Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2004
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
FAMILY
AND COMMUNITY SERVICES AND VETERANS’ AFFAIRS LEGISLATION AMENDMENT (2004
ELECTION COMMITMENTS)
BILL 2004
EXPLANATORY
MEMORANDUM
(Circulated
by the authority of the
Minister for Family
and Community Services,
Senator the Hon Kay
Patterson)
FAMILY AND COMMUNITY SERVICES AND
VETERANS’ AFFAIRS LEGISLATION AMENDMENT (2004 ELECTION COMMITMENTS)
BILL 2004
This Bill amends the social security law, the family
assistance law and the Veterans’ Entitlements Act 1986 to give
effect to 2004 election commitments in respect of self funded retirees, older
Australians and carers on income support, grandparents caring for children and
certain disability pensioners. The bill
will:
• establish the new utilities
allowance, generally $100 a year for singles and $50 for each member of a
couple, payable to senior Australians of age pension or veteran pension age who
are in receipt of income support, to help this group to pay regular household
bills;
• establish the new seniors
concession allowance, a payment of $200 a year to holders of a Commonwealth
Seniors Health Card, in recognition of the fact that most self funded retirees
do not receive concessions for energy, rates, water and sewerage, and motor
vehicle registration from state and territory governments and also to
acknowledge the contribution made by self funded retirees in providing for their
own retirement;
• improve opportunities
and flexibility for carers by increasing the number of hours (from 20 to 25
hours per week) that carers may spend in work, training or study, without losing
qualification for carer payment;
• make
child care more affordable for grandparents who have primary care of a
grandchild and who are receiving income support, by enabling them to have access
to a special rate of child care benefit that will cover the full cost of child
care fees charged to eligible grandparents by approved child care services;
and
• amend the Veterans’
Entitlements Act 1986 to increase bereavement payments in respect of
persons receiving above general rate disability
pension.
Schedule 1 (Utilities
Allowance)
Financial impact: Administered
resourcing
2004-05 $80.4
m
2005-06 $168.0
m
2006-07 $175.5
m
2007-08 $183.0
m
Departmental
resourcing
2004-05 $1.7
m
2005-06 $1.3
m
2006-07 $0.1
m
2007-08 $0.1
m
Schedule 2 (Seniors Concession
Allowance)
Financial impact: Administered
resourcing
2004-05 $57.8
m
2005-06 $61.6
m
2006-07 $65.7
m
2007-08 $70.1
m
Departmental
resourcing
2004-05 $1.0
m
2005-06 $0.6
m
2006-07 $0.7
m
2007-08 $0.8
m
Schedule 3 (Carer
payment)
Financial impact: Administered
resourcing
2004-05 $0.1
m
2005-06 $2.3
m
2006-07 $5.9
m
2007-08 $10.2
m
Departmental
resourcing
2004-05 $0.7
m
2005-06 $0.1
m
2006-07 $0.1
m
2007-08 $0.1
m
Schedule 4 (Special child care benefit
rate for grandparents on income
support)
Commencement:
1 January 2005
Financial impact:
Administered resourcing
2004-05 $7.4
m
2005-06 $18.0
m
2006-07 $22.9
m
2007-08 $28.1
m
Departmental
resourcing
2004-05 $1.3
m
2005-06 $0.3
m
2006-07 $0.3
m
2007-08 $0.3
m
Schedule 5 (Increase in bereavement
payments in respect of above general rate disability
pensioners)
Financial impact: Administered
resourcing
2004-05 $1.9
m
2005-06 $4.1
m
2006-07 $4.3
m
2007-08 $4.5
m
Departmental
resourcing
nil
FAMILY AND COMMUNITY SERVICES AND
VETERANS’ AFFAIRS LEGISLATION AMENDMENT (2004 ELECTION COMMITMENTS)
BILL 2004
NOTES ON
CLAUSES
Clause 1 sets out how the
Act is to be cited, that is, the Family and Community Services and
Veterans’ Affairs Legislation Amendment (2004 Election Commitments)
Act 2004.
Clause 2 provides a table
that sets out the commencement dates of the various sections in, and Schedules
to, the Act.
Clause 3 provides that each
Act that is specified in a Schedule is amended or repealed as set out in that
Schedule.
This Explanatory Memorandum uses
the following
abbreviations:
• ‘Social Security
Act’ means the Social Security Act
1991;
• ‘Social Security
Administration Act’ means the Social Security (Administration) Act
1999;
• ‘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;
and
• ‘Veterans’ Entitlements
Act’ means the Veterans’ Entitlements Act
1986.
Schedule 1 – Utilities
Allowance
The amendments made by this Schedule will introduce a new
payment for senior Australians, to be known as the utilities allowance. The
payment will be made to recipients of income support who are of age pension or
veteran pension age. The payment will be made if the person is qualified for
the allowance on 20 March and 20 September of each year, commencing on
20 March 2005. In general, the new allowance will, subject to CPI
indexation, be a payment of $100 a year for singles and $50 to each member of a
couple. The allowance will be paid in two instalments on the person’s
income support payday following the ‘test days’ on 20 March and 20
September of each year.
During the 2004 election campaign, the Government made a
commitment to introduce a new payment to provide more help for older Australians
on income support payments. Senior Australians on income support are entitled
to receive one of a number of concession cards, which provide access to cheaper
prescriptions and a range of other benefits. However, some of these older
Australians can experience difficulties in saving up to pay regular household
bills, such as for gas and electricity. Accordingly, the new payment will be
introduced to provide assistance for older Australians in paying for such
utilities.
Explanation of
changes
Part 1 – Amendments
relating to Family and Community Services’ payment of utilities
allowance
Income Tax Assessment Act
1997
Item 1 inserts a reference to
the new utilities allowance in the table in section 52-10, which provides
for the income tax treatment of social security payments. The effect of the
amendment is that in each of the first two cases dealt with in that table, the
new allowance will be exempt from income tax. In particular, case 1 applies if
a person receives an ordinary payment of the allowance (that is, a payment made
other than because of a person’s death) unless case 2 applies. Case 2
applies if a person’s partner dies, the person does not qualify for
bereavement payments (because no bereavement payments are payable in relation to
the allowance), and the person receives an ordinary payment of the allowance on
any of the person’s paydays after their partner’s death. Cases 3
and 4 are not applicable to the new
allowance.
Item 2 inserts a reference to
the new utilities allowance in the table in section 52-40, which lists the
provisions of the Social Security Act under which social security payments are
made that are wholly or partly exempt from income
tax.
Social Security Act
1991
Item 3 inserts a definition of
‘utilities allowance‘ in subsection 23(1) of the Social Security
Act.
Item 4 inserts new Part 2.25A into
the Social Security Act to provide for the new utilities
allowance.
Division 1 – Qualification for
and payability of utilities allowance
New
subsection 1061T provides the qualification conditions for the new allowance.
First, the person must have reached ‘pension age’, which is defined
in subsection 23(1) of the Social Security Act, as elaborated in subsections
23(5A) to (5D). Pension age is 65 years for men and is currently 62.5 years for
women.
Secondly, the person must be receiving
an ‘income support payment’, which is defined in subsection 23(1) of
the Social Security Act.
Thirdly, the person
must be either in Australia, or temporarily absent from Australia for a
continuous period not exceeding 13 weeks.
New
subsection 1061TA provides for when the new allowance is
payable.
New subsection 1061TA(1) provides the
general rule that the allowance is payable to a person for each utilities
allowance test day (defined in new subsection 1061TA(3) as 20 March and 20
September) on which the person is qualified for the
allowance.
New subsection 1061TA (2) provides
that the allowance will not be payable on a utilities allowance test day
if:
• service pension or income support
supplement is payable to the person on that day – this recognises that a
person cannot be paid two allowances if they are receiving income support
payments under both the Social Security Act and the Veterans’ Entitlements
Act. In this case, an allowance will be payable under the Veterans’
Entitlements Act only; or
• two
instalments of any combination of the new utilities allowance and the new
seniors concession allowance (whether under the Social Security Act or the
Veterans’ Entitlements Act) have already been payable in the same
financial year as the test day – this recognises that a person is not
entitled to more than two payments of either or both of the new payments in any
financial year, as the new payments are closely related;
or
• before that day, the person has
elected not to receive the allowance, and has not withdrawn such an election
– this recognises that a person has the right to not receive the payment
if they so decide, but they can change their mind about this, so that that the
allowance can again become payable.
New section
1061TB provides for a person’s annual rate of the new allowance. The
person’s annual rate is $100 (subject to indexation) if the person is
single or a member of an illness separated, respite care or temporarily
separated couple. The person’s annual rate is half of the rate specified
in column 3 of item 1 (that is, $50, when the first payment is made shortly
after the 20 March 2005 test day) if the person is a member of a couple (other
than an illness separated, respite care or temporarily separated
couple).
Items 5 and 6 provide for the indexation of each of
the annual rates of utilities allowance listed in the table in new section
1061TB. In general terms, the annual rates of the allowance are indexed twice a
year in line with CPI increases. Item 7 inserts new subsection
1192(6), which will have the effect that the first indexation of the allowance
will occur in relation to the utilities allowance payment made for the 20
September 2005 test day.
Social Security
(Administration) Act 1999
Item 8
inserts new section 12C, which provides that a claim is not required for the new
utilities allowance. The new payment will be made automatically if a person is
qualified for the allowance, and the allowance is payable, on a test
day.
Item 9 inserts new section 48A,
which provides for the payment of the new utilities allowance. New subsection
48A(1) provides that the allowance is to be paid by instalments. New subsection
48A(2) provides that an instalment of the allowance is to be paid on the
person’s payday (as defined in subsection 23(1) of the Social
Security Act) on or after the utilities allowance test day. In effect, the
allowance will be added to the person’s normal income support payment on
their first payday on or after 20 March or 20 September in each year.
Item 10 amends subsection 55(1) to enable the usual
provisions relating to the manner of payment of a social security entitlement to
apply to the new allowance.
Items 11 and
12 amend subsection 68(1) and 69(1) to provide, in effect, that the
Secretary cannot give notices under section 68 or 69 in relation to a person to
whom the new allowance is being paid. The reason for this is that the
entitlement to the new allowance is based on receipt of an income support
payment and obligations can be imposed, by way of notices under section 68 or 69
notices given in relation to that payment, which can be relied upon to determine
entitlement to the new utilities
allowance.
Item 13 amends paragraph
75(1)(b) to provide that the Secretary’s power to request tax file numbers
does not apply in relation to the new
allowance.
Item 14 inserts new section
78A, which provides that Subdivision A of Division 7 does not apply in relation
to the new utilities allowance and the new seniors concession
allowance.
Item 15 inserts new section
90A, which provides that Subdivision A of Division 8 does not apply in relation
to the new utilities allowance and the new seniors concession
allowance.
Item 16 adds new paragraphs
(d) and (e) to the definition of ‘relevant payment’ in section 123A
to enable payments of the new utilities allowance and the new seniors concession
allowance to be made to the payment nominee of the person entitled to those
payments.
Part 2 – Amendments relating to Veterans’ Affairs’ payment of utilities allowance
The amendments made in this Schedule provide for the
introduction of new Part VIIAC into the Veterans’ Entitlements Act,
providing for the payment of the utilities allowance to recipients of service
pension (age, invalidity or partner) and income support supplement, who are of
veteran pension age.
Pensioner males will be
eligible for the allowance from 60 years of age and females will be eligible
depending on their date of birth. Currently, veteran pension age for females is
57 years and 6 months and this age is increasing by 6 months every 2 years until
eligibility for females is also 60 years.
The
utilities allowance will initially be payable at a rate of $100 per year to a
single pensioner and at a rate of $50 per year to the members of a couple with
the payment to be indexed.
In the circumstances
where the members of a couple separately receive income support payments from
Department of Veterans’ Affairs and from Centrelink, each agency will pay
the utilities allowance at the member of a couple
rate.
Where only one member of a couple is
receiving a service pension or income support supplement (including the
circumstances where the spouse is of pension age but not receiving a service
pension), payment of the allowance will be at the member of a couple
rate.
The utilities allowance will be payable
in two instalments each year, from March 2005 and from each September and March
thereafter.
The utilities allowance will be
payable to eligible persons on the relevant paydays being the first pension
paydays on or after 20 March and 20 September of each
year.
The amount of the payment is indexed
twice yearly on the basis of CPI increases and is provided for in new section
198E.
The utilities allowance will be subject
to the general payment provisions of sections 122, 122A, 122B, 202, 202A and
202B relating to such matters as the manner of payment and payments to agents
and trustees.
The payments will be non-taxable
and amendments have been made to sections 52-65 and 52-75 of the Income Tax
Assessment Act 1997.
The utilities
allowance will be payable to a person who has been temporarily absent from
Australia for a continuous period not exceeding 13
weeks.
As it is possible for individuals to
move from receiving income support to holding a Commonwealth Seniors Health Card
(and back again) over time, some people may meet the tests for both the
utilities allowance and the new seniors concession allowance in any one year.
To prevent ‘double dipping’, a person will only be entitled to be
paid no more than two instalments of either of the new payments in any financial
year (including the financial year commencing 1 July
2004).
The amendments also provide the
cardholder with the opportunity to elect (by written notice) to not receive the
allowance.
The existing debt recovery
provisions in Part XII of the Veterans’ Entitlements Act will provide for
the recovery of a payment made to a person not entitled to receive
it.
Income Tax Assessment Act 1997
Item 17 amends section 52-65. Section 52-65
contains a table setting out the income tax treatment of veterans’ affairs
payments.
The table setting out the income tax
treatment of veterans’ affairs payments is amended by the inclusion of new
item 20A.1 referring to payments of the utilities allowance. The reference
provides that payments of utilities allowance will be exempt from income
tax.
Item 18 inserts a reference to the
new utilities allowance being payable under Part VIIAC in the table in section
52-75 listing the provisions of the Veterans’ Entitlements Act under which
payments are made.
Item 19 inserts new subparagraph (viia)
referring to utilities allowance payable under Part VIIAC of the Veterans’
Entitlements Act in paragraph 8(8)(y). Paragraph 8(8)(y) lists
Veterans’ Entitlements Act payments that are to be regarded as an
‘excluded amount’ for the purposes of determining income under the
Social Security Act.
Veterans’ Entitlements Act
1986
Item 20 amends subsection 5H(8) by inserting new
paragraph (ga). Subsection 5H(8) sets out the payments that are to be regarded
as being an ‘excluded amount’ for the purposes of determining the
income of a person under the Veterans’ Entitlements
Act.
New paragraph 5H(8)(ga) provides that all
payments of utilities allowance made under Part VIIAC are to be regarded as
being an ‘excluded amount’.
Item 21 inserts in subsection 5Q(1) a
definition of ‘utilities allowance’ as meaning the utilities
allowance payable under new Part VIIAC.
Item 22 inserts new Part VIIAC into the
Veterans’ Entitlements Act.
New Part
VIIAC is titled ‘Utilities Allowance’.
New section 118O defines the ‘utilities
allowance test day’ for the purposes of the new Part as being either the
20 March or 20 September of each year.
New
section 118OA provides the eligibility conditions for the new allowance. The
conditions as set out in paragraph 118OA(1)(a) are firstly, that the person must
have reached ‘qualifying age’ as set out in subsection
118OA(2).
Secondly, paragraph 118OA(1)(b)
provides that service pension or income support supplement must be payable to
the person and thirdly as provided for in paragraph 118OA(1)(c), the person must
be either in Australia, or temporarily absent from Australia for a continuous
period not exceeding 13 weeks.
Subsection
118OA(2) provides that qualifying age for a veteran is pension age and is
therefore 60 years for men and is currently 57.5 years for women. Subsection
118OA(2) also provides that qualifying age for a person who is not a veteran
will be the same as if that person were a
veteran.
The Note to subsection 118OA(2) refers
the reader to the pension age as being defined in section 5QA of the
Veterans’ Entitlements Act.
New section
118OB provides for when the new allowance is
payable.
New subsection 118OB(1) provides the
general rule that the allowance is payable to a person for each utilities
allowance test day (as defined in new section 118O as 20 March and 20 September)
on which the person is eligible for the
allowance.
New subsection 118OB(2) provides
that the allowance will not be payable on a utilities allowance test day if
either:
• two instalments of any
combination of both the new utilities allowance and the new seniors concession
allowance have already been payable under the Veterans’ Entitlements Act
or the Social Security Act in the same financial year as the test day –
this provision recognises that a person is not entitled to more than two
payments of either or both of the new payments in any financial year, as the new
payments are closely related; or
• before
that day, the person has elected not to receive the utilities allowance, and has
not withdrawn such an election – this recognises that a person has the
right to not receive the payment if they so decide, but they can change their
mind about this, so that that the allowance can again become
payable.
Subsection 118OB(3) refers to the
making of an election not to receive payments of utilities allowance and the
withdrawal of such an election. It provides that an election and the withdrawal
of an election must be by document lodged at an office of the Department of
Veterans’ Affairs in accordance with section 5T. The lodgement of the
document will be taken to have been made on a date determined under that
section.
New section 118OC provides for a person’s annual
rate of payment of the new allowance. The person’s annual rate is $100
(subject to indexation) if the person is single or a member of an illness
separated or respite care couple. The person’s annual rate is half of the
single rate (that is, $50, when the first payment is made shortly on or after
the 20 March 2005 test day) if the person is a member of a couple (other than an
illness separated or respite care couple).
The
Note to section 118OC refers to the annual rate of the utilities allowance being
indexed in line with increases in the CPI as provided for in
section 198E.
New section 118OD provides for the payment of the new
utilities allowance. New subsection 118OD(1) provides that the allowance is to
be paid in instalments.
New subsection 118OD(2)
provides that an instalment of the allowance is to be paid on the person’s
first pension payday (as defined in subsection 5Q(1)) on or after the utilities
allowance test day. In effect, the allowance will be added to the
person’s normal service pension or income support supplement payment on
their first payday on or after 20 March or 20 September in each
year.
Subsection 118OD(3) provides for the six
monthly instalments of utilities allowance to be paid at a rate equivalent to
one half of the annual rate.
Subsection
118OD(4) provides for an instalment of utilities allowance that is not a
multiple of ten cents to be rounded up to the next ten
cents.
Item 23 amends section 121 by
including payments of utilities allowance in the list of payments made under the
Veterans’ Entitlements Act that are to excluded from the definition of a
‘pension’ in subsection 121(7). The effect of the exclusion is to
provide that payments of utilities allowance will not be subject to the
operation of the provisions of section
121.
Section 121 provides for the payment of
all pensions and allowances (with the exception of the payments referred to in
subsection 121(7)) under the Veterans’ Entitlements Act to be paid in
instalments and in arrears. The section also sets out the eligibility rules
that apply to the payment of
instalments.
Item 24 amends section
128A. Section 128A refers to the provision of tax file numbers by the
recipients and the partners of recipients of payments made under the
VEA.
Subsection 128A(1) defines the
Veterans’ Entitlements Act payments that are to be considered to be an
‘income payment’ for the purposes of the
section.
Paragraph 128A(1)(d) is amended by
including a reference to payments of utilities allowance and seniors concession
allowance as being excluded from the definition of an ‘income
payment’. The effect of the exclusion is that power to request tax file
numbers does not apply in relation to the new
allowance.
Item 25 inserts new section
198E to provide for the indexation of each of the annual rates of utilities
allowance listed in the table in new section 118OC. In general terms, the
annual rates of the allowance are indexed twice a year in line with CPI
increases with reference to the December and June
quarters.
Subsection 198E(10) provides that the
first indexation of the allowance will occur in relation to the utilities
allowance payment made for the 20 September 2005 test day.
Schedule 2 – Seniors concession
allowance
The amendments made by this Schedule will introduce a new
payment for self funded retirees, to be known as the seniors concession
allowance. In general, the payment will be made to a person who holds a seniors
health card on 1 December and 1 June of each year, commencing on
1 December 2004. Special transitional arrangements will enable the
payment to be made to any person who is entitled to hold a card during any time
in December 2004 (that is, other than on 1 December 2004). The new allowance
will, subject to CPI indexation, be a payment of $200 a year. The allowance
will be paid in two instalments as soon as practicable after 1 December and
1 June each year (with special arrangements for the transitional payment in
December 2004).
During the 2004 election campaign, the Government made a
commitment to introduce a new payment to provide more help for self funded
retirees. In general, the seniors health card is available to retirees with
adjusted taxable income of less than $50,000 for single people and $80,000
(combined) for couples. The seniors health card provides access to cheaper
prescriptions and a range of other benefits. However, it is recognised that
most self funded retirees do not receive concessions for energy needs, rates,
water and sewerage and motor vehicle registration costs from state and territory
governments. Accordingly, the new payment will be introduced to provide
assistance for self funded retirees in meeting such expenses. The allowance
also recognises the contribution that this group has made in providing for their
own retirement.
Explanation of
changes
Part 1 – Amendments
relating to Family and Community Services’ payment of seniors concession
allowance
Division 1
–Amendments
Income Tax Assessment Act
1997
Item 1 inserts a reference to
the new seniors concession allowance in the table in section 52-10, which
provides for the income tax treatment of social security payments. The effect
of the amendment is that in each of the first two cases dealt with in that
table, the new allowance will be exempt from income
tax.
In particular, case 1 applies if a person
receives an ordinary payment of the allowance (that is, a payment made other
than because of a person’s death) unless case 2 applies. Case 2 applies
if a person’s partner dies, the person does not qualify for bereavement
payments (because no bereavement payments are payable in relation to the
allowance), and the person receives an ordinary payment of the allowance on any
of the person’s paydays after their partner’s death. Cases 3 and 4
are not applicable to the new
allowance.
Item 2 inserts a reference to
the new seniors concession allowance in the table in section 52-40, which lists
the provisions of the Social Security Act under which social security
payments are made that are wholly or partly exempt from income
tax.
Social Security Act
1991
Item 3 inserts a definition of
‘seniors concession allowance’ in subsection 23(1) of the
Social Security Act.
Item 4 inserts new
Part 2.25B into the Social Security Act to provide for the new seniors
concession allowance.
Division 1 –
Qualification for and payability of seniors concession
allowance
New subsection 1061U provides the
qualification conditions for the new allowance. A person is qualified for the
allowance if the person is the holder of a seniors health card and is in
Australia. Alternatively, qualification will arise if a person is temporarily
absent from Australia for a continuous period not exceeding 13 weeks, and the
person was the holder of a seniors health card immediately before leaving
Australia. (Under subsection 1061ZG(1) of the Social Security Act, a person
must be in Australia to be qualified for the seniors health
card.)
New subsection 1061UA provides for when
the new allowance is payable.
New subsection
1061UA(1) provides the general rule that the allowance is payable to a person
for each seniors concession allowance test day (defined in new subsection
1061UA(3) as 1 June and 1 December) on which the person is qualified for the
allowance.
New subsection 1061UA (2) provides
that the allowance will not be payable on a seniors concession allowance test
day if:
• two instalments of any
combination of the new seniors concession allowance and the new utilities
allowance (whether under the Social Security Act or the Veterans’
Entitlements Act) have already been payable in the same financial year as the
test day – this recognises that a person is not entitled to more than two
payments of either or both of the new payments in any financial year, as the new
payments are closely related; or
• before
that day, the person has elected not to receive the allowance, and has not
withdrawn such an election – this recognises that a person has the right
not to receive the payment if they so decide, but they can change their mind
about this, so that that the allowance can again become payable;
or
• subsection 55(5) of the Social
Security Administration Act applies to the person, as a result of the
person failing to nominate a bank account.
New
section 1061UB provides that a person’s annual rate of the new allowance
is $200. This annual rate of the allowance is indexed twice a year in line with
CPI increases.
Item 5 inserts a
reference to ‘income support supplement’ in
paragraph 1061ZG(1)(g). The effect of this amendment is that a person who
is receiving this payment cannot be qualified for a seniors health card under
the Social Security Act. A person receiving income support supplement may be
qualified for a seniors health card under the Veterans’ Entitlements
Act.
Item 6 inserts new paragraph
1061ZG(2)(aa) to provide that a person is not qualified for a seniors health
card under the Social Security Act if the person holds a seniors health card
under the Veterans’ Entitlements Act. This mirrors the corresponding rule
in section 118X of the Veterans’ Entitlements
Act.
Items 7 and 8 provide for the
indexation of the annual rate of seniors concession allowance set out in new
section 1061UB. In general terms, the annual rate of the allowance is indexed
twice a year in line with CPI increases. Item 9 provides that the first
indexation of the allowance will take place on 1 June
2005.
Social Security (Administration) Act
1999
Item 10 inserts new section
12D, which provides that a claim is not required for the new seniors concession
allowance. The new payment will be made automatically if a person is qualified
for the allowance, and the allowance is payable, on a test
day.
Item 11 inserts new section 48B,
which provides for the payment of the new seniors concession allowance. New
subsection 48B(1) provides that the allowance is to be paid be instalments. New
subsection 48B(2) provides that an instalment of the allowance is to be paid as
soon as is reasonably practicable on or after the relevant seniors concession
allowance test day (defined in subsection (4) as 1 June and 1 December). New
subsection 48B(3) provides that an instalment of the new allowance is the
annual rate of the allowance divided by
two.
Item 12 amends subsection 55(1) to
enable the usual provisions relating to the manner of payment of a social
security entitlement to apply to the new
allowance.
Division 2 – Transitional
provisions
Item 13 contains rules
relating to the special payment of seniors concession allowance, to be known as
transitional seniors concession
allowance.
Subitem 13(1) provides
definitions of terms used in the
item.
Subitem 13(2) provides that the
transitional allowance is payable in relation to a transitional day (defined as
any day in December 2004 other than 1 December 2004) if the seniors
concession allowance would be payable if that day had been the 1 December 2004
test day, and seniors concession allowance was not payable in relation to the 1
December 2004 test day.
Subitem 13(3)
provides that the transitional allowance is payable only once in relation to
December 2004.
Subitem 13(4) provides
that the transitional payment of the allowance is to be paid as soon as
practicable on or after the transitional day, and that the amount of the
instalment of the allowance is $100.
Subitem
13(5) provides that, for the purposes of relevant legislation, transitional
seniors concession allowance is to be treated as if it were seniors concession
allowance payable in relation to the 1 December 2004 test day, and an instalment
of the transitional allowance is to be treated as an instalment of seniors
concession allowance under new section 49B of the Social Security Administration
Act in relation to the 1 December 2004 test day.
Part 2 – Amendments relating to Veterans’ Affairs payment of seniors concession allowance
The amendments made in this Schedule provide for the
introduction of new Part VIIAD into the Veterans’ Entitlements Act
providing for the payment of the seniors concession allowance of $200 per year
to holders of a Commonwealth Seniors Health Card (seniors health card) under
Part VIIC of the Veterans’ Entitlements Act. The allowance will be paid
in two instalments each year with the payments being made as soon as practicable
after the 1 December and 1 June of each
year.
The first payment will be made to all
eligible persons who are cardholders on 1 December
2004.
In addition, the first payment will be
made to a person whose claim for a seniors health card has been granted in
respect of a period that includes any day in December 2004. In that case, the
payment will be made as soon as reasonably practicable after eligibility for the
seniors health card has been determined.
The
amount of the payment will be indexed twice yearly on the basis of CPI
increases. Section 198E has been amended to provide for the indexation of the
allowance.
The allowance will be subject to the
general payment provisions of sections 122, 122A, 122B, 202, 202A and 202B
relating to such matters as the manner of payment and payments to agents and
trustees.
The payments will be non-taxable and
amendments have been made to sections 52-65 and 52-75 of the Income Tax
Assessment Act 1997.
The seniors concession
allowance will be payable to an eligible person who has been temporarily absent
from Australia for a continuous period not exceeding 13
weeks.
To ensure that persons will not be
eligible under both the Social Security Act and Veterans’ Entitlements Act
for the payment of the allowance section 118X of the Veterans’
Entitlements Act provides that a person who holds a seniors health card under
the Social Security Act is not entitled to one under the Veterans’
Entitlements Act.
As it is possible for
individuals to move from receiving income support to holding a seniors health
card (and back again) over time, some people may meet the test for both the
seniors concession allowance and the new utilities allowance in any one year.
To prevent ‘double dipping’, a person will only be entitled to be
paid no more than two instalments of either of the new payments in any financial
year (including the financial year commencing 1 July
2004).
The amendments also provide the
cardholder with the opportunity to elect (by written notice) to not receive the
allowance.
The existing debt recovery
provisions in Part XII of the VEA will provide for the recovery of a payment
made to a person not entitled to receive
it.
Division 1
–Amendments
Income Tax Assessment Act
1997
Item 14 amends section 52-65.
Section 52-65 contains a table setting out the income tax treatment of
veterans’ affairs payments.
The table
setting out the income tax treatment of veterans’ affairs payments is
amended by the inclusion of new item 16A.1 referring to payments of the seniors
concession allowance. The reference provides that payments of seniors
concession allowance will be exempt from income
tax.
Item 15 inserts a reference to the
new seniors concession allowance being payable under Part VIIAD in the table in
section 52-75 listing the provisions of the Veterans’ Entitlements Act
under which payments are made.
Social
Security Act 1991
Item 16 inserts
new subparagraph (viib) referring to seniors concession allowance payable under
Part VIIAD of the Veterans’ Entitlements Act in paragraph 8(8)(y).
Paragraph 8(8)(y) lists Veterans’ Entitlements Act payments that are to be
regarded as an ‘excluded amount’ for the purposes of determining
income under the Social Security Act.
Veterans’ Entitlements Act
1986
Item 17 amends subsection 5H(8) by inserting new
paragraph (gb). Subsection 5H(8) sets out the payments that are to be regarded
as being an ‘excluded amount’ for the purposes of determining the
income of a person under the Veterans’ Entitlements
Act.
New paragraph 5H(8)(gb) provides that all
payments of seniors concession allowance made under Part VIIAD are to be
regarded as being an ‘excluded amount’.
Item 18 inserts in subsection 5Q(1) a
definition of ‘seniors concession allowance’ as meaning the seniors
concession allowance payable under new Part VIIAD.
Item 19 inserts new Part VIIAD into the
Veterans’ Entitlements Act.
New Part
VIIAD is titled ‘Seniors concession Allowance’.
New section 118P defines the ‘seniors concession
allowance test day’ for the purposes of the new Part as being either the 1
June or 1 December of each year.
New section
118PA provides the eligibility conditions for the new allowance. The conditions
as set out in paragraph 118PA(a) are that the person must be the holder of a
seniors health card and be in Australia.
For
the allowance to be payable to a person who is not in Australia,
paragraph 118PA(b) provides that the person must be temporarily absent from
Australia for a continuous period not exceeding 13 weeks and that the person was
the holder of a seniors health card immediately before leaving
Australia.
New section 118PB provides for when
the new allowance is payable.
New subsection
118PB(1) provides the general rule that the allowance is payable to a person for
each seniors concession allowance test day (as defined in new section 118P as
either 1 June or 1 December) on which the person is eligible for the
allowance.
New subsection 118PB(2) provides
that the allowance will not be payable on a seniors concession allowance test
day if either:
• two instalments of any
combination of both the new utilities allowance and the new seniors concession
allowance have already been payable under the Veterans’ Entitlements Act
or the Social Security Act in the same financial year as the test day –
this provision recognises that a person is not entitled to more than two
payments of either or both of the new payments in any financial year, as the new
payments are closely related; or
• before
that day, the person has elected not to receive the seniors concession
allowance, and has not withdrawn such an election – this recognises that a
person has the right to not receive the payment if they so decide, but they can
change their mind about this, so that that the allowance can again become
payable.
Subsection 118PB(3) refers to the
making of an election not to receive payments of seniors concession allowance
and the withdrawal of such an election. It provides that an election and the
withdrawal of an election must be by document lodged at an office of the
Department of Veterans’ Affairs in accordance with section 5T. The
lodgement of the document will be taken to have been made on a date determined
under that section.
New section 118PC provides for a person’s annual
rate of payment of the new allowance. The person’s annual rate is $200
(subject to indexation).
The Note to section
118PC refers to the annual rate of the seniors concession allowance being
indexed in line with increases in the CPI as provided for in section
198E.
New section 118PD provides for the payment of the new
seniors concession allowance. New subsection 118PD(1) provides that the
allowance is to be paid in instalments.
New
subsection 118PD(2) provides that an instalment of the allowance is to be paid
as soon as is reasonably practicable on or after the seniors concession
allowance test day.
Subsection 118PD(3)
provides for the six monthly instalments of seniors concession allowance to be
paid at a rate equivalent to one half of the annual
rate.
Subsection 118PD(4) provides for an
instalment of seniors concession allowance that is not a multiple of ten cents
to be rounded up to the next ten
cents.
Items 20 and 21 amend section
122A. The amendments include a reference to a payment of seniors concession
allowance in subsection 122A(1A) and insert new subsections 122A(1C) and
(1D).
Section 122A provides for he payment of
pensions and allowances under the Veterans’ Entitlements Act to be paid
into a bank account nominated by the recipient. Subsection 122A(1A) provides
that a pension or allowance will not be payable if an account has not been
nominated. The effect of the amendment is to exclude payments of seniors
concession allowance from being subject to the operation of the existing
provisions of section 122A.
Subsection 122B(1B)
operates so that a payment not payable under subsection 122A(1A) because bank
account details were not provided will be later payable if the an account is
nominated.
New subsection 122A(1C) provides
that a payment of seniors concession allowance will not be payable after a
period of 28 days (or more as nominated) if a response to request for bank
account details made by the Repatriation Commission has not been
received.
New subsection 122A(1D) provides that
if a bank account is nominated after the end of the 28 day period (or more if
nominated) then subsection 122A(1C) will no longer apply to the
person.
Item 23 amends section 198E to
provide for the indexation of the annual rate of seniors concession allowance
referred to in new section 118PC. In general terms, the annual rates of the
allowance are indexed twice a year in line with CPI increases with reference to
the March and September quarters. Subsection 198E(10A) provides that the first
indexation of the allowance will occur in relation to the seniors concession
allowance payment made for the 1 June 2005 test day.
Item 24 contains rules relating to the special
payment of seniors concession allowance, to be known as transitional seniors
concession allowance.
Subitem 24(1) provides
definitions of terms used in the item.
Subitem
24(2) provides that the transitional allowance is payable in relation to a
transitional day (defined as any day in December 2004 other than 1 December
2004) if the seniors concession allowance would be payable if that day had been
the 1 December 2004 test day, and seniors concession allowance was not payable
in relation to the 1 December 2004 test
day.
Subitem 24(3) provides that the
transitional allowance is payable only once in relation to December
2004.
Subitem 24(4) provides that the
transitional payment of the allowance is to be paid as soon as practicable on or
after the transitional day, and that the amount of the instalment of the
allowance is $100.
Subitem 24(5) provides that,
for the purposes of relevant legislation, transitional seniors concession
allowance is to be treated as if it were seniors concession allowance payable in
relation to the 1 December 2004 test day, and an instalment of the transitional
allowance is to be treated as an instalment of seniors concession allowance
under new Part VIIAD in relation to the 1 December 2004 test day.
Schedule 3 – Carer
payment
This measure will amend section 198AC of the Social
Security Act to give effect to an election commitment to provide additional
support to carers participating in work, training or study.
At the present time, people caring for an adult or a child
with a disability, and who receive carer payment under Part 2.5 of the
Social Security Act, do not lose qualification for that payment if they
temporarily cease providing care in order to undertake training, education,
unpaid voluntary work or paid employment (subsections 198AC(4) and 198AC(5) of
the Social Security Act). However, the maximum length of time that a carer may
temporarily cease providing care in order to undertake any of these activities,
and still retain their qualification for carer payment under these
provisions, is 20 hours per week (paragraphs 198AC(4)(c) and
198AC(5)(c)).
Explanation of
changes
Item 1 increases the 20 hour limit referred to in paragraphs 198AC(4)(c) and 198AC(5)(c) to 25 hours. This means that carers may temporarily cease providing care in order to undertake training, education, unpaid voluntary work or paid employment for up to 25 hours per week, without losing their qualification for carer payment. This is intended to provide more opportunities and flexibility for carers to combine caring with work, training or study. This will allow carers to have increased involvement in these activities, to assist their participation in the workforce, and to provide more of a break from caring, without affecting their eligibility for carer payment.
Item 2 is an application provision which
clarifies how the amendments made by item 1 are to be applied after
their commencement. Item 2 provides that the item 1 amendments to
paragraphs 198AC(4)(c) and 198AC(5)(c) will allow a carer payment recipient who
undertakes training, education, unpaid voluntary work or paid employment for up
to 25 hours in any seven-day period to remain qualified for carer payment, as
long as the seven-day period (or ‘week’) in which those
activities are undertaken commences on or after the commencement of
item 1, that is, on or after 1 April 2005.
Schedule 4 – Special child care benefit rate for grandparents on income support
The amendments made by this Schedule will make child care
more affordable for grandparents who are receiving an income support payment by
enabling them to have access to a special rate of child care benefit. The
special rate will cover the full cost of child care fees charged to eligible
grandparents by approved child care services.
A
‘grandparent’ who will benefit from these amendments is a
biological, adoptive and step grandparent and great grandparent of a child
(grandchild).
A grandparent will be eligible
for the special child care benefit rate in respect of a grandchild if the
grandparent or the grandparent’s partner is the principal carer of the
grandchild and is conditionally eligible, or eligible, for child care benefit by
fee reduction for the grandchild.
If a
grandparent is eligible for the special grandparent rate for a grandchild, other
children who are in the care of the grandparent, or the grandparent's partner,
will also attract the special rate if the grandparent, or the grandparent's
partner, is conditionally eligible, or eligible, for child care benefit by fee
reduction for the other children.
These
amendments do not affect the current conditions of conditional eligibility, or
eligibility, for child care benefit by fee
reduction.
The amendments made in this Schedule
include amendments that specify the ‘special grandparent rate’, the
conditions of eligibility for that rate, when a determination of eligibility for
the special rate must be made or varied, eg as a result of changes in the
claimants’ circumstances, and the obligations of approved child care
services related to the provision of fee-free care to eligible
grandparents’ children. A number of consequential amendments is also
made; for example, to ensure that determinations of eligibility of the special
grandparent rate are reviewable.
During the 2004 election campaign, the Government made a
commitment to make child care more affordable for grandparents on income support
and who are the primary carers for their grandchildren, by providing a special
rate of child care benefit covering the full cost of the child care fees that
approved child care services charge
grandparents.
Currently, the child care benefit
rate (an hourly rate) for care provided to a child by an approved child care
serviced depends, among other things, on the claimant’s income. A
claimant receiving an income support payment (such as, a social security pension
or benefit, a service pension or an income support supplement under Part IIIA of
the Veterans’ Entitlements Act) is entitled to the maximum rate of child
care benefit. The difference between the amount of child care benefit and the
amount of fees an approved child care service charges for care provided to a
child for the period constitutes a claimant’s out-of-pocket
expense.
As a result of the amendments made by
this Schedule, a rate of child care benefit applicable to a claimant who is
eligible for the special grandparent rate for a child will equal the rate of
child care fees which a service providing care to the child charges the
claimant. The claimant to whom the amendments apply will not incur any
out-of-pocket expenses for the hours of care provided to the child within the
weekly limit of hours applicable to the claimant and the child.
Explanation of
changes
Amendments to the Family Assistance
Act
Items 1 to 13 make amendments to Part 3, Division 4
of the Family Assistance Act.
Items 1 and
2 amend the definition of ‘receiving’ in subsection 3(1),
relevant to new sections 50S and 50T inserted in the Family Assistance
Administration Act by item 16.
Division
4 deals with child care benefit rates, including the rates relevant to a claim
for child care benefit by fee reduction, that is, a fee reductions rate and the
rate of child care benefit by fee reduction.
If
a claimant makes a claim for child care benefit by fee reduction
(paragraph 49B(a) of the Family Assistance Administration Act), and a
determination of conditional eligibility for child care benefit by fee reduction
is made in respect of the claimant and the child (section 50F of the Family
Assistance Administration Act), the claimant‘s child care fees are reduced
by the child care service providing care to the child by the amount of
’fee reductions’, the rate of which is calculated in accordance with
the relevant provisions of Division 4. After the end of the income year during
which the claimant was conditionally eligible for child care benefit by fee
reduction, a determination of entitlement to child care benefit by fee reduction
is made for the claimant in respect of the income year (section 51B of the
Family Assistance Administration Act). As part of the entitlement
determination, a ‘child care benefit’ rate is determined in
accordance with the provisions of Division 4. The fee reductions rate and the
child care benefit rate are calculated in the same
way.
Section 73 of Subdivision B provides that,
if a determination of conditional eligibility is in force in respect of a
claimant and a child, the rate of fee reductions, and child care benefit by fee
reduction, is the rate calculated under Schedule 2 to the Family Assistance Act
(Child care benefit rate calculator). However, this rate does not apply when
the child is determined to be at risk or the claimant is determined to be in
hardship. In such a situation, the applicable rate is the rate certified by the
relevant service under subsection 76(1) of the Family Assistance Act, or by the
Secretary under subsections 81(2) and (3) of the Family Assistance Act (as the
case may be).
Subdivision C deals with the rate
applicable when the child is determined to be at risk or the claimant is
determined to be in hardship.
Item 13
amends Division 4 by inserting a new Subdivision CA dealing with the special
grandparent rate. New Subdivision CA includes a new section 82A, which provides
that the special grandparent rate applies if a determination under new
subsection 50T(1) of the Family Assistance Administration Act is in force with
effect that the claimant is eligible for the special grandparent rate for the
child in respect of a session of care provided to the child. If a determination
of the special grandparent rate is in force, the rate of fee reductions, and
child care benefit by fee reduction, applicable to the individual, the child and
the session of care is 100% of the hourly rate charged by the service for the
session.
Item 5 inserts a new subsection
69(4A) in section 69, which provides an overview of Division 4. New subsection
69(4A) provides that new Subdivision CA deals with the special grandparent rate
of fee reductions and child care benefit. It specifies that the rate is
applicable to a session of care provided by an approved child care service to a
child if a determination of conditional eligibility for child care benefit by
fee reduction, under section 50F of the Family Assistance Administration Act, is
in force in respect of the individual with effect that the individual is
conditionally eligible for child care benefit by fee reduction in respect of the
child and a determination under subsection 50T(1) of the Family Assistance
Administration Act is in force with effect that the individual is eligible for
the special rate for the child.
Items 3 and
4 make consequential amendments to section 69 to include cross-references to
new Subdivision CA inserted by item
13.
As a consequence of the introduction of
new Subdivision CA dealing with the special grandparent rate, items 6, 7 and
8 make amendments to subsection 73(1). This subsection specifies that
a Schedule 2 (Child care benefit rate calculator) rate applies to a fee
reduction rate unless a different fee reduction rate certified by a service or
determined by the Secretary applies (in the cases when a child is at risk or an
individual is in hardship). Amendments made by items 6, 7 and 8 ensure
that, if a determination under subsection 50T(1) is in force with the effect
that the individual is eligible for the special grandparent rate for a child and
a session of care occurs while the determination is in force, the hourly rate of
fee reductions for the session of care provided to the child is the special rate
worked out under new Subdivision CA. In that case, the Schedule 2 rate does not
apply.
Items 9, 10 and 11 make similar
amendments to subsection 73(2) to ensure that, if a determination under
subsection 50T(1) is in force with the effect that the individual is eligible
for the special grandparent rate for a child and a session of care occurs while
the determination is in force, the hourly rate of child care benefit for the
session of care provided to the child is the special rate worked out under new
Subdivision CA. In that case, the Schedule 2 rate does not
apply.
Amendments to the Family Assistance
Administration Act
Section 49C specifies
the conditions for a claim for child care benefit to be an effective claim (if a
claim is not effective, it is taken not to have been made). One of the
conditions of an effective claim is that the information requested by the
Secretary is provided. Subsection 49C(2) makes a claim for child care benefit
by fee reduction effective even though the information specified in this
subsection is not provided. Item 14 amends subsection 49C(2) to ensure
that a claim for child care benefit by fee reduction is effective even though
the information requested by the Secretary in relation to the eligibility for
the special grandparent rate is not provided in the claim. In such a case, if a
determination of conditional eligibility is made in respect of the claimant, the
rate of fee reductions will be the rate calculated under Schedule 2 to the
Family Assistance Act and not the special grandparent
rate.
If a claim for child care benefit by fee
reduction is made, and the claimant is determined to be conditionally eligible
for that benefit for a child (determination under section 50F), section 50C
requires the Secretary to determine, at the same time, the weekly limit of hours
applicable to the claimant (determination under section 50H), CCB %
(determination under section 50J) and schooling % (determination under section
50K).
As a result of the amendment made by
item 16, new subsection 50T(1) will require the Secretary to make, at the
time of determining the claim, a determination of eligibility for the special
grandparent rate if the claimant informs the Secretary that he/she wants the
determination to be made. Item 15 therefore adds a note at the end
of section 50C to draw the reader’s attention to the fact that a
determination of the special grandparent rate may also need to be made at the
time a claim for child care benefit by fee reduction is
determined.
Division 4 of Part 3 of the Family
Assistance Administration Act deals with the child care benefit, and, more
specifically, with the provisions relevant to making and determining child care
benefit claims.
Item 16 inserts in
Division 4 of Part 3 new Subdivision CA dealing with determination of
eligibility for the special grandparent rate if the individual is determined to
be conditionally eligible for child care benefit by fee
reduction.
The new Subdivision CA specifies the
conditions that have to be met for a claimant to be eligible for the special
grandparent rate for the child, the situations in which the Secretary is
required to make a determination of eligibility for the special rate, the
requirements relating to the notification of the determination, and when the
determination is in force.
New section 50Q
– determination of eligibility for special grandparent
rate
This section provides that Subdivision
CA deals with the determination of eligibility for the special grandparent rate
the Secretary must make if a claimant is determined to be conditionally eligible
for child care benefit by fee reduction in respect of a
child.
New section 50R – Grandparents
and great grandparents
This section defines
the meaning of ‘grandparent’ and ‘great grandparent’,
for the purposes of the new Subdivision which includes new section 50S dealing
with the eligibility of grandparents and great grandparents for the special
grandparent rate.
Subsection 50R(1) defines the ‘grandparent’
and ‘great grandparent’ by reference to a biological child-parent
relationship. It also treats the relationship between an adopted child and the
adoptive parent, and between a step child and the step parent, as a biological
relationship.
Subsection 50R(2) contains
definitions relevant to the concept of a grandparent and great grandparent.
‘Adoptive parent’ is defined as the person who adopted the child
under a law of any place, whether in Australia or not, relating to adoption of
children. ‘Step parent’ is defined as the current or former partner
of the biological or adoptive parent of the child, the step parent not being the
biological or adoptive parent of the child.
New section 50S – Eligibility for special
grandparent rate
This section specifies
when a grandparent or great grandparent who is conditionally eligible for child
care benefit by fee reduction in respect of a child is eligible for the special
grandparent rate for a session of care provided to the child by an approved
child care service.
New subsection 50S(1)
provides that a grandparent or a great grandparent (as defined in new section
50R) of a child is eligible for the special grandparent rate for the child if he
or she, or his/her partner, is the principal carer of the grandchild and he or
she, or his/her partner, is receiving a social security pension, a social
security benefit, a service pension or an income support supplement under Part
IIIA of the Veterans’ Entitlements Act.
‘Principal carer’ is defined in new subsection 50S(2) as the person who is the sole or major provider of ongoing daily care for the child and who has substantial autonomy for the day-to-day decisions about the child’s care, welfare and development.
A social security pension, a social security benefit,
a service pension and an income support supplement under Part IIIA of the
Veterans’ Entitlements Act are the payments that are defined as
‘income support payment’ in subsection 23(1) of the Social Security
Act.
‘Social security pension’,
‘social security benefit’ and ‘service pension’ are
defined in subsection 3(1) of the Family Assistance Act by reference to the
relevant definitions in the Social Security Act (subsection 23(1)
refers).
For the purposes of the existing
references (in Schedule 2 clause 7 of the Family Assistance Act) to
‘receiving’ a social security pension and social security benefit,
the meaning of ‘receiving’ is specified in subsection 3(1) of the
Family Assistance Act. Items I and 2 amend the definition of
‘receiving’ so it also operates for the purposes of new section
50S.
New subsection 50S(3) provides that, if a
grandparent or a great grandparent (as defined in new section 50R) is eligible
under new subsection 50S(1) for the special grandparent rate for a grandchild,
he or she, or his/her partner, is also eligible for the special grandparent rate
in respect of another child. To be eligible for the special rate for that other
child, the grandparent or great grandparent, or his/her partner, must be is
conditionally eligible for child care benefit by fee reduction for that other
child.
New section 50T – Secretary
must determine claimant’s eligibility for special grandparent rate in
certain circumstances
New subsection 50T(1)
provides that the Secretary must determine the eligibility for the special
grandparent rate in circumstances specified in new subsections (2), (3) and
(4).
• request at
claim
New subsection 50T(2) provides that
the Secretary must determine the special grandparent rate if, on or after 1
January 2005, a determination of conditional eligibility is made in respect of a
claimant and a child, and the claimant informed the Secretary, in the claim or
in connection with the claim, that he wanted the determination of the special
grandparent rate to be made (new subsection 50T(2)
refers).
If the Secretary determines a form and
manner of the request, the request must be made in that form and manner (new
subparagraph 50T(2)(a)(ii) refers).
A determination under this subsection may come into
force up to 4 weeks before the day of claim in connection with which the
determination was made, but not earlier than on 1 January 2005 (new subsections
50X(2) and (3) refer).
• subsequent
application
New subsection 50T(3) provides
that the Secretary must determine the special grandparent rate for a child if a
claimant, in respect of whom a determination of conditional eligibility is in
force in respect of the child, subsequently applies for the determination of
rate to be made.
A determination under this
subsection may come into force up to 4 weeks before the day the application was
made but not earlier than on 1 January 2005 (new subsections 50X(2)
and (3) refer).
• transitional
situation
New subsection 50T(4) provides
that the Secretary must determine the special grandparent rate for a child if,
immediately before 1 January 2005, a determination of conditional eligibility
and a determination of the weekly limit of hours are in force in respect of the
claimant and the child, and the determination of hours is based on the claimant,
or the claimant’s partner, being taken to have satisfied the work
/training/study test as a result of the determination made under subsection
14(2) and gazetted on 28 October 2004, and the claimant or the claimant’s
partner, is receiving a social security pension, a social security benefit, a
service pension or an income support supplement under Part III of the
Veterans’ Entitlements Act
1986.
This subsection operates to require
the Secretary to make a determination of special grandparent rate, without any
request from the claimant for that purpose. The Secretary is required to make
this determination in respect of claimants who, on 31 December 2004, are
conditionally eligible for child care benefit by fee reduction in respect of a
child, whose determination of weekly limit of 50 hours is due to the exemption
from the work/training/study test under the Child Care Benefit
(Work/Training/Study test Exemption) Amendment Determination 2004 (No.1) and who
are receiving one of the income support payments (or whose partners are
receiving such a payment).
A determination made
under this subsection is to be backdated to 1 January 2005 (new
subsection 50X(4) refers).
New section 50U -
Criteria for making determination
This
section specifies two criteria that must be satisfied before the Secretary must
determine that a claimant is eligible for the special grandparent rate for a
child. One criterion is that there is a determination of conditional
eligibility in force in respect of the claimant and the child. The second
criterion is that the claimant must be eligible for the special grandparent rate
under new section 50S. If these criteria are not satisfied, the Secretary must
determine that the claimant is not eligible for the special
rate.
New section 50V - Notice of
determination that the claimant eligible for special grandparent rate
If a determination is made that the
claimant is eligible for the special grandparent rate for a child, this section
requires the Secretary to give notice of the determination to the claimant and
the relevant approved child care service (new subsection
50V(1)).
The notice must state the names of the
claimant and the child, that the claimant is eligible for the rate for the child
and the date from which the determination comes into force, and it must inform
the claimant of the review rights under Part 5 of the Family Assistance
Administration Act (new subsection 50V(2)).
The
determination is effective even if the notice is not given or the information
specified in subsection (2) is not provided in the notice (new
subsection 50V(3)).
New section 50W
– Notice of determination that the claimant not eligible for special
grandparent rate
If a determination is
made that the claimant is not eligible for the special grandparent rate for a
child, this section requires the Secretary to give notice of the determination
to the claimant (new subsection 50W(1)).
The
notice must state that the claimant is not eligible for the special grandparent
rate for the child and inform the claimant of the review rights under Part 5 of
the Family Assistance Administration Act (new
subsection 50W(2)).
The determination is
effective even if the notice is not given or the information specified in
subsection (2) is not provided in the notice (new
subsection 50W(3)).
New section 50X -
When determination that claimant is eligible for special grandparent rate is in
force
This section specifies when a
determination under new subsection 50T(1) that a claimant is eligible for the
special grandparent rate comes into force, and when it ceases to be in
force.
New subsection 50X(1) specifies that
such a determination comes into force either on the day specified in the notice
of determination; otherwise, on the day the determination is
made.
If a determination under new subsections
50T(1)) is made at claim or as a result of a subsequent application for the
determination of the rate, the day on which the determination comes into force
may be a day not earlier than 4 weeks before the day the on which the claim or
the application was made (new subsection 50X(2) refers) but it cannot be earlier
than 1 January 2005 (new subsection 50X(3)
refers).
Whether a day earlier than the day of
the determination may be specified as the day from which the determination comes
into force will depend on whether the claimant was eligible for the special
grandparent rate for the child on and since that day (new subsection 50X(3)
refers).
If a determination is made in the
transitional situation to which new subsection 50T(4) applies, the
determination comes into force on 1 January 2005 (new subsection
50X(4) refers).
New subsection 50X(5) provides
that a determination under new subsection 50T(1) that a claimant is
eligible for the special grandparent rate may be varied in accordance with this
Division (new sections 59G, 62CA and 65DA
refer).
New subsection 50X(6) provides that a
determination under new subsection 50T(1) that a claimant is eligible for
the special grandparent rate remains in force as varied (if varied) while the
determination of conditional eligibility under section 50F is in force in
relation to the claimant and the child. The effect of this provision is that if
the determination of conditional eligibility under section 50F in relation to
the claimant and the child ceases to be in force, the determination under new
subsection 50T(1) that a claimant is eligible for the special grandparent rate
ceases to have any effect.
New section 50Y -
When a determination that claimant is not eligible for the special grandparent
rate is in force
This section specifies
when a determination under new subsection 50T(1) that a claimant is not eligible
for the special grandparent rate comes into force, and when it ceases to be in
force.
New paragraph 50Y(a) specifies that such
a determination comes into force on the day it is
made.
New paragraph 50Y(b) specifies that such
a determination cannot be varied.
New paragraph
50Y(c) specifies that such a determination remain in force while the
determination of conditional eligibility in respect of the claimant and the
child remains in force.
However, new paragraph
50Y(d) specifies that, if a subsequent determination is made that the claimant
is eligible for the special grandparent rate for the child, the previous
determination that the claimant is not eligible for that rate ceases to have
effect once the subsequent determination comes into
force.
A Note at the end of new section 50Y
informs the reader that the situation referred to in new paragraph (d) may arise
when the claimant, in respect of whom a determination was made under new
subsection 50T(1) that the claimant is not eligible for the special grandparent
rate for a child, subsequently made a new successful application for the
determination of such a rate in respect of the
child.
Obligation to notify change of
circumstances
Item 17 inserts new
subsections in section 56C dealing with obligations of an individual to notify
change of circumstances.
Section 56C requires
individuals, in respect of whom a determination of conditional eligibility is in
force, to notify changes in circumstances that adversely affect the
determination of conditional eligibility or other determinations in force in
respect of the individual (the CCB % determination, the limit of hours
determination and the schooling %
determination).
As a result of the amendments
that provide for the making of a determination of the special grandparent rate
in respect of individuals who are conditionally eligible for child care benefit
by fee reduction, item 17 inserts new subsection 56C(7) that
requires the claimant in respect of whom a determination of the special rate is
in force to notify the Secretary if anything happens that causes the claimant to
cease to be eligible for the special rate or if the claimant becomes aware that
anything is likely to happen that will have that
effect.
New subsection 56C(7) requires the
claimant to provide notification in the manner specified in a written notice
given to the claimant under section 57 (section 57 requires the Secretary to
approve the manner of notification and to give the claimant notice of the
approved manner of the notification).
New
subsection 56C(7) requires the claimant to provide notification as soon as
possible after the claimant becomes aware that something has happened or is
likely to happen that will have an adverse effect on the claimant’s
eligibility for the special rate.
The same
criminal penalty applies for failure to comply with this notification
requirement as it applies for failure to comply with other existing notification
requirements of this section. New subsection 56C(8) specifies that strict
liability applies to the following elements of an offence against new
subsection 56C(7): that a determination is the determination under
subsection 50T(1) and that a notice (specifying the manner of notification)
is the notice given under section
57.
Variation for failure to provide
information in the data verification form relating to special grandparent
rate
Section 57F authorises the Secretary
to require a claimant who is determined to be conditionally eligible for child
care benefit by fee reduction to provide information specified in the data
verification form sent to the claimant. If a data verification form is returned
by the claimant but the claimant does not provide the information requested by
the Secretary and relevant to any of the child care benefit determinations in
force in respect of the claimant (conditional eligibility determination, CCB %
determination, the limit of hours determination, the schooling % determination),
the relevant determination is varied with an adverse effect from 1 July in the
income year following the income year in which the request was
made.
Item 18 inserts new section 59G in
Subdivision N of Division 4 of Part 3 to provide a similar variation power in
relation to a determination of the special grandparent
rate.
New subsection 59G(1) provides that if a
data verification form is returned by the claimant but the claimant does not
provide the information requested by the Secretary and relevant to the special
grandparent rate, the Secretary may vary the determination with the effect that
the claimant is not eligible for the special grandparent rate for the child,
from 1 July in the income year following the income year in which the request
was made.
New subsection 59G(2) ensures that if
the Secretary finds out the relevant information before the end of the income
year following the one in which the variation took effect, the Secretary must
vary the determination again to undo the adverse effect.
Variation of child care benefit determinations may
occur if, under Division 1 of Part 6 of the Family Assistance Administration
Act, the Secretary requires a claimant who is conditionally eligible for child
care benefit by fee reduction, or the claimant’s partner, to give
information or provide a document relevant to the matter dealt with by the
determination and the claimant, or the partner, fails to provide the information
or the document. In such a situation, the relevant child care benefit
determinations are varied with an adverse
effect.
Item 19 inserts new section 62CA
in Subdivision R of Division 4 of Part 3 to provide a similar variation power in
relation to a determination of the special grandparent
rate.
New subsections 62CA(1) and (2) provide
that if the Secretary requires the claimant or the claimant partner to provide
the information or document, that the Secretary requires to make a decision
about the claimant’s eligibility for the special grandparent rate, and the
claimant or the partner fails to comply with the requirement, the Secretary may
vary the determination with the effect that the claimant is not eligible for the
special grandparent rate for the child, from the Monday after the day the
variation is made.
New subsection 62CA(3)
ensures that if the claimant or the claimant’s partner gives the
information, or document by the end of the income year following the one in
which the variation took effect, the Secretary must vary the determination again
to undo the adverse effect.
Further
variations after certain variations that can be
undone
Under section 62D, if a variation of
a child care benefit determination may be undone within a specified period of
time, and it had not been because the Secretary had not received the relevant
information before the end of the specified period, but the Secretary received
the information after that period ended the Secretary must vary the
determination again using the received information. This variation takes effect
from the Monday after the variation is
made.
Items 20 and 21 make consequential
amendments to section 62D to include references to new sections 59G and 62CA,
under which adverse variation that can be undone may be made in respect of the
determination of eligibility for the special child care rate, so that the rate
determination must be varied again using the relevant information obtained by
the Secretary after the period within which the variation may be undone has
ended.
Notice of variation
determinations
Subsection 63(1) requires
the Secretary to give a notice of any variation to the claimant. Subsection
63(1) requires the Secretary to give a notice of specified variations to the
relevant service.
Item 22 amends section
63 to insert new subsection (2A) which requires the Secretary to give to the
relevant service a notice of variation of the eligibility for the special
grandparent rate.
Subsection 63(3) provides
that non-compliance with the requirements of subsections 63(1) and (2) do not
make the variation ineffective. Item 23 makes a consequential amendment
to subsection 63(3) to insert a cross-reference to new subsection
(2A).
Variation of determination of
eligibility for the special grandparent rate - changes in
circumstances
Subdivision V of Division 4
of Part 3 contains provisions dealing with variations of the existing child care
benefit determinations that are in force when a change occurs that affects the
determination.
As a result of the introduction,
by item 16, of a determination of the eligibility for the special
grandparent rate (determination under new section 50T), item 24
inserts new section 65DA in Subdivision V to enable variation of that
determination.
New subsections 65DA(1) and (2)
apply in a situation when a determination of conditional eligibility for child
care benefit by fee reduction is in force in respect of the claimant, and a
determination of eligibility for the special grandparent rate is in force in
respect of the claimant, and an event occurs that affects the claimant’s
eligibility for that rate. If the Secretary becomes aware of the occurrence,
the Secretary must vary the determination of eligibility for the special rate
with effect that the claimant is not eligible for the special rate from the date
of the occurrence.
New subsections 65DA(3),
(4), (5) and (6) apply in a situation when a determination of conditional
eligibility for child care benefit by fee reduction is in force in respect of
the claimant and a variation determination is in force that the claimant is not
eligible for the special grandparent rate and an event occurs that makes the
claimant eligible again for the special grandparent rate. If the Secretary
becomes aware of the occurrence, the Secretary must vary the determination again
so that the claimant is eligible for the special rate grandparent
rate.
If the occurrence is notified by the
claimant – the variation takes effect from a day not earlier than 4 weeks
from the day of the notification. Otherwise, the variation takes effect from
the day not earlier than 4 weeks before the day the variation is made. The new
variation can only be made from a day earlier than the day on which the
variation is made if the Secretary is satisfied that the claimant was eligible
for the special rate on and since that day.
New
subsection 65DA(7) applies in a situation when, at the time when a variation
under this new section takes place (that the claimant is eligible for the
special rate or that the claimant is not so eligible), a variation under new
sections 59G and 62CA (variations for non-compliance with a request for
provision of information relevant to eligibility for the special rate) is in
force with effect that the claimant is not eligible for the special rate. New
subsection 65DA(7) provides that in such a situation, the earlier variation
prevails over the variation under this new
section.
Review of decisions on the
Secretary’s own initiative
Items
25 to 27 make amendments to sections 106 and 107 dealing with internal
review of decisions made by the Secretary on the Secretary’s own
initiative under section 105.
Section 106
requires the Secretary to give to the claimant and to the relevant service a
notice of review of the specified child care benefit determinations made by the
Secretary on own initiative under section 105. Item 25 makes a
consequential amendment to this section to ensure that if a determination of
eligibility for the special grandparent rate is reviewed, the Secretary gives
notice of the review decision to the claimant and the
service.
Section 107(2) determines a date of
effect of review decisions relating to the specified child care benefit
determinations. If a review decision has the effect of creating or increasing
the entitlement and a review decision is made more than 52 weeks after the
claimant was given the original decision, the date of effect of the review
decision cannot be earlier than the first day of the income year before the
income year in which the review decision was
made.
Items 26 and 27 make consequential
amendments to subsection 107(2) to ensure that if a determination of eligibility
for the special grandparent rate is reviewed with the beneficial effect, the
date of effect of the review decision is the same as the date of effect of
review decisions of other child care benefit determinations, as provided for in
section 107.
Review of decisions on
application
Items 28 to 32 make
amendments to sections 109B, 109D and 109G dealing with internal review of
decisions initiated by the applicant.
Section
109B requires the Secretary to give to the applicant and to the relevant service
a notice of review of the specified child care benefit determinations made by
the Secretary under section 109A. Item 28 makes a consequential
amendment to section 109B to ensure that if a determination of eligibility for
the special grandparent rate is reviewed on application, the Secretary gives
notice of the review decision to the claimant and the
service.
Subsection 109D(1) sets out the rule
that an application for review under section 109A (internal review on
application) must be made within 52 weeks after the applicant is notified of the
decision concerned. Subsection 109D(3) make exemptions from that rule for
various decisions, including child care benefit determinations, and allows an
application for review of these determinations to be made during the income year
in which the determination took effect and during the following income
year.
Item 29 makes a consequential
amendment to section 109D to ensure that an application for review of a
determination of eligibility for the special grandparent rate may be made in the
extended period provided for in that
section.
Items 30, 31 and 32 amend
section 109G dealing with the Secretary’s power to continue payment etc
pending outcome of an application for
review.
Section 109G provides that if an
application for review of certain specified ‘adverse family assistance
decisions’ is made and the adverse decisions depend on the exercise of a
discretion or holding of an opinion by a person, the Secretary may make a
declaration to the effect that the adverse decision does not have that effect
while the review of the adverse decision is
pending.
The various child care benefit
determinations are included in the definition of ‘adverse family
assistance decision’ in subsection 109G(5). Item 32 amends this
definition to include a determination that the person is not eligible for the
special grandparent rate.
Items 30 and
31 amend subsection 109G(2) to the effect that if an application is made for
review of a decision that a determination that the person is not eligible for
the special grandparent rate, the Secretary may declare that the eligibility of
the person for the special grandparent rate continues as if the adverse decision
has not been made.
Review by the Social
Security Appeals Tribunal
Subsection 111(2)
lists certain decisions that are not reviewable by the Social Security Appeals
Tribunal. Sections of the Act that provide for determinations of a form or
manner of claims are included in the list. Item 33 amends subsection
111(2) to include references to new subparagraph 50T(2)(a)(ii) and paragraph
50T(3)(b) dealing with a form and manner of a request or application for
determination of eligibility for the special grandparent
rate.
Items 34, 35 and 36 amend section
112. Section 112 provides that if an application for review by the Social
Security Appeals Tribunal of certain specified ‘adverse family assistance
decisions’ is made and the adverse decisions depend on the exercise of a
discretion or holding of an opinion by a person, the Secretary may make a
declaration to the effect that the adverse decision does not have that effect
while the review of the adverse decision is
pending.
The various child care benefit
determinations are included in the definition of ‘adverse family
assistance decision’ in subsection 112(4). Item 36 amends this
definition to include a determination that the person is not eligible for the
special grandparent rate.
Items 34 and
35 amend subsection 112(1A) to the effect that if an application is made for
review of a decision that a determination that the person is not eligible for
the special grandparent rate, the Secretary may declare that the eligibility of
the person for the special grandparent rate continues as if the adverse decision
has not been made.
Section 141A requires the
Secretary to give to the relevant service a notice of review of the specified
child care benefit determinations made by the Social Security Appeals Tribunal.
Item 37 makes a consequential amendment to section 141A to ensure that if
a determination of eligibility for the special grandparent rate is reviewed by
the Social Security Appeals Tribunal, the Secretary gives notice of the review
decision to the service.
Information
gathering
Section 154 contains general power for the Secretary to
obtain information, from any person, if the information is relevant to the
matters specified in this section. Failure to comply with this requirement is
an offence (section 159 refers).
Subsection
154(3) authorises the Secretary to require a person to provide information, or
produce a document in the person’s control, if the Secretary considers
that the information may be relevant to determine conditional eligibility, CCB
%, weekly limit of hours or schooling % of a claimant for child care benefit by
fee reduction. Item 38 amends subsection 154(3) to ensure that the
Secretary has the authority to request information, or a document, relevant to a
claimant’s eligibility for the special grandparent
rate.
Offences – false statement to
deceive
Section 173 specifies when a person
who recklessly makes a false or misleading statement contravenes this section.
Contravention of this section is an offence (section 177
refers).
A person contravenes this section if,
among other things, the person is reckless as to whether the statement affects,
or might affect, the rate of family assistance payment (this includes child care
benefit by fee reduction), the conditional eligibility for child care benefit by
fee reduction, CCB %, the weekly limit of hours or schooling
%.
Item 39 amends section 173 to ensure
that recklessness in the making of a statement that affects, or might affect, a
person’s eligibility for the special grandparent rate for a child
constitutes an offence.
Obligation of
approved child care services
Section 219A
sets out obligations of approved child care services to act on notices given
under this Act to the service.
Generally, when
an approved child care service receives notices of determination of conditional
eligibility in respect of an individual and a child, CCB %, the limit of hours
of care and schooling %, the service has the following obligations: to calculate
the amount of fee reductions applicable to the individual for a session of care
provided by the service to the child, to reduce the amount of child care fees
for the session by the amount of the fee reductions and to charge the individual
only the reduced fees. The service calculates the amount of the fee reductions
applicable to the individual and the child using the provisions of the Family
Assistance Act relevant to the calculation of fee reductions and using the
notified CCB %, the limit of hours and the schooling %(subsection 219A(2), table
item 1 refers).
An approved child care service
has an obligation to take actions specified in the table in subsection 219A(2)
if notices of variations of the determinations or review decisions or other
notices are received by the service.
Failure to
comply with the requirements to act as specified in subsection 219A(2) is
an offence (subsection 219A(2)
refers).
Items 40, 41 and 42 amend
subsection 219A(2) by inserting new table items 3A, 3B and 9A and amending
table item 10. The amendments set out what services must do if they receive
notices relevant to an individual’s eligibility for the special
grandparent rate in respect of a session of care provided to a
child.
New table item 3A (inserted by item
40) is relevant to notice under new section 50V that the individual is
eligible for the special grandparent rate for the child, if the notice is given
together with the notice of conditional eligibility of the individual given
under section 50M.
New table item 3A provides
that, once the service receives those notices, the service must calculate fee
reductions using the rate applicable to an individual who is eligible for the
special grandparent rate (it is the rate specified in a new section 82A of the
Family Assistance Act, inserted by item 13) and the limit of hours in a
week applicable to the individual. The service must then reduce the child care
fees that the individual is liable to pay by the amount of the fee reductions
and must charge only the reduced fees.
If the
individual is eligible for the special grandparent rate for sessions of care
provided to a child in a week within the limit of hours applicable to the
individual and the child, the amount of the individual’s fee reductions
for those sessions will equal the amount of the fee charged for those sessions.
The effect of the obligations specified in new table item 3A will therefore be
that the individual will not be charged by the service for the sessions of care
provided to the child in that week.
When, in
respect of an individual, a determination of conditional eligibility is made
together with other determinations, the determinations may commence before the
date on which the determinations are made. If this occurs, table item 1
requires the service to reimburse the individual the amount of fee reductions in
respect of the sessions of care provided by the service after the commencement
day of the determinations and the day on which the service starts reducing fees.
It is only in these circumstances (that is, when an individual starts receiving
fee reductions) that a service has the obligation to reimburse the
individual.
A determination of eligibility for
the special grandparent rate may also be backdated (new subsection 50X(2)
inserted by item 16 refers). New table item 3A also includes the
requirement that a service reimburses the individual the amount of fee
reductions for sessions of care provided after the day the determination comes
into force and before the day the service starts applying the special
grandparent rate.
New table item 3B (inserted
by item 40) is relevant to notice under new section 50V that the
individual is eligible for the special grandparent rate for the child, if the
notice is not given together with the notice of conditional eligibility of the
individual. This is the situation when an individual who receives fee
reductions from a service is subsequently determined to be eligible for the
special grandparent rate and the determination is backdated. Obligations set
out in new table item 3B are essentially the same as the obligations in table
item 3A, except for the requirement to reimburse the individual for the period
of backdating.
New table item 9A (inserted by
item 41) is relevant to notices of variation of a determination of
eligibility for the special grandparent rate. These notices are given under new
sections 59G, 62CA or 65DA. New table 9A requires the service to act on the
notice by applying the determination as varied to the calculation of fee
reductions. That is, if the variation is that an individual who was not
eligible for the special rate is eligible for that rate, the service has to
start calculate the fee reduction using the special grandparent rate. If the
variation has the effect that an individual who was eligible for the special
rate is not so eligible, the service has to cease using the special rate and
start using the rate calculated under Schedule 2 of the Family Assistance
Act.
Table item 10 is relevant to a notice of a
review decision to vary a decision or substitute a new decision. Item 42
amends this table item to include a reference to a notice of a review decision
relating to the determination of eligibility for the special grandparent rate.
Such notices may be given under subsection 106(1), 109B or section 141A. The
amendments will create an obligation that a service receiving the notice acts on
the notice in the manner specified in new paragraph (f) of table item 10.
Depending on the effect of the review decision, the service has to either start
applying the special grandparent rate to fee reductions of the individual
concerned, or cease using the special rate and start using the rate calculated
under Schedule 2 of the Family Assistance
Act.
In relation to obligations specified in
new table item 3B, 9A and new paragraph (f) of table item 10, the service has
the obligation to start applying the fee reductions rate based on the received
notice only for sessions of care occurring on the days the service has not yet
charged the individual when the notice is received. In practical terms, the
obligations imposed on services by new table items are prospective in
character.
All new table items, 3A, 3B, 9A, and
new paragraph (f) of table item 10, impose a requirement on a service receiving
a notice that if an individual is eligible for the special grandparent rate for
a child, the service has to ensure that the fees set by the service for a
session of care provided to the child do not exceed the amount of the fees that
the service would charge another individual, who was not eligible for the
special grandparent rate, for the same
child.
The intention behind this latest
requirement is to ensure that a service does not charge an individual more than
another individual would be charged for the same child (that is, the child of
that age and of those care requirements using the same kind of care and the same
sessions of care) only because the individual is eligible for the special
grandparent rate and the individual’s child care fees are fully paid for
via child care benefit entitlement.
Notice
of decisions
Section 224 provides that if a
notice of a decision, including the specified child care benefit decision, is
given in the manner specified in this section, the notice is taken, for the
purposes of the family assistance law, to have been given to the person.
Item 43 amends section 224 to include a reference to the decision of
eligibility for the special grandparent
rate.
Application
Item
44 states that the amendments made by this Schedule apply to sessions of
care provided in a week that commences after 1 January 2005.
Schedule 5 – Increase in bereavement payments in respect of above general rate disability pensioners
These amendments to the Veterans’ Entitlements Act
will increase bereavement payments in respect of persons receiving above general
rate disability pension.
Disability pensions are paid to veterans and members of
the Defence Force or a Peacekeeping Force for incapacity from injuries or
diseases (disabilities) that are accepted as war or defence
caused.
There are multiple rates for the
disability pension, which is paid in accordance with the degree and nature of
incapacity. ‘Above general rate’ disability pensions are defined in
subsection 198(1) of the Veterans’ Entitlements Act as the following
rates:
• the rate under subsection 22(4)-
Extreme Disablement Adjustment;
• the rate
under subsection 23(4) - Intermediate Rate;
and
• the rate under subsection 24(4) -
Special Rate.
General rate, paid under section
22 of the Veterans’ Entitlements Act, is payable in increments of 10 per
cent, up to 100 per cent. Special rate, paid under section 24 of the
Veterans’ Entitlements Act is the highest rate, paid to veterans assessed
as unable to work more than eight hours a week as a result of their
service-related incapacity. Intermediate rate is set at approximately halfway
between special rate and the 100 per cent general rate. Extreme disablement
adjustment is paid at approximately 50 per cent above the general
rate.
Section 27 of the Veterans’
Entitlements Act provides for amounts that may be paid for certain disabilities
in addition to pension payable under sections 22, 23 or 25. However, the
total amount of pension payable cannot exceed the Special rate. Section 27
amounts are not defined as ‘above general rate’ disability pension
and as such are not subject to the increased bereavement
payment.
Under the existing VEA provisions in
section 98A, where a disability pensioner dies, the surviving spouse or partner
may receive a maximum lump sum bereavement payment equivalent to six fortnightly
payments (12 weeks) of the 100 per cent general rate. Thus, the existing
bereavement payment for the surviving spouse or partner of a disability
pensioner receiving special rate, intermediate rate or extreme disablement
adjustment is less than that having been received by the deceased veteran or
member. The spouses or partners of those who were in receipt of 100 per cent
general rate or less receive a payment calculated on the percentage at which the
deceased veteran or member was paid.
The
application of section 98A to members of the Defence Force or a Peacekeeping
Force is provided for in section 96 of the VEA.
Explanation of
changes
Item 1 repeals subsection 98A(2) and substitutes a
new subsection 98A(2).
New paragraph
98A(2)(a) provides that, if the veteran or member was receiving disability
pension at a rate specified or worked out under subsection 22(4), 23(4),
(5) or (6) or 24(4), (5) or (6), the widow or widower of the deceased veteran or
member, is entitled, in respect of the period of 12 weeks after the
deceased veteran or member’s death, to payments at the rate payable
immediately before the veteran or member’s death. Subsections 22(4),
23(4) and 24(4) refer to rates of disability pension that are above general
rate. Subsections 23(5) or (6) and 24(5) or (6), act to, in certain
circumstances, reduce the amount of disability pension payable to a person in
receipt of intermediate rate or special rate disability pension. New
paragraph 98A(2)(a) will ensure that the bereavement payment to a widow or
widower of a deceased veteran or member will be calculated at the disability
pension rate received by the veteran or member immediately before his or her
death and is not limited to 100 per cent of the general rate. The payment is to
be made to the widow or widower on the first available payday after the
Commission becomes aware of the veteran or member’s
death.
New paragraph 98A(2)(b) provides
that the widow or widower of a deceased veteran or member, other than a veteran
or member receiving disability pension at a rate specified or worked out under
subsection 22(4), 23(4), (5) or (6) or 24(4), (5) or (6), is entitled in respect
of the period of 12 weeks after the deceased veteran or member’s death, to
payments at the rate payable immediately before the veteran or member’s
death, or at the general rate in force on that pension pay day, whichever is
lower. New paragraph 98A(2)(b) will ensure that, a bereavement payment
in respect of a veteran or member receiving 100 per cent of the general rate or
less, or a total amount that is higher than the general rate because of an
additional amount payable under section 27, is calculated on the amount of
disability pension received by the veteran or member immediately before his or
her death or is limited to 100 per cent of the general rate, whichever is lower.
The payment is to be made to the widow or widower on the first available payday
after the Commission becomes aware of the veteran or member’s
death.
Item 2 repeals the definition of
Deceased veteran’s amount in subsection 98A(3).
Item 3 inserts a new definition for
deceased veteran’s amount in
subsection 98A(3).
This item provides
that, where the widow or widower dies within 12 weeks of the deceased veteran or
member, and the Commission has not become aware of the death of the deceased
veteran or member before the death of the widow or widower, the payment payable
to such a person as the Repatriation Commission thinks is appropriate, is
calculated in the same way as the bereavement payment to a widow or widower
under new subsection 98A(2). The payment is to be made on the first
available payday after the Commission becomes aware of the widow or
widower’s death.
Item 4 is an
application provision. It provides that the amendments made by items 1, 2
and 3 apply only in relation to deaths of veterans or members that occur on
or after the commencement of this Schedule. The Schedule is taken to commence
on 1 January 2005.