FAMILY AND COMMUNITY SERVICES LEGISLATION AMENDMENT (FAMILY ASSISTANCE AND RELATED MEASURES) BILL 2005

This bill will amend the social security law, the family assistance law and the Veterans’ Entitlements Act 1986 to provide several important measures for families and for low income Australians renting their homes.

Schedule 1 gives effect to a proposal announced by the Government on 11 May 2004 as part of the More Help for Families package relevant to FTB Part B.

Part B is intended to assist families with one main income. In the case of couples, Part B is paid on the basis of the income of the lower income earner provided that their income is under certain thresholds.

Under the current legislation, the income of a secondary earner who is a member of a couple who commences paid work for the first time or returns to paid work part-way during a particular income year following the birth is taken into account under the Part B income test for that income year. This can result in a debt on reconciliation and may act as a disincentive for those wanting to return to the work force.

Schedule 1 introduces a new method of calculating Part B applicable to secondary earners who say return to work for the first time following the birth of a child or the adoption of a child. The new method provides the secondary earner with the maximum rate of Part B for the period in question provided that all the criteria for accessing the new method are met for the day or days in question.

This measure will be available to a secondary earner who is the natural parent or step parent of the child. It will also be available to adoptive parents and other secondary earners who are primary carers (such as grandparents who commence work or return to work for the first time after assuming responsibility as a carer of a grand child).

This measure will apply in respect of the 2005-06 income year and later income years.

Maternity payment was introduced from 1 July 2004 and currently provides $3079, in a lump sum or instalments, to families with new children, including to adopting families who assume care of children up to 26 weeks of age. However, as a recent publication on adoptions from the Australian Institute of Health and Welfare testifies, the majority of current adoptions in Australia are inter-country adoptions, which often happen when the children are older than 26 weeks because of the lengthy processes involved. Therefore, these adopting families have often missed out on the maternity payment.

The Government has responded to this area of need by widening the maternity payment age range for adoptions. Maternity payment will be made available through this bill for children being adopted from another country who enter their new families’ care, and arrive in Australia, before age two. Maternity payment eligibility will also be extended for local adoptions, to families assuming care of children before age two, assuming maternity payment has not already been paid for the child under the current rules.

In a related measure, it is being clarified that maternity payment is not available for a child who has already attracted maternity allowance under the former scheme applying before 1 July 2004. This completes the transitional rules for the new payment.

This bill contains several other family assistance measures. Notable among these are amendments to lessen the impact of family tax benefit or child care benefit debts that arise from the non-lodgment of income tax returns in situations where parents have separated and an ex-partner has not lodged the relevant income tax return to enable annual reconciliation of family tax benefit or child care benefit to occur.

Lastly, the bill includes two measures to improve the administration of the rent assistance program for social security and family tax benefit. Rent assistance is paid to assist low-income people with the costs of renting their homes in the private rental market. Amendments are being made to prevent the possibility of rent assistance being paid to the same person twice—once with the person’s family tax benefit and once with their social security or veterans’ affairs payment. Further amendments will clarify that, when a person fails to give information regularly sought by Centrelink to confirm their ongoing rent assistance entitlement, the rent assistance portion of their family tax benefit or social security payment may be cancelled, rather than the whole benefit or payment, as currently provided.