Ms MACKLIN (Minister for Families, Housing, Community Services and Indigenous Affairs) (9:41 AM) —I move:

This bill introduces a new requirement for families receiving family tax benefit part A for children aged between 16 and 20.

To be eligible to receive family tax benefit part A, children between 16 and 20 must be studying full time towards, or have completed, year 12 or its equivalent.

Exemptions may be granted in special circumstances which I will detail shortly.

This new participation requirement for FTB part A supports the Australian government’s determination to increase the number of young people with a year 12 or equivalent qualification.

The FTB changes complement the requirement recently introduced for youth allowance by the Social Security Amendment (Training Incentives) Act 2009.

The evidence makes it clear that young people who leave school early are less likely to make the transition into employment or further education than those who complete year 12.

We also know that people of working age who do not reach year 12 or an equivalent level of education are more likely to be unemployed.

And, if they are working, they are less likely to earn as much as people with a higher education.

In fact, for every year of extra education, a person can expect to earn on average around $100 a week more.

And, in times of economic downturn, early school leavers are at greater risk of disadvantage.

Looking back at the recession of the early 1990s, we find that young people who did not complete year 12 were around three times more likely to be unemployed or not undertaking further education than their peers who had completed year 12.

This bill implements an important element of the agreement reached at the Council of Australian Governments meeting on 30 April 2009 as part of the national youth participation requirement and the compact with young Australians.

Broadly, the compact with young Australians will guarantee an education or training place for all young Australians under 25 who are not in work or education.

To support the compact, the national youth participation requirement will make participation in education, training or employment compulsory for all young people until they turn 17.

This bill introduces an activity test into eligibility requirements for an FTB child aged between 16 and 20 under the family assistance law.

To be eligible, a young person must be undertaking full-time study in an approved course of education or study that will allow or assist them to complete year 12 or an equivalent level of education.

The activity test will also be satisfied if a young person has completed their final year of secondary school or equivalent level of education, generally considered to be a certificate level II qualification.

Exemptions may be granted if a young person’s circumstances meet one of three criteria.

The first is that there is no locally accessible approved course of education or study, and no such course available by distance education.

The second is that there is no place available in the course, or the young person is not qualified to undertake it, or lacks the capacity to study due to a physical, psychiatric, intellectual or learning disability.

An exemption may also be granted if there are special circumstances which make it unreasonable for the young person to undertake the course.

The Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs will be able to establish guidelines concerning the special circumstances discretion, through a legislative instrument which will be subject to parliamentary scrutiny.

There will also be some flexibility for a different study load, where this is appropriate to the young person’s circumstances.

The secretary will be able to set a specific number of hours per week of study for a young person for the purposes of the new activity test.

The changes made by this bill complement existing eligibility rules for family tax benefit part A for dependants aged 21 to 24, and for family tax benefit part B for young people aged 16 to 18, which both specify a full-time study requirement.

FTB part B is not paid to a family after the end of the calendar year in which the young person turns 18.

The new participation requirements will apply from 1 January 2010 for new claimants and end of year lump sum claimants.

Families who have already claimed payments by instalment for a period before 1 January 2010 will have the new rules applied from 1 May 2010.

This later starting date for existing customers will give Centrelink adequate time to make necessary IT system changes.

This bill, along with the new youth allowance legislation, encourages young Australians to gain the skills and experience they need to move into work or further education.

It reflects the Australian government’s commitment to do all we can to give every young Australian the best possible chance in life—recognising that education is vital to securing a productive, independent future. I commend the bill to the House.

Debate (on motion by Mrs Mirabella) adjourned.