Insert:

Omit "the income year", substitute "the first or second income year".

The amendment made by item 2 applies in respect of a past period that occurs in the 2003-2004 income year or a later income year.

Add "(taking away so much of the individual's standard rate, and then so much (if any) of the individual's FTB Part B supplement, as equals the reduction)".

A New Tax System (Family Assistance) (Administration) Act 1999

After "subsection (2)", insert "or (6)".

Insert:

and (ba) subsection (4) (which is about when the claimant and the claimant's partner separate after the determination is varied) does not apply;

Omit "cancellation year", substitute "cancellation income year".

Add:

Consequence where claimant and partner separate after determination varied

(4)

After the Secretary varies the determination under subsection (2) or (6), the Secretary must again vary the determination if the following conditions are met:

(a) the claimant and the partner mentioned in subparagraph (1)(b)(iii) (the ex-partner ) ceased to be members of the same couple during the income year (the later income year ) that began 2 years after the beginning of the cancellation income year;
(b) at the time when the Secretary would vary the determination under this subsection, the claimant and the ex-partner are not members of the same couple;
(c) if the claimant was required to lodge an income tax return for the cancellation income year—an assessment is or has been made under the Income Tax Assessment Act 1936 of the claimant's taxable income for the cancellation income year;
(d) in any case—the ex-partner was required to lodge an income tax return for the cancellation income year but still had not done so by:
(i) if paragraph (c) applies—the later of the time when the claimant and the ex-partner last ceased to be members of the same couple and the time when the assessment of the claimant's taxable income is made; or
(ii) otherwise—the time when the claimant and the ex-partner last ceased to be members of the same couple;
(e) the Secretary is satisfied that the claimant was eligible for an amount (the recalculated amount ) of family tax benefit for the cancellation days.

(5)

The Secretary must vary the determination under subsection (4) so that it has the effect that, for the cancellation days, the claimant is entitled to be paid:

(a) if:
(i) the claimant was required to lodge an income tax return for the cancellation income year and the claimant lodged the return with the Commissioner of Taxation before the end of the later income year; or
(ii) the claimant was not required to lodge an income tax return for the cancellation income year;
the recalculated amount; or
(b) in any other case—the lesser of:
(i) the recalculated amount; and
(ii) the amount that the claimant was entitled to be paid before the variation under subsection (2) or (6) was made.

Consequence where claimant and ex-partner reconcile after separation

(6)

If:

(a) after the Secretary varies the determination under subsection (4), the claimant and the ex-partner become members of the same couple again; and
(b) the ex-partner has still not lodged an income tax return for the cancellation income year by the time when the claimant and the ex-partner become members of the same couple;

the Secretary must vary the determination so that it has the effect that the claimant is not, and never was, entitled to family tax benefit for the cancellation days.

Application of items 5, 6 and 8

(1) The amendments made by items 5, 6 and 8 apply in respect of a cancellation income year that is the 2001-2002 income year or a later income year.

Transitional provisions

(2) If a claimant has received an act of grace payment under section 33 of the Financial Management and Accountability Act 1997 of the difference between:

(a) the recalculated amount; and
(b) the amount that the claimant was entitled to be paid before a variation under subsection 28(2) of the A New Tax System (Family Assistance) (Administration) Act 1999 was made for the cancellation income year;

then the claimant is not entitled to be paid that amount again under subsection 28(5) of that Act.

(3) Sections 107 and 109E of the A New Tax System (Family Assistance) (Administration) Act 1999 do not limit the date of effect of a review decision that is made on or before 30 June 2006 that results in a decision under subsection 28(4) of that Act, in respect of the 2001-2002, 2002-2003 or 2003-2004 income year.

Repeal the subsection, substitute:

(1A)

This subsection applies to an individual who, on the advance assessment day, owes a debt to the Commonwealth (whether arising under this Act or not) that is:

(a) recoverable under Part 4 by means of deductions from the individual's instalments of family tax benefit under section 84; or
(b) being recovered by deductions from the individual's instalments of family tax benefit under section 227.

Omit "An individual's", substitute "Subject to subsection (2A), an individual's".

Insert:

(2A)

If an individual's request to the Secretary for the payment of a family tax benefit advance for a standard advance period is made after the start of that period, the individual's advance assessment day for that period is the day on which the individual made the request.

Repeal the subsection, substitute:

(1)

If:

(a) a determination of entitlement under section 51B is in force in respect of a claimant who is an individual and a particular income year; and
(b) any of the following people:
(i) the claimant;
(ii) the claimant's partner at the end of the second income year (the later income year ) following the particular income year (if he or she was also the claimant's partner in the particular income year);
(iii) both the claimant and the claimant's partner (as described in subparagraph (ii));
are required to lodge an income tax return for the particular income year but have not done so by the end of the later income year; and
(c) by the end of the later income year, an assessment has not been made under the Income Tax Assessment Act 1936 of the taxable income for the particular income year for everyone to whom paragraph (b) applies;

the Secretary may vary the determination.

Repeal the subsection, substitute:

(1)

The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or

(4B)

applies.

Omit ", and only if".

Note: The following heading to subsection 95(2) is inserted " Secretary may write off debt if debt irrecoverable or debt will not be repaid etc. ".

Insert:

Secretary may write off subsection 28(2) or (6) debt if claimant and partner separate

(4A)

The Secretary may, under subsection (1), decide to write off a debt arising because of subsection 28(2) or (6) (which deal with when income tax returns have not been lodged) if the following conditions are met:

(a) the claimant and the partner mentioned in subparagraph 28(1)(b)(iii) (the ex-partner ) ceased to be members of the same couple after the end of the income year (the later income year ) that began 2 years after the beginning of the cancellation income year mentioned in subsection 28(1);
(b) if the claimant was required to lodge an income tax return for the cancellation income year—an assessment is or has been made under the Income Tax Assessment Act 1936 of the claimant's taxable income for the cancellation income year;
(c) in any case—the ex-partner was required to lodge an income tax return for the cancellation income year but still had not done so by the time when the claimant and the ex-partner ceased to be members of the same couple.

Secretary may write off subsection 60D(2) debt if claimant and partner separate

(4B)

The Secretary may, under subsection (1), decide to write off a debt arising because of subsection 60D(2) (which deals with when income tax returns have not been lodged) if the following conditions are met:

(a) the claimant and the partner mentioned in paragraph 60D(1)(b) (the ex-partner ) ceased to be members of the same couple after the end of the second income year following the particular income year mentioned in paragraph 60D(1)(a);
(b) if the claimant was required to lodge an income tax return for the particular income year—an assessment is or has been made under the Income Tax Assessment Act 1936 of the claimant's taxable income for the particular income year;
(c) in any case—the ex-partner was required to lodge an income tax return for the particular income year but still had not done so by the time when the claimant and the ex-partner ceased to be members of the same couple.

Note 1: The following heading to subsection 95(5) is inserted " When decision under subsection (1) takes effect ".
Note 2: The following heading to subsection 95(6) is inserted " Debt that has been written off may be recovered ".

(1) The amendments made by items 14 to 16 apply in respect of a cancellation income year or a particular income year (as the case requires), that is the 2000-2001 income year or a later income year.
(2) However, the amendments made by those items apply in respect of the 2000-2001 income year as if paragraphs 95(4A)(a) and (c) of the A New Tax System (Family Assistance) (Administration) Act 1999 referred to the income year that began immediately after the cancellation income year mentioned in subsection 28(1) of that Act (instead of the income year that began 2 years after the beginning of the cancellation income year).