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2016-2017-2018 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES FAMILY ASSISTANCE AND CHILD SUPPORT LEGISLATION AMENDMENT (PROTECTING CHILDREN) BILL 2017 SUPPLEMENTARY EXPLANATORY MEMORANDUM Amendments to be moved on behalf of the Government (Circulated by the authority of the Minister for Social Services, the Hon Dan Tehan MP)Index] [Search] [Download] [Bill] [Help]FAMILY ASSISTANCE AND CHILD SUPPORT LEGISLATION AMENDMENT (PROTECTING CHILDREN) BILL 2017 Amendments to be moved on behalf of the Government OUTLINE Amendments to be moved on behalf of the Government to clause 2 and Schedule 2 to the Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2017. The amendments to clause 2 set out the commencement dates of the various amendments to Schedule 2. The amendments to insert new Division 1, Part 3 of Schedule 2, correct an overlooked amendment to the definition of "receiving" in subsection 3(1) of the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act), so that a social security recipient in an employment income nil rate period (who is not actually being paid social security) will no longer be regarded as receiving social security for family tax benefit (FTB) Part A rate purposes, from 1 July 2018. The Budget Savings (Omnibus) Act 2016 introduced amendments to this effect, however the amendments were incomplete in that they did not include reference to the provision which determines which method of rate calculation is applied in a particular person's circumstances. The amendments insert new Divisions 2 and 3 of Part 3 of Schedule 2 to correct an unintended drafting error. They ensure that the immunisation requirements in section 6 of the Family Assistance Act continue to apply for FTB. FINANCIAL IMPACT STATEMENT The financial impact of amendments to Schedule 2 will not alter the financial impact of the Bill. STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS The statement of compatibility with human rights appears at the end of this supplementary explanatory memorandum.
FAMILY ASSISTANCE AND CHILD SUPPORT LEGISLATION AMENDMENT (PROTECTING CHILDREN) BILL 2017 Amendments to be moved on behalf of the Government Schedule 2 - Family tax benefit amendments Summary These amendments to insert new Division 1, Part 3 of Schedule 2 correct an overlooked amendment to the definition of "receiving" in subsection 3(1) of the Family Assistance Act, so that a social security recipient in an employment income nil rate income period (who is not actually being paid social security) will no longer be regarded as receiving social security for FTB Part A rate purposes, from 1 July 2018. The amendments to insert new Schedule 2, Part 3, Divisions 2 and 3 correct an unintended drafting error. They ensure that the immunisation requirements in section 6 of the Family Assistance Act continue to apply for FTB. Background The social security law provides in some circumstances for a person to be treated as continuing to receive a social security payment despite their payment being reduced to nil by their employment income. In particular, FTB Part A is paid at the maximum rate to a person receiving a social security payment. Schedule 19 to the Budget Savings (Omnibus) Act 2016 (administered by the Minister for Social Services) introduced amendments so that a social security recipient in an employment income nil rate period (who is not actually being paid social security) is no longer taken to be receiving social security for FTB Part A rate purposes, from 1 July 2018. However, the amendments were incomplete in that they did not amend clause 1 of Schedule 1 to the Family Assistance Act. Schedule 1 determines the rate of FTB a person receives, as the result of applying and comparing the results of various methods of calculation within the Schedule. Clause 1 determines which method is applied to FTB Part A in a particular person's circumstances. The amendments did not amend clause 1, resulting in method 2 being unavailable to calculate the FTB rate of a person in a nil rate employment period. This results in a higher rate of FTB being payable to affected persons. Since clause 1 is not exempt from subparagraph (b)(i) of the definition of "receiving", subparagraphs (2)(b)(i) and (ii) of clause 1 of Schedule 1 cannot apply, even though the individual's adjusted taxable income exceeds the higher income free area while they technically are in an employment income nil rate period. The amendments made by new Division 1, Part 3 of Schedule 2 will correct this issue, so that the correct method will be applied when working out an individual's FTB Part A rate. The amendments inserting Divisions 2 and 3 of Part 3 of Schedule 2 to the Bill allow for a reduction in an individual's FTB child rate where health check requirements and immunisation requirements have not been satisfied. The Family Assistance
Legislation Amendment (Jobs for Families Child Care Package) Act 2017 (Child Care Package Act) repeals and substitutes subsection 6(1) so the immunisation requirements apply for the purposes of determining an individual's eligibility for child care subsidy (CCS), and providers' eligibility for additional child care subsidy (ACCS) (child wellbeing). While it was intended that, from 2 July 2018 immunisation requirements would apply for CCS, ACCS and FTB, the reference to FTB was omitted. To give effect to the policy intention the scope of proposed subsection 6(1) must match the scope of existing subsection 6(1) for FTB purposes. A drafting error in this section requires a technical amendment so the policy intent is achieved. Explanation of the changes Family Assistance Act Amendment (2) omits proposed paragraph 6(1)(b) at item 4, which is effectively replaced by item 25, below. Amendment (3) inserts new Part 3, including items 23, 24, 25, 26, 27 and 28 into Schedule 2. Item 23 amends subparagraph 3(1)(b)(i), which provides for the definition of receiving, so that for the purposes of clauses 1 and 38L, an individual will no longer be treated as continuing to receive a social security pension or social security benefit. Item 24 is an application provision. It provides that the amendments made by Division 1 of Part 2 of Schedule 2 apply in relation to working out the rate of FTB for days on or after the commencement of this item. Item 25 repeals and substitutes paragraph 6(1)(b) to reduce an adult's FTB child rate under subclause 7(2) or (3) or 26(3) or (4) of Schedule 1, which relates to reduction during a reduction period for failing to have a health check or meet immunisation requirements. Item 26 is an application provision. It will provide that the amendments made by new Division 3 apply in relation to relevant periods beginning on or after the commencement of item 25. The amendments do not have retrospective effect. Item 27 adds proposed paragraph 6(1)(c) to subsection 6(1) as amended by the Child Care Package Act, which removed reference to FTB. The amendment will reduce an adult's FTB child rate under subclause 7(2) or (3) or 26(3) or (4) of Schedule 1 (as done in amendment 25). This correctly gives effect to the intended policy that immunisation requirements would apply for CCS, ACCS and FTB. Item 28 is an application provision. It will provide that the amendments made by Division 3 apply in relation to relevant periods beginning on or after the commencement of item 27. The amendments do not have retrospective effect.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 FAMILY ASSISTANCE AND CHILD SUPPORT LEGISLATION AMENDMENT (PROTECTING CHILDREN) BILL 2017 Schedule 2 - Family tax benefit amendments These amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Part 3 - Contingent amendments Overview of the amendments These amendments correct an overlooked amendment to the definition of "receiving" in subsection 3(1) of the Family Assistance Act, so that a social security recipient in an employment income nil rate period (who is not actually being paid social security) will no longer be regarded as receiving social security for FTB rate purposes, from 1 July 2018. This removes an unintended inequity between families, where those families incorrectly considered to be receiving social security can receive greater financial assistance from FTB Part A than families not in an employment income nil rate period, even though they have the same income. This also recognises that a family with income, including employment income sufficient to reduce their social security payment to nil, has financial means greater than a family that is receiving a social security payment. The measure will encourage greater self-sufficiency by reducing perverse incentives for families to maintain contact with the income support system rather than move to higher labour force attachment. These amendments reinforce these principles and ensure that all FTB Part A recipients are income tested consistently, regardless of whether they are in a social security employment nil rate period. The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Act 2017 (CCS Act) which replaces Child Care Benefit and Child Care Rebate with a new Child Care Subsidy comes into effect on 2 July 2018. The CCS Act repeals and substitutes subsection 6(1) of the Family Assistance Act to ensure that an immunisation requirement applies to the new Child Care Subsidy. Consequently, the FTB Part A immunisation requirements may be compromised. The amendments will ensure that from 2 July 2018, the immunisation requirements in section 6 of the Family Assistance Act continue to apply for FTB.
As these are technical amendments, the original Human rights implications still apply. Human rights implications The amendments do not alter the compatibility of these Schedules with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, as set out in the original Explanatory Memorandum to the Bill. (Circulated by the authority of the Minister for Social Services, the Hon Dan Tehan MP)