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Wednesday, 8 December 2004
Page: 64

Senator DENMAN (2:23 PM) —My question is to Senator Patterson, the Minister for Family and Community Services. Is the minister aware that one family has been paid compensation under the compensation for detriment caused by defective administration scheme as a result of that family complying with the government's advice to overestimate their income and to reduce the risk of incurring family tax benefit debts? Wasn't this payment necessary in order to compensate the family for financial losses incurred as a result of having a low-income health care card because they followed the government's advice to overestimate their income? Can the minister now indicate how much this family was paid in compensation? Can the minister also update the Senate on how many other families find themselves in this situation?

Senator PATTERSON (Minister for Family and Community Services and Minister Assisting the Prime Minister for Women's Issues) —I do not know the exact details of the individual case to which Senator Denman is referring and I will seek advice on that. But let me just say that it is not government policy to advise customers to overestimate their income. The government has implemented a large number of policies to help families receive their correct family tax benefit payments. In November 2002, we implemented the More Choices for Families measure to give families more payment choices to reduce the likelihood of an overpayment. These choices were further simplified in 2004, in addition to the publication of new information booklets and simpler claim forms—things that I said I would introduce when I first became minister.

Centrelink encourages customers to estimate their income as accurately as possible. Customers can ring Centrelink as often as they like to change their income estimates. There is one situation—that is, where the secondary income earner is returning to work—where they cannot estimate what their income will be. In the next financial year, the money that they earn will be able to be quarantined on returning to work. That is yet another measure to reduce the likelihood of families receiving an overpayment. Families are able and, as I said, encouraged to update their income estimates at any time throughout the year. The majority of customers get their correct entitlement or receive a top-up at the end of the year while a small number incur an overpayment.

The latest figures show that only eight per cent of the 1.6 million families who have been reconciled incurred an overpayment. The figures referred to in the Ombudsman's report—I have found the actual date here now—are from 2002-03 and do not really reflect the most recent trends in delivery of the family tax benefit. Families entitled to receive the family tax rate of FTB are entitled to a low-income health care card even if they take advantage of the More Choices for Families measure. Families are able to adjust their payments—for example, by deferring part of their payment to the end of the year. In doing so, they retain access to all other ancillary benefits such as health care cards.

The government's family assistance arrangements are simpler and more generous than the previous system under Labor. We believe that because we are now assisting families to the tune, on average, of $7,000 in family benefits, including an addition—those people who hold a health care card have a safety net that Labor would have stripped away from them—Labor is now nitpicking around the edges because they have got a policy that has failed, a policy which people saw the holes in and a policy which actually made some families, particularly those more vulnerable families, worse off.

Senator DENMAN —Mr President, I ask a supplementary question. Minister, I think you have realised I got that from the October 2004 Ombudsman's report. I think you have already answered some of my supplementary question, but can you indicate how many families have suffered financial loss as a result of following the government's advice to overestimate their income? What is the minister now doing to compensate all those families who missed out on valuable concessions because they followed the government's advice? How much will it cost to compensate those families?

Senator PATTERSON (Minister for Family and Community Services and Minister Assisting the Prime Minister for Women's Issues) —With all due respect to Senator Denman, and I do respect Senator Denman as one of the senators on the other side—she does not have to go to preselection now so it is not going to affect her—she is basing her statement on a wrong premise.

Senator Chris Evans —The Ombudsman's report?

Senator PATTERSON —She is saying that they followed the government's advice. It is not the policy to advise customers to overestimate their income.

Senator Chris Evans —The Ombudsman's report 2004.

Senator Vanstone —Stop interrupting.

Senator PATTERSON —That is not the government's policy—

Senator Chris Evans —If you have a hangover—

The PRESIDENT —Order! Senator Evans!

Senator Vanstone —I don't have a hangover.

Senator PATTERSON —Mr President, I actually think that what Senator Evans said just then was totally unacceptable and ought to be withdrawn.

The PRESIDENT —Senator Patterson, have you concluded your answer?

Senator PATTERSON —I am actually in the middle of my answer and had a point of order. Senator Evans sits there making snide remarks across the chamber that are totally unparliamentary. Mr President, you ought to call him to order. But I will finish on the fact that Senator Denman has based her question on an incorrect premise. It is not the government's policy to encourage people to overestimate their income. We have got a range of measures to encourage them to estimate their income correctly. If they do have income that goes up and down, there are a number of choices they can make. We are working to ensure that they are aware of those choices.