  the  rate  of  single
income family supplement and  includes  a  method  statement  that  must  be
applied in calculating the rate.

New subsection 84G(1) provides that an individual's rate  of  single  income
family supplement is worked out in accordance with new section 84G.

New subsection 84G(2) sets out what is meant by main income earner  and  low
income earner for the purpose of new section 84G.  If the  individual  is  a
member of a couple, the main  income  earner  is  the  individual  with  the
highest taxable income and the low income earner  is  the  individual  whose
taxable income is the lowest (unless their income is the same, and then  the
main income earner is the claimant  and  the  low  income  earner  is  their
partner).  If the individual is single, they are the main income earner.

New subsection 84G(3) provides that the annual rate of single income  family
supplement is nil if the main income earner's taxable income  (rounded  down
to the nearest dollar) is $68,000 or less, or $150,000 or more.

New subsection 84G(4) sets out the method statement that applies  where  the
main income earner's taxable income (rounded down to the nearest dollar)  is
more than $68,000 and less than $150,000.

Step 1 requires the working out of the main income earner's  taxable  income
(rounded down to the nearest dollar).  Step 2 provides that the main  income
earner's taxable income is reduced by $68,000 and, in step  3,  this  amount
is multiplied by 0.025.

Step 4 provides that, if the amount in step 3  is  less  than  or  equal  to
$300, this is the  individual's  provisional  component.   Step  5  provides
that, if the amount  in  step  3  is  greater  than  $300,  the  provisional
component is $300  if  the  main  income  earner's  taxable  income  exceeds
$80,000 but does not exceed $120,000, or, if their  taxable  income  exceeds
$120,000, the provisional component is $300 less $0.01 for  each  dollar  of
the excess.

Step 6 provides that, if the individual is not a member  of  a  couple,  the
annual  rate  of  single  income  family  supplement  is   the   provisional
component.  Step 7 provides that,  if  the  individual  is  a  member  of  a
couple,  then  the  annual  rate  is  the  provisional  component  less  any
reduction under step 8.

Step 8 provides that, if the low income  earner's  taxable  income  (rounded
down to the  nearest  dollar)  is  greater  than  $16,000,  the  provisional
component is reduced by $0.15 for each dollar of the excess.

   Example
   George and Mildred have one qualifying child.  George has taxable  income
   of $76,000 and is the main income earner, and Mildred has taxable  income
   of $17,000 and is, therefore, the low income earner.


   Step 1 - main income earner = $76,000
   Step 2 - $76,000 - $68,000 = $8,000
   Step 3 - $8,000 x 0.025 = $200
   Step 4 - provisional component = $200
   Step 8 - as the low income earner's taxable income of $17,000 is greater
   than $16,000 by $1,000, this reduces the provisional component by:
   $1,000 x $0.15 = $150
   Step 7 - annual rate is the provisional component of $200 less reduction
   under step 8 of $150 = $50


   If George's taxable income is $90,000 and Mildred's is $15,000:


   Step 1 - main income earner = $90,000
   Step 2 - $90,000 - $68,000 = $22,000
   Step 3 - $8,000 x 0.025 = $550
   Step 5(a) - main income earner's taxable income exceeds $80,000 but does
   not exceed $120,000, therefore, provisional component = $300
   Step 7 - as Mildred's income is less than $16,000, there is no reduction
   under step 8 for the low income earner.
   Therefore, the annual rate is $300


   If George's taxable income is $125,000 and  he  is  not  a  member  of  a
   couple:


   Step 1 - main income earner = $125,000
   Step 2 - $125,000 - $68,000 = $57,000
   Step 3 - $57,000 x 0.025 = $1425
   Step 5(b) - main income earner's taxable income of $125,000 exceeds
   $120,000 by $5,000.
   $5,000 x $0.01 = $50
   $300 - $50 = $250
   Provisional component = $250
   Step 6 - the annual rate is the provisional component = $250


New subsection 84G(5) provides that the daily rate of single  income  family
supplement is the annual rate divided by 365, then rounded  to  the  nearest
cent (rounding 0.5 cents upwards).  If the  daily  rate  is  above  nil  but
below half a cent, then this is rounded up to 1 cent.

New section 84GA is similar to section 60 of the Family Assistance Act,  and
provides that, if a percentage is determined  under  new  section  57GC  for
members of a couple in a blended family, each individual's  annual  rate  of
single income family supplement is that percentage of the  rate  that  would
otherwise apply.

New section 84GB is similar to section 61 of the Family Assistance Act,  and
provides that, if a percentage is determined  under  new  section  57GD  for
separated members of  a  couple  for  the  period  before  separation,  each
individual's  annual  rate  of  single  income  family  supplement  is  that
percentage of the rate that would otherwise apply.

Amendments to the Family Assistance Administration Act

Items 6, 7, 8 and 9 make amendments to definitions in subsection 3(1).   The
definitions that are amended are TFN claim person, TFN determination  person
and TFN  substitution  person.   These  changes  are  consequential  to  the
amendments being made by this Schedule.

Item 10 inserts a new Division 4E into  Part  3  of  the  Family  Assistance
Administration Act.

New Subdivision A of Division 4E of Part 3 sets  out  the  requirements  for
making a claim for single income family supplement.  New  section  65K  sets
out the need for a claim.  New subsection 65K(2) provides that, if there  is
a  determination  in  force  that  an  individual  is  entitled  to  FTB  by
instalment (section 16), FTB for a past period (section  17),  or  a  single
payment because of the death of an FTB  child  (section  18),  and,  if  the
individual's rate of FTB takes into account at least one FTB  child  of  the
individual, then the individual is not required to make a claim  for  single
income family supplement.  New  subsection  65K(1)  provides  that,  if  the
individual does not come within new subsection  65K(2),  they  must  make  a
claim to become entitled to be paid single income  family  supplement.   The
claim must be made in accordance with new Division 4E.

New section 65KA sets out how to make  a  claim  for  single  income  family
supplement.  This  provision  is  similar  to  section  7  for  FTB.   Where
required,  an  individual  may  make  a  claim  for  single  income   family
supplement for a past period or for a single payment (because of  the  death
of the qualifying child) or in substitution because of the death of  another
individual (who was eligible to be paid single income family supplement  for
part or all of a past period and had not been paid before their death).

New subsection 65KA(2) sets out what  must  be  included  for  a  claim  for
single income family supplement to be effective.   This  includes  that  the
tax file number requirement in either new section 65KB or 65KC must  be  met
for a new claim for single income family supplement.

New section 65KB sets out the details of the  tax  file  number  requirement
that is required by new paragraph 65KA(2)(b), which relates  to  claims  for
single income family supplement for a past period. For single income  family
supplement, each TFN  claim  person  is  subject  to  the  tax  file  number
requirement in new section 65KB.  This provision is  similar  to  section  8
(FTB), section 38A (baby bonus and  maternity  immunisation  allowance)  and
section 49E (child care benefit).

The tax file number requirement in new section  65KB  can  be  satisfied  in
several ways, including:  providing a statement of the  TFN  claim  person's
tax file number (this option is only available  to  the  claimant,  but  the
actual statement can include the claimant and their partner's (if  any)  tax
file number); making a statement that the TFN claim  person  does  not  know
their tax file number, has asked the Commissioner of Taxation to  tell  them
the  number,  and  authorises  the  release  of  this  information  to   the
Secretary; or making a statement that the application for a tax file  number
is pending  and  authorising  the  Commissioner  of  Taxation  to  tell  the
Secretary the result of this  application  and  the  individual's  tax  file
number, if applicable.

New subsection 65KB(7) provides that a statement of  a  TFN  claim  person's
tax file number  may  not  be  required  if  the  statement  relates  to  an
individual who is, or was, the  claimant's  partner,  and  if  the  claimant
cannot obtain the person's tax file number or a statement as set out in  new
subsection 65KB(4) or (5).

New section 65KC sets out  the  details  of  the  TFN  requirement  that  is
required by new paragraph 65KA(2)(c), which relates  to  claims  for  single
income family supplement in substitution because of  the  death  of  another
individual.  For single income  family  supplement,  each  TFN  substitution
person is subject to the tax file number requirement  in  new  section 65KC.
This provision is similar to section 8A (FTB), section 38B (baby  bonus  and
maternity immunisation allowance) and section 49F (child care benefit).

New  subsections  65KC(1)  to  (6)  provide  the  same   tax   file   number
requirements as new subsections  65KB(1)  to  (6)  provide  for  claims  for
single income family supplement for a past period in  normal  circumstances,
but they apply in  relation  to  a  TFN  substitution  person  who  was  the
deceased individual and any partner of the deceased  individual  during  the
period in respect of which the single income family supplement is claimed.

New  subsections  65KC(7)  and  (8)  contain  discretions  which  allow  the
Secretary to exempt a TFN substitution  person  from  the  tax  file  number
requirement in new section 65KC if  the  claimant  does  not  know  the  TFN
substitution person's tax file number, or cannot obtain a statement  as  set
out under new subsection 65KC(4) or (5).

New section 65KD sets out restrictions on claims for  single  income  family
supplement for a past period.  New subsection 65KD(1) provides that a  claim
is not effective if the claimant has previously made a claim for any of  the
past period.

New subsection 65KD(2) provides that, for  a  claim  to  be  effective,  the
period claimed must fall wholly within one income year, and, if  the  period
does fall wholly within one income year, the claim must be made  before  the
end of the second income year after the income year that is the  subject  of
the claim.

New subsection 65KD(3) provides  that  a  claim  for  single  income  family
supplement for a past period cannot be made in the income year in which  the
past period occurs.

New section 65KE sets out the  restrictions  on  claims  for  single  income
family supplement by single payment/in substitution because of the death  of
another individual.  New  subsection  65KE(1)  provides  that  a  claim  for
payment  of  single  income   family   supplement   by   single   payment/in
substitution because of the death of another individual is not effective  if
the claimant has previously made a claim on the same basis.  New  subsection
65KE(2)  provides  that  a  claim  for  payment  of  single  income   family
supplement by single payment/in substitution because  of  death  of  another
individual, where eligibility is based on new section 57GF or  57GG  of  the
Family Assistance Act, must, for the claim to be effective, be  made  before
the end of the income year after the income year in which the person died.

Under new section 65KF, a claim for single income family supplement  can  be
withdrawn or varied, in a manner determined by the Secretary, before  it  is
determined.  A claim that is withdrawn is taken not to have been  made  and,
therefore, the Secretary does not have to make a determination.

New Subdivision B of  Division  4E  of  Part  3  of  the  Family  Assistance
Administration Act provides for  determination  of  claims  and  payment  of
single income family supplement.

New section 65KG provides  that,  if  a  claim  is  effective,  it  must  be
determined by the Secretary.  If a claim is not effective, it is  taken  not
to have been made.

New sections 65KH, 65KI and 65KJ provide that a  determination  of  a  claim
for  single  income  family   supplement   cannot   be   made   in   certain
circumstances.

New section 65KH provides that,  where  an  individual  makes  a  claim  for
single income family supplement for a past period in  an  income  year,  the
claim can only be determined if the claimant and  an  individual  they  were
partnered with during the past period have lodged  a  tax  return  for  that
income year if required, and if assessments have been made under the  Income
Tax Assessment Act 1936.  If a claimant had two  different  partners  during
the relevant income year and only one of the  partners  has  had  their  tax
assessment made for the income year, the claim for the  past  period  during
which that partner was a member  of  a  couple  with  the  claimant  can  be
determined, but the claim  for  the  past  period  during  which  the  other
partner was a member of a couple with  the  claimant  cannot  be  determined
until the other partner has their tax assessment made.

   Example
   Sara was partnered with John from 1 July to 1 September 2012 and with  Mo
   from 4 May to 30 June 2013.  In determining Sara's past period claims for
   single income family  supplement  for  1  July  to  1 September  2012,  2
   September 2012 to  3  May  2013,  and  4  May  to  30 June  2013,  it  is
   ascertained that she and Mo have tax assessments for the  2012-13  income
   year, but John does not.  Therefore, Sara's claims can be determined  for
   the period 2 September to 3 May (based on Sara's taxable income) and  for
   the period 4 May to 30 June (based on Sara and Mo's taxable incomes), but
   not yet for the period 1 July to 1 September.


New section 65KI provides that a claim for single income  family  supplement
for a past period in an income year is taken never to have been made if  the
claimant and/or their partner  (during  the  past  period  in  the  relevant
income year) are required to lodge tax return(s) for that year, but  do  not
lodge the tax return(s) before the end of the second income  year  following
the relevant income year.

If a claimant had two different partners during  the  relevant  income  year
and the claimant lodged a required  tax  return  within  the  two-year  time
limit but only one of the partners has lodged a required tax  return  within
the two-year time limit, the following would apply under new  section  65KI.
The claim for the past period during which the partner who did not  lodge  a
required tax return was a member of a couple  with  the  claimant  would  be
deemed never to have been made, because the partner in that period  did  not
lodge a required tax return within the two-year time limit.  The claims  for
the other past periods in the income  year  will  not  be  affected  by  new
section 65KI, because the relevant tax returns were lodged within  the  two-
year time limit.

New subsection 65KJ(1) provides that, where  a  TFN  claim  person  makes  a
statement under either new subsection  65KB(4)  or  65KC(4)  (that  the  TFN
claim person  does  not  know  their  TFN  etc.),  the  Secretary  can  only
determine the claim if, within 28 days of the claim,  the  Commissioner  for
Taxation tells the Secretary the person's tax file number or  28  days  pass
without the Commissioner telling the Secretary  that  the  person  does  not
have a tax file number.

Similarly, new subsection 65KJ(2) provides  that,  if  a  TFN  claim  person
makes a statement under  either  new  subsection  65KB(5)  or  65KC(5),  the
Secretary can only determine the claim if, within 28 days of the claim,  the
Commissioner for Taxation tells the Secretary the person's tax file  number,
or 28 days pass without the Commissioner  telling  the  Secretary  that  the
person has not applied for a tax file number, or the  application  has  been
refused by the Commissioner or withdrawn by the person.

New subsection 65KJ(3) provides that, if, after the 28 days,  the  Secretary
cannot determine the claim because of either new subsection 65KJ(1) or  (2),
the claim is taken never to have been made.

New sections 65KK, 65KL and 65KM set out when a determination must  be  made
that an individual is entitled or  not  entitled  to  single  income  family
supplement.

New section 65KK sets out when a claim for single income  family  supplement
for a past period must  be  determined.   This  section  provides  that  the
Secretary must determine that a claimant  is  entitled  to  be  paid  single
income family supplement for a past period if there is a claim that  is  for
a past period, and the Secretary is satisfied that the claimant is  eligible
for the whole of the period based on the  eligibility  requirements  in  new
Subdivision A of  Division  6  of  Part  3  of  the  Family  Assistance  Act
(eligibility in normal circumstances) or, where the qualifying  child  dies,
for part of the period in accordance with new section  57GE  of  the  Family
Assistance Act.

New section 65KL sets out when a claimant must  be  determined  as  entitled
where there has been a claim for single income family supplement  by  single
payment or in substitution because of the death of another  individual.   In
these circumstances, if a claim is made and the Secretary is satisfied  that
the claimant is  eligible  for  the  supplement  based  on  the  eligibility
requirements  in  new  section  57GF  (eligibility  for  single  amount   if
qualifying child dies) or new section 57GG (eligibility because an  eligible
individual dies)  of  the  Family  Assistance  Act,  the  claimant  must  be
determined as entitled.

New section 65KM provides that, if the Secretary is not satisfied under  new
section 65KK or 65KL, then the Secretary must determine  that  the  claimant
is not entitled to be paid the supplement for the past period or because  of
the death of the other individual.

New section 65KN provides that a determination made  under  new  Division 4E
of Part 3 of the Family Assistance Administration Act comes into force  when
it is made and remains in force at all times afterwards.

New section 65KO provides  that  the  Secretary  must  give  notice  to  the
claimant of a determination under new Subdivision B of Division 4E  of  Part
3.  The notice must include whether the claimant  is  entitled  to  be  paid
single income  family  supplement  and,  if  entitled,  the  amount  of  the
entitlement and how it is to be paid.  The notice must also state that  that
the claimant can seek review of the decision under  Part  5  of  the  Family
Assistance Administration Act.  New subsection  65KO(2)  provides  that  the
determination will be effective even if the notice requirements as  set  out
in new subsection 65KO(1) are not complied with.

Subsection (1) of new section 65KP sets out when payment  of  single  income
family supplement is to be made when a claim is  not  required  because  the
claimant has an entitlement determination for FTB in force and the  rate  of
FTB payable under the determination takes into  account  at  least  one  FTB
child of the individual.  In these circumstances,  the  Secretary  must  pay
any amount of single income family supplement  the  individual  is  eligible
for  to  the  individual  in  such  manner  as   the   Secretary   considers
appropriate, on the earliest day that  is  reasonably  practicable  for  the
amount to be paid.

The note after new subsection 65KP(1) mentions that  new  subsection  65K(2)
sets out when a claim for single income family supplement is not required.

New subsection  65KP(2)  provides  that,  if  the  individual  and/or  their
partner(s) during a period in the  relevant  income  year  are  required  to
lodge an income tax return for  that  income  year,  the  amount  of  single
income family supplement cannot be paid unless assessments  have  been  made
under the Income Tax Assessment Act 1936  for  each  person.   As  with  new
section 65KH, if the  individual  had  two  different  partners  during  the
relevant income year and  only  one  of  the  partners  has  had  their  tax
assessment made for the income year,  payment  can  be  made  for  the  past
period during which  that  partner  was  a  member  of  a  couple  with  the
individual and for the period the individual was not a member of  a  couple,
but payment cannot be made for  the  past  period  during  which  the  other
partner was a member of  a  couple  with  the  individual  until  the  other
partner has their tax assessment made.

New subsection  65KP(3)  provides  that,  if  the  individual  and/or  their
partner(s) during a period in the  relevant  income  year  are  required  to
lodge an income tax return for that  income  year,  and  they  and/or  their
partner(s) have not lodged by the end of the second income year  immediately
following the past period income year, then  the  amount  of  single  income
family supplement is not to be paid to the individual.  As with new  section
65KI, if the individual had  two  different  partners  during  the  relevant
income year, and the individual lodged a required tax return within the two-
year time limit but only one of the  partners  has  lodged  a  required  tax
return within the two-year time limit, payment can  be  made  for  the  past
period during which  that  partner  was  a  member  of  a  couple  with  the
individual and for the period the individual was not a member of  a  couple,
but payment cannot be made for  the  past  period  during  which  the  other
partner was a member of a couple with  the  individual,  because  the  other
partner did not lodge the required  tax  return  within  the  two-year  time
limit.

New  subsection  65KP(4)  provides  that  the  payment  provisions  in   new
section 65KP are also subject to overpayment and  debt  recovery  provisions
in Part 4, the payments to payment nominee provisions in Division 3 of  Part
8B and sections 225 and 226.

New section 65KQ sets out when the payment must be made  if  the  individual
has made a claim for single income family supplement.  If it  is  determined
that the claimant is entitled to the supplement for  a  past  period  or  by
single payment/in substitution because of the death of  another  individual,
the Secretary must pay the amount to the individual  at  such  time  and  in
such manner as the Secretary considers appropriate.

The payment provisions in new section 65KQ are also subject  to  overpayment
and debt recovery provisions in Part 4,  the  payments  to  payment  nominee
provisions in Division 3 of Part 8B and sections 225 and 226.

Under new section 65KB, a claimant is subject to  certain  tax  file  number
requirements before a claim can be determined.  Similar  requirements  apply
under new section 65KR  if  a  determination  is  in  force  under  which  a
claimant is entitled to be paid single income family supplement for  a  past
period.  These tax file number requirements  apply  in  relation  to  a  TFN
determination person, which will be defined in subsection 3(1) as being  the
claimant or the claimant's partner(s) during the past  period,  due  to  the
amendment in item 7.

New section  65KS  sets  out  the  circumstances  in  which  a  past  period
determination will be varied if there is a failure to  provide  a  tax  file
number.

New subsection 65KS(1) provides that,  if  the  Secretary  makes  a  request
under new subsection  65KR(1)  and  the  claimant  does  not  comply  within
28 days, then the  Secretary  may  vary  the  determination  such  that  the
claimant is not entitled to be paid single income family supplement for  any
day in the past period.

Under new subsection 65KS(2), the Secretary may determine that  a  variation
because of the application of new subsection 65KS(1) does  not  apply.   The
claimant may remain entitled to single  income  family  supplement,  despite
failing to provide a requested tax file number, if the reason  is  that  the
claimant  cannot  obtain  from  a  relevant  partner  (whether  previous  or
current),  the  partner's  tax  file  number  or  a  statement   under   new
subsection 65KR(3) or (4).

New subsections 65KS(3) and  (4)  set  out  the  rules  that  apply  if  the
Secretary makes a request under new subsection  65KR(1),  and  the  claimant
provides a statement of the kind  set  out  in  new  subsection  65KR(3)  or
65KR(4), but the Commissioner of  Taxation  tells  the  Secretary  that  the
person has no tax file number, has not applied for a tax  file  number,  has
had their application refused, or has withdrawn their application.  In  this
case, the Secretary may vary the determination such  that  the  claimant  is
not entitled to be paid single income family supplement for any day  in  the
past period.

Similarly, new subsections 65KS(5) and (6) set out the rules that  apply  if
a TFN claim person has  made  a  statement  of  the  kind  set  out  in  new
subsection 65KB(4) or (5),  but  the  Commissioner  of  Taxation  tells  the
Secretary that the person has no tax file number, has not applied for a  tax
file number, has had their  application  refused,  or  has  withdrawn  their
application.  In this case, the Secretary may vary  the  determination  such
that  the  claimant  is  not  entitled  to  be  paid  single  income  family
supplement for any day in the past period.

New  subsection  65KS(8)  provides  that,  if  the  Secretary   varies   the
determination such that the person was not entitled  to  the  single  income
family supplement and then  finds  out  the  tax  file  number  of  the  TFN
determination person or the TFN claim person, then the Secretary  must  vary
the determination to undo  the  effect  of  the  variation  made  under  new
subsection 65KS(7).

New section  65KT  provides  that  the  Secretary  must  give  notice  of  a
variation made under  Subdivision  B  of  Division  4E  of  Part  3  to  the
claimant.  The notice must state the effect of the variation  and  that  the
claimant can seek review  of  the  decision  under  Part  5  of  the  Family
Assistance Administration Act.  New subsection  65KT(2)  provides  that  the
determination will be effective even if the notice requirements as  set  out
in new subsection 65KT(1) are not complied with.

Item 11 inserts the reference to single income family  supplement  into  the
list of inalienable payments in subsection 66(1).

Item 12 amends paragraph 71(1)(a) such that, if an amount of  single  income
family supplement is paid to a person and they  were  not  entitled  to  the
amount paid, then the amount paid is a debt due to the Commonwealth  by  the
person.

Item 13 inserts a new  paragraph  93A(6)(aa),  which  provides  that  single
income family supplement is included as a family assistance payment for  the
purpose of section 93A, which relates to recovery of amounts from  financial
institutions.

Item  14  inserts  into   paragraph   111(2)(a)   the   reference   to   new
subsection 65KA(2), such that a person cannot apply to the  Social  Security
Appeals Tribunal for review of a decision as to the form of  the  claim  for
single income family supplement.

Item 15 inserts a new subsection 154A(8), which provides that,  if  the  tax
file number of an individual or partner(s)  is  provided  to  the  Secretary
under new Division 4E  of  Part  3,  then  section  154A  applies  as  if  a
reference to adjusted taxable income is a reference to  the  taxable  income
of the individual or their partner(s).

Item 16 amends the definition of relevant benefit in  section  219TA,  which
is a definition that applies to Part 8B  (nominees).   The  amendment  means
that single income family supplement is a relevant benefit for  the  purpose
of Part 8B.

Item 17 is an application provision setting out that this  Schedule  applies
in relation to the 2012-13 income year and later income years.


                      Schedule 9 - Aged care amendments


                                   Summary

This Schedule amends the Aged Care Act 1997 (the Aged Care Act)  to  provide
additional support to aged care homes to compensate them for  the  increased
costs that they will incur on behalf of residents from the  introduction  of
a price on carbon.

                                 Background

To align with the Household  Assistance  Package,  from  1  July  2012,  the
Support  for  Aged  Care  Homes   measure   will   provide   an   additional
$132.1 million over five years to aged care homes  to  compensate  them  for
the increased costs that they will incur on behalf  of  residents  from  the
introduction of a price on carbon.

In an aged care home, some of the cost impact of a carbon price is borne  by
the aged care home, which pays for some  of  its  residents'  living  costs,
including electricity bills.  Nevertheless, residents of aged care homes  do
incur incidental expenses, and so will experience some of  the  cost  impact
of a carbon price.  It is,  therefore,  important  that  they  receive  some
portion of  the  increase  to  help  with  costs  of  additional  day-to-day
expenses.

Broadly, under the Household Assistance Package, pensioners will receive  up
to $338 per annum through the  Clean  Energy  Advance  (a  lump  sum  to  be
provided before commencement of carbon pricing) and,  from  20  March  2013,
fortnightly or quarterly  payments  of  Clean  Energy  Supplement.   Similar
assistance will  also  be  provided  to  self-funded  retirees  who  hold  a
Commonwealth Seniors Health Card.

The amendments are to ensure that some of  the  compensation  that  eligible
residents of aged care homes will receive as part of the package  is  passed
on to aged  care  homes.   The  amendments  increase  the  maximum  standard
resident contribution (a  daily  fee  charged  to  cover  living  expenses),
payable by most eligible residents of aged care homes, from  84 per cent  to
85 per cent of the total basic age pension  amount.   This  is  an  increase
from the projected daily rate as of 1 July 2012 of $42.08  per  day  to  the
projected daily rate as at 1 July 2012 of $42.58 per day.

Through this measure,  aged  care  homes  will  receive  over  half  of  the
Household Assistance Package that eligible  residents  receive  through  the
increased standard resident contribution.   This  equates  to  approximately
$3.50 per week per resident.  Pensioners living  in  aged  care  homes  will
retain almost half of the assistance  they  receive  through  the  Household
Assistance Package to  help  meet  their  incidental  expenses  -  a  higher
proportion  than  they  would  normally  receive  through  routine   pension
increases.  This equates to approximately $3.00 per week.

The Aged Care Act  provides  that  the  standard  resident  contribution  is
84 per cent (rising as a result of these amendments to 85 per cent)  of  the
basic age pension amount unless the care recipient is:

    . a protected resident - applies to people in care on 19 September  2009
      who did not get the benefit of the 2009 pension increase;

    . a non-standard resident (certain pre-2008 reform residents) -  applies
      to certain people who entered care prior to 20 March 2008;

    . a phased resident - applies to people who entered  care  on  or  after
      20 September 2009 who did not get the  benefit  of  the  2009  pension
      increase.

To implement the policy intent in relation  to  carbon  compensation  across
other applicable  categories  of  care  recipient,  further  amendments  are
included in this Schedule to provide  for  proportional  increased  standard
resident contributions for  protected,  phased  and  non-standard  residents
from 1 July 2012.

Non-pensioner residents of aged care homes who do not  hold  a  Commonwealth
Seniors Health Card  will  not  receive  assistance  through  the  Household
Assistance  Package.   To  ensure  these  residents  are  not  disadvantaged
through  the  higher  charges  implemented  by  these  amendments,   a   new
Government  aged  care  supplement,  equal  to  one per cent  of  the  basic
pension, will be payable in respect of these residents  where  they  are  in
care prior to  1  July  2012.   This  will  effectively  mean  the  standard
resident contribution for  these  residents  will  not  increase.   The  new
supplement will be implemented through aged care delegated legislation  (the
Aged Care Principles).

                         Explanation of the changes

Context and summary of the changes

Section 58-2 of the Aged Care Act provides that the maximum daily amount  of
resident fees payable by a care  recipient  is  the  amount  worked  out  in
accordance  with  the  resident  fee  calculator  in  section   58-2.    The
calculator requires the addition of  a  number  of  different  payments  and
types of supplement.  One of the amounts included in the calculation is  the
'standard resident contribution'.  Under the Aged Care  Act,  all  residents
in aged care can be asked to pay a standard resident contribution  to  cover
living expenses such as meals, cleaning, laundry, heating and cooling.

For most care recipients, the general rule regarding the  standard  resident
contribution provided under section 58-3 is  applicable.   However,  due  to
arrangements introduced as part of the 2009 Secure and  Sustainable  Pension
Reforms, there are three classes of resident  for  whom  the  maximum  basic
daily fee is not currently 84 per cent of the basic age pension amount:
    . for  protected  residents  (people  who  were  in  permanent  care  on
      19 September 2009, including part-payment pensioners whose pension, on
      20 September 2009, did not increase by  more  than  the  corresponding
      increase  in  the  standard  resident  contribution,  and  self-funded
      retirees), the maximum rate is 76.7 per cent of the basic age  pension
      amount;

    . for non-standard residents (certain people who entered care  prior  to
      20 March 2008, including self-funded retirees, pensioners  who  agreed
      to  pay  a  bond  referred  to  in  paragraph   58-3C(1)(c)(ii),   58-
      3C(1)(e)(ii) or 58-3C(1)(e)(iii),  and  residents  who  chose  not  to
      disclose their financial information to Centrelink), the maximum  rate
      equivalent to 95.5 per cent of the basic age pension amount; and

    .  for  phased  residents  (people  who  enter  permanent  care  between
      20 September 2009 and 19 March 2013, whose pension did not increase by
      more  than  the  corresponding  increase  in  the  standard   resident
      contribution, and who, therefore, did not  benefit  from  the  changed
      pension arrangements of 20 September  2009),  the  maximum  rate  will
      increase  to  81 per cent  of  the  basic  age  pension  amount   from
      20 September 2011, rising to 84 per cent over time.

In summary, this Schedule amends the Aged Care Act such that:

    . from 1 July 2012, the standard resident contribution will increase  to
      85 per cent of the basic age pension amount (rather than 84 per cent);




    . for a protected resident,  the  standard  resident  contribution  will
      increase to 77.5 per cent of the basic age pension amount;


    . for non-standard residents (certain pre-2008  reform  residents),  the
      standard resident contribution will increase to 96.5 per cent  of  the
      basic age pension amount; and


    .  for  phased  residents,  the  applicable  percentage  rate  has  been
      determined for the various periods required (being a percentage of the
      basic age pension amount) and is detailed below.

Amendments to the Aged Care Act

Currently, sections 58-3, 58-3B,  58-3C  and  58-4  of  the  Aged  Care  Act
describe different calculations  for  the  standard  resident  contribution,
depending on the circumstances of  the  individual,  including  whether  the
person is a pre or post-September 2009 resident or one of  certain  pre-2008
reform residents, and whether or not they are receiving  an  income  support
payment.  These sections have been amended as follows:

Item 1 amends subsection 58-3(1) such that (from 1 July 2012)  the  standard
resident contribution for  a  care  recipient  is  the  amount  obtained  by
rounding down to the nearest cent an amount  equal  to  85 per cent  of  the
basic age pension amount (worked out on a daily basis).

Item 2 repeals subsection 58-3B(3) and replaces it with a provision  stating
that the standard resident contribution  for  a  care  recipient  who  is  a
protected resident is the amount obtained by rounding down  to  the  nearest
cent an amount equal to  77.5 per cent  of  the  basic  age  pension  amount
(worked out on a per day basis).

The repealed subsection expresses the  standard  resident  contribution  for
this type of resident as  a  dollar  figure  as  indexed  on  and  after  20
September 2009.  This item coverts the rate to  a  percentage  to  make  the
legislation less  complex.   This  is  necessary  as  it  is  impossible  to
calculate in advance the dollar amount to  replace  the  current  figure  of
$33.41 (given indexation will occur twice - on  20  September  2011  and  20
March 2012) before the new arrangements take effect on 1 July 2012.

If a person is a protected resident, they will continue to  pay  a  standard
resident contribution equivalent to their pre-20  September  2009  rate,  as
indexed in line with the indexation arrangements for the basic rate  of  the
pension and adjusted  for  the  introduction  of  the  Household  Assistance
Package.

Item 3  repeals  subsection  58-3C(3)  and  replaces  it  with  a  provision
requiring  that  the  standard  resident   contribution   for   non-standard
residents (certain pre-2008 reform residents)  is  the  amount  obtained  by
rounding down to the nearest cent an amount equal to  96.5 per cent  of  the
basic age pension amount (worked out on a per day basis).

The repealed subsection expresses the  standard  resident  contribution  for
this type of resident as  a  dollar  figure  as  indexed  on  and  after  20
September 2009.  In line with other  provisions  under  section  58-3,  this
item converts the rate to a percentage  for  consistency  and  to  make  the
legislation less complex.

Item 4 repeals items 5 and 6 of subsection  58-4(5)  to  provide  that,  for
phased residents, the applicable percentage rate  for  the  various  periods
(being a percentage of the basic age pension amount) is as  follows  (noting
that only items 5-7 introduce new arrangements):


|Standard resident contribution-phased residents       |
|Item  |If the relevant period is ...  |the applicable  |
|      |                               |percentage is   |
|      |                               |...             |
|1     |20 March 2010 to               |78              |
|      |19 September 2010 (inclusive)  |                |
|2     |20 September 2010 to           |79              |
|      |19 March 2011 (inclusive)      |                |
|3     |20 March 2011 to               |80              |
|      |19 September 2011 (inclusive)  |                |
|4     |20 September 2011 to           |81              |
|      |19 March 2012 (inclusive)      |                |
|5     |20 March 2012 to 30 June       |82              |
|      |2012 (inclusive)               |                |
|6     |1 July 2012 to 19 September    |83              |
|      |2012 (inclusive)               |                |
|7     |20 September 2012 to           |84              |
|      |19 March 2013 (inclusive)      |                |

Under the phased resident arrangements introduced in 2009, phased  residents
pay a standard resident contribution starting at  an  amount  equal  to  the
protected rate for the first six months (until 20 March 2010).  This was  to
be phased up to an amount equal to 84 per cent  of  the  basic  age  pension
over the period from 20 March 2010 to 20 March 2013.   This  phasing  period
ensures that those residents who did not benefit from the  increase  to  the
basic age pension, and who enter care from 20 September 2009, will not  have
a significant jump in the amount they could be asked to pay  as  a  standard
resident contribution.

This policy is retained under  the  amended  percentages  and  time  periods
shown  above.   The  amendments  simply  allow  for  some  of   the   carbon
compensation arrangements to be passed to  the  aged  care  home  through  a
proportional increase  in  the  standard  resident  contribution  for  these
residents.  In line with previous policy,  the  general  rule  for  standard
resident contribution will apply to these residents post 19 March 2013  when
they too will pay 85 per cent of the basic aged pension in  accordance  with
subsection 58-3(1).

Item 5 provides that amendments made by this Schedule apply in  relation  to
the calculation of the standard resident contribution for a  care  recipient
under Division 58 of the Aged Care Act in respect of a day  that  is  on  or
after 1 July 2012.

                       Schedule 10 - Other amendments


                                   Summary

This Schedule will amend  certain  Acts  to  provide  further  consequential
amendments relating to the various clean energy  payments  provided  for  in
this Bill.  Notably, the amendments ensure that the payments will not  count
as income for social security, family assistance and veterans'  entitlements
purposes, and will be tax-exempt.  The amendments  will  also  ensure  that,
where an individual is subject to  income  management,  deductions  will  be
made  from  any  clean  energy  advances  or  quarterly  supplements.    The
amendments also make various amendments of an administrative nature  to  the
Social Security Administration Act where the  amendments  are  common  to  a
number of payments.

                                 Background

In broad terms, this Schedule provides for  certain  amendments  to  various
pieces of legislation  to  ensure  that  the  various  clean  energy-related
payments are tax-exempt and not to be treated as income for  welfare-related
purposes, and to ensure that lump sum clean  energy  advances  or  quarterly
supplements will be income managed for  those  people  who  are  subject  to
income management.

Various new payments are created by this Bill, including  the  clean  energy
advance (Schedules 1 and 2), low income  supplement  (Schedule  6)  and  the
essential medical equipment payment (Schedule 7).  Where  common  amendments
are required to support  the  administration  of  these  new  payments,  the
amendments  are  made  in   this   Schedule.    Other   amendments   of   an
administrative nature are made in the main Schedules for the new payments.

The amendments made by this Schedule commence on 14 May 2012, subject to
commencement of the new Clean Energy Act 2011.

                         Explanation of the changes

Amendments to the Family Assistance Act

Item 1 adds to paragraph (j)  of  clause 7  of  Schedule  3  to  the  Family
Assistance Act a reference to clean energy supplement.  The effect  will  be
that the clean energy supplement component of the relevant payment will  not
come within the defined term tax free pension  or  benefit  and,  therefore,
will not be adjusted taxable income for family assistance purposes.

Amendments to the Income Tax Assessment Act 1997

Items 2 and 3 make consequential amendments to the table  in  section  11-15
of the Income Tax Assessment Act 1997, inserting  references  to  the  clean
energy  advance  and  single  income  family  supplement  under  the  Family
Assistance Act, and to clean energy payments, including advances, under  the
Social  Security  Act,  the  Veterans'  Entitlements   Act,   the   Military
Rehabilitation and Compensation Act and the Farm Household Support Act.

Items 4 and 5 similarly insert into section 52-10 reference to clean  energy
payments under the Social Security Act to provide  that  such  payments  are
exempt from income tax.

Items 6, 7, 8 and 9 amend section 52-15 to provide that so much of a  social
security payment that is included by  way  of  clean  energy  supplement  is
exempt from income tax.

Item 10 inserts into the table in section 52-40, which lists the  provisions
of the Social Security Act under which social  security  payments  are  made
that are exempt from income tax, reference to a clean energy  payment  under
Part 2.18A.

Item 11 inserts new paragraph (b) after  paragraph  52-65(1)(a)  to  provide
that  clean  energy  payments  under  the  Veterans'  Entitlements  Act  are
excluded from the table in that section (because they  are  covered  at  new
subsection (1G), inserted at item 12 below).

Item 12 adds new subsection (1G) before subsection 52-65(2) to provide  that
clean energy payments under the Veterans' Entitlements Act are  exempt  from
income tax.

Item 13 adds a new paragraph (e) to the definition of supplementary  amounts
of a veterans' affairs payment in section 52-70, to include reference to  so
much of the payment as is included by way of clean energy supplement.

Item 14 inserts references to Part IIIE and clean energy  payment  into  the
table  in  section 52-75,  which  lists  the  provisions  of  the  Veteran's
Entitlements Act under which veterans' affairs payments are  made  that  are
wholly or partly exempt from income tax.

Item 15 inserts reference to a  clean  energy  payment  under  the  Military
Rehabilitation and Compensation Act into the  table  in  section  52-114  as
exempt from income tax.

Item 16 amends subsection 52-150(1) to specify that a clean  energy  advance
or single income family  supplement  payment  to  families  is  exempt  from
income tax.

Item 17  inserts  reference  to  a  clean  energy  advance  under  the  Farm
Household Support Act into the table in section 53-10 as exempt from  income
tax.

Amendments to the Social Security Act

The clean energy advance payment to families will not be counted  as  income
for social security purposes.  Subsection 8(8) of the  Social  Security  Act
lists payments that are not income for social  security  purposes.   Item 18
adds a reference to a clean energy advance under the Family  Assistance  Act
into paragraph 8(8)(jaa).  The single income family supplement  is  excluded
from being income because it is a form  of  'family  assistance',  which  is
already referred to within that paragraph.

Items 19 and 20 insert new paragraphs (yha) and (znb)  into  subsection 8(8)
to  provide  that  a  clean  energy  payment  under  either  the   Veterans'
Entitlements Act or the Military Rehabilitation and Compensation Act is  not
to be treated as income for the purposes of the Social Security Act.

Item 21 inserts new section 1224A into Part 5.2 of Chapter 5 of  the  Social
Security Act.  This new provision sets out when a low income  supplement  or
a social security essential medical equipment payment is a debt.   In  broad
terms, a debt would only  arise  where  some  or  all  of  the  payment  was
incorrectly paid because a relevant individual knowingly  made  a  false  or
misleading statement or knowingly provided false or misleading information.

Where an individual is paid a low income supplement or an essential  medical
equipment payment because of a  determination  made  under  Part  3  of  the
Social Security Administration Act,  the  determination  is  later  changed,
revoked, set aside or superseded by another determination, a reason for  the
determination  needing  to  be  changed  was  that  a  relevant   individual
knowingly made a false or misleading statement or knowingly  provided  false
or misleading information, and, apart from that  statement  or  information,
the payment would not have been paid, then the amount of  the  payment  made
is a debt.  The relevant rules are in new subsection 1224A(1).

New subsection 1224A(2) provides that, in  this  case,  the  amount  of  the
payment is a debt due to the Commonwealth by the individual.

New subsection 1224A(3) states that, with the  exception  of  section 1224AA
of  the  Social  Security  Act  (relating  to  misdirected  cheques),  other
provisions in relation to the raising of social security debts do not  apply
to the low income supplement or essential medical equipment payment.

Items 22 and 23 amend paragraph 1231(1AA)(b) of the Social Security Act.

Paragraph (b) provides  that,  when  the  Secretary  makes  a  determination
regarding what amount, if any, is to be deducted from  a  person's  payments
in repayment of an  existing  debt,  the  Secretary  is  not  to  reduce  an
individual's payment covered by the  paragraph  (including  a  reduction  to
nil) unless the person has requested the Secretary to do  so.   These  items
insert references to the low income supplement  and  the  essential  medical
equipment payment into this paragraph, so  that  the  same  rules  apply  to
these payments.

Amendments to the Social Security Administration Act

Item 24 adds two  new  paragraphs  to  subsection  47(1).   Subsection 47(1)
defines a lump sum benefit for the purposes of  that  section,  which  deals
with how such benefits are to be paid,  and  applies  various  other  needed
provisions, such as the nominee provisions.  New paragraph (k) includes  the
clean energy advance under the Social Security Act,  and  new  paragraph (l)
includes the low income  supplement  and  the  essential  medical  equipment
payment under the Social Security Act, as lump sum benefits.

Item 25 inserts new sections 47D and 47DAA.  New  section 47D  provides  for
payment of the clean energy advance to the individual in a single lump  sum,
and in such manner as the Secretary  considers  appropriate.   However,  new
subsection (2) provides that the Secretary must not pay the advance  if  the
Secretary is aware that the individual has died.

New section 47DAA provides for payment  of  the  low  income  supplement  or
essential medical equipment payment under the Social  Security  Act  to  the
individual in a single lump  sum,  and  in  such  manner  as  the  Secretary
considers appropriate.

Item 26 inserts a new paragraph into section 123A  after  paragraph  (c)  of
the definition of relevant payment.  Section 123A provides  the  definitions
for Part 3A - Nominees.  The Secretary may appoint a nominee  for  a  person
in respect of a relevant payment.   New  paragraph  (ca)  includes  a  clean
energy payment, to allow a nominee to be appointed  in  respect  of  such  a
payment, particularly the quarterly clean energy supplement.

Items 27  and  28  make  amendments  to  Part  3B  of  the  Social  Security
Administration Act, dealing with income management of a number  of  the  new
clean energy payments.

Item 27 amends section 123TC to insert a definition of clean energy  income-
managed payment, to mean a clean energy advance under  the  1991  Act  (that
is, the Social Security Act), the Veterans'  Entitlements  Act  for  service
pension  or  the  Family  Assistance  Act,  or  a  quarterly  clean   energy
supplement under the 1991 Act (that is, the  Social  Security  Act)  or  the
Veterans' Entitlements Act.

Item 28 inserts new Subdivision DE after Subdivision DD  of  Division  5  of
Part 3B, providing for deductions from clean energy income-managed  payments
that may be payable to a person who is subject to  income  management.   New
section 123XPJ provides that, if a clean energy  income-managed  payment  is
payable to a person who is subject to income management,  100  per  cent  of
the payment is the deductible portion.  This means that the full  amount  of
these payments is to be deducted  and  credited  to  the  Income  Management
Record and to the person's income management account.

An income managed individual's clean energy supplement that  is  paid  as  a
distinct component of the person's rate of social security payment  will  be
income managed by virtue of being part of the individual's rate of  payment.
 The low income supplement, the essential medical equipment payment and  the
single income family supplement will not be income managed.

Item 29 inserts reference to the low  income  supplement  or  the  essential
medical equipment payment into paragraph 129(3)(a).  In common with  pension
bonus, subsection 129(3) limits the  capacity  of  a  person  to  apply  for
review of a decision in relation to these payments more than 13 weeks  after
notice is given to the person of the decision.  Date  of  effect  provisions
under the social security law (see Division  9  of  Part  3  of  the  Social
Security  Administration  Act)  generally  limit  the  date  of  effect   of
decisions on review where a person seeks such  review  more  than  13  weeks
after being given notice of the  decision.   For  instalment  payments,  the
review decision will take effect on  the  day  review  was  sought  in  this
situation,   limiting   retrospectivity   of   the   decision.    To   limit
retrospective payments of these lump sum payments, the equivalent result  is
produced by requiring review to occur within 13 weeks after notification  of
the decision.  Where the particular income  year  has  not  ended,  a  fresh
claim for the low income supplement or essential medical  equipment  payment
may still be made.

Item 30 inserts reference to the low  income  supplement  or  the  essential
medical equipment  payment  after  subsection  238(1)  to  provide,  in  new
subsection (1A), that the Secretary  is  not  required  to  make  deductions
sought by the Commissioner of Taxation.   It  is  not  intended  that  these
payments be paid to the Commissioner in satisfaction of a tax debt  owed  by
the individual.

Amendments to the Veterans' Entitlements Act

Item 31 inserts reference  to  a  clean  energy  advance  under  the  Family
Assistance Act into paragraph 5H(8)(paa) to provide that such  payments  are
not income in relation to  a  person  for  the  purposes  of  the  Veterans'
Entitlements Act.  (The single income family  supplement  is  excluded  from
being income because it is covered by the term 'family assistance'.)

Item 32 inserts new  paragraph  5H(8)(zzaaaa)  after  paragraph  5H(8)(zza),
referring to a clean energy payment under the  Military  Rehabilitation  and
Compensation Act to provide that such a payment is not  income  in  relation
to a person for the purposes of the Veterans' Entitlements Act.

Item 33  inserts  new  paragraph  5H(8)(zzah)  after  paragraph 5H(8)(zzag),
referring to a clean energy payment under Part IIIE  to  provide  that  such
payment is not income in relation to  a  person  for  the  purposes  of  the
Veterans' Entitlements Act.

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