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Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008

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2008

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT

(ECONOMIC SECURITY STRATEGY) BILL 2008

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP)



SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT

(ECONOMIC SECURITY STRATEGY) BILL 2008

 

 

OUTLINE

 

This bill will amend the social security law, the family assistance law, the Veterans’ Entitlements Act 1986 and the tax law to provide for payments to pensioners, seniors, people with disability, carers, veterans and families with dependent children, as announced by the Government on 14 October 2008 as a key part of its $10.4 billion Economic Security Strategy.  The payments will provide immediate financial support during the global financial crisis.

 

The payments will be made during the payment fortnight commencing on 8 December 2008, with no need for a claim, will not count as income for social security, family assistance and veterans’ entitlements purposes, and will be tax-free.  Families who receive family tax benefit Part A as a lump sum after the end of the financial year will be paid after their family tax benefit claim is determined.

 

The bill will include capacity for an administrative scheme to be made to provide payments in circumstances where the statutory regime does not necessarily produce an appropriate result.  Such a scheme would be established by a legislative instrument made by the Minister.

 

Economic security strategy payments to pensioners, seniors, people with disability, carers and veterans

 

The bill will provide for economic security strategy payments to be made to pensioners, seniors, people with disability, carers and veterans as an immediate down payment on long-term pension reform.

 

A payment of $1,400 will be made for single recipients or holders of one of the stipulated payments or cards.  For couples, a combined payment of $2,100 will be made if both members of a couple receive or hold one of the stipulated payments or cards, and a single payment of $1,050 if only one member of the couple does so.

 

The payments and cards attracting the economic security strategy payment are:

 

  • age pension;
  • disability support pension;
  • wife pension;
  • widow B pension;
  • service pensions;
  • income support supplement;
  • carer payment;
  • partner allowance;
  • widow allowance;
  • bereavement allowance;
  • parenting payment - if person is of age pension age;
  • special benefit - if person is of age pension age;
  • Austudy payment - if person is of age pension age;
  • ABSTUDY - if person is of age pension age and receiving a living allowance;
  • Commonwealth seniors health card;
  • Veterans' Affairs gold card - if person is also eligible for seniors concession allowance.

 

For recipients of carer allowance, a payment of $1,000 will generally be made for each person cared for.  If the allowance is shared between two or more people, the economic security strategy payment will be similarly shared.  Where receipt of one payment of carer allowance depends on the person providing care for two care receivers, the payment will also be $1,000.

 

Economic security strategy payments to families with dependent children

 

This bill will also provide for economic security strategy payments to families with dependent children.

 

A payment of $1,000 will be made for each child who attracts family tax benefit Part A for 14 October 2008.  Similarly, a $1,000 payment will be made for each dependent child who, for 14 October 2008, either attracts or receives youth allowance, ABSTUDY living allowance or an education allowance under the Veterans’ Children Education Scheme or the Military Rehabilitation and Compensation Act Education and Training Scheme.

 

If any of these qualifying payments for families is shared between two people under the usual rules for that payment, the economic security strategy payment will be similarly shared.

 

Financial impact statement

 

Payments to pensioners, seniors, people with disability, carers and veterans

 

Total resourcing

 

2008-09

$4,874.6 m

 

2009-10

nil

 

2010-11

nil

 

 

 

Payments to families

 

Total resourcing

 

2008-09

$3,859.0 m

 

2009-10

$0.6 m

 

2010-11

$0.2 m

 

 

 

TOTAL

 

TOTAL RESOURCING

 

2008-09

$8,733.6 m

 

2009-10

$0.6 m

 

2010-11

$0.2 m

 



SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT

(ECONOMIC SECURITY STRATEGY) BILL 2008

 

 

NOTES ON CLAUSES

 

Clause 1 sets out how the Act is to be cited, that is, the Social Security and Other Legislation Amendment (Economic Security Strategy) Act 2008.

 

Clause 2 provides that the Act commences on the day on which it receives the Royal Assent.

 

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:

 

  • ‘1936 Tax Act’ means the Income Tax Assessment Act 1936 ;

 

  • ‘1997 Tax Act’ means the Income Tax Assessment Act 1997 ;

 

  • ‘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 ;

 

  • ‘Social Security Act’ means the Social Security Act 1991 ;

 

  • ‘Social Security Administration Act’ means the Social Security (Administration) Act 1999 ; and

 

  • ‘Veterans’ Entitlements Act’ means the Veterans’ Entitlements Act 1986 .

 



Schedule 1 - E conomic security strategy payments under the Social Security Act

 

 

Summary

 

This Schedule provides for economic security strategy payments to be made to pensioners, seniors, people with disability and carers as an immediate down payment on long term pension reform.

 

A payment of $1,400 will be made for single recipients or holders of one of the stipulated payments or cards.  For couples, a combined payment of $2,100 will be made if both members of a couple receive or hold one of the stipulated payments or cards, and a single payment of $1,050 if only one member of the couple does so.

 

The payments attracting the economic security strategy payment include:  age, disability support, wife and widow B pensions; carer payment; and partner, widow and bereavement allowances.  People who are of age pension age and receiving parenting payment, special benefit, Austudy payment or ABSTUDY living allowance will also attract the payment.  The payment will also go to self-funded retirees holding a current Commonwealth seniors health card.

 

For recipients of carer allowance, in most circumstances, a payment of $1,000 will be made for each person cared for.  If the allowance is shared between two or more people, the economic security strategy payment will be similarly shared.  Where receipt of one payment of carer allowance depends on the person providing care for two care receivers, the payment will also be $1,000.

 

Background

 

In broad terms, this Schedule introduces new economic security strategy payments to be made to pensioners, seniors, people with disability and carers, to be paid as a lump sum payment as soon as practicable from 8 December 2008.  There will not be a claim process attached to the economic security strategy payment. 

 

The amendments made by this Schedule commence on Royal Assent.

 

Explanation of the changes

 

Amendments to the Social Security Act

 

Item 1 inserts new Part 2.17 into Chapter 2 of the Social Security Act.

 

New Part 2.17 contains the provisions relevant to the economic security strategy payment.

 

New section 900 contains the qualification criteria for the economic security strategy payment.

 

New subsection 900(1) provides that a person is qualified for an economic security strategy payment if subsection 900(2), (3) or (4) applies to the person.

 

New subsection 900(2) applies to a person where that person is qualified for the economic security strategy payment because of receipt of certain social security payments or allowances.  Subsection 900(2) provides that a person is qualified for an economic security strategy payment if the person meets the following criteria:

 

  • the person received one of the following social security payments:

 

-         age pension;

-         disability support pension;

-         wife pension;

-         carer payment;

-         bereavement allowance;

-         widow B pension;

-         partner allowance;

-         carer allowance; and

 

  • the person received a payment in respect of 14 October 2008; and

 

  • except in the case of carer allowance, the person received that payment as a result of a claim made on or before 14 October 2008.

 

Subsection 900(2) reflects the intention to pay the economic security strategy payment only in circumstances where the triggering social security payment was received by the person in respect of 14 October 2008. 

 

The note directs the reader to the definition of receive in subsections 23(2) and 23(4) of the Social Security Act.

 

New subsection 900(3) applies where a person is qualified for the economic security strategy payment by meeting the following criteria:

 

  • the person reached age pension age on or before 14 October 2008 (that is, 65 for men and 63 years, 6 months for women, as set out in subsection 23(5C) of the Social Security Act); and

 

  • the person received one of the following payments

 

-         parenting payment;

-         Austudy payment;

-         special benefit;

-         a payment under the ABSTUDY scheme that includes an amount of living allowance; and

 

  • the person received the relevant payment in respect of 14 October 2008; and

 

  • the person received the payment because of a claim made on or before 14 October 2008.

 

The note directs the reader to the definition of receive in subsections 23(2) and 23(4) of the Social Security Act.

 

Subsections 900(2) and 900(3) reflect the intention to pay the economic security strategy payment only in circumstances where the triggering payment was received by the person in respect of 14 October 2008. 

 

Subsection 23(2) of the Social Security Act provides that a person is taken to be receiving a payment under the Act from the earliest day on which the payment is payable to the person, even if the first instalment of the payment is not actually paid until a later day.  Subsection 23(4) of the Social Security Act provides that a person is taken to be receiving a payment under the Act until the last day on which the payment is payable to the person, even if the last instalment of the payment is not paid until a later day.  Subsections 900(2) and 900(3) could therefore apply to people who are granted the relevant payments after 14 October 2008, provided that the payments in question are payable to the person on 14 October 2008 and, except in the case of carer allowance, the person claimed the relevant payment on or before 14 October 2008.  The intention is that the person must have received an amount of the payment for the relevant instalment period that included a daily rate of payment in respect of 14 October 2008.

 

The new subsection 900(4) applies where the person is qualified for the economic security strategy payment because of being qualified for the seniors health card.  Subsection 900(4) provides that a person is qualified for an economic security strategy payment if:

 

  • the person made a claim for the seniors health card and had not withdrawn that claim on or before 14 October 2008; and

 

  • the person was qualified for the seniors health card under section 1061ZG of the Social Security Act on 14 October 2008.

 

Subsection 900(5) clarifies that a person may receive only one economic security strategy payment under section 900, regardless of how many times the person qualifies under this section.

 

Subsection 900(6) clarifies that a person is not qualified for an economic security strategy payment under section 900 if the person is eligible for a payment under section 118ZZQ of the Veterans’ Entitlements Act.  It should be noted that, in certain circumstances, a person may qualify for additional economic security strategy payments, but they are not paid under section 900.

 

The new section 901 sets out the amount of the economic security strategy payment for people other than recipients of carer allowance.

 

Subsection 901(1) sets out in tabular form the amount of economic security strategy payment payable to people who qualify under section 900, other than those in receipt of carer allowance.  Subsection 901(1) clarifies that the amount payable is dependent upon the person’s family situation, including whether or not the person is a member of a couple.

 

The note directs readers to the definitions of member of a couple , partnered , illness separated couple , respite care couple and partnered (partner in gaol) in section 4 of the Social Security Act.

 

While a person who is partnered (partner in gaol), or a member of an illness separated couple, or a member of a respite care couple, is also necessarily ‘partnered’, the person is entitled to the $1,400 amount for falling into the category of partnered (partner in gaol), member of an illness separated couple or member of a respite care couple, rather than the $1,050 amount for simply being partnered.

 

Subsection 901(2) states that subsection 901(1) does not apply to people receiving an economic security strategy payment as a result of qualification due to receipt of carer allowance in respect of 14 October 2008.

 

New subsection 902(1) provides that, if a person is qualified for an economic security strategy payment because they were receiving carer allowance in respect of 14 October 2008, and they were not receiving any other payment that would qualify them for an economic security strategy payment, then the amount of their economic security strategy payment is worked out under new subsection 902(3). 

 

New subsection 902(2) provides that, if a person qualifies for an economic security strategy payment because they were receiving carer allowance in respect of 14 October 2008, and they also qualify for an economic security payment because they were receiving a payment listed in one of paragraphs 900(2)(a)(i) to (viii) on that same date, then the amount of the person’s economic security strategy is the amount worked out under subsection 902(3) in addition to the amount that would have been worked out under section 901 if subsection 901(2) had not been applied to them.  That is, they receive an amount of economic security strategy payment for carer allowance and an amount of economic security strategy payment for the other payment.

 

New subsection 902(3) provides that the amount of economic security strategy payment in relation to a person’s carer allowance is calculated by adding together the amount for each care receiver whose care qualified the person for carer allowance in respect of 14 October 2008.  However, new subsection 902(4) provides that, where a person’s qualification for receipt of carer allowance arises in respect of the care the person provides for two disabled children (subsection 953(2) of the Social Security Act), the two disabled children are treated as a single care receiver.

 

New subsection 902(5) provides that, subject to subsection (6), the amount of payment for each care receiver is $1,000.

 

New subsection 902(6) applies where the two people are qualified for carer allowance because they share the care of a care receiver (or care receivers) and the Secretary makes a written determination specifying the share of carer allowance that each person is to receive pursuant to subsection 981(1) of the Social Security Act.  In this case, the $1,000 applicable to the care receiver is to be divided in the same share (being a percentage or proportion) as set out in the determination.

 

Item 2 is concerned with determining whether a person has made a claim, or should be taken to have made a claim, on or before 14 October 2008.  In determining whether this has occurred, the effect of section 12 and section 15 of the Social Security Administration Act is to be disregarded.

 

In relation to section 12, subitem 2(a) provides that a person should not be paid an economic security strategy payment where he or she has claimed a non-economic security strategy trigger payment (for example, newstart allowance), has subsequently become qualified for an economic security strategy trigger payment (for example, widow allowance) and, after 14 October 2008, is transferred to that latter payment by virtue of section 12 of the Social Security Administration Act.

 

In relation to section 15, subitem 2(b) clarifies that the effect of a decision of the Secretary made after 14 October 2008 for the purposes of section 15 of the Social Security Administration Act (dealing with certain incorrect or inappropriate claims) is to be disregarded.  This means that, where a person becomes entitled to an economic security strategy trigger payment because of the operation of section 15 of the Social Security Administration Act, then the relevant decision for the purposes of section 15 must have been made on or before 14 October 2008.

 

Item 3 inserts new section 1223ABAAA into Part 5.2 of Chapter 5 of the Social Security Act.  This new provision sets out when an economic security strategy payment made to pensioners, seniors, people with a disability and carers is a debt.  In broad terms, a debt would only arise where some or all of the payment was incorrectly paid because a relevant individual knowingly made a false or misleading statement or knowingly provided false or misleading information.

 

Where an individual is paid an economic security strategy payment because of qualification for, or payment of, the relevant social security payment, the determination relating to that qualification or payment (the relevant determination) is later changed with the effect that the individual was not qualified for an economic security strategy payment, and a reason for the determination needing to be changed was that a relevant individual knowingly made a false or misleading statement or knowingly provided false or misleading information, then the economic security strategy payment paid would be a debt.  The relevant rules are in new subsection 1223ABAAA(2).  Similar rules apply, through new subsection 1223ABAAA(4), where an individual is paid an economic security strategy payment because of qualification for a seniors health card.

 

Similar rules, set out in subsection 1223ABAAA(3), would apply where an individual is paid in excess of the amount of their entitlement to the economic security strategy payment because of a subsequent change to the relevant determination, except that the amount of the debt would be the difference between the amount of economic security strategy payment paid and the amount that should have been paid.

 

The relevant determinations are listed in new subsection 1223ABAAA(1).

 

New section 1223ABAAA(5) states that, with the exception of section 1224AA of the Social Security Act, other provisions in relation to the raising of debts do not apply to economic security strategy payments that fall within the application of the new section 1223ABAAA.

 

Item 4 repeals section 1231(1AA) of the Social Security Act and substitutes a new section 1231(1AA). 

 

This amendment creates two subparagraphs and, in particular, new subparagraph (b), which states that, when the Secretary makes a determination regarding what amount, if any, is to be deducted from a person’s payments in repayment of an existing debt, the Secretary is not to reduce an individual’s economic security strategy payment (including a reduction to nil) unless the person has requested the Secretary to do so.

 

Amendments to the Social Security Administration Act

 

Item 5 inserts a new section 12AB into Division 1 of Part 3 of the Social Security Administration Act to provide that no claim is required for the economic security strategy payment.

 

Item 6 inserts a new paragraph (ht) into the definition of lump sum benefit in subsection 47(1) to clarify that the economic security strategy payment is to be regarded as a lump sum benefit for social security purposes.

 

Item 7 inserts a new paragraph 47C into Division 4 of Part 1 of the Social Security Administration Act to provide that all economic security strategy payments must be paid to the individual in a single lump sum on either 8 December 2008 or the earliest practicable date after that date, and in such manner, as the Secretary considers appropriate.



Schedule 2 - E conomic security strategy payments under the Veterans’ Entitlements Act

 

 

Summary

 

This Schedule will provide for economic security strategy payments to be made to veterans’ entitlements income support pensioners and seniors as an immediate down payment on long-term pension reform.

 

A payment of $1,400 will be made for single recipients of income support payments or holders of one of the stipulated cards.  For couples, a combined payment of $2,100 will be made if both members of a couple receive an income support payment or hold one of the stipulated cards, and a single payment of $1,050 if only one member of the couple does so.

 

The payments and cards attracting the economic security strategy payment are age, invalidity, partner and carer service pensions, income support supplement, the Commonwealth seniors health card and the gold card if the person is also eligible for seniors concession allowance.

 

Background

 

On 14 October 2008, the Commonwealth Government announced a $10.4 billion Economic Security Strategy to strengthen the Australian economy during the global financial crisis.  The economic security strategy payments provided by this Schedule are part of that strategy.

 

The payments will be made during the fortnight commencing on 8 December 2008 and are intended to provide additional support in the lead up to long-term pension reform.

 

The amendments made by this Schedule commence on Royal Assent.

 

Explanation of the changes

 

Part 1 - Amendments to the Veterans’ Entitlements Act

 

Item 1 inserts new Part VIIG into the Veterans’ Entitlements Act after Part VIIF.

 

New Part VIIG gives effect to the Economic Security Strategy measure to provide a payment to certain older Australians.

 

New subsection 118ZZQ(1) provides that a person is eligible for an economic security strategy payment if subsection 118ZZQ(2) or 118ZZQ(3) applies to the person.

 

New subsection 118ZZQ(2) provides that a person is eligible for an economic security strategy payment if the person meets the following criteria:

 

·          a service pension, income support supplement or carer service pension was payable to the person in respect of a period that includes 14 October 2008; and

 

·          the pension or supplement was payable to the person because of a claim that the person made on or before 14 October 2008.

 

New subsection 118ZZQ(3) provides that a person is eligible for an economic security strategy payment if:

 

·          the person was eligible for seniors concession allowance on 14 October 2008 (seniors concession allowance is provided for under section 118PA of the Veterans’ Entitlements Act); or

 

·          the person meets both the following criteria:

 

-        the person made a claim for a seniors health card on or before 14 October 2008 and that claim had not been withdrawn on or before 14 October 2008; and

-        the person was subsequently determined to be eligible for a seniors health card on 14 October 2008.

 

New subsection 118ZZQ(4) provides that a person may receive one payment of the economic security strategy payment only, regardless of how many times the person may be eligible under new section 118ZZQ. 

 

New section 118ZZR sets out a table to specify the amount of the economic security strategy payment that is payable to a person in various family situations under section 118ZZQ. 

 

The table provides that a person who is not a member of a couple or is a member of an illness separated or respite care couple will receive a payment of $1,400.  A person who is partnered will receive a payment of $1,050.

 

New section 118ZZS provides that a person does not have to claim an economic security strategy payment. 

 

New subsection 118ZZT provides that the Repatriation Commission must pay the economic security strategy payment to an eligible individual:

 

·          in a single lump sum; and

 

·          on the earliest date that is reasonably practicable on or after 8 December 2008; and

 

·          in such a manner as the Repatriation Commission considers appropriate. 

 

New section 118ZZU provides for the circumstances under which a debt may arise in respect of an economic security strategy payment.  In very broad terms, an economic security strategy payment will be a debt where it is established that the recipient knowingly made a false or misleading statement (or provided false information) and, if the true circumstances had been known, the determination in relation to the relevant payment or card (which gave rise to the qualification for the payment) would not have been made.

 

New subsection 118ZZU(8) provides that the other provisions of the Veterans’ Entitlements Act under which debts arise do not apply in relation to payments to which section 118ZZU applies. 

 

New subsection 118ZZU(9) provides that a debt that arises under section 118ZZU is a recoverable amount within the meaning of subsection 205(8) of the Veterans’ Entitlements Act.  

 



Schedule 3 - Economic security strategy payments to families

 

 

Summary

 

This Schedule will provide for economic security strategy payments to families with dependent children.

 

A payment of $1,000 will be made for each child who attracts family tax benefit (FTB) Part A for 14 October 2008.  Similarly, a $1,000 payment will be made for each dependent child who, for 14 October 2008, either attracts or receives youth allowance, ABSTUDY living allowance or an education allowance under the Veterans’ Children Education Scheme (VCES) or the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS).

 

If any of these qualifying payments for families is shared between two people under the usual rules for that payment, the economic security strategy payment will be similarly shared.

 

Background

 

On 14 October 2008, the Government announced a series of measures as part of its Economic Security Strategy to support sustained economic growth, including further financial assistance for families.  This assistance is to take the form of a payment of $1,000 for each FTB child in a family who attracts FTB Part A and for each dependent child who attracts or receives youth allowance, ABSTUDY living allowance, or an education allowance under the VCES or the MRCAETS for 14 October 2008.

 

This new payment to families would be paid in the fortnight beginning 8 December 2008 for families who receive their family assistance or other payments as fortnightly instalments.  Families who get arrears of FTB Part A for 14 October 2008 will also be paid the economic security strategy payment to families.  For the small number of recipients who receive their FTB as a lump sum for a previous income year, the economic security strategy payment to families would be paid after their actual income is known for the 2008-09 income year.

 

The economic security strategy payment to families would be exempt from tax and would not be taken as income for the purposes of the social security law or the Veterans’ Entitlements Act.

 

The economic security strategy payment to families would be provided for in the family assistance law.

 

The amendments made by this Schedule commence on the day of Royal Assent.

 



Explanation of the changes

 

Amendments to the Family Assistance Act

 

Definitions

 

Items 1, 2 and 3 insert new definitions for terms relevant to the new economic security strategy payment to families into subsection 3(1) of the Family Assistance Act.

 

Item 1 defines economic security strategy payment to families to mean a payment to which an individual is entitled under new section 89 or 93.

 

Item 2 defines the Military Rehabilitation and Compensation Act Education and Training Scheme to mean the scheme determined under section 258 of the Military Rehabilitation and Compensation Act 2004 , as in force on commencement of this definition.

 

Item 3 defines the Veterans’ Children Education Scheme to mean the scheme prepared under section 117 of the Veterans’ Entitlements Act, as in force on commencement of this definition.

 

Item 4 inserts new Part 6 into the Family Assistance Act, which sets out the new entitlement and payment amount rules applicable to the new economic security strategy payment to families. 

 

In broad terms, new Division 1 of Part 6 sets out the situations in which an individual is entitled to an economic security strategy payment to families in respect of an eligible child.  New Division 2 of Part 6 sets out the situations in which a young person or student is entitled to an economic security strategy payment to families.

 

Entitlements in respect of eligible children

 

An individual is entitled to an economic security strategy payment to families in the circumstances set out in new section 89.

 

FTB category

 

Section 16 of the Family Assistance Administration Act enables the Secretary to make an entitlement determination on a claim for FTB by instalment where the claimant satisfies the relevant eligibility rules.   

 

An individual who is entitled to payment of FTB under a section 16 determination that includes 14 October 2008 is also entitled to an economic security strategy payment to families if the individual’s rate of FTB for 14 October includes a Part A rate greater than nil that is worked out taking into account one or more FTB children (new subsection 89(2) refers).

 

Individuals who have an entitlement to only the rent assistance component of FTB Part A that is worked out using Part 3A of Schedule 1 to the Family Assistance Act because they have a regular care child only (a child for whom the individual has less than 35 per cent care) would not be entitled to an economic security strategy payment to families.  The concept of ‘eligible child’ (in new section 90) would also operate to ensure that, where an individual has a mix of FTB and regular care children, only the FTB children can attract the economic security strategy payment to families.  This is the situation for each of the FTB categories. 

 

Section 17 of the Family Assistance Administration Act enables the Secretary to make an entitlement determination on a claim for FTB for a past period where the claimant satisfies the relevant eligibility rules. 

 

An individual who is entitled to FTB for a past period that includes 14 October 2008 under a section 17 determination is also entitled to an economic security strategy payment to families if the individual’s past period entitlement is based on a claim made in 2008-09 and the individual’s rate of FTB for 14 October includes a Part A rate greater than nil that is worked out taking into account one or more FTB children.  If the individual’s past period entitlement is based on a claim made in 2009-10 or 2010-11, then there is the additional requirement that the individual satisfy the relevant FTB reconciliation conditions for 2008-09 Subsection 89(3) is the relevant new provision.  Section 32B of the Family Assistance Administration Act sets out when an individual satisfies the relevant reconciliation conditions.  This generally occurs when the Tax Office has assessed the taxable income of the individual or their partner, if they are required to lodge a tax return.

 

This means that, where an individual makes claims in the 2008-09 income year for both FTB by instalment (prospectively) and for a past period that falls in that income year and covers 14 October 2008, the individual would be entitled to an economic security strategy payment to families if their estimated income results in payment of FTB Part A for 14 October 2008.  Recipients who choose to receive their FTB as a lump sum after the end of the relevant income year would be entitled to an economic security strategy payment to families if their actual income results in payment of FTB Part A for 14 October 2008.

 

Section 18 deals with entitlement determinations on bereavement claims.  A bereavement claim can be made where an eligible individual dies and another individual claims the unpaid FTB (including for 14 October 2008) or where an individual wants to be paid a single payment that includes 14 October 2008 because of the death of an FTB child. 

 

An individual who is entitled to payment of FTB under a section 18 determination that includes 14 October 2008 is also entitled to an economic security strategy payment to families if the rate of FTB payable under the determination for 14 October includes a Part A rate greater than nil that is worked out taking into account one or more FTB children (new subsection 89(4) refers).

 

In the case of bereavement claims, an individual will be able to access the economic security strategy payment to families based on an estimate of income for FTB Part A purposes if the actual income is not yet known.

 

Youth allowance category

 

Youth allowance is provided for in the social security law.  Youth allowance can be paid to a young person who qualifies for the payment or, in certain circumstances, to another person on the young person’s behalf.  Where the young person is under 18 and not independent (as defined in Part 3.5 of the Social Security Act), the person’s youth allowance is normally paid to a parent (subsection 45(1) of the Social Security Administration Act refers).  Alternatively, a young person may have a payment nominee under Part 3A of the Social Security Administration Act to whom youth allowance is paid on their behalf. 

 

New subsection 89(5) deals with the situation where a person (recipient) is paid an instalment of a young person’s youth allowance in respect of a period that included 14 October 2008 because of the application of subsection 45(1) of the Social Security Administration Act or as payment nominee, and the young person was under 25 years of age and not independent on 14 October.  In these circumstances, the recipient is entitled to the economic security strategy payment to families. 

 

New section 93 (described in more detail below) deals with the situation where it is the young person who is paid an instalment of their youth allowance directly in respect of a period that included 14 October 2008. 

 

ABSTUDY category

 

ABSTUDY can be paid to the student or to a parent, guardian or third party (such as an educational institution) on behalf of the student. 

 

New subsection 89(6) deals with the situation where the whole or part of an instalment under the ABSTUDY scheme that includes an amount of living allowance was paid in respect of a dependent student, where the instalment was for a period that included 14 October 2008 and the student was both a dependent student under the ABSTUDY scheme and under 25 years of age on that date.  If the ABSTUDY was paid to an individual who was the student’s parent or guardian on 14 October 2008, then the parent or guardian is entitled to the economic security strategy payment to families. 

 

If no amount of the instalment was paid to the parent, guardian or student (for example, it was paid to an educational institution), then an individual who was the student’s parent or guardian on 14 October 2008 with whom the student usually lives and who is determined by the Secretary to be the most appropriate person is entitled to the economic security strategy payment to families. 

 

New section 93 (described in more detail below) deals with the situation where it is the dependent student who is paid the whole or part of an instalment of ABSTUDY directly in respect of a period that included 14 October 2008. 

 

Education allowance category

 

The VCES and the MRCAETS provide for the payment of education allowances in respect of eligible children of veterans, members and former members of the Australian Defence Force.  New subsections 89(7) and (8) link entitlement to the economic security strategy payment with these payments.

 

New subsection 89(7) applies where the whole or part of an education allowance under specified sections of the VCES was paid in respect of a student, where the allowance was for a period that included 14 October 2008 and the student was under 25 years of age on that date.  If the allowance was paid to an individual who was the student’s parent or guardian on 14 October 2008, then the parent or guardian is also entitled to the economic security strategy payment to families.  However, if no amount of the allowance was paid to the parent, guardian or student (for example, it was paid to an educational institution), then an individual who was the student’s parent or guardian on 14 October 2008 with whom the student usually lives and who is determined by the Secretary to be the most appropriate person is entitled to the economic security strategy payment to families. 

 

New subsection 89(8) provides an equivalent set of rules where an education allowance under the MRCAETS is paid in respect of a student, where the allowance was for a period that included 14 October 2008.

 

New section 93 (described in more detail below) deals with the situation where it is the student who is paid an education allowance under either the VCES or the MRCAETS in respect of a period that included 14 October 2008. 

 

In respect of which children is the economic security strategy payment payable?

 

Where an individual is entitled to the economic security strategy payment to families because of their entitlement to FTB Part A, each FTB child of the individual taken into account in determining the rate of FTB Part A in relation to 14 October 2008 would be an eligible child in relation to the entitled individual.  The relevant rules are in new paragraphs 90(a), (b) and (c).

 

Where an individual is entitled to the economic security strategy payment to families because he or she was paid an instalment of a young person’s youth allowance for a period that included 14 October 2008, then the young person is an eligible child in relation to the entitled individual. 

 

If the individual has been paid more than one instalment of youth allowance for different young people (for example, a mother has two student children and is directly paid the youth allowance of both children), then each young person is an eligible child in relation to the entitled individual (mother). 

 

The relevant new provision is paragraph 90(d).  

 

Where an individual is entitled to the economic security strategy payment to families because the whole or part of an instalment of ABSTUDY (which included living allowance) for a period that included 14 October 2008 was paid in respect of a dependent student, then the student is an eligible child in relation to the entitled individual.  If there is more than one dependent student covered by subsection 89(6) in relation to the individual, then each dependent student is an eligible child in relation to that individual.  The relevant new provision is paragraph 90(e).

 

Where an individual is entitled to the economic security strategy payment to families because the whole or part of an education allowance under the VCES for a period that included 14 October 2008 was paid in respect of a student, then the student is an eligible child in relation to the entitled individual.  If there is more than one student covered by subsection 89(7) in relation to the individual, then each student is an eligible child in relation to that individual.  The relevant new provision is paragraph 90(f).

 

New paragraph 90(g) provides a similar rule where an individual is entitled to the economic security strategy payment to families because the whole or part of an education allowance under the MRCAETS for a period that included 14 October 2008 was paid in respect of a student.

 

What is the amount of the payment?

 

New section 91 sets out the rules for working out the amount of an entitled individual’s economic security strategy payment to families.

 

The general rule, set out in new subsection 91(2), is that the amount applicable for an eligible child is $1,000.

 

However, if the individual’s rate of FTB Part A in relation to 14 October 2008 in respect of an eligible child takes account of a shared care percentage (under section 59 of the Family Assistance Act), then the amount applicable to the individual for the eligible child is that percentage of $1,000.  The relevant rule is in new subsection 91(3).

 

An individual has a shared care percentage for an FTB child under section 59 where there is a pattern of care in relation to the child and the individual has been determined under subsection 22(6A) as having at least 35 per cent care but not more than 65 per cent  care.  An individual who has more that 65 per cent care of an FTB child can potentially receive the full amount of FTB in respect of the FTB child (and therefore the full economic security strategy payment of $1,000 in respect of the FTB child).

 

Similarly, the amount of the economic security strategy payment to families could also be affected by a specified percentage determination due to a blended family determination under section 28 of the Family Assistance Act (where there is an instalment or past period determination) or under section 29 (where there is a past period determination).  The amount applicable to an individual for an eligible child in respect of whom there is such a percentage determination would be that percentage of $1,000.  For example, if the individual is eligible for three FTB children on 14 October 2008 and the specified percentage for each child under section 28 of the Family Assistance Act is 50 per cent, the individual is eligible for $1,500 (that is, $1,000 x 50 per cent x 3).

 

Where an individual has a shared care percentage under section 59 of the Family Assistance Act in relation to a particular FTB child and a section 28 or 29 specified percentage, both percentages would be taken into account in determining the amount of an individual's economic security strategy payment to families.  For example, if an individual has 100 per cent care of two FTB children, 50 per cent care of one FTB child (due to section 59 of the Family Assistance Act), plus a specified percentage under section 28 of 50 per cent for the three children, the individual is eligible for $1,250 (that is, [2 x $1,000 x 50 per cent] plus [1 x $1,000 x 50 per cent x 50 per cent]).

 

The relevant rules are set out in new subsections 91(4) and (5).

 

An education allowance under the VCES or the MRCAETS can also be paid to more than one individual, for example, where the care of a child is shared between separated parents.

 

Under new subsection 91(6), if part of an education allowance is paid to an individual in respect of an eligible child, then the amount applicable to the individual for the eligible child is the same proportion of $1,000 as the proportion of education allowance paid to the individual.

 

It is also possible for part of an instalment of ABSTUDY (which included living allowance) or part of an education allowance under the VCES or the MRCAETS to be paid directly to a third party (such as a school) and the other part to an entitled individual who is a parent or guardian of the student.  Where this happens, the full amount of economic security strategy payment for the student would be paid to the parent or guardian.  New subsection 91(6) would have no application in this situation. 

 

General rules

 

New section 92 provides some general rules about how the various categories of entitlement to the economic security strategy payment under Division 1 relate to each other and apply in certain circumstances.

 

It is possible for an individual to be entitled to an economic security strategy payment to families in respect of a particular child under more than one entitlement category (for example, a child aged under 16 can attract payment of FTB Part A and VCES).  Where this happens, the first of the subsections in section 89 applicable to the individual in respect of the child would apply to the exclusion of the others in relation to that child.  In the above example, the individual’s entitlement to an economic security strategy payment would arise under the relevant FTB category and no other category in relation to the child.

 

If an economic security strategy payment has been paid to an individual in relation to an eligible child because an FTB or education allowance category of entitlement applied to the individual, then another individual can only be paid an economic security strategy payment in relation to the same child under the same category of entitlement.  These rules are set out in new subsections 92(2) and (4).  

 

For example, if an individual is entitled to an economic security strategy payment for an eligible child because the individual receives an instalment of FTB Part A for the child in relation to 14 October 2008, then another individual can only be entitled to an economic security strategy payment for that same child under one of the FTB categories (that is, where the individual is entitled to FTB Part A by instalment, for a past period or under a bereavement claim in relation to 14 October).

  

If an economic security strategy payment has been paid to an individual because the individual has been paid an instalment of youth allowance or an ABSTUDY living allowance in relation to an eligible child, then no other individual can be paid an economic security strategy payment to families for that eligible child.  The relevant rule is in new subsection 92(3).

 

Finally, new subsection 92(5) provides that, if an economic security strategy payment is paid to an individual under Division 1 in relation to an eligible child, then the individual cannot be paid a further economic security strategy payment in relation to that same child. 

 

When other individuals are entitled to the economic security strategy payment to families

 

New section 93 sets out the circumstances in which a young person or student is entitled to an economic security strategy payment to families (new subsection 93(1) refers).

 

Youth allowance category

 

An individual who has been paid an instalment of youth allowance in respect of a period that included 14 October 2008 is entitled to an economic security strategy payment to families provided the individual was both under 25 years of age and not independent on that date.  The relevant entitlement rule is in new subsection 93(2).

 

Since youth allowance is paid either to a student or their parent or payment nominee, and not apportioned between them, a student will not be entitled to an economic security strategy payment to families under section 93 if their parent or payment nominee is entitled to the payment under section 89 because the student’s youth allowance was paid directly to the parent or payment nominee. 

 

ABSTUDY category

 

An individual who has been paid the whole or part of an instalment of ABSTUDY that includes living allowance in respect of a period that included 14 October 2008 is entitled to an economic security strategy payment to families, provided the individual was a dependent student and under 25 years of age on that date.  The relevant entitlement rule is in new subsection 93(3).

 

Since ABSTUDY living allowance is not apportioned between a student and their parent or guardian, a student will not be entitled to an economic security strategy payment to families under section 93 if their parent or guardian is entitled to the payment under section 89 because the student’s ABSTUDY living allowance was paid directly to the parent or guardian. 

 

The reference in subsection 93(3) to payment of a ‘part’ of ABSTUDY (which includes an amount identified as living allowance) refers to the situation where part is paid to the student and part to a third party such as a boarding school or residential college.  In this situation, the student will be entitled to the full amount of the economic security strategy payment to families. 

 

Education allowance category

 

An individual who has been paid an education allowance under specified sections of the VCES or the MCRAETS in respect of a period that included 14 October 2008 is entitled to an economic security strategy payment to families, provided the individual was under 25 years of age on that date.  The relevant entitlement rules are in new subsections 93(4) and (5).

 

What is the amount of the payment?

 

New section 94 provides that the amount of the economic security strategy payment to the entitled individual under Division 2 is $1,000.

 

Amendments to the Family Assistance Administration Act

 

Payment

 

Part 3 of the Family Assistance Administration Act provides the rules for payment of the various family assistance payments available under the family assistance law.

 

Item 5 inserts a new Division 4B and section 65G into Part 3 of the Family Assistance Administration Act.  New section 65G outlines the payment arrangements for the new economic security strategy payment to families.  The economic security strategy payment to families will be paid as a single lump sum on a date that is determined by the Secretary to be the earliest date on which it is reasonably practicable to make the payment and in an appropriate manner. 

 

A note at the end of new section 65G indicates to the reader that a claim would not be required for the new payment.

 

It is expected that the economic security strategy payment to families will be paid to most entitled individuals in the fortnight beginning 8 December 2008, as a direct credit to the same bank account as the relevant qualifying payment.  For the small number of recipients who receive their FTB as a lump sum for a previous income year, the economic security strategy payment to families would be paid after their actual income is known for the 2008-09 income year.

 

Inalienability

 

Section 66 of the Family Assistance Administration Act lists the family assistance payments that are absolutely inalienable.  The new economic security strategy payment to families is included in the list as new paragraph 66(1)(h) by item 6

 

Debts

 

An amount paid by way of economic security strategy payment to families will only be a debt to the extent that a provision in the Family Assistance Administration Act expressly provides for it.  Item 7 makes an amendment to section 70 of the Family Assistance Administration Act to this effect.

 

Item 8 inserts new section 71J into the Family Assistance Administration Act.  This new provision sets out when an economic security strategy payment to families is a debt.  In broad terms, a debt would only arise where some or all of the payment was incorrectly paid because a relevant individual knowingly made a false or misleading statement or knowingly provided false information.

 

Where an individual is paid an economic security strategy payment to families because of entitlement to, or payment of, FTB Part A, youth allowance, ABSTUDY (which included living allowance) or an education allowance under the VCES or the MCRAETS and the determination relating to that entitlement or payment (the relevant determination) is later changed with the effect that the individual was not entitled to an economic security strategy payment to families, and a reason for the determination needing to be changed was that a relevant individual knowingly made a false or misleading statement or knowingly provided false information, then the economic security strategy payment paid would be a debt.  The relevant rules are in new subsection 71J(3).

 

Similar rules, set out in subsection 71J(4), would apply where an individual is paid in excess of the amount of their entitlement to the economic security strategy payment to families because of a subsequent change to the relevant determination, except that the amount of the debt would be the difference between the amount of economic security strategy payment to families paid and the amount that should have been paid.

 

The relevant determinations are listed in new subsection 71J(2).

 

Where entitlement to the economic security strategy payment to families arises because of entitlement to FTB, the false or misleading statement or false information must come from the recipient of the economic security strategy payment for there to be a debt.  Similarly, where a young person or student is entitled to an economic security strategy payment, it is the young person or student as the recipient who must have knowingly made a false or misleading statement or knowingly provided false information.  For the other categories of entitlement to the economic security strategy payment, the false or misleading statement or false information must come from the recipient of the economic security strategy payment, the young person or the student for there to be a debt.  These rules are in new paragraphs 71J(3)(b) and 71J(4)(b).

 

Section 74 of the Family Assistance Administration Act applies where an amount of family assistance is paid by cheque, a person who is not the payee obtains the cheque, the cheque is not endorsed by the payee to the person and the person obtains the benefit of the cheque.  In these circumstances, the amount of the cheque is a debt owed by the person.  This provision is amended by item 9 so that it also applies where an economic security strategy payment to families is paid by cheque. 

 

Section 82 of the Family Assistance Administration Act lists the methods by which a debt can be recovered.  Item 10 amends the definition of debt in subsection 82(3) so that it also refers to new section 71J (where payment of an economic security strategy payment to families is a debt). 

 

Item 11 inserts a reference to the economic security strategy payment to families at the end of the definition of family assistance payment in subsection 93A(6) of the Family Assistance Administration Act.   This would enable the economic security strategy payment to families paid to a financial institution to the credit of an account with that institution to be recovered from the institution in certain circumstances (for example, where the economic security strategy payment to families is paid into an incorrect account).

 



Review and appeals

 

Where the Secretary reviews certain decisions, there is a requirement for the Secretary to give notice of the review decision to the person or people whose entitlement or possible entitlement to family assistance or the 2004 one-off payment to families is affected by the review decision (subsection 106(3) of the Family Assistance Administration Act refers). 

 

Item 12 amends subsection 106(3) so that the same rule also applies in relation to review decisions relating to the economic security strategy payment to families.

 

As a general rule, an application for review of a decision must be made no later than 52 weeks after the applicant has been notified of the decision.  There are exceptions to this general rule (for example, where the Commissioner of Taxation reviews and changes a person’s taxable income).  Items 13 and 14 amend subsection 109D(4) and paragraph 109D(5)(a) of the Family Assistance Administration Act respectively to ensure that the exceptions should apply also to applications for review of decisions relating to the payment of the economic security strategy payment to families.

 

Nominees

 

Item 15 inserts a reference to the economic security strategy payment to families at the end of the definition of relevant benefit in section 219TA of the Family Assistance Administration Act.  This would enable the Secretary to appoint a payment nominee who would be paid the economic security strategy payment to families on behalf of the entitled individual.

 



Schedule 4 - Administrative scheme for economic security strategy payments

 

 

Summary

 

This Schedule contains provisions to enable administrative schemes to be established.  In broad terms, the purpose of each administrative scheme will be to provide payments in circumstances where the statutory regime of economic security strategy payments provided for in Schedules 1, 2, and 3 does not necessarily produce an appropriate result in relation to circumstances that occur in the 2008-09 income year.  The relevant Minister is able to determine the details of the scheme by legislative instrument.

 

Background

 

This Schedule enables an administrative scheme to be established alongside the statutory regime providing for economic security strategy payments.

 

The amendments made by this Schedule commence on Royal Assent.

 

Explanation of the changes

 

Item 1 provides for the establishment of an administrative scheme by a relevant Minister administering the Social Security Act or the Veterans’ Entitlements Act or the Family Assistance Act, under which economic security strategy payments can be made to people who would not otherwise qualify for such a payment in specified circumstances.  The purpose of the scheme is to provide payments in circumstances where the statutory regime of economic security strategy payments does not necessarily produce an appropriate result in relation to circumstances that occur in the 2008-09 income year.

 

The details of the administrative scheme (including such matters as qualification, amount of the payment and administrative matters) would be set out in a legislative instrument.

 

Payments under the administrative scheme would be made out of the Consolidated Revenue Fund (in accordance with subitem 1(4) ).

 

The administrative scheme provisions in this bill are substantially the same as those used for ‘one-off payments’ in previous years, including the legislative instrument basis, and the appropriation arrangements, for the scheme.

 

It is unlikely that the provisions, enabling a scheme to be made, will ever be used.  This is consistent with the fact that the primary economic security strategy payments provisions are intended to cover all the known situations in which payments should be made.  A scheme would be made only to cover unusual and unforeseen situations that come within the spirit of the economic security strategy payment measures but are not strictly covered by the primary legislation.  It would be impractical to include such situations in primary legislation.

 

Similarly, and given the very slight use made of similar scheme-enabling provisions in the past, and the fact that any future use is unlikely and would be small in scale, it is not considered necessary to provide for any funding limits and formal review of any decision to make a scheme.  The special (standing) appropriation mechanism is appropriate to fund any such payments, consistent with the appropriation mechanism for economic security strategy payments under the primary legislation and for payments generally under the social security law, the family assistance law and the Veterans’ Entitlements Act.

 

The tabling and disallowance process for any schemes made give sufficient opportunity to address any issues arising.



Schedule 5 - Other amendments

 

 

Summary

 

This Schedule will amend certain Acts to provide further consequential amendments relating to the economic security strategy payments provided for in this bill.  Notably, the amendments ensure that the payments will not count as income for social security, family assistance and veterans’ entitlements purposes, and will be tax-free.  The amendments will also ensure that, where an individual is subject to income management, any economic security strategy payment they receive will be placed in their income management account.

 

Background

 

In broad terms, this Schedule provides for certain amendments to various pieces of legislation to ensure that the economic security strategy payments are not to be treated as income for tax and welfare-related purposes and to ensure that economic security strategy payments will be income managed for those people who are currently subject to income management.

 

The amendments made by this Schedule commence on Royal Assent.

 

Explanation of the changes

 

Amendments to the 1936 Tax Act

 

A taxpayer’s dependants’ separate net income (SNI) is used to determine the taxpayer’s eligibility to certain dependant offsets.  SNI is income and other specified amounts earned, derived or received, less certain expenses incurred in earning that income.  Payments such as carer allowance, child care benefit and family tax benefit are not included as part of SNI.  It is not intended that the economic security strategy payments (or any payment under an administrative scheme determined under Schedule 4 to the bill) form part of SNI. 

 

Item 1 amends paragraph (ac) of the definition of separate net income in subsection 159J(6) of the 1936 Tax Act to exclude economic security strategy payments to families.

 

Item 2 inserts paragraphs (adag) and (adah) into subsection 159J(6) to amend the definition of separate net income to exempt economic security strategy payments made under the Social Security Act, the Veterans’ Entitlements Act or a payment made under an administrative scheme set out in Schedule 4 to this bill.



Amendments to the 1997 Tax Act

 

Items 3 to 5 make consequential amendments to the table in section 11-15 of the 1997 Tax Act, inserting references to the economic security strategy payment to families and the economic security strategy payments under the Social Security Act, the Veterans’ Entitlements Act and under an administrative scheme as set out in Schedule 4 to this bill.

 

The effect of items 6 and 7 is to make the economic security strategy payment (as well as payments made under the administrative scheme determined under Schedule 4 to the bill) exempt from income tax under subsection 52-10.

 

Item 8 amends subsection 52-65(1) so as to note that the income tax treatment of an economic security strategy payment under the Veterans’ Entitlements Act is not dealt with in the table at the end of section 52-65.

 

The effect of item 9 is to make an economic security strategy payment under the Veterans’ Entitlement Act exempt from income tax.

 

Item 10 inserts a reference to economic security strategy payment in the table in section 52-75, which lists payments that are wholly or partly exempt from income tax.

 

Item 11 amends section 52-150(1) to specify that an economic security strategy payment to families is exempt from income tax.

 

Item 12 inserts a new subdivision 52-H and new section 52-160, which provides that an economic security strategy payment made under an administrative scheme, as set out in Schedule 4 to this bill, is exempt from income tax.

 

Amendments to the Social Security Act

 

The economic security strategy payment to families will not be counted as income for social security purposes.  Subsection 8(8) of the Social Security Act lists payments that are not income for social security purposes.  Item 13 adds a reference to the economic security strategy payment to families into paragraph 8(8)(jaa).

 

Item 14 inserts new paragraphs (yh) and (yi) to provide that an economic security strategy payment made under the Veterans’ Entitlements Act or under an administrative scheme determined under Schedule 4 to the bill is not to be treated as income for the purposes of the Social Security Act.

 



Amendments to the Social Security Administration Act

 

The amendments made to the Social Security Administration Act by items 16 and 17 of this Schedule provide for deductions to be made from economic security strategy payments, in certain circumstances, for the purposes of the income management regime established under Part 3B of the Social Security Administration Act.

 

Item 16 inserts a new defined term, economic security strategy payment , into section 123TC of the Social Security Administration Act.  The definition refers to each of the payments provided for by the amendments contained in Schedules 1, 2, 3 and 4 to this bill.

 

Item 17 inserts new Subdivision DB into Division 5 of Part 3B of the Social Security Administration Act.  Subdivision DB, and new section 123XPC, deal with the deduction of amounts from a person’s economic security strategy payment if the person is subject to the income management regime.

 

New subsections 123XPC(3) and (4) provide that, if section 123XPC applies, the Secretary must deduct 100 per cent of the net amount of an economic security strategy payment and credit the person’s income management account and the Income Management Special Account accordingly.  (The terms income management account , net amount and Special Account are defined in section 123TC.)  The treatment of economic security strategy payments under new subsections 123XPC(3) and (4) is consistent with the existing treatment of other lump sum payments under Part 3B of the Social Security Administration Act.

 

New subsection 123XPC(1) provides that section 123XPC applies if a person is subject to the income management regime and an economic security strategy payment is payable to the person.  New subsection 123XPC(2) further provides that the section does not apply in relation to an economic security strategy payment made under Part VIIG of the Veterans’ Entitlements Act if the person is subject to the income management regime because of section 123UB or 123UF of the Social Security Administration Act.

 

The phrase subject to the income management regime is defined in section 123TC of the Social Security Administration Act.  A person can be subject to the income management regime because of the operation of any of the following sections contained in Part 3B of the Social Security Administration Act:  section 123UB (the Northern Territory scheme of income management); section 123UC (the child protection scheme of income management); section 123UD or 123UE (school enrolment or attendance requirements); section 123UF (the Cape York Welfare Reform trials); section 123UFA (voluntary income management agreements).

 

The effect of new subsection 123XPC(2) is that, if a person is subject to the income management regime because of section 123UB or 123UF of the Social Security Administration Act, the new deduction rules in section 123XPC do not apply to an economic security strategy payment made to the person under Part VIIG of the Veterans’ Entitlements Act.  If a person who is subject to the income management regime because of section 123UB or 123UF of the Social Security Administration Act receives an economic security strategy payment under Part VIIG of the Veterans’ Entitlements Act and an economic security strategy payment under another provision established by this bill, the economic security strategy payment that is paid under the other provision (that is, not paid under the Veterans’ Entitlements Act) will, however, be subject to the new deduction rules in section 123XPC.

 

The treatment of economic security strategy payments made under Part VIIG of the Veterans’ Entitlements Act is consistent with the existing treatment, under Part 3B of the Social Security Administration Act, of other payments made under the Veterans’ Entitlements Act.

 

Amendments to the Veterans’ Entitlements Act

 

Item 17 amends paragraph 5H(8)(paa) to provide that the economic security strategy payment to families is not to be treated as income for the purposes of the Veterans’ Entitlements Act.

 

Item 18 inserts a new paragraph (zzag) into section 5H(8) to provide that an economic security strategy payment made under the Veterans’ Entitlements Act is not to be treated as income for the purposes of the Veterans’ Entitlements Act.

 

Item 19 inserts a new paragraph (zzf) into section 5H(8) to provide that an economic security strategy payment made under an administrative scheme determined under Schedule 4 of the bill is not to be treated as income for the purposes of the Veterans’ Entitlements Act.