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Wednesday, 4 May 1994
Page: 277

(Question No. 1303)

Senator Newman asked the Minister representing the Minister for Social Security, upon notice, on 7 April 1994:

  (1) With reference to the fact that family payment in a given year is assessed on an income test using taxable income from the previous year, which means that families do not receive adequate family payment at a time when the greatest costs associated with having a baby are incurred, why don't family payment assessment arrangements better reflect the realities of family circumstances in a given year.

Senator Crowley —The Minister for Social Security has provided the following answer to the honourable senator's question:

  (1) In designing the income test arrangements, various methods of income testing were carefully considered. The aim was to ensure that procedures for claiming and reviewing payments were as simple as possible for clients.

  The use of annual taxable income for the financial year ending in the previous calendar year ensures that the administration of income tests for Family Payment is simple, effective and easily understood by the community. Under the current arrangements, most clients need only look at a single document, their Tax Notice of Assessment, to work out for themselves whether or not they will meet the income test requirements.

  Although the previous financial year's income is used in most cases, a person's current financial year income may be used in certain circumstances. The current financial year can be used where significant changes have occurred in a family's

financial circumstances. This applies where income in the current financial year has changed by more than 25% or falls below the Additional Family Payment qualifying threshold (the amount at which the maximum rate of AFP is payable).