Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
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)
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)
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