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Family Assistance and Other Legislation Amendment Bill 2013

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2010-2011-2012-2013

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

SENATE

 

 

 

 

 

 

FAMILY ASSISTANCE AND OTHER LEGISLATION AMENDMENT BILL 2013

 

 

 

 

REVISED EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

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

 

THIS EXPLANATORY MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE OF REPRESENTATIVES TO THE BILL AS INTRODUCED

 



FAMILY ASSISTANCE AND OTHER LEGISLATION AMENDMENT BILL 2013

 

 

OUTLINE

 

Reduction of baby bonus from 1 July 2013

 

This Bill implements the Government’s changes to the baby bonus announced in the 2012-13 Mid-Year Economic and Fiscal Outlook.  These changes will maintain support for new parents with the upfront costs of having a baby, while ensuring the family payments system is sustainable into the future.

 

The amount of baby bonus for second and subsequent children who come into a family from 1 July 2013 will be reduced to $3,000.  The change will generally apply regardless of whether the child is born into the family, adopted by the family, or entrusted to the family’s care within 26 weeks of birth (for example, under a foster care arrangement).  Baby bonus will continue to be paid at the rate of $5,000 for a family’s first child, and for each child who comes into the family in a multiple birth, adoption or entrustment to care.

 

This change recognises that families generally do not face the same upfront costs for a second or later child as they do for their first child, with the more expensive items usually already purchased.

 

The saving from this measure will support the future sustainability of the family payments system, which continues to deliver substantial assistance for low and middle-income families - including through paid parental leave, dad and partner pay, the schoolkids bonus and family tax benefit and child care payments.

 

Family tax benefit and double orphan pension

 

This Bill also makes amendments to ensure families can continue to receive family tax benefit until the end of the calendar year that the child finishes secondary study or its equivalent.  Additionally, the qualification period for double orphan pension is being extended so that it aligns with eligibility for family tax benefit.  This means, for example, that a carer can continue to receive double orphan pension for a young person in their care until the end of the calendar year in which the young person turns 19 if they are still in secondary study.

 

Replacement of baby bonus from 1 March 2014 - new family payment arrangements for newborns

In a measure from the 2013 Budget package, A More Sustainable Family Payments System , the baby bonus will no longer be available from 1 March 2014.  In its place, families who are eligible for family tax benefit Part A, and who are not accessing parental leave pay, will receive an additional loading on their payments to help with the upfront costs of having a new baby.

The extra family tax benefit Part A payment will deliver $2,000 for a family’s first child (and for each child in a multiple birth) and $1,000 for second and subsequent children.  It will be paid as an initial instalment of $500, with the remainder rolled into normal fortnightly payments over a three-month period.

These new arrangements more closely reflect the essential upfront costs of having a baby and better target assistance now that Australia has a national Paid Parental Leave scheme.

This measure also makes changes to the work test under the Paid Parental Leave scheme, making it easier for working mothers with children born close together to qualify for parental leave pay for subsequent children.

Reducing the claim period for family assistance lump sum claims

In a second measure from the same Budget package, f amilies choosing to wait until the end of the financial year to claim their family tax benefit or child care benefit entitlement will now have a grace period of one year instead of two years in which to claim.  This change will start for the 2012-13 entitlement year, meaning families will have 12 months from the end of that year (until 30 June 2014) in which to claim their entitlement.

Families will also have one year in which to lodge their tax returns if they are to receive the end-of-year family tax benefit supplements, and to meet immunisation and health check requirements linked to the end-of-year family tax benefit Part A supplement.

Families will be able to access extensions in special circumstances, similar to arrangements for tax returns.  The changes bring family payment claim periods more into line with time limits for lodging tax returns before penalties may be imposed, and with the policy intent of the family assistance program, to assist parents with day-to-day costs of raising children.

Other amendments

 

This Bill also makes some clarifying and technical amendments to portfolio legislation, consistent with intended policy. 

 



 

Financial impact statement

 

MEASURE

FINANCIAL IMPACT

Reduction of baby bonus from 1 July 2013

Saving of $687.5 million over five years.

Replacement of baby bonus from 1 March 2014 - new family payment arrangements for newborns

Saving of $1.1 billion over five years.

Reducing the claim period for family assistance lump sum claims

Saving of $562 million over five years.

Remaining amendments

Negligible financial impact.

 

 

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

 

The statements of compatibility with human rights appear at the end of this explanatory memorandum.

 



FAMILY ASSISTANCE AND OTHER LEGISLATION AMENDMENT BILL 2013

 

 

NOTES ON CLAUSES

 

Abbreviations used in this explanatory memorandum

 

  • 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

 

  • Paid Parental Leave Act means the Paid Parental Leave Act 2010

 

  • Social Security Act means the Social Security Act 1991

 

  • Social Security Administration Act means the Social Security (Administration) Act 1999

 

 

Clause 1 sets out how the new Act is to be cited, that is, as the Family Assistance and Other Legislation Amendment Act 2013.

 

Clause 2 provides a table that sets out the commencement dates of the various sections in, and Schedules to, the new Act.

 

Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in that Schedule.

 

 

 

 



Schedule 1 - Reduction of baby bonus from 1 July 2013

 

 

Summary

 

This Schedule implements the Government’s changes to the baby bonus announced in the 2012-13 Mid-Year Economic and Fiscal Outlook.  These changes will maintain support for new parents with the upfront costs of having a baby, while ensuring the family payments system is sustainable into the future.

 

The amount of baby bonus for second and subsequent children who come into a family from 1 July 2013 will be reduced to $3,000.  The change will generally apply regardless of whether the child is born into the family, adopted by the family, or entrusted to the family’s care within 26 weeks of birth (for example, under a foster care arrangement).  Baby bonus will continue to be paid at the rate of $5,000 for a family’s first child, and for each child who comes into the family in a multiple birth, adoption or entrustment to care.

 

This change recognises that families generally do not face the same upfront costs for a second or later child as they do for their first child, with the more expensive items usually already purchased.

 

Background

 

Baby bonus is paid to eligible individuals following the birth or adoption of a child to assist with the upfront costs of having a child.  Currently, baby bonus is a payment of $5,000.

 

The amendments made by this Schedule commence on 1 July 2013, apart from items 4 to 6 and item 9, which commence the day after Royal Assent.

 

Explanation of the changes

 

Amendments to the Family Assistance Act

 

Item 1 repeals and inserts a new section 66, which outlines the amount of baby bonus that an individual is entitled to receive in respect of a child. 

 

General rule

 

Subsection 66(1) provides for the general rule in relation to the amount of baby bonus an individual is entitled to receive in respect of a child.  If the individual satisfies paragraph 66(1)(a), (b), (c) or (d), then the amount of baby bonus is $5,000.

 

Otherwise, the amount of baby bonus is $3,000.

 

New paragraph 66(1)(a) applies to an individual who is a parent of the child and is eligible for baby bonus under subsection 36(2).  If the child is the first child born alive to the mother who gave birth to the child, the amount of baby bonus is $5,000.

 

Example

A mother claims baby bonus for both the first and second children that she gives birth to (the children were not born as part of a multiple birth).  A payment of $5,000 of baby bonus is made for the first child, and a payment of $3,000 for the second child. 

 

New paragraph 66(1)(b) applies to an individual who has a child entrusted to the care of the individual or the individual’s partner and is eligible for baby bonus under subsection 36(3).  If the child is the first child who becomes entrusted to the care of the individual, which occurred at any time within the period of 26 weeks starting on the day of the child’s birth, the amount of baby bonus is $5,000.  Alternatively, if the individual is a member of a couple at any time within the period of 26 weeks starting on the day of the child’s birth and the child becomes entrusted to the care of the individual’s partner at that time, the amount of baby bonus is $5,000.

 

Examples

A carer is eligible for baby bonus for a child entrusted to her or his care under subsection 36(3) (for example, through a foster care arrangement).  The birth mother had care of the child until the child was 10 weeks old, and then the carer took on care of the child, intending to be the primary carer of the child for at least 26 weeks.  Both wish to claim baby bonus.  In this situation, a pro-rated payment of $5,000 of baby bonus is apportioned between the birth mother for her first born child and the carer as this is the first child entrusted to her or his care.

 

A child is born of a surrogacy arrangement between a surrogate mother and a commissioning couple.  The commissioning couple have not taken on care of any other child of a surrogacy arrangement previously.  The child enters their care four weeks after birth, and the individual who is the primary carer of the child receives an amount of $5,000 for baby bonus.

 

New paragraph 66(1)(c) applies to an individual who has a stillborn child and is eligible for baby bonus under subsection 36(4).  If the child is the mother’s first stillborn child and the mother has not given birth to any other children (including stillborn children), the amount of baby bonus is $5,000.

 

            Examples

A birth mother has a stillborn child and she receives an amount of $5,000 for baby bonus. 

 

A birth mother has a first live-born birth, followed by a stillbirth.  In this situation, the mother will be entitled to receive baby bonus amounts of $5,000 and $3,000 respectively. 

 

A birth mother who firstly has a stillborn child, followed by a first live-born child, will receive $5,000 for the stillborn child and then $5,000 again to assist with the upfront costs of raising her child.  

 

New paragraph 66(1)(d) applies to an individual who has an adopted child and is eligible for baby bonus under subsection 36(5).  If the child is the first child who becomes entrusted to the care of the individual or the individual’s partner as part of the process of adoption by an authorised party, and the child is aged under 16 at the time, the amount of baby bonus is $5,000.

 

Examples

A couple adopts a child and has not adopted before.  The adopting father claims baby bonus and receives $5,000 for the child.

 

A couple adopts a second child.  The adopting mother claims baby bonus, and receives $3,000 as the couple had adopted a child previously.

 

Multiple children cases

 

New subsection 66(2) provides for an exception to the general rule for multiple children - for example, twins.  Subsection 66(2) provides that the amount of baby bonus for an individual in respect of each child born during the same multiple birth is $5,000.  This amount also applies to any stillborn child born in a multiple birth. 

 

New subsection 66(3) provides that, if an individual is eligible for baby bonus under subsection 36(3) of the Family Assistance Act in respect of two or more children who become entrusted to the care of the individual or the individual’s partner within 26 weeks of birth, as part of the same entrustment to care process, the amount of baby bonus in respect of each child is $5,000.  For example, if twin babies become entrusted to the care of a foster mother, the foster mother would be entitled to receive an amount of $5,000 in baby bonus for each of the twin children.

 

New subsection 66(4) provides that, if an individual is eligible for baby bonus under subsection 36(5) as part of the process for adoption by an authorised party, in respect of two or more children who become entrusted to the care of the individual as part of the same adoption process, the amount of baby bonus in respect of each child is $5,000.  For example, if a couple adopted two siblings as part of the same adoption process and the children are both under 16 years of age, either member of the couple would be entitled to receive an amount of $5,000 in baby bonus for each of the children.

 

Shared baby bonus

 

New subsection 66(5) provides clarification that, if the Secretary has determined (under paragraph 37(3)(b)) the percentage that is to be an individual’s percentage of baby bonus in respect of a child, the amount of baby bonus for the individual in respect of that child is that percentage of the amount worked out under subsections 66(1) to (3).

 

Item 2 omits ‘subsection 66(1)’ and substitutes ‘paragraphs 66(1)(a), (b), (c), (d) and (e) and subsections 66(2), (3) and (4)’ in table item 17AD of clause 2 of Schedule 4.  This item is consequential to item 1, and makes reference to the provisions in the Family Assistance Act that state the monetary amount of baby bonus that is to be indexed and adjusted under Schedule 4.

 

Items 3, 3A and 3B amend subclause 3(9) of Schedule 4 and its heading, and repeal the existing note to the subclause.  These changes are to correct existing references to indexation of the baby bonus, in light of the replacement of the baby bonus with new family payment arrangements for newborns from 1 March 2014 - Schedule 2A to this Bill refers.

 

Amendments to the Family Assistance Administration Act

 

Claims for baby bonus - time limits

 

Item 4 omits ‘if it is made later than 52 weeks after’, and substitutes ‘unless it is made before the end of the period of 52 weeks beginning on’ in subsection 39(2).  This amendment to wording clarifies the policy intent that a baby bonus claim must be made within the period of 52 weeks beginning on the day of the birth of the child or the day the child becomes entrusted to the care of the claimant as part of the process for adoption.

 

Item 5 omits ‘the birth’, and substitutes ‘the day of the birth’ in paragraph 39(2)(a).  This amendment clarifies that the claim period for baby bonus in relation to eligibility under any of subsections 36(2) to (4) of the Family Assistance Act begins on the day of the birth of the child.

 

Item 6 omits ‘the time’, and substitutes ‘the day’ in paragraph 39(2)(b).  This amendment clarifies that the claim period for baby bonus in relation to eligibility under subsection 36(5) of the Family Assistance Act begins on the day the child becomes entrusted to the care of the claimant as part of the process for adoption.

 

‘Upfront part’ of baby bonus

 

Item 7 repeals paragraphs 47(2A)(b) and (c) and substitutes new paragraphs 47(2A)(b) to (f), which make amendments to the ‘upfront part’ of the baby bonus so that the baby bonus amount for second and subsequent children will remain at $3,000 until 1 July 2015, at which time it will be indexed in line with Consumer Price Index increases. 

 

New paragraph 47(2A)(b) provides that, if the claimant becomes eligible for baby bonus between 1 September 2012 and 30 June 2013, the upfront part of baby bonus is $846.20.

 

New paragraph 47(2A)(c) provides that, if the claimant becomes eligible for baby bonus between 1 July 2013 and 30 June 2015 and the amount of baby bonus is the amount applicable under paragraph 66(1)(a), (b), (c) or (d), or subsection 66(2), (3) or (4), of the Family Assistance Act, the upfront part of baby bonus is $846.20.

 

New paragraph 47(2A)(d) provides that, if the claimant becomes eligible for baby bonus between 1 July 2013 and 30 June 2015 and the amount of baby bonus is the amount applicable under paragraph 66(1)(e) of the Family Assistance Act, the upfront part of baby bonus is $692.40.

 

New paragraph 47(2A)(e) provides that, if the claimant becomes eligible for baby bonus on or after 1 July 2015 and the amount of baby bonus is the amount applicable under paragraph 66(1)(a), (b), (c) or (d), or subsection 66(2), (3) or (4), of the Family Assistance Act, the amount of the upfront part of baby bonus is worked out using the formula in this paragraph - that is, 16.92 per cent multiplied by the amount of baby bonus the claimant is entitled to.

 

New paragraph 47(2A)(f) provides that, if the claimant becomes eligible for baby bonus on or after 1 July 2015 and the amount of baby bonus is the amount applicable under paragraph 66(1)(e) of the Family Assistance Act, the amount of the upfront part of baby bonus is worked out using the formula in this paragraph - that is, 23.08 per cent multiplied by the amount of baby bonus the claimant is entitled to. 

 

Item 8 is an application provision.  It provides that the amendments made by item 1 apply in relation to individuals who become eligible for baby bonus on or after 1 July 2013.

 

Item 9 is an application provision.  It provides that the amendments made by items 4 to 6 apply in relation to claims for payment of baby bonus that are made on or after the commencement of those items - that is, the day this Act receives the Royal Assent.

 

Amendments to the Family Assistance and Other Legislation Amendment Act 2012 

 

Item 11 repeals item 6 of Schedule 2 to the Family Assistance and Other Legislation Amendment Act 2012 , which is a transitional provision applying to the indexed amount for baby bonus on 1 July 2015.   That transitional provision is no longer necessary, in light of the replacement of the baby bonus with new family payment arrangements for newborns from 1 March 2014 - Schedule 2A to this Bill refers.

 

 



Schedule 2 - Family tax benefit and double orphan pension

 

 

Summary

 

This Schedule makes amendments to ensure families can continue to receive family tax benefit until the end of the calendar year that the child finishes secondary study or its equivalent.  Additionally, the qualification period for double orphan pension is being extended so that it aligns with eligibility for family tax benefit.  This means, for example, that a carer can continue to receive double orphan pension for a young person in their care until the end of the calendar year in which the young person turns 19 if they are still in secondary study.

 

Background

 

Currently, under subsection 22B(3) of the Family Assistance Act, a child continues to be a senior secondary school child until 31 December, if the day the child completes the final year of secondary school or equivalent level of education is in December of that calendar year.  If the day of completion is before December, the child continues to be a senior secondary school child for a period of 28 days after completion.  This allows for continued eligibility for family tax benefit until the end of the calendar year for a child who completes secondary school in December, or for a period of 28 days if the child completes school before December. 

 

This Schedule amends the Family Assistance Act so that eligibility for family tax benefit will continue until the end of the calendar year for a child who completes secondary school in either November or December of that year.  The amendments confirm access to family tax benefit until the end of the calendar year for students who complete secondary study in the usual way - for example, by sitting final examinations.  The amendments also ensure continued family tax benefit eligibility for a child for a period of 28 days after completion if the child completes secondary school before November. 

 

This Schedule also amends the definition of young person in subsection 5(1) of the Social Security Act to extend the double orphan pension qualification period for students completing study by aligning it with the family tax benefit eligibility period.

 

The amendments in items 1 to 5 of this Schedule commence on 1 January 2012 and those in items 6 and 7 commence on 1 January 2013.

 

Explanation of the changes

 

Amendments to the Family Assistance Act

 

Item 1 inserts ‘November or’ after ‘is in’ in paragraph 22B(3)(a), so that extended eligibility for family tax benefit for a child until 31 December would apply for those completing the final year of secondary school or equivalent in November, as well as for those completing in December, of a calendar year.

 

Item 2 omits ‘December’ and substitutes ‘November’ in paragraph 22B(3)(b).  This amendment allows a child who completes the final year of secondary school or equivalent before November to continue to be a senior secondary school child for a period of 28 days after completion.

 

Item 3 is an application provision for items 1 and 2.  The amendments made by items 1 and 2 apply in relation to working out whether an individual is a senior secondary school child for days on or after 1 January 2012.  The retrospective commencement of this item is beneficial, and aligns with the commencement of the policy under the Supporting Families with Teenagers 2010 election commitment, which was implemented on 1 January 2012.

 

Amendments to the Social Security Act

 

Item 4 repeals the definition of young person in subsection 5(1) and substitutes a new definition.   Item 5 provides that this new definition applies for double orphan pension qualification for days on or after 1 January 2012, in line with the changes made by item 3.

 

Under the new definition, a young person (except in Part 2.20, relating to double orphan pension, of the Social Security Act) has the meaning given by subsection 5(1B) (that is, the person is under 16 years of age or is a student child) - so, for all purposes other than those of Part 2.20, the definition has not changed.  However, in Part 2.20 (relating to double orphan pension), a young person means a person who:

 

·          is under 16 years of age; or

 

·          has reached 16, but is under 22, years of age and is studying full-time; or

 

·          has reached 16 years of age and is a senior secondary school child under the Family Assistance Act.

 

The changes to the definition allow a young person to qualify for double orphan pension for a period after completing study (in line with the amendments made by items 1 and 2). 

 

Item 6 repeals paragraph (b) of the definition of young person in subsection 5(1) (inserted by item 4 above) and substitutes a new paragraph (b).  Item 7 provides that this new definition applies for double orphan pension qualification for days on or after 1 January 2013.  New paragraph 5(1)(b) provides that, in Part 2.20 of the Social Security Act, a young person means a person who is under 20 years of age.  This allows child age qualification for double orphan pension to be fully aligned with child age eligibility for family tax benefit.

 



Schedule 2A - Replacement of b aby bonus from 1 March 2014

Summary

From 1 March 2014, the baby bonus will no longer be available.  In its place, families who are eligible for family tax benefit Part A, and who are not accessing parental leave pay, will receive an additional loading on their payments to help with the upfront costs of having a new baby.

The extra family tax benefit Part A payment will deliver $2,000 for a family’s first child (and for each child in a multiple birth) and $1,000 for second and subsequent children.  It will be paid as an initial instalment of $500, with the remainder rolled into normal fortnightly payments over a three-month period.

These new arrangements more closely reflect the essential upfront costs of having a baby and better target assistance now that Australia has a national Paid Parental Leave scheme.

This measure also makes changes to the work test under the Paid Parental Leave scheme, making it easier for working mothers with children born close together to qualify for parental leave pay for subsequent children.

Background

Replacement of baby bonus

Under current legislative arrangements, baby bonus is available to families following the birth (including stillbirth), entrustment to care or adoption placement of a child.

The current baby bonus rate is $5,000 per eligible child, paid in 13 fortnightly instalments, and is limited to families whose estimated combined adjusted taxable income is $75,000 or less in the six months following the birth of the child or the child’s entry into the family’s primary care.  From 1 July 2013, amendments in Schedule 1 to this Bill will reduce the rate for second and subsequent children to $3,000.

From 1 March 2014, baby bonus will be abolished and replaced with an increase to family tax benefit and a separate stillborn baby payment. 

The change to family tax benefit will involve an increase to the family tax benefit Part A rate for a 13-week period, with a newborn supplement component included in both the maximum rate (clause 3 of Schedule 1 to the Family Assistance Act), and the base rate (clause 25 of Schedule 1 to that Act).  This will apply to parents, to families entrusted with the care of a child (for example, foster carers), and to adopting parents. 

There will also be a ‘newborn upfront amount’ of $500, if eligibility for the newborn supplement is established, so that part of the new assistance is delivered as an upfront lump sum.

Additionally, there will be a separate stillborn baby payment.

Counting previous PPL period etc. for work test

The Paid Parental Leave scheme commenced on 1 January 2011, and provides eligible primary carers (usually the mother) of children born or adopted from 1 January 2011 with up to 18 weeks’ parental leave pay at the rate of the national minimum wage.  The Paid Parental Leave scheme was extended to introduce a new payment, called dad and partner pay, for eligible fathers and partners, including adopting parents and parents in same-sex couples, who are caring for a child born or adopted from 1 January 2013. 

Under the current rules, to be eligible for parental leave pay or dad and partner pay, a person needs to satisfy a number of different criteria, including the work test.

In the case of parental leave pay, the work test applies by reference to work undertaken in the work test period, which is the 392 days prior to the day the claimant becomes the primary carer of the child (in most cases, upon birth of the child for the birth mother).  The test operates similarly for dad and partner pay, where it applies by reference to work performed prior to the DAPP period.  The work test requires a person to have performed at least 330 hours of qualifying work during a qualifying period of 295 consecutive days in the 392 days, with no more than a 56-day gap between two working days.  An exception to the work test applies where a person would have met the work test but for a premature birth or pregnancy-related complication or illness.

In some cases, where there is short birth spacing between children, or children enter a family close together, it may be difficult for a person to satisfy the work test for a subsequent child.  For example, a primary claimant may have claimed and received parental leave pay for a previous child, and will have a PPL period of up to 18 weeks during which they cannot engage in paid work under eligibility criteria.  A previous PPL period that occurs in the work test period for a new claim cannot currently contribute to the work test for a new claim for a second or subsequent child.

These measures address this issue by allowing a person to count a day in their previous PPL period and/or DAPP period towards satisfying the work test for a new claim.

These amendments apply to PPL periods and DAPP periods taken for a previous child.  Sections 36B and 115CF of the Paid Parental Leave Act already allow a person to satisfy the work test if they are already eligible for parental leave pay or dad and partner pay for that same child.

The amendments made by Schedule 2A generally commence on 1 March 2014.

Explanation of the changes

Part 1 - Newborn supplement for Part A rate of family tax benefit

Amendments to the Family Assistance Act

Newborn upfront payment

Item 2 inserts a new section 58AA into the Family Assistance Act.  This new provision sets out the circumstances in which an individual is entitled to a newborn upfront payment of family tax benefit in respect of an FTB child and the circumstances in which the payment cannot be paid. 

New subsection 58AA(1) provides that an individual is entitled to be paid, as family tax benefit, an amount of $500 in respect of an FTB child if an amount of newborn supplement in respect of that child is added in working out their rate of family tax benefit Part A. 

A note at the end of this provision refers to the reader to new section 24A, which provides that this $500 amount - the ‘newborn upfront payment’ - is to be paid as a single lump sum.

However, two members of the same couple cannot each receive the newborn upfront payment in respect of the same FTB child (new subsection 58AA(2) refers). 

New subsection 58AA(3) enables the Minister to prescribe, by legislative instrument, other circumstances in which the newborn upfront payment cannot be paid.  The instrument would be made under new subclause 35A(12) of Schedule 1 to the Family Assistance Act (as inserted by item 6 ).

New subsection 58AA(4) makes it clear that an individual cannot receive more than one newborn upfront payment of family tax benefit in respect of an FTB child.

Item 1 makes a consequential change by including the new $500 payment in the definition of family tax benefit .

Newborn supplement

The method statement in clause 3 of Schedule 1 to the Family Assistance Act sets out the method for calculating an individual’s maximum Part A rate.  Item 3 ensures that the individual’s newborn supplement is included as a component of their maximum rate. 

Item 4 includes the newborn supplement as another relevant amount in the method statement in clause 24N, which is then used for the purposes of working out an individual’s maintenance income ceiling for income received by the individual or their partner in relation to child support.

The method statement in clause 25 of Schedule 1 to the Family Assistance Act sets out the method for calculating an individual’s Part A base rate.  Item 5 ensures that the individual’s newborn supplement is included as a component in the calculation of their base rate. 

Item 6 inserts a new Division 1A into Part 5 of Schedule 5.  This new Division sets out the circumstances in which an amount of newborn supplement is to be added in working out an individual’s Part A rate (new clause 35A) and how to calculate an individual’s annual amount of newborn supplement (new clause 35B).

New clause 35A deals with eligibility for the newborn supplement.

New subclause 35A(1) provides that an amount of newborn supplement is to be added for a day in working out an individual’s Part A rate, if the individual is eligible for the newborn supplement on that day.  The maximum period of eligibility would be 13 weeks.

There are three broad eligibility categories - parent, child entrusted to care and adoption. 

Parent of child

New subclause 35A(2) sets out the conditions that need to be satisfied for a parent to be eligible for the newborn supplement.

An individual would be eligible for the newborn supplement for a day in respect of their FTB child if, on that day, the individual or their partner is a parent of the child, the child is aged less than one and the individual’s Part A rate (including the newborn supplement but disregarding specified deductions) would be greater than nil.  The day would also need to occur within a period of 13 weeks after these conditions are first met and before the child’s first birthday. 

Generally an individual would become eligible for the newborn supplement in the 13-week period following the child’s birth.  However, an individual who is ineligible for the newborn supplement in the income year in which the child is born (because their Part A rate is nil due to income) may become eligible for the newborn supplement in the next income year (if their Part A rate then exceeds nil because their income is lower).  Eligibility would cease upon the child turning one, even where the 13-week period has not yet ended.

Finally, if the individual is responsible for registering the child’s birth under the law of a State or Territory, the Secretary must be notified, or become aware, within a certain time limit, that the birth registration requirement has been met.

The birth registration requirement, as set out in new subclause 35A(3), is that the birth of the child has been registered in accordance with the relevant law or that the individual or their partner has applied to register the birth. 

The time limit for registration of the birth would generally be the end of the first income year after the income year that includes the last day on which the newborn supplement could be paid for the child.  For example, if the last day the newborn supplement could be paid for the child was 10 July 2014, the time limit for a parent to advise of birth registration and still be eligible for the newborn supplement would generally be 30 June 2016.  This time limit coincides with the time limit for a past period claim.  However, if the Secretary grants the individual a special circumstances extension for lodging an family tax benefit claim in relation to the child and the relevant income year, the Secretary would also be able to extend the time limit for meeting the birth registration requirement, but to no later than the end of the second income year following the income year in which the ‘last day’ occurs (new subclause 35A(4) refers).

Child entrusted to care

New subclause 35A(5) sets out the conditions that need to be satisfied for an individual to be eligible for the newborn supplement under the child entrusted to care category of eligibility.

An individual would be eligible for the newborn supplement for a day in respect of their FTB child if, on that day, neither the individual or their partner is a parent of the child but the child has been entrusted to the care of the individual or their partner, the child is aged less than one and the individual’s Part A rate (including the newborn supplement but disregarding specified deductions) would be greater than nil.  The day would also need to occur within a period of 13 weeks after these conditions are first met and before the child’s first birthday. 

However, the individual would not be eligible for any amount of newborn supplement if the child is not in their care for a period of at least 13 weeks (new subclause 35A(6) refers). 

Adoption

New subclause 35A(7) sets out the conditions that need to be satisfied for an adoptive parent to be eligible for the newborn supplement.

An individual would be eligible for the newborn supplement for a day in respect of their FTB child if, on or before that day, the child became entrusted to the care of the individual or their partner by an authorised party as part of the process of adoption and the individual’s Part A rate (including the newborn supplement, but disregarding specified deductions) would be greater than nil on the day.  The day would also need to occur within a period of 13 weeks after these conditions are first met and before the end of the period of 12 months beginning on the day that the child became entrusted to the care of the individual or their partner. 

For adoptive parents, there is no age limit for children to attract the newborn supplement, apart from the FTB child age limit. 

The situations in which an individual cannot be eligible for the newborn supplement are set out in new subclauses 35A(8), (9) and (10).

New subclause 35A(8) ensures that an individual cannot be eligible for a newborn supplement in respect of their FTB child if parental leave pay is payable at any time to the individual for that child. 

New subclause 35A(9) ensures that an individual cannot be eligible for a newborn supplement in respect of their FTB child if parental leave pay in respect of that child is payable to another person who was their partner for at least 13 weeks of the person’s PPL period or, if the person’s PPL period was less than 13 weeks, the whole of the PPL period.

New subclause 35A(10) ensures that the partner of an individual who has been paid the newborn supplement in respect of an FTB child for 13 weeks cannot also be eligible for the newborn supplement in respect of that child. 

New subclauses 35A(11) and (12) enable the Minister, by legislative instrument, to prescribe circumstances in which an amount of newborn supplement is not to be added for one or more days in relation to an individual and an FTB child.  The instrument can also prescribe circumstances in which the related newborn upfront payment of family tax benefit (under section 58AA) cannot be added.  The circumstances prescribed in the instrument in relation to the individual and their FTB child must relate to payability of parental leave pay, or the addition of a newborn supplement to another individual for the same child, or the individual being a member of a couple or a former member of a couple (new subclause 35A(13) refers).  The instrument may deal with situations where an individual is eligible for the newborn supplement for less than 13 weeks, because they were partnered to another person who was paid either parental leave pay or newborn supplement for the child but separated from that other person before they received the full benefit of the other payment.

In clause 35A, a parent includes a relationship parent (new subclause 35A(14) refers). 

New clause 35B sets out the annualised rate of newborn supplement for a first or subsequent child, and in situations of multiple birth or where two or more children are entrusted to care as part of the same process. 

The annualised amount of newborn supplement for a parent in respect of an FTB child who is the first child born alive to the woman who gave birth is the amount worked out using the formula:

$1,501.50 x 365/91

The annualised amount of newborn supplement is the same for an individual who is eligible under the entrusted to care and adoption categories where the child is the first child that is entrusted to the care of the individual or their partner. 

The amount of $1,501.50 is the total amount of newborn supplement that can be added in respect of a first child in working out the individual’s maximum rate or base rate for the 13-week maximum period of eligibility. 

This amount of newborn supplement would also apply where two or more children are born during the same multiple birth, or where two or more children become entrusted to the care of an individual or their partner as part of the same entrustment to care process or adoption process.

Otherwise, the amount of newborn supplement for an individual in respect of an FTB child who is not a first child born or entrusted to the care of a family is worked out using the formula:

$500.50 x 365/91

The amount of $500.50 is the total amount of newborn supplement that can be added in respect of a child who is not a first child in working out the individual’s maximum rate or base rate for the 13-week maximum period of eligibility. 

The note at the end of new subclause 35B(1) explains that the formula annualises the newborn supplement because it forms part of the process of working out an individual’s annual rate of family tax benefit.  The rate of family tax benefit for a day is the annual rate divided by 365 (see section 58 of the Family Assistance Act).  That daily rate will only include the newborn supplement for a maximum period of 13 weeks.

Indexation

Clause 2 of Schedule 4 to the Family Assistance Act lists the amounts to be indexed or adjusted and provides an abbreviation for easy reference.  The abbreviation is then used in clause 3, which sets out how certain amounts are to be indexed in accordance with the Consumer Price Index.

Item 7 inserts references to the newborn supplement and newborn upfront payment into clause 2, and indicates where the relevant amounts are located.

Item 8 then provides for indexation of these amounts on 1 July in accordance with the Consumer Price Index.

Under subclause 3(7) of Schedule 4, specified amounts, including the baby bonus income limit, are not indexed on 1 July of the years 2009 to 2013.  Item 9 makes a consequential amendment to remove the reference to the baby bonus income limit from subclause 3(7).  Because this change commences on 1 March 2014, the existing provision will ensure that the baby bonus income limit is not indexed on 1 July 2013. 

Subclause 3(9) provides that baby bonus is not to be indexed on 1 July of 2012, 2013 or 2014.  As this provision is repealed by item 10 from 1 March 2014, baby bonus will not be indexed on 1 July 2013.

Item 10 also inserts a new subclause 3(9), which ensures that the first indexation of the newborn supplement and newborn upfront payment will be 1 July 2014.

Amendments to the Family Assistance Administration Act

As a general rule, the only way that a person can become entitled to be paid family tax benefit is to make a claim.  Item 12 amends section 5 of the Family Assistance Administration Act so that a claim is not required for a person to be paid the newborn upfront payment of family tax benefit, which can occur automatically upon the person becoming eligible for the newborn supplement.  Item 11 makes a technical consequential amendment.

Item 13 changes the heading to section 24 so that it reflects the subject matter dealt with by the provision.

Item 14 inserts new section 24A, which provides that the newborn upfront payment of family tax benefit is to be paid as a single lump sum at such time and in such manner as the Secretary considers appropriate.  Payment of the newborn upfront payment would be subject to rules which prevent payment of family tax benefit on the basis of an estimate where relevant tax returns have not been lodged, and also subject to nominee arrangements and tax-related reductions.

Item 15 inserts a reference to family tax benefit under new section 58AA (the newborn upfront payment) into the definition of relevant benefit in section 219TA of the Family Assistance Administration Act.  The effect is that the newborn upfront payment can be paid to a person’s nominee if a nominee arrangement is in place.

Part 2 - Stillborn baby payment

Amendments to the Family Assistance Act

Items 16 to 19 amend definitions in subsection 3(1) of the Family Assistance Act. These changes are consequential to the repeal of baby bonus and introduction of a new payment, the stillborn baby payment.

Item 20 inserts a new definition of stillborn baby payment .

Item 21 repeals Division 2 of Part 3 of the Family Assistance Act, which related to eligibility for baby bonus.  A new Division 2 is substituted, which sets out the eligibility criteria for the stillborn baby payment.

The eligibility criteria for the stillborn baby payment reflect the criteria that applied for an individual to be eligible for baby bonus in respect of a stillborn child, with some changes to the income test requirements to reflect other changes in this Schedule related to family tax benefit.

Where an individual has given birth to a stillborn child and the individual is already eligible for family tax benefit (in respect of another child or other children) on the day of delivery, or becomes eligible for family tax benefit within 52 weeks beginning on the day of the child’s delivery, the individual meets the income test for the stillborn baby payment.  Otherwise, to meet the income test, the individual’s and their partner’s income for the period of six months beginning on the day of the child’s delivery must be less than or equal to $60,000.   Items 25, 26 and 27 provide for the income limit of $60,000 to be indexed from 1 July 2017, consistent with the recommencement of indexation of other income limits.

New subsection 36(4) provides how the stillborn baby payment interacts with parental leave pay.  It prevents an individual being eligible for the stillborn baby payment if parental leave pay is payable to the individual, or the individual’s partner, for the child.

Item 22 repeals Division 2 of Part 4 of the Family Assistance Act, which provided for the amount of baby bonus for an individual.  A new Division 2 is substituted, which sets out the amount of stillborn baby payment for an individual.

The amount of stillborn baby payment is the sum of the amounts of the newborn supplement and newborn upfront amount defined earlier in the Schedule.

Item 24 repeals subsection 85(2), referring to baby bonus.   Item 23 is consequential to item 24.

Amendments to the Family Assistance Administration Act

Items 28 to 30 amend definitions in subsection 3(1) of the Family Assistance Administration Act.  These changes are consequential to the repeal of baby bonus and introduction of a new payment, the stillborn baby payment.

Items 31 to 40 amend Division 3 of Part 3 of the Family Assistance Administration Act.  The amended Division 3 will provide for the making of claims in relation to the stillborn baby payment, the determination of those claims, and payment of the stillborn baby payment where an individual is determined to be entitled.  These provisions broadly reflect the provisions that currently apply to a claim for baby bonus in respect of a stillborn child.

Item 41 to 44 remove various references to baby bonus and substitute references to the stillborn baby payment.   Item 41 amends subsection 66(1) of the Family Assistance Administration Act, which provides for the inalienability of payments.   Item 42 amends subsection 71(1), which allows a debt to be raised where a payment is made and the individual was not entitled to that payment.   Item 43 amends subsection 93A(6) of the Family Assistance Administration Act, which defines the family assistance payments that can be recovered under section 93A from financial institutions.   Item 44 amends the definition of relevant benefit in section 219TA of the Family Assistance Administration Act, which applies to Part 8B of the Family Assistance Administration Act, relating to nominees.

Amendments to the Income Tax Assessment Act 1997

Items 45 to 47 are consequential amendments to the Income Tax Assessment Act 1997, resulting from the repeal of baby bonus and the introduction of the stillborn baby payment.  The amendments will preserve the current tax-exempt status of the baby bonus when replaced by the new stillborn baby payment.

Amendments to the Paid Parental Leave Act 2010

Items 48 to 52 remove references to baby bonus from the Paid Parental Leave Act.  These amendments are consequential amendments to the repeal of baby bonus.  The interaction between the newborn supplement, newborn upfront amount and stillborn baby payment, which replace the baby bonus, has been described in Parts 1 and 2 above.

Amendments to the Social Security (Administration) Act 1999

Items 53 to 61 are consequential amendments to the income management provisions in the Social Security (Administration) Act 1999 , resulting from the repeal of baby bonus and introduction of the stillborn baby payment.  Consistent with the treatment of the baby bonus, the stillborn baby payment will be fully income managed where appropriate.

Part 3 - Counting previous PPL period etc. for work test

Amendments to the Paid Parental Leave Act

Items 62 and 66 amend the guides contained in sections 30 and 115CA of the Paid Parental Leave Act to highlight the availability of the new measures.

Item 63 is consequential to item 65

Items 64 and 65 make the substantive amendments to the Paid Parental Leave Act.



 

Item 64 repeals subsection 34(1) and substitutes a new subsection, which provides that a person performs qualifying work on a day if at least one of the following applies on the day:

(a)       the person performs at least one hour of paid work;

(b)       the person takes a period of paid leave of at least one hour;

            (c)        the day is in the person’s PPL period for a previous child;

            (d)       the day is in the person’s DAPP period for a previous child.

Paragraphs 34(1)(a) and (b) reflect the existing rules.  Paragraphs 34(1)(c) and (d) are new rules, clarifying that a person performs qualifying work on a day if the day is in a person’s previous PPL period or DAPP period.

Item 65 inserts a new section 35A into the Paid Parental Leave Act.

New subsection 35A(1) applies if the person does not perform paid work or take paid leave in their PPL period or DAPP period for a pervious child.  In these circumstances, the person is taken to have performed on that day:

  • 7.6 hours of work, if the day is a week day; and
  • no hours of work, if the day is a Saturday or Sunday.

New subsection 35A(2) applies where the person has performed at least one hour of paid work on a day in the person’s PPL period or DAPP period for a previous child.  This will apply where a person takes parental leave pay or dad and partner pay at the same time as performing work for a permissible purpose.  In these circumstances, the person is taken to have performed on that day the greater of:

  • the hours of work the person would be taken to have performed if subsection (1) applied; and
  • the number of hours of paid work performed by the person on that day.

For example, a person may have performed two hours of paid work for a permissible purpose on a day in their PPL period.  In these circumstances, the person will be taken to have performed 7.6 hours of qualifying work.

The note to subsection 35A(2) clarifies that paid work for a permissible purpose (such as a keeping in touch day) could be performed during a person’s PPL period or DAPP period for a previous child.

New subsection 35A(3) is similar to subsection 35A(2), but applies where a person has taken paid leave of at least one hour on a day that falls in the person’s PPL period or DAPP period for a previous child.  This will apply where a person takes parental leave pay or dad and partner pay at the same time as receiving paid leave from their employer.  In these circumstances, a person is taken to have performed on that day the greater of:

  • the hours of work the person would be taken to have performed if subsection (1) applied; and
  • the number of hours of paid leave taken by the person on that day.

For example, a person may be taking eight hours’ leave at half pay, thereby using four hours of paid leave on a day in their PPL period.  In these circumstances, the person will be taken to have performed 7.6 hours of qualifying work on that day.

Part 4 - Application and transitional provisions

Item 67 sets out the application and transitional provisions for Parts 1 and 2 of this Schedule.

Subitem 67(1) saves the provisions in the Family Assistance Act and the Family Assistance Administration Act on and after commencement to the extent they relate to baby bonus for children who were born or stillborn before 1 March 2014, or entrusted to care as part of an adoption process before 1 March 2014.

Subitems 67(2), (3) and (4) provide for eligibility for the newborn supplement in relation to children who were born on or after 1 March 2014, or entrusted to care as part of an adoption process on or after 1 March 2014.

Subitem 67(5) is included to avoid doubt.  It makes clear that, in determining whether a child is the first child born alive to a woman, children born alive to the woman at any time (including before commencement of these amendments) are taken into account. 

Subitem 67(6) is included to avoid doubt.  It makes clear that, in determining whether a child is the first child entrusted to the care of an individual, or the partner of an individual, children entrusted to the care of the individual or their partner at any time (including before commencement of these amendments) are taken into account. 

Subitem 67(7) provides that paragraph 36(1)(a) of the Family Assistance Act, which contains the eligibility criteria for the stillborn child payment, applies in relation to a child born as a stillborn child on or after 1 March 2014.

Subitem 67(8) is included to avoid doubt.  It makes clear that, in determining whether a child is the first stillborn child of a woman, any previous stillborn child of the woman (including a stillborn child born before commencement of these amendments) is taken into account. 

Subitem 67(9) provides for the continued application of section 52-150 of the Income Tax Assessment Act 1997 in respect of any payments of baby bonus made, including payments made after commencement of these amendments.  Baby bonus could be paid after commencement in circumstances provided by subitem 67(1). 

Subitem 67(10) provides for the continued income management of baby bonus payments on and after commencement of these amendments.  This includes income management of any baby bonus paid after commencement.  Baby bonus could be paid after commencement in circumstances provided by subitem 67(1). 

Subitem 67(11) preserves current rules that prevent an individual becoming eligible for parental leave pay where they are entitled to baby bonus.  Despite the repeal of baby bonus, entitlement to baby bonus could still be relevant for determination of parental leave pay eligibility after commencement of these amendments.  Individuals could have become entitled to baby bonus before commencement.  Individuals could also become entitled to baby bonus after commencement since subitem 67(1) provides for the continued application of the baby bonus provisions in certain circumstances.  In practice, the current rules that prevent an individual becoming eligible for parental leave pay where they are entitled to baby bonus only apply in respect of children who were born or stillborn before 1 March 2014, or entrusted to care as part of an adoption process before 1 March 2014. 

Subitem 67(12) contains definitions of terms used in this item.  The terms abbreviate the names of Acts referred to in this item.

Item 68 sets out application and transitional provisions for Part 3 of this Schedule.

Subitem 68(1) clarifies that the amendments made by this Part apply in relation to a person’s eligibility for parental leave pay and dad and partner pay for a child born on or after 1 March 2014.

Subitem 68(2) clarifies that the following provisions of the Paid Parental Leave Act apply in relation to this item as if this item were a provision of that Act:

  • section 275 (which deals with how that Act applies to an adopted child);
  • section 276 (which deals with how that Act applies to claims made in exceptional circumstances);
  • section 277A (which deals with how that Act applies to claims for dad and partner pay made in prescribed circumstances).

 



Schedule 2B - Family assistance lump sum payments

 

 

Summary

Families choosing to wait until the end of the financial year to claim their family tax benefit or child care benefit entitlement will now have a grace period of one year instead of two years in which to claim.  This change will start for the 2012-13 entitlement year, meaning families will have 12 months from the end of that year (until 30 June 2014) in which to claim their entitlement.

Families will also have one year in which to lodge their tax returns if they are to receive the end-of-year family tax benefit supplements, and to meet immunisation and health check requirements linked to the end-of-year family tax benefit Part A supplement.

Families will be able to access extensions in special circumstances, similar to arrangements for tax returns.  The changes bring family payment claim periods more into line with time limits for lodging tax returns before penalties may be imposed, and with the policy intent of the family assistance program, to assist parents with day-to-day costs of raising children.

Background

Currently, families have until the end of the second income (financial) year after the entitlement year in which to:

·          make lump sum claims for family tax benefit and child care benefit;

·          lodge a tax return (if required) to receive top-ups and end-of-year supplements following reconciliation of income for family tax benefit;

·          ensure that children have met immunisation and health check requirements for the end-of-year family tax benefit Part A supplement;

·          notify of school commencement to become eligible for schoolkids bonus payments; and

·          meet claim or tax return lodgement requirements for the single income family supplement.

This measure reduces the time available for families to complete these tasks to one income year after the entitlement year.  For example, to receive and settle their family tax benefit for the 2012-13 year, families will have until 30 June 2014 to complete their paperwork.

Families may be able to access extensions to the one-year period for an additional year if there are special circumstances, consistent with arrangements in the taxation system. 

Explanation of the changes

Part 1 - Amendments

Amendments to the Family Assistance Act

Schoolkids bonus

An individual who is entitled to family tax benefit Part A is also eligible for the schoolkids bonus on a bonus test day for children in their care who meet the schoolkids bonus study requirements in sections 35UB and 35UD of the Family Assistance Act.  In addition to meeting the study requirements, the Secretary must be notified or become aware that the child meets the study requirements before the end of the second income year after the income year in which the relevant bonus test day occurs.

Items 1, 2, 3 and 4 reduce these timeframes to the end of the first income year after the income year in which the bonus test day occurs, or such further period as the Secretary allows.  The Secretary can only allow a further period if there are special circumstances and the Secretary has allowed the individual a further period in which to lodge a past period claim for family tax benefit in respect of the child for the income year in which the bonus test day occurs.  The further period must end no later than the end of the second income year after the income year in which the bonus test day occurs.

Under section 65B of the Family Assistance Act, if an individual is eligible for a schoolkids bonus on a bonus test day, then the amount for that day is worked out by adding together applicable amounts for each eligible child in respect of the individual for the bonus test day.  For an eligible child aged under 16 on the bonus test day, the secondary school amount can be paid for the child if the study requirements in subsection 65B(4) apply to the child and the Secretary is notified or becomes aware that the study requirements are satisfied before the end of the second income year after the income year in which the test bonus day occurs.  Items 13 and 14 reduce this timeframe, consistent with amendments made by items 1, 2, 3 and 4.

Health check requirement

For families in receipt of income support, payment of the end-of-year family tax benefit Part A supplement in respect of an FTB child in the income year in which the child turns four is conditional on the child meeting the health check requirement.  However, the family tax benefit Part A supplement can be paid if, at any time before the end of the second income year after the income year in which the FTB child turned four, the Secretary becomes aware of information suggesting that the FTB child meets or is exempt from the health check requirement, or if there are special circumstances that make it inappropriate for the requirement to be imposed. 

Items 5 and 6 reduce the timeframe mentioned to the end of the first income year after the income year in which the FTB child turned four or such further time as the Secretary allows.  The further period can only be allowed if there are special circumstances and the Secretary has allowed the individual a further period in which to lodge a past period claim for family tax benefit in respect of the child for the income year in which the child turned four.  The further period must end no later than the end of the second income year after the income year in which the FTB child turned four (see new subsection 61A(2AA), as inserted by item 7 ).

If a child dies before the end of the second income year after the income year in which the child turned four, then the health check requirement does not affect payment of the family tax benefit Part A supplement in relation to the child (see new subsection 61A(3), as inserted by item 8 ).  That new subsection features a reduced timeframe to reflect changes made by items 5 to 7. 

Immunisation requirements

Section 61B of the Family Assistance Act sets out similar rules, which make payment of the family tax benefit Part A supplement for an FTB child in the income years in which the child turns one, two or five conditional on the child meeting the immunisation requirements.  However, the family tax benefit Part A supplement can be paid if, at any time before the end of the second income year after the income year in which the FTB child turned one, two or five, the Secretary becomes aware of information or is satisfied that the FTB child meets the immunisation requirements. 

Items 9 and 10 reduce the timeframe mentioned in each of paragraphs 61B(3)(a) and (b) to the end of the first income year after the income year in which the FTB child turned one, two or five (as relevant) or such further time as the Secretary allows.  The further period can only be allowed if there are special circumstances and the Secretary has allowed the individual a further period in which to lodge a past period claim for family tax benefit in respect of the child for the income year in which the child turned one, two or five (as relevant).  The further period must end no later than the end of the second income year after the income year in which the FTB child turned one, two or five (see new subsection 61B(3A), as inserted by item 11 ). 

If a child dies before the end of the second income year after the income year in which the child turned one, two or five, then the immunisation requirements do not affect payment of the family tax benefit Part A supplement in respect of the child - see new subsection 61B(4), as inserted by item 12 .  That new subsection features a reduced timeframe to reflect changes made by items 9 to 11. 

Amendments to the Family Assistance Administration Act

Item 15 amends paragraph 10(2)(b) of the Family Assistance Administration Act, which limits the period for making a claim for family tax benefit.  New paragraph 10(2)(b) generally requires a claim to be made before the end of the first income year after the income year containing the period to which the claim relates.  However, the Secretary may allow a further period for lodging the claim if the Secretary is satisfied that special circumstances prevented the claimant from lodging their claim within the standard timeframe.  Item 16 inserts new subsection 10(2A), which limits the further period that the Secretary can allow.  The further period must end no later than the end of the second income year after the income year containing the period to which the claim relates.

Item 17  inserts new section 14A, which provides that a claim for family tax benefit for a past period in an income year (the past period income year) is taken never to have been made if the claimant and/or their partner are required to lodge tax return(s) for the past period income year, but do not do so before the periods specified in that section.  The claim will be taken never to have been made if tax returns are not lodged before the end of the first income year after the past period income year, or within such further period allowed by the Secretary in special circumstances that prevented the tax payer from lodging their tax return before the end of that first income year.  The further period must end no later than the end of the second income year after the past period income year.

Items 18 to 21 amend section 28 of the Family Assistance Administration Act.  Current section 28 provides for the variation of instalment and past period entitlement determinations where tax returns have not been lodged by the end of the income year after the entitlement year.  In these circumstances, the family tax benefit claimant's entitlement is varied to nil under subsection 28(2) or (6) due to non-lodgement of required tax returns.  If a relevant individual's actual income subsequently becomes known after relevant tax returns are lodged and income tax assessments are made, the claimant's family tax benefit entitlement is recalculated under subsection 28(3), or, if the claimant and partner separate within a set period after the determination is varied under subsection 28(2) or (6), it is recalculated under subsection 28(4).

Under the new rules, if the recalculated amount exceeds the amount the claimant was entitled to before the variation to nil, a top-up amount would generally not be payable because an income tax return was not lodged before the end of the first income year following the entitlement year.  A top-up payment can only be paid if special circumstances prevented the claimant or their partner, or both, lodging their tax returns before the end of the first income year, and if the tax return is lodged within the further period allowed by the Secretary.

Item 18 repeals paragraph 28(3)(c) of the Family Assistance Administration Act and substitutes a new paragraph 28(3)(c).

If special circumstances prevented the claimant or their partner, or both, lodging their tax returns before the end of the first income year, new paragraph 28(3)(c) allows a top-up to be paid, provided the claimant and their partner have lodged their tax returns within the timeframe that applies to them.

Item 19 amends paragraph 28(4)(a), and item 20 repeals and substitutes a new paragraph 28(4)(c), of the Family Assistance Administration Act.

Subsection 28(4) as so amended would apply where a debt is raised under section 28 in circumstances where the claimant’s partner has not lodged their tax return before the end of the first income year after the entitlement year and the Secretary allows a further period for the partner to lodge their tax return.  If the claimant separates from the partner before the end of the further period allowed for their partner to lodge their tax return, new paragraph 28(4)(c) would allow the claimant to receive a top-up, provided they have lodged their own tax return within the timeframe that applies to them.

Item 21 amends subsection 28(5) of the Family Assistance Administration Act .  This amendment is consequential to amendments to subsection 28(4) above.  As a result of those amendments, subsection 28(5) would only apply where the claimant is entitled to be paid the recalculated amount.

The family tax benefit reconciliation conditions outlined in Subdivision D of Division 1 of Part 3 are essentially the triggers for the process known as income reconciliation.  During a financial year, a family will base their entitlement for family tax benefit on an estimate of their income for that year.  After the end of the financial year, once the family meets their tax return requirements, their family tax benefit entitlements based on estimated and actual income are compared (reconciled), and the family’s entitlement to the end-of-year family tax benefit supplements is also taken into account at this time.  The reconciliation provisions set out when reconciliation occurs in particular circumstances (for example, when the individual is and remains a member of a couple).  These provisions establish a relevant reconciliation time that is then the trigger for the reconciliation review (and payment of the end-of-year supplements).

Items 22 to 36 amend the family tax benefit reconciliation conditions in the Family Assistance Administration Act.  The amendments reflect changes to the timeframe for lodging tax returns, and make some minor technical amendments to correct some pre-existing gaps in those provisions.

Child care benefit

Items 37 and 38 amend subsection 49J(2) of the Family Assistance Administration Act, to change the period available for making a claim for child care benefit.  These changes reflect changes to timeframes for lodging claims for family tax benefit made by items 15 and 16.

Single income family supplement

Items 39 and 40 amend subsection 65KD(2) of the Family Assistance Administration Act, to change the period available for making a claim for single income family supplement.  These changes reflect changes to timeframes for lodging claims for family tax benefit made by items 15 and 16, and changes to timeframes for lodging claims for child care benefit made by items 37 and 38.

Item 41 amends the period for lodging tax returns in paragraph 65KI(2)(b) of the Family Assistance Administration Act.  Item 42 makes a similar amendment to paragraph 65KI(3)(c).  Section 65KI restricts determination of claims for single income family supplement where the claimant has not lodged their tax return within the period specified in paragraph (2)(b) or their partner has not lodged their tax return within the period specified in paragraph (3)(c).  For the claim to be determined, tax returns must generally be lodged before the end of the first income year after the income year containing the period to which the claim relates.

However, the Secretary may allow a further period for the claimant or their partner to lodge a tax return if the Secretary is satisfied that special circumstances prevented lodgement of the tax return within the standard timeframe.  Item 43 limits the further period that the Secretary may allow for lodgement of tax returns.  The further period must end no later than the end of the second income year after the income year containing the period to which the claim relates.

Item 44 amends the period for lodging tax returns in paragraph 65KP(3)(a) of the Family Assistance Administration Act.  Item 45 makes a similar amendment to subparagraph 65KP(3)(b)(iii).  Subsection 65KP(3) applies to prevent an individual who is not required to lodge a claim for single income family supplement from being paid the single income family supplement where the individual has not lodged their tax return within the period specified in paragraph (3)(a), or where the individual’s partner has not lodged their tax return within the period specified in subparagraph (3)(b)(iii).

For payment to be made, tax returns must generally be lodged before the end of the first income year after the income year containing the period to which the payment relates.  However, the Secretary may allow a further period for the individual or their partner to lodge their tax return if the Secretary is satisfied that special circumstances prevented lodgement of the tax return within the standard timeframe.  Item 46 limits the further period that the Secretary may allow for lodgement of tax returns.  The further period must end no later than the end of the second income year after the income year containing the period to which the claim relates.

Other changes related to family tax benefit

Item 47 amends paragraph 95(4A)(a) of the Family Assistance Administration Act.  Currently, debts arising under subsection 28(2) or (6) of the Family Assistance Administration Act (as a result of non-lodgement of tax returns) can be written off where the claimant and their partner separate after the end of the second income year after the cancellation income year.  Consistent with the new general time limit for the lodgement of tax returns, debts arising under subsection 95(4A) can now be written off where the claimant and their partner separate after the end of the income year after the cancellation income year.

Items 48, 50 and 52 amend subparagraphs 107(3A)(b)(i), 109D(4)(d)(iii) and 109E(3)(d)(iii) of the Family Assistance Administration Act.  These provisions ensure that, where a child meets the health check requirement in section 61A of the Family Assistance Act after reconciliation occurs or after the general 52-week review time limit, the family tax benefit Part A supplement can still be paid for the child.  The periods referred to in those subparagraphs are amended to reflect the change made by item 5 to the period referred to in paragraph 61A(2A)(a) of the Family Assistance Act.

Items 49, 51 and 53 amend subparagraphs 107(3C)(b)(i), 109D(4)(f)(iii) and 109E(3)(f)(iii) of the Family Assistance Administration Act.  These provisions relate to the immunisation requirement in section 61B of the Family Assistance Act, and have similar effect to subparagraphs 107(3A)(b)(i), 109D(4)(d)(iii) and 109E(3)(d)(iii) relating to the health check requirement.  The amendments made by items 49, 51 and 53 reflect the change made by item 9 to the period referred to in paragraph 61B(3)(a) of the Family Assistance Act.

Part 2 - Application provisions

Item 54 provides how the amendments relating to the schoolkids bonus apply.  The amendments made by items 1, 2, 13 and 14 apply in relation to bonus test days on or after 1 January 2013.  For entitlement relating to bonus test days of 1 January 2013 and 30 June 2013, individuals would generally have until 30 June 2014 to meet the notification requirements.  The amendments made by items 3 and 4 apply to bonus test days occurring on or after commencement.

Item 55 provides for the application of amendments relating to the health check and immunisation requirements for family tax benefit.  The amendments apply where the child turns the relevant age in relation the 2012-13 income year or a later income year.  Only family tax benefit entitlement for the 2012-13 and later income years is affected.  For entitlement relating to the 2012-13 income year, individuals have until 30 June 2014 to meet the health check and immunisation requirements.

Item 56 provides for the application of amendments relating to the lodgement of claims and tax returns for family tax benefit.  Family tax benefit entitlement for the 2012-13 and later income years is affected.  For entitlement relating to the 2012-13 income year, individuals have until 30 June 2014 to lodge their claims and tax returns.

Item 57 provides for the application of amendments relating to lodgement of claims for child care benefit.  Child care benefit entitlement for the 2012-13 and later income years is affected.  For entitlement relating to the 2012-13 income year, individuals have until 30 June 2014 to lodge their claims.

Item 58 provides for the application of amendments relating to lodgement of claims and tax returns for the single income family supplement.  Entitlement for the 2012-13 and later income years is affected.  For entitlement relating to the 2012-13 income year, individuals have until 30 June 2014 to lodge their claims and tax returns.

 



Schedule 3 - Other amendments

 

 

Summary

 

This Schedule makes some clarifying and technical amendments to portfolio legislation, consistent with intended policy.  For example, eligibility for schoolkids bonus is confirmed for students who are absent from school for a period due to special circumstances.  It is also clarified that customers who decide to end payment on a quarterly basis of clean energy supplement, pension supplement or seniors supplement do not have to wait until the end of the quarter to be paid arrears.

 

Background

 

Schoolkids bonus

 

Amendments to the schoolkids bonus will ensure that students aged under 16 who have already commenced primary or secondary school, but who are unable to participate for a period due to special circumstances, are still able to receive schoolkids bonus.  Minor amendments are also made to clarify the periods within which customers need to notify that they are engaging in eligible study.

 

These amendments commence on the day after Royal Assent.

 

Entrusted to care

 

The family assistance legislation provides in general that baby bonus is payable within 52 weeks after a child is born or entrusted to an individual’s care.  The existing policy is that baby bonus is payable at around the time of the child’s entry into a family, when the family is likely to incur set-up costs.  A recent judgment of the Federal Court in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Abbott [2012] FCAFC 172 interpreted ‘entrustment to care’ differently to the existing policy, to the effect that baby bonus may be paid at some time after a child enters a person’s care, when a formal process of adoption commences.

 

These amendments will clarify the meaning of entrustment to care to reflect the intended policy, so that baby bonus is only paid at around the time a child first enters a person’s care.

 

These amendments commence on the day after Royal Assent. .

 

Family assistance clean energy payments

 

Minor changes to clean energy supplement under the family assistance law will ensure that, if individuals end their choice to receive clean energy supplement on a quarterly basis and start to be paid fortnightly instead, they can be paid their arrears straight away instead of having to wait until the end of the quarter.  Another amendment removes an anomaly that prevents a member of a couple from being entitled to a clean energy advance top-up in certain situations.

 

These amendments commence on 1 July 2013, except for items 64 to 66, which commence on the day after Royal Assent.  

 

Social security and veterans’ entitlements supplements

 

Amendments to the social security law and the Veterans’ Entitlements Act 1986 (Veterans’ Entitlements Act) clarify that customers who decide to end payment on a quarterly basis of clean energy supplement, pension supplement or seniors supplement do not have to wait until the end of the quarter to be paid arrears (similar to the family assistance clean energy supplement amendment above).  In essence, these are minor and technical amendments, ensuring that people receive the correct amount of quarterly payments and receive them at the correct time.

 

These amendments commence on the later of the day after Royal Assent or immediately after the commencement of Part 3 of Schedule 1 to the Clean Energy (Household Assistance Amendments) Act 2011.

 

Dad and partner pay

 

Lastly, the Schedule mirrors for dad and partner pay an administrative provision that already exists for parental leave pay, to improve consistency in the claim process. 

 

These amendments commence on the day after Royal Assent.

 

Explanation of the changes

 

Part 1 - Schoolkids bonus

 

Amendments to the Family Assistance Act

 

Items 1, 2, 3, 15, 19, 20, 21, 23, 24, 25, 26, 27 and 31 introduce a study notification period for an individual’s eligibility for schoolkids bonus where that eligibility is based on the payment of certain social security income support payments (for example, youth allowance). 

 

To be eligible for schoolkids bonus for a particular bonus test day in relation to relevant study or an eligible activity, the Secretary must be notified, or otherwise become aware, of the study or activity before the end of the calendar year in which the bonus test day occurs.  Therefore, to be eligible for the bonus test days of 1 January or 30 June in a particular calendar year, an individual will have until 31 December of that calendar year to notify the Secretary of the study or activity (if the Secretary is not already aware of the study or activity). 

 

Items 12, 13, 14, 16, 17, 18 and 22 are consequential to the above amendments to introduce a calendar year study notification period for income support payment recipients.

 

Items 6 and 10 add another way in which an FTB child aged under 16 can be eligible for schoolkids bonus where there are special circumstances, such as a State or Territory education authority granting an exemption due to sickness or disability.  .

 

Items 4, 5 and 9 are consequential to items 6 and 10.

 

Items 7, 8 and 11 amend subsection 35UD(1) by introducing a study notification period for an FTB child of an individual to be an eligible child for schoolkids bonus in relation to relevant study or an eligible activity.  For an FTB child to be an eligible child for schoolkids bonus for a particular bonus test day, the Secretary must be notified, or otherwise become aware, of the study or activity before the end of the second income year after the income year in which the bonus test day occurs.  This two-year period is in line with the claim period for family tax benefit. 

 

Item 30 inserts new paragraph 65B(4)(c), which would add another way in which an FTB child aged under 16 can attract the higher secondary school amount of schoolkids bonus.  This would apply if the eligible child has at any time undertaken full-time study in respect of a secondary course and the Secretary is satisfied that there are special circumstances that justified the child not participating in that course during the previous education period for the bonus test day, including where a State or Territory education authority has granted an exemption due to sickness or disability.

 

Items 28 and 29 are consequential to item 30.

 

Item 33 repeals subsection 65E(3) and substitutes new subsections 65E(3) and (3A).  New subsections 65E(3) and (3A) are applicable in determining the amount of schoolkids bonus an individual is entitled to for a child aged under 16.  If the individual satisfies the requirements of subsection 65E(3) or (3A), the individual is entitled to the secondary school amount of schoolkids bonus of $410 (paid twice a year). 

 

New subsection 65E(3) relates to an individual who is eligible under subsection 35UE(1) or (3) for schoolkids bonus (due to being paid youth allowance, disability support pension, carer payment, parenting payment or special benefit).  The amendment would increase the period for notifying the Secretary of the relevant study or eligible activity from ‘13 weeks’ to ‘the end of the calendar year in which the bonus test day occurs’.

 

New subsection 65E(3A) relates to an individual who is eligible under subsection 35UE(2) for schoolkids bonus (due to being paid ABSTUDY living allowance).  The amendment would remove the current 13-week period for notifying the Secretary of the relevant study or eligible activity.  A separate notification period would not be included as the general claim period for payment of ABSTUDY living allowance for a particular calendar year is already the end of that calendar year.

 

Item 32 is consequential to item 33.

 

Amendments to the Family Assistance Administration Act

 

Item 34 adds new section 35H, which will introduce an obligation to notify the Secretary of a change in circumstances that may affect eligibility for, or the amount of, schoolkids bonus.

 

New subsection 35H(1) provides that, if an individual is eligible for schoolkids bonus on a bonus test day and there is a change in circumstances that may affect the individual’s eligibility for schoolkids bonus on a later bonus test day or the amount of schoolkids bonus for a later bonus test day, the individual must notify the Secretary of that change, in the manner set out in a written notice given to the individual under subsection 35H(3).  The individual must notify the Secretary as soon as practicable after the change in circumstances.  The relevant circumstance affecting schoolkids bonus is a child’s study status.  For example, an individual would be obliged under new section 35H to notify the Secretary if a child leaves study or moves onto another type of study which does not attract schoolkids bonus.

 

New subsection 35H(2) provides that the Secretary must approve a manner of notification that an individual is to use when notifying the Secretary of a thing under subsection 35H(1).  Under new subsection 35H(3), the Secretary must, by written notice, notify the individual of the approved manner of notification. 

 

Item 35 is an application provision.  Subitem 35(1) provides that the amendments made by items 1 to 33 apply in relation to working out eligibility for schoolkids bonus on bonus test days occurring on or after the day this Act receives the Royal Assent.

 

Subitem 35(2) provides that paragraph 35H(1)(a) of the Family Assistance Administration Act, as inserted by item 34, applies in relation  to bonus test days occurring on or after the day this Act receives the Royal Assent. 

 

Part 2 - Entrusted to care

 

Amendments to the Family Assistance Act

 

Item 36 inserts a new definition of becomes entrusted to clarify that a child becomes entrusted to the care of an individual at a particular point in time.  At that time, the child must be entrusted to the individual’s care by a person, with the result that the child is in the care of that individual, and the child cannot have previously been in the care of that individual.

 

Item 37 amends subparagraphs 36(3)(b)(i) and (ii) by substituting the words, ‘becomes entrusted’ in place of ‘is entrusted’.  Subsection 36(3) of the Family Assistance Act provides the conditions for eligibility for baby bonus in cases where a child is entrusted to the care of an individual or individual’s partner.  The amendments clarify the intention for these provisions to apply to the point in time that entrustment occurs.

 

Item 38 repeals paragraphs 36(5)(a) and (b) and substitutes paragraphs (a), (aa), (ab) and (b).  Subsection 36(5) provides the conditions for eligibility for baby bonus in adoption cases.  New subparagraphs 36(5)(a), (aa), (ab) and (b) clarify that where a child becomes entrusted to the care of an individual on a day, that entrustment must be made by an authorised party as part of the adoption process of the child by the individual.  The child must be aged under 16 on that day.

 

Item 39 makes consequential amendments to subparagraphs 36(5)(bc)(i) and (ii) and (c)(i) to specifically refer to the day on which entrustment occurs.

 

Amendments to the Family Assistance Administration Act

 

Items 40 and 41 make similar amendments to the Family Assistance Administration Act by substituting the words, ‘becomes entrusted’ in place of ‘is entrusted’, to clarify that eligibility is determined by the particular point in time a child becomes entrusted to care.

 

Amendments to the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2008 Budget and Other Measures) Act 2008

 

Items 42, 43, 44, 45 and 46 make consequential amendments to the Families, Housing, Community Services and Other Legislation Amendment (2008 Budget and Other Measures) Act 2008 .  The amendments alter application provisions so that those provisions have effect in line with the substantive amendments to the Family Assistance Act in items 36 to 39 above.

 

Amendments to the Paid Parental Leave Act

 

Item 47 repeals the definition of day of placement in section 6.  The definition is not required because of the amendments providing for the date that a child becomes entrusted to care made by this Part.

 

Items 48 inserts the word ‘aged’ in section 274 to clarify the section.

 

Items 49 is a consequential amendment to section 274.

 

Items 50, 51 and 52 amend paragraphs 275(1)(b), (c) and (d) as a result of the amendment made in item 53.

 

Item 53 replaces subsections 275(2) and (3) of the Paid Parental Leave Act with new subsection 275(2).  The new paragraph 275(2)(a) provides that, where a child becomes, or is to become, entrusted to the care of a person, the term ‘becomes entrusted’ has the same meaning as in in the Family Assistance Act.  Paragraphs (b) and (c) provide that the entrustment must be made by an authorised party as part of the adoption process of the child by the person.  Paragraph (d) provides that the child must be aged under 16 on the day the child becomes entrusted to care of that person.

 

Amendments to the Paid Parental Leave (Consequential Amendments) Act 2010

 

Item 54, 55 and 56 make consequential amendments to paragraphs 3(b), 3(c) and 3(d) of Schedule 2 to the Paid Parental Leave (Consequential Amendments) Act 2010 to ensure that a consistent interpretation of the concept of ‘becomes entrusted’ is applied.

 

Application of amendments

 

Item 57 provides that the amendments will apply to a child becoming entrusted to care before, on or after the commencement of these provisions.

 

The amendments are being applied retrospectively to decisions made before the commencement of the amendments, to support the policy and administration that has been applied before that commencement.  If the amendment were not retrospective, it would allow some previously decided cases to be revisited.

 

However, the amendments do not apply to proceedings finally determined by a court before this item commenced to avoid altering the rights and liabilities of the parties determined by a court in that case. 

 

Part 3 - Family assistance clean energy payments

 

Amendments to the Family Assistance Act

 

Item 58 removes some words from note 2 to subsection 58A(1) as a consequence of the amendment made by item 67.

 

Item 59 inserts new subsections 58A(3A) and (3B) after subsection 58A(3).

 

New subsection 58A(3A) provides that an election to receive clean energy supplements quarterly ceases to be in force if the individual is eligible under subsection 32(1) for a single amount of family tax benefit on the death of an FTB child or regular care child (that is, a lump sum child bereavement payment).  The election ceases to be in force on the ‘request day’, which is the day the individual requests a lump sum child bereavement payment.  This will enable the arrears of clean energy supplement to be paid as soon as practicable if the family tax benefit recipient is entitled to a lump sum child bereavement payment, and will avoid the complex interaction of lump sum child bereavement calculations and clean energy supplement calculations.

 

New subsection 58A(3B) provides that, if an election to receive clean energy supplements quarterly ceases to be in force under new subsection 58A(3A), the individual cannot make another election under subsection 58A(1) to receive clean energy supplements quarterly until after the end of the lump sum child bereavement period.  In general, the lump sum child bereavement period ends at the end of the period of 14 weeks beginning on the day the child died.

 

Item 60 makes a technical amendment to allow the addition of a new paragraph by item 61.

 

Item 61 adds new paragraph 109(c) after paragraph 109(b) in the general rules for the clean energy advances provisions.  The effect of adding new paragraph 109(c) is that, if a top-up payment of clean energy advance was worked out under subsection 108(1A) in accordance with a legislative instrument under subsection 108(1B), then section 109 will not apply.  This amendment will avoid the current anomaly whereby section 109 prevents a member of a couple from being entitled to a clean energy advance top-up in certain situations where that outcome is unintended.  For example, where a person who was previously paid a clean energy advance for a child later becomes a member of a couple and they have a child together, it is intended that a clean energy advance top-up can be paid if the top-up is worked out in accordance with a legislative instrument under subsection 108(1B).

 

Item 62 is an application provision, which provides that the amendments made by items 60 and 61 apply in relation to working out whether individuals are entitled to payments of clean energy advance on or after the day those items commence (whether the entitlements referred to in paragraph 109(a) of the Family Assistance Act arose before, on or after that commencement).  The amendments made by items 60 and 61 are beneficial because they will enable a clean energy advance top-up in certain situations where it would not otherwise be payable.  The application of those amendments to an entitlement referred to in paragraph 109(a) that arose before the amendments commence (as well as on or after commencement) is beneficial, as it would also enable a top-up where the original clean energy advance was paid before the amendments commence.

 

Items 63, 64 and 65 remove some words from the notes to three subclauses in Schedule 1 as a consequence of the amendment made by item 67.

 

Amendments to the Family Assistance Administration Act

 

Item 66 makes a technical amendment to paragraph 105B(1)(b) to reflect the insertion of new subsection 105B(2A) by item 67.

 

Item 67 repeals subsection 105B(2) and substitutes new subsections 105B(2) and (2A).  Section 105B applies to a determination in force in a quarter under which an individual is entitled to be paid family tax benefit by instalment where an election has been made by the individual, under subsection 58A(1) of the Family Assistance Act, to receive clean energy supplements on a quarterly basis.  A ‘quarter’ means the period of three months beginning on 1 July, 1 October, 1 January or 1 April.

 

The changes made by new subsections 105B(2) and (2A) will allow the immediate payment of arrears to an individual where a quarterly clean energy supplement choice is ended.  New paragraph 105B(2)(a) allows a calculation to occur before the end of the quarter and arrears to be paid immediately, once one of the following applies in that quarter:

 

·          the individual ceases to be entitled to be paid family tax benefit by instalment (under the determination under section 16 of the Family Assistance Administration Act); or

 

·          the individual revokes the election to be paid quarterly clean energy supplements; or

 

·          the individual is entitled to a lump sum child bereavement payment (under subsection 32(1) of the Family Assistance Act).

 

Under new paragraph 105B(2)(b), if none of the conditions in paragraph 105B(2)(a) applies, then calculation and payment of arrears will occur after the end of that quarter.

 

Part 4 - Social security and veterans’ entitlements supplements

 

Division 1 - Instalments of quarterly supplements

 

Amendments to the Social Security Administration Act

 

Item 68 amends subsection 48B(2) by omitting the words, ‘on or after the first seniors supplement test day (the current test day ) that follows a day on which the person is qualified for seniors supplement’, and substituting the words, ‘after the end of an instalment period’.  The amendment provides that seniors supplement is to be paid to the person as soon as practicable after the end of the instalment period which is inserted by item 70 below.

 

Item 69 amends paragraph 48B(3)(a) by omitting the words, ‘during the test period on which the person was qualified for seniors supplement’, and substituting the words, ‘in the instalment period’.  This is a consequential amendment as a result of the amendment made in item 70 below.

 

Item 70 repeals subsection 48B(4) and substitutes a new subsection.  The new subsection 48B(4) provides a definition of instalment period .  An instalment period is the number of days for which seniors supplement is payable to a person starting on or after 20 March, 20 June, 20 September or 20 December and ending on or before the following 19 June, 19 September, 19 December or 19 March respectively.

 

This amendment allows immediate payment of any accrued seniors supplement where it ceases to be payable to a person.  It ensures that people receive their accrued seniors supplement as soon as they cease to qualify for it, instead of having to wait until the end of the quarter.  If a person remains qualified for seniors supplement, they will continue to receive the payment quarterly.

 

Item 71 amends subsection 48C(2) by omitting the words, ‘on or after the first supplement test day (the current test day ) that follows a day on which an election by the person subsection 1061VA(1) is in force’, and substituting the words, ‘after the end of an instalment period’.  The amendment provides that quarterly pension supplement is to be paid to the person as soon as practicable after the end of the instalment period , a definition of which is inserted by item 73 below.

 

Item 72 amends subsection 48C(3) by omitting the words, ‘during the test period for which an election by the person under subsection 1061VA(1) is in force’, and substituting the words, ‘in the instalment period’.  This is a consequential amendment as a result of the amendment made by item 73 below.

 

Item 73 repeals subsection 48C(4) and substitutes a new subsection.  New subsection 48C(4) has the same practical effect as new subsection 48B(5) provided for by item 70 above.  That is, it allows immediate payment of any accrued quarterly pension supplement where it ceases to be payable to a person.  It ensures that people receive their accrued quarterly pension supplement as soon as they cease to qualify for it, instead of having to wait until the end of the quarter.  If a person remains qualified for quarterly pension supplement, they will continue to receive the payment quarterly.

 

Item 74 amends subsection 48D(2) by omitting the words, ‘on or after the first supplement test day (the current test day) that follows a day for which quarterly clean energy supplement is payable to the person’, and substitutes the words, ‘after the end of an instalment period’.  The amendment provides that quarterly clean energy supplement is to be paid to the person as soon as practicable after the end of the instalment period , definition of which is inserted by item 76 below.

 

Item 75 omits the words, ‘during the test period for which quarterly clean energy supplement is payable to the person’, from paragraph 48D(3)(a), and substitutes the words, ‘instalment period’.  This is a consequential amendment as a result of the amendment made by item 76 below.

 

Item 76 repeals subsection 48D(4) and substitutes a new subsection.  New subsection 48D(4) has the same practical effect as new subsection 48B(5) provided for by item 70 above.  That is, it allows immediate payment of any accrued quarterly clean energy supplement where it ceases to be payable to a person.  It ensures that people receive their accrued quarterly clean energy supplement as soon as they cease to qualify for it, instead of having to wait until the end of the quarter.  If a person remains qualified for quarterly clean energy supplement, they will continue to receive the payment quarterly.

 

Amendments to the Veterans’ Entitlements Act

 

Item 77 amends subsection 60C(2) by omitting the words, ‘on or after the first supplement test day (the current test day ) that follows a day on which an election by the person under subsection 60A(1) is in force’, and substituting the words, ‘after the end of an instalment period’.  The amendment provides that quarterly pension supplement is to be paid to the person as soon as practicable after the end of the instalment period , a definition of which is inserted by item 79 below.

 

Item 78 amends subsection 60C(3) by omitting the words, ‘during the test period for which an election by the person under subsection 60A(1) is in force’, and substituting the words, ‘in the instalment period’.  This is a consequential amendment as a result of the amendment made by item 79 below.

 

Item 79 repeals subsection 60C(5) and substitutes a new subsection.  The new subsection 60C(5) provides a definition of instalment period .  An instalment period is the number of days for which quarterly pension supplement is payable to a person starting on or after 20 March, 20 June, 20 September or 20 December and ending on or before the following 19 June, 19 September, 19 December or 19 March respectively.

 

This amendment allows immediate payment of any accrued quarterly pension supplement where it ceases to be payable to a person.  It ensures that people receive their accrued quarterly pension supplement as soon as they cease to be eligible for it, instead of having to wait until the end of the quarter.  If a person remains eligible for quarterly pension supplement, they will continue to receive the payment quarterly.

 

Item 80 amends subsection 62D(3) by repealing the subsection and substituting a new subsection.  The new subsection provides that an instalment of quarterly clean energy supplement is to be paid as soon as practicable after the end of an instalment period. 

 

Item 81 amends subsection 62D(4) by omitting the words, ‘that period on which the election was in force’, and substituting the words, ‘the instalment period’.  This is a consequential amendment as a result of the amendment made by item 82 below.

 

Item 82 repeals subsection 62D(5) and substitutes a new subsection.  New subsection 62D(5) has the same practical effect as new subsection 60C(5) provided for by item 79 above.  That is, it allows immediate payment of any accrued quarterly clean energy supplement where it ceases to be payable to a person.  It ensures that people receive their accrued quarterly clean energy supplement as soon as they cease to be eligible for it, instead of having to wait until the end of the quarter.  If a person remains eligible for quarterly clean energy supplement, they will continue to receive the payment quarterly.

 

Item 83 amends subsection 62E(2) by repealing the subsection and substituting a new subsection.  The new subsection provides that an instalment of quarterly clean energy supplement is to be paid as soon as practicable after the end of an instalment period. 

 

Item 84 amends subsection 62E(3) by omitting the words, ‘that period on which the election was in force’, and substituting the words, ‘the instalment period’.  The amendment provides that quarterly clean energy supplement is to be paid to the person as soon as practicable after the end of the instalment period , a definition of which is inserted by item 85 below.  This is a consequential amendment as a result of the amendment made by item 85 below.

 

Item 85 inserts new subsection 62E(4A).  New subsection 62E(4A) has the same practical effect as new subsection 60C(5) provided for by item 79 above.  That is, it allows immediate payment of any accrued quarterly clean energy supplement where it ceases to be payable to a person.  It ensures that people receive their accrued quarterly clean energy supplement as soon as they cease to be eligible for it, instead of having to wait until the end of the quarter.  If a person remains eligible for quarterly clean energy supplement, they will continue to receive the payment quarterly.

 

Item 86 makes amendments to subsection 118PC(2) by omitting the words, ‘on or after the first seniors supplement test day (the current test day ) that follows a day on which the person is eligible for seniors supplement’, and substituting the words, ‘after the end of an instalment period’.  The amendment provides that seniors supplement is to be paid to the person as soon as practicable after the end of the instalment period , a definition of which is inserted by item 88 below.

 

Item 87 makes amendments to paragraph 118PC(3)(a) by omitting the words, ‘during the test period on which the person was qualified for seniors supplement’, and substituting the words, ‘in the instalment period’.  This is a consequential amendment as a result of the amendment made by item 88 below.

 

Item 88 repeals subsection 118PC(4) and substitutes a new subsection.  The new subsection 118PC(4) provides a definition of instalment period .  An instalment period is the number of days for which seniors supplement is payable to a person starting on or after 20 March, 20 June, 20 September or 20 December and ending on or before the following 19 June, 19 September, 19 December or 19 March respectively.

 

This amendment allows immediate payment of any accrued seniors supplement where it ceases to be payable to a person.  It ensures that people receive their accrued seniors supplement as soon as they cease to be eligible for it, instead of having to wait until the end of the quarter.  If a person remains eligible for seniors supplement, they will continue to receive the payment quarterly.

 

Division 2 - Interactions with quarterly clean energy supplement

 

Amendments to the Social Security Act

 

Item 89 makes amendments to Note 1 at the end of subsection 1210(1) by adding the words, ‘See also subsection (2A)’.  This is a consequential amendment as a result of the amendment in item 90 below.

 

Item 90 inserts a new subsection 1210(2A) after subsection 1210(2).  This is a technical amendment to ensure that people who elect to receive quarterly clean energy supplement receive the same amount of social security payment (other than social security pensions, unless the pension is parenting payment single or disability support pension for a person under 21 years of age without a dependent child) as they would receive if they had elected to receive their clean energy supplement as part of their fortnightly instalment.

 

Item 91 makes an amendment to the note at the end of subsection 1210(3A) by omitting the words, ‘person’s quarterly clean energy supplement is’, and substituting the words, ‘main rate would be’.

 

Amendments to the Social Security (Administration) Act

 

Item 92 omits the words, ‘(other than a social security pension)’, from paragraph 43(4)(a).  This is a consequential amendment to give full effect to the further amendments below.

 

Item 93 inserts a new paragraph 43(4)(aa) into subsection 43(4) to provide that the subsection applies to social security payments that are not social security pensions other than pension PP(single) for people who have not reached pension age and disability support pension for people who are under 21 years of age and who do not have dependent children.

 

Item 94 inserts a new paragraph 43(5AA)(aa) into subsection 43(5AA) to provide that the subsection applies only to social security pensions other than pension PP(single) for people who have not reached pension age and disability support pension for people who are under 21 years of age and who do not have dependent children.

 

Item 95 repeals paragraph 43(5B)(c) and substitutes new paragraph 43(5B)(c).  This is a technical amendment to ensure that people receive the same amount of quarterly clean energy supplement as they would receive if they had elected to receive their clean energy supplement as part of their fortnightly instalment.

 

Amendments to the Veterans’ Entitlements Act

 

Item 96 repeals paragraph 62E(6)(b) and substitutes new paragraphs 62E(6)(b) and (c).  This is a technical amendment to ensure that people receive the same amount of quarterly clean energy supplement as they would receive if they had elected to receive their clean energy supplement as part of their fortnightly instalment.

 

Item 97 amends the note at the end of subclause 4(5) of Schedule 6 by omitting the words, ‘person’s quarterly clean energy supplement is’, and substituting the words, ‘main rate would be’.

 

Division 3 - Other minimum daily rate amendments

 

Amendments to Social Security Administration Act

 

Item 98 amends paragraph 43(4)(a) to omit the words, ‘of the following amounts (an added amount ) is’, and substituting the words, ‘or both of the following amounts (the added amounts ) are’.  This is a typographical amendment to ensure that people on the relevant payment types receive the full benefit of this provision and the amendments in items 99 and 100 below.

 

Item 99 repeals paragraph 43(4)(b) and substitutes a new paragraph 43(4)(b).  The new paragraph ensures that people in receipt of parenting payment single and disability support pension (where they are under 21 years of age and do not have a dependent child) receive the correct minimum daily rate.

 

Item 100 repeals the definition of minimum daily rate in subsection 43(5) and substitutes a new definition.  The new definition clarifies that the minimum daily rate for people in receipt of parenting payment single and disability support pension (where they are under 21 years of age and do not have a dependent child) is comprised of pharmaceutical allowance.  For people on other social security payments covered by subsection 43(4), the minimum daily rate is determined by reference to the pension supplement minimum amount.

 

Part 5 - Dad and partner pay

 

Amendments to the Paid Parental Leave Act

 

Item 101 adds a new Division 3A after Division 3 of Part 6-1 of Chapter 6.  This relates to how the Paid Parental Leave Act applies to claims for dad and partner pay made in prescribed circumstances.

 

New subsection 277A(1) provides that this section applies to a claim for dad and partner pay that is made in circumstances prescribed by the Paid Parental Leave Rules as being circumstances in which this section applies.

 

New subsection 277A(2) outlines how the Paid Parental Leave Act applies to dad and partner pay claims made in prescribed circumstances.  A claim is made in prescribed circumstances if it is made under the Paid Parental Leave Rules.  Prescribed circumstances will generally include surrogacy arrangements and circumstances in which there is an unexpected change of carer for the child - for example, as a result of the death or serious illness of a parent of the child - allowing for another claimant to make a claim for dad and partner pay as provided for in the Paid Parental Leave Rules.  In certain prescribed circumstances, under subsection 277A(2), the Paid Parental Leave Act applies in relation to a claim for dad and partner pay as if:

 

·          a reference to the birth of a child were a reference to the earlier of the claimant beginning to care for the child and the claimant’s partner (if any) beginning to care for the child; and

 

·          a reference to the day the child was born were a reference to the earlier of the day the claimant began to care for the child and the day the claimant’s partner (if any) began to care for the child; and

 

·          a reference to the expected date of birth of the child were a reference to the earlier of the day the claimant expects to begin to care for the child and the day the claimant’s partner (if any) expects to begin to care for the child; and

 

·          a reference to the child’s first birthday were a reference to the first anniversary of the earlier of the day the claimant began to care for the child and the day the claimant’s partner (if any) began to care for the child; and

 

·          a reference to a completed birth verification form for a child were a reference to information required by the Secretary about the earlier of the claimant beginning to care for the child and the claimant’s partner (if any) beginning to care for the child; and

 

·          a reference to a child being born during the same multiple birth were a reference to:

 

-        the claimant beginning to care for the child at the same time as beginning to care for another child; or

 

-        if the claimant’s partner (if any) begins to care for the child before the claimant - the claimant’s partner beginning to care for the child at the same time as beginning to care for another child.

 

Subsection 18(3), which deals with birth registration, is excluded from the effect of new subsection 277A(2) so that a DAPP claimant in prescribed circumstances may still be required to comply with the requirements of that subsection.

 

New subsection 277A(3) is included to deal with adoption.  The new subsection provides that section 277A does not limit Division 2 of Part 6-1 of the Paid Parental Leave Act, which deals with how this Act applies to an adopted child.  The note to subsection 277A(3) provides guidance that not all circumstances to which paragraph 115DD(d) applies must be prescribed as being circumstances in which section 277A applies.  An example of this is the adoption of a child, which could be prescribed for the purposes of paragraph 115DD(d), but not for the purposes of section 277A.  In this case, section 275, which deals with how the Act applies to an adopted child, would apply.

 

Item 102 is an application provision for new Division 3A, which provides that the amendment made by this Part applies to claims for dad and partner pay made on or after the commencement of this item (the day after this Act receives the Royal Assent).



STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the

Human Rights (Parliamentary Scrutiny) Act 2011

 

Family Assistance and Other Legislation Amendment Bill 2013

 

Reduction of baby bonus from 1 July 2013 (Schedule 1) and

Other amendments - Dad and partner pay (Part 5 of Schedule 3)

 

These amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the amendments

 

Schedule 1 to the Bill makes amendments to the amount of baby bonus provided for in section 66 of the A New Tax System (Family Assistance) Act 1999 .  The amount of baby bonus for second and subsequent children who come into a family from 1 July 2013 will be reduced to $3,000.  The change will apply regardless of whether the child is born into the family, adopted by the family, or entrusted to the family’s care within 26 weeks of birth (for example, under a foster care arrangement).  Baby bonus will continue to be paid at the rate of $5,000 for a family’s first child, and for each child who comes into the family in a multiple birth, adoption or entrustment to care.

 

The purpose of the amendments to baby bonus is to maintain support for new parents with the upfront costs of having a baby, while ensuring the family payments system is sustainable into the future.  The amendments recognise that families do not face the same upfront costs for a second or later child as they do for their first child, with the more expensive items usually already purchased.

 

Part 5 of Schedule 3 makes technical amendments to the Paid Parental Leave Act 2010 , relating to how the legislation applies to dad and partner pay claims made in ‘prescribed circumstances’.

 

Human rights implications

 

These amendments are likely to engage the following human rights:

 

Right to social security

 

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises ‘the right of everyone to social security’.  That right requires a social security system to be established, and states that a country must, within its maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.   Article 26 of the Convention on the Rights of the Child (CRC) ensures that right to ‘every child’ and requires that ‘the benefits should, where appropriate, be granted, taking into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child’.

 

The amendments to the amount of baby bonus will continue to support new parents with the payment of $5,000 for the upfront costs of having their first child, regardless of whether the child is born into the family, adopted by the family, or entrusted to the family’s care within 26 weeks of birth.  This higher rate takes into account the circumstances of parents having their first child, as they face higher upfront costs.  The baby bonus rate of $3,000 provides benefits to individuals and families for second and subsequent children, taking into account the reduced upfront costs involved.

 

The amendments also recognise the financial pressures that families face with multiple births, and where two or more children are adopted as part of the same process or entrusted to the family’s care within 26 weeks of birth as part of the same process.   The baby bonus rate of $5,000 is maintained for each child in those circumstances.

 

Rights of children deprived of their family environment

 

Article 20 (1) of the CRC provides that a child temporarily or permanently deprived of his or her family environment, or in whose own best interests cannot be allowed to remain in that environment, shall be entitled to special protection and assistance provided by the State’.

 

The amendments to the amount of baby bonus ensure that children adopted by a family, or entrusted into care of a family within 26 weeks of birth, receive special protection and assistance, by maintaining the same higher rate of $5,000 of baby bonus for the first child that is adopted or entrusted into care, as for the first birth child.

 

The amendments made to the Paid Parental Leave Act 2010 clarify how the legislation applies to dad and partner pay claims made in ‘prescribed circumstances’.  These amendments promote the rights of parents and children by extending the time in which dad and partner pay claims made in ‘prescribed circumstances’ can be made to a year from the day the claimant began to care for the child, rather than a year from the day the child was born.  This means that, for surrogacy claims and circumstances involving a change in care arrangements due to the long-term inability of the birth mother to care for the child, there is a longer time in which a claim can be made, protecting the interests of children in these circumstances.

 

Right to health

 

Article 10 (2) of the ICESCR states that special protection should be accorded to mothers during a reasonable period before and after childbirth’.

 

The change to the amount of baby bonus recognises that mothers who have had their first stillborn child have had a traumatic experience.  The baby bonus rate of $5,000 is given to mothers following a stillbirth to protect their physical and mental health and meet any expenses associated with the stillbirth.  The baby bonus amount of $3,000 is also given to mothers who have a second or a subsequent stillbirth.

 

Conclusion

 

These amendments are compatible with human rights because they advance the protection of human rights.

 



 

Family Assistance and Other Legislation Amendment Bill 2013

 

Family tax benefit and double orphan pension (Schedule 2)

 

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of Schedule 2

 

This Schedule makes amendments to ensure eligibility for family tax benefit until the end of a calendar year for young people who complete secondary study or its equivalent in either November or December of that year.  Additionally, the qualification period for double orphan pension is being extended so that it aligns with eligibility for family tax benefit. 

 

Human rights implications

 

This Schedule is likely to engage the following human rights:

 

Right to social security

 

The amendments in Schedule 2 will ensure the continuation of payments such as family tax benefit and double orphan pension to parents and guardians for a period after the child has completed secondary study, so that assistance for a child does not cease immediately on the child completing study.  As such, these amendments promote the right to social security outlined in Article 9 of the International Covenant on Economic, Social and Cultural Rights and Article 26 of the Convention on the Rights of the Child ( CRC).

 

Rights of children deprived of their family environment

 

Double orphan pension qualification currently ceases as soon as the child ceases study.  The amendments to double orphan pension extend qualification so that child age qualification aligns with family tax benefit child age eligibility.  Under the amendments in Schedule 2, a carer can continue to receive double orphan pension for a young person in their care until their 18th birthday if they have already completed secondary study, or up to the end of the calendar year if the child is aged less than 20 and completes secondary study in November or December.  This continuation of government assistance for children who are double orphans promotes the rights of children deprived of their family environment as outlined under Article 20 of the CRC.

 

Conclusion

 

This Schedule is compatible with human rights because it advances the protection of human rights.

 



Family Assistance and Other Legislation Amendment Bill 2013

 

Replacement of baby bonus from 1 March 2014 (Schedule 2A) and

Time periods (Schedule 2B)

 

These Schedules are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of Schedules 2A and 2B

 

Part 1 of Schedule 2A to the Bill replaces the baby bonus with an increased rate of family tax benefit Part A for babies born on or after 1 March 2014 (where the individual is a parent or the child has been entrusted to the individual’s care) and in respect of children who have become entrusted to care on or after 1 March 2014, where this occurs as part of an adoption process.

 

The increased rate of family tax benefit Part A will be $2,000 for first children (and each child in a multiple birth or entrustment to care) and $1,000 for subsequent children.  It will be paid as an initial instalment of $500, with the remainder rolled into fortnightly payments over a 13-week period.  The increase to family tax benefit Part A maintains support for new parents at a rate that more closely reflects the essential upfront costs of having a baby.  The amendments also recognise that families do not face the same upfront costs for a second or later child as they do for their first child, with the more expensive items usually already purchased.

 

Part 2 of Schedule 2A to the Bill introduces a stillborn baby payment, which delivers the same level of assistance for families with a stillborn child.

 

Part 3 of Schedule 2A to the Bill amends the Paid Parental Leave (PPL) work test, so that a person’s previous PPL period or dad and partner pay (DAPP) period that occurs in the 13 months before the birth or adoption of a second or subsequent child, will count towards the work test in respect of a new paid parental leave claim.

 

Schedule 2B to the Bill makes amendments to reduce certain time periods in the family assistance system from two financial years to one financial year.

 

Families who have estimated their income will have one financial year to lodge their tax return and confirm income to get family tax benefit top-ups or end of year supplements.  For example, families who have received family tax benefit instalments during the 2012-13 financial year will have until 30 June 2014 to lodge their tax returns to be paid any additional amounts they are entitled to for the 2012-13 financial year based on their actual income. 

 

Where families choose not to estimate their income and instead claim family tax benefit or child care benefit at the end of a financial year, they will have one financial year period to do so.  Similar arrangements will apply for the single income family supplement.

 

Families with children of a particular age may be required to undertake certain actions, such as meet immunisation and health check requirements, before family assistance amounts can be paid.  These families will now have one financial year after the financial year in which the child turns the relevant age to meet those requirements. 

 

The purpose of the amendments in Schedule 2B to claim and tax return lodgement periods is to align those periods more closely with the timeframes for lodging tax returns in the taxation system.  However, where a family has special circumstances, an extension to the time period may be granted, similar to arrangements in the taxation system.

 

Human rights implications

 

These amendments are likely to engage the following human rights:

 

Right to social security

 

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises ‘the right of everyone to social security’.  That right requires a social security system to be established, and states that a country must, within its maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.   Article 26 of the Convention on the Rights of the Child (CRC) ensures that right to ‘every child’, and requires that ‘the benefits should, where appropriate, be granted, taking into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child’.

 

The increased rate of family tax benefit Part A associated with the birth, adoption or placement into care of a child will continue to support new parents with the upfront costs of having their first child, regardless of whether the child is born into the family, adopted by the family, or entrusted to the family’s care for at least 13 weeks within the first year of the child’s life (for example, due to a foster care placement).  The higher payment of $2,000 takes into account the circumstances of parents having their first child, as they face higher upfront costs.  The lower payment of $1,000 provides benefits to individuals and families for second and subsequent children, taking into account the reduced upfront costs involved.

 

Where a family has a stillborn child, the amendments in Part 2 of Schedule 2A will maintain the same level of assistance for these families.

 

The amendments in Schedule 2A also recognise the financial pressures that families face with multiple births, and where two or more children are adopted as part of the same process, or entrusted to the family’s care as part of the same process.   The payment rate of $2,000 is maintained for each child in those circumstances.

 

The amendment to the work test promotes the right to social security because it will enable more people to be eligible for the Paid Parental Leave scheme, as any PPL period or DAPP period for a previous child will count towards the work test in respect of a subsequent parental leave pay or dad and partner pay claim.  This will make it easier for mothers who have children close together to be eligible for the Paid Parental Leave scheme.  The amendments will also make it easier for dads and partners to meet the work test and qualify for dad and partner pay and parental leave pay, by counting any DAPP period or PPL period for a previous child towards the work test for a new dad and partner pay claim.  These amendments take into account the circumstances of families having children close together, and ensure those families receive maximum benefits.

 

The amendments in Schedule 2B also engage the right to social security.  The change to the affected time periods will not affect families’ access to assistance for day-to-day costs.  Families can continue to access this assistance on the basis of their estimated family income during a particular financial year.  One year is a reasonable length of time for families to lodge a claim for family and child care payments or to finalise their family tax benefit entitlements for the previous financial year.  The amendment to the claim and reconciliation period is expected to encourage behavioural change.

 

The change to the affected time periods also takes into account that, in some situations, families may have difficulties meeting the one-year period (for example, in the case of a natural disaster).  In these situations, families will be able to access an extended period of up to the end of the second financial year to lodge claims or meet requirements.

 

Rights of children deprived of their family environment

 

Article 20 (1) of the CRC provides that a child temporarily or permanently deprived of his or her family environment, or in whose own best interests cannot be allowed to remain in that environment, shall be entitled to special protection and assistance provided by the State’.

 

The increased rate of family tax benefit Part A associated with the adoption or placement into care of a child ensure that children adopted by a family, or entrusted into the care of a family for at least 13 weeks within the first year of the child’s life, receive special protection and assistance, by maintaining the same higher payment of $2,000 for the first child adopted or entrusted into care as for the first child born to a family.

 

Right to maternity leave

 

Article 10 (2) of the ICESCR states that ‘Special protection should be accorded to mothers during a reasonable period before and after childbirth.  During such period working mothers should be accorded paid leave or leave with adequate social security benefits’.

 

The amendments to the work test recognise that special protection should be accorded to mothers after childbirth by making it easier for mothers who have children close together to access the Paid Parental Leave scheme to take time off work and care for their child.

 

Conclusion

 

The amendments in Schedules 2A and 2B are compatible with human rights because they advance the protection of human rights and, to the extent that these changes limit access to family and parental payments, these limitations are reasonable and proportionate.

 



 

 

Family Assistance and Other Legislation Amendment Bill 2013

 

Other amendments (Schedule 3)

 

This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of Schedule 3

 

This Schedule makes some clarifying and technical amendments to portfolio legislation, consistent with intended policy. 

 

For example, amendments to schoolkids bonus provisions ensure FTB children aged under 16 who have already commenced primary or secondary school, but are unable to participate for a period due to special circumstances, are still able to receive schoolkids bonus.  Minor amendments are also made to clarify the periods within which customers need to notify that they are engaging in eligible study.

 

Amendments to payment arrangements for the clean energy supplement under the family assistance law ensure that, in some cases, an individual can be paid their clean energy supplement arrears straightaway, instead of having to wait until the end of the quarter.  Another amendment removes an anomaly that prevents a member of a couple from being entitled to a clean energy advance top-up in certain situations.

 

It is also clarified that social security and veterans’ entitlements customers who decide to end payment on a quarterly basis of clean energy supplement, pension supplement or seniors supplement do not have to wait until the end of the quarter to be paid arrears.  Other minor amendments give effect to the policy intention of ensuring that customers receiving the clean energy supplement receive their full entitlement.

 

Human rights implications

This Schedule is likely to engage the following human right:

Right to social security

The schoolkids bonus amendments promote the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights ( ICESCR) and Article 26 of the Convention on the Rights of the Child ( CRC) as they extend access to schoolkids bonus for a small group of children who are already in study but prevented from participating for a period due to special circumstances. 

Current arrangements for schoolkids bonus allow for indefinite backdating of payments for some income support recipients who are in study but do not provide study details until a later time.  The amendments allow a reasonable period of backdating for these students: 

·          Where the student is entitled to an income support payment, they are able to provide these details until the end of the calendar year to receive backdated schoolkids bonus amounts for that calendar year. 

·          Where the student attracts family tax benefit, study details must be provided before the end of the second financial year after the financial year in which the child was studying.  This two-year period is in line with the claim period for family tax benefit. 

To the extent that these changes limit access to schoolkids bonus payments, these limitations are reasonable and proportionate and still allow a generous amount of time for payment recipients to provide study details and access backdated payments.

The social security and veterans’ entitlements quarterly supplement amendments are consistent with the right to social security, as they will make sure these customers receive their full and correct entitlements, and remove a current obstacle to those entitlements being received as early as possible, thereby potentially alleviating financial pressures for those customers.

No applicable rights or freedoms engaged

The amendments relating to when a child is entrusted to the care of an individual make changes to payment arrangements to ensure earlier access and does not change eligibility for or rates of payments.  As such, those amendments do not engage any of the applicable rights or freedoms.

Conclusion

 

This Schedule is compatible with human rights because, where applicable rights or freedoms are engaged, it advances the protection of human rights and, to the extent that these changes limit access to schoolkids bonus payments, these limitations are reasonable and proportionate .

 

 

 

 

 

 

 

 

 

Minster for Families, Community Services and Indigenous Affairs, Minister for Disability Reform, the Hon Jenny Macklin MP