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Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017

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2017

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

SOCIAL SERVICES LEGISLATION AMENDMENT

(OMNIBUS SAVINGS AND CHILD CARE REFORM) BILL 2017

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Social Services, the Hon Christian Porter MP)



 



Contents

Outline . 3

Financial Impact Statement 6

Schedule 1 - Payment rates . 10

Schedule 2 - Family tax benefit Part B rate . 14

Schedule 3 - Family tax benefit supplements . 17

Schedule 4 - Jobs for families child care package . 21

Schedule 5 - Proportional payment of pensions outside Australia . 100

Schedule 6 - Pensioner education supplement 102

Schedule 7 - Education entry payment 107

Schedule 8 - Indexation . 111

Schedule 9 - Closing energy supplement to new welfare recipients . 113

Schedule 10 - Stopping the payment of the pension supplement after six weeks overseas . 131

Schedule 11 - Automation of income stream review processes . 136

Schedule 12 - Seasonal horticultural work income exemption . 139

Schedule 13 - Ordinary Waiting Periods . 143

Schedule 14 - Age requirements for various Commonwealth payments . 150

Schedule 15 - Income support waiting periods . 157

Schedule 16 - Other waiting period amendments . 165

Schedule 17 - Adjustment for primary carer pay and other amendments . 173

Schedule 18 - Removal of parental leave pay mandatory employer role . 199

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS . 206

Schedule 1 - Payment rates . 206

Schedule 2 - Family tax benefit Part B rate . 208

Schedule 3 - Family tax benefit supplements . 211

Schedule 4 - Jobs for families child care package . 213

Schedule 5 - Proportional payment of pensions outside Australia . 222

Schedule 6 - Pensioner education supplement 224

Schedule 7 - Education entry payment 227

Schedule 8 - Indexation . 230

Schedule 9 - Closing Energy Supplement to New Welfare Recipients . 231

Schedule 10 - Stopping the payment of pension supplement after six weeks overseas . 233

Schedule 11 - Automation of income stream review process . 235

Schedule 12 - Seasonal horticultural work income exemption . 237

Schedule 13 - Ordinary waiting periods . 238

Schedule 14 - Age requirements for various Commonwealth payments . 244

Schedule 15 - Income support waiting periods . 247

Schedule 16 - Other waiting period amendments . 253

Schedule 17 - Adjustment for primary carer pay and other amendments . 260

Schedule 18 - Removal of parental leave pay mandatory employer role . 267

 



SOCIAL SERVICES LEGISLATION AMENDMENT

(OMNIBUS AND CHILD CARE REFORM) BILL 2017

 

Outline

This bill contains the following Schedules:

 

  1. Payment rates

The family tax benefit Part A standard fortnightly rate will be increased by $20.02 for each FTB child in the family aged up to 19.  An equivalent rate increase, of around $19.37 per fortnight, will apply to youth allowance and disability support pension recipients aged under 18 and living at home.  These increases will apply from 1 July 2018.

 

  1. Family tax benefits Part B rate

From 1 July 2017, the Bill will introduce a reform to family tax benefit Part B that removes entitlement to FTB Part B for single parent families who are not single parents aged 60 or more or grandparents or great-grandparents, from 1 January of the calendar year their youngest child turns 17.

 

  1. Family tax benefit supplements

This Schedule will phase out the family tax benefit Part A supplement for families with an adjusted taxable income of $80,000 a year or less by reducing it to $602.25 a year from 1 July 2016, and to $302.95 a year from 1 July 2017.  It will then be withdrawn from 1 July 2018. The family tax benefit Part A supplement has already been withdrawn for families with an adjusted taxable income over $80,000 a year under the Budget Savings (Omnibus) Act 2016.

The family tax benefit Part B supplement will also be phased out.  It will be reduced to $302.95 a year from 1 July 2016, and to $153.30 a year from 1 July 2017.  It will then be withdrawn from 1 July 2018.

 

  1. Jobs for Families Child Care Package

The purpose of Schedule 4 is to introduce key aspects of the Jobs for Families Child Care Package , as announced in the 2015-16 and 2016-17 Budget.  The Schedule will, through the introduction of a new Child Care Subsidy and other enhancements, deliver a simpler, more affordable, more flexible and more accessible child care system for families. 

 

  1. Proportional payments of pensions outside Australia

This Schedule reduces from 26 weeks to six weeks the period during which age pension, and a small number of other payments with unlimited portability, can be paid outside Australia at the basic means-tested rate. 

After six weeks, payment will be adjusted according to the length of the pensioner’s Australian working life residence.

 

6.     Pensioner education supplement

This Schedule ceases pensioner education supplement from the first 1 January or 1 July after the day the Act receives Royal Assent.

 

  1. Education entry payment

This measure ceases the education entry payment from the first 1 January or 1 July after the Act receives Royal Assent.

 

  1. Indexation

This Schedule implements the following changes to Australian Government payments:

  • maintain at level for three years from 1 July of the first financial year beginning on or after the day this Act receives Royal Assent the income free areas for all working age allowances (other than student payments) and for parenting payment single; and
  • maintain at level for three years from 1 January of the first calendar year beginning on or after the day this Act receives Royal Assent the income free areas and other means test thresholds for student payments, including the student income bank limits.

 

  1. Close the energy supplement to new welfare recipients

This Schedule ceases, from 20 September 2017, payment of the energy supplement to recipients who were not receiving a welfare payment on 19 September 2016 and closes the energy supplement to new welfare recipients from 20 September 2017.

 

 

  1. Stopping the payment of pension supplement after six weeks overseas

This Schedule will stop the payment of pension supplement after six weeks temporary absence overseas and immediately for permanent departures.

 

  1. Automation of income stream review processes

This Schedule will allow for the automation of the regular income stream review process by enabling the Secretary to require income stream providers to transfer a dataset to the Department of Human Services (DHS) on a regular basis.

 

 

 

 

 

  1. Seasonal horticultural work income exemption

Schedule 12 to the Bill provides a social security income test incentive aimed at increasing the number of job seekers who undertake specified seasonal horticultural work, such as fruit picking.

 

13. Ordinary waiting periods

This Schedule makes amendments to extend and simplify the ordinary waiting period for working age payments.

 

14. Age requirements for various Commonwealth payments

This Schedule provides that young unemployed people aged 22 to 24 would no longer be eligible for newstart allowance or sickness allowance until they turn 25 years of age and would, instead, be able to claim and qualify for youth allowance.  To enable this, youth allowance for all types of people who can satisfy the activity test, will be available to people who have not yet reached 25.

 

  1. Income support waiting periods

This Schedule introduces a four-week waiting period, for job ready young people who are looking for work, to receive income support payments.  During this four-week period, job seekers under 25 years of age who have been classified as job ready (Stream A) by the Job Seeker Classification Instrument will also be required to complete assigned activities, through a new program, RapidConnect Plus, that will help them prepare for and find work.

 

  1. Other waiting period amendments (Rapid Activation of young job seekers)

This Schedule implements the Rapid Activation of young job seekers 2015-16 Budget measure.

 

  1. Adjustments for Primary Carer Pay

This and the following Schedule introduce the revised arrangements for the Paid Parental Leave scheme announced in the 2015-16 Mid-Year Economic and Fiscal Outlook and previously introduced in the Fairer Paid Parental Leave Bill 2016, which will now be withdrawn.  The measure is changed in that the maximum PPL period for which a person may be paid parental leave pay is increased from the current 18 weeks to 20 weeks.  The measure will commence on the first 1 January, 1 April, 1 July or 1 October that is 9 months after the date the Act receives royal assent, with an earliest commencement date of 1 January 2018.

 

  1. Employer Opt-In (PPL)

Schedule 18 removes the employer paymaster role in administering the Paid Parental Leave scheme.



Financial Impact Statement

The measures in this Bill have the following estimated impact on the fiscal balance over the forward estimates 2016-17 to 2019-20 ($ million):

 

Schedule

Title

Indicative Financials

1

Payment rates

-2,373.5

2

Family tax benefits Part B rate

440.6

3

Family tax benefit supplements

4,653.0

4

Jobs for Families Child Care Package - measures requiring legislation*

-1,290.9

5

Proportional payments of pensions outside Australia

213.9

6

Pensioner education supplement

201.0

7

Education entry payment

42.3

8

Indexation

69.0

9

Close the energy supplement to new welfare recipients

933.4

10

Stopping the payment of pension supplement after six weeks overseas

123.6

11

Automation of income stream review processes

38.1

12

Seasonal horticultural work income exemption

-27.5

13

Ordinary waiting periods

189.4

14

Age requirements for various Commonwealth payments

431.3

15

Income support waiting periods

169.5

16

Other waiting period amendments (Rapid Activation of young job seekers)

-0.8

17

Adjustments for Primary Carer Pay

491.2

18

Employer Opt-In (PPL)

 *Including measures not requiring legislation, the Jobs for Families Child Care Package totals -$1,663.5.

STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS

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

 

REGULATION IMPACT STATEMENT

 

The Regulation Impact Statement for the Jobs for Families Child Care Package, including measures proposed to be given effect to by Schedule 4 of this Bill, appears at the end of this Explanatory Memorandum ( Attachment A ).

 

Where appropriate, the Regulation Impact Statement for the remaining Schedules is incorporated in the respective chapters.



SOCIAL SERVICES LEGISLATION AMENDMENT

(OMNIBUS AND CHILDCARE REFORM) BILL 2016

 

 

Abbreviations used in this explanatory memorandum

  • ACCS means Additional Child Care Subsidy;

 

  • ATI means adjusted taxable income;

 

  • the Budget Savings (Omnibus) Act means the Budget Savings (Omnibus) Act 2016 ;

 

  • CCB means Child Care Benefit;

 

  • CCR means Child Care Rebate;

 

  • CCS means Child Care Subsidy;

 

  • 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 ;

 

  • Family assistance law means the Family Assistance Act and the Family Assistance Administration Act;

 

·          Farm Household Support Act means the Farm Household Support Act 2014

 

·          FTB means Family Tax Benefit;

 

  • JETCCFA means Jobs, Education and Training Child Care Fee Assistance;

 

  • the Military Rehabilitation and Compensation Act means the Military Rehabilitation and Compensation Act 2004 .

 

  • National Law means the Education and Care Services National Law Act 2010 (Vic) (and equivalent legislation in other State and Territory jurisdictions);

 

·          Social Security Act means the Social Security Act 1991

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

  • TFN means Tax File Number.

 

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

 

 



Schedule 1 - Payment rates

 

 

Summary

The family tax benefit Part A standard fortnightly rate will be increased by $20.02 for each FTB child in the family aged up to 19.  An equivalent rate increase, of around $19.37 per fortnight, will apply to certain youth allowance and disability support pension recipients aged under 18.  These increases will apply from 1 July 2018.

Background

The standard FTB child rate for an individual whose family tax benefit is calculated under method 1 is set out in clause 7 of Schedule 1 to the Family Assistance Act.  There are two different FTB child rates, depending on whether the FTB child is under 13 or has reached 13 years of age.  These FTB child rates are referred to as ‘FTB child rate (A1)’ for the purposes of indexation under Schedule 4 to the Family Assistance Act.

From 1 July 2018, these rates will be increased by $521.95 a year (equivalent to $20.02 per fortnight).  The increase will be applied to these FTB child rates after they have been indexed on 1 July 2018 in accordance with the usual rules. 

Youth allowance is calculated under the Youth Allowance Rate Calculator in section 1067G of the Social Security Act.  The tables in points 1067G-B2 and 1067G-B3 set out a person’s maximum basic rate, depending on their situation and whether or not they are independent. 

From 1 July 2018, the maximum basic rate of youth allowance for a person who is:

·          not independent, lives at home and is not yet 18 years of age;

·          independent, an accommodated independent person and not yet 18 years of age; or

·          independent, in supported state care and not yet 18 years old;

 

will be aligned to the method 1 FTB child rate applicable to an FTB child who has reached 13 years of age.

Aligning these two rates of payment will avoid confusion for families, and make sure there is no financial incentive for an FTB child to leave full-time secondary study to claim youth allowance.

Disability support pension is calculated under Pension Rate Calculator D in section 1066A of the Social Security Act for people who are under 21 years of age, who are not blind and who do not have dependent children.  Pension Rate Calculator E provides for the calculation of the rate of disability support pension for a person who is under 21 years of age and is permanently blind.

From 1 July 2018, the maximum basic rate of disability support pension for a person who is not a member of a couple, under 18, not independent and not living away from the person’s parental home because of a medical condition of the person, will also be aligned to the method 1 FTB child rate applicable to an FTB child who has reached 13 years of age.

Explanation of the changes

Part 1 - Family tax benefit

Amendments to the Family Assistance Act

Schedule 4 provides for the indexation of specified rates and amounts.  These include the FTB child rates set out in clause 7 of Schedule 1 which are referred to in Schedule 4 as ‘FTB child rate (A1)’.  These are annual amounts.

Item 1 inserts a new clause 7 into Schedule 4, which, in effect, increases each annual amount of FTB child rate (A1) by $521.95.  The increase would occur on 1 July 2018, after the amounts have been indexed under Schedule 4 in accordance with the current rules.  The note at the end of new clause 7 addresses a technical issue.

Item 2 is an application provision which ensures that the new increased amounts are used to calculate the rate of family tax benefit for days on and after commencement (being 1 July 2018).

Part 2 - Youth allowance and disability support pension

Amendments to the Social Security Act

The rate of disability support pension for a person who is under 21, not blind and has no dependent children is worked out using Pension Rate Calculator D at the end of section 1066A.  The maximum basic rates table is in point 1066A-B1.  Item 1 in the table at the end of point 1066A-B1 specifies the maximum basic rate (both annual and fortnightly) for a person who is not a member of a couple, who is under 18, not independent and not living away from the person’s parental home because of a medical condition.

Item 3 omits the annual amount in column 3 of item 1 and substitutes a reference to the annual linked rate .  This concept is then defined in new point 1066A-B2 (inserted by item 6 ) by reference to column 2 or item 2 of the table in clause 7 of Schedule 1 to the Family Assistance Act (being the FTB child rate applicable to an FTB child who has reached 13 years of age).

Item 4 omits the fortnightly amount in column 4 of item 1 and substitutes a reference to the fortnightly linked rate .  This concept is then defined in new point 1066A-B3 (inserted by item 6 ) through a formula that converts the annual rate in column 3 (the annual linked rate) into a fortnightly rate. 

Item 5 makes a consequential amendment to note 4 at the end of point 1066A-B1.

Items 7 to 10 make similar amendments to Pension Rate Calculator E at the end of section 1066B to link the maximum basic rate of disability support pension, for a blind person who is otherwise in the same situation as described above, to the FTB child rate applicable to an FTB child who has reached 13 years of age.

Youth allowance is calculated under the Youth Allowance Rate Calculator in section 1067G. 

The table in point 1067-B2 lists maximum basic rates of youth allowance for the various categories of people who are not independent.  Item 1 of this table provides the maximum basic rate for a person who lives at home and is not yet 18 years old.

Item 11 omits the fortnightly amount in column 3 of item 1 and substitutes a reference to the linked rate .  This concept is then defined in new point 1067G-B2A (inserted by item 13 ) by reference to the FTB child rate for an FTB child who has reached 13 years of age (the annual amount in column 2 of item 2 of the table in clause 7 of Schedule 1 to the Family Assistance Act) and provides a formula to convert the relevant FTB child rate to a fortnightly amount. 

Item 12 makes a consequential amendment to the note at the end of point 1067G-B2. 

The table in point 1067-B3 lists maximum basic rates of youth allowance for the various categories of people who are independent and not long-term income support students.  Item 1 of this table provides the maximum basic rate for a person who is an accommodated independent person and not yet 18 years of age.  Item 3 of this table provides the maximum basic rate for a person who is in supported state care and not yet 18 years old. 

Item 14 omits the fortnightly amounts in table items 1 and 3 in column 3 and replaces the amounts with references to the linked rate .  This concept is then defined in new point 1067G-B3AAA (inserted by item 16 ) by reference to the FTB child rate for an FTB child who has reached 13 years of age (the annual amount in column 2 of item 2 of the table in clause 7 of Schedule 1 to the Family Assistance Act), which also provides a formula to convert the relevant FTB child rate to a fortnightly amount. 

Item 15 makes a consequential amendment to the note at the end of point 1067G-B3. 

The amendments described above directly link certain youth allowance and disability support pension maximum basic rates for under 18 year-olds to the FTB child rate for an FTB child who has reached 13 years of age.  As the relevant FTB child rate is indexed on 1 July of each year, the linked youth allowance and disability support pension rates will also be increased. 

The amounts that have been omitted by the amendments described above would have been subject to indexation or adjustment under the Social Security Act. 

Items 17 to 21 make consequential amendments to remove references to these amounts from the relevant indexation and adjustment provisions.

Item 22 is an application provision, which ensures that the new linked amounts are used in working out the rate of youth allowance and disability support pension for days on and after commencement (being 1 July 2018).



Schedule 2 - Family tax benefit Part B rate

 

Summary

From 1 July 2017, this Schedule will introduce a reform to family tax benefit Part B that removes entitlement to FTB Part B for single parent families who are not single parents aged 60 or more or grandparents or great-grandparents, from 1 January of the calendar year their youngest child turns 17. 

Background

Under the current rules, an individual’s standard rate of family tax benefit Part B is worked out using the table in clause 30 of Schedule 1 to the Family Assistance Act.  There are two different rates, depending on whether the individual’s youngest FTB child is under five years of age or five years and over.  An FTB child who has turned 16 is disregarded for the purposes of family tax benefit Part B unless they are a senior secondary school child (as defined in section 22B of the Family Assistance Act) and the calendar year in which the child turned 18 has not ended. 

 

From 1 July 2017, amendments made by this Schedule introduce a new rate structure for family tax benefit Part B. 

 

Under the new structure, single parents who are not aged 60 or more or grandparents or great-grandparents will be able to access family tax benefit Part B for an FTB child who is a senior secondary school child until the end of the calendar year in which the child turns 16 (rather than until the end of the calendar year in which the child turns 18 which is the current rule).

 

Explanation of the changes

Amendments to the Family Assistance Act

 

Subclause 29(3) of Schedule 1 to the Family Assistance Act currently disregards an FTB child who has turned 16 for the purposes of family tax benefit Part B rate unless the child is a senior secondary school child.  Section 22B of the Family Assistance Act defines a senior secondary school child

 

Item 1 amends section 22B to provide new definitions of senior secondary school child for the purposes of subclause 29(3). 

 

New subparagraph 22B(1)(a)(ia) defines a senior secondary school child for the purposes of subclause 29(3) insofar as it relates to determining a standard Part B rate for a single parent aged at least 60 years, a grandparent or a great-grandparent with a youngest child aged at least 13 years.  In this situation, the child must be aged 16 or 17, or 18 where the calendar year in which the child turns 18 has not ended.  This definition will also be relevant in working out the rest of the individual’s Part B rate (for example, energy supplement) by operation of new subclause 29(4), as inserted by item 6 Item 4 inserts a related note at the end of subsection 22B(1). 

 

New subparagraph 22B(1)(a)(ib) defines senior secondary school child for the purposes of subclause 29(3) insofar as it relates to any other provision in Part 4 of Schedule 1 (which provides the rules for calculating an individual’s Part B rate).

 

Items 2 and 3 make other necessary consequential amendments to section 22B.

 

Clause 30 of Schedule 1 sets out the standard rates for family tax benefit Part B, depending on the individual’s family situation (that is, whether the individual’s youngest FTB child is under five years of age or is aged five or over).  Item 7 repeals the table in clause 30 and inserts a new table.

 

Under the new table, there will be  two standard rates for Part B and four family situations.   

 

The first rate will apply where the individual’s youngest FTB child is aged less than five years of age.  This is item 1 in the new standard rates table in clause 30.  This rate will be the equivalent of the current standard rate (Part B) that applies where the youngest FTB child is aged under five years, as it would have been indexed on 1 July 2017 under the ‘old’ rules.  New subclause 30(2) has this effect.

 

The second rate will apply where the individual’s youngest FTB child is aged at least five years but less than 13 years of age.  This is item 2 in the new standard rates table in clause 30.  This rate will be the equivalent of the current standard rate (Part B) that applies where the youngest FTB child is aged five or over, as it would have been indexed on 1 July 2017 under the ‘old’ rules.  New subclause 30(3) has this effect.

 

This rate will also apply where the individual’s youngest child is at least 13 years of age and the individual is not a member of a couple and is aged 60 or more or is a grandparent or great-grandparent of that youngest child (item 3) and where the individual’s youngest FTB child is aged at least 13 years but less than 17 years of age and item 3 of the new rates table does not apply (item 4 refers). 

 

New subclauses 30(4) and (5) then define a grandparent or great-grandparent to take account of biological, adoptive, step and relationship child-parent relationships. 

 

The new amounts in the table in clause 30 will apply from 1 July 2017, and these amounts will be indexed for the first time on 1 July 2018 in accordance with the usual rules ( subitem 11(2) refers).  

 

Item 10 inserts a new subclause 3(2A) into Schedule 4 of the Family Assistance Act which makes it clear that the new amounts will not be indexed on 1 July 2017. A new heading is also inserted.

 

Item 5 makes a consequential amendment to subclause 29(3), which is required because of the insertion of the new table in clause 30.

 

Item 8 makes a minor consequential amendment to clause 2 of Schedule 4 to the Family Assistance Act.

 

Item 9 makes a minor consequential change to the indexation provisions (base quarter).

 

Item 11 is an application provision.  It provides that the amendments made by this Schedule apply in working out the rate of family tax benefit for days on or after commencement (that is, 1 July 2017).  It also provides that the first indexation of the new amounts in the table in subclause 30(1) of Schedule 1 is to be on 1 July 2018



Schedule 3 - Family tax benefit supplements

 

Summary

This Schedule will phase out the family tax benefit Part A supplement for families with an adjusted taxable income of $80,000 a year or less by reducing it to $602.25 a year from 1 July 2016, and to $302.95 a year from 1 July 2017.  It will then be withdrawn from 1 July 2018. The family tax benefit Part A supplement has already been withdrawn for families with an adjusted taxable income over $80,000 a year under the Budget Savings (Omnibus) Act 2016.

The family tax benefit Part B supplement will also be phased out.  It will be reduced to $302.95 a year from 1 July 2016, and to $153.30 a year from 1 July 2017.  It will then be withdrawn from 1 July 2018.

Background

Starting in 2016-17, the end-of-year family tax benefit Part A and family tax benefit Part B supplements will be phased out.  These amounts will not be available from 1 July 2018.

 

The family tax benefit Part A and Part B supplements are components of the rate of family tax benefit, and are added into the rate after the end of the relevant income year when certain conditions are satisfied and FTB is reconciled.  This means that an individual’s supplements for any given income year cannot be paid until after the end of that income year.  Therefore, while the supplements are being reduced in the 2016-17 income year, there is no practical effect on payment of the supplement until after 1 July 2017.  

Explanation of the changes

Part 1 - Amendments commencing 1 July 2016

 

Amendments to the Family Assistance Act

 

For 2016-17, the end-of-year family tax benefit Part A and family tax benefit Part B supplements will be reduced. 

 

Clause 31A of Schedule 1 to the Family Assistance Act provides for the calculation of the FTB Part B supplement (referred to in clause 31A as the FTB (B) gross supplement amount ).  Item 1 repeals subclauses 31A(2) and (3) and substitutes a new subclause 31A(2), which resets the FTB (B) gross supplement amount to $302.95. 

 

 

Clause 38A of Schedule 1 provides for the calculation of the family tax benefit Part A supplement (referred to in clause 38A as the FTB gross supplement amount ), which is a per-child amount.  Item 2 repeals subclauses 38A(3) and (4) and substitutes a new subclause 38A(3), which resets the FTB gross supplement amount to $602.25. 

 

The FTB gross supplement amount and the FTB (B) gross supplement amount are usually indexed in accordance with movements in the CPI on 1 July each year (although indexation of these amounts is currently paused under clause 3(8) of Schedule 4 to the Family Assistance Act).  The amendments made by items 3 and 4 ensure that these amounts are no longer subject to indexation.

 

Item 5 repeals a spent indexation provision. 

 

Item 6 is an application provision.  It provides that the amendments made by Part 1 of this Schedule apply in working out the rate of family tax benefit for days on or after commencement (1 July 2016).

 

Part 2 - Amendments commencing 1 July 2017

 

Amendments to the Family Assistance Act

 

For 2017-18, the end-of-year family tax benefit Part A and family tax benefit Part B supplements will be further reduced. 

 

Item 7 repeals subclause 31A(2) of Schedule 1 and substitutes a new subclause 31A(2), which resets the FTB (B) gross supplement amount to $153.30. 

 

Item 8 repeals subclause 38A(3) and substitutes a new subclause 38A(3), which resets the FTB gross supplement amount to $302.95. 

 

Item 9 is an application provision.  It provides that the amendments made by Part 2 of this Schedule apply in working out the rate of family tax benefit for days on or after commencement (1 July 2017).

 

Part 3 - Amendments commencing 1 July 2018

 

Amendments to the Family Assistance Act

 

From 1 July 2018, the end-of-year family tax benefit Part A and family tax benefit Part B supplements will no longer be available. 

 

Division 2A of Part 4 of Schedule 1 to the Family Assistance Act provides for the rate of the family tax benefit Part B supplement.  Item 21 repeals this Division.

 

Division 2A of Part 5 of Schedule 1 to the Family Assistance Act provides for the rate of the family tax benefit Part A supplement.  Item 22 repeals this Division.

 

 

The method statements in clauses 3 and 25 of Schedule 1 set out the steps to be taken in working out an individual’s Part A rate where method 1 and method 2 apply respectively.  Items 14 and 17 remove the paragraphs in these method statements which provide for the family tax benefit Part A supplement to be included in the rate. 

 

Clauses 29 and 29A of Schedule 1 provide rules for calculating an individual’s Part B rate.  Items 18 to 20 amend these clauses to remove paragraphs which provide for the family tax benefit Part B supplement to be included in the rate. 

 

An individual’s supplement amount (defined by reference to the family tax benefit Part A supplement) is relevant in working out an individual’s maintenance income ceiling for certain purposes.  The relevant provisions are clauses 24N and 24R of Schedule 1 to the Family Assistance Act.  Items 15 and 16 make consequential amendments to these provisions to reflect the repeal of the family tax benefit Part A supplement.

 

Under the current rules, payment of the family tax benefit Part A supplement is linked to the health check and immunisation requirements through sections 61A and 61B of the Family Assistance Act.  Item 13 repeals these sections, while items 10 to 12 make other necessary consequential amendments. 

 

Amendments to the Family Assistance Administration Act

 

Section 32A of the Family Assistance Administration Act currently ensures that the family tax benefit supplements are disregarded in calculating an individual’s rate of family tax benefit unless and until the relevant family tax benefit reconciliation conditions are satisfied.  Section 105A then requires that the Secretary review an individual’s rate under section 105 where the family tax benefit reconciliation conditions are satisfied so as to include the supplements in the rate.  As a consequence of the repeal of the family tax benefit supplements, item 23 repeals section 32A, while item 26 repeals section 105A. 

 

However, the family tax benefit reconciliation conditions are also relevant for other purposes (such as the maintenance income test) and are therefore retained.  Item 24 makes some technical adjustments to the wording of section 32B so that the family tax benefit reconciliation conditions can continue to operate.

 

Item 25 makes a consequential amendment to the definition of adjusted Part A rate in subsection 35D(4) to remove a reference to the repealed clause 38A of Schedule 1 to the Family Assistance Act.

 

Items 27 to 34 make consequential amendments to various review provisions, which refer to provisions that are being repealed.

 

Item 35 is an application provision.  It provides that the amendments made by Part 3 of this Schedule apply in working out the rate of family tax benefit for days on or after commencement (1 July 2018).

 



Part 4 - Other amendments

 

Amendment to the Social Services Legislation Amendment (Family Assistance Alignment and Other Measures) Act 2016

 

Item 36 makes a technical amendment to the commencement table in the Social Services Legislation Amendment (Family Assistance Alignment and Other Measures) Act 2016 so that amendments in that Act that are contingent upon passage of amendments to phase out the family tax benefit Part A and B supplements commence on 1 July 2018.  This is the date from which the family tax benefit supplements will not be available (Part 3 of this Schedule refers).



Schedule 4 - Jobs for families child care package

Overview of the Schedule

 

The purpose of this Schedule is to introduce key aspects of the Jobs for Families Child Care Package , as announced in the 2015-16 Budget. 

 

In the 2016-17 Budget, it was announced that the commencement of the main amendments in the Schedule would be delayed until July 2018.

 

The Schedule will, through the introduction of a new Child Care Subsidy (CCS), and enhancements to the operating requirements of approved child care providers, deliver a simpler, more affordable, more flexible and more accessible child care system for families.  The new measures improve access to quality early education and care, support parents as they balance work and family responsibilities, and enable greater engagement with the workforce.

 

Recognising the needs of vulnerable and disadvantaged families, and the benefits that quality child care and a positive early learning environment can have on children’s early development, this Schedule also introduces the Additional Child Care Subsidy (ACCS).  ACCS will provide improved and targeted support to those families who require it most, such as: families with children at risk of serious abuse or neglect (though “ACCS (child wellbeing)”); families experiencing temporary financial hardship (through “ACCS (temporary financial hardship)”); families on income support transitioning to work (through “ACCS (temporary financial hardship)”); and grandparent carers on income support (through “ACCS (grandparent)”).

 

The Schedule comprises four Parts.

 

Part 1—Main Amendments

           

Amendments to the A New Tax System (Family Assistance) Act 1999 will improve the affordability, accessibility and flexibility of child care for families, particularly through:

 

  • Establishing eligibility criteria, and the payment calculation process, for a new simpler child care subsidy, the CCS.  The CCS will replace the current poorly targeted child care payments (including Child Care Benefit (CCB) and Child Care Rebate (CCR)) with the objective of supporting parents who want to work or work more. 

 

  • Establishing eligibility for ACCS elements of the Child Care Safety Net which will improve accessibility to child care for disadvantaged or vulnerable families.

 

Amendments to the A New Tax System (Family Assistance) (Administration) Act 1999 set out further payment and claim rules, as well as rules dealing with: reconciliation of payments following a financial year; debt recovery; compliance powers and other machinery provisions. 

 

Part 2—Consequential amendments

 

This Part contains provisions to ensure that related legislation such as the A New Tax System (Goods and Services Tax) Act 1999 , the Fringe Benefits Assessment Act 1986 and the Income Tax Assessment Act 1997 align with the changes to family assistance law through minor consequential amendments.

 

Part 3—Other amendments

 

This Part contains amendments that commence on Royal Assent (Division 1) or from 1 July 2017 (Division 2).  Among other matters, the Part enables the Secretary to treat certain new applications for approval as not having been made and to reassess whether existing operators and their services continue to meet conditions of the approval at any time from Royal Assent.  Part 3 also closes enrolment advance payments and allows for their recovery from 1 July 2017.

 

Part 4—Application, saving and transitional amendments

 

This Part contains provisions relating to: the cessation of eligibility for CCB and CCR and the transition to the CCS and ACCS payment system; the saving of certain laws in relation to CCB and CCR (to ensure, for example, that debts and reviews can continue to be dealt with); and transitional provisions to enable existing claimants and recipients to be eligible for CCS and for existing approved services to transition to the CCS system from 2 July 2018.

 

Part 1—Main Amendments

Summary

Part 1 contains the main amendments of this Schedule, which are effective to:

 

  • cease CCB and CCR;

 

  • introduce, from 2 July 2018, a new CCS, which is subject to both an income and activity test;

 

  • introduce various rates of ACCS that are available to individuals (and in one case, child care providers) in various circumstances; and

 

  • make other amendments to deal with CCS and ACCS claims, reviews of decisions, provider approvals and compliance obligations of approved providers of child care services.

Background

Prior to the amendments proposed by this Part, the Family Assistance Act provided the eligibility criteria and method for calculating rates for the CCB and the CCR.  The Family Assistance Administration Act provides for procedural matters relating to these payments, such as making claims, determinations of entitlement, how payment is made, recovery of overpayments and review of decisions.  It also provides for a process for operators of child care services to be approved so that individuals can be eligible for child care payments for care they provide and places obligations on approved child care services, including to accurately report enrolments and attendance of children for a session of care.

 

In the 2015-16 Budget, the Australian Government announced a package of measures to simplify and strengthen the child care system and to ensure greater incentives for parents to work.  This included replacing existing child care payments with a new payment, the CCS. 

 

The Child Care Safety Net will provide additional targeted assistance to genuinely disadvantaged or vulnerable families.  One of the components of the Child Care Safety Net is ACCS, which provides additional assistance:

 

·        in relation to children at risk of serious abuse or neglect (through the ACCS (child wellbeing) payment);

 

·        to individuals experiencing temporary financial hardship;

 

·        to individuals on income support who are transitioning to work; and

 

·        grandparent carers on income support.

 

This Part amends the Family Assistance Act and the Family Assistance Administration Act to replace CCB and CCR with CCS and ACCS.  It also replaces the current approval process for child care services with a more streamlined process that more clearly distinguishes between the approved provider and the services they operate, consistent with the approach taken in the National Law.

 

The amendments made by this Part commence on 2 July 2018 (noting that other Parts of this Schedule commence earlier).

 

Explanation of the changes

 

Amendments to the Family Assistance Act

 

Definitions

 

Items 1, 3, 10, 12, 16, 19, 21, 25 and 26 repeal definitions relating to CCB and CCR that are not needed for CCS and ACCS.  

 

Items 2, 4, 7, 9, 13, 15, 18, 20 and 22 insert new definitions of key terms, which will be used in provisions relating to CCS and ACCS.

 

Items 5, 6, 17, 24 and 26 amend various definitions by substituting references to CCB and CCR with references to CCS and ACCS.

 

Item 6 removes reference to subsections 24(4) and (6) from the definition of “FTB child” for child care purposes.

 

The previous reference to subsections 24(4) and (6) in the definition of FTB child for child care purposes was intended to ensure that an individual’s maximum period of eligibility for CCB when an individual is absent from Australia aligned with an individual’s maximum period of eligibility for FTB.  This outcome is now achieved through a new provision proposed for the Family Assistance Act ( section 85EE inserted by item 40 ), which specifies a maximum period of eligibility for CCS or ACCS during an individual’s absence from Australia (generally 6 weeks). 

 

The definition of the term “FTB child” for child care purposes otherwise has the same meaning as for FTB purposes, including by aligning with the meaning in section 22 of the Family Assistance Act.

 

Item 8 substitutes the definition of “lower income threshold” to refer to subclause 3(4) of Schedule 2 of the Family Assistance Act and item 23 substitutes the definition of “upper income threshold” to also refer to that subclause.  The new definitions reflect the income thresholds applicable to CCS, which are different from the income thresholds that applied to CCB.  The lower income threshold is the ATI point below which an individual is able to receive 85 per cent of the hourly fee cap (or of the fee charged where is it lower than the hourly fee cap) through CCS—that percentage tapers to 20 per cent at the upper income threshold.  There are also amendments at items 20 and 22 to refer to the intermediate thresholds “second income threshold” and “third income threshold” which are the income levels at which the applicable percentage of CCS tapers from 85 per cent to 50 per cent and from 50 per cent to 20 percent, as described in more detail below in relation to proposed new clause 3 of Schedule 2 to the Family Assistance Act.

 

Items 11, 28 and 29 amend the definition of “paid work” that applies for FTB purposes.  References to paid work in CCB provisions were excluded from the scope of the definition.  The amendments remove references to CCB provisions that are repealed, and make clear that the definition of “paid work” for CCS purposes is contained in paragraph 12(2)(a) of Schedule 2 to the Family Assistance Act.

 

Item 14 makes a consequential amendment to the definition of “receiving”.  This paragraph modifies the concept of receiving under the Social Security Act 1991 for provisions in the Family Assistance Act that use the term “receiving” in relation to a social security payment.  The amendment removes references to CCB provisions that are repealed, and adds reference to new section 85CJ , which refers to social security payments (for ACCS (grandparent)).

 

Reference to new section 85CK , which also refers to social security payments, has not been included in the definition at paragraph (b) because the modification of the definition of “receive” for social security purposes is not intended to apply to the receipt of the income support payments required for eligibility of ACCS (transition to work)—for ACCS (transition to work), receipt will have the same meaning as in the social security law.  The modification deems an individual to be receiving a social security payment for a period of 12 weeks from when their rate reduces to nil due to employment income.  If the modification was applied in section 85CK individuals would have access to two 12 week transition payments (that is, noting the effect of subsection 85CK(2)) when they start earning employment income, which is not intended.

 

Item 27 substitutes subsection 3AA(1) to remove references to CCB provisions that are repealed and to add in references to CCS provisions.

 

Immunisation rules

 

Item 30 substitutes the reference to CCB in subsection 6(1) with a reference to individual eligibility to CCS in paragraph (a), and provider eligibility to ACCS (child wellbeing) in paragraph (b).  This is so the immunisation requirements in section 6 of the Family Assistance Act apply for the purposes of determining an individual’s eligibility for CCS, and providers’ eligibility for ACCS (child wellbeing).

 

Various interpretative provisions

 

Item 31 substitutes the reference to CCB in subsection 8(1) with a reference to CCS.  Section 8 of the Family Assistance Act allows the Secretary to determine that an individual who is not an Australian resident is taken to be an Australian resident for CCS purposes, in cases of hardship or other special circumstances.

 

For CCB, a determination under section 8 was required to comply with guidelines determined by the Minister by legislative instrument.  Item 32 makes amendments so any new guidelines can be contained in the Minister’s rules (which are intended to be made as a single compilation), rather than in a separate legislative instrument.

 

Item 33 repeals sections 10 through to 18 (noting that sections 11 to 18 are no longer required as they relate purely to CCB and CCR) and substitutes a new section 10 for CCS purposes.

 

New section 10 reflects repealed sections 10 and 11, with some modifications to address an anomaly that existed in repealed section 10 and to clarify the intended effect of the section.

 

The basic rule in new subsection 10(1) is that, for family assistance purposes, an approved child care service does not provide a session of care to a child unless the child is enrolled for care by the service and the child physically attends the service. Subsections (2), (3) and (4) specify circumstances in which a child is taken to have attended a session of care, even where they do not physically attend.  There is also a power for the Minister to specify rules to ensure that there are certain days on which a child is definitely not to have been taken to have attended during a physical absence (paragraphs (2)(iv) and (3)(iv)).

 

Under new paragraph 10(1)(a) an approved child care service is taken to have provided a session of care to a child if the child attends part of the session of care.  This provision is intended to ensure that where a parent picks their child up early, for example, but still pays for an entire session of care, they are able to access fee assistance in relation to their out of pocket expenses for the whole session of care.

 

New subsections 10(2) and (3) allow a child to be taken to have attended a session of care in certain circumstances—that is, these provisions allow for certain absences.  Subsection 10(2) deals with when a session of care is taken to have been provided for up to 42 days in a single financial year (the initial 42 absences) and subsections 10(3) and (4) deal with the circumstances in which, following the initial 42 absences, it is still possible for a child to be taken to have attended a session of care (such as due to illness).  The initial 42 absences limit applies per child.  On the day the child does not attend, if CCS or ACCS would not have been paid even if the child had attended (for example, because the fortnightly limit of hours had already been reached), the day does not count towards the initial 42 absences limit. 

 

Both subsections 10(2) and (3) require the session of care to occur on a day that is after the day the child first attended a session of care provided by the service and before the day the service permanently ceased providing care to the child.  This means the child must have physically attended a session of care at the service before subsection 10(2) or 10(3) can be relied on, and absence days under subsection 10(2) or 10(3) will not be available on and after the day the service permanently ceased providing care to the child.  Subsection 10(5) clarifies that a service permanently ceases to provide care to a child on the day the child last physically attends a session of care provided by the service.

 

Repealed section 11 is no longer relevant as occasional care is not a distinct service type for CCS.  Repealed section 12 is no longer relevant as there will not be registered carers for CCS.

 

Repealed section 13 allowed the Secretary to specify a day that would otherwise not be a school holiday as a school holiday for the purposes of the definition of school holiday session.  The repeal of section 13 is consequential to the repeal of the definition of “school holiday session” by item 19 .

 

Repealed section 17A provided activity requirements for CCB.  The activity requirements for CCS will be in Part 5 of Schedule 2 of the Family Assistance Act.

 

Repealed section 18 was only used in relation to the schooling percentage in the CCB rate calculator.  This definition is no longer required as there is no schooling percentage for CCS.

 

Eligibility and rate of family assistance

 

Item 34 amends the heading of Part 3 and item 38 amends the heading of Part 4. These amendments are consequential to the structural changes made by items 35, 39 and 40 .

 

Item 35 repeals Divisions 4 and 5 of Part 3, which provide eligibility criteria for CCB and CCR.  Item 39 repeals Divisions 4 and 4A of Part 4, which provide for the rate of CCB and CCR.  New Part 4A inserted by item 40 provides for eligibility for and the rate of CCS and ACCS.  This structural change places eligibility and rate provisions for CCS and ACCS closer together and is intended to simplify the layout of the child care provisions in the family assistance law.

 

Items 36 and 37 replace CCB and CCR references in subsection 57GI (note 2) and section 57GQ with references to CCS and ACCS. The effect of this is that Division 7 of Part 3 of the Family Assistance Act, which provides for loss of family assistance on security grounds, does not apply to CCS and ACCS.

 

New Part 4A - Child care subsidy

 

Item 40 inserts new Part 4A into the Family Assistance Act.  This Part deals with eligibility for and how to calculate the rate of CCS and ACCS.  A simplified outline of the Part is provided in section 85AA .

 

Section 85AB provides, without limitation, a statement of the Constitutional basis for provisions in the family assistance law that deal with child care payments.

 

Eligibility for CCS

 

Section 85BA provides when an individual is eligible for CCS for a session of care provided to a child by an approved child care service.

 

The definition in section 10 of the Family Assistance Act (as amended by item 33 ) is relevant for determining whether a session of care is “provided” to the child (which can include a day of absence because of that provision).

 

If the session of care is provided, all the following requirements must be met at the time the session is provided for the individual to be eligible for CCS for the session:

 

(i)             the child is an FTB child, or regular care child, of the individual, or the individual’s partner;

 

(ii)           the child is 13 years of age or under and does not yet attend secondary school (that is, the child is not yet at school or attends primary school), or where the child does not meet this criteria, the child is included in a class determined by the Minister under rules made for subsection 85BA(2 ) ;

 

(iii)          the child meets immunisation requirements (set out in section 6 of the Family Assistance Act);

 

(iv)          the individual, or the individual’s partner, meet the residency requirements (in new section 85BB).

 

These key eligibility criteria (as set out in subparagraphs 85BA(1)(i) to (iv)) are the criteria that the Secretary will assess at the time that an individual makes a claim for CCS.  However further eligibility criteria also apply in relation to particular sessions of care as below.

 

In addition, the individual, or the individual’s partner, must have incurred a liability to pay for the session of care under a written arrangement with the provider of the service, and the session of care must satisfy all the following requirements:

 

(i)             it is provided in Australia;

 

(ii)           it is not part of a compulsory education programme in the State or Territory where the care is provided;

 

(iii)          it is not provided in circumstances prescribed in the Minister’s rules (for example, where family day care is provided in a “child-swapping” arrangement). 

 

Subsection 85BA(2) allows the Minister to make rules to ensure that an individual can be eligible for CCS in relation to certain prescribed children who are over 13 or at secondary school.  Children prescribed by such rules may face specific accessibility issues, or be in circumstances of vulnerability, such as due to disability or in other circumstances where fee assistance for child care is necessary.

 

Note that new Division 5 in Part 4A provides some limitations on eligibility.  An individual is only eligible for CCS for a session of care provided to a child if the individual, the child and the session of care meet all the eligibility requirements described above, and Division 5 does not prevent the individual being eligible.

 

“FTB child” and “regular care child” are terms defined for FTB that also apply for CCS purposes (see definitions in s 3(1)).

 

The immunisation requirements are in section 6 of the Family Assistance Act.  They are the same as the immunisation requirements that apply for FTB.

 

The residency requirements are in section 85BB .  These are the same as the residency requirements that apply to CCB.

 

Eligibility for ACCS (child wellbeing)

 

Subsection 85CA(1) provides when an individual is eligible for ACCS (child wellbeing) for a session of care provided to a child by an approved child care service.  ACCS (child wellbeing) provides a short term, higher rate of assistance than CCS in order to reduce the possibility of the cost of child care being a barrier to children at risk of serious abuse or neglect, from either entering or remaining engaged with, child care.

 

For individuals, CCS eligibility is a pre-requisite to ACCS eligibility.  This means the individual must be eligible for CCS for the session of care and meet additional criteria to be eligible for ACCS (child wellbeing) for the session of care.

 

The additional criteria for ACCS (child wellbeing) is that a certificate given by the approved provider of the service (under section 85CB), or a determination made by the Secretary (under section 85CE), must be in effect in relation to the child for the week in which the session of care is provided certifying or determining that the child is at risk of serious abuse or neglect.

 

Even if these requirements are met, the limitations in Division 5 may prevent the individual being eligible for ACCS (child wellbeing).

 

Subsection 85CA(2) sets out when the approved provider of an approved child care service is eligible for ACCS (child wellbeing) for a session of care provided to a child.

 

An approved provider can only be eligible for ACCS (child wellbeing) for a session of care if the provider cannot identify an individual who is eligible for CCS for the session of care—this is intended to ensure that provider eligibility is a last resort measure.

 

Other requirements which apply for an approved provider to be eligible for ACCS (child wellbeing) reflect those which apply to individuals:

 

·                    the child must be 13 or under and not yet attending secondary school (that is, the child must not yet be at school or be attending primary school) at the time the session of care is provided, or, where the child does not meet this criteria, the child is included in a class determined by the Minister under rules made for subsection 85CA(2) ;

 

·                    the child must meet immunisation requirements at the time the session of care is provided;

 

·                    the session of care must meet CCS eligibility criteria (the care must be provided in Australia, but not as part of a State/Territory compulsory education program and not be provided in circumstances prescribed in the Minister’s rules);

 

·                    a certificate or a determination, certifying or determining that the child is or was at risk of serious abuse or neglect, must be in effect in relation to the child for the week in which the session of care is provided; and

 

·                    the provider must not be prevented from being eligible under Division 5.

 

Note, importantly, the requirement for the child to meet immunisation requirements at the time the session of care is provided will also apply for provider eligibility to ensure that the “No Jab No Pay” measure, as recently enacted, applies to cases where a provider is eligible for ACCS (child wellbeing) in its own right.

 

Subsection 85CA(4) enables the Minister’s rules to prescribe circumstances in which a child is, or is not taken to be, at risk of serious abuse or neglect.

 

The power to prescribe these circumstances has been delegated to the Minister to ensure that there is ability for the law to adapt to changes in the understanding and definition of “abuse” and “neglect” into the future.  The rules will specify the criteria which must be met in order to certify/determine a child to be at risk of serious abuse or neglect, and provide guidance to providers to ensure that “child wellbeing” assistance is targeted to those children who are genuinely at risk of serious abuse or neglect.  The rules are intended to be made after having regard to criteria used by each State and Territory in relation to vulnerable children.

 

Section 85CB provides when the approved provider of an approved child care service can issue a certificate, what it must contain and when it takes effect.

 

An approved provider can only give a certificate if it considers that a child is at risk of serious abuse or neglect in accordance with the Minister’s rules made for subsection 85CA(4) .

 

The certificate must:

 

  • be given in a form and manner approved by the Secretary;

 

  • contain the information, and be accompanied by the documents, required by the Secretary;

 

  • specify the day it takes effect and the weeks for which it has effect;

 

  • identify the child and the service to whom it relates; and

 

  • include any other matters prescribed by the Secretary’s rules.

 

The day the certificate takes effect must be a Monday that is no earlier than 28 days before the day it is given (to ensure that certificates are given relatively soon after a child is actually in circumstances of risk).  Each week for which the certificate has effect must include at least one day when the child is at risk of serious abuse or neglect.

 

For each child, certificates given by the approved provider in relation to a particular service cannot be in effect for more than 6 weeks in any 12 month period.

 

The approved provider is not able to give a certificate if it would result in more than 50 per cent of the children cared for by the service on any one day (within the first week that the certificate would have effect) having a certificate or a Secretary determination for ACCS (child wellbeing) in effect.  A different percentage can be specified in the Secretary’s rules, and in appropriate circumstances the Secretary can determine a different percentage for a particular service.  Subsection (6), which clarifies that a determination of a different percentage under paragraph (4)(c) is not a legislative instrument, is merely declaratory and included to assist readers.  It is not an exemption from the Legislation Act 2003 .

 

Subsection (5) enables the Minister’s rules to specify other circumstances when a certificate given by a provider is not effective.  This rule making power could be used to address cases of inappropriate giving of certificates, or if the Minister decides it is appropriate to limit providers to applying to the Secretary for a determination under section 85CE.

 

Certificates issued by approved providers will include “protected Information” as defined by section 3 of the Family Assistance Administration Act and, as such, that information will be protected by safeguards offered by those secrecy rules, including though exposing a person who misuses that information to an offence (e.g. sections 162 through to 168 of the Family Assistance Administration Act).  

 

If an approved provider considers a child to be at risk of serious abuse or neglect and is unable to give an effective certificate, the provider may apply under section 85CE for a determination by the Secretary that the child is at risk of serious abuse or neglect.

 

Section 85CC requires an approved provider to cancel a certificate they have given if they no longer consider the child to be at risk during a week for which the certificate has effect.  However, if any of the weeks for which the certificate has effect is a week for which the time for updating or withdrawing a report under subsection 204B(6) has expired, the provider cannot cancel the certificate under this section.  Instead, the Secretary will need to take action to cancel or vary the certificate under section 85CD.  The time limit on provider cancellation of certificates is intended to restrain the extent to which providers can backdate information on which ACCS entitlement is based without intervention by the Secretary.

 

Under subsection 85CC(4), where the provider then issues a replacement certificate on the basis that it now has the correct information to certify that a child was at risk of serious abuse or neglect, the provider is able to backdate the replacement certificate to take effect more than 28 days before the replacement certificate is given but no earlier than the day the original certificate took effect.  This has the intention of not disadvantaging the provider by modifying the general rule of how far back in time a certificate can take effect.

 

Section 85CD allows the Secretary to vary or cancel a certificate given by an approved provider if the Secretary is not satisfied the child to whom the certificate relates is at risk of serious abuse or neglect during a week for which the certificate has effect.  Notice of the variation or cancellation must be given to the approved provider and the variation or cancellation takes effect from the day specified in notice.  In exercising this power, the Secretary may rely on any source of information available to the Secretary, including, but not limited to, information approved providers are required to provide under section 67FC of the Family Assistance Administration Act.

 

The power to cancel or vary certificates will be delegated to officers with appropriate seniority.

 

Section 85CE provides that the Secretary may make a determination that a child is at risk of serious abuse or neglect on application by an approved provider.

 

An approved provider can apply for a determination in respect of a child if the provider considers the child is or was at risk of serious abuse or neglect at the time care was provided and the provider is unable to give a certificate under section 85CB.  The application must be in the form and manner approved by the Secretary.  It must also contain the information and be accompanied by the documents required by the Secretary.  The provider must have also given notice to the relevant State or Territory body that they consider the child to be at risk of serious abuse or neglect prior to seeking a determination by the Secretary.

 

The Secretary must make a decision on the application within 28 days of receiving the application, and is required to give notice of the decision in accordance with subsection 27A(1) of the Administrative Appeals Tribunal 1975 (the AAT Act) .  The rationale for the inclusion of a 28 day timeframe is to ensure a timely response to applications.

 

Subsection (4) states that if the Secretary does not make a decision, the application is taken to be refused and the Secretary is not required to give notice of the deemed refusal.  Although, the Secretary will make every effort to deal with applications in a timely manner, this provision is included to provide certainty to applicants about the status of their application in the unlikely event that the Secretary does not meet the obligation in subsection (3), such as due to the application becoming lost in the mail, or where it is not processed due to administrative oversight.  In such circumstances, where the Secretary has neither made a determination nor refused the application, the application is taken to be refused so that there is a clear and effective outcome for an applicant.  Despite subsection 27A(1) of the AAT Act providing that a person who makes a reviewable decision must take reasonable steps to give to an affected person a written notice of the decision and of their review rights, it would not be appropriate to do so in this circumstance.  This is because of the practical reality that any deemed refusals are likely to occur without the Secretary's actual and active knowledge.  In situations where a deemed refusal has occurred, the applicant will have full access to review rights (both merits review through internal review and subsequently through the Administrative Appeals Tribunal, and judicial review).  For example, the applicant may contact the Department to ask about the progress of their application, and the Secretary would be able to initiate an own motion review of the refusal decision.  Alternatively, the person may make a formal application for an internal review of the refusal decision.  In addition, there will also be nothing to prevent an applicant whose application is deemed to be refused from making a new application.

 

If the Secretary decides to determine the child to be at risk of serious abuse or neglect, the determination must specify the date it takes effect, which must be a Monday not more than 28 days before the date the application was made.  The determination must also specify the weeks for which it is in effect.  While a determination is in effect under this section, if the Secretary is satisfied the child will continue to be at risk of serious abuse or neglect after the determination ceases to have effect, the Secretary can make another determination to take effect immediately after the current determination ceases.  Each determination cannot be in effect for more than 13 weeks.  Notice of the determination must be given to any person affected by the determination.

 

Subsection (7) clarifies that a determination under this section is not a legislative instrument.  It is merely declaratory and included to assist readers. It is not an exemption from the Legislation Act 2003 .

 

If the Secretary refuses an application under this section, the Secretary must give the provider and any other affected person notice of the decision.  The refusal is a reviewable decision.

 

Section 85CF allows the Secretary to vary or revoke a determination if the Secretary is no longer satisfied the child to whom the determination relates is at risk of serious abuse or neglect for a week when the determination has effect.  The variation or revocation takes effect from the day specified in the notice of revocation or variation.  The Secretary must give the provider and any other affected person notice of the decision.

 

Eligibility for ACCS (temporary financial hardship)

 

Subsection 85CG(1) provides for when an individual is eligible for ACCS (temporary financial hardship) for a session of care provided to a child by an approved child care service.  ACCS (temporary financial hardship) provides a higher hourly rate of assistance than CCS in order to reduce the possibility that children, who are already engaged in mainstream child care, do not reduce or withdraw from child care due to the costs involved, only because an exceptional circumstance or event has compromised a family’s short-term financial situation.

 

CCS eligibility is a prerequisite to ACCS eligibility.  This means the individual must be eligible for CCS for the session of care and meet additional criteria to be eligible for ACCS (temporary financial hardship) for the session of care.

 

The additional requirement for ACCS (temporary financial hardship) is that a determination of temporary financial hardship must be in effect in relation to the child when the session of care is provided.

 

Even if these requirements are met, the limitations in Division 5 may prevent the individual being eligible for ACCS (temporary financial hardship).

 

Subsection 85CG(2) enables the Minister’s rules to prescribe circumstances in which an individual is taken to be experiencing temporary financial hardship.  The power to prescribe these circumstances has been delegated to the Minister to ensure there is an ability for the law to adapt to unforeseen circumstances (such as certain natural disasters).  

 

Section 85CH provides that the Secretary may make a determination of temporary financial hardship in relation to a child on application by an individual.

 

The Secretary may make such a determination on his or her own initiative, including on a class basis, or in response to applications.

 

Where an individual makes an application for a determination under this section, the application must be in a form and manner approved by the Secretary.  It must contain the information, and be accompanied by the documents, required by the Secretary.  The Secretary must make a decision on the application within 28 days of receiving the application.

 

If the Secretary makes a temporary financial hardship determination, it must take effect on a Monday not more than 28 days before the date the application was made, or 28 days before the determination where there was no application, and must be in effect for a whole number of weeks.  The number of weeks the determination is in effect cannot exceed 13, reflecting that this assistance is intended to be short-term in nature.  A state of temporary financial hardship cannot be determined in relation to more than 13 weeks for a particular reason.

 

Subsection (8) clarifies that a determination under this section is not a legislative instrument. It is merely declaratory and included to assist readers.  It is not an exemption from the Legislation Act 2003 .

 

If the Secretary refuses an application under this section, the Secretary must give the individual and any other affected person notice of the decision.  The refusal is a reviewable decision.

 

If the Secretary does not to make a decision within 28 days of receiving the application, the Secretary is deemed to have refused the application under subsection 85CH(5) .  This provision has been included for the same reasons as described above in relation to deemed refusals under subsection 85CE(4).  It is not intended to be relied on in the vast majority of circumstances and is included simply to ensure that the status of an application, in the unusual circumstance where it has not been dealt with in time, is clear.  The Secretary will make every effort to deal with applications in a timely fashion.  A deemed refusal is reviewable, but the Secretary is not required to give notice of the deemed refusal in view of the fact that deemed refusals are likely to occur where the Secretary is not aware of the application.  Where an application is deemed to be refused under subsection 85CH(5), there is no restriction to an individual making a new application. 

 

Section 85CI allows the Secretary to vary or revoke a temporary financial hardship determination if the Secretary is no longer satisfied the individual concerned is or was experiencing temporary financial hardship for a week when the determination has effect.  The variation or revocation takes effect from the day specified in the notice of variation or revocation.  The Secretary must give the notice to the individual concerned and any other affected person.

 

Eligibility for ACCS (grandparent)

 

Section 85CJ provides for when an individual is eligible for ACCS (grandparent) for a session of care provided to a child by an approved child care service.  ACCS (grandparent) provides a higher hourly rate of assistance than CCS for eligible grandparents in order to reduce the possibility of the cost of mainstream child care being a barrier to a child in their care from either entering or remaining engaged with, child care.

 

CCS eligibility is a pre-requisite to ACCS eligibility.  This means a grandparent (or great-grandparent) must be eligible for CCS for the session of care and meet additional criteria to be eligible for ACCS (grandparent) for the session of care.

 

The additional criteria for ACCS (grandparent) include that: the individual or their partner is a grandparent or great-grandparent of the child; at the start of the CCS fortnight in which the session of care is provided, they are the primary carer for their grandchild (that is, they must be responsible for 65% or greater of the child’s care); and the individual or their partner is receiving an income support payment as listed in paragraph 85CJ(1)(d).  Note that the term “receive” for this purpose is defined in section 3 of the Family Assistance Act and has a specific meaning by reference to the social security law (generally to include periods of an income support rate above nil).

 

Subsection (3) requires adoptive and step parent relationships to be treated as biological relationships when determining whether an individual is a grandparent or great-grandparent of a child.  Subsection (4) defines the terms adoptive parent and step-parent used in subsection (3).

 

Even if these requirements are met, the limitations in Division 5 may prevent the individual being eligible for ACCS (grandparent).

 

Eligibility for ACCS (transition to work)

 

Section 85CK provides when an individual is eligible for ACCS (transition to work) for a session of care provided to a child by an approved child care service.  ACCS (transition to work) provides a higher rate of assistance than CCS and is intended to support families to meet the costs of child care where an eligible parent is undertaking approved work, training or study activities that will support an increased workforce engagement.

 

CCS eligibility is a pre-requisite to ACCS eligibility.  This means the individual must be eligible for CCS for the session of care and meet additional criteria to be eligible for ACCS (transition to work) for the session of care.

 

The additional requirements for ACCS (transition to work) include that, at the start of the CCS fortnight in which the session of care is provided, the individual is receiving a transition to work payment (as set out in subsection (3)) and meets any other requirements specified in the Minister’s rules.  It is intended to be open to Minister’s rules to set out other eligibility matters including, for example, an income test or to clarify the relationship between subsection 85CK(2) eligibility with eligibility under subsection 85CK(1).  It would be open to rules to state that eligibility under subsection (2) only follows directly from a period of eligibility under subsection (1), for instance.

 

Except where the transition to work payment is a payment prescribed in the Minister’s rules, the individual is required to also have an employment pathway plan or a participation plan in effect at the start of the CCS fortnight in which the session of care is provided.

 

When the individual stops receiving a transition to work payment, the individual continues to be eligible for ACCS (transition to work) for all sessions of care for which the individual is eligible for CCS that are provided in the period of 12 weeks from the start of the CCS fortnight after the CCS fortnight in which the individual stops receiving the transition to work payment. 

 

Even if these requirements are met, the limitations in Division 5 may prevent the individual being eligible for ACCS (transition to work).

 

Eligibility in substitution for a deceased person

 

Section 85DA applies when an individual dies in circumstances where an amount of CCS or ACCS for which the individual was eligible has not been paid.  In those circumstances, another individual can become eligible in substitution for the individual who has died, if the other individual makes a claim in accordance with Part 3A of the Family Assistance Administration Act, and the Secretary considers the other individual ought to be eligible for the unpaid amount.  Only unpaid amounts relating to sessions of care provided after the start of the income year before the income year in which the individual died can be paid in substitution to another individual.

 

Example: if David dies on 31 July 2019 (i.e. in the 2019-20 income year), only unpaid amounts relating to sessions of care provided on or after 1 July 2018 can be paid in substitution to Yasmin, and only if she meets the requirements under section 85DA and claim rules in new Part 3A of the Family Assistance Administration Act.  Because most amounts will have already been paid to David for the 2018-19 income year, Yasmin can only be paid any further owing amounts (including any amount that might be owing as part of the reconciliation process for the 2018-19 income year).

 

Limitations on eligibility for CCS and ACCS

 

Section 85EA prevents more than one individual being eligible for CCS for the same session of care (for instance, two parents of the same child).  A reason why more than one individual can become eligible relates to the eligibility criterion in paragraph 85BA(1)(b) which allows either an individual, or the individual’s partner to incur a liability for child care fees for eligibility of the individual.  If more than one individual meets the eligibility criteria for CCS for a session of care, the individual determined in writing by the Secretary under subsection 85EA(2) will be the eligible individual.  This section reflects repealed section 48, which applied for CCB.  Note that the Secretary will still have the power to make determinations even if the Minister chooses not to make rules.

 

As eligibility for CCS is a pre-requisite for an individual to be eligible for ACCS, this section also prevents more than one individual being eligible for ACCS for the same session of care.

 

Subsection (3) clarifies that a determination under subsection (2) is not a legislative instrument.  It is merely declaratory and included to assist readers. It is not an exemption from the Legislation Act 2003 .

 

Section 85EB prevents an individual being eligible for more than one type of ACCS for the same session of care.

 

The section establishes the following order of hierarchy:

 

  1. ACCS (child wellbeing);

 

  1. ACCS (grandparent);

 

  1. ACCS (temporary financial hardship);

 

  1. ACCS (transition to work).

 

Note that ACCS (transition to work) does not need to be listed in the operative provisions in the legislation, as only the ACCS types that can take priority over another need to be listed to produce the hierarchy set out above.

 

Where an individual is eligible for more than one type of ACCS for a session of care, the type of ACCS higher up in the hierarchy takes precedence.

 

Example: if Odetta is eligible for ACCS (child wellbeing) and also eligible for ACCS (temporary financial hardship) for a session of care, she is taken to be eligible for ACCS (child wellbeing) and not eligible for ACCS (temporary financial hardship) for that session of care.

 

Section 85EC prevents more than one individual being eligible in substitution for the same unpaid amount under section 85DA when an individual dies.

 

Section 85ED prevents CCS and ACCS eligibility for a session of care provided to a child who is under the care of a person (other than a foster parent) under a State or Territory child welfare law.  The purpose of this is to ensure that the Commonwealth does not financially support care that is financed by another level of government.  It also prevents CCS and ACCS eligibility for a session of care provided to a child who is a member of a class prescribed by the Minister’s rules.  This section reflects repealed section 49, which applied for CCB.  The rules will allow the Minister to prescribe “State/Territory welfare laws” for the purposes of this provision, however, if rules are not made, any State or Territory law that relates to the welfare of children will be taken to be a “State/Territory welfare law” for the purposes of subsection (1).

 

Section 85EE limits the period for which an individual can be eligible for CCS or ACCS while they are overseas and details the circumstances in which the Secretary may extend the period.  This mirrors the effect of recent amendments to the portability period for family tax benefit and reduces, from 56 weeks to six weeks, the period during which CCS payments can be paid to an individual who is outside Australia in relation to sessions of care provided during their absence. 

 

The effect of an individual not returning to Australia by the end of the portability period is that the individual ceases to become eligible for CCS for any sessions of care that were provided after the portability period ended.  The short return rules will continue to apply such that the portability period will not be reset if, where an individual returns to Australia after the end of their portability period, remains in Australia for less than six weeks and then leaves again.  In other words, if the individual returns to Australia after the end of the six week period and then leaves Australia again less than six weeks later, the individual will not be eligible for CCS during the length of that subsequent absence (even if that absence is less than six weeks) as it is effectively treated as a continuation of the initial absence (see subsection 85EE(2) ).

 

Where the individual returns after six weeks, or such longer period as extended, the Secretary may make a determination under new subsection 67CC(2) of the Family Assistance Administration Act that the individual’s eligibility for future CCS payments has ceased.  In this case, the individual would be required to make a new claim for CCS.  If the Secretary does not make a determination under subsection 67CC(2) of the Family Assistance Administration Act, the Secretary may require the individual to again confirm necessary details that were provided at the time of claim, using the power to require more information from the individual about present and future eligibility in section 67FI of the Family Assistance Administration Act.

The capacity for the Secretary to extend the portability period will remain under subsections 85EE(3) to (6) (although modified, to take account of the reduced portability period).  This maintains the capacity to extend the six week portability in certain circumstances (for example, where an individual cannot return to Australia because they have been hospitalised or in the case of an individual who is deployed overseas as a member of the Defence Force).

Division 6—Amount of CCS and ACCS

 

Section 85FA requires an individual’s amount of CCS for a week to be worked out under Part 1 of Schedule 2 of the Family Assistance Act (which contains a detailed rate calculator).

 

Sections 85FB and 85FC require an individual’s amount of ACCS for a week to be worked out under Part 2 of Schedule 2 for sessions of care for which the individual is eligible for ACCS (child wellbeing), ACCS (temporary financial hardship) or ACCS (grandparent) and Part 3 of Schedule 2 for sessions of care for which the individual is eligible for ACCS (transition to work).

 

Section 85FD requires a provider’s amount of ACCS (child wellbeing) for a week for a child to be worked out under Part 4 of Schedule 2.

 

Division 7—Miscellaneous

 

Section 85GA provides legislative authority for Commonwealth grants for purposes related to child care, where the expenditure is consistent with the constitutional heads of power listed in paragraph (1)(b).

 

This provision is intended to ensure that future child care funding programmes will have requisite legislative authority in view of the High Court of Australia’s decision in Williams v Commonwealth of Australia (2012) 248 CLR 156.

 

Section 85GB enables the Minister to make the Minister’s rules and enables the Secretary to make the Secretary’s rules by legislative instrument (including, in particular, in relation to provisions that expressly empower “rules” to be made by the Minister or the Secretary).

 

New Schedule 2 - Amounts of CCS and ACCS

 

Item 41 repeals and substitutes Schedule 2 of the Family Assistance Act.  Repealed Schedule 2 contained the rate calculator for CCB.  New Schedule 2 is the rate calculator for CCS and ACCS.

 

Calculations are based on weeks in a CCS fortnight , to accommodate the activity test which applies to activity or circumstances across a fortnight (but payments can be made weekly).

 

A CCS fortnight is defined in subsection 3(1) of the Family Assistance Act as the two week period beginning on Monday 2 July 2018 and each subsequent two week period.  CCS fortnights are fixed for everyone, with the first CCS fortnight being 2 July 2018 to 15 July 2018.

 

For CCS and ACCS, a week is defined in subsection 3(1) of the Family Assistance Act to always commence on a Monday to ensure consistency in payment administration and attendance reporting.  The term “week” was defined in the same way for CCB purposes.

 

Part 1—Amount of CCS

 

Clause 1 contains a method statement for calculating an individual’s amount of CCS for a week for sessions of care provided by an approved child care service to a child.  The rate is calculated per week per child per service.

 

This means that if the child is attending two services, there will be two applications of the rate calculator, one for sessions of care provided by the first service and one for sessions of care provided by the second service.  It is open to the Secretary to calculate amounts in the order in which the services submit attendance reports under section 204B of the Family Assistance Administration Act, unless an “election” as referred to in clause 4, applies to allow another approach to calculation in accordance with the election.

 

The method statement contains the following steps:

 

  1. work out the individual’s activity test result in relation to the child for the CCS fortnight in which the week occurs;

 

  1. if the annual cap applies, work out whether the annual cap has been reached;

 

  1. identify all sessions of care provided by the service in the week to the child for which the individual is eligible for CCS;

 

  1. work out the hourly rate of CCS for each session of care;

 

  1. work out the activity-tested amount of CCS for the sessions of care;

 

  1. if the annual cap applies, adjust the activity-tested amount for the annual cap.

 

Each step is explained in more detail below.

 

Step 1:

 

The activity test result is the maximum number of hours of CCS the individual and their partner (if any) can be paid in a CCS fortnight for a child.  This will usually depend on the amount of activity the individual and their partner (if any) engage in during the CCS fortnight.  There are some exceptions explained below under “Part 5 - Activity Test”.  If the activity test result is zero, the individual’s CCS amount for the week is nil, and the other steps in the method statement need not be applied.  If the activity test result is more than zero, the calculation proceeds to step 2.

 

Step 2:

 

The annual cap ($10,000, as indexed) is the maximum amount of CCS an individual and their partner can receive for a child for CCS fortnights starting in the income year if their combined adjusted taxable income (ATI) for the income year is greater than the annual cap threshold (see subclauses 1(2) and (3)).  For the 2018-19 income year the annual cap threshold is $185,710.  The threshold, like the cap itself, is subject to annual indexation.

 

If the combined ATI is at or below the annual cap threshold, there is no annual cap and the calculation proceeds to step 3.

 

If the annual cap applies (i.e. combined ATI is greater than the annual cap threshold), the calculation only proceeds to step 3 if the annual cap has not already been reached in the income year.  If the annual cap for the income year has been reached, the individual’s CCS amount for the week is nil, and the other steps in the method statement are not applied.

 

Step 3:

 

The relevant sessions of care are identified by applying the eligibility criteria in section 85BA to each session of care provided to the child by the service.

 

Step 4:

 

The hourly rate for each session of care identified in step 3 is determined by applying clause 2 .  The hourly rate is the applicable percentage multiplied by the lower of the hourly session fee and the CCS hourly rate cap.

 

The applicable percentage is worked out under clause 3 based on the combined ATI of the individual and the individual’s partner in the income year in which the CCS fortnight starts.  If the combined ATI is at or below the lower income threshold (initially set at $65,710 prior to indexation), the applicable percentage is 85%.  If the combined ATI is above the lower income threshold but below the second income threshold (of $170,710), the applicable percentage tapers from 85% to 50%, using the formula at subclause (2).  If the combined ATI is at or above the second income threshold (of $170,710), but below the third income threshold (of $250,000) the applicable percentage is 50%.  If the combined ATI is above the third income threshold (of $250,000) and below the upper income threshold (of $340,000), the applicable percentage is calculated using the formula in subclause 3(3), which tapers the applicable percentage down from 50% to 20%.  Finally, if the combined ATI is equal to or above the upper income threshold (of $340,000), the applicable percentage is 20%.  The effect of the formulas at subclauses (2) and (3) is to reduce the applicable percentage at a rate of 1 percentage point for every $3000 to ensure a consistent and graduated taper.  Subclause (4) defines the various thresholds by reference to a dollar figure above the lower income threshold of $65,710.  This means that the indexation of the lower income threshold against the consumer price index will result in the higher threshold points shifting by the same amount.

 

For weekly payment decisions prior to a reconciliation process, the applicable percentage will be based on an estimate of ATI. 

 

The hourly session fee is defined in subclause 2(2) as the amount the individual or the individual’s partner is liable to pay for the session of care, divided by the number of hours in the session, and reduced by the hourly rate of any other subsidy from which the individual benefits in respect of the session (e.g. subsidy provided by a State or Territory).

 

The CCS hourly rate cap depends on the type of service providing the session of care (see subclause 2(3) ).  The CCS hourly rate caps are:

 

  • $11.55 for care provided by a centre-based day care service;

 

  • $10.70 for care provided by a family day care service;

 

  • $10.10 for care provided by an outside school hours care service;

 

  • the rate prescribed by the Minister’s rules for care provided by a service type prescribed in the Minister’s rules.

 

Note that these amounts are subject to indexation, as dealt with in Schedule 4, Part 4, item 254, to this Bill.

 

The ability to prescribe service types in the Minister’s rules provides flexibility to add more service types in the future (including to adapt to changes in the child care sector) without amendments to the family assistance law. 

 

Step 5:

 

To determine the activity tested amount under clause 4 , for each session of care identified in step 3, the hourly rate is multiplied by the number of hours in the session of care that is counted for CCS purposes and the results for all sessions of care identified in step 3 are added together.

 

The number of hours in a session of care that is counted for CCS purposes is the lowest of the following amounts:

 

  • the number of hours in the session of care;

 

  • the balance of the activity test result worked out under subclause 4(2);

 

  • if the Secretary is satisfied it is appropriate to have regard to an election under subclause 4(3), the number determined in accordance with the election.

 

The balance of the activity test result, in relation to a particular session of care, is the activity test result worked out in step 1 reduced by:

 

  • the number of hours (if any) in the CCS fortnight for which the individual is entitled to be paid CCS or ACCS in respect of the child;

 

  • if the individual is a member of a couple on each day in the CCS fortnight, the number of hours (if any) in the CCS fortnight for which the individual’s partner is entitled to be paid CCS or ACCS in respect of the child; and

 

  • the number of hours in any earlier sessions of care identified in step 3.

 

This clause ensures that the number of hours for which the individual and their partner are paid do not exceed the activity test result.

 

The election made under subclause 4(3) is intended to apply where a child attends more than one service.  The election enables individuals to nominate the proportion of their subsidy that should be paid to each service.  An election must be made in a form and manner approved by the Secretary.

 

Step 6:

 

If the annual cap applies to the individual, and the activity tested amount when added to the “total previous CCS” (as set out in subclause (3)) exceeds the annual cap, the activity tested amount is adjusted so the activity tested amount, when added to the total previous CCS, equals the annual cap.  This essentially ensures that an individual who is subject to the annual cap is only paid CCS up to that cap.  The total previous CCS is the sum of the amount of CCS the individual is entitled to receive for the child for CCS fortnights starting in the income year and the amount of CCS the individual’s partner is entitled to receive for the child for CCS fortnights starting in the income year.

 

In determining whether the annual cap is reached in Steps 2 and 6, if the individual becomes a member of a couple or separates during the income year in which the CCS fortnight starts, entitlement of the individual’s partner is not taken into account.

 

Part 2—Amount of ACCS (child wellbeing), ACCS (temporary financial hardship) or ACCS (grandparent) for an individual

 

Clause 5 sets out the method for calculating an individual’s amount of ACCS (child wellbeing), ACCS (temporary financial hardship) or ACCS (grandparent) for a week for sessions of care provided by an approved child care service to a child.  The rate is calculated per week per child per service.

 

The method requires applying the CCS rate calculator in Part 1 with some modifications:

 

·        references to CCS in Part 1 are read as reference to the relevant type of ACCS, except in subclause 4(2);

 

·        parts of the CCS rate calculator relating to the annual cap are not applied as the annual cap does not apply to amounts of ACCS;

 

·        the hourly rate is worked out under clause 6 instead of clause 2.

 

These modifications mean that in applying the method statement, the relevant eligibility criteria in section 85CA, 85CG or 85CJ are used to identify the relevant sessions of care in step 3 of the method statement. 

 

In calculating the hourly rate under clause 6 there are two differences compared to clause 2:

 

  • 100% is used instead of the applicable percentage;

 

  • the ACCS hourly rate cap, which is 120% of the CCS hourly rate cap, is used instead of the CCS hourly rate cap. 

 

Paragraph 6(2)(b) enables the ACCS hourly rate cap to be increased in the Secretary’s rules.

 

In exceptional circumstances the Secretary can specify a higher ACCS hourly rate cap for a particular individual in a determination under paragraph 6(2)(c). 

 

Subclause 6(3) clarifies that a determination under paragraph (2)(c) is not a legislative instrument.  It is merely declaratory and included to assist readers.  It is not an exemption from the Legislation Act 2003 .

 

Part 3—Amount of ACCS (transition to work)

 

Clause 7 sets out the method for calculating an individual’s amount of ACCS (transition to work) for a week for sessions of care provided by an approved child care service to a child. The rate is calculated per week per child per service.

 

The method requires applying the CCS rate calculator in Part 1 with some modifications:

 

·        references to CCS in Part 1 are read as reference to ACCS (transition to work), except in subclause 4(2);

 

·        parts of the CCS rate calculator relating to the annual cap are not applied as the annual cap does not apply to amounts of ACCS;

 

·        95% is used instead of the applicable percentage to work out the hourly rate.

 

These modifications mean that in applying the method statement, the eligibility criteria in section 85CK is used to identify the relevant sessions of care in step 3 of the method statement.

 

Part 4—Amount of ACCS (child wellbeing) for an approved provider

 

Clause 8 sets out the method statement for calculating an approved provider’s amount of ACCS (child wellbeing) (where a provider is eligible for a child) for a week for sessions of care provided by an approved child care service of the provider to a child at risk of serious abuse or neglect.

 

The method statement contains the following steps:

 

  1. work out the provider’s deemed activity test result in relation to the child and the service for the CCS fortnight in which the week occurs;

 

  1. identify all sessions of care provided by the service in the week to the child for which the provider is eligible for ACCS (child wellbeing);

 

  1. work out the hourly rate of ACCS for each session of care;

 

  1. work out the activity-tested amount of CCS for the sessions of care.

 

Step 1:

 

The deemed activity test result is the maximum number of hours of ACCS the provider can be paid in a CCS fortnight for sessions of care provided by the service to the child.  This will usually be 100. 

 

Step 2:

 

The relevant sessions of care are identified by applying the eligibility criteria in subsection 85CA(2) to each session of care provided to the child by the service.

 

Step 3:

 

The hourly rate for each session of care identified in step 2 is determined by applying clause 9 .  The hourly rate is 100% of the lower of the hourly session fee and the ACCS hourly rate cap.

 

The hourly session fee is defined in subclause 9(2) as the amount the provider would ordinarily charge an individual for the session of care, divided by the number of hours in the session, and reduced by the hourly rate of any other subsidy (for example, a subsidy provided by a State or Territory).

 

The ACCS hourly rate cap is defined in subclause 6(2) .

 

Step 4:

 

To determine the activity tested amount under clause 10 , for each session of care identified in step 2, the hourly rate is multiplied by the number of hours in the session of care that is counted for ACCS purposes and the results for all sessions of care identified in step 2 are added together.

 

The number of hours in a session of care that is counted for ACCS purposes is the lower of the number of hours in the session of care and the balance of the deemed activity test result worked out under subclause 10(2).

 

The balance of the deemed activity test result, in relation to a particular session of care, is the deemed activity test result worked out in step 1 reduced by:

 

  • the number of hours (if any) in the CCS fortnight for which the provider is entitled to be paid ACCS in respect of the child;
  • the number of hours in any earlier sessions of care identified in step 2.

 

This clause ensures that the number of hours for which the provider is paid do not exceed the deemed activity test result.

 

Step 5:

 

This step ensures that the amount of ACCS (child wellbeing) for the provider for the relevant week (to which the rate calculator is being applied) for sessions of care identified at step 2 is the activity tested amount.

 

Part 5—Activity test

 

Division 1—Individual’s activity test result

 

The activity test result for an individual is worked out using subclause 11(1) .  The activity test result is the maximum number of hours for which CCS or ACCS can be paid to the individual and their partner for a child in a CCS fortnight. 

 

If the individual is not a member of a couple, for the purposes of working out an amount of CCS or ACCS, the individual’s activity test result is the highest of:

 

  • the result specified in item 1 of the table below for the amount;

 

  • any other result specified in any other table item for the amount that applies.

 

If the individual is a member of a couple, the individual’s activity test result is the lower of the result worked out using the table for the individual and the result worked out using the table for the individual’s partner.

 

Item

Result for:

Amount of CCS

Amount of ACCS other than ACCS (transition to work)

Amount of ACCS (transition to work)

1

Recognised activity result (clause 12)

100

Recognised activity result (clause 12)

2

Low income result (clause 13)

 

3

Minister’s rules result (clause 14)

Minister’s rules result (clause 14)

Minister’s rules result (clause 14)

4

child wellbeing result (clause 15)

 

child wellbeing result (clause 15)

5

Exceptional circumstances result

Exceptional circumstances result

Exceptional circumstances result

 

In exceptional circumstances, subclause 11(2) enables the Secretary to specify an individual’s activity test result in a determination.

 

Subclause 11(4) clarifies that a determination under subclause (2) is not a legislative instrument.  It is merely declaratory and included to assist readers. It is not an exemption from the Legislation Act 2003 .

 

Subclause 11(5) deals with the situation where an individual’s activity test result changes during a CCS fortnight because they are eligible for CCS or ACCS (transition to work) in one week of the fortnight and ACCS (child wellbeing) or ACCS (temporary financial hardship) in the other week of the fortnight.  In this case, the higher activity test result that applies for ACCS (child wellbeing) or ACCS (temporary financial hardship) is maintained for the whole CCS fortnight. 

 

 

The recognised activity test ( clause 12 ) result is determined based on the activity engaged in by the individual in the CCS fortnight as follows:

 

Hours of activity

Result

fewer than 8

0

at least 8 and no more than 16

36

more than 16 and no more than 48

72

more than 48 

100

 

A note to clause 12 explains that the number of hours of recognised activity for an individual to be counted towards the recognised activity result may be affected by Minister’s rules made for subclause (4) or a Secretary’s determination made for subclause (5). 

 

Recognised activity is defined in clause 12 to include paid work, a training course, an approved course of education or study or another activity as prescribed by Minister’s rules or a Secretary’s determination.  Further notes clarify that “paid work” takes its ordinary meaning, whilst “approved course of education or study” has the meaning given to it by subsection 541B(5) of the Social Security Act 1991 and subsection 3(1) of the Family Assistance Act.  However, the Minister’s rules (or a Secretary’s determination) can also extend the definition of “recognised activity” in prescribed circumstances.  For example, for paragraph 12(2)(d) or (e), unpaid work experience may be prescribed or determined as a recognised activity.  It is intended that Minister’s rules (or a Secretary’s determination) (under subclauses 12(4) or (5)) may also provide for time limitations, for instance, by setting out that a certain kind of activity is only recognised for the activity test for the first 3 months during which an individual engages in that activity.

 

Associated activities

 

For subclause 12(3) (or subclause 12(5)), the Minister’s rules (or Secretary’s determination) can also prescribe activities that are taken to be “associated activities” for the purpose of describing when an individual is taken to be engaged in recognised activity under clause 12.  For example, the Minister’s rules (or Secretary’s determination) may prescribe that periods of paid leave granted under the terms and conditions of an individual’s employment are taken to be included in the recognised activity of paid work.  The Minister’s rules (or Secretary’s determination) may also provide that an individual enrolled in an approved course of education or study is taken to continue to engage in the course during a break between semesters of the course.  The note clarifies that activities are taken to be associated if they are prescribed to be so by the rules or determination, even if they are not associated in the ordinary sense of that word.

 

Subclause (4) specifies that the Minister’s rules (or Secretary’s determination) can also prescribe how to work out a number of hours of recognised activity of that kind that is taken to be counted towards the activity in that fortnight (which may be more or less than the actual number of activities during which the individual engaged in the activity during the fortnight).  In other words, the rules may prescribe a formula or method for how to take into account hours to work out the individual’s activity test result.  The instruments may also prescribe a maximum number of hours, which can either be attached to the prescribed method or stand alone, in respect of an activity in subclause 12(2) .  The intention of these provisions is to allow for the flexibility for the following possibilities to be covered:

 

·          activities prescribed for subclause 3(1) for which something different from a 1:1 relationship is to apply to the hours engaged in for the purposes of the activity test; or

 

·          maintaining the capacity to fix a maximum number of hours in any particular fortnight for certain kinds of activity.

 

The Minister’s rules under clause 12 (in paragraph 12(2)(d), (3) and (4)) are expressed broadly to allow sufficient flexibility to provide beneficial treatment to individuals who are engaging in kinds of activity that would not ordinarily be regarded as one of the recognised activities listed in paragraphs 12(2)(a) to (c). By providing the capacity for the Minister’s rules to deem other activities as “associated activities” to a “recognised activity” for the purposes of working out an individual’s activity test result, the rules can capture a broad spectrum of activities that individual’s may be engaged in or taken to be engaged in, to ensure adequate child care fee assistance is available to parents.  Any Minister’s rules made in accordance with clause 12 will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments, which means that Parliament will be able to disallow any rules that are considered non-beneficial or otherwise unfair.

 

Subclause (5) simply states the the Secretary may make a written determination (the Secretary’s determinations referred to above) for an individual, which can cover all matters that the Minister’s rules may cover for subclauses (3) and (4).  This is to ensure that the Secretary can make decisions on a case by case basis where an individual is not covered by the Minister’s rules which will have general application.  A person affected by a Secretary’s determination made under this provision will have full access to review rights (both merits review through internal review and subsequently through the Administrative Appeals Tribunal, and judicial review).

 

Subclause (6) is merely declaratory and included to assist readers.  It is not an exemption from the Legislation Act 2003 .

 

Any changes in the individual’s circumstances during the CCS fortnight are disregarded for the purpose of determining this result (and are applied to the next CCS fortnight, should those circumstances apply) under subclause 12(7) .  This provision ensures that, should an individual’s routine activity pattern be affected on an ongoing basis part way through a fortnight, the individual’s activity test for the whole fortnight can be taken to be based on their circumstances at the beginning of the fortnight.

 

The low income result under clause 13 applies to an individual if the individual’s estimate ATI for the income year in which the CCS fortnight starts is equal to or below the lower income threshold.  This result allows the individual to receive up to 24 hours of CCS in a CCS fortnight for each child.  It gives effect to a measure of the Child Care Safety Net by allowing assistance to low income families that do not meet the CCS activity test.

 

Clause 14 provides for the Minister’s rules result.  It enables the Minister to prescribe in Minister’s rules a result, or a method for working out a result, by reference to the circumstances of the individual, the individual’s partner or the child.  This power could be exercised to effectively grant certain individuals an exemption from activity test requirements, or a certain result in particular circumstances that are not necessarily associated with their actual level of activity (in contrast to the rules that are able to made under clause 12).

 

Rules under this clause could be made to deal with shift workers or others with irregular activity who may need to obtain a child care place to cover their busiest fortnights.  In this case, the rules could say that an individual’s activity test result is determined by their most active fortnight within a particular three month period, for instance.

 

Clause 15 applies to an individual for a CCS fortnight in relation to a particular child if the individual is eligible for CCS for a session of care provided to the child in the CCS fortnight and on the first day of the CCS fortnight it has been less than 18 months since an extended “child wellbeing” period for the child ended.

 

An extended “child wellbeing” period is a continuous period of at least 6 months during which a certificate or determination was in effect in relation to the child due to the child being at risk of serious abuse or neglect.

 

If the “child wellbeing” result in clause 15 applies, the individual’s activity test result will be 100, unless a higher result applies to the individual under another clause.

 

Division 2—Provider’s deemed activity test result

 

The deemed activity test result for a provider, in relation to a particular child and service, is worked out using clause 16 and will be 100, unless a higher result applies under the Minister’s rules.

 

In exceptional circumstances, the Secretary can specify a higher deemed activity test result for the provider in a determination under paragraph (1)(c).  This might occur in cases of particular need or vulnerability.

 

Subclause (3) clarifies that a determination under paragraph (1)(c) is not a legislative instrument.  It is merely declaratory and included to assist readers. It is not an exemption from the Legislation Act 2003 .

 

Amendments to Schedule 3—Adjusted taxable income

 

Items 42, 43 and 44 amend Schedule 3 of the Family Assistance Act to replace references to CCB with references to CCS and to restrict the rule in subclause 3(1) to FTB and schoolkids bonus, in view of new clause 3AA for CCS.

 

Item 45 amends Schedule 3 of the Family Assistance Act to confirm that there is a different way to work out the adjusted taxable income (ATI) for members of a couple for CCS purposes.  That different way is set out in new clause 3AA (adjusted taxable income of members of a couple - child care subsidy).   This establishes a method for the Secretary to calculate an individual’s adjusted taxable income, to work out an individual’s rate of child care assistance (through an applicable percentage of their fees) where the individual is, or was, a member of a couple during an income year.  Where the individual has the same partner (a “TFN determination person)”) for the whole income year, the individual’s ATI is taken to include that TFN determination person’s adjusted taxable income for that year.  However, new paragraph 3AA(2)(b) deals specifically with individuals who have a partner for only some of an income year (for example, where they cease to become a member of a couple, or subsequently re-partner and become a member of a new couple, or enter into a partnership for the first time).   For these individuals, the provision sets out a proportionality principle whereby, in addition to the individual’s ATI, the partner’s ATI is added only in proportion to the period of time of the partnership.  This is an attempt to only add to an individual’s ATI the amount that a new or former partner notionally contributed to the relationship.  A note clarifies that, where the individual has re-partnered, and therefore there are a number of different TFN determination persons during an income year, the individual’s adjusted taxable income for that year is taken to include the sum of the amounts worked out under paragraph (b) for each such person.

 

Example :   Nigel is an individual eligible for CCS.  At the start of the income year he is partnered with Mabel and Nigel estimates that his and Mabel’s adjusted taxable income (ATI) combined will be $130,000, based on estimates of annual income of approximately $65,000 each.  Four months into the income year, Nigel and Mabel separate, and Nigel’s income reduces to $65,000.  However, another four months passes and Nigel re-partners with Norma, whose estimated ATI for the year is $60,000.  Using new paragraph 3AA(2)(b), the Secretary would work out Nigel’s ATI by applying the proportionality principle in including both Mabel and Norma’s estimated ATI relative to the number of weeks in the income year each of them was a member of a couple with Nigel and by adding the amounts together to work out a single ATI amount that applied across the year.  That is, the following calculation would be undertaken at the end of the income year:

 

Nigel’s ATI - $ 65,000.00;

Mabel’s ATI (for period of partnership) - $ 65,000.00 (divided by 3 as Mabel only partnered with Nigel for Mondays in first third of the income year) = $ 21 ,666.67;

Norma’s ATI (for period of partnership) - $ 60,000.00 (divided by 3 as Norma only partnered with Nigel for Mondays in the final third of the income year) = $20,000.00.

 

Nigel’s final ATI result at the end of the income year will be his ATI of:

 

$65,000 + $21,666.67 + $20,000 = $106,666.67

 

(assuming that there are exactly a third of all Mondays in each four month period in the particular income year).

 

This provision is intended to operate along with, rather than as an exception to, existing clause 3A, which can still apply on its terms. 

 

An ATI result affected by clause 3AA is also affected by other clauses in Schedule 3, including in relation to fringe benefits and other amounts that can be added towards ATI calculation.

 

Amendments to Schedule 4 of the Family Assistance Act—Indexation and adjustment of amounts

 

Items 47 and 48 repeal items in Schedule 4 of the Family Assistance Act relating to CCB and CCR and substitute new items to provide for indexation of the lower income threshold for CCS, the CCS hourly rate caps and the annual cap for CCS.

 

Because the other thresholds in clause 3 of Schedule 2 of the Family Assistance Act are defined as the lower income threshold plus certain fixed dollar amounts, each time the lower income threshold is indexed, the other income thresholds will increase by the same amount as the lower income threshold.

 

Note that the first indexation of these amounts is dealt with by item 254 of Part 4 of this Schedule (which effectively requires first indexation to occur on 1 July 2018, prior to commencement to keep pace with the Consumer Price Index).

 

Items 46 and 49 make minor consequential amendments dealing with the cessation of CCB and CCR. 

 

Amendments to the Family Assistance Administration Act

 

Definitions

 

Items 50 to 84 amend section 3 of the Family Assistance Administration Act, which contains the definitions for terms used in that Act.  A number of items repeal definitions of terms that were required for CCB and CCR, but are no longer relevant to CCS.  Other items replace definitions with new definitions that are adapted to the new CCS and ACCS system.

 

Item 85 inserts new section 4A .  Subsection (1) sets out the meaning of “large centre-based day care provider”, which is a kind of provider that is subject to additional approval rules, including a financial viability test.  This replaces the definition of “large long day care centre operator” in existing section 3 .   In broad terms, a provider is a large centre-based day care provider if the provider alone, or jointly with other related providers, operates or proposes to operate, 25 or more approved child care services that are centre-based day care services.  Subsection (2) allows the Minister to prescribe in the Minister’s rules, a number other than 25 for the purposes of subsection (1).  This will allow the law to adapt to business practices in the child care sector.  Subsection (3) provides for when 2 or more providers are considered to be “related providers” for the purposes of paragraph (1)(c).

 

Items 86 to 90 amend various provisions in Part 3, by repealing the provisions relating to the payment of CCB and CCR in Division 4 and 4AA of Part 3, and making consequential amendments to section 66.  These amendments are intended to ensure that Part 3 of the Family Assistance Administration Act is now solely about payment of kinds of family assistance other than CCS and ACCS (such as FTB).  Provisions relating to the payment of CCS and ACCS will be contained in new Part 3A , as inserted by item 92 .

 

 

Part 3A—Payment of Child Care Subsidy and Additional Child Care Subsidy

 

Section 67AA contains a simplified outline of new Part 3A, which is self-explanatory.

 

Note that the new payment rules attempt to simplify many of the complications of the former CCB payment system, including by removing the long and complex stream of “determination” and “variation” rules that followed a decision about an individual’s “conditional eligibility” to CCB by fee reduction (for example, former sections 50 to 51E of the Family Assistance Administration Act).  Many of the old child care payment rules in Part 3 were unnecessarily complicated.

 

Section 67AB sets out a summary of the kinds of child care payments an individual and a provider can become entitled to under new Part 3A (following their eligibility being determined in accordance with the rules described above in the Family Assistance Act).

 

Division 2—Making Claims

 

Division 2 of new Part 3A provides for rules in relation to making claims.

 

Section 67BA contains a simplified outline.

 

An individual must make a claim for CCS in order to become entitled to be paid CCS or ACCS ( section 67BB ).  Only an individual can make a claim for CCS ( section 67BC ).  The two kinds of claims that an individual may make are CCS by fee reduction, and CCS in substitution for an individual who has died ( section 67BD ).  Some kinds of ACCS payments, however, will require an additional application.

 

Section 67BE provides that a claim is effective if the claim meets the requirements set out in paragraphs (a) to (h).  Notably, in relation to claims for CCS in substitution for an individual who has died, paragraph (f) specifies that the claim must be made before the end of the income year after the income year in which the individual has died.  Paragraph (g) allows the Secretary to prescribe further requirements for claims in the Secretary’s rules.

 

One of the requirements that must be met for a claim to be effective is the bank account requirements as set out in section 67BG .  The bank account requirements are met for the purposes of a claim if:

 

  • the individual provides details of a bank account into which amounts of CCS or ACCS can be paid; or

 

  • the individual makes a statement that she or he will provide details of such a bank account within 28 days after the claim is made; or

 

  • the Secretary is satisfied that it is appropriate to exempt the individual from the bank account requirements for the purposes of a claim.

 

Other requirements that must be met for a claim to be effective include the TFN requirements as set out in section 67BH .  The provision of tax file numbers is important to enable identification of claimants and for the reconciliation process that follows an individual meeting the reconciliation conditions in section 103A following the end of a financial year.  Subsection (1) provides the tax file number requirement is met for the purposes of a claim if, in relation to each TFN claim person (as defined in subsection 3(1)), one of the following statements is made:

 

  • a statement stating their TFN; or

 

  • a statement that they have authorised the Tax Commissioner to tell the Secretary what their TFN is; or

 

  • a statement that they have applied for a TFN.

 

Subsection 67BH(3) provides that if the Secretary makes a determination that she is satisfied that the claimant cannot obtain the TFN from a TFN claim person who is their current or ex-partner, the TFN requirements do not apply in relation to that TFN claim person.  Subsection (4) makes clear that this determination is not a legislative instrument (which is intended to be declaratory rather than an exemption from the Legislation Act 2003 ).

 

The TFN requirements for the purposes of a claim for CCS in substitution for an individual who has died are set out in section 67BI , which mirrors section 67BH .  The main difference being that the TFN requirements must be met in relation to each TFN substitution person, which is defined in subsection 3(1) to mean the deceased individual and any partner of the deceased individual during the period in respect of which the payment is claimed.

 

Section 67BF makes clear that a claim that is not in effect is taken not to have been made. 

 

 

Division 3—Determinations

 

Section 67CA sets out a simplified outline for this Division, which crucially deals with eligibility and entitlement decisions for payments.

 

While an individual or approved provider may be eligible for CCS or ACCS, section 67CB makes clear that an individual or an approved provider can only be entitled to be paid CCS or ACCS if the Secretary makes a determination to that effect under this new Division.  In general, eligibility is about who can be paid and entitlement is about how much.

 

Note that subsection 67CB(4) is important because it ensures that entitlement is lost with respect to an income year (the relevant income year) where an individual fails to meet the reconciliation conditions.  There are two deadlines:

 

  • by the end of the first income year after the relevant year, if the reconciliation conditions are not met, the individual loses entitlement for the relevant income year (this can be reversed if the reconciliation conditions are met during the next income year—before the “second deadline”);

 

  • if the reconciliation conditions are still not met by the end of the second income year after the relevant income year , their non-entitlement remains and the individual loses eligibility for CCS (because of paragraph 67CC(2)(b)).

 

Section 67CC provides for the determination of an individual’s eligibility for CCS by fee reduction.

 

If an individual makes an effective claim, the Secretary must determine:

 

  • if the Secretary is satisfied at the time of making the determination that the FTB child, age, immunisation and residency requirements are met—that the individual is eligible for CCS by fee reduction, and

 

  • if the Secretary is not so satisfied—that the individual is not eligible for CCS by fee reduction for the child.

 

The Secretary may determine that an individual is not eligible for CCS by fee reduction for the child concerned, if:

 

  • the Secretary is satisfied that the individual’s eligibility has ceased permanently (for example, where all their children have grown up or where the individual has lost their residency status) or is not reasonably likely to become eligible again (for example, where the individual ceases to be eligible under section 85EE of the Family Assistance Act for sessions of care during a period of absence from Australia exceeding 6 weeks and the Secretary considers that they may not return or may not require child care assistance on their return);

 

  • an individual has had no entitlement to CCS or ACCS for at least 52 consecutive weeks (for example, this would apply where the individual has not met the CCS reconciliation conditions by the second deadline under subsection 103C , because in this case section 105E would require 52 weeks of no-entitlement decisions following from the “first deadline”); or

 

  • the child ceased to meet the immunisation requirements in section 6 of the Family Assistance Act more than 63 days ago.

 

Where the Secretary has made a determination under subsection 67CC(2) (cessation of eligibility), the individual will be notified under section 67CE and be provided with details, including the date of effect of the determination, and whether a new claim must be made under section 67BE for the individual to once again become eligible for CCS.

 

The Secretary may also revoke a determination of eligibility upon request by the individual under subsection (3).

 

Subsection (4) provides for when a determination of eligibility comes into effect, which must be the first Monday of a CCS fortnight, no earlier than 28 days before the date of claim.

 

Example: Rhys has met the eligibility requirements in subsection 85BA(1) since the beginning of 2018.  He makes a claim for CCS on Tuesday 7 August 2018.  Tuesday 10 July 2018 is the 28th day before the day the claim was made.  A CCS fortnight is defined in subsection 3(1) of the Family Assistance Act to mean the period of two weeks beginning on Monday 2 July 2018 or each subsequent period of two weeks.  The determination that Rhys is eligible for CCS by fee reduction will take effect on Monday 23 July 2018, which is the first day the Secretary is satisfied that the eligibility requirements are met, that is also the first Monday of a CCS fortnight that is within 28 days from the date of claim.

 

Subsections (5) and (6) apply on their terms and set out when certain determinations under this section have effect from.

 

Section 67CD provides for determinations of an individual’s entitlement to be paid CCS or ACCS.

 

Preconditions for making determinations

 

Subsection (1) provides for when the Secretary is to make a determination of entitlement under this section.  Each determination of entitlement is made in relation to an individual, for a week, in relation to sessions of care provided to a child, by an approved child care service.

 

Example: Greta has two children, Uditha and Jo, each attending two different child care services in a week—in this case, the Secretary would make four entitlement determinations for Greta for that week.

 

The Secretary is only able to make an entitlement determination if, and once, all of the following conditions are satisfied:

 

  • the approved provider of the service has given the Secretary a report under section 204B (commonly known as attendance reports); or

 

  • if the approved provider of the service has not given the Secretary a report under section 204B (because of subsection 204B(3))—the Secretary has corrected the report under section 204C; and

 

  • if the individual’s claim was made less than 28 days ago—the bank account requirements in section 67BG are met for the purposes of an entitlement determination; and

 

  • if the individual’s claim was made less than 28 days ago—the tax file number requirements in 67BH are met for the purposes of a determination under this Division for the individual; and

 

  • if the Secretary has given the individual a notice under subsection 67CD(11) in relation to the child’s enrolment for those sessions—the individual has complied with the notice.

 

The clarifying note at the end of this provision emphasises the requirement for the provider to have given an accurate and complete report under section 204B, for the Secretary to be satisfied that this precondition has been met.  Where the Secretary has a reasonable basis to believe that a report purporting to be given under section 204B is not accurate and complete, a determination of no entitlement will be made in respect of the sessions of care for that week.  However, the Secretary may still make an entitlement determination where, despite the provider failing to comply with the obligation to submit a report under section 204B (because of subsection 204B(3)), the Secretary has exercised their power under section 204C to correct the report.  It is possible that responses to a subsection 67CD(11) notice, where one is given, may supply relevant information to the Secretary to correct a report where appropriate.

 

Paragraphs (c) and (d) ensure that, where an individual still has time to meet the bank account and tax file number requirements (both of which need to be met in 28 days from the date of claim), the Secretary must hold off making entitlement determinations until these requirements are met. 

 

Entitlement to be paid CCS

 

Subsection 67CD(2) sets out the conditions that must be met for a determination to be made that an individual is entitled to be paid CCS, and the amount of that entitlement.

 

These conditions are intended to ensure that an individual can only be paid an amount of CCS in relation to one or more sessions of care in a week if:

 

  • they meet the eligibility criteria for CCS in relation to those sessions of care (subject to the “immunisation grace period” referred to in subsection (9));

 

  • they meet information requirements for the week (they: have provided bank account details unless exempt; have provided TFN unless exempt; have not failed to comply with certain types of information requests; and have not failed to lodge tax return in time);

 

  • they have not been determined to be entitled to be paid ACCS for those sessions of care.

 

In addition, if an individual meets the above conditions but the amount of CCS to which the individual will become entitled for the sessions of care is nil, the Secretary must determine in writing that the individual is not entitled to CCS.

 

Entitlement to be paid ACCS (child wellbeing) or ACCS (temporary financial hardship)

 

Subsection 67CD(3) sets out the conditions that must be met in order for a determination to be made that the individual is entitled to be paid ACCS (child wellbeing) or ACCS (temporary financial hardship), and the amount of that entitlement.

 

These conditions are intended to ensure that an individual can only be paid either of these two categories of ACCS for one or more sessions of care in a week if: the individual meets the eligibility criteria for ACCS (child wellbeing) or ACCS (temporary financial hardship) in relation to those sessions of care; no provider has been determined to be eligible for ACCS (child wellbeing) for those sessions of care; and the individual meets the information requirements for the week. 

 

Entitlement to be paid ACCS (grandparent)

 

Subsection 67CD(4) sets out the conditions that must be met for a determination to be made that an individual is entitled to be paid ACCS (grandparent), and the amount of that entitlement.

 

These conditions are intended to ensure that an individual can only be paid ACCS (grandparent) for one or more sessions of care in the week if the individual: has applied to the Secretary for ACCS (grandparent); meets the eligibility requirements for ACCS (grandparent); has not been determined to be entitled to be paid ACCS (child wellbeing) for those sessions of care; and meets the information requirements for the week.  Determinations of entitlement cannot be made for a week if the CCS fortnight that includes the week starts earlier than 28 days before the individual made the application for ACCS (grandparent).

 

Entitlement to be paid ACCS (transition to work)

 

Subsection 67CD(6) sets out the conditions that must be met for a determination to be made that an individual is entitled to be paid ACCS (transition to work), and the amount of that entitlement.

 

These conditions are intended to ensure that an individual can only be paid ACCS (transition to work) for one or more sessions of care in the week if the individual: has applied to the Secretary for that payment; meets the eligibility requirements; has not been determined to be entitled to be paid ACCS (child wellbeing) or ACCS (temporary financial hardship); and meets the information requirements.  Determinations of entitlement can be made for a week in a CCS fortnight that starts after the date of application.

 

Subsection 67CD(7) ensures that such determinations can only relate to whole CCS fortnights following an application under paragraph 6(a).

 

No entitlement to be paid CCS or ACCS

 

Subsection 67CD(8) provides that if the Secretary is not satisfied that an individual meets the conditions of entitlement for either CCS, ACCS (child wellbeing), ACCS (temporary financial hardship), ACCS (grandparent), or ACCS (transition to work), for one or more sessions of care in a week, the Secretary must determine that the individual is not entitled to be paid CCS or ACCS for those sessions.  Determinations under this provision can be made, on Secretary initiated review, in certain cases where an individual has not met the CCS reconciliation conditions under section 103A.

 

Immunisation grace period

 

Subsection 67CD(9) defines the concept of an “immunisation grace period”.  Even if a child ceases to meet immunisation requirements and therefore the individual is no longer eligible for CCS or ACCS, the Secretary must still determine that the individual is entitled to CCS or ACCS if the individual would be eligible to CCS or ACCS except the session falls in an immunisation grace period.  The following example illustrates the application of the immunisation grace period.

 

Example: Amanda ceased to meet immunisation requirements on 1 July 2019 and starts to meet immunisation requirements again on 1 October 2019.  Her father Jeff meets all other eligibility and entitlement requirements for CCS during this period.  1 September 2019 would be the 63rd day after the day Amanda ceased to meet the immunisation requirements.  Subsection (9) means that the days following 1 July 2019 up to 1 September 2019 would fall within the immunisation grace period.  In accordance with paragraphs (2)(a) and (9)(b) of section 67CD, Amanda’s father Jeff would be determined to be entitled to CCS for sessions of care up to the end of the week beginning on 26 August 2019.  Jeff would be determined not to be entitled to CCS from the week beginning 2 September 2019.

 

Subsection 67CD(11) is about notices requiring information about enrolments.  Where the Secretary has issued a notice to an individual in relation to the child’s enrolment for sessions of care, compliance by the individual with a notice is a precondition to the Secretary making a determination of entitlement for the individual under paragraph 67CD(1)(e).

 

The notice may be issued either in respect to information provided by the approved provider under an initial enrolment notice given under section 200A, or through an update to an enrolment notice given under section 200D.   The idea behind these notices is to make sure that future attendance reporting under section 204B is consistent with the Secretary’s understanding of basic enrolment details (such as usual care days and fees).   The notice will require individuals to verify certain information given by the provider under either section 200A or section 200D about a child’s enrolment.  This information is expected to reflect terms in a “complying written arrangement” between the provider and the individual, which should set out basic information about days of attendance and agreed fees. 

 

Therefore, where an individual is asked to comply with a notice, they will simply be confirming whether enrolment details provided to the Secretary by a provider match with the parent’s understanding of their arrangement.  It is intended that this provision will provide the Secretary with an additional source of information to confirm an individual’s present and ongoing entitlement, and calculate the correct amount of entitlement, to ensure payment integrity and accuracy.  Where the individual does not comply with a notice under subsection (11), the Secretary cannot make a determination of entitlement, and this will stall the making of the payment for the period during which the individual does not verify the information by complying with the notice (all preconditions in subsection 67CD(1) will not be met).  Where compliance with a subsection 67CD(11) notice results in the Secretary doubting the accuracy of an attendance report provided under section 204B, the Secretary may request the approved provider to correct the attendance report under section 204C (or the Secretary could correct the report themselves under section 204C).  If the correction is made, the Secretary will then be able to make a section 67CD determination (if other preconditions in subsection 67CD(1) are met).

 

 

Section 67CE and section 67CG provides for when the Secretary must give notice of determinations under Subdivision B and C, both to individuals and to approved providers.  In particular, subsection 67CE(6) provides that, where the Secretary has decided to make a fee reduction payment directly to the individual under subsection 67EC(2) , the provider will be notified to that effect.  The obligation to pass on fee reductions in section 201A does not apply to the amount which the provider is notified has been paid directly to the individual.

 

Section 67CF provides for determinations of an individual’s entitlement to be paid CCS or ACCS in substitution for individual who has died.

 

Section 67CH provides for determinations of a provider’s entitlement to be paid ACCS (child wellbeing).

 

Determinations of entitlement for approved providers are made under this section in relation to sessions of care provided during a week to a child, by an approved service of the provider.  The intention is that the Secretary must only make such a determination when all of the following conditions are met:

 

(a)   either a certificate in relation to risk of serious abuse or neglect, or a determination in relation to risk of serious abuse or neglect, is in effect;

 

(b)   the provider has given the Secretary a section 204B report (an attendance report);

 

(c)   the provider has given the Secretary a declaration that the provider has not been able to identify an eligible individual after making reasonable endeavours.

 

If the Secretary is satisfied that the provider is eligible for ACCS (child wellbeing) under subsection 85CA(2) of the Family Assistance Act for sessions of care provided to the child in the week, the Secretary must determine that the provider is entitled to be paid ACCS (child wellbeing) and the amount of the entitlement.  Conversely, if the Secretary is not satisfied that the provider is eligible, the Secretary must determine that the provider is not eligible.

 

Section 67CI requires the Secretary to give written notice of determinations made under section 67CH.



Division 4—Estimates of ATI

 

Section 67DA is a simplified outline of this Division which is self-explanatory.

 

Section 67DB provides that where the actual ATI of an individual is not known at the time of making an entitlement determination, the Secretary has the power to make entitlement determinations on the basis of the most recent estimate that exists on the first Monday of the CCS fortnight.

 

This can be either:

 

(a)   a reasonable estimate given to the Secretary by the claimants;

 

(b)   the indexed estimate;

 

(c)   the indexed actual income; or

 

(d)   the estimate the claimant is taken to have given the Secretary in an election made under subsection (3).

 

Subsections (3) and (4) allow a claimant to make an election in relation to the estimate adjusted taxable income that is to be used in entitlement determinations that would result in an applicable percentage of between 20% and 50%.  By making an election, a claimant is taken to have given the Secretary an estimate adjusted taxable income of an amount between the third income threshold ($250,000) and the upper income threshold ($340,000).  Incorrect elections can be effectively remedied at reconciliation when ATI is known and this may result in further payments being made or debts. 

 

Subsection (5) provides that if none of the estimates referred to in subsection (2) exists on the first Monday of the CCS fortnight, the Secretary must make a determination that the individual is not entitled to be paid CCS or ACCS for that fortnight.

 

New sections 67DC (indexed estimates), 67DD (indexed actual incomes) and 67DE (indexed estimates and indexed actual incomes for members of couples) replace existing sections 55AA, 55AB and 55AC in the current Family Assistance Administration Act.  The difference between the old and new provisions are consequential to the new machinery provisions supporting the administration of CCS and ACCS payments.

 

Division 5—Payments

 

Section 67EA is a simplified outline of this Division which is self-explanatory.

 

New section 67EB replaces existing section 219Q.  It provides that if the Secretary makes a determination of entitlement for an individual or an approved provider, the Secretary must pay the amount of the determination, less the withholding amount, to the bank account of the provider. However, the Secretary may instead pay the amount directly to the individual under section 67EC.

 

If the Secretary increases the amount of CCS or ACCS upon review of a determination of entitlement, the Secretary must pay an amount equal to the increase, less the withholding amount, to the bank account of the provider.

 

The withholding amount for a payment of CCS is 10% of the payment, unless the Minister’s rules prescribe a different percentage.  The Minister may exercise this power after monitoring whether the 10% is adapted and proportionate to managing debts for most individuals.  There is no withholding amount for a payment of ACCS.

 

The Secretary also has the ability to make a determination to specify a different percentage of withholding for an individual.  The Secretary may make such a determination if she is satisfied that the percentage is appropriate to avoid the individual incurring a debt, or to reduce the potential size of the debt.  Subsection (5) makes it clear that such a determination (as distinct from the Minister’s rules which will apply as a matter of general application) is not a legislative instrument—this is just declaratory of the law and is not an exception to the Legislation Act 2003 .

 

Subsection 67EC(1) requires the Secretary to pay directly to an individual, an amount that would have otherwise been paid to an approved provider under section 67EB as a result of a fee reduction decision made , but for the child no longer being enrolled at the service.  It is intended that this provision will enable the Secretary to make a direct payment to an individual in respect of a session of care provided at the time the child was still enrolled, but after the child ceases to be enrolled.  The reason why the Secretary is required to make the payment to the individual in this circumstance, as opposed to the provider under section 67EB , is due to the fact it may no longer be practicable for the provider to pass on the fee reduction in accordance with its obligation to do so under section 201A as the child is no longer enrolled.  Note that payment could still effectively be made to the provider in discharge of any of an individual’s outstanding fee liability under paragraphs 67EC(1)(b) and 67EC(5)(b).

 

Subsection 67EC(2) provides the Secretary with a discretion to make payments directly to individuals following a fee reduction decision being made, where appropriate, despite the child still being enrolled at the service.  Where the Secretary has made a decision to pay the individual directly under this provision, the individual and approved provider will be notified of this decision under section 67CE .  The notice to the provider will state that the payment has been made directly to the individual under subsection 67EC(2) and will have the effect that the obligation upon the provider to pass on the fee reduction amount under section 201A does not apply in respect of the amount paid directly to the individual (see subsection 67CE(6)).

 

The broad nature of the power in this provision, to pay an individual directly, is considered reasonable given that CCS is an individual’s entitlement and it simply operates to allow a more direct method of providing that entitlement to an individual, including where it is not appropriate, for any reason, to pay the amount to a child care provider to pass on as a fee reduction (such as in cases of suspected provider non-compliance).  In a case where the individual is paid directly, the provider will still, of course, be able to recover fees from individuals under their fee arrangements, established at enrolment.

 

Subsection 67EC(3) provides the Secretary with a discretion to pay directly to an individual fee reduction amounts which have not already been passed on by the provider, either because the provider has remitted the amount to the Secretary in accordance with paragraph 201A(1)(b) or has failed to remit the amount and incurred a debt to the Commonwealth under section 71D.

 

Subsection 67EC(4) requires the Secretary to pay directly to an individual, the difference between the total amount of CCS or ACCS the individual is entitled to be paid for sessions of care provided by a child care service in CCS fortnights starting in an income year, and the amount the provider was required to pass on to the individual under section 201A for those sessions.

 

Subsection 67EC(5) sets out how amounts are to be paid if a decision to pay individuals directly is made under this section.  It allows for amounts to be paid to discharge an obligation of an individual and allows, in cases where subsection 67EC(1) applies (because the enrolment has ceased), for the Secretary to make a payment to a provider if the individual still owes them child care fees.

 

Subsection 67EC(6) provides the Secretary with a discretion to defer paying the above amounts until after the individual meets the CCS reconciliation conditions in section 103A.

 

Section 67ED, provides for the payment of CCS or ACCS in substitution for an individual who has died.

 

Section 67EE deals with payments to providers who are eligible in their own right to ACCS (child wellbeing), stating that payments are to be paid to a bank account held by the provider (rather than by “passing on” the amount to any individual).

 

Division 6—Giving Information

 

Section 67FA is a simplified outline of this Division which is self-explanatory.

 

Section 67FB replaces existing section 56C which provides for the requirement for individuals to notify the Secretary of change of circumstances relevant to individuals CCS or ACCS eligibility and entitlement such as any change in activity or income.

 

Section 67FC replaces existing section 56D which provides for the requirement for approved providers to notify the Secretary of change of circumstances relevant to whether a child remains at risk of abuse or neglect.  Contravention of this provision carries an offence of 60 penalty units.

 

Section 67FD , which gives the Secretary the power to approve a manner of notifying changes of circumstances, replaces existing section 57 with minor consequential modifications.

 

Section 67FE (request for bank account details), section 67FF (request for tax file number etc. in claim forms), section 67FG (request for tax file number etc. of TFN determination persons), and section 67FH (request for information about care provided) replace existing sections 57A, 57B, 57D and 57G with minor consequential modifications.

 

Section 67FI is a new provision that gives the Secretary the power to request information from individuals in relation to present or future entitlement for CCS or ACCS.  The Secretary may do so by giving a written notice to an individual, specifying the information that is requested, and the time in which the information must be provided.  This power reflects the fact that some CCS claimants may cease to be eligible or entitled for payment in relation to sessions of care for various reasons after their initial claim and allows the Secretary to ask for current information.  This power exists alongside existing coercive information powers in the Family Assistance Administration Act.

 

Division 7—Payment protection and garnishee orders

 

Section 67GA is a simplified outline of this Division which is self-explanatory.

 

Section 67GB stands alongside existing section 66 (which now deals with only family assistance other than child care payments) and is consistent with the policy that, except for the limited exceptions specified, a family assistance payment is inalienable and is absolutely protected from sale, assignment, charge, execution, bankruptcy or other types of alienation.

 

Section 67GC is related to the inalienability provision set out in section 67GB and clarifies that if a garnishee order comes into effect in relation to a bank account into which payments listed in subsection 66(1) are credited, the garnishee order is not effective in relation to the “saved amount”, calculated according to the formula specified.

 

Part 4—Overpayments and debt recovery

 

Item 93 makes amendments to clarify that amounts of family assistance are taken to be “paid” to a person where the amount is applied against certain liabilities or debts, or is set off against another amount ( section 68 ).  Section 69 clarifies that references to amounts paid to approved providers are taken to apply in relation to providers who are no longer approved (or approved in respect of a particular service).

 

Items 94 and 95 are minor technical amendments.

 

Items 96 and 97 insert new provisions that raise debts of CCS or ACCS.  Amounts are debts due to the Commonwealth where:

 

  • an amount of CCS or ACCS is paid to an individual or provider who is not entitled to it at all for one or sessions of care ( section 71B );

 

  • an overpayment of CCS or ACCS is received ( section 71C ) by an eligible individual or provider;

 

  • a provider fails to pass on an amount of CCS to an eligible individual or does not remit the amount to the Secretary if required ( section 71D );

 

  • because of an individual’s false or misleading statement, a provider would incur a debt where they have made themselves eligible for ACCS (child wellbeing) in respect of a child ( section 71E )—in this case the individual incurs the debt rather than the provider;

 

  • because of a provider’s false or misleading statement or contravention an individual would incur a debt ( section 71F )—in this case the provider incurs the debt rather than individual; and

 

  • a provider’s approval is suspended or cancelled and fee reduction payments or business continuity payments are subsequently made ( sections 71G and 71H ).

 

Items 98 and 99 make amendments consequential to the introduction of “approved providers” to a provision dealing with methods of debt recovery.  The intention is that the listed methods of recovery for individuals and providers will be common, but will only operate to the extent legally possible.  It may be, for example, that some methods are not legally available in respect of partnerships or unincorporated providers, notwithstanding sections 230A and 230B.

 

Items 100 to 108, 110, 111 and 113 are technical amendments consequential upon the introduction of CCS and ACCS.

 

Item 109 deals with the time for recovering certain CCS debts.  This provision is intended to be practical and gives the Secretary the discretion to not pursue recovery where it is possible that an individual may belatedly meet CCS reconciliation conditions (generally, by lodging their tax return) and thereby resume entitlement for a former income year after having lost entitlement because of subsection 105E(2).

 

Item 112 inserts a new kind of debt that can be written off into section 95.  Under new subsection (4B), the Secretary may write off a debt that arises in circumstances where the reconciliation conditions are not met (generally because a tax return has not been lodged) if the reason why the reconciliation conditions were not met was because an individual’s former partner had not lodged a tax return at the time the individual and the partner separated (where the separation occurred as specified in paragraph (a)). 

 

Part 5—Review of decisions

 

Item 114 inserts new Division 1A , which deals with preliminary matters in relation to child care decisions and sets out important rules for the CCS reconciliation process.

 

Section 103 defines “child care decision”.  A child care decision includes an original determination made by the Secretary under Division 3 of Part 3A (determinations of eligibility and determinations of entitlement to CCS or ACCS) as well as an internal review decision by the Secretary or a review decision by the AAT of a determination under Division 3 of Part 3A.  The intention is to ensure that the same outcome (for example, as relevant for limitations on arrears) will be achieved for original decisions and in relation to reviews.

 

Section 103A sets out when an individual is considered to have met the “CCS reconciliation conditions”, which relate to tax assessments becoming available for the individual and anyone who was a partner of the individual in the income year (unless the individual or partner is not required to lodge a tax return because of their low income, for example).  Subsection (4) ensures that, where a relationship has ended during the year, individuals with former partners are not disadvantaged during the end-of-year reconciliation process where their former partners do not lodge their tax return and this would result in unfairness for the individual.  This provision allows the Secretary to treat an individual’s former partner as having lodged their tax return so that the individual can be taken to have met the reconciliation conditions in these circumstances.

 

Sections 103B and 103C define the “first deadline” and “second deadline” for the purposes of provisions relating to meeting the CCS reconciliation conditions.  The deadlines are the end of the first and second whole income years following the income year that is subject to reconciliation.

 

Item 115 makes amendments to section 104 to list some limited exceptions to the default rule that decisions under the family assistance law are reviewable on internal review by the Secretary.  The exceptions relate to events that cannot or should not be reversed, including a decision to pay a fee reduction amount (review may instead be sought in relation to the entitlement determination) or decisions to issue compliance notices (reviews may instead be sought in relation to a non-compliance decision). 

 

Paragraph 104(d) provides funding agreement decisions made under section 85GA are not reviewable by the Administrative Appeals Tribunal (AAT) to ensure certainty to contractors.  In accordance with the Administrative Review Council’s (the Council) publication “ What decisions should be subject to merit review? ” (which, as at August 2016, could be viewed on the Council’s website: http://www.arc.ag.gov.au ), such decisions are not generally considered appropriate for merits review given they will relate to the allocation of a finite resource, drawn from Annual Appropriations, and only a proportion of claims for a share of the resource can be met.  Furthermore, if these decisions, in relation to funding agreements, were open for review, any outcome overturning the original decision made would likely affect the interests of a contracted party who was successful after a competitive grants round. One-off payments may also be made to certain service providers in accordance with section 85GA, for instance, under the Community Child Care Fund, and such decisions should also be excluded from merits review for the following reasons considered by the Council to outweigh the benefits of review in these circumstances: review would only promote competition among community groups, no effective remedy could be provided without reducing funding to other service providers, and to avoid delays in effectively channelling funds into service provision.  Finally, as acknowledged by the Council:

 

“…such decisions by the Government to allocate funding to programmes as a whole are not suitable for review, as they are budgetary decisions of a policy nature, rather than decisions immediately affecting any particular person's interests. Those decisions are subject to parliamentary scrutiny…”

 

This provision would also align the treatment of contracts made pursuant to items listed in the Financial Framework (Supplementary Powers) Regulations 1997 , for which decisions under section 32B of the Financial Framework (Supplementary Powers) Act 1997 are also not subject to AAT review. 

 

Item 116 inserts new section 105C which ensures that certain information is not taken into account on review where the information was provided to the Secretary unreasonably late (after the 28 day period as referred in paragraph (c)) following a notification obligation in respect to that information.  This provision attempts to encourage the prompt notification of information that might increase the amount of CCS or ACCS that a person might be entitled to.  The limitation does not apply where the new information is the adjusted taxable income of the individual.

 

Section 105D ensures that a person’s entitlement for CCS or ACCS cannot be increased on review for a week that falls in the income year immediately before the income year in which the decision on review is made.  This provision is intended to discourage unreasonably late requests for review.  Subsection (2) ensures that an exception applies where the review is conducted because the reconciliation conditions are met (generally, following a person’s tax assessment becoming available and their adjusted taxable income becoming known).

 

Section 105E obliges the Secretary to conduct an own motion review once the reconciliation conditions for an individual are met (usually where a person’s tax assessment becomes available after they lodge a tax return).  This provision enables the Secretary to review the entitlement determinations made throughout the year based on income estimates, and substitute with the correct amount of entitlement based on information about the person’s adjusted taxable income as determined by the Commissioner of Taxation following a tax assessment being made.

 

Subsections 105E(2) and (3) notably deal with consequences for missing the “first deadline” and the “second deadline”, and require the Secretary to make no entitlement decisions where the first deadline is missed and only allow for entitlement to resume if, and once, the reconciliation conditions are met by the “second deadline”.

 

Items 117 to 122 are minor technical amendments.

 

Item 123 inserts new section 106A , which sets out circumstances in which the Secretary is required to give notice of review decisions about eligibility or entitlement to CCS or ACCS to an individual and a provider affected by the decision.  In particular, the provision clarifies that if the review decision is a fee reduction decision, and the Secretary has decided to pay the fee reduction amount directly to the individual under subsection 67EC(2), the notice provided must include a statement to this effect.

 

Section 106B acknowledges the possibility that a Secretary may initiate an own motion review after a person has applied to the AAT for review of the same original decision.  If this occurs, this provision requires the Secretary to give the AAT written notice of the Secretary’s review decision so that the AAT can take it into account.

 

Items 124 and 125 make consequential amendments to section 107 to maintain the existing law about the date of effect of certain internal review decisions with respect to family tax benefit.

 

Item 126 adds new section 107A into the Family Assistance Administration Act to address the date of effect of a review decision made under section 105 to vary, or set aside and substitute a new determination about eligibility for CCS.  The provision ensures that the date of effect of favourable decisions in respect of CCS eligibility (made on review under section 105) cannot be earlier than the beginning of the income year before the income year during which the review decision was made.

 

Items 127 to 132 make amendments to section 108 of the Family Assistance Administration Act, which is a provision that deals with decisions that may and may not be reviewed under section 109A (which relates to applicant initiated reviews).  These amendments:

 

  • remove references to decisions about CCB from the list of exceptions to the default rule that all decisions are reviewable on request (because they are no longer relevant);

 

  • insert new exceptions in relation to decisions that cannot or should not be reviewed (including funding agreement decisions, decisions to pay an amount through a provider to pass on a fee reduction, decisions to give non-compliance notices or decisions to publish non-compliance information);

 

  • make other minor amendments consequential upon the introduction of CCS and ACCS; and

 

  • ensure that an applicant may only initiate a review of a decision about an individual’s entitlement based on the individual’s income and activity levels after a person’s tax assessment becomes available following an income year (where a tax return is required to be lodged).

 

Items 133 and 134 (as well as the minor amendments made by items 135 and 136 ) alter section 109A of the Family Assistance Administration Act (the provision under which persons can apply for internal review) to ensure that requests for review of Part 8 decisions about the approval of providers can only be made by providers.  Requests in relation to other decisions can be made by a person that is “affected” by those decisions, which is a broader standing rule.  However, for decisions under Part 8, standing is limited reduce possibly numerous and identical applications from individuals who may be affected by a provider approval decision, leaving it to the provider themselves to apply for review.  Another reason for limiting standing to providers is because any review of a Part 8 decision would only take into account information relating to the child care provider.  An individual’s loss of access to a child care service that attracts CCS due to the provider’s loss of approval would not be a relevant consideration in a review of any decisions under Part 8.  Note that this provision will not limit an individual’s right to apply to a court in relation to a question of law, including under the Administrative Decisions (Judicial Review) Act 1977 , where they have standing under that Act.

 

Items 137, 138 and 139 make technical amendments to a provision that deals with providing notice of applicant initiated review decisions, to make references to CCS and ACCS and to remove references to repealed provisions relevant to CCB.  There are also new obligations in this provision to provide notification to “providers”.  In particular, the provision clarifies that if the review decision is a fee reduction decision, and the Secretary has decided to pay the fee reduction amount directly to the individual under subsection 67EC(2), the notice provided must include a statement to this effect.

 

Item 140 amends section 109D to require that applications for review of decisions under section 109A must be made no later than 13 weeks after the applicant is notified of the decision (if the decision is in relation to CCS or ACCS).  Otherwise, the application can be made 52 weeks after notification, which is the existing rule.  This provision is intended to encourage prompt requests for review in relation to child care decisions.  Items 141 to 147 are related technical amendments.

 

Item 148 provides a longer period in which internal reviews can be requested where the decision on review is made because a person’s ATI has become known because the person’s tax assessment has become available or where the Taxation Commissioner has reviewed a decision under taxation law about the taxable income of an individual. 

 

Items 149 and 150 make minor technical amendments.

 

Item 151 replaces section 109DA to provide for a time limit on applications by providers for internal review in relation to decisions made about provider approval.

 

New section 109DB ensures that new section 105C (which limits information that can be taken into account in a decision on review) also applies where the review occurs because of a request under section 109A.  New section 109DC operates similarly with respect to time limits on increases (by ensuring that section 105D also applies where the review occurs because of a request under section 109A).  New section 109EA (as inserted by item 152 ) operates similarly, by ensuring that section 107A (which limits the date of effect of review decisions to no earlier than the first day of the income year before a review decision was made) also applies where the review occurs because of a request under section 109A in relation to determinations of eligibility or entitlement for CCS or ACCS. 

 

Items 153 to 156 make a series of technical amendments to section 109G (which is about payments pending the outcome of a review process) consequential upon the introduction of CCS and ACCS.

 

Items 157 to 163 make a number of technical amendments to section 111, which deals with applications to the AAT for “first review”.  Some limited exceptions to review at the AAT are inserted through these items where review is inappropriate or would be ineffective to yield a remedy (such as in relation to “form and manner” requirements for notices or forms).  Item 163 is important because it ensures that review of decisions relevant to a person’s income changes or activity cannot be made at “AAT first review” until after a reconciliation process has occurred following an income year (that is, generally once a person’s tax assessment becomes available).  This provision also recognises that, once reconciliation conditions are met, the Secretary will conduct an internal review to take account of known ATI and activity.

 

Item 166 makes amendments to section 111A, which deals with time limits on applications for “AAT first review”.  Generally a person has 13 weeks to request such review after notification of a decision, however new subsection (2A) provides for a longer period where the decision is made following reconciliation conditions being met (generally, because a person’s tax assessment has become available, where the person is required to lodge a tax return).  Items 164, 165 and 167 make related technical amendments.

 

Items 168 to 172 make minor technical amendments.

 

Item 173 makes amendments to section 124 to ensure that complex calculations required to give effect to the AAT’s decision on first review are performed by the Secretary on the AAT’s direction, because the Secretary has access to the computer system that calculates child care payments.

 

Item 174 inserts new section 125A to deal with the date of effect of certain AAT first review decisions relating to CCS and ACCS.  The new provision limits the date of effect for favourable decisions (in respect of eligibility or entitlement to CCS or ACCS) to no earlier than the first day of the income year prior to the income year in which the application for review was made.

 

Item 175 amends section 128 of the Family Assistance Administration Act, which deals with “AAT second review”.  The amendments adding subsections (3) and (4) ensure that the same rules that apply to limitations on first review (as dealt with by subsections 111(2A) and (2B)) apply to second review.  Like for amendments to section 111, these provisions ensure that decisions relevant to a person’s income changes or activity cannot be reviewed at “AAT second review” until after a reconciliation process has occurred following an income year (that is, generally once a person’s tax assessment becomes available).  New subsection 128(5) gives applicants more time to lodge an application for “AAT second review” where the application is made because an individual meets the reconciliation conditions (generally because their tax assessment has become available) or where the Taxation Commissioner has reviewed a decision under taxation law about the taxable income of an individual.

 

Item 176 inserts new sections 134A and 134B which ensure that sections 124 and 125C (about ensuring that the Secretary makes complex calculations to give effect to AAT decisions and about date of effect of CCS and ACCS decisions) apply at AAT second review in the same way that they do at AAT first review.

 

Item 177 inserts new section 136 which outlines the requirements for the Secretary to notify relevant providers of certain AAT decisions that impact an individual’s eligibility or entitlement to CCS or ACCS.

 

Item 178 inserts new section 137A which limits how far back in time favourable changes affecting individuals and providers can take effect, where information is not provided promptly.  This provision is intended to encourage the prompt provision of information in response to the Secretary’s information gathering powers, and the prompt notification of change in circumstances that would affect eligibility or entitlement.

 

New section 137B ensures that favourable decisions made on first or second review by the AAT do not have effect prior to the income year before the income year in which an application is made.  This provision gives people a reasonable chance to request review, but ensures that applicants have an incentive to apply for AAT relatively reasonably promptly.  An exception applies where the application for review is made because the reconciliation conditions are met (generally because a person’s tax assessment is made available) or where the Commissioner of Taxation reviews a tax decision with respect to an individual’s taxable income.

 

Items 179 and 180 (and item 181 , as a consequence) amend section 138 to limit standing for decisions about the approval of providers to providers rather than other persons who may be affected by an approval decision.  Standing is limited to reduce vexatious and possibly numerous applications from individuals who may be affected by a provider approval decision, leaving it to the provider themselves to apply for review.  Note that this provision will not limit an individual’s right to apply to a court in relation to a question of law, including under the Administrative Decisions (Judicial Review) Act 1977 where an individual has standing under that Act.

 

Item 182 repeals a Division that is no longer required because of the cessation of CCR.

 

Part 6—Provisions relating to information

 

Item 183 makes amendments to the compulsory information gathering power in section 154 of the Family Assistance Administration Act that are consequential upon the introduction of CCS and ACCS.

 

Items 184 to 187 make technical amendments to an information gathering power consequential upon the cessation of CCB and the introduction of CCS and ACCS.

 

Item 188 inserts new section 157A which empowers the Secretary to obtain records kept by approved providers about whether a child is at serious risk of abuse or neglect.

 

Item 189 amends subsection 158(3) to allow the Secretary to specify, in a notice given under Division 1 of Part 6 of the Family Assistance Administration Act, a period shorter than 14 days in which the information is to be provided where a shorter period is reasonable to ensure the effective administration of the family assistance law.  A shorter period may be imposed where urgent provision of information is required to mitigate risk to children in care or to limit debts.

 

Item 190 also amends section 158 to require notices to specify a time and place for a person to appear where relevant and that the time for appearing must be at least 14 days, unless a shorter period is reasonable to ensure the effective administration of the family assistance law.  A shorter period may be imposed where urgent provision of information is required to mitigate risk to children in care or to limit debts.

 

Item 191 adds to the list of legislative schemes that protected information can be disclosed for the purposes of, by adding the National Law of a State or Territory jurisdiction.  This amendment will authorise the flow of child care information between the Commonwealth and States and Territories for the limited purposes of child care payments and child care quality under Commonwealth and State/Territory legislation.

 

Item 192 is a minor technical amendment.

 

Item 193 is a consequential amendment required because of the cessation of CCB.

 

Items 194 and 195 amend section 172 to ensure that references to claims for family assistance in this provision include certain applications in relation to ACCS.

 

Item 196 makes a consequential amendment to paragraph 173(1)(d), required because of the cessation of CCB and CCR.

 

Items 197, 198, 199 are minor technical amendments.

 

Item 200 clarifies that the reference to a person for the offence in section 175 includes a provider or an individual who obtains a fee reduction amount.

 

Item 201 consolidates offences that had applied to CCB and CCR into a single provision that operates in respect of payments obtained by fraud.

 

Items 202, 203 and 204 are minor consequential amendments required because of the cessation of CCB and because of the introduction of CCS and ACCS.

 

Part 8—Approvals

 

Item 205 repeals and substitutes Part 8 of the Family Assistance Administration Act. New Part 8 provides for approval of providers of child care services in respect of particular services. The Part attempts to draw consistencies in terminology between the family assistance law and the Education and Care Services National Law Act 2010 (Vic) and equivalent legislation in other State jurisdictions (the National Law), which refers to “providers” as distinct from “services”.

 

New Part 8 aims to streamline the approval process by tailoring the approval criteria to take into account matters relevant to the provider’s suitability to administer child care payments on behalf of the Commonwealth.  The approval process is also streamlined by consideration of a smaller set of service specific criteria when a provider seeks to add new service(s) to their approval.

 

 

 

 

Division 1—Provider approval

 

Section 194A sets out the requirements for an application for approval.

 

Subsection (1) limits the types of entities that can apply for approval.  An application for approval can be made by an individual, body corporate, partnership, or other entity or body prescribed by the Minister’s rules.

 

Subsection (2) provides the form, manner and content requirements for applications. 

 

Subsection (3) clarifies that applications that do not comply with the form and substance requirements in subsection 194A(2) are taken not to have been made and also allows the Minister’s rules to prescribe circumstances in which an application is taken not to be made.  This rule making power is intended to be used to limit applications to address excessive growth within a particular child care service type specifically where there are concerns about proven or alleged non-compliance with family assistance law.

 

Section 194B deals with when the Secretary may approve a provider (essentially where an applicant can satisfactorily demonstrate that they can meet the eligibility criteria in sections 194C and 194D ) and when the Secretary can approve the provider in respect of services it operates.  A provider must operate, or propose to operate, at least one approved service, otherwise the provider cannot be approved. There are also administrative provisions in this section dealing with notification of approval and the circumstances in which the Secretary must refuse to approve a provider as a provider in respect of a service it operates.  By default, an approval will take effect on a Monday, unless the Secretary has determined it is more appropriate for the approval to take effect on another day.

 

Sections 194C and 194D set out the provider and service eligibility rules.  For a provider to meet the eligibility rules, they will need to: hold any approvals or licences required under the National Law or other State or Territory laws that relate to child care; demonstrate that they, and any person with management or control of the provider, are fit and proper persons (as defined in section 194E ); where they are a large centre-based day care provider, demonstrate that they are financially viable and are likely to remain as such; and meet any other criteria specified by the Minister.

 

The service eligibility rules refer to kinds of care that the service must not provide and refers to criteria that also apply to providers.  Paragraph 194D(f) is notable for setting out factors that the Secretary must weigh up and be satisfied of regarding the appropriateness of the approval, including: any conditions that have already been imposed on the provider’s approval; whether there is a history of non-compliance with laws; whether there is a poor record of administering CCS, ACCS, CCR or CCB payments or other funding provided by the Commonwealth or States or Territories; the perceived capacity of staff to use the electronic child care payment system; and other matters prescribed in rules or that are considered relevant in a particular case (that are not set out in rules).

 

Section 194E lists the fit and proper person considerations that the Secretary must have regard to for the purposes of the provider and service eligibility rules.  Notably, subsection (2) is intended to ensure that references to a “relevant person” in any of the factors listed in subsection (1) includes another person or body in respect of which the person is or has ever been a person with management or control.  This provision is intended to ensure that the Secretary is able to take into account a person’s previous record of management or control of other entities in having regard to the factors in subsection (1).  The fit and proper person considerations cover requirements which apply to applications for approval for the purposes of the family assistance law, and as ongoing conditions for continued approval, including ensuring that findings of guilt can be considered (as well as convictions).  The Secretary’s capacity to require disclosure of such matters is subject to the application of Part VIIC of the Crimes Act 1914 , which is about spent convictions and pardons.

 

Section 194F provides a definition of “person with management or control” for the purposes of the fit and proper person considerations in the provider and service eligibility rules.  In particular, paragraph (b) ensures that even if a person does not have the legal authority or responsibility for the planning, direction or control of the activities of a body, but has a significant influence over the planning, direction or control of the activities of the body, that person would be considered a “person with management or control” of the body.  For example, a parent company who has a significant influence over the activities of a subsidiary would be considered a “person with management or control”, even where the parent company has no legal authority to direct the activities of the subsidiary.

 

Section 194G provides a definition of “approved child care service” and clarifies that a service is not approved during a period of suspension (although a service could be taken to be approved during a period of suspension if a suspension is revoked with backdated effect or on review).

 

Section 194H puts beyond doubt that any obligation or permission imposed or conferred under the family assistance law on an approved child care service is taken to be imposed or conferred on the approved provider that is approved with respect to that service.  This provision reflects the fact that, under the family assistance law, an approved child care service is effectively the business operations of an approved provider, who is the controlling legal entity or body.

 

Division 2—Conditions for continued approval

 

Section 195A sets out the conditions for continued approval of an approved provider that relate to ongoing compliance with eligibility rules, the family assistance law and other laws of the Commonwealth or States and Territories that apply to the provider (including the National Law).

 

Section 195B states that it is a condition of continued approval that, where a service (with respect to which they are approved) has been allocated places, the service is to fill no more places than those allocated.  This provision has no effect in respect to services where places have not been allocated.

 

Section 195C outlines, as a condition of continued approval, the minimum period that an approved child care service must operate (that is, provide child care) per year.  The provision enables rules to be made to prescribe alternative periods to the default periods listed in subsection (2) and empowers the Secretary to determine shorter periods in “special circumstances”, which are intended to be very unusual circumstances in which it would be unfair or inappropriate for the provider to provide care for the minimum period.

 

Section 195D ensures that details of the working with children cards that staff are required to hold who work in an approved child care service are provided to the Secretary so that the Secretary can be satisfied that the staff have been subject to the requisite checks to work with children.

 

Section 195E allows the Minister to prescribe further conditions of continued approval by legislative instrument.  This power is intended to ensure that additional conditions of continued approval may be imposed in the future, to deal with unforeseen changes affecting the child care sector.

 

Section 195F gives the Secretary the ability to impose specific conditions in relation to a particular provider or service (for example, where these are required because of the particular characteristics of the provider or service).  Such conditions might include restrictions on a provider from operating in a particular geographical location, or a requirement in relation to particular alterations to the facilities provided at an approved service. 

 

Subsection 195F(4) clarifies that notices of conditions imposed by the Secretary are not legislative instruments.  This provision is included simply to assist readers, as any such notice is not a legislative instrument within the meaning of section 5 of the Legislation Act 2003 .

 

Section 195G empowers the Secretary to assess, at any time, a provider’s compliance with the conditions for its continued approval, including whether the provider eligibility continues to satisfy the provider eligibility rules and whether the provider and persons with management control of the provider are fit and proper persons to be involved in the administration of CCS and ACCS.

 

Section 195H sets out the consequences that follow a breach of a condition of continued approval, otherwise known as “sanctions” that the Secretary can impose.  Provisions in this section: list the sanctions that can be imposed (subsection (1)); empower the Minister to set out rules that the Secretary must have regard to in applying sanctions to approved providers (subsection (2)); and the processes involved to impose a sanction and following the imposition of a sanction.

 

Division 3—Adding or removing services

 

Section 196A enables approved providers to apply to add or remove services from their approval.  Subsection (3) clarifies that applications that do not comply with the form and substance requirements in subsection 196A(2) are taken not to have been made and allows the Minister to prescribe other circumstances in respect of which applications are taken not to have been made as referred to in subsection 194A(3). 

 

Sections 196B and 196C empowers the Secretary to vary the provider’s approval by adding or removing a service to the provider’s approval.  It also sets out the administrative steps the Secretary may take in response to an application under section 196B .

 

Division 4—Suspension, variation and cancellation of approval

 

Section 197A provides the Secretary the power to immediately suspend the approval of an approved provider, or a service in which a provider is approved in respect of, in the circumstances listed in subsection (1).  For example where there are immediate threats to the health and safety of a child. There are also provisions in this section outlining the administrative steps that the Secretary is to follow.

 

Section 197B allows the Secretary to suspend the approval of an approved provider, or a service in respect of which they are approved, if the provider has been given numerous infringement notices (10 within 12 months, or just 5 in 12 months, where the infringement penalty has not been paid in accordance with the notices). Note that infringement notices are given for non-compliance.

 

Section 197C allows providers to request that the Secretary cancel their approval and provides for administrative steps following such a request. Providers may wish to do this where they want to remain operating as a child care service without CCS approval.

 

Sections 197D and 197E allow the Secretary to cancel a provider’s approval or vary an approval (so that the provider is not approved in respect of service) if the Secretary becomes aware that the approval should not have been made because the factors in section 194B were not satisfied at the time the provider/service was approved.

 

Sections 197F and 197G allow the Secretary to cancel approvals (of providers or services) where services have not operated for 3 months (unless the exceptions in (1)(b) apply).  This provision ensures that providers who, and services that, stop operating can be removed from the CCS payment system.

 

Sections 197H and 197J require the Secretary to cancel or vary the approval of a provider where the provider ceases to operate its services. 

 

Section 197K ensures the Secretary can cancel a provider’s approval where they are no longer approved in respect of any services.

 

Division 5—Allocation of child care places

 

Section 198A allows the Minister to prescribe rules dealing with the matters listed with respect to the allocation of child care places.  If a condition of a service’s approval is that they are subject to these rules, section 198B provides that the Secretary must allocate places in accordance with them and allows approved providers to apply for additional places. 

 

Section 198C empowers the Secretary to reduce the number of places allocated where the number allocated exceeds the number of places actually provided or able to be provided under a State or Territory law because of licensing restrictions.

 

Division 6—Miscellaneous

 

Division 6 is the final Division in Part 8 and deals with a number of miscellaneous matters including the procedure for imposing sanctions ( section 199A ) and a power to publicise action taken on providers or individuals ( section 199B ).

 

Section 199C is an obligation imposed on approved providers to notify the Secretary of matters affecting the original approval and whether it should continue to be approved.  The obligation is punishable by an offence carrying a penalty of 80 penalty units or through a civil penalty of 60 penalty units.  This offence is not one of strict liability and therefore the prosecution would need to establish relevant fault elements.

 

Section 199D applies alongside the obligation to provide notices of reviewable decisions under section 27A of the Administrative Appeals Tribunal Act 1975 and requires the Secretary to notify of review rights in notices of decisions under Part 8 of the Family Assistance Administration Act.

 

Section 199E empowers the Secretary to notify individuals whose eligibility for CCS or ACCS may be affected by an approved provider’s non-compliance with a condition of continued approval or by a cancellation, suspension or variation of an approved provider’s approval, were the Secretary to take such action.  There are requirements in this provision for the form and content of such notices.

 

Section 199F allows the Minister to specify providers who are exempt from meeting certain approval criteria in order to become, or remain, approved.  It is intended that the Minister would specify providers who are in difficult or unusual circumstances and who should nevertheless be able to provide child care with respect to which an individual can remain eligible for CCS or ACCS.  This provision could be used for services formally funded under the Budget Based Funding model.

 

Section 199G , while appearing to provide a broad modification power of principal legislation (sometimes referred to as a “Henry VIII clause”), is intended to operate in a purely beneficial way to deal with any anomalies that may arise where an approval is taken to be backdated in time.  Where approvals are made with an effective date in the past, providers may be unable to meet certain requirements (such as the requirement to provide reports under section 204B) within the time specified in legislation.  This provision gives Ministerial power to make rules which modify the principal legislation, so that it operates without anomalous or unfair consequences for providers where their approval takes effect for a past period.  Such modifications would be beneficial for providers as they would ensure providers are not retrospectively and unfairly exposed to obligations in the past that they are unable to meet.  This provision provides flexibility to ensure that anomalous timing rules and other matters, consequent upon backdated approvals, can be dealt with in a reasonable, sensible and beneficial manner. Any rules made in accordance with this provision will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments, which means that Parliament is able to disallow any rules that are considered non-beneficial or otherwise unfair.

 

Part 8A—Provider requirements and other matters

 

New Part 8A of the Family Assistance Administration Act sets out a number of obligations that are imposed on approved providers.  A number of provisions in the new Part 8A include the application of strict liability offences on providers that fail to comply with particular obligations.  The new sections that include strict liability offences are: 200A, 200D, 201A, 201C, 201D, 201E, 202A, 202B, 202C, 202D, 204B, 204C, 204F, and 2014K.  The offences set out in these provisions, as part of a wider compliance regime, are aimed at deterring inappropriate practices and penalising those providers that continue to disregard their obligations under the family assistance law.  Civil penalty provisions on their own may not be a sufficient deterrent or penalty as providers may choose not to pay these penalties and continue to operate.  In some cases, civil penalties are not sufficient in their penalty amounts as it may be more profitable for providers to inappropriately submit attendance reports and pay the financial penalties.

 

The nature of these obligations is such that it is extremely difficult to prove an intention element, and the punishment of these offences not involving fault is likely to significantly enhance the effectiveness of the compliance regime.

 

The integrity of the subsidy system relies on child care services engaging in a range of important administrative and business practices to ensure that the financial benefit of child care subsidy payments are passed onto families, including by appropriate record keeping, invoicing practices and reporting attendance and enrolment of children.  

 

The imposition of strict liability offences in relation to the contravention of obligations offers the ability for criminal prosecution only where a contravention is considered to be sufficiently serious to pursue in this manner.  Strict liability offences are only proposed in relation to contraventions that would have a significant impact on the payment integrity of the new child care regime.

 

None of the strict liability offences introduced in the new Part 8A, as listed above, are punishable by imprisonment under the terms of the family assistance law.  These offences are punishable by penalties not exceeding 60 penalty units for an individual, with the exception of 201A, 201C and 202C which are punishable by a penalty not exceeding 80 penalty units for an individual, and 204B and 204C, which are punishable by a fine not exceeding 70 penalty units for an individual.  The five provisions containing strict liability offences punishable by over 60 penalty units relate to certain matters that may impact on the ability of families to access child care.  The penalty units have been increased (as compared to penalties that apply prior to the amendments to the family assistance law made by this Schedule) because non-compliance with these obligations is increasing and there is growing concern about child care provider compliance.

 

Division 1—Requirements in relation to enrolments and relevant arrangements

 

Section 200A requires approved providers to provide the Secretary notification of the enrolment of a child within the timeframe specified in paragraphs (3)(c) or (d).   Subsection (2) deals with notification requirements in cases where a child is enrolled prior to an approval being given or during a period of suspension of approval.

 

Subsection 200A(3) requires providers to report on care provided to children whether or not the children are enrolled at a service under a complying written arrangement for the purposes of CCS eligibility.  This requirement retains current arrangements and will assist the Secretary make payments should individuals become eligible after reports are provided and will otherwise assist the administration of the child care payments system and related early childhood programmes.   A “relevant arrangement” is defined as being an arrangement, other than a complying written arrangement, entered into by the provider and an individual for the service to provide care to a child.

 

Due to the central importance of notifying enrolments to the CCS and ACCS payment system, subsections (4) and (5) provide for an offence of strict liability for failure to notify and a civil penalty.  It is not intended that the offence would be prosecuted in respect of honest or reasonable mistakes.  There is also a civil penalty and an option to issue infringement notices for less serious breaches of the obligation.

 

For the purposes of the notification obligation in subsections 200A(1) and (2), section 200B sets out when a child is taken to be enrolled.  Importantly, (unless subsection (4) applies because the child it at serious risk of abuse or neglect) a child is only enrolled where the individual and the provider of the service enter into a complying written arrangement that complies with the requirements in the Secretary’s rules referred to in subsection (3).  An arrangement can only be varied in writing in accordance with section 200C .

 

Section 200D imposes obligations on approved providers to notify the Secretary when a “complying written arrangement” or other “relevant arrangement” is varied in a way that results in the information that was notified about the enrolment to become incorrect (or in other circumstances prescribed by the Minister’s rules), where other information becomes available that should have been provided or where the information affects the currency of the enrolment or the arrangement.  Due to the importance of the integrity of the payment system and the Secretary being updated on enrolment arrangements and changes, contravention on subsection (1) is punishable by an offence of strict liability, or through a civil penalty.  It is not intended that the offence would be prosecuted in respect of honest or reasonable mistakes. 

 

Division 2—Requirements in relation to CCS and ACCS by fee reduction

 

Division 2 sets out obligations of approved providers that relate to ensuring that CCS and ACCS operate by passing on fee reductions to individuals (except for ACCS in respect to which a provider is eligible).

 

Section 201A requires providers, after they have received a notice of a fee reduction decision for an individual, to pass on the fee reduction or to remit the amount received to the Secretary where they cannot.  A provider may pass on a fee reduction amount by reducing the fee that they charge the individual.  Due to the central importance of passing on fee reductions of CCS and ACCS, provisions in this section provide for an offence of strict liability for failure to notify as well as a civil penalty.  It is not intended that the offence would be prosecuted in respect of honest or reasonable mistakes. Subsection 201A(2) exempts a provider from complying with this obligation where the notice of the fee reduction decision to the provider states that the Secretary has decided to pay the individual directly under subsection 67EC(6).

 

Subsection 201A(5) is a practical provision that allows for fee reductions to be passed on to the individual otherwise than reducing fees (for instance by providing a refund of fees already charged).  This provision is intended to deal with cases where certain decisions are backdated, such as a decision to approve a provider with backdated effect or where a suspension is revoked or overturned on review.  Where the individual receives the benefit of the fee reduction from the provider, the provider is taken to have passed on the amount, and the individual is taken to have been paid an amount of CCS or ACCS.

 

Section 201B is a provision that obliges approved providers to ensure that they recover, from individuals, the difference between a fee reduction (made available through CCS or ACCS) and the actual fee charged to the individuals, where there is a difference.  The CCS payment is designed with a concept of co-contribution to the cost of child care.  This provision intends to address an issue that has arisen with CCB where some child care services did not actually pursue the difference between fee reductions and actual fee charged to the individual.  The fees the provider charges the individual are reported through to the current computer system and these fees and hours of child care provided form the basis for the calculation of fee reductions.  Failure to satisfy this obligation carries both criminal and civil penalties as specified.

 

Section 201C imposes an obligation on approved providers to charge an individual who is eligible for ACCS no more in child care fees than they would charge an individual who is eligible for CCS for the same session of care.  This provision is important to ensure that providers do not raise their fees in expectation of passing higher fee reductions onto individuals by way of ACCS.  An offence of strict liability applies in cases where it is clear that services are establishing a pricing structure that is different for individuals who are eligible for CCS as opposed to ACCS to ensure that providers do not take advantage of situations where individuals are eligible for the ACCS rate (such as because of their low income, or where a child is at serious risk of abuse or neglect).  Although there is a strict liability offence, it is intended that action to prosecute the offence would only be taken in serious or repealed cases. 

 

Section 201D imposes an obligation on providers to give written statements in relation to a statement period (usually a CCS fortnight, or other otherwise prescribed) to an individual containing details about the session fees and other matters set out in subsection (3).  Due to the importance of this provision to the payment system of CCS and ACCS, provisions in this section provide for an offence of strict liability and a civil penalty, however it is intended that action to prosecute the offence would only be taken in serious or repealed cases.  A similar obligation applies where, as a result of a review, a determination about an individual’s entitlement is set aside or varied ( section 201E ).

 

Division 3—Requirements in relation to records

 

Section 202A imposes on obligation to make written records where an approved provider (who would not otherwise have a record) becomes aware of an event that relates to or impacts on eligibility for CCS or ACCS, compliance with conditions for continued approval or other prescribed matters.  Although a penalty of strict liability applies, the fact that the offence is only made out where the provider becomes aware of relevant events imports a knowledge element into the offence.  It is not intended that the offence would be prosecuted in respect of honest or reasonable mistakes.  There is also a civil penalty and an option to issue infringement notices for less serious breaches of the obligation.  A similar obligation applies in relation to keeping records ( section 202B ) for the period specified in subsection 202B(2).

 

Section 202C imposes an obligation to make and keep records that evidence the matters certified in a certificate of risk of serious abuse or neglect (or its cancellation).  A strict liability offence applies, however it is not intended that the offence would be prosecuted in respect of honest or reasonable mistakes.  There is also a civil penalty and an option to issue infringement notices for less serious breaches of the obligation.

 

Section 202D imposes an obligation to keep the Secretary informed about the location of records following cancellation or suspension of approval (or a provider or in respect of a service).  As for other provisions in this Division, a strict liability offence applies, however it is not intended that the offence would be prosecuted in respect of honest or reasonable mistakes.  There is also a civil penalty and an option to issue infringement notices for less serious breaches of the obligation.

 

Division 4—Requirements relating to large centre-based day care providers

 

This Division imposes obligations that only apply in relation to “large centre-based day care providers” as defined in section 4A of the Family Assistance Act.

 

Section 203A allows the Secretary to require financial information for the current financial year and up to four previous financial years, where the information is relevant to determining the financial viability of the provider, but only where the provider is reasonably capable of providing it.  Subsection (4) exempts persons registered under the Australian Charities and Not-for-profits Commission Act 2012 who have provided financial information under that Act.  Subsection (5) puts beyond doubt that the disclosure of any personal information under this provision is taken to be authorised by law for privacy purposes.  Section 203B sets out who notices may be given to.

 

Section 203C empowers the Secretary to engage an auditor if she is concerned about information received under section 203A.  An auditor engaged must provide a report that conforms with the requirements set out in section 203D .

 

Division 5—Requirement in relation to information and reports

 

Section 204A sets out a requirement for providers to notify the Secretary at least 42 days before their intention to stop operating a child care service, or to provide further information about the cessation on request.  An offence and a civil penalty applies for breach of this obligation.

 

Section 204B is a very important requirement that obliges approved providers to provide materially accurate reports about sessions of care provided to a child who is enrolled with the service, or is provided with care by the service under a “relevant arrangement”.  These reports are used to help calculate CCS and ACCS entitlement amounts.  There are content, form and manner requirements set out in subsections (2) and (3) for these reports.  The provider must give attendance notices to the Secretary relating to all children for whom care is provided, including both enrolled children (for whom complying written arrangements exist) and others for whom relevant arrangements exist. The requirement to report care provided to all children replicates the requirement contained in its predecessor provision (see old section 219N of the Family Assistance Administration Act).  As reports under this provision are essential to payments of CCS and ACCS, a strict liability offence applies, however it is not intended that action would be taken to prosecute the offence where there is an honest or reasonable excuse—only serious or repeated offences would be subject to prosecution.  A civil penalty also applies and the Secretary would be able to issue infringement notices under the Regulatory Powers (Standard Provisions) Act 2014 for contravention of the requirements in this provision.  This section imposes an obligation on approved providers, and compliance with this is therefore a condition of continued approval.  There is limited scope (subsection (6)) for providers to update reports and this must be done promptly.

 

Section 204C allows the Secretary to give a notice to a provider instructing them to withdraw, update or vary a report where the Secretary reasonably considers that a detail is inaccurate.  If a provider does not respond to a notice within the time required, the contravention is an offence as well as being subject to a civil penalty.  As for section 204B, because reports are essential to payments of CCS and ACCS, a strict liability offence applies, however it is not intended that action would be taken to prosecute the offence where there is an honest or reasonable excuse—only serious or repeated offences would be subject to prosecution. 

 

Section 204D empowers the Secretary to give an approved provider a written notice requiring the provider to give the Secretary information the Secretary needs in order to determine whether to reduce the number of child care places allocated to the service (where the service is the subject of allocation of places).  Failure to comply with the notice exposes a provider to the civil penalty outlined in subsection (5).

 

Section 204E imposes a requirement to comply with a notice to provide information about children who are enrolled.  An offence and a civil penalty apply to contraventions.

 

Section 204F imposes a requirement for approved providers to provide information about matters prescribed by the Minister’s rules, commonly referred to as notifiable events.  An offence and a civil penalty apply to contraventions.

 

Section 204G allows the Minister to prescribe rules that impose requirements about monitoring or investigating whether an approved service is providing care to a child where there is no eligibility for a session of care or to a child who is of a class in respect of whom no one is eligible (under subparagraph 85BA(1)(c)(iii) and paragraph 85ED(1)(b) of the Family Assistance Act).  Such children might be subject to “child-swapping” measures and the requirements could relate to the provision of information about this practice.

 

Section 204H sets out provisions that must be complied with notwithstanding a provider’s cancellation or suspension of approval.  This provision has the effect that any penalty or offence contained in the listed provisions can still apply on contravention.

 

Section 204J clarifies, to avoid any doubt, that the collection, use or disclosure of personal information for the purposes of determining the financial viability of a large centre-based day care provider is authorised by law for privacy purposes.

 

Section 204K requires approved providers to inform an appropriate State/Territory body that, within six weeks after it has given a certificate certifying, or applied for a determination determining, that the provider considers the relevant child is or was at risk of serious abuse or neglect.  The purpose of this provision is to ensure that State or Territory government agencies responsible for the welfare of children are informed and able to respond to the welfare risks that such children may be facing.

 

Division 6—Business continuity payments

 

This Division sets out provisions that allow for payments of CCS and ACCS to be made where there are good reasons why approved providers are unable to provide section 204B reports (for instance, where the computer system that facilitates such reporting is down).

 

Items 203 and 204 make minor technical amendments consequential upon the introduction of CCS and ACCS by this Bill.

 

Part 8C—Regulatory powers

 

This Part triggers the monitoring provisions under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 .  Prior to amendments to the child care provisions in the family assistance law proposed by this Schedule, the family assistance law contained its own monitoring powers and processes.  The purpose for triggering the Regulatory Powers Act 2014 is to ensure that monitoring is brought into line with the consistent approach embodied by that Act (subject to modifications where these are necessary in the child care payment context).  The triggering of the Regulatory Powers (Standard Provisions) Act 2014 by provisions in this Schedule is not intended to expand the Commonwealth’s regulatory powers with respect to child care matters.

 

Division 1—Monitoring powers

 

Section 219UA sets out: which provisions in the family assistance law are subject to monitoring under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 ; what information is subject to monitoring; and which provisions are “related provisions” for the purposes of Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 .  Subsection (4) sets out matters that are required to be specified when triggering Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 and specifies who or what the following matters are: authorised applicant; authorised person; issuing officer; relevant chief executive; and relevant court.

 

Section 219UB sets out “listed child care information provisions” for the purposes of section 219UA (these provisions are subject to monitoring under Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 ).

 

Section 219UC modifies the Regulatory Powers (Standard Provisions) Act 2014 to ensure that entry of premises for the purposes of monitoring where either an occupier or a person who apparently represents the occupier provides consent for entry.  This is important in the child care context because it is likely that educators or staff working for an occupier may provide consent on behalf of an occupier when an authorised officer seeks entry for monitoring purposes.

 

Section 219UD empowers the Secretary to appoint authorised persons for the purposes of the monitoring powers in the Regulatory Powers (Standard Provisions) Act 2014 .  It is intended that persons appointed under this provision will be APS employees under the Public Service Act 1999.

 

Division 2—Civil penalties

 

Section 219VA ensures that the civil penalty provisions in the family assistance law are enforceable under Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 .  This ensures that orders can be obtained in the Federal Court or Federal Circuit Court under that Act to enforce the penalties.

 

Section 219VB imposes a requirement for persons to assist with applications for civil penalty orders, but only where the Secretary suspects or believes that the person can provide relevant information.  This provision is not intended to displace the privilege in respect of self-incrimination and is intended to only be relied on in limited cases where it is clear that a person’s assistance will assist to obtain an order. 

 

Division 3—Infringement notices

 

Section 219WA provides that civil penalty provisions are subject to the infringement notice provisions in Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 .  Infringement officers are appointed under subsection (3) and will be APS employees of the Department responsible for administering the Act (currently the Department of Education and Training).

 

Subsection (6) operates as a modification of the provision in the Regulatory Powers (Standard Provisions) Act 2014 that ensures that infringement notices can only be issued with respect to a single contravention and ensures that a single notice can cover multiple contraventions.  This provision is required because of the related contraventions that are possible under the family assistance law and enables providers and the Secretary to outline related contraventions that might occur in relation to multiple children (for example, multiple contraventions of the notice requirement in section 204B) or in relation to related behaviour in a single notice.  It is not intended to rely on single notices in relation to behaviour that is, or contraventions that are, unrelated.

 

Division 4—General rules about offences and civil penalty provisions

 

Section 219XA clarifies that the physical elements required to prove an offence are as set out in the provision that provides for the contravention.

 

Section 219XB is an interpretative provision that applies where one provision states that a person commits an offence or is liable to a civil penalty where they contravene another provision.  Subsection (2) makes clear that a reference to the contravention relates to both provisions.

 

Items 209 and 210 make minor consequential amendment to the delegation provision in the family assistance law, including by listing important powers that should be exercised by the Secretary personally and cannot be delegated.

 

Item 211 replaces the provision that deals with notice requirements by referring to “providers”, which is a new concept introduced by this Schedule.

 

Items 212, 213 and 214 are minor and technical amendments consequential upon the introduction of CCS and ACCS.

 

Item 215 inserts new section 230A into the Family Assistance Administration Act to deal with the application of the family assistance law to providers that are partnerships and therefore not legal entities or persons in their own right.  This provision essentially ensures that the obligations and permissions of the provider rest with the partners.  New section 230B is a similar provision that ensures that the obligations and permissions of other unincorporated providers rest with each member of the entity or body’s governing body.

 

Items 216, 217 and 218 further clarify the effect of the family assistance law in respect of partnerships and unincorporated bodies, which are both entity types that are not uncommon for child care providers.

 

Items 219 and 220 amend and limit the standing appropriation in section 233 of the Family Assistance Administration Act to ensure that additional funds required to pay full rates of ACCS are drawn through Annual Appropriation Acts, rather than through the standing appropriation in the family assistance law.  Generally item 1 and 2 operate to essentially require the calculation of a notional CCS amount that the individual would be entitled to if they were not entitled to ACCS—this amount is drawn through the standing appropriation—and require the remaining amount to meet the entire ACCS entitlement to be drawn elsewhere.  A payment of an amount under a funding agreement entered into under section 85GA, is also drawn through Annual Appropriation Acts rather than through the standing appropriation. 

 

Item 221 is a minor technical amendment.

 



Part 2—Consequential amendments

 

Items 222 and 223 make an amendment to the A New Tax System (Goods and Services Tax) Act 1999 which is consequential on the removal of “registered care” as a kind of Commonwealth supported child care by Part 1 of this Schedule.

 

Items 224 and 225 make some minor consequential amendments to the Early Years Quality Fund Special Account Act 2013 consequential upon the new terminology of “approved provider” and “large centre-based day care provider” introduced by Part 1 of this Schedule.

 

Item 226 makes a minor consequential amendment to the Fringe Benefits Tax Assessment Act 1986 .  The previous references to an array of care types for the purposes of “exempt residual benefits” is replaced by the simpler term “approved child care service”, as introduced by Part 1 of this Schedule.

 

Items 227, 228 and 229 make amendments to the Income Tax Assessment Act 1997 that are consequential upon the cessation of CCB and CCR and the introduction of CCS and ACCS by Part 1 of this Schedule.  The overall approach to the tax treatment of child care payments, however, remains unchanged.



Part 3—Other amendments

 

Division 1—Amendments commencing day after Royal Assent

 

Items 230 and 231 amend section 4 of the Family Assistance Act by specifying that, despite subsection 14(2) of the Legislation Act 2003, a determination made for subsection (1) may make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.  The departure from the general position reflected in section 14 of the Legislation Act 2003 is intended to ensure that future versions of the instruments that set out vaccination and immunisation details and schedules (including the Australian Immunisation Handbook ) can continue to be meaningfully referred to.  The Australian Immunisation Handbook is approved by the National Health and Medical Research Council to provide clinical advice on vaccination.   As the Handbook is updated regularly to take account of scientific evidence as it becomes available (and is currently in its 10 th edition of publication) it is important to ensure that any reference in a legislative instrument made under section 4 is a reference to the current and up to date edition.  The Handbook is publicly, readily and freely available to access from the National Health and Medical Research Council website, through the Australian Government Department of Health, for those seeking to access the content of the law.  It is understood that updates to the Handbook are also regularly notified on the National Health and Medical Research Council’s homepage.

 

Items 232, 233, 234 and 235 introduce amendments to section 194 and section 199 of the Family Assistance Administration Act that allow the Minister to, firstly, prescribe circumstances in which applications (made commencement day from Royal Assent) for approval of a child care service are taken to not have been made.  This rule making power could be used to limit applications to address excessive growth within a particular child care service type, specifically where there are concerns about proven or alleged non-compliance with family assistance law.  It could also be exercised to establish a short “moratorium” on new applications in the lead up to transition to the new CCS regime.  The second amendment to section 199 allows the Secretary to reassess whether a child care service continues to meet the conditions of continued approval.  Where a service has been identified as no longer meeting their conditions of continued approval, the service’s approval may be cancelled.  This provision ensures that sanction action in relation to non-compliant existing services can occur in the lead up to the new CCS system.  This provision also aligns with the ability of the Secretary, following the commencement of Part 1 of this Schedule, to review the approval of approved providers.

 

Items 236 and 237 simplify a provision in the A New Tax System (Goods and Services Tax) Act 1999 that deals with the GST treatment of child care that is funded by the Commonwealth.  The provision allows the Minister to determine certain kinds of child care for this purpose to enable new child care funding programmes to be treated in a consistent way for GST purposes.

 

Division 2—Amendments commencing 1 July 2017

 

Items 238 and 239 shorten the period in which CCB service approvals are able to be backdated from the date of application.  A change is made from 6 to 3 months.  This provision is transitional in nature and is designed to ensure that lengthy backdated approvals are not possible in the lead up to the new CCS system.

 

Items 240 to 249 make amendments related to the cessation of enrolment advances.  These amendments ensure that no new enrolment advances are payable in relation to enrolments that post-date 1 July 2017.  The amendment will also ensure that, from 1 July 2017, enrolment advances can begin to be recovered where they were paid in relation to enrolments that occurred more than four years ago. 

 



Part 4—Application, saving and transitional provisions

 

Division 1—Introduction

 

Item 250 sets out definitions for some terms specifically for the purposes of the application, savings and transitional provisions in Part 4 of this Schedule.  Notably, the “commencement day” is the day that Part 1 of Schedule 4 commences and the “pre-commencement period” is taken to be (approximately) the six month period leading up to that day.

 

Division 2—Child care subsidy and Additional Child Care Subsidy

 

Item 251 is essentially an application provision which puts beyond doubt that a person is only able to be eligible for (and therefore be paid) CCS or ACCS for a session of care provided on or after commencement day, and not before.

 

Item 252 is a provision that ensures that individuals who had been in receipt of CCB by fee reduction, or who had claimed CCB prior to commencement day, are taken to have made a claim for CCS after commencement day.  This provision aims to ensure a smooth transition into the new CCS system for existing CCB recipients/claimants by ensuring that they do not need to make a new claim for assistance with their child care.  However it is intended that the Secretary will require individuals, through her information gathering powers, to provide information that they will be eligible.

 

Item 253 is another provision that aims to ensure a smooth transition to the new CCS system by allowing amounts of CCS to be paid promptly after commencement day.  Under this provision, individuals can make early claims for CCS, and the Secretary, through her delegates, can exercise certain powers and functions in anticipation of making CCS and ACCS payments.  A provision at the end of the item clarifies that these powers and functions can only be exercised subject to the application provision in item 251 , about how a person can only be eligible for CCS and ACCS after commencement day.

 

Item 254 ensures that the effective first indexation day for certain new CCS amounts that are subject to indexation is 1 July 2018.  This means that relevant dollar amounts referred to in the provision will be deemed to have been indexed from commencement in line with consumer price index movement.

 

Item 255 ensures that the new requirement for arrangements (contracts with child care providers) to be in writing will apply to arrangements that are already in force on commencement day.  This means, among other things, that any verbal contracts for the provision of child care need to be set out in writing for a person to be eligible and entitled to CCS following commencement day.

 

Division 3—Child care benefit and Child Care Rebate

 

Item 256 puts beyond doubt that from commencement day onwards, eligibility (and therefore entitlement) for CCB and CCR is no longer possible in relation to child care that occurs from that day onwards.

 

Item 257 saves the operation of legislation and instruments, as they were prior to amendments made by Part 1 of this Schedule, to ensure that eligibility and entitlement for CCB or CCR can still be determined and reviewed in respect of child care that occurred prior to commencement day. 

 

Division 4—Providers of child care services

 

Item 258 ensures continuity for operators of child care services prior to commencement day.  Under this provision operators are taken to be “providers” under the new CCS system on and from commencement day.

 

The provision also provides the Secretary the power to determine that an approved child care service is a service of a type listed in subitem 9(2). The Secretary’s determination will be a legislative instrument where it is expressed to apply in relation to a class of approved child care services.

 

Where the Secretary’s determination relates to a particular approved child care service, it will not be a legislative instrument for the purposes of the Legislation Act 2003.

 

The provisions are beneficial in nature as they support existing operators to transition into the new CCS approval regime without having to make a new application for approval, as well as to assist continuity of business.  Where a class determination is made, it will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments.

 

Where a determination is made in relation to a particular service, the determination itself is not amenable to merits review, given its purpose is to efficiently and effectively transition currently approved services into the new system.  However, there is nothing to prevent a provider who wishes to hold CCS approval for a service or services from making a new application for approval under section 194B of the Family Assistance Administration Act.  The primary consequences of being deemed a certain service type relate to the kinds of conditions of continued approval which apply to that service type (see Part 8 of the Family Assistance Administration Act), as well as the hourly rate cap that will apply to sessions of care provided by that service (see table in subclause 2(3) of Schedule 2 of the Family Assistance Act).  Once transitioned, the obligations set out under the family assistance law, will apply without any differentiation between transitioned services, and services approved under the new CCS regime.  Merits review will continue to be available in respect of any further decisions made under the family assistance law which affect the provider as a consequence of their transition.

 

Item 259 saves the previous effect of the family assistance law to ensure that: liability for debts under the old law continues; new debts can arise under the old debt rules in relation to CCB and CCR payments; debts can be recovered under the recovery powers in the family assistance law as amended by Part 1 of this Schedule; and old decisions are still reviewable.

 

Division 5—Miscellaneous

 

Item 260 is declaratory and clarifies that the amendment of the delegation power in the family assistance law does not affect a delegation (or power exercised in reliance on one) previously in effect.

 

Item 261 gives the Minister a power to make rules dealing with transitional issues.  This power is worded broadly in order to ensure that any unforeseen and unintended consequences of repealing and amending legislation can be remedied promptly and flexibly by legislative instrument.  Although the power is broad and allows the Minister to modify the effect of principal legislation, the power is intended to be limited to ensuring the smooth transition into the new CCS and ACCS system and the framing of this power means that any rules that attempt to modify the principal legislation other than to assist transition would be beyond power and ineffective.  The power is intended to be relied on to ensure beneficial outcomes for providers, services and individuals who may otherwise be affected by unanticipated scenarios that arise at transition.  The power to modify principal legislation is also limited to a two year period from commencement in light of the expectation that no further transitional issues will arise after that time.  Any rules made under this power will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments, which means that Parliament is able to disallow any rules that are considered non-beneficial or otherwise unfair. In addition, to avoid doubt, there is no ability to convict a person of an offence, or impose a pecuniary penalty, in relation to conduct which took place prior to registration of the rules, where the conduct would not have been unlawful but for any retrospective effect of rules made under this provision.



Schedule 5 - Proportional payment of pensions outside Australia

 

 

Summary

On the first 1 January, 1 April, 1 July or 1 October after Royal Assent , this Schedule reduces the point at which the Age Pension and a small number of other payments are adjusted to reflect a person’s Australian working life residence from 26 weeks to six weeks overseas.  The measure does not affect the length of time a person can receive  portability period, which continues to be unlimited.

Background

This Schedule affects the rate of pension paid to age pension recipients and a limited number of disability support pension, wife pension and widow B pension recipients who have unlimited portability.

The amendments will reduce from 26 weeks to six weeks the period of absence from Australia after which a pension recipient’s payment is proportionalised.  After six weeks, payment will be adjusted according to the length of the pensioner’s Australian working life residence.

To retain their basic means-tested rate while overseas, a person needs 35 years’ working life residence in Australia.  Working life residence is calculated based upon the period beginning when the person turns 16 and ending when the person reaches pension age (point 1221-B1 of the Social Security Act).  If a person’s period of Australian working life residence is less than 35 years, their individual rate of pension after six weeks will be adjusted according to their years of working life residence.

The measure will reinforce and strengthen the residence-based nature of Australia’s social security system.  After a six-week absence, payment will be based on the length of time a person has resided in Australia during their working life.

The measure does not affect the length of the portability period, which continues to be unlimited.  However, the rate received after a six-week absence may change. 

The amendments will commence on the first 1 January, 1 April, 1 July or 1 October after Royal Assent , but will only apply to absences starting on or after commencement.  Pensioners who are overseas on the commencement date will continue to be allowed the full 26-week period of absence before their payment is potentially reduced.

Explanation of the changes

Amendments to the Social Security Act

Items 2, 3 and 4 amend sections 1220A (Proportionality - age pension rate), 1220B (Proportionality - disability support pension rate for a severely disabled person) and 1221 (Proportionality - wife pension and widow B pension rate for entitled persons).  These three sections each substitute a proportionalised rate of pension based upon a person’s Australian working life residence after 26 weeks.  In each case, the provision is amended to substitute reference to six weeks for the current reference to 26 weeks.  

Item 1 makes a consequential amendment to a note at subsection 1214(1), to refer to six weeks instead of 26 weeks.

Item 5 provides that the amendments made by this Schedule apply in relation to periods of absence from Australia starting on or after the commencement of this item.



Schedule 6 - Pensioner education supplement

 

 

Summary

This Schedule ceases pensioner education supplement from the first 1 January or 1 July after the day the Act receives Royal Assent.

Background

In broad terms, the pensioner education supplement assists people receiving certain income support payments with the ongoing costs of full-time or part-time study.  This Schedule repeals provisions that provide for pensioner education supplement, and makes related consequential changes.

The pensioner education supplement was introduced to assist long-term income support recipients improve their skills and training to be more competitive in the labour market. The pensioner education supplement is $62.40 per fortnight or $31.20 per fortnight depending on the person’s study load.

Since the introduction of the pensioner education supplement, several policies have been introduced which provide more appropriate and targeted channels of support to improve income support recipient’s employment prospects through study or training. This includes through the HECS-HELP, FEE-HELP and VET Student Loans tuition loan programs and through the Employment Fund, which provides financial assistance to job seekers registered with an employment services provider to engage in study or training.

Additionally, income support payments, particularly youth allowance (student), austudy and ABSTUDY, are specifically targeted towards people undertaking education and training, taking into account their circumstances and needs. These student payments will continue and will not be affected by the removal of the pensioner education supplement.

Ceasing the pensioner education supplement will also help to simplify the income support system by reducing the number of payment supplements.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Part 2.24A of the Social Security Act provides for the payment of pensioner education supplement.  Item 17 repeals Part 2.24A.

Consequential amendments are made as set out below.

Item 1 omits ‘a pensioner education supplement,’ from subsection 7(6).

Item 2 repeals subparagraph (l)(v) of the definition of compensation affected payment in subsection 17(1).

Item 3 omits ‘ or supplement, ’ from paragraph (l) of the definition of compensation affected payment in subsection 17(1).

Item 4 repeals and substitutes paragraph (m) of the definition of compensation affected payment in subsection 17(1) to reflect the repeal of subparagraph 1061ZAAA(1)(b)(iv) by item 19.

Item 5 repeals the note at the end of the definition of approved course of education or study in subsection 19AB(2).

Item 6 repeals and substitutes the definition of independent in subsection 23(1).

Item 7 repeals paragraph (cb) of the definition of newly arrived resident’s waiting period in subsection 23(1).

Item 8 omits ‘ , a double orphan pension or a pensioner education supplement’, and substitutes ‘or a double orphan pension’ in paragraph (a) of the definition of payday in subsection 23(1).

Item 9 omits the word ‘, supplement’ from paragraph (a) of the definition of payday in subsection 23(1).

Item 10 repeals paragraph 23(4AA)(c).

Item 11 omits ‘paragraph 1061PB(1)(b)’, and substitutes ‘subsection 541B(5)’, in paragraphs 23(10F)(c) and (d).

Item 12 repeals section 119.

Item 13 repeals subsection 503AA(1).

Item 14 omits ‘(2)’ from subsection 503AA(2).  This is consequential to item 13.

Item 15 omits ‘, 569A(b) or 1061PB(1)(b)’, and substitutes ‘or 569A(b)’ in subparagraph 569H(7)(g)(iii).

Item 16 repeals subsection 1049(1).

Item 18 adds ‘and’ to the end of subparagraph 1061ZAAA(1)(b)(iii).  This is consequential to item 19.

Item 19 repeals subparagraph 1061ZAAA(1)(b)(iv).

Item 20 omits ‘ , a mobility allowance or a pensioner education supplement’, and substitutes ‘or a mobility allowance’, in section 1158.

Amendments to the Social Security Administration Act

Item 21 omits ‘allowance; or’, and substitutes ‘allowance.’, in paragraph (i) of the definition of supplementary payment in subsection 15(5).  This is consequential to item 22.

Item 22 repeals paragraph (j) of the definition of supplementary payment in subsection 15(5).

Item 23 repeals subsection 50(3).

Item 24 repeals paragraph 52(1)(h).

Item 25 omits ‘, austudy payment or pensioner education supplement’, and substitutes ‘or austudy payment’, wherever occurring in paragraphs 55(4A)(a) and (b).

Items 26 and 27 repeal paragraphs (i) and (o) of the definition of category I welfare payment and paragraphs (d) and (i) of the definition of category Q welfare payment respectively in section 123TC.

Item 28 repeals subparagraphs (a)(xiv) and (xxiii) of the definition of restrictable payment in subsection 124PD(1). Item 29 repeals paragraph (i) of the definition of social security periodic payment in subclause 1(1) of Schedule 1.

Item 30 repeals clauses 30 to 32 of Schedule 2.

Part 2 - Other amendments

Consequential amendments are also made to the Acts set out below.

Amendments to the Family Assistance Act

Item 31 omits the reference to paragraph 17(1)(c) in subparagraph 14(1A)(b)(i).  This is consequential to item 32.

Item 32 repeals paragraph 17(1)(c).

Amendment to the Farm Household Support Act

Item 33 repeals paragraph 94(i). 

Amendments to the Income Tax Assessment Act 1997

Item 34 repeals item 22A.1 in the table contained in section 52-10.

Item 35 repeals item 22A in the table contained in section 52-40.

Part 3 - Application and saving provisions

Subitem 36(1) provides that, despite the amendments to the definition of compensation affected payment in subsection 17(1) of the Social Security Act made by Part 1 of this Schedule, Parts 3.6A and 3.14 of the Social Security Act continue to apply as if those amendments had not been made.

Subitem 36(2) provides that, despite the amendments made by items 12, 13, 14 and 16 of this Schedule, sections 119, 503AA and 1049 of the Social Security Act, as in force immediately before the commencement of this item, will continue to apply on and after the commencement of the items in relation to working out whether an approved program of work supplement or language, literacy and numeracy supplement are payable in respect of a fortnight beginning before that commencement.

Subitem 36(3) provides that, despite the amendment made by item 17 of this Schedule, Part 2.24A of the Social Security Act, as in force immediately before the commencement of this item, will continue to apply on and after the commencement in relation to days occurring before the commencement.

Subitem 36(4) provides that, despite the amendments made by items 18 and 19 of this Schedule, paragraph 1061ZAAA(1)(b) of the Social Security Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a relevant period that began before that commencement.

Subitem 36( 5 ) provides that, despite the amendment made by item 20 of this Schedule, section 1158 of the Social Security Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to days occurring before that commencement.

Subitem 36(6) provides that, despite the amendments made by items 23 and 25 of this Schedule, subsections 50(3) and 55(4A) of the Social Security Administration Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to the payment of fares allowance on or after that commencement, to the extent that payment of fares allowance is being made because of the receipt of pensioner education supplement.

Subitem 36(7) provides that, despite the amendment made by item 24 of this Schedule, paragraph 52(1)(h) of the Social Security Administration Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to the payment of pensioner education supplement on or after that commencement.

Subitem 36(8) provides that, despite the amendments made by items 26 to 28, Parts 3B and 3D of the Social Security Administration Act continue to apply  in relation to a payment of pensioner education supplement or an ABSTUDY payment that includes an amount identified as pensioner education supplement  that was made before, on or after commencement.

Subitem 36(9) provides that, despite the amendments made by items 31 and 32 of this Schedule, subparagraph 14(1A)(b)(i) and paragraph 17(1)(c) of the Family Assistance Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to working out whether an individual satisfies the work/training/study test or has recognised study commitments before, on or after that commencement.

Subitem 36(10) provides that, despite the amendment made by item 34 of this Schedule, item 22A.1 of the table in section 52-10 of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a payment of pensioner education supplement before, on or after that commencement.



Schedule 7 - Education entry payment

 

 

Summary

This Schedule ceases the education entry payment from the first 1 January or 1 July after the Act receives Royal Assent.

Background

In broad terms, the education entry payment assists with education expenses, and is paid once a year to eligible recipients.  This Schedule repeals provisions that provide for education entry payment, and makes related consequential changes.

The education entry payment is an annual lump sum payment of $208 per year and was introduced in 1993 to assist long-term income support recipients improve or

re-build their skills and training to be more competitive in the labour market.

Since the introduction of the education entry payment several policies have been introduced which provide more appropriate and targeted channels of support to improve income support recipient’s employment prospects through study or training. This includes through the HECS-HELP, FEE-HELP and VET Student Loans tuition loan programs and through the Employment Fund, which provides financial assistance to job seekers registered with an employment services provider to engage in study or training.

Additionally, income support payments, particularly youth allowance (student), austudy and ABSTUDY, are specifically targeted towards people undertaking education and training, taking into account their circumstances and needs. These student payments will continue and will not be affected by the removal of the education entry payment.

Ceasing the education entry payment will also help to simplify the income support system by reducing the number of payment supplements.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Part 2.13A of the Social Security Act provides for the payment of education entry payment.  Item 3 repeals Part 2.13A.

Consequential amendments are made as set out below.

Item 1 repeals subparagraph (l)(iv) of the definition of compensation affected payment in subsection 17(1).

Item 2 omits ‘allowance, payment’, and substitutes ‘allowance,’ in paragraph (l) of the definition of compensation affected payment in subsection 17(1).

Item 4 repeals table item 7 in subsection 1222(2).

Item 5 omits ‘or an education entry payment supplement’ in paragraph 1223ABAAB(1)(a).

Item 6 omits ‘benefit; and’, and substitutes ‘benefit.’ in paragraph 1223ABAAB(2)(e).  This is consequential to item 7.

Item 7 repeals paragraph 1223ABAAB(2)(h).

Item 8 repeals section 1224B.

Amendments to the Social Security Administration Act

The paragraphs set out below refer to the education entry payment.  Amendments are made to remove these references.

Item 9 repeals paragraph (c) of the definition of supplementary payment in subsection 15(5).

Item 10 repeals paragraph (d) of the definition of lump sum benefit in subsection 47(1).

Item 11 repeals paragraph (c) of the definition of household stimulus payment in section 123TC.

Amendments to the Veterans’ Entitlements Act

Part VIIAA of the Veterans’ Entitlements Act provides for the payment of education entry payment.  Item 19 repeals Part VIIAA.

 

Consequential amendments are made as set out below.

Item 12 omits the words ‘age; or’ and substitutes ‘age.’ in paragraph (c) of the definition of compensation affected pension in subsection 5NB(1).

 

Item 13 repeals paragraph (f) of the definition of compensation affected pension in subsection 5NB(1).

 

Item 14 omits the words ‘pensions, supplements and payments’, and substitutes ‘pensions and supplements’ in subsection 59M(1).

 

Item 15 omits the word ‘supplement;’ and substitutes ‘supplement.’ in paragraph 59M(1)(f).  This is consequential to item 16.

 

Item 16 repeals paragraph 59M(1)(i).

 

Item 17 omits the words ‘pensions, supplements, allowances and payments’, and substitutes ‘pensions and supplements’ in note 2 to subsection 59M(1).

 

Item 18 omits the words ‘supplement or payment’ and substitutes ‘or supplement’ in subsections 59M(2), (3) and (4).

                                                      

Part 2 - Other amendments

Consequential amendments are made to various Acts, as set out below.

Amendment to the Farm Household Support Act

Item 20 repeals paragraph 94(e).

Amendments to the Income Tax Assessment Act 1936

Item 21 omits ‘or education entry payment’ in subparagraph 160AAAA(2)(c)(i).

Item 22 omits ‘or education entry payment’ in subparagraph 160AAAB(2)(c)(i).

Amendments to the Income Tax Assessment Act 1997

Item 23 omits the ‘education entry payment supplement under the Social Security Act 1991’ in the table item headed ‘social security or like payments’ in section 11-15.

Item 24 omits ‘purposes;’, and substitutes ‘purposes.’ in paragraph 51-35(e).  This is consequential to item 25.

Item 25 repeals paragraph 51-35(f).

Item 26 repeals and substitutes section 51-40.

Item 27 repeals paragraph 52-10(1)(za).

Item 28 repeals subsection 52-10(1J).

Item 29 repeals section 55-10.

Amendment to the Taxation Administration Act 1953

Item 30 omits ‘, 55-5 or 55-10’, and substitutes ‘or 55-5’ in paragraph 12-110(1)(c) of Schedule 1.

Part 3 - Application and saving provisions

Subitem 31(1) provides that, despite amendments to the definition of compensation affected payment in subsection 17(1) of the Social Security Act made by Part 1 of this Schedule, Parts 3.6A and 3.14 of the Act continue to apply as if the amendments had not been made. 

Subitem 31(2) provides that, despite the amendment made by item 3 of this Schedule, Part 2.13A the Social Security Act, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a claim for the education entry payment made by a person before that commencement, where the person was qualified for that payment before that commencement.

Subitem 31(3) provides that, despite amendments made by items 5 to 8 of this Schedule, sections 1223ABAAB and 1224B of the Social Security Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment supplement or education entry payment made before, on or after that commencement.

Subitem 31(4) provides that, despite the amendments of the definition of compensation affected pension in subsection 5NB(1) of the Veterans’ Entitlements Act made by Part 1, Part IIIC of the Veterans’ Entitlements Act continues to apply as if those amendments had not been made.

 

Subitem 31(5) provides that, despite the amendment made by item 19, Part VIIAA of the Veterans’ Entitlements Act , as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a claim for the education entry payment made by a person before that commencement, where the person was qualified for that payment before that commencement.

 

Subitem 31(6) provides that, despite the amendments made by items 14 and 15 of this Schedule, paragraphs 160AAAA(2)(c)(i) and 160AAAB(2)(c)(i) of the Income Tax Assessment Act 1936 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment made before, on or after that commencement.

Subitem 31(7) provides that, despite the amendments made by items 25, 26 and 29 of this Schedule, paragraph 51-35(f) and sections 51-40 and 55-10 of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment made before, on or after that commencement.

Subitem 31(8) provides that, despite the amendment made by item 28 of this Schedule, subsection 52-10(1J) of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to payments of education entry payment supplement made before that commencement.

 



Schedule 8 - Indexation

 

 

Summary

This Schedule implements the following changes to Australian Government payments:

  • maintain at level for three years from 1 July of the first financial year beginning on or after the day this Act receives Royal Assent the income free areas for all working age allowances (other than student payments) and for parenting payment single; and
  • maintain at level for three years from 1 January of the first calendar year beginning on or after the day this Act receives Royal Assent the income free areas and other means test thresholds for student payments, including the student income bank limits.

Background

Under the current rules, income free areas and means test thresholds are indexed annually in line with movements in the Consumer Price Index.  Indexation occurs either on 1 July or 1 January, depending on the payment involved.

This Schedule pauses for three years the indexation that occurs on 1 July each year of various income thresholds that apply to certain social security benefits and allowances (other than student payments) and the income test free area for parenting payment single.  Under this measure, these amounts will not be indexed on 1 July for three years following Royal Assent. 

Similarly, the usual 1 January indexation of the income free areas and other means test thresholds for student payments will be paused for three years.  These amounts will not be indexed on 1 January for three years following Royal Assent. 

When indexation recommences, it will apply to the (paused) thresholds and there will be no catch-up in respect of indexation that would otherwise have occurred during the three-year pause.

Explanation of the changes

Amendments to the Social Security Act

Item 1 relates to the benefits and allowances ‘payment free area’ (defined in item 20AAA of the table in section 1190 of the Social Security Act).  Current subsection 1192(4AB) provides that the first indexation of amounts to which item 14AAA of the CPI Indexation Table in subsection 1191(1) relates is to take place on 1 July 2015.  This item inserts new subsection 1192(4AC), providing that amounts under this table item are not to be indexed on 1 July of the first financial year on or after Royal Assent and on 1 July of the next 2 financial years.

Item 2 adds further subsections to section 1192.



New subsection 1192(5AAA) affects indexation provided for by item 14 in the CPI Indexation Table in subsection 1191(1).  Item 14 deals with the pension free area (which is an abbreviation for the ordinary income free area for social security pension - see item 20 of the table in subsection 1190(1)).  To the extent the pension free area relates to the Pension PP (Single) Rate calculator in point 1068A-E14, new subsection 1192(5AAA) provides it is not to be indexed on 1 July of the first financial year on or after Royal Assent and on 1 July of the next 2 financial years.

New subsection 1192(5AAB) affects indexation provided for by items 14AA (the youth allowance and austudy ordinary income free area), 14AB (the youth allowance and austudy range reduction boundary), 15 (the student income bank balance limit) and 24 (the youth allowance (non-independent) assets value limit) of the CPI Indexation Table in subsection 1191(1).  The amounts under these items are not to be indexed on 1 January of the first calendar year on or after Royal Assent and on 1 July of the next 2 calendar years.



Schedule 9 - Closing energy supplement to new welfare recipients

 

Summary

Schedule 9 will close the energy supplement to new welfare recipients from 20 September 2017.

Background

S chedule 9 amends the Social Security Act 1991, Farm Household Support Act 2014, Veterans’ Entitlements Act 1986 , Military Rehabilitation and Compensation Act 2004 and Budget Savings (Omnibus) Act 2016 .

The amendments made to these Acts prevent new recipients of welfare payments being paid the energy supplement from 20 September 2017. The amendments ensure that welfare recipients who are paid the energy supplement with their payment prior to 20 September 2016 who satisfy the requirements set out in Schedule 9 will continue to receive the energy supplement with their payment from 20 September 2017 onwards.

For payment recipients who first receive the energy supplement on or after 20 September 2016, the energy supplement can only be paid to them until 19 September 2017 and this is subject to the person satisfying the current legislative criteria for receiving the supplement. From 20 September 2017 onwards they can no longer receive the energy supplement.

The amendments made by Schedule 9 commence on 20 September 2017.

Explanation of the changes

Part 1 - Energy supplement under the social security law

 

Amendments to the Social Security Act

 

Item 1 repeals the formula in subsection 17(8) and substitutes a new formula that does not contain an energy supplement component. The formula in subsection 17(8) is used to determine the income cut-out amount for the purposes of working out the number of weeks in a person’s lump sum preclusion period under subsection 1170(4).

 

Item 2 repeals the definition of energy supplement component from subsection 17(8). This definition is no longer required as a result of the amendments made by item 1.

 

Item 3 is an application provision that provides that the amendments made to subsection 17(8) by this Part only apply in relation to lump sum preclusion periods beginning on or after the commencement of this item.

 

Item 4 inserts new section 22. Section 22 sets out when a person becomes a transitional energy supplement person . While a person remains a transitional energy supplement person they will continue to receive energy supplement after the commencement of this Schedule.

 

New subsection 22(1) provides that a person becomes a transitional energy supplement person on 19 September 2016 if on that day:

 

(a)   the person was receiving an income support payment where energy supplement was used to work out the rate of that payment; or

(b)   energy supplement was payable to the person under section 1061UA; or

(c)   subsection 62B(2) of the Veterans’ Entitlements Act applied in relation to the person; or

(d)   energy supplement was payable to the person under section 118PA of the Veterans’ Entitlements Act; or

(e)   under the scheme referred to in section 117 of the Veterans’ Entitlements Act, the Commonwealth was liable to pay the person energy supplement for the person’s clean energy underlying payment; or

(f)    subsection 238A(1) of the Military Rehabilitation and Compensation Act applied in relation to the person; or

(g)   under the scheme referred to in section 258 of the Military Rehabilitation and Compensation Act, the Commonwealth was liable to pay the person energy supplement for the person’s clean energy underlying payment; or

(h)   the person was receiving a payment under the ABSTUDY scheme (also known as the Aboriginal Study Assistance Scheme) that included an amount identified as living allowance and the person qualified for an energy supplement under that scheme.

 

New paragraph 22(1)(a) applies to a person receiving farm household allowance under the Farm Household Support Act where energy supplement is used to work out the rate of that allowance. Subsection 91(3) of the Farm Household Support Act treats a reference in the Social Security Act to an income support payment as including a reference to farm household allowance under the Farm Household Support Act.

 

Paragraph 22(1)(a) will also be applicable to certain persons in receipt of a Defence Force Income Support Allowance (DFISA).  DFISA is payable to those persons in receipt of a social security or benefit that is reduced, including to nil, because of the inclusion of disability pension paid to the person under the Veterans’ Entitlements Act as income in the assessment of that pension or benefit.

 

Those people in the circumstances where the social security or benefit is reduced to nil are commonly referred to as DFISA-only recipients.  Under paragraph 23(1D)(f) of the Social Security Act they will be taken to be receiving the particular pension or benefit for which they qualify and they remain subject to the obligations associated with that pension or benefit.

 

It should also be noted that income support payment, as defined in section 23 of the Social Security Act, includes a service pension under the Veterans’ Entitlements Act.

 

New subsection 22(2) provides that a person ceases to be a transitional energy supplement person on a day on or after 20 September 2016 (and can never again become a transitional energy supplement person) if none of paragraphs 22(1)(a) to (h) apply to the person on that day.

 

A note to subsection 22(2) alerts the reader that subsections 22(3) to (7) set out certain situations in which a person will be taken to be receiving a payment on a day and therefore subsection 22(2) will not apply to the person on that day.

 

New subsection 22(3) applies to treat a person as receiving an income support payment for new paragraph 22(1)(a) if, before 19 September 2016, the person receives a rate of a social security payment that is greater than nil (where energy supplement was used to work out that rate) and the person’s rate of payment goes to nil on a day on or after 19 September 2016 (where energy supplement was used to work out that rate).

 

The person must, on the day before the person’s rate goes to nil, have been receiving a social security payment at a rate greater than nil and energy supplement must have been used to work out that rate.  Further, the person must remain qualified for their social security payment while their rate of payment is nil and their payment is not cancelled.

 

For subsection 22(3) to apply a person must remain on a nil rate of the same payment.  Otherwise, subsection 22(3) will cease to apply and the person will no longer be receiving an income support payment for new paragraph 22(1)(a).

 

New subsection 22(4) applies to treat a person as receiving an income support payment despite the person’s payment being suspended on a day on or after 19 September 2016.

 

The person must, before 19 September 2016, be receiving a social security payment at a rate greater than nil and energy supplement must have been used to work out that rate.

 

The person must, on the day before the suspension took effect have been receiving a social security payment at a rate greater than nil and energy supplement must have been used to work out that rate. Further, the person must remain continuously qualified for their social security payment while suspended.

 

When a person’s suspension ends with the person being restored to a positive rate of payment, the person will again be able to have the energy supplement added to their rate of payment if all other requirements regarding the payment of the energy supplement have been met.

 

For subsection 22(4) to apply a person must return to the same payment they were receiving before the suspension began.

 

New subsection 22(5) applies to treat a person as receiving an income support payment under paragraph 22(1)(a) if, on 19 September 2016 a person is absent from Australia and is receiving an income support payment at a rate greater than nil on that day. If the person returns to Australia after an absence of greater than six weeks and their income support payment is payable to the person on the day before the person returns, paragraph 22(1)(a) will apply to each day that occurs in the period beginning on 19 September 2016 and ending at the end of the day before the person returns to Australia.

 

New subsection 22(6) applies to treat a person as receiving an income support payment under paragraph 22(1)(a) if, on 19 September 2016 the person was receiving an income support payment at a rate greater than nil, energy supplement was used to work out the rate of the payment and the person leaves Australia on a day on or after 20 September 2016

 

To satisfy subsection 22(6) the person must, before leaving Australia, have been receiving the income support payment at a rate greater than nil and energy supplement must have been used to work out the rate of the payment. Additionally, the person must return to Australia, where the period of the absence has exceeded 6 weeks and the person’s income support payment must be payable to the person on the day before the person returns to Australia.

 

If the above criteria have been met, subsection 22(6) will apply to treat a person as receiving an income support payment under paragraph 22(1)(a) for each day that occurs in the period beginning on the day after the end of the 6 week period of absence and ending at the end of the day before the person returns to Australia.

 

New subsection 22(7) applies to treat a person as receiving an income support payment under paragraph 22(1)(a) if the person makes a claim for a seniors health card under the Social Security Administration Act or the Veterans’ Entitlements Act and the claim is made:

 

(a)   within the 6 week period mentioned in subsection 1061U(4) or (8) of the Social Security Act, in circumstances where paragraphs 1061U(4)(a) to (d) or (8)(a) to (d) apply; or

(b)   within the 6 week period mentioned in subsection 118P(1C) or (1G) of the Veterans’ Entitlements Act, in circumstances where paragraphs 118P(1C)(a) to (d) or (1G)(a) to (d) of that Act apply.

 

Subsections 1061U(4) and (8) of the Social Security Act and subsections 118P(1C) and (1G) of the Veterans’ Entitlements Act give certain income support payment recipients a six week period from the date of the cancellation of their payment in which to claim a seniors health card. If the claim is made within the six week period the person can qualify for the energy supplement if a seniors health card is granted to the person.

 

A person’s claim for a seniors health card under the Social Security Act or Veterans’ Entitlements Act must be granted under one of these Acts for subsection 22(7) to apply.

 

If a person meets the requirements in new subsection 22(7) they will be treated as receiving an income support payment for the period:

 

(a)   beginning on the cessation day mentioned in subsection 1061U(4)(c) or (8)(c) of the Social Security Act or paragraph 118P(1C)(c) or (1G)(c) of the Veterans’ Entitlements Act; and

 

(b)   ending at the end of the day before the person becomes the holder of the seniors health card.

 

Item 5 Inserts a definition of transitional energy supplement person into subsection 23(1) that refers to new section 22.

 

Item 6 repeals section 915 and substitutes a new section 915. New subsection 915(1) provides that quarterly energy supplement is payable to a person for each day for which an election by the person under subsection 915A(1) is in force in relation to a social security payment the person is receiving.

 

A note to this subsection alerts the reader that section 918 (multiple qualification exclusions) may affect the person’s qualification for quarterly energy supplement.

 

Subsection 915(2) then ensures that a social security payment recipient who continues to have energy supplement used to work out the rate of their payment will continue to have their energy supplement paid quarterly if the person has made or makes an election under subsection 1061VA(1) to have their minimum pension supplement amount paid quarterly. 

 

A note to this subsection alerts the reader that section 918 (multiple qualification exclusions) may affect the person’s qualification for quarterly energy supplement.

 

Item 7 amends paragraph 915A(1)(a) to insert the words “(the main payment )” after “a social security payment”.

 

Item 8 amends the note in subsection 915A(1) to replace the word ‘would’ with ‘may’. This is a consequence of the repeal and substitution of section 915 made by item 6.

 

Item 9 repeals subsection 915A(3) and substitutes a new subsection 915A(3) which provides that an election to receive energy supplement quarterly under Division 2 of Part 2.18A of the Social Security Act ceases to be in force if, disregarding the election, energy supplement would cease to be used to work out the rate of a social security payment of the person.

 

Item 10 is an application and savings provision for the repeal and substitution of section 915 made by item 6 and the repeal and substitution of subsection 915A(3) made by item 9.

 

Sub-item (1) provides that the repeal and substitution of section 915 made by this Part applies in relation to working out whether quarterly energy supplement is payable to a person for a day on or after the commencement of this item.

 

Sub-item (2) provides that the repeal and substitution of section 915 made by this Part does not affect the validity of an election made under subsection 915A(1) or 1061VA(1) before the commencement of this item.

 

Sub-item (3) provides that subsection 915A(3), as substituted by this Part, applies on and after the commencement of this item in relation to elections made before, on or after that commencement.

 

Items 11 to 34, 36 to 39, 41 to 44, 46 to 52 and 54 to 55 amend the rate calculators for the following social security payments:

 

·          section 1064 (Rate of age, disability support, wife pensions and carer payment (people who are not blind));

·          section 1065 (Rate of age and disability support pension (blind people)); 

·          section 1066 (Rate of bereavement allowance and widow B pension); 

·          section 1066A (Rate of disability support pension (people under 21 who are not blind)); 

·          section 1066B (Rate of disability support pension (people under 21 who are blind)) 

·          section 1067G (Rate of youth allowance); 

·          section 1067L (Rate of austudy payment); 

·          section 1068 (Rate of widow allowance, Newstart allowance (18 or over) sickness allowance (18 or over) partner allowance, and mature age allowance under Part 2.12B); 

·          section 1068A (Rate of parenting paymentxxpension PP (single)); and 

·          section 1068B (Rate of parenting paymentxxPP (partnered)). 

 

The amendments made by these items apply so that the step in the method statement for the rate calculator that adds an amount of energy supplement to the rate of the person’s social security payment does not apply in relation to a person on a day on or after the commencement of these items unless the person is a transitional energy supplement person on that day.

 

If a person is a not a transitional energy supplement person in accordance with new section 22 (inserted by item 4 of this Part) on a day on or after the commencement of these items, the person’s rate of social security payment will not include an amount of energy supplement.

 

Various notes in the rate calculators mentioned above have also been added or amended as a result of the changes made to limit the payment of the energy supplement to certain individuals.

 

Items 35, 40, 45 and 53 amend the partner income free area provisions in the rate calculators for the following social security benefits:

 

·          section 1067G (Rate of youth allowance) 

·          section 1067L (Rate of austudy payment) 

·          section 1068 (Rate of widow allowance, Newstart allowance (18 or over) sickness allowance (18 or over) partner allowance, and mature age allowance under Part 2.12B); and 

·          section 1068B (Rate of parenting paymentxxPP (partnered)). 

 

The partner income free area is the amount of income a recipient's partner can receive before the recipient's rate of benefit is reduced. The partner income free area for a person varies depending on their partner's age and whether their partner also receives a social security benefit.

 

The effect of items 35, 40, 45 and 53 is to include an amount of energy supplement into the calculation of a person’s partner income free area where the person continues to have an amount of energy supplement added to their rate of social security benefit.

 

If the person does not have an amount of energy supplement added to their rate of payment then energy supplement won’t be taken into account in determining the partner income free area if the person’s partner is not a social security benefit recipient.

 

If the person does not have an amount of energy supplement added to their rate of payment and the person’s partner is a social security benefit recipient then the energy supplement will only be taken into account in determining the partner income free area where the person’s partner has an amount of energy supplement added to their rate of payment.

 

An example of how these items apply can be found in the amendments made to the youth allowance calculator by item 35. This item inserts new points 1067G-H26C and 1067G-H26D into the youth allowance rate calculator in section 1067G.

 

Point 1067G-H26C provides that where a person does not have an amount of energy supplement added to their rate of youth allowance and the person's partner is not receiving a social security benefit, an amount of energy supplement will not be included when calculating the person’s partner income free area.

 

Point 1067G-H26D provides that where a person has an amount of energy supplement added to their rate of youth allowance, an amount energy supplement will be included when calculating the person’s partner income free area. This applies regardless of whether the person’s partner receives a social security benefit and regardless of whether the person’s partner receives a social security benefit that includes an amount of energy supplement.

 

Item 56 repeals point 1071A-2A of the Social Security Act and substitutes a new point 1071A-2A. The intended effect of this item is to disregard step 1B of the method statement in point 1068-A1 of the Social Security Act when calculating a person’s allowable income for the purposes of the health care card income test in section 1071A of the Social Security Act. Step 1B would otherwise add an amount of energy supplement to the calculation when determining a person’s allowable income.

 

Item 57 is an application provision for the repeal and substitution of point 1071A-2A of the Social Security Act made by item 56 of this Part. The repeal and substitution of point 1071A-2A made by item 56 applies in relation to working out if a person is qualified for a health care card on a day on or after the commencement of this item (whether or not the person held such a card immediately before that commencement).

 

Part 2 - Energy Supplement under the Farm Household Support Act

 

Amendments to the Farm Household Support Act

 

Item 58 adds a note at the end of section 58 of the Farm Household Support Act that explains that energy supplement is not payable to certain persons due to point 1068-A2 of the Social Security Act, added by item 42 of this Schedule.

 

Item 59 amends the note at the end of section 58 of the Farm Household Support Act by renumbering this note as ‘Note 2’.

 

Item 60 adds a note at the end of section 62 of the Farm Household Support Act that explains that energy supplement is not payable to certain persons due to point 1067G-A2 of the Social Security Act, added by item 32 of this Schedule.

 

Item 61 amends the note at the end of section 62 of the Farm Household Support Act by renumbering this note as ‘Note 2’.

 

Part 3 - Energy supplement under the Veterans’ Entitlements Act

 

Amendments to the Veterans’ Entitlements Act

 

Item 62 repeals and replaces the formula in paragraph 59Q(7)(b) with a new formula that does not contain an energy supplement component.  The formula in paragraph 59Q(7)(b) is used to determine the lump sum preclusion period for the purposes of section 59Q.   Where a person has received lump sum compensation the person’s pension will not be payable during the lump sum preclusion period.

 

Item 63 repeals the definition of point SCH6-BB3 amount from paragraph 59Q(7)(b).  This definition is no longer required as a result of the amendments made by Item 62 .

 

Item 64 is an application provision that provides that the amendments made to paragraph 59Q(7)(b) by this Part only apply in relation to lump sum preclusion periods beginning on or after the commencement of this item.

 

Items 65 to 67 amend section 62A.  Section 62A provides for the payment of energy supplement to the recipients of a disability pension under Parts II or IV of the Veterans’ Entitlements Act.

 

Subsection 62A(1) provides the requirements to be met for a person to be eligible for energy supplement for a day:

(a)   the person receives disability pension for the day; and

(b)   the person’s rate of disability pension for the day is greater than nil; and

(c)   the person is residing in Australia; and

(d)   either the person is in Australia or is temporarily absent for a period not exceeding 6 weeks. 

 

Item 65 is a technical amendment to the Note to subsection 62A(1) to renumber it as “Note 1” as a consequence of the amendment made by Item 66 which inserts “Note 2”.

 

Item 66 inserts “Note 2” to subsection 62A(1).  The Note refers the reader to the effect that the insertion of subsection 62A(4) (by Item 67 ) has in limiting the circumstances when subsection 62A(1) (eligibility for energy supplement) will continue to be applicable.

 

Item 67 inserts new subsections 62A(4) to (6).

 

New subsection 62A(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement if the person is a transitional energy supplement person (as defined under new subsection 62A(5)) on that day.

 

The Note to new subsection 62A(4) states that a person must also satisfy the requirements set out in paragraphs 62A(1)(a) to (d) to be eligible for energy supplement.

 

New subsection 62A(5) defines for the purposes of section 62A that a person is a transitional energy supplement person on 19 September 2016 if:

(a)   paragraphs 62A(1)(a) to (d) are applicable to the person; or

(b)   energy supplement was payable under subsection 83A(1) of the Military Rehabilitation and Compensation Act because the person was eligible for compensation for permanent impairment under that Act; or

(c)   energy supplement was payable under subsection 209A(1) of the Military Rehabilitation and Compensation Act because the person was in receipt of or would have been eligible for the receipt of Special Rate Disability Pension under that Act.

 

The effect of new subsections 62A(4) and (5) is to prevent new recipients of disability pension, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing disability pensioners who are paid the energy supplement with their disability pension on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 62A of those persons who received energy supplement under section 83A or under section 209A of the Military Rehabilitation and Compensation Act because on 19 September 2016 they were either eligible for compensation for permanent impairment or were receiving or eligible to receive the Special Rate Disability Pension.

 

New subsection 62A(6) provides for the circumstances in which a person will cease to be a transitional energy supplement person.  On a day on or after

20 September 2016, if none of the paragraphs 62A(5)(a) to (c) apply to a person, the person will cease to be a transitional energy supplement person and can never again become a transitional energy supplement person.

 

The effect of subsection 62A(6) is to make it clear that a person will lose eligibility for the energy supplement on or after 20 September 2016 if any of the circumstances referred to in paragraphs 62A(5)(a) to (c) are no longer applicable to the person.  Subsection 62A(6) also makes it clear that there are no circumstances in which a person who ceases to be a transitional energy supplement person can regain the status of being a transitional energy supplement person.

 

Items 68 to 70 amend section 62B.  Section 62B provides for the payment of energy supplement for recipients of war widow/ war widower pension.

 

Subsection 62B(1) provides the requirements to be met for a person to be eligible for  energy supplement for a day:

(a)   the person receives war widow or war widower pension for the day; and

(b)   the person’s rate of that pension for the day is greater than nil; and

(c)   the person is residing in Australia; and

(d)   either the person is in Australia or is temporarily absent for a period not exceeding 6 weeks. 

 

Item 68 is a technical amendment to the Note to subsection 62B(1) to renumber it as “Note 1” as a consequence of the amendment made by Item 69 which inserts “Note 2”.

 

Item 69 inserts “Note 2” to subsection 62B(1).  The Note refers the reader to the effect that the insertion of subsection 62B(4) (by Item 70) has in limiting the circumstances when subsection 62B(1) (eligibility for energy supplement) will continue to be applicable.

 

Item 70 inserts new subsection 62B(4).

 

New subsection 62B(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement if the person is a transitional energy supplement person (within the meaning of section 22 of the Social Security Act) on that day.

 

New section 22 of the Social Security Act is inserted by Item 4 of this Schedule.

 

The Note to new subsection 62B(4) states that a person in receipt of a war widow/ widower pension must also satisfy the requirements set out in paragraphs 62B(1)(a) to (d) to be eligible for energy supplement.

 

The effect of new subsection 62B(4) is to prevent new recipients of war widow/ war widower pension, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing war widow/ war widower pensioners who are paid the energy supplement with their pension on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of

section 62B of all those persons (including war widow/ war widower pensioners) who on 19 September 2016 were eligible to receive energy supplement because they satisfied one of the conditions referred to in section 22 of the Social Security Act (as inserted by Item 4 of this Schedule).

 

Item 71 inserts a new Note 3 to subsection 62D(1).  Section 62D provides a person receiving disability or war widow or war widower’s pension with the option to receive their energy supplement on a quarterly basis.

 

New Note 3 refers the reader to the limitations set out in new subsections 62A(4) and 62B(4).

 

Item 72 amends subsection 62E(1) by inserting the words “but only if energy supplement is used to work out the rate of that service pension on that day”. 

 

Subsection 62E(1) provides that a quarterly energy supplement for service pension is payable to a person, as a separate payment, for as long as the person elects to receive quarterly pension supplement.

 

The additional words will make it clear that energy supplement will continue to be payable as a quarterly payment only to those persons still eligible to receive the payment as a transitional energy supplement person.

 

Items 73 and 74 amend subsection 62E(6).  Subsection 62E(6) provides for an exception to a reduction of quarterly pension supplement under subclause 4(5) of Schedule 6 of the Veterans’ Entitlements Act.

 

Clause 4 of Schedule 6 is applicable for income tax purposes and sets out the order in which deductions are made to a person’s rate of service pension or income support supplement for the purposes of the income and assets tests and compensation recovery.

 

Subclause 4(5) of Schedule 6 provides that where a person’s rate of service pension is to be reduced as described in subclause 4(1) and the person has elected to receive quarterly pension supplement, a person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subclause (1) were the election not in force.

 

Paragraph 62E(6)(a) is repealed and substituted by Item 73 .  Repealed paragraph 62E(6)(a) referred to an election by the person under subsection 60A(1) as being in force on a particular day.  New paragraph 62E(6)(a) refers to quarterly pension supplement for service pension being payable to a person for a day.

 

Item 74 is a minor amendment to paragraph 62E(6)(c) to identify a reference to “paragraph 4(5)(a)” as being located in “Schedule 6” of the Veterans’ Entitlements Act.

 

Item 75 is an application provision which provides that the amendments to section 62E made by Items 73 and 74 are to apply in working out whether quarterly energy supplement is payable to a person for a day on or after the commencement of the amendment.

 

Item 76 inserts new subsections 118P(2A), (2B) and (2C).  Section 118P sets out the eligibility criteria for the payment of the energy supplement under Part VIIAD of the Veterans’ Entitlements Act to holders of a seniors health card or a gold card.

 

Subsection 118P(2) specifies that a person is eligible for the energy supplement if:

(a)   the person is the holder of a gold card; and

(b)   the person has reached qualifying age; and

(c)   the person is in Australia, or is temporarily absent from Australia for a period not exceeding 6 weeks; and

(d)   the person is not receiving any of the following payments:

·        service pension;

·         income support supplement;

·        a social security pension or benefit; or

·        energy supplement under Part 2.25B of the Social Security Act.

 

New subsection 118P(2A) provides that subject to new subsection (2C), subsection 118P(2) will continue to apply to a person on or after the commencement of subsection 118P(2A) if on 19 September 2016 energy supplement was payable to the person under section 118PA.

 

The Note to new subsection 118P(2A) states that subsection 118P(2) will only continue to apply to a person who satisfies the requirements set out in

paragraphs 118P(2)(a) to (d).

 

The effect of new subsection 118P(2A) is (subject to new subsection 118P(2C) - discussed below) to prevent new gold card holders, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing gold card holders who are paid the energy supplement on 19 September 2016.

 

New subsection 118P(2B) provides subject to subsection (2C) that if:

(a)   energy supplement was payable to the person under section 118PA of the Veterans’ Entitlements Act on 19 September 2016; and

(b)   energy supplement ceases to be payable under that section on or after 20 September 2016;

then subsection 118P(2) will not apply, and never again apply to the person from:

(c)   if the cessation occurred before the commencement of subsection 118P(2B) - the day the subsection commences; or

(d)   if the cessation occurred on or after the commencement of subsection 118P(2B) - the day that the cessation occurred.

 

The effect of subsection 118P(2B) is to determine the date on which a person who has lost eligibility under section 118PA for the energy supplement on or after

20 September 2016 will cease to be eligible under subsection 118P(2) for the energy supplement.

 

New subsection 118P(2C) provides that if:

(a)   on 19 September 2016, a person was receiving an income support payment (within the meaning of the Social Security Act) where energy supplement was used to work out the amount of that payment; and

(b)   on a day (the cessation day ) on or after the commencement of subsection 118P(2C), the person ceases to be in receipt of any income support payment (as defined by the Social Security Act); and

(c)   on the day before the cessation day, the person was receiving an income support payment (as defined by the Social Security Act) where energy supplement was used to work out the amount of that payment; and

(d)   the person is the holder of a gold card on the cessation day;

the person can become eligible for energy supplement under subsection 118P(2) because they hold a gold card.

 

New subsection 118P(2C) allows a person who is paid the energy supplement with their income support payment on or after the commencement of the subsection to move to being eligible for energy supplement as the holder of a gold card on cessation of the income support payment.

 

Item 77 is a minor amendment to the Note to subclause 4(1) of Schedule 6 (Rate Calculator) of the Veterans’ Entitlements Act.

 

Clause 4 of Schedule 6 is applicable for income tax purposes and sets out the order in which deductions are made to a person’s rate of service pension or income support supplement for the purposes of the income and assets tests and compensation recovery.

 

The amendment replaces the reference to a person having made an election under subsection 60A(1) to receive quarterly pension supplement with a reference to quarterly pension supplement being “payable to the person”.

 

Items 78 to 80 amend subclause 4(5) of Schedule 6 (Rate Calculator) of the Veterans’ Entitlements Act.  Subclause 4(5) provides that where a person’s rate of service pension is to be reduced as described in subclause 4(1) and the person has elected to receive quarterly pension supplement, a person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subclause (1) were the election not in force.

 

Item 78 repeals and substitutes paragraph 4(5)(b)  .Paragraph 45(5)(b) had referred to the circumstances in which a person had elected under subsection 60A(1) to receive payments of quarterly energy supplement.  New paragraph 45(5)(b) states that quarterly energy supplement for service pension is payable to the person.

 

Items 79 and 80 are minor amendments to subclause 4(5) to replace the reference to an election to receive quarterly energy supplement not being in force with a reference to “were quarterly energy supplement for service pension not payable to the person” and to repeal and substitute the Note.

 

The replacement Note refers the reader to subsection 62E(6) as setting out the circumstances when the reduction in the instalment of the person’s quarterly energy supplement will not occur.

 

Items 81 to 84 make amendments to method statement 1 (service pension, not blind, not war widow/ war widower - pensioner) in subpoint SCH6-A1(2) and method statement 2 (service pension, blind, not war widow/ war widower - pensioner) in subpoint SCH6- A1(3) of Schedule 6 (Rate Calculator) of the Veterans’ Entitlements Act

 

Items 81 and 83 insert notes to Steps 1B and 2B respectively of method statements 1 and 2 to refer to the circumstances in which the steps will not be applicable as set out in new point SCH6-A10 (inserted by Item 85 ).  The notes also include the reference to the effect of section 65A which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.  That reference had been included in the notes to Step 4 of the method statements which are to be repealed by Items 82 and 84 of this Part.

 

Items 82 and 84 repeal the notes to Step 4 of method statements 1 and 2.

 

Item 85 inserts new point SCH6-A10 which is applicable to steps 1B and 2B respectively of method statements 1 and 2 of the rate calculator.  Those steps which add an amount of energy supplement to the rate of the person’s service pension will not be applicable in relation to a person on a day on or after commencement of the Item unless the person is a transitional energy supplement person on that day.

 

If a person is a not a transitional energy supplement person (within the meaning of new section 22 of the Social Security Act (inserted by Item 4 of this Schedule) on a day on or after commencement of these items, the rate of the person’s service pension will not include an amount of energy supplement.

 

Items 86 and 87 are a technical amendment to renumber the Note to point SCH6-BB1 of Schedule 6 (Rate Calculator) and to insert new Note 2.  Note 2 refers the reader to new point SCH6-A10 (inserted by Item 85 of this Part).

 

Part 4 - Energy supplement under the Military Rehabilitation and Compensation Act

 

Amendments to the Military Rehabilitation and Compensation Act

 

Items 88 and 89 amend section 83A.  Section 83A provides for the payment of energy supplement where the person is eligible for compensation for permanent impairment under the Military Rehabilitation and Compensation Act.

 

The Note to subsection 83A(1) is amended by Item 88 to include a reference to new subsection 83A(4) as setting out the applicable circumstances where a limitation will be imposed on subsection 83A(1).  The amended note retains the reference to the effect of section 424L which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.

 

New subsections 83A(4), (5) and (6) are inserted by Item 89 .

 

New subsection 83A(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement under subsection 83A(1) if the person is a transitional energy supplement person (as defined in new subsection 83A(5) on that day.

 

The Note to new subsection 83A(4) states that a person must also satisfy the requirements set out in paragraphs 83A(1)(a), (b) and (c) to be eligible for energy supplement.

 

New subsection 83A(5) defines for the purposes of section 83A that a person becomes a transitional energy supplement person on 19 September 2016 if:

(a)   paragraphs 83A(1)(a), (b) and (c) are applicable to the person; or

(b)   energy supplement was payable under subsection 209A(1) of the Military Rehabilitation and Compensation Act because the person was in receipt of or would have been eligible for the receipt of Special Rate Disability Pension under that Act; or

(c)   energy supplement was payable under subsection 62A(2) of the Veterans’ Entitlements Act because the person was in receipt of a disability pension under that Act

 

The effect of new subsections 83A(4) and (5) is to prevent new recipients of compensation for permanent impairment pension, granted from after 19 September 2016, from being paid the energy supplement after 20 September 2017.  The amendments also ensure the “grandfathering” of existing recipients of compensation who are paid the energy supplement with their compensation on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 83A of those persons who received energy supplement under section 209A of the Military Rehabilitation and Compensation Act because on 19 September 2016 they were either eligible to receive the Special Rate Disability Pension or under the Veterans’ Entitlements Act because they were receiving disability pension.

 

New subsection 83A(6) provides for the circumstances in which a person will cease to be a transitional energy supplement person.  On a day on or after

20 September 2016, if none of the paragraphs 83A(5)(a) to (c) apply to a person, the person will cease to be a transitional energy supplement person and can never again become a transitional energy supplement person .

 

The effect of subsection 83A(6) is to make it clear that a person will lose eligibility for the energy supplement on or after 20 September 2016 if any of the circumstances referred to in paragraphs 83A(5)(a) to (c) are no longer applicable to the person.  Subsection 83A(6) also makes it clear that there are no circumstances in which a person who ceases to be a transitional energy supplement person can regain the status of being a transitional energy supplement person.

 

Items 90 and 91 amend section 209A.  Section 209A provides for the payment of energy supplement where the person is eligible for a Special Rate Disability Pension under the Military Rehabilitation and Compensation Act.

 

The Note to subsection 209A(1) is amended by Item 90 to include a reference to new subsection 209A(3) as setting out the applicable circumstances where a limitation will be imposed on subsection 209A(1).  The amended note retains the reference to the effect of section 424L which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.

 

New subsections 209A(3), (4) and (5) are inserted by Item 91 .

 

New subsection 209A(3) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement under subsection 209A(1) if the person is a transitional energy supplement person (as defined in new subsection 209A(4)) on that day.

 

The Note to new subsection 209A(3) states that a will be a transitional energy supplement person if he or she satisfies the requirements set out in paragraphs 209A(1)(a), (b) and (c).

 

New subsection 209A(4) defines for the purposes of section 209A that a person becomes a transitional energy supplement person on 19 September 2016 if:

(a)   paragraphs 209A(1)(a), (b) and (c) are applicable to the person; or

(b)   energy supplement was payable under subsection 83A(1) of the Military Rehabilitation and Compensation Act because the person was eligible for compensation for permanent impairment under that Act; or

(c)   energy supplement was payable under subsection 62A(2) of the Veterans’ Entitlements Act because the person was in receipt of a disability pension under that Act

 

The effect of new subsections 209A(3) and (4) is to prevent new recipients of Special Rate Disability Pension, granted from after 19 September 2016, from being paid the energy supplement from 20 September 2017.  The amendments also ensure the “grandfathering” of existing recipients of Special Rate Disability pension who are paid the energy supplement with their pension on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 209A of those persons who received energy supplement under section 83A because on 19 September 2016 they were eligible for compensation for permanent impairment or under the Veterans’ Entitlements Act because they were receiving disability pension.

 

New subsection 209A(5) provides for the circumstances in which a person will cease to be a transitional energy supplement person.  On a day on or after 20 September 2016, if none of the paragraphs 209A(4)(a) to (c) apply to a person, the person will cease to be a transitional energy supplement person and can never again become a transitional energy supplement person.

 

The effect of subsection 209A(5) is to make it clear that a person will lose eligibility for the energy supplement on or after 20 September 2016 if any of the circumstances referred to in paragraphs 209A(4)(a) to (c) are no longer applicable to the person.  Subsection 209A(5) also makes it clear that there are no circumstances in which a person who ceases to be a transitional energy supplement person can regain the status of being a transitional energy supplement person.

 

Items 92 and 93 amend section 238A.  Section 238A provides for the payment of energy supplement where the person is eligible for compensation as a wholly dependent partner of a deceased member under the Military Rehabilitation and Compensation Act.

 

The Note to subsection 238A(1) is amended by Item 92 to include a reference to new subsection 238A(4) as setting out the applicable circumstances where a limitation will be imposed on subsection 238A(1).  The amended note retains the reference to the effect of section 424L which provides that an energy supplement may not be payable if the person is in receipt of energy supplement because they are eligible for another payment.

 

New subsection 238A(4) is inserted by Item 93 .

 

New subsection 238A(4) provides that on or after the commencement of the amendment a person will only be eligible for energy supplement under subsection 238A(1) if the person is a transitional energy supplement person (within the meaning of section 22 of the Social Security Act) on that day.

 

The Note to new subsection 238A(4) states that a will be a transitional energy supplement person if he or she satisfies the requirements set out in paragraphs 238A(1)(a), (b) and (c).

 

The effect of new subsection 238AB(4) is to prevent new recipients of compensation for a wholly dependent partner, granted from after 19 September 2016, from being paid the energy supplement after 20 September 2017.  The amendments also ensure the “grandfathering” of existing compensation recipients who are paid the energy supplement with their compensation on 19 September 2016.

 

The amendments also provide for the “grandfathering” for the purposes of section 238A all those persons who on 19 September 2016 were eligible to receive energy supplement because they satisfied one of the conditions referred to in section 22 of the Social Security Act (as inserted by Item 4 of this Schedule) or were receiving war widow/ war widower pensions under the Veterans’ Entitlements Act.

 

Part 5 - Other amendments

 

Amendments to the Budget Savings (Omnibus) Act

 

Item 94 amends item 38 of Schedule 21 to the Budget Savings (Omnibus) Act to add new paragraph 38(i). The effect of this item is to ensure that a person who satisfies paragraphs (a) to (f) of item 38 is then taken to be a transitional energy supplement person for the purposes of new paragraph 22(1)(a) of the Social Security Act for the period beginning on 19 September 2016 and ending at the end of the day before the person became the holder of the seniors health card referred to in item 38 of Schedule 21 to the Budget Savings (Omnibus) Act.

 

Item 95 amends item 107 of Schedule 21 to the Budget Savings (Omnibus) Act to add new paragraph 107(i). The effect of this item is to ensure that a person who satisfies paragraphs (a) to (f) of item 107 is then taken to be a transitional energy supplement person for the purposes of new paragraph 22(1)(a) of the Social Security Act for the period beginning on 19 September 2016 and ending at the end of the day before the person became the holder of the seniors health card referred to in item 107 of Schedule 21 to the Budget Savings (Omnibus) Act.

 

Amendments to the Veterans’ Entitlements Act

 

Item 96 amends paragraph 118P(4)(d) to ensure that those persons who are eligible for an energy supplement because they hold a gold card will be subject to the same portability rules as the holders of a seniors health card.



Schedule 10 - Stopping the payment of the pension supplement after six weeks overseas

 

Summary

This Schedule will stop the payment of pension supplement after six weeks temporary absence overseas and immediately for permanent departures.

Background

This Schedule amends the Social Security Act and the Veterans’ Entitlements Act .

The pension supplement combined the former telephone allowance, utilities allowance, pharmaceutical allowance and Goods and Services Tax (GST) supplement into a single payment. Currently, the pension supplement is payable at the full domestic rate to Australian residents for the first six weeks of a temporary absence overseas.

Currently the pension supplement basic amount remains payable where a recipient permanently departs Australia or after six weeks temporary absence overseas. The pension supplement basic amount is equivalent to the former GST supplement and was originally paid to offset the cost increases associated with the introduction of the GST in Australia. Pensioners who leave Australia permanently or who are temporarily absent from Australia for more than six weeks are unlikely to be impacted by the Australian GST and it is therefore not appropriate to continue to pay them the pension supplement basic amount.

The amendments made by this Schedule will stop the payment of pension supplement basic amount after six weeks overseas and stop the payment of pension supplement basic amount immediately for permanent departures from Australia. The amendments made in this Schedule apply prospectively to all pension recipients overseas before, on or after commencement of the Schedule.

The amendments made by this Schedule commence on 1 July 2017. However, if the Act receives Royal Assent after 1 July 2017, this Schedule will commence on the next 1 October, 1 January, 1 April or 1 July after Royal Assent.

 

 

REGULATION IMPACT STATEMENT

 

The Office of Best Practice Regulation (OBPR) advised that the change appears to affect only the level of financial assistance paid and does not appear to have regulatory impact on business, community organisations or individuals.



Explanation of the changes

Amendments to the Social Security Act

 

Item 1 amends the definition of pension supplement amount in subsection 23(1) of the Act to clarify that there may be no amount added under the pension supplement Module (if there is such a module) of the Rate Calculator when working out the rate of the person’s social security payment.

 

Items 2, 7, 12, and 17 amend the method statements in points 1064-A1, 1065-A1, 1066-A1 and 1068A-A1 respectively to clarify that there may be no amount of pension supplement worked out in accordance with Modules 1064-BA, 1065-BA, 1066-BA and 1068A-BA.

 

Items 3, 8 and 13 repeal and replace current points 1064-BA1 and 1064-BA2, 1065-BA1 and 1065-BA2 and 1066-BA1 and 1066-BA2, respectively. These points have been redrafted in Module 1064-BA, 1065-BA and 1066-BA to clarify that a pension supplement is only to be added to the person’s maximum basic rate where the person is residing in Australia and the person is either, in Australia or temporarily absent for a continuous period of up to 6 weeks.

 

Items 4. 5, 9, 10, 11, 14, 15, 16 19, 20 and 21 are technical amendments.

 

Items 6, 11 and 16 repeal points 1064-BA5, 1065-BA5 and 1066BA5. These points currently provide that where a recipient is not in Australia or is temporarily absent from Australia for a period exceeding 6 weeks, the person’s pension supplement amount is the pension supplement basic rate. Repealing these points gives effect to the policy that the payment of pension supplement should stop immediately for permanent departures from Australia or after six weeks of temporary absence from Australia.

 

Item 18 repeals and replaces current points 1068A-BA1 and 1068A-BA2.

These points have been redrafted in Module 1068A-BA to clarify that a pension supplement is only to be added to the person’s maximum basic rate where the person is residing in Australia, has reached pension age and the person is either, in Australia or temporarily absent for a continuous period of up to 6 weeks.  If the person has not reached pension age, and is either in Australia or temporarily absent for a continuous period of up to 6 weeks, the person’s pension supplement amount is the pension supplement basic rate.

 

Item 22 clarifies that point 1068A-BA5 applies to persons who have not reached pension age.

 

Item 23 inserts new section 1216A to clarify that where portability of a payment exists or is extended under Division 2 of Part 4.2 of Chapter 4 of the Act, the rate of payment must still be determined by reference to the rate calculators in Chapter 3. The amendment includes a note to refer the reader to the rate calculators in Chapter 3. This provision applies is relation to all ancillary payments.

 

Example A recipient of disability support pension (who is not severely impaired or terminally ill) undertakes ten weeks of study overseas for the purpose of their Australian course of education. They have a right to continue to be paid disability support pension for the duration of their overseas study. However, their rate of payment must still be determined in accordance with the rate calculators in Chapter 3. This means that after six weeks overseas, the recipient will no longer be paid the pension supplement.

 

Items 24 and 25 repeal and replace the method statements in subclauses 147(3) and 147(4) of Schedule 1A to clarify that the pension supplement basic amount will no longer be payable outside Australia indefinitely. 

 

Item 26 is an application provision which provides that the amendments made to the Social Security Act by this Schedule apply in relation to permanent or temporary absences from Australia, whether the absence commenced before, on or after commencement. This means that payment of the pension supplement basic amount will cease immediately for recipients that are permanently overseas and that have been temporarily overseas for a period exceeding six weeks on commencement.

 

Amendments to the Veterans’ Entitlements Act

 

Item 27 amends the definition of pension supplement amount in subsection 5Q(1) of the Veterans’ Entitlements Act to clarify that there may be no amount added under pension supplement Module of the Rate Calculator when working out the rate of the person’s income support payment.

 

Item 28 inserts new paragraph 58K(1A) of the Veterans’ Entitlements Act.  Subsection 58K(1) refers to the general portability of the various service pensions and income support supplement and states that once granted, eligibility for the payments will not be affected by the fact that the person has left Australia.

 

New subsection 58K(1A) refers to the impact of the proposed amendments on the payment of the basic pension supplement and provides that the reference in subsection 58K(1) to the right of a person to continue to be paid a service pension or income support supplement is not a reference to the fact that the rate of the payment cannot be impacted by an absence from Australia.

 

The Note to new subsection 58K(1A) refers the reader to the rate of pension or supplement as being that which was worked out under the Rate Calculator.

 

Items 29 and 30 repeal and substitute the method statements located in subclauses 31(3) and 31(4) of Schedule 5 of the Veterans’ Entitlements Act to clarify that the pension supplement basic amount will no longer be payable outside Australia indefinitely.

 

Clause 31 of Schedule 5 provides for the payment of a transitional rate of service pension to a person who would have been adversely affected by the amendments made by the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 (the Pension Reform Act).

 

Subclause 31(3) determines the transitional rate of service pension for a person who is not a member of a couple, or is otherwise paid at a single rate of pension because they are a member of an illness separated couple or a member of a respite care couple in the circumstances where the transitional rate is not determined under subclause 31(1) because the person is not residing in Australia or because the person has been absent from Australia for a period of more than 6 weeks.

 

The repealed method statement in subclause 31(3) had provided for the calculation of the transitional rate by reference to the maximum basic rate of service pension payable if the amendments made by the Pension Reform Act had not been made; and the pension supplement that would be payable to the person had the amendments not been made.

 

The substituted method statement has been revised to remove the reference to amount of the pension supplement that would have been payable if the Pension Reform Act had not been enacted.

 

Subclause 31(4) determines the transitional rate of service pension for a person who is a member of a couple, but who is not a member of an illness separated couple or respite care couple in the circumstances where the transitional rate is not determined under subclause 31(2) because the person is not residing in Australia or because the person has been absent from Australia for a period of more than 6 weeks.

 

The repealed method statement in subclause 31(4) had provided for the calculation of the transitional rate by reference to the maximum basic rate of service pension payable if the amendments made by the Pension Reform Act had not been made; and the pension supplement that would be payable to the person had the amendments not been made.

 

The substituted method statement has been revised to remove the reference to amount of the pension supplement that would have been payable if the Pension Reform Act had not been enacted.

 

Items 31, 32 and 33 amend steps 1A, 2A and 1A respectively of the method statements in subpoints SCH6-A1(2), SCH6-A1(3) and SCH6-A1(6) of the Veterans’ Entitlements Act to clarify that there may be no amount of pension supplement included in the rate of service pension or income support supplement as worked out in accordance with Module BA in Schedule 6 of the Veterans’ Entitlements Act.

 

Item 34 repeals and replaces points SCH6-BA1 and SCH6-BA2.  These points have been redrafted in Module BA to clarify that a pension supplement is only to be added to the person’s maximum basic rate of service pension or income support supplement where the person is residing in Australia and the person is either, in Australia or temporarily absent for a continuous period of up to 6 weeks.

 

Items 35 and 36 are technical amendments that reflect the impact of the changes.  The amendments repeal and replace the headings to points SCH6-BA3 and SCH6-BA4.  The current headings “Residents in Australia etc.-no election in force” and “Residents in Australia- election in force” are replaced respectively with the new headings “Amount if no election in force” and “Amount if election in force”.

 

Item 37 repeals point SCH6-BA5. The point currently provide that where a recipient is not in Australia or is temporarily absent from Australia for a period exceeding 6 weeks, the person’s pension supplement amount is the pension supplement basic amount.  The repeal of the point gives effect to the policy that the payment of pension supplement should stop after 6 weeks of temporary absence from Australia.

 

Item 38 is an application provision.  It provides that the amendments to the Veterans’ Entitlements Act made by Items 27 to 37 of this Schedule apply in relation to permanent or temporary absences from Australia, whether the absence commenced before, on or after the commencement of the amendments.  This means that payment of the pension supplement basic amount will cease immediately for recipients who on commencement are permanently overseas or who have been temporarily overseas for a period exceeding six weeks.



 

Schedule 11 - Automation of income stream review processes

 

Summary

This Schedule will allow for the automation of the regular income stream review process by enabling the Secretary to require income stream providers to transfer a dataset to the Department of Human Services (DHS) on a regular basis.

Background

This Schedule amends the Social Security (Administration) Act.

 

Currently, under social security legislation, the Secretary can require that income support recipients with an income stream provide updated information about their income stream on a regular basis. Currently, the Secretary (or DHS as delegate) does not have the legislative authority to require income stream providers to provide income stream information for all income support recipients.  These amendments empower DHS to give a notice requiring the provision of income stream information by providers.

 

The amendments made by this Schedule are expected to create cost savings by reducing regulatory and compliance costs, and improving the efficiency of DHS’ service delivery. It is also expected that the amendments will improve the accuracy of income support payments and reduce customer debts that arise when a customer fails to inform DHS of changes to their income streams, or when they do not inform DHS that they have commenced receiving an income stream payment.

 

Once the amendment commences, DHS will coordinate a staged implementation in consultation with income stream providers.

 

The amendments made by this Schedule commence on the day after this Act receives the Royal Assent.

Explanation of the changes

Amendments to the Social Security (Administration) Act

 

Item 1 inserts new paragraph 195(2)(ja). Section 195 sets out when the Secretary may require a person to give information about a class of persons to the Department for various purposes. Subsection 195(2) sets out the types of information that the Secretary may require about each person in the class of persons. Currently subsection 195(2) does not specifically list information in relation to income stream payments.

New paragraph 195(2)(ja) provides that the Secretary may require the following information:

                    (ja)  in relation to an income stream received by the person:

                              (i)  the type of income stream; and

                             (ii)  a unique identifier allocated to the income stream (also known as a product reference number); and

                            (iii)  the date on which the income stream was purchased; and

                            (iv)  the purchase price; and

                             (v)  the commencement day; and

                            (vi)  the date of the first payment under the income stream; and

                           (vii)  the relevant number; and

                          (viii)  the account balance of the income stream as at the date of the notice; and

                            (ix)  the account balance of the income stream on 1 July of the financial year in which the notice is given; and

                             (x)  for every payment made under the income stream in the 52 weeks before the date of the notice—the gross amount of the payment, the date on which it was paid and, if the payment is paid as a lump sum, the period to which the payment relates; and

                            (xi)  for every payment to be made under the income stream in the 52 weeks after the date of the notice—the gross amount of the payment and the date on which it is to be paid; and

                           (xii)  the date on which, rate at which and way in which the income stream is indexed; and

                          (xiii)  the residual capital value; and

                          (xiv) if there is a reversionary beneficiary to which the income stream reverts on the death of the person - the name of the reversionary beneficiary and the percentage of the income stream that the reversionary beneficiary will receive; and

                          (xv)  if the income stream was purchased before 20 September          2007—whether the income stream satisfies section 9A, 9B or 9BA of the 1991 Act, as those sections applied immediately before that date; and

                          (xvi)  if the income stream was purchased on or after 20 September 2007—whether the income stream was purchased with funds resulting from the commutation of an asset-test exempt income stream and whether it is eligible to retain its asset-test exempt income stream status; and

                         (xvii)  if the income stream is commuted—the date of commutation and the commuted amount; and

                        (xviii)  if the income stream is a defined benefit income stream—the deductible amount for the year in which the notice is given and the method used to work out the tax free components of that deductible amount; and

                          (xix)  if payments made under the income stream represent an amount for a child of the person—the number of children for which payment is made and the amount of each payment made under the income stream for each child; and

                           (xx)  any other information required by the Minister in an instrument made under subsection (3A).

New paragraph 195(2)(ja) allows DHS to obtain an agreed dataset from income stream providers

 

Item 2 inserts new subsections 195(3A) and 195(3B) and provides that the Minister may specify further information required to be given in relation to an income stream, by way of legislative instrument. This allows for new income stream products, where such products are not yet available and have not been contemplated in the drafting of these amendments, to be included in the income stream review process. Subsection 195(3B) provides that before making an instrument under subsection (3A), the Minister must consult the Information Commissioner in relation to matters relating to the privacy functions of the instrument. The Minister must also have regard to any submissions made by the Information Commissioner because of the consultation.

 

REGULATION IMPACT STATEMENT

Policy objective

This schedule will automate the regular income stream review process by requiring income stream providers to electronically transfer a dataset to the Department of Human Services (DHS) on a regular basis.

 

The amendments made by this schedule are expected to create cost savings by reducing regulatory and compliance costs and improving the efficiency of DHS’ service delivery. It is also expected that the amendments will improve the accuracy of income support payments and reduce customer debts that arise when a customer fails to inform DHS of changes to their income streams, or when they do not inform DHS that they have commenced receiving an income stream payment.

 

Once the amendment commences, DHS will implement coordinate a staged implementation in consultation with income stream providers.

Regulatory impacts associated with this proposal

The amendments are minor in machinery and have small regulatory change. The Office of Best Practice Regulation approval ID for this regulatory impact statement is 20629.

Regulatory costs/savings associated with this proposal

The amendments have significant regulatory savings (preliminary estimate of over $19 million) for recipients and providers although some providers will experience an initial increase to the regulatory burden in order to transition to the new process. The ongoing burden will be significantly reduced for recipients in a reduced time, effort and cost to comply with the departmental requirements and reduced interaction with their financial planners and the Department.

 



Schedule 12 - Seasonal horticultural work income exemption

 

Summary

Schedule 12 to the Bill provides a social security income test incentive aimed at increasing the number of job seekers who undertake specified seasonal horticultural work, such as fruit picking.

Background

The income test incentive is part of a package of incentives that will commence from 1 July 2017 as a trial for two years. The number of job seekers who will be able to participate in the trial will be capped at 7,600.

The income test incentive will provide an additional financial reward to eligible job seekers who participate in the trial. Participants will be able to earn up to $5,000 from specified horticultural seasonal work during the 12 months after they join the trial without it being assessed under the social security income test.

Eligible job seekers will be able to access the $5,000 income test incentive in each of the 2017-18 and 2018-19 financial years. If they participate in the second year of the trial, any unused balance from the first year will expire.

NSA and YA(o) recipients who have been receiving those payments continuously for at least three months will be eligible to participate in the trial. A period during which a person did not receive NSA or YA(o) because of employment income (known as an employment income nil rate period) will count towards the period of three months continuous receipt.

Only qualifying seasonal horticultural work will be eligible for the concession. The Employment Secretary may determine by way of a legislative instrument what constitutes qualifying seasonal horticultural work.

Under the current rules, a person must be unemployed or treated as unemployed and satisfy the activity test in order to qualify for NSA. For YA(o) a person must satisfy the activity test but cannot be taken to satisfy the activity test if they are in full-time paid work of at least 35 hours per week. The effect of these provisions is that a person undertaking substantial work, including full-time work, will not normally be considered qualified for NSA or YA(o).

The intention is that a person undertaking substantial hours (including full-time hours) of eligible seasonal horticultural work will continue to be qualified for NSA or YA(o) for as long as they are accessing their $5,000 seasonal work income exemption. Amendments are made to achieve this outcome. After this time (from the first instalment period after the $5000 is depleted), the requirement to be unemployed and satisfying the activity test will apply in accordance with the current rules.

A consequential amendment is also made to the Farm Household Support Act to ensure that the new seasonal horticultural work income exemption does not apply in relation to the operation of the Farm Household Support Act.

A further consequential amendment is made to the Veterans’ Entitlements Act to ensure that the new seasonal horticultural work income exemption also applies to Veterans’ Affairs income support payments received by partners of eligible jobseekers.

The package of incentives includes a payment of seasonal work living away and travel allowance in the amount of $300 for eligible job seekers participating in the trial who undertake specified seasonal horticultural work that is more than 120km from their home. This payment will be administered by employment services providers contracted with the Department of Employment. Amendments are made to ensure that any payment of the seasonal work living away and travel allowance will not be included as income for the purposes of the Social Security Act or Veterans’ Entitlements Act.

Employment service providers will receive a Provider Seasonal Work Incentive Payment of $100 a week for up to 6 weeks a year for each eligible job seeker that they successfully refer to a seasonal job as part of the trial. 

All legislative references in this Schedule to the Explanatory Memorandum are to the Social Security Act unless otherwise specified.

Explanation of the changes

Part 1 - Main Amendments

 

Social Security Act 1991

Section 8 contains income test definitions. Note 3 at the end of the definition of ordinary income refers to other provisions that affect a person’s ordinary income. Item 1 introduces a reference to new section 1073K in this note.

Item 2 inserts paragraph 8(8)(sa). Subsection 8(8) provides a list of exclusions to income. This item includes a payment of seasonal work living away and travel allowance in the list.

Section 541 sets out the requirements of the activity test for YA. Item 3 inserts new subsection 541(3A), which creates an exception to paragraph 541(3)(b) which sets out when a person cannot be taken to satisfy the activity test. This item provides that a person can engage in full-time paid work and be taken to satisfy the activity test if the full time paid work is qualifying seasonal horticultural work within the meaning of subsection 1073K(6), and the income received by the person from that work is being disregarded for the purposes of subsection 1073K(2) (i.e. the first $5,000 earned undertaking such work). In relation to NSA payments, the existing section 595, which sets out when a person may be treated as unemployed, can apply to recipients undertaking qualifying seasonal horticultural work where the income from that work is being disregarded for the purposes of subsection 1073K(2).

Item 4 inserts new paragraph (aa) to Note 2 of subsection 1067G-H1 to inform the reader that the seasonal horticultural work income exemption affects the application of the YA income test in 1067G-H1.

Item 5 amends Note 3 of subsection 1068-G1 to inform the reader that the seasonal horticultural work income exemption affects the application of the NSA ordinary income test in 1068-G1.

Item 6 amends Note 2 in section 1072 to insert a reference to new section 1073K (seasonal horticultural work income exemption) in relation to provisions that affect the amount of a person’s ordinary income.

New Provisions - seasonal horticultural work income exemption

Item 7 inserts new Division 1AC (Seasonal horticultural work income exemption) and new section 1073K (Seasonal horticultural work income exemption).

New subsection 1073K(1) sets out when the new section will apply. It will apply to a person if the Secretary is satisfied that on a day in the 2017-18 or the 2018-19 financial year, the person is placed in qualifying horticultural work under the Seasonal Horticultural Work program (“the program”). A note at the end of this provision refers the reader to new subsection 1073K(6) for a definition of qualifying seasonal horticultural work .

New subsection 1073K(2) provides that the first $5,000 of any ordinary income earned, derived or received by the person from undertaking work under the program and during the period commencing on the first day of the person’s instalment period that includes the placement day and application day will be disregarded for the purposes of working out the rate of a qualifying payment for the person. A note at the end of this provision refers the reader to new subsection 1073K(5) for a definition of qualifying payment .

New subsection 1073K(3) provides that if an amount is disregarded in relation to a person under subsection 1073K(2), that amount is also disregarded in relation to the person’s partner for the purposes of the Social Security Act.

New subsection 1073K(4) provides that this section applies to a person only once in relation to each of the 2017-18 or 2018-19 financial years (the first time that the person qualifies under subsection 1073(1)).  This prevents a person from accessing the exemption in this section more than once during the trial.

Qualifying payments

New subsection 1073K(5) sets out the definition of qualifying payment for the purposes of this section. Both NSA and YA(o) are qualifying payments.

Qualifying seasonal horticultural work

Subsection 1073K(6) defines qualifying seasonal horticultural work as seasonal work of a kind determined in an instrument under subsection 1073K(7). A note at the end of this provision alerts readers to section 16A for the definition of seasonal work , which includes fruit picking.

Subsection 1073K(7) provides that the Secretary may determine kinds of seasonal work for the purpose of subsection (6), by way of legislative instrument.

 

Part 2 - Other Amendments

 

Farm Household Support Act 2014

                                                                                         

Item 8 amends section 94, which provides a list of certain provisions of the Social Security Act 1991 that do not apply in relation to the operation of this Act. This item inserts paragraph 94(ma), which references section 1073K of the Social Security Act 1991 and provides that the seasonal horticultural work income exemption does not apply in relation to the operation of this Act.

Veterans’ Entitlements Act 1986

                                                                                         

Item 9 amends subsection 5H(8), which provides a list of certain amounts that are not income in relation to a person for the purposes of this Act. This item inserts paragraph 5H(8)(hf), which references section 1073K of the Social Security Act 1991 and provides that an amount of ordinary income that is subject to the seasonal horticultural work income exemption is not income for the purposes of this Act, and paragraph 5H(8)(hg), which provides that an amount of seasonal work living away and travel allowance is not income for the purposes of this Act.

Part 3 - Repeals

 

Items 10 to 18 repeal all amendments made in parts 1 and 2 of this Schedule. As the program is running on a 2 year trial basis, all amendments will need to be repealed to allow for the trial to conclude.



Schedule 13 - Ordinary Waiting Periods

 

Summary

This Schedule makes amendments to extend and simplify the ordinary waiting period for working age payments.

Background

Currently, a person who is qualified for newstart allowance or sickness allowance under the Social Security Act must, subject to some exceptions, serve an ordinary waiting period of seven days before either of those allowances is payable.  The exceptions include where the Secretary is satisfied that the person is in severe financial hardship.  Depending on the circumstances, an ordinary waiting period may be served concurrently with other waiting periods and preclusion periods.

This Schedule creates a new ordinary waiting period for parenting payment, and for youth allowance for a person who is not undertaking full-time study and is not a new apprentice (in this Schedule, referred to as youth allowance (other)).

This Schedule also provides that the current exemption on the basis of severe financial hardship will only apply if the person is also experiencing a personal financial crisis.  A person will be taken to be experiencing a personal financial crisis if they have been subjected to domestic violence, incurred unavoidable or reasonable expenditure or in the circumstances prescribed by the Secretary in a legislative instrument.

The Schedule further clarifies that an ordinary waiting period is to be served after certain other relevant waiting periods or preclusion periods have ended.

The amendments made by this Schedule commence on the first 1 January or 1 July to occur after the Royal Assent.

Explanation of the changes

 

Part 1 - Main amendments

Amendments to the Social Security Act

Items 1 and 2 amend the definition of unavoidable and reasonable expenditure so the definition can apply for the purpose of whether a person is experiencing a personal financial crisis.  Item 5 inserts a new section 19DA to provide for when a person is experiencing a personal financial crisis.  This is relevant for whether a person has an exemption from the ordinary waiting period.  Under new subsection 19DA(3), a person is experiencing a personal financial crisis if the person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure.

Current subsection 19C(4) provides for the meaning of unavoidable or reasonable expenditure in relation to a person who is serving a liquid assets test waiting period, is subject to a seasonal work preclusion period, or a person to whom an income maintenance period applies.

Items 1 and 2 amend subsection 19C(4) to provide that, in relation to working out whether a person is subject to an ordinary waiting period, unavoidable or reasonable expenditure includes, but is not limited to, the reasonable costs of living, under subsection 19C(6) and (7) that the person has incurred in the four-week period before the person’s claim for the relevant payment, if the person is qualified for the payment on the day of claim.

Current subsection 19C(5) provides that the reasonable costs of living of a person include, but are not limited to, the following costs:

·          food costs;

·          rent or mortgage payments;

·          regular medical expenses;

·          rates, water and sewerage payments;

·          gas, electricity and telephone bills;

·          costs of petrol for the person’s vehicle;

·          public transport costs; and

·          any other cost that the Secretary determines is a reasonable cost of living in relation to a person.

Items 3 and 4 amend subsections 19C(6) and (7) to provide for the maximum amount of the reasonable costs of living that are taken to have been incurred for the purpose of subsection 19C(4).  The amount of reasonable costs of living cannot exceed the amount of newstart allowance, youth allowance (other), sickness allowance or parenting payment (as the case may be) that would have been payable in the four-week period before the person’s claim for that payment if the payment was payable, or in the case of a person who is a member of a couple, twice the amount of the payment that would have been payable in that period.

Item 5 inserts a new definition of experiencing a personal financial crisis

There is currently an exemption to the ordinary waiting period for newstart allowance and sickness allowance for a person who is in severe financial hardship.  Section 19C generally provides that a person is in severe financial hardship if the value of the person’s liquid assets is less than the fortnightly amount at the maximum payment rate of the relevant social security payment.  Other items in this Schedule replace this exemption with a new concept of experiencing a personal financial crisis.

A person will still need to be in severe financial hardship in order to be experiencing a personal financial crisis.  However, the exemption will now apply only if, in addition to being in severe financial hardship, subsection 19DA(2), (3) or (4) applies to the person.  Those subsections will apply if the person:

·       has been subjected to domestic violence in the four-week period before the person makes a claim for a relevant payment, if the person is qualified for the payment on the day of claim (subsection (2));

·       is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure in the  four-week period before the person makes a claim for a relevant payment, if the person is qualified for the payment on the day of claim.  Items 1 and 2 amend the definition of unavoidable and reasonable expenditure in section 19C so that it can apply for the purpose of determining whether a person has an exemption from an ordinary waiting period (subsection (3)); or

·       satisfies circumstances prescribed in a legislative instrument made by the Secretary (subsection (4)).  Subsection 19DA(5) provides the Secretary with the power to prescribe circumstances for this purpose. 

Subsection 19DA(6) clarifies that a person will not be taken to satisfy the circumstances in subsections 19DA(2), (3) or (4) unless he or she can produce evidence that demonstrates a reasonable possibility that he or she satisfies the circumstances.  It is expected that a person will meet this evidence requirement by complying with the current evidentiary requirements of the Department of Human Services.  It will not always be necessary for a person to provide written evidence. For example, a person may provide confirmation from a social worker that they have experienced domestic violence and this will likely satisfy the ‘evidence requirement’ in subsection 19DA(6).

Item 6 is consequential to the amendments made by item 5.

Items 7 and 8 amend the definitions of ordinary waiting period and waiting period in subsection 23(1) to refer to the new ordinary waiting periods for parenting payment and youth allowance (other).  The definition of waiting period is also amended to refer to a newly arrived resident’s waiting period.  This is a waiting period that may currently apply under the Social Security Act but which has been inadvertently omitted from the definition of waiting period .

Item 9 amends subsection 23(10) to clarify when a person is taken to have served an ordinary waiting period. 

Current subsection 23(10) refers to the ordinary waiting periods for newstart allowance and sickness allowance.  The amendments made by this item replace the references to ‘newstart allowance’ and ‘sickness allowance’ with references to ‘social security benefit’ and ‘social security pension’ to cover all of the payments to which an ordinary waiting period may apply.  

Items 10 and 12 provide for a new ordinary waiting period for parenting payment and youth allowance (other), and provide for the duration of those waiting periods.

New subsection 549CA(1) makes it clear that the new ordinary waiting period provisions for youth allowance apply only in relation to a person who is qualified for youth allowance (other) and not in relation to a person who is qualified for youth allowance on the basis of being a student or new apprentice.

Under new subsections 500WA(1) and 549CA(2), a person will be subject to the ordinary waiting period for parenting payment and youth allowance (other) unless:

·          the person was receiving an income support payment at some time in the 13 weeks immediately before the person made a claim for  parenting payment or youth allowance (other); or

·          the Secretary is satisfied that the person is experiencing a personal financial crisis (as defined in new section 19DA, inserted by item 5); or

·          in relation to youth allowance (other), immediately before the person was qualified for that payment, the person was qualified for youth allowance on the basis of being a student or new apprentice.  This means that a person transitioning from youth allowance on the basis of being a student or new apprentice to youth allowance (other) will not serve an ordinary waiting period.

Further, subsections 500WA(2) and 549CA(3) provide that an ordinary waiting period will not apply if the person is undertaking an activity specified in a legislative instrument.  These provisions replicate a current exemption to the ordinary waiting period for newstart allowance and sickness allowance.  The legislative instrument made for the purpose of those current provisions (the Social Security (Exemptions from Non-payment and Waiting Periods - Activities) Specification 2015 specifies the following activities:

·          an activity undertaken by a person as part of Stream C employment services provided to the person;

·          a rehabilitation programme; and

·          an activity undertaken by a person as part of the Remote Jobs and Communities Programme (subsequently renamed the Community Development Programme) in certain circumstances.

Subsections 500WA(3) and 549CA(4) allow the Secretary to specify these activities in a legislative instrument.

Subsections 500WB(1) and 549CB(1) provide that, subject to subsections (2) and (4) of those provisions, the ordinary waiting period is a period of seven days that starts on the day that parenting payment or youth allowance (other), as applicable, would have been payable but for the ordinary waiting period.

Subsection 500WB(2) provides for the start of an ordinary waiting period for parenting payment where the person is subject to a seasonal work preclusion period, a lump sum preclusion period or an income maintenance period, where the rate of parenting payment payable would be nil on the start day.  Subsection 549CB(2) provides for the start of an ordinary waiting period for youth allowance (other) where a person is subject to one or more these preclusion periods, but also where the person is subject to a liquid assets test waiting period or a newly arrived resident’s waiting period.

If a person is subject to one or more of the other waiting periods or preclusion periods, then the ordinary waiting period starts on the day after all the other waiting periods and preclusion periods have ended.  The effect of this is that the ordinary waiting period cannot be served concurrently with other relevant waiting periods and preclusion periods.

Subsections 500WB(3) and 549CB(3) provide for circumstances in which a person is subject to an income maintenance period where the person’s rate of parenting payment or youth allowance (other) is nil on the person’s start day, but where the rate of payment subsequently would become payable at a rate greater than nil during the income maintenance period.  In these circumstances, the effect of subsections 500WC(3) and 549CB(3) is that the income maintenance period is taken to have ended for the purpose of the ordinary waiting period provisions when the payment would have become payable at a rate greater than nil.  This means that the person will serve the ordinary waiting period when their rate of parenting payment or youth allowance (other) would have become payable at a rate greater than nil.

Subsections 500WB(4) and 549CB(4) provide for the start of an ordinary waiting period for parenting payment or youth allowance (other) where:

·          a person is subject to an ordinary waiting period (the first ordinary waiting period) for any payment; and

·          during the first ordinary waiting period, the person ceases to be qualified for the payment to which the first ordinary waiting period relates; and

  • during the first ordinary waiting period, the person claims another payment which has an ordinary waiting period (the second ordinary waiting period).

In these circumstances, the second ordinary waiting period starts on the day that the first ordinary waiting period starts.

Item 11 inserts a reference to an ordinary waiting period in section 549.

Section 549 provides that a youth allowance is not payable to a person who is subject to a waiting period.  Certain waiting periods are specified for the purpose of that provision, and it is appropriate to include a reference to an ordinary waiting period, given one of the effects of this Schedule is to create an ordinary waiting period for youth allowance (other).

Items 13, 14 and 15 make consequential amendments to section 549F.  Section 549F makes it clear that a youth allowance is not payable until both the waiting periods mentioned in Subdivision C of Division 2 of Part 2.11 of the Social Security Act have ended.  As this Schedule inserts a new ordinary waiting period for youth allowance (other), section 549F will now make it clear that a youth allowance is not payable until all of the waiting periods in Subdivision C, including an ordinary waiting period, have ended.

Items 16 and 21 amend paragraphs 620(1)(a) and 693(a).  Current sections 620 and 693 provide for the ordinary waiting period for newstart allowance and sickness allowance.  Paragraphs 620(1)(a) and 693(a) provide that a person is not subject to an ordinary waiting period for newstart allowance and sickness allowance if the person has received an income support payment in a 13-week period.  The effect of these items is to make it clear that this 13-week period is the period before the person’s start day, disregarding clause 5 of Schedule 2 to the Social Security Administration Act.  This will generally be the 13 weeks before the person made a claim for newstart allowance or sickness allowance.

Items 17 and 22 are consequential to the amendments made by items 19 and 24.

Items 18 and 23 amend paragraphs 620(1)(g) and 693(f), the effect of which is that an ordinary waiting period for newstart allowance and sickness allowance will not apply if the person is experiencing a personal financial crisis, as defined in new section 19DA (inserted by item 5 of this Schedule).

Items 19 and 24 insert new notes that are consequential to the amendments made by this Schedule.

Items 20 and 25 substitute sections 621 and 694 with new provisions that provide for the duration of the ordinary waiting period for newstart allowance and sickness allowance.

The effect of subsections 621(1) and 694(1) is that, subject to subsections (3) and (5) of those provisions, the ordinary waiting period is a period of seven days starting on the day that newstart allowance or sickness allowance, as applicable, would have been payable but for the ordinary waiting period.

Subsections 621(2) and 694(2) provide for the start of an ordinary waiting period for newstart allowance and sickness allowance where the person is disqualified for those payments because of the liquid assets test.  In these circumstances, the ordinary waiting period is the period of seven days that starts after the end of the liquid assets test waiting period.

Subsections 621(3) and 694(3) provide for the start of an ordinary waiting period for newstart allowance and sickness allowance where the person is subject to a newly arrived resident’s waiting period, a seasonal work preclusion period, a lump sum preclusion period or an income maintenance period where the rate of newstart allowance or sickness allowance payable would be nil on the start day.  If a person is subject to one or more of the other waiting periods or preclusion periods, then the ordinary waiting period starts on the day after all the other waiting periods and preclusion periods have ended.  The effect of this is that the ordinary waiting period cannot be served concurrently with other relevant waiting periods and preclusion periods.

Subsections 621(4) and 694(4) provide for circumstances in which a person is subject to an income maintenance period where the person’s rate of newstart allowance or sickness allowance is nil on the person’s start day, but where the rate of payment subsequently would become payable at a rate greater than nil during the income maintenance period.  In these circumstances, the effect of subsections 621(4) and 694(4) is that the income maintenance period is taken to have ended for the purpose of the ordinary waiting period provisions when the payment would have become payable at a rate greater than nil.  This means that the person will serve the ordinary waiting period when their rate of newstart allowance or sickness allowance would have become payable at a rate greater than nil.

Subsections 621(5) and 694(5) provide for the start of an ordinary waiting period for newstart allowance and sickness allowance where:

·          a person is subject to an ordinary waiting period (the first ordinary waiting period) for any payment; and

·          during the first ordinary waiting period, the person ceases to be qualified for the payment to which the first ordinary waiting period relates; and

·          during the first ordinary waiting period, the person claims another payment which has an ordinary waiting period (the second ordinary waiting period).

In these circumstances, the second ordinary waiting period starts on the day that the first ordinary waiting period starts.

Item 26 provides that the amendments made by this Schedule apply in relation to a claim for a social security payment that is made on or after the commencement of this Schedule.



Schedule 14 - Age requirements for various Commonwealth payments

 

Summary

This Schedule provides that young unemployed people aged 22 to 24 would no longer be eligible for newstart allowance or sickness allowance until they turn 25 years of age and would, instead, be able to claim and qualify for youth allowance.  To enable this, youth allowance for all types of people who can satisfy the activity test, will be available to people who have not yet reached 25.  Youth disability supplement will also be available to all youth allowance recipients who have not yet reached 25.  The amendments include a grandfathering arrangement to allow existing newstart allowance recipients who are 22, 23 or 24 leading up to commencement (or people undergoing certain waiting periods or suspension periods) to remain in receipt of newstart allowance.  Similar savings rules are provided for sickness allowance.

This Schedule also makes consequential amendments to the Farm Household Support Act to align rates at which farm household allowance is paid to farmers and their partners, with newstart allowance and youth allowance rates.

Background

The key aim of this measure is to provide incentives to young unemployed people to obtain the relevant education and training to increase employability.  Changes to labour markets presage the need for a highly educated and skilled workforce and this measure is designed to encourage young people to adequately skill themselves and move off unemployment benefits.  The proposal is driven by the current high youth unemployment rate.

 

Presently, unemployed youth aged 22 to 24 are able to qualify for newstart allowance or sickness allowance rather than youth allowance.  People in this age bracket may perceive an advantage by remaining in receipt of newstart allowance and a disincentive to pursue full-time study or employment, given the higher rate of newstart allowance and sickness allowance as compared to youth allowance.  This measure removes this disincentive by placing all under 25 year olds on the same payment levels whether unemployed or studying full-time.  The broad financial incentives provided for further education in lieu of working, applying to those on youth allowance (student) payments are not diminished, since youth allowance (student) attracts more generous income testing compared to youth allowance (other).  In addition, a facility is provided to youth allowance (student) recipients to accumulate a student income bank of $10,000 without affecting payments.

 

While youth allowance is paid at lower rates to newstart allowance, the payment has a larger income free area compared to newstart allowance, providing greater flexibility to earn while on payment.

 

The amendments made by this Schedule commence on the first

1 January or 1 July to occur after the Royal Assent.

Explanation of the changes

Item 1 replaces the reference to age 22 in paragraphs 19C(8)(b) and (c) of the Social Security Act with a reference to age 25.  This amendment is consequential on the age adjustments proposed to be made by the Bill to youth allowance and newstart allowance qualification rules.  Section 19C deals with definitions for a number of terms related to when a person is in severe financial hardship .  The concept of severe financial hardship is relevant to a number of provisions in the Social Security Act, including those dealing with advance payments, ordinary waiting periods, special employment advances, certain rules dealing with seasonal workers and others.  The specific amendments to paragraphs 19C(8)(b) and (c) will ensure that the reference to ‘maximum payment rate’ in subsections 19C(2) and (3) will mean that the age thresholds relevant to determining a person’s maximum payment rate will be interpreted in line with the new qualification age thresholds for youth allowance and newstart allowance as proposed by this Schedule to the Bill.

Item 2 replaces the reference to age 22 in paragraphs 38K(2)(a) and (b) with a reference to age 25.  Section 38K sets out an income test for a person’s social security pension if green army allowance is payable to the person’s partner.    Subsection 38K(1) provides that if the amount of the partner’s green army allowance exceeds the threshold applicable under subsection 38K(2), the part of the green army allowance that exceeds that threshold is ordinary income of the person’s partner.  Current subsection 38K(2) provides a different threshold where a person’s partner is aged under 22 compared to where the person’s partner is aged 22 or over.  There is a higher threshold for a person aged over 22 years compared with a person aged under 22 years.  This item will change the age references in subsection 38K(2) to 25 years.

Item 3 is the key amendment that will lift the qualification age for youth allowance to 25 for people who are not a full-time student.  Under section 543 of the Social Security Act, a person is of youth allowance age if the person has attained the ‘minimum age for youth allowance’ and has not yet attained the ‘maximum age for youth allowance’ as set out under section 543B.  Prior to these amendments, the maximum age for youth allowance under section 543B was set at different ages (either 22 or 25) for people not undertaking full-time study, people undertaking full-time study and people who are ‘new apprentices’.  This amendment proposes to set the maximum age of youth allowance at 25 for all people previously dealt with by subsection 543B(1).  Note that subsection 543B(2) will still provide that people in receipt of youth allowance at the time they turn 25 remain below the maximum age for youth allowance if they continue full-time study or remain as a new apprentice after they turn 25.  The amendments made by this item will operate subject to the application rules set out in item 15.

Items 4 and 5 propose to make changes to the basic qualification rules for newstart allowance, amending references to age 22 to age 25.  These amendments will ensure that a person is only qualified for youth allowance during a period where they have not reached the age of 25.  These amendments will operate subject to the application rules set out in item 16.

Item 6 proposes to amend the age at which a person can qualify for sickness allowance, by changing the reference to 22 years to 25 years in paragraph 666(1)(e) of the Social Security Act.  This will mean that, from commencement, a person will no longer be able to qualify for sickness allowance if they have not yet turned 25 years old.  This amendment will operate subject to the application rules set out in item 17.

Item 7 proposes to amend the age at which a person is able to have an amount by way of youth disability supplement to be added to their rate of youth allowance under the youth allowance rate calculator.  Prior to these amendments, a person can only receive an amount by way of youth disability supplement if they have not turned 22.  These amendments will allow a person to receive youth disability supplement up to the age of 25 to align with the adjustment to the maximum age for youth allowance made by item 3.

Items  8, 9, 10 and 11 propose to make changes to the rules around how to determine the ‘partner income free area for a person’ for the purposes of the youth allowance, austudy payment, benefit rate calculator B (including for newstart allowance) and parenting payment (partnered) rate calculators.  Prior to these amendments, the partner income free area was determined by reference to the amount of income of a partner beyond which youth allowance or newstart allowance would not be payable to the partner if the partner were qualified for youth allowance or newstart allowance.  Whether the calculation is conducted by reference to youth allowance or newstart allowance depends on the age of the partner:  whether they have reached 22 years of age or not.  The amendments propose to change references to 22 to 25 for relevant ‘partner income free area’ provisions such that the ‘partner income free area for a person’ will be calculated by reference to the income test for youth allowance for partners who are not yet 25 and by reference to the income test for newstart allowance for partners who have already turned 25.

Item 12 is an amendment consequential upon the changes to youth disability supplement proposed by item 7.  Item 12 addresses the description of youth disability supplement in the indexation table at section 1190 of the Social Security Act to refer to youth disability supplement as payable to a recipient of youth allowance who is under 25 (rather than under 22).  This item in the indexation table operates to make clear which amount is subject to the indexation rules in Part 3.16 of the Social Security Act.

Item 13 is an application provision to clarify that the amendments made to the ‘severe financial hardship’ definitions in item 1 will apply for days on or after the commencement date.

Item 14 is an application provision to clarify that the amendment made by item 2 to the income test for a person’s social security pension where green army allowance is payable to the person’s applies in relation to instalment periods ending on or after the commencement date.

Item 15 is an application provision that sets out how various amendments proposed by this Schedule will affect different people. 

Subitem 15(1) sets out the default rule (‘default’ in the sense that it operates subject to subitems 15(2) and (3)) that the amendments made by item 3 to the ‘maximum age for youth allowance’ apply for the purposes of working out whether a person qualifies for youth allowance for days from commencement date and onwards.

Subitem 15(2) provides that, if a person was aged 22, 23 or 24 on the day before the amendments to adjust the ‘maximum age of youth allowance’ commence and is, at that time, receiving newstart allowance (or is undergoing a period of suspension), the amendment to the maximum age of youth allowance does not apply to the person until their newstart allowance is cancelled.  This provision will operate to ensure, along with subitem 16(2), that existing people in receipt of newstart allowance (or subject to a period of suspension) will remain in receipt of newstart allowance in spite of the amendments proposed to the ages at which a person can qualify for youth allowance and newstart allowance as proposed by this Schedule to the Bill.

Subitem 15(3) is an application provision that will apply to a person where a claim for newstart allowance was granted before the commencement of item 3 in circumstances where the start day is worked out as being on a day after the commencement date.  If this provision applies to a person, the amendments made by item 3 (to adjust the ‘maximum age of youth allowance’) will not apply to that person until their newstart allowance is cancelled.

Subitem 15(4) is an application provision that deals with when the changes to youth disability supplement (as paid as an amount by way of youth allowance) proposed by item 7 will apply to a person.  The subitem states that the amendment made by item 7 will apply from the commencement date onwards.

Item 16 deals with various circumstances around how the amendments made by items 4 and 5 (to raise the lower age qualification limits for newstart allowance) apply, depending upon a person’s particular case as follows.

Subitem 16(1) sets out the default rule (to operate subject to the more specific rules in the remainder of item 16) that the amendments made by items 4 and 5 apply for working out whether a person is qualified for newstart allowance from days extending from the commencement date onwards.

Subitem 16(2) provides that if, immediately before the amendments made by this Schedule commence, the person was aged 22, 23 or 24 and was receiving newstart allowance (or subject to a period of suspension), the amendments made by items 4 and 5 (to raise the lower qualification age for newstart allowance from 22 to 25) do not affect the person from the commencement date until their newstart allowance is cancelled.  This provision will mean that existing recipients of newstart allowance, at the time this Schedule commences, will be able to remain in receipt of newstart allowance.

Subitem 16(3) operates to ensure that claims for newstart allowance made by people aged 22, 23 or 24 that have been made but not determined by the Secretary at the time immediately before the commencement date can still be granted on the basis that the lower age limit for qualification for newstart allowance is not affected by the amendments proposed by items 4 and 5.  This means that 22, 23 and 24 year old people who have a claim pending (that is, made but not determined) on the commencement date can still be granted newstart allowance on the basis of the claim as if the lower age limit for qualification remains 22, from the commencement date until the person’s payment (if granted as a result of the claim) is cancelled.

Subitem 16(4) deals with the application of the amendments proposed by items 4 and 5 to people aged 22, 23 or 24 who have claimed newstart allowance prior to the time this Schedule commences and who are undergoing a liquid assets test waiting period, in relation to that claim, on the commencement date.  For such people, the amendments made by items 4 and 5 do not apply from the commencement date in relation to their claim and subsequent qualification for and payment of newstart allowance as a result of that claim.  Once any payment as a result of that claim is cancelled, the person will no longer be subject to this application provision and will not be able to qualify for newstart allowance again until they turn 25.

Subitem 16(5) ensures that people serving an income maintenance period on the commencement date in relation to newstart allowance are not affected by the amendments proposed by items 3 and 4 from the commencement date until their payment is cancelled.  This provision will operate as a beneficial rule for people who are 22, 23 and 24 in these circumstances, as they will able to resume payment on newstart allowance following their income maintenance period, notwithstanding the proposal to raise the age of qualification for newstart allowance to 25.

Subitem 16(6) is an application provision that will apply to a person where a claim for newstart allowance was granted before the commencement of items 4 and 5 in circumstances where the start day is worked out as being on a day after the commencement date.  If this provision applies to a person, the amendments made by items 3 and 4 (to raise the lower age for qualification for newstart allowance) will not apply to that person until their newstart allowance is cancelled.  This will operate beneficially for such people aged 22, 23 or 24 at the time of commencement, as people of these ages will still be able to receive newstart allowance, notwithstanding the amendments to the qualification age for newstart allowance proposed by this Schedule.

Subitems 17(1) and (2) provide that item 6, which amends the lower qualification age for sickness allowance from 22 to 25, applies for working out a person’s qualification for sickness allowance from the commencement date onwards, unless the person is 22, 23 or 24 on the commencement date and is in receipt of sickness allowance or is undergoing a period of suspension in relation to their sickness allowance:  such people can remain in receipt (or have their sickness allowance payment resumed after a period of suspension) following the commencement date until their payment is cancelled.

Subitems 17(3) to 17(6) are modelled on the application provisions for newstart allowance at subitems 16(3) to 16(6), and operate as described in more detail above in relation to newstart allowance in circumstances where, for people aged 22, 23 and 24:  a claim is made but not determined; the person is serving a liquid assets test waiting period; the person is serving an income maintenance period; or a claim is granted but the person’s start day is after the commencement date.

Item 18 provides that the amendments made by items 8, 9, 10 and 11 (which make changes to the rules around how to determine the ‘partner income free area’ for a person) apply in relation to working out that rates of social security payments for a person for days following the commencement date onwards.

Amendments to the Farm Household Support Act

Items 19, 20, 21 and 22 replace a number of references in the Farm Household Support Act to a person who has ‘turned 22’ to references to a person who has ‘turned 25’.  The changes are consequential upon the changes to the qualification ages for youth allowance and newstart allowance proposed by items 3, 4 and 5 of this Schedule to the Bill.  Prior to these amendments, farm household allowance was paid either at youth allowance rates or newstart allowance rates, depending upon whether a person had turned 22.  These amendments will ensure payment rates of farm household allowance remain aligned with payment rates of youth allowance and newstart allowance for people of the same age.

Similarly, items 23, 24 and 25 replace a number of references in the Farm Household Support Act to a person who has ‘not turned 22’ to references to a person who has ‘not turned 25’.  These amendments will also ensure payment rates of farm household allowance remain aligned with payment rates of youth allowance and newstart allowance for people of the same age.

Item 26 makes amendments to the table in section 93 of the Farm Household Support Act that deals with reading certain references in the Social Security Act for the purposes of the Farm Household Support Act.  The amendments to items 1 and 2 in the table will ensure that, from commencement, references to newstart allowance and youth allowance in the Social Security Act are to be read as including references to people who have and have not turned 25 respectively (subject to the other rules in Division 2 of Part 5 of the Household Support Act).  The amendments to items 15 and 16 in the table will ensure that, from commencement, references to the newly arrived resident’s waiting period for newstart allowance and youth allowance are to be read as references to a newly arrived resident’s waiting period (within the meaning of the Farm Household Support Act) for people who have and have not turned 25 respectively.

The amendments made by item 27 are various application rules which determine how certain people are affected by the amendments made by items 21, 22, 24 and 24 from the commencement date.

Subitem 27(1) sets out a default rule (that is, one that is subject to subitems 27(2) and (3)) for how various substantive provisions made by this Schedule apply (excluding amendments made to headings and the outline at section 7 of the Farm Household Support Act).   Subitem (1) states that amendments made by items 21, 22, 24 and 25, to change references to age 22 to age 25 throughout the Farm Household Support Act apply for working out the rate of a person’s farm household allowance from the commencement date and days following.

Subitem 27(2) ensures that people in receipt of farm household allowance on the commencement date (or for whom payment is suspended) and who are aged 22, 23 or 24 are not affected by amendments to change references to age 22 to age 25 made by items 21 and 22.  This is a beneficial rule which will ensure that such people will be able to be paid farm household allowance at the newstart allowance rate (under benefit rate calculator B of the Social Security Act) notwithstanding amendments made to Subdivision A of Division 8 of the Farm Household Support Act.  Note that equivalent amendments are not required in relation to the amendments made by items 24 and 25 as these items change references to people who ‘have not turned 22’ to references to people who ‘have not turned 25’, the rationale being that people who have not turned 22 on commencement will also have not turned 25.  People will only remain able to benefit from this application provision until their payment is cancelled.

Subitem 27(3) is a similar rule that deals with people who are aged 22, 23 or 24 on commencement whose claim has been granted prior to the commencement date for a start date on or after the commencement date.  Such people are also not affected by the amendments made by items 21 and 22 and can therefore receive farm household allowance at the newstart allowance rate (under benefit rate calculator B of the Social Security Act) notwithstanding amendments made to Subdivision A of Division 8 of the Farm Household Support Act.  People will only remain able to benefit from this application provision until their payment is cancelled.

Subitem 27(4) ensure that the amendments proposed for changing the reference from 22 to 25 in items 1 and 16 of the table in subsection 93(1) of the Farm Household Support Act do not apply during the period that the application provisions described above (and particularly subitems 27(2) and (3)) do not apply.  Aligned in this way to the period for which the application provisions dealing with items 21 and 22 operate for a person, this subitem also ensures that people aged 22, 23 and 24 on commencement who are in receipt of farm household allowance, subject to a period of suspension, or for whom a claim has been determined but whose start date follows the commencement date, can benefit from their payment being calculated at the at the newstart allowance rate (under benefit rate calculator B of the Social Security Act) until their farm household allowance is cancelled.

 

 



Schedule 15 - Income support waiting periods

 

Summary

This measure introduces a four-week waiting period, for job ready young people who are looking for work, to receive income support payments.  During this four-week period, job seekers under 25 years of age who have been classified as job ready (Stream A) by the Job Seeker Classification Instrument will also be required to complete assigned activities, through a new program, RapidConnect Plus, that will help them prepare for and find work.

Background

This measure aims to encourage greater participation in work and other activities and make the welfare system fairer and more sustainable, to ensure a productive Australian workforce for the future.  The measure establishes firm expectations for young job seekers.  It provides an incentive for affected persons to be self-sufficient, or to undertake further relevant education or training to increase employability before relying on the taxpayer for support. 

Subject to some exceptions, the amendments made by this Schedule will apply to a person aged under 25 years who is a new claimant for youth allowance (other) and, in certain circumstances, special benefit.  Such a person will be subject to a four-week waiting period, as well as any other waiting periods that may apply, before the social security benefit becomes payable.

A person will not be subject to the new waiting period if they are subject to an exemption.  This Schedule sets out a number of exemptions for a person who is not yet job ready and allows the Minister to specify further exemptions in a legislative instrument. 

The amendments made by this Schedule commence immediately after the commencement of Schedules 13 and 14, that are due to commence on the first

1 January or 1 July after Royal Assent.

Explanation of the changes

Part 1 - Main amendments

Amendments to the Social Security Act

Item 1 inserts a new definition of income support waiting period into subsection 23(1).  This Schedule provides for a new youth allowance income support waiting period under new section 549CAA and a new special benefit income support waiting period under new section 739AA.

Items 2 and 3 amend the definition of waiting period in subsection 23(1) to refer to the new income support waiting period for youth allowance and special benefit.

Item 4 is a technical amendment to remove a redundant reference to section 732 in paragraph (ka) of the definition of waiting period .  Section 732 no longer provides for a waiting period.

Item 5 amends subsection 549(2) to provide for an income support waiting period under section 549CAA (as inserted by item 6).  Section 549 provides that youth allowance is not payable if a person is subject to certain waiting periods.

Item 6 inserts new sections 549CAA and 549CAB to provide for a new income support waiting period for youth allowance and exemptions from that waiting period.

Persons subject to the income support waiting period

Subsection 549CAA(1) provides that a person is subject to an income support waiting period if the person who is qualified for youth allowance is neither undertaking full-time study nor a new apprentice.

As a result of amendments made by Schedule 2 to this Bill, the maximum age at which a person is qualified for youth allowance will be increased to 24 years.  As such, the youth allowance income support waiting period will apply to a person who is under the age of 25 years.

Subsection 549CAA(2) provides that a person is not subject to an income support waiting period if:

·          the person was qualified for another income support payment (other than youth allowance or special benefit) on the day before the person qualified for youth allowance (other).  This means that a person who ‘transfers’ from most other social security payments to youth allowance (other) will not be subject to the income support waiting period;

·          an exemption in section 549CAB (inserted by this item) applies to the person on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act).  The general rule is that the start day is the day of the person’s claim for a social security payment, if the person is qualified for the payment on that day;

  • the person has served a four-week income support waiting period for youth allowance or special benefit in the previous six months. 

Length of the income support waiting period

Subsection 549CAA(3) provides that an income support waiting period starts on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act) for youth allowance.  This means that, in most circumstances, a youth allowance income support waiting period will start on the day the person makes a claim for youth allowance, if the person is qualified for youth allowance on that day. 

The income support waiting period will start even if the person is subject to other waiting periods and exclusion periods.  That is, the income support waiting period will be served concurrently with any other waiting periods and exclusion periods, with the exception of the ordinary waiting period which will start after the income support waiting period has ended (see item 7 of this Schedule).

Subsection 549CAA(4) provides that the income support waiting period ends on the earliest of the following:

·          four weeks after it started;

·          when the person turns 25 years of age;

·          when section 549CAB applies to the person.  Section 549CAB (inserted by this item) provides for exemptions to the income support waiting period;

·          if the person was serving an income support waiting period for special benefit when the person claims and qualifies for youth allowance (other), when the income support waiting period for special benefit would have ended.

Special rules for transitioning between youth allowances

Subsection 549CAA(5) modifies rules in section 549CAA where a person becomes qualified for youth allowance (other) immediately after they were qualified for youth allowance on the basis of being a student or new apprentice.  In particular, one of the effects of subsection 549CAA(5) is that a person may be required to serve an income support waiting period if the person became qualified for youth allowance (other) on the day after the person was qualified for youth allowance on the basis of being  a student or new apprentice.

Subsection 549CAA(6) provides for the end of an income support waiting period where a person was previously subject to that waiting period because they were qualified for youth allowance (other) and they then become qualified for youth allowance on the basis of being a student or new apprentice.  In these circumstances, the waiting period will end when the person becomes qualified for youth allowance on the basis of being a student or new apprentice.

Special rule relating to employment services or disability employment services

Subsection 549CAA(7) creates a special rule relating to employment services or disability employment services.

A person may be assessed under the Job Seeker Classification Instrument (JSCI) as requiring a level of employment services on the basis that they are ‘job ready’ (Stream A of jobactive).  Such a person may be subject to an income support waiting period.  However, it is possible that the initial assessment may not have been made on the basis of all of the information that applies to the person.  In some circumstances, a person may be ‘reassessed’ under the JSCI and found to require employment services or disability employment services of a class determined under proposed paragraph 549CAB(2)(a).  A person who is assessed as requiring such employment services or disability employment services is exempt from the income support waiting period. 

 

Subsection 549CAA(7) provides that, in certain circumstances, a person who is reassessed as requiring employment services or disability employment services of a class determined under proposed paragraph 549CAB(2)(a) is taken not to have been subject to an income support waiting period.  The circumstances are where the Secretary is satisfied that the person should have been assessed as requiring that level of employment services or disability employment services on the person’s start day for youth allowance or special benefit.  That is, where the Secretary is satisfied that, as a matter of fact, on the person’s start day, the person required employment services on the basis that the person was not job ready.  In these circumstances, the person will be entitled to ‘back payment’ for the waiting period that had been served before the reassessment.

 

A person will not be entitled to ‘back payment’ where the initial JSCI assessment was, as a matter of fact, accurate for the person’s circumstances at the time, but where the person’s circumstances change such that they are subsequently assessed to require employment services or disability employment services of a class determined under proposed paragraph 549CAB(2)(a).  Such a person would, however, be exempt from the remainder of the income support waiting period that would have applied to the person.

Exemptions

New section 549CAB provides for exemptions from the income support waiting period.  A person is exempt from an income support waiting period if the person:

·       is a parent of an FTB child.  The effect of this is that a parent who has 35 per cent care of a child will be exempt from an income support waiting period;

·       is the principal carer of a child;

·       is in State care or ceased to be in State care during the previous 12 months.  Subsection 549CAB(3) provides that a person is in State care if:

o   the person is in the guardianship, care or custody of a court, a Minister, or a Department, of the Commonwealth, a State, or a Territory; or

o   there is a current direction from such a court, Minister or Department placing the person in the guardianship, care or custody of someone who is not the person’s parent;

·       is not required to satisfy the activity test for 15 days or more on the basis that the person has:

o   a temporary incapacity exemption;

o   a pre-natal exemption or post-natal exemption;

o   a domestic violence or other special family circumstances exemption;

o   a disabled child or other family circumstances exemption;

o   a training camp exemption; or

o   a special circumstances exemption.

·       requires employment services or disability employment services of a class determined by the Minister in a legislative instrument.  Paragraph 549CAB(2)(a) provides that the Minister may determine classes of employment services or disability employment services for this purpose.  It is intended that the legislative instrument would determine classes of employment services or disability employment services which mean that the person is not ‘job ready’.  This means that only a person who is ‘job ready’ will be subject to the income support waiting period;

·       is covered by an exemption determined by the Minister by legislative instrument.  Paragraph 549CAB(2)(b) provides that the Minister may determine exemptions for this purpose.  

Item 7 amends new subsection 549CB(2) (as inserted by Schedule 1 to this Bill) to provide that an ordinary waiting period for youth allowance starts after the income support waiting period ends.  This will ensure that the new income support waiting period is treated in the same way as other waiting periods and exclusion periods.  An ordinary waiting period will start after all waiting periods and exclusion periods have ended.

Item 8 inserts a new paragraph into a special benefit qualification provision.

A person is generally qualified for special benefit only if other social security benefits or social security pensions are not payable to the person.  However, under current provisions, a person is not qualified for special benefit if youth allowance is not payable to the person because of certain non-payment periods or preclusion periods.

The effect of this item is that a person will not be qualified for special benefit if youth allowance is not payable to the person because of an income support waiting period.  It would undermine the integrity of income support waiting periods if a person was able to qualify for, and be paid, special benefit while they are subject to an income support waiting period for youth allowance.

Item 9 inserts new sections 739AA and 739AB to provide for a new income support waiting period for special benefit and exemptions from that waiting period.

Persons subject to the income support waiting period

Subsection 739AA(1) provides that a person is subject to an income support waiting period if:

·          the person is qualified for a special benefit; and

·          the person is an Australian resident or the holder of a visa determined by the Minister in a legislative instrument.  Subsection 739AA(5) provides that the Minister may determine classes of visas; and

·          on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act) for the special benefit, the person has attained the minimum age for youth allowance but less than 25 years of age.  The general rule is that the start day is the day of the person’s claim for a social security payment, if the person is qualified for the payment on that day.  Subsection 543A(1) provides that, subject to some exceptions, a person has attained the minimum age for youth allowance if the person is at least 16 years old, or is 15 years old and is independent.

Subsection 739AA(2) provides that a person is not subject to an income support waiting period if:

·       the person was qualified for another income support payment on the day before the person qualified for special benefit.  This means that a person who ‘transfers’ from another social security payment to special benefit will not be subject to the income support waiting period;

·       an exemption in section 739AB (inserted by this item) applies to the person; and

·       the person has served a four-week income support waiting period for youth allowance or special benefit in the previous six months.

Length of the income support waiting period

Subsection 739AA(3) provides that an income support waiting period starts on the person’s start day (worked out disregarding clause 5 of Schedule 2 to the Social Security Administration Act) for special benefit.  This means that, in most circumstances, a special benefit income support waiting period will start on the day the person makes a claim for special benefit. 

The special benefit income support waiting period will start even if the person is subject to other waiting periods and exclusion periods.  That is, the income support waiting period will be served concurrently with any other waiting periods and exclusion periods.

Subsection 739AA(4) provides that the income support waiting period ends on the earliest of the following:

·          four weeks after it started;

·          when the person turns 25 years of age;

·          when the person becomes subject to an exemption under section 739AB.

Exemptions

New section 739AB provides that a person is exempt from an income support waiting period if the person:

·       is a parent of an FTB child.  The effect of this is that a parent who has 35 per cent care of a child will be exempt from an income support waiting period;

·       is a principal carer of a child;

·       is in State care or ceased to be in State care during the previous 12 months.  Subsection 739AB(3) provides that a person is in State care if:

o   the person is in the guardianship, care or custody of a court, a Minister, or a Department, of the Commonwealth, a State, or a Territory; or

o   there is a current direction from such a court, Minister or Department placing the person in the guardianship, care or custody of someone who is not the person’s parent;

·        is not required to satisfy the activity test for 15 days or more on the basis that:

o   the person has been subjected to domestic violence;

o   has responsibility for the care of a child;

o   special circumstances beyond the person’s control exist;

o   a pre-natal exemption or post-natal exemption applies to the person;

o   the person was granted a visa during the previous 13 weeks that is included in a class of visas granted for temporary protection, humanitarian or safe haven purposes; or

o   the person is temporarily incapacitated for work;

·       is taken to satisfy the activity test for 15 days or more on the basis that the person would be qualified for carer payment in certain circumstances;

·       a special circumstances exemption;

·       requires employment services or disability employment services of a class determined by the Minister in a legislative instrument.  Paragraph 739AB(2)(a) provides that the Minister may determine classes of employment services or disability employment services for this purpose.  It is intended that the legislative instrument would determine classes of employment services or disability employment services which mean that the person is not ‘job ready’.  This means that only a person who is ‘job ready’ will be subject to the income support waiting period;

·       is covered by an exemption determined by the Minister by legislative instrument.  Paragraph 739AB(2)(b) provides that the Minister may determine exemptions for this purpose.

Special rule relating to employment services or disability employment services

Subsection 739AA(6) creates a special rule relating to employment services or disability employment services.

A person may be assessed under the Job Seeker Classification Instrument (JSCI) as requiring a level of employment services on the basis that they are ‘job ready’ (Stream A of jobactive).  Such a person may be subject to an income support waiting period.  However, it is possible that the initial assessment may not have been made on the basis of all of the information that applies to the person.  In some circumstances, a person may be ‘reassessed’ under the JSCI and found to require employment services or disability employment services of a class determined under proposed paragraph 739AB(2)(a).  A person who is assessed as requiring such employment services or disability employment services is exempt from the income support waiting period. 

 

Subsection 739AA(6) provides that, in certain circumstances, a person who is reassessed as requiring employment services or disability employment services of a class determined under proposed paragraph 739AA(2)(a) is taken not to have been subject to an income support waiting period.  The circumstances are where the Secretary is satisfied that the person should have been assessed as requiring that level of employment services or disability employment services on the person’s start day for youth allowance or special benefit.  That is, where the Secretary is satisfied that, as a matter of fact, on the person’s start day, the person required employment services on the basis that the person was not job ready.  In these circumstances, the person will be entitled to ‘back payment’ for the waiting period that had been served before the reassessment.

 

A person will not be entitled to ‘back payment’ where the initial JSCI assessment was, as a matter of fact, accurate for the person’s circumstances at the time, but where the person’s circumstances change such that they are subsequently assessed to require employment services or disability employment services of a class determined under proposed paragraph 739AA(2)(a).  Such a person would, however, be exempt from the remainder of the income support waiting period that would have applied to the person.

Item 10 provides the application provision for this Schedule.

Subitem 10(1) provides that the amendments made by this Schedule apply in relation to a claim for a social security payment made on or after the commencement of the Schedule.

Subitem 10(2) provides a specific application provision for a person transitioning between youth allowances.  Where a person made a claim for youth allowance before commencement and became qualified for that payment on the basis of being a student or new apprentice, but becomes qualified for youth allowance (other) after commencement, then the new income support waiting period starts on the day the person became qualified for youth allowance (other).



Schedule 16 - Other waiting period amendments

 

This Schedule implements the Rapid Activation of young job seekers 2015-16 Budget measure.

Background

This Schedule builds on measures in Schedule 15 to this Bill, which will introduce a four-week income support waiting period for some job seekers under 25.  This Schedule is aimed at ensuring that those job seekers will be part of a new programme, RapidConnect Plus.  RapidConnect Plus will require job seekers who do not have significant barriers to obtaining employment to complete pre-benefit activities during their four-week income support waiting period in order to receive payments.

 

Under RapidConnect Plus, pre-benefit activities can include attending an interview with a jobactive provider, preparing a résumé, completing a job seeker profile, entering into and complying with a Job Plan and undertaking adequate job searches.  Employment Pathway Plan will remain the legislative term for a Job Plan.  The number of job searches required would take into account the job seeker’s capacity and/or the state of the job seeker’s local labour market.  Most pre-benefit activities would be included in the job seeker’s Job Plan, which is negotiated between the job seeker and their jobactive provider and is designed to assist young job seekers who are job ready to prepare for and find work as soon as possible.

 

The Schedule will also provide that a special benefit claimant can be required to enter into a Job Plan if they contact the Department about a claim or the Department is contacted on their behalf This amendment aligns the time at which a special benefit claimant can be required to enter into a Job Plan with that of claimants for newstart allowance and youth allowance.

 

It will be provided that, if a job seeker has a reasonable excuse for not complying with their pre-benefit activities, the Employment Secretary must not make a determination that income support is not payable.  This is consistent with other provisions in the social security law under which a job seeker is not to be denied a benefit for non-compliance when there is a reasonable excuse for that non-compliance.  A job seeker who has a reasonable excuse for not complying with their pre-benefit activities will be treated in the same way as a job seeker who complies with their pre-benefit activities.

 

The amendments made by this Schedule commence immediately after the commencement of Schedule 15, which is due to commence on the first 1 July or

1 January after Royal Assent.

 

 

 

Explanation of the changes

Amendments to the Social Security Act

 

Item 1 inserts new subsection 549CAA(2A), which provides when certain exemptions from the income support waiting period will not apply to claimants for youth allowance (other).

Item 6 of Schedule 3 to this Bill inserts a new section 549CAA, which provides for a four-week income support waiting period for claimants for youth allowance who are not full-time students or new apprentices.  New subsection 549CAA(2) will set out exemptions where a job seeker is not subject to an income support waiting period.  Specifically, paragraph 549CAA(2)(c) will provide that a job seeker is not subject to an income support waiting period if, in the prior six months, the job seeker had already served an income support waiting period for youth allowance (other) or special benefit.

New subsection 549CAA(2A) provides that the exemption to the income support waiting period under paragraph 549CAA(2)(c) will not apply if the Employment Secretary makes a determination under new subsection 549CAC(1) that youth allowance (other) is not payable because the person has not completed their pre-benefit activities.  Specifically, new paragraph 549CAA(2A)(a) provided that the exemption in new paragraph 549CAA(2)(c) will not apply where the Employment Secretary makes a determination under new subsection 549CAC(1) in relation to a claimant for youth allowance (other).  New paragraph 549CAA(2A)(b) provides that the exemption in new paragraph 549CAA(2)(c) will not apply where the Employment Secretary makes a determination under new subsection 739AC(1) in relation to special benefit.

The effect of new section 549CAA(2A) will be that, where the Secretary has determined that income support is not payable to a job seeker because they have not complied with their pre-benefit activities (and they have no reasonable excuse for not complying) and the job seeker then makes a further claim for income support, even if that claim is within six months of their original claim, that job seeker will be subject to a further income support waiting period. 

New subsection 549CAA(2A) gives effect to the policy intent of RapidConnect Plus, which is that a job seeker who does not comply with their pre-benefit activities in an income support waiting period must, in the usual course, serve another full income support waiting period and comply with their pre-benefit activities in that period if they wish to receive income support.  Where, under other provisions of the social security law, another waiting period applies, such as the ordinary waiting period, income support is not paid until the person has also served that waiting period.

Item 2 inserts a new section 549CAC, which provides for the Employment Secretary to determine that youth allowance is not payable at the end of the income support waiting period if a job seeker fails to comply with their pre-benefit activities during the income support waiting period.

Completion of pre-benefit activities

Subsection 549CAC(1) provides that, if the Employment Secretary is satisfied that a job seeker who claims youth allowance (other) failed to comply with a requirement under Subdivision E of Division 1 during the income support waiting period, the Employment Secretary must determine that youth allowance is not payable to that job seeker.  A determination by the Employment Secretary will mean that income support will not become payable at the end of the income support waiting period.

Subdivision E of Division 1 contains legislative requirements for youth allowance Employment Pathway Plans.  Subsection 544(1) relevantly provides that a job seeker who claims youth allowance must enter into an Employment Pathway Plan when required by the Secretary to do so, must comply with the plan and must be prepared to enter into another plan if required.  Subsection 544A(4) relevantly provides that the Secretary may require the job seeker to attend a place to negotiate the plan.  These legislative provisions allow the Secretary to require a job seeker to undertake certain activities which, in the case of a job seeker who is subject to the income support waiting period, can be required to be undertaken during that period.

Reasonable excuse

 

Subsection 549CAC(2) provides that the Secretary must not make a determination that youth allowance is not payable at the end of the income support waiting period where the Secretary is satisfied that the job seeker has a reasonable excuse for not complying with their pre-benefit activities during the income support waiting period.

 

Subsection 549CAC(3) provides that the Employment Secretary must, by legislative instrument, determine matters that the Employment Secretary must take into account in deciding whether a person has a reasonable excuse for not complying with their pre-benefit activities.  There are currently two instruments under the social security law that set out the matters the Secretary must take into account in deciding whether a person has a reasonable excuse.  They are the Social Security (Reasonable Excuse-Participation Payment Obligations) (DEEWR) Determination 2009 (No.1) and the Social Security (Reasonable Excuse—Participation Payment Obligations) (FaHCSIA) Determination 2009 (No.1).   The matters in the two instruments are identical.  It is intended to combine these two instruments into a new, single instrument and that this instrument will also apply to a decision by the Employment Secretary as to whether a person has a reasonable excuse for the purposes of the determination discussed above.

 

Subsection 549CAC(4) provides that the Employment Secretary is not limited by the matters set out in the legislative instrument in deciding whether a person has a reasonable excuse.

 

Timing of the determination 

 

Subsection 549CAC(5) provides that the Employment Secretary’s determination under subsection 549CAC(1) that the job seeker failed to complete their pre-benefit activities can be made before or after the end of the income support waiting period, but takes effect at the end of the period.  In practice, jobactive providers will advise the Department of Human Services once the job seeker has completed all of their pre-benefit activities, which can be at any time during the four-week waiting period.  Any determination that a person has not complied with their pre-benefit activities would typically be made at the end of the income support waiting period. 

 

Allowing the Employment Secretary’s determination to take effect at the end of the income support waiting period means that a job seeker who has not fully complied with their pre-benefit activities in an income support waiting period can be given a further chance to comply during that period.  It is intended that job seekers be given the maximum opportunity to comply with their pre-benefit activities in the relevant income support waiting period.

 

Non-payability and further claim

 

Subsection 549CAC(6) provides that, if the Secretary determines that youth allowance is not payable to a job seeker at the end of an income support waiting period because the job seeker did not comply with their pre-benefit activities during that income support waiting period, the job seeker will be required to make a subsequent claim for youth allowance if they wish to continue to receive income support.  Subsection 549CAC(7) provides that any subsequent claim cannot be made until after the end of the relevant income support waiting period.

 

Subsection 549CAC(8) provides that any determination made by the Employment Secretary is to be disregarded in determining any further claim for youth allowance.  This would mean that a job seeker cannot be paid youth allowance from the date of their first claim where a subsequent claim for youth allowance has been granted.

 

Subsection 549CAC(9) is a technical amendment that would enable the Employment Secretary to make a fresh determination under subsection 549CAC(1) in relation to a subsequent waiting period.

 

Subsections 549CAC(6), (7), (8) and (9) give effect to the policy intent of RapidConnect Plus, which is that a job seeker who does not comply with their pre-benefit activities in a four-week income support waiting period must make a fresh claim for youth allowance, serve another full income support waiting period and comply with their pre-benefit activities in that period if they wish to receive income support. 

 

Item 3 repeals subsection 731L(1) and substitutes a new subsection.

 

Currently under the Social Security Act, a claimant for newstart allowance or youth allowance can be required to attend an interview and enter into a Job Plan if they contact the Department of Human Services about a claim or the Department is contacted on their behalf.  However a special benefit claimant can only be required to enter into a Job Plan once they have actually made a claim or are in receipt of payments.  This item amends subsection 731L(1), and provides that a special benefit claimant can be required to enter into a Job Plan if they contact the Department about a claim or the Department is contacted on their behalf. 

 

This amendment aligns the time at which a special benefit claimant can be required to enter into a Job Plan with that of a claimant for newstart allowance or youth allowance.  The amendment is necessary to ensure that claimants for youth allowance (other) and special benefit are subject to the same rules regarding the time at which they can be required to enter into a Job Plan and for RapidConnect Plus, complete pre-benefit activities.

 

Item 4 is in similar terms to item 1 of this Schedule, and would insert new subsection 739AA(2A), which provides when certain exemptions from the income support waiting period will not apply to special benefit claimants.

 

Item 9 of Schedule 3 to this Bill inserts a new section 739AA, which provides for an income support waiting period for claimants for special benefit claimants.  New subsection 739AA(2) sets out exemptions where a job seeker is not subject to an income support waiting period.  Specifically, paragraph 739AA(2)(c) provides that a job seeker is not subject to an income support waiting period if, in the prior six months, the job seeker had already served an income support waiting period for youth allowance (other) or special benefit.

New subsection 739AA(2A) provides that the exemption to the income support waiting period under paragraph 739AA(2)(c) will not apply if the Employment Secretary makes a determination under new subsection 739AC(1) that income support is not payable to a special benefit claimant because they have not completed their pre-benefit activities.  Specifically, new paragraph 739AA(2A)(a)  provides that the exemption in new paragraph 739AA(2)(c) will not apply where the Employment Secretary makes a determination under new subsection 739AC(1) in relation to a special benefit claimant.  New paragraph 739AA(2A)(b) provides that the exemption in the new paragraph 739AA(2)(c) will not apply where the Employment Secretary makes a determination under new subsection 549CAC(1) in relation to a claimant for youth allowance (other).

The effect of new subsection 739AA(2A) will be that, where the Secretary has determined that income support is not payable to a job seeker because they have not complied with their pre-benefit activities (and they have no reasonable excuse for not complying) and the job seeker then makes a further claim for income support, even if that claim is within six months of their original claim, that job seeker will be subject to a further income support waiting period.

The insertion of new subsection 739AA(2A) gives effect to the policy intent of RapidConnect Plus, which is that a job seeker who does not comply with their pre-benefit activities in an income support waiting period must, in the usual course, serve another full income support waiting period and comply with their pre-benefit activities in that period if they wish to receive income support.  Where, under other provisions of the social security law, another waiting period applies, such as the ordinary waiting period, income support is not paid until the person has also served that waiting period.

Item 5 is in similar terms to item 2 of this Schedule, and inserts a new section 739AC, which provides for the Employment Secretary to determine that special benefit is not payable at the end of the income support waiting period if a job seeker fails to comply with their pre-benefit activities during the income support waiting period.

 

Completion of pre-benefit activities

Subsection 739AC(1) provides that, if the Employment Secretary is satisfied that a special benefit claimant failed to comply with a requirement under paragraph 729(2B)(b), (c), (d) or (e) of the Social Security Act, during the income support waiting period, the Employment Secretary must determine that special benefit is not payable to that job seeker.  A determination by the Employment Secretary will mean that income support will not become payable at the end of the income support waiting period.

Paragraphs 729(2B)(b), (c), (d) and (e) of the Social Security Act contain legislative requirements for special benefit Employment Pathway Plans.  Paragraphs 729(2B)(b) and (c) respectively provide that a special benefit claimant must be prepared to enter into an Employment Pathway Plan, and must be prepared to enter into another such plan if required.  Paragraph 729(2B)(d) requires the special benefit claimant to enter into the plan when required by the Secretary.  Paragraph 729(2B)(e) provides that, where a special benefit claimant enters into a plan, the special benefit claimant must comply with the plan.  These legislative provisions allow the Secretary to require a job seeker to undertake certain activities which, in the case of a job seeker who is subject to the income support waiting period, can be required to be undertaken during that period.

Reasonable excuse

 

Subsection 739AC(2) provides that the Secretary must not make a determination that special benefit is not payable at the end of the income support waiting period where the Secretary is satisfied that the job seeker has a reasonable excuse for not complying with their pre-benefit activities during the income support waiting period.

 

Subsection 739AC(3) provides that the Employment Secretary must, by legislative instrument, determine matters that the Employment Secretary must take into account in deciding whether a person has a reasonable excuse for not complying with their pre-benefit activities.  As discussed in item 2 of this Schedule, there are currently two instruments under the social security law that set out the matters the Secretary must take into account in deciding whether a person has a reasonable excuse.  They are the Social Security (Reasonable Excuse-Participation Payment Obligations) DEEWR) Determination 2009 (No.1) and the Social Security (Reasonable Excuse—Participation Payment Obligations) (FaHCSIA) Determination 2009 (No.1).   As the matters in the two instruments are identical, it is intended to combine these two instruments into a new single instrument.  It is intended that this instrument will also apply to a decision by the Employment Secretary as to whether a person has a reasonable excuse for the purposes of the determination discussed above.

 

Subsection 739AC(4) provides that the Employment Secretary is not limited by the matters set out in the legislative instrument in deciding whether a person has a reasonable excuse.

 

Timing of the determination

 

Subsection 739AC(5) would provide that the Employment Secretary’s determination under subsection 739AC(1) that the job seeker failed to complete their pre-benefit activities can be made before or after the end of the income support waiting period but takes effect at the end of the period.  In practice jobactive providers will advise the Department of Human Services once the job seeker has completed all of their pre-benefit activities, which can be at any time during the four week waiting period.  Any determination that a person has not complied with their pre-benefit activities would typically be made at the end of the income support waiting period. 

 

Allowing the Employment Secretary’s determination to take effect at the end of the income support waiting period means that a job seeker who has not fully complied with their pre-benefit activities in an income support waiting period can be given a further chance to comply during that period.  It is intended that job seekers be given the maximum opportunity to comply with their pre-benefit activities in the relevant income support waiting period.

 

Non-payability and further claim

 

Subsection 739AC(6) provides that, if the Secretary determines that special benefit is not payable to a job seeker at the end of an income support waiting period because the job seeker did not comply with their pre-benefit activities during that income support waiting period, the job seeker will be required to make a subsequent claim for special benefit if they wish to continue to receive income support.  Subsection 739AC(7) would provide that any subsequent claim cannot be made until after the end of the relevant income support waiting period.

 

Subsection 739AC(8) provides that any determination made by the Employment Secretary is to be disregarded in determining any further claim for special benefit. This means that a job seeker cannot be paid special benefit from the date of their first claim where a subsequent claim for special benefit has been granted.

 

Subsection 739AC(9) is a technical amendment that will enable the Employment Secretary to make a fresh determination under subsection 739AC(1) in relation to a subsequent waiting period.

 

Subsections 739AC(6), (7), (8) and (9) give effect to the policy intent of RapidConnect Plus, which is that a job seeker who does not comply with their pre-benefit activities in an income support waiting period must make a fresh claim for special benefit, serve another full waiting period and comply with their pre-benefit activities in that period if they wish to receive income support.

 

Item 6 provides the application and saving provisions for this Schedule.  Sub-item 6(1) provides that the amendments made by this Schedule apply in relation to an income support waiting period that commences after this Schedule. 

 

Sub-item 6(2) provides that the amendment to section 731L does not affect any requirements made by the Secretary under subsection 731L(1) prior to the commencement of item 6.  That is, any requirement made by the Secretary of a special benefit claimant or recipient prior to the commencement of item 6 will continue to apply.

 



Schedule 17 - Adjustment for primary carer pay and other amendments

 

Summary

This Schedule ensures that Government-provided parental leave pay is more fairly targeted to ensure eligible working parents have access to a base level of financial support on the birth or adoption of their child.  Parents will no longer receive both employer-provided paid primary carer leave (such as maternity leave pay) and the full amount of parental leave pay under the Government-provided PPL scheme.  However, to offset the reduction in support this may represent for some recipients of parental leave pay, the maximum PPL period is increased from 18 to 20 weeks.

 

Parents who are entitled to receive employer-provided paid primary carer leave totalling at least 20 weeks at the National Minimum Wage will not receive any parental leave pay under the PPL scheme.

 

Parents who are entitled to receive employer-provided paid primary carer leave totalling less than 20 weeks, will continue to receive some parental leave pay under the PPL scheme, but the amount will be reduced by length of the employer-provided paid primary carer leave they receive.  However, where parents’ employer-provided paid primary carer leave payments (other than lump sum payments) are paid at a rate below National Minimum Wage, a Government-provided parental leave pay supplement will be paid valued at the difference between their primary carer pay and the rate of the National Minimum Wage.

 

These changes will commence from the first 1 January, 1 April, 1 July or 1 October that is 9 months after the date the Act receives royal assent, with an earliest commencement date of 1 January 2018.

 

Background

Currently under the Paid Parental Leave Act, the PPL scheme provides working parents and adoptive parents, with access to up to 18 weeks parental leave pay at the National Minimum Wage, while they stay at home to look after their baby or adopted child.

 

Payments under the current PPL scheme are made irrespective of whether an individual receives employer-provided paid primary carer leave and regardless of the amount of such payments. 

 

Parental leave pay, under the PPL scheme, is paid over an 18-week period at the National Minimum Wage.  To offset the fact some parents will be entitled to less parental leave pay as a result of these amendments, the maximum PPL period will be increased to 20 weeks.

 

Parents who lodge a claim before the birth of a child, or a child entering their care, currently receive an initial eligibility determination stating whether they will be eligible for parental leave pay. Under the se amendments , a person must inform the Secretary (or delegate) of any primary carer pay they are entitled to from their employer.  The PPL period of a person is then proportionately reduced by the length of the paid primary carer leave period they are entitled to from their employer.  If a person receives 20 weeks or more paid primary carer leave that is valued at equal to or more than the National Minimum Wage, the person will not be entitled to receive parental leave pay from the Government.  If the person’s paid primary carer leave is paid at a rate less than the National Minimum Wage, the person will be entitled to a lump sum supplement of paid parental leave representing the difference between their paid leave (up to 20 weeks) and the National Minimum Wage for that period.

 

The purpose of these changes is to provide fairer parental leave pay by creating a base level of paid parental leave entitlement for all eligible working parents. 

 

Primary claimants will no longer be able to access parental leave pay at the same time as they are taking employer-provided paid primary carer leave.  This change is consistent with the above change, to better target the Paid Parental Leave scheme and ensure working parents have access to at least 20 weeks of paid time off work to care for their child. 

 

Provision is made for a primary claimant to nominate a start day 28 days before the day they make their claim for parental leave pay or verify their child’s birth, to provide greater flexibility for parents to make their claim after the birth of their child but without delaying their receipt of parental leave pay.

 

This Schedule will commence on the first 1 January, 1 April, 1 July or 1 October that occurs 9 months after the Bill receives Royal Assent, with an earliest commencement date of 1 January 2018.

Explanation of the changes

Part 1 - Amendments

 

Amendments to the Paid Parental Leave Act

 

Items 1 and 2 amend section 4, which sets out the Guide to the Act.  The second and third paragraphs under the heading Overview are omitted and replaced with three new paragraphs to state that parental leave pay is paid to a person for a particular period, or as a lump sum supplement.  Where parental leave pay is for a period, that period is called the PPL period.  The full PPL period will be 20 weeks.  However, a person may not be eligible for the full 20 weeks if they are not eligible for the entire period or they receive primary carer pay from their employer.

 

Parental leave pay may be paid as a lump sum supplement because the person received employer-provided primary carer pay for up to 20 weeks at less than the National Minimum Wage. 

 

Parental leave pay is paid in instalments, at the National Minimum Wage for each week during a person’s PPL period or, in the case of a lump sum supplement, one instalment.  Payment can be made either by the Secretary or the person’s employer. 

 

The last paragraph under the heading Chapter 2 - When parental leave pay is payable to a person is omitted and replaced with a paragraph stating that there are three types of claims:   a primary claim, a secondary claim and a tertiary claim.  The claims relate to one another.  However, a secondary and tertiary claim cannot be made without a primary claim.  Often, only a primary claim is made.

 

Item 3 amends section 6 by inserting a signpost to the definition of adjustment for paid PC leave at section 11J inserted by item 17 below.

 

Item 4 amends section 6 by repealing the definition of initial eligibility determination and replacing it with a signpost to the definition of initial eligibility determination at section 115BL, which relates to dad and partner pay. 

 

Item 5 amends section 6 to amend the definition of maximum PPL period end day .  This is a technical amendment to signpost the definition of maximum PPL period end day at section 11B, inserted by item 17 below.

 

Item 6 amends section 6 to amend the definition of maximum PPL period start day .  This is a technical amendment to signpost the definition of maximum PPL period start day at section 11A, inserted by item 17 below.

 

Item 7 amends section 6 to include a signpost to the definitions of maximum supplement period and supplement period at section 11H , inserted by item 17 below, paid PC leave , paid PC leave period , PC pay ,and primary carer pay at section 11F, inserted by item 17 below, paid PC leave reduction number at section 11D, inserted by item 17 below, PC leave and primary carer leave at section 11E, inserted by item 17 below, provisional entitlement determination at section 26 and parental leave pay supplement at section 11G, inserted by item 17 below. 

 

Item 8 amends section 7, which is the Guide to Part 2-1 of the Act, to specify that parental leave pay can be paid under the Act as a lump sum supplement as well as for a particular period.  It also specifies that a person’s PPL period may be for a lesser period than 20 weeks, not only in cases where the person is not eligible for the full 20-week period, but also in cases where the person is entitled to primary carer pay in respect of the child.

 

Items 9, 10, 11, 12 and 13 are minor amendments to sections 8, 9 and 10 to delete the following phrases:   ‘for a period’ at sections 9 and 10, ’or that period’ at section 8 and ‘during the period’ at section 9.  These amendments reflect the fact parental leave pay may not necessarily be payable for a period if it is paid as a lump sum supplement.