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Family Assistance and Other Legislation Amendment Bill 2012

Schedule 3 Non-entitlement to family tax benefit on estimated income basis

   

A New Tax System (Family Assistance) Act 1999

1  Subsection 3(1) (paragraph (b) of the definition of receiving )

After “sections”, insert “32AI,”.

2  Paragraph 103(1)(e)

Omit “the basis referred to in subsection 20(1), (2A) or (3) of that Act”, substitute “an estimated income basis”.

A New Tax System (Family Assistance) (Administration) Act 1999

3  Subsection 3(1)

Insert:

estimated income basis : family tax benefit is worked out on an estimated income basis if it is worked out on the basis referred to in subsection 20(1), (2A) or (3).

4  At the end of section 20

Add:

Note:          If family tax benefit is worked out on the basis referred to in subsection (1), (2A) or (3), it is referred to in this Act as being worked out on an estimated income basis (see the definition of this term in subsection 3(1)).

5  Subsection 32AA(1)

Omit “the basis referred to in subsection 20(1), (2A) or (3)”, substitute “an estimated income basis”.

6  Section 32AD

Omit “the basis referred to in subsection 20(1), (2A) or (3)”, substitute “an estimated income basis”.

7  Subsections 32AE(2) and (5)

Omit “the basis referred to in subsection 20(1), (2A) or (3)”, substitute “an estimated income basis”.

8  After Subdivision CA of Division 1 of Part 3

Insert:

Subdivision CB Non-entitlement to FTB on estimated income basis

32AF   Non-entitlement to FTB on estimated income basis—review of income during 2 consecutive income years

Scope of Subdivision

             (1)  This Subdivision applies in relation to an individual if:

                     (a)  there are 2 consecutive income years (each of which is a consecutive year ) in which there are one or more days for which the individual was entitled to be paid family tax benefit worked out on an estimated income basis; and

                     (b)  in respect of each consecutive year, the Secretary, under section 105, reviews the rate of family benefit the individual was entitled to be paid for those days on the basis of the individual’s adjusted taxable income as finally determined in respect of the consecutive year by the Secretary; and

                     (c)  as a result of the review and in respect of each consecutive year, the Secretary determines either or both of the following:

                              (i)  the individual’s Part A rate of family tax benefit is nil for those days because of the individual’s adjusted taxable income, and there are no other days in either consecutive year for which the individual was entitled to be paid the Part A rate;

                             (ii)  the individual’s Part B rate of family tax benefit is nil for those days because of subclause 28B(1) of Schedule 1 to the Family Assistance Act.

Note:          Family tax benefit may be worked out on an estimated income basis under subsection 20(1), (2A) or (3) (see definition of estimated income basis in subsection 3(1)).

Basic non-entitlement rule

             (2)  Subject to this Subdivision:

                     (a)  if subparagraph (1)(c)(i) applies—the individual is not entitled, on and after the exclusion day, to be paid the Part A rate of family tax benefit worked out on an estimated income basis; and

                     (b)  if subparagraph (1)(c)(ii) applies—the individual is not entitled, on and after the exclusion day, to be paid the Part B rate of family tax benefit worked out on an estimated income basis.

             (3)  For the purposes of this Subdivision, the exclusion day , in relation to an individual, is:

                     (a)  either:

                              (i)  if the later of the consecutive years is 2010-11—1 July 2012; or

                             (ii)  in any other case—1 July of the first income year after the later of the consecutive years; or

                     (b)  if the Secretary determines a later day in relation to the individual—the later day.

             (4)  A determination under paragraph (3)(b) is not a legislative instrument.

Position of individual’s partner

             (5)  While paragraph (2)(a) applies in relation to the individual, the individual’s partner (if any) is not entitled to be paid the Part A rate of family tax benefit worked out on an estimated income basis.

             (6)  While paragraph (2)(b) applies in relation to the individual, the individual’s partner (if any) is not entitled to be paid the Part B rate of family tax benefit worked out on an estimated income basis.

Multiple applications of section

             (7)  Sections 32AG to 32AM do not prevent this section applying again in relation to the individual in respect of 2 consecutive income years, either or both of which are different from the 2 consecutive income years the subject of the previous application of this section.

32AG   Exception—greater than nil rate of FTB for later income year

Scope

             (1)  This section applies if, in respect of an income year (the payment year ) after the later of the consecutive years, the Secretary, taking into account the individual’s adjusted taxable income as finally determined in respect of the payment year by the Secretary, determines either or both of the following on a day (the payment day ):

                     (a)  the individual’s Part A rate of family tax benefit is greater than nil on one or more days in the payment year;

                     (b)  the individual’s Part B rate of family tax benefit is greater than nil on one or more days in the payment year.

Payment day is in same income year as exclusion day

             (2)  If the payment day is in the income year in which the exclusion day occurs, then:

                     (a)  if this section applies in relation to the Part A rate of family tax benefit—paragraph 32AF(2)(a) is taken not to have applied in relation to the individual; and

                     (b)  if this section applies in relation to the Part B rate of family tax benefit—paragraph 32AF(2)(b) is taken not to have applied in relation to the individual.

Example:    Assume that under section 32AF the consecutive years are 2009-10 and 2010-11. Assume that the individual is not entitled, on and after 1 July 2012, to be paid the Part A rate and Part B rate of family tax benefit worked out on an estimated income basis. The exclusion day is 1 July 2012.

                   Assume that on 1 November 2012 the Secretary determines, under subsection (1), that the individual’s Part A rate and Part B rate of family tax benefit are greater than nil on one or more days in 2011-12. The payment day is 1 November 2012.

                   Under subsection (2), subsection 32AF(2) is taken not to have prevented the individual from being entitled, on and after 1 July 2012, to be paid family tax benefit worked out on an estimated income basis.

Payment day is in income year later than that of exclusion day

             (3)  If the payment day is in an income year that is later than the income year in which the exclusion day occurs, then:

                     (a)  if this section applies in relation to the Part A rate of family tax benefit—paragraph 32AF(2)(a) ceases to apply in relation to the individual on 1 July of the later income year; and

                     (b)  if this section applies in relation to the Part B rate of family tax benefit—paragraph 32AF(2)(b) ceases to apply in relation to the individual on 1 July of the later income year.

Example:    Assume that under section 32AF the consecutive years are 2009-10 and 2010-11. Assume that the individual is not entitled, on and after 1 July 2012, to be paid the Part A rate and Part B rate of family tax benefit worked out on an estimated income basis. The exclusion day is 1 July 2012.

                   Assume that on 1 November 2013 the Secretary determines, under subsection (1), that the individual’s Part A rate and Part B rate of family tax benefit are greater than nil on one or more days in 2011-12. The payment day is 1 November 2013.

                   Under subsection (3), subsection 32AF(2) ceases to prevent the individual from being entitled, on and after 1 July 2013, to be paid family tax benefit worked out on an estimated income basis.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

32AH   Exception—resumption of eligibility for FTB

Scope

             (1)  This section applies if:

                     (a)  the individual is not eligible for family tax benefit for the whole of an income year (the applicable year ) that is after the later of the consecutive years (other than because of the individual’s income or the individual’s partner’s income); and

                     (b)  after the applicable year, the individual makes a claim for family tax benefit in relation to the income year (the current year ) in which the claim is made; and

                     (c)  the Secretary has finally determined the individual’s adjusted taxable income in respect of the applicable year; and

                     (d)  the Secretary is satisfied that, if the Secretary were to take into account that adjusted taxable income, either or both of the following would apply in respect of one or more days in the current year:

                              (i)  the individual’s Part A rate of family tax benefit would be greater than nil;

                             (ii)  the individual’s Part B rate of family tax benefit would be greater than nil, or would be nil (other than because of subclause 28B(1) of Schedule 1 to the Family Assistance Act).

Exclusion day is in current year

             (2)  If the exclusion day is in the current year, then:

                     (a)  if this section applies in relation to the Part A rate of family tax benefit—paragraph 32AF(2)(a) is taken not to have applied in relation to the individual; and

                     (b)  if this section applies in relation to the Part B rate of family tax benefit—paragraph 32AF(2)(b) is taken not to have applied in relation to the individual.

Example:    Assume that under section 32AF the consecutive years are 2009-10 and 2010-11. Assume that the individual is not entitled, on and after 1 July 2012, to be paid the Part A rate and Part B rate of family tax benefit worked out on an estimated income basis. The exclusion day is 1 July 2012.

                   Assume that the individual is not eligible for family tax benefit for the whole of 2011-12 (the applicable year). Assume that in 2012-13 (the current year) the individual makes a claim for family tax benefit for 2012-13.

                   Assume that the Secretary is satisfied that, if the Secretary were to take into account the individual’s final adjusted taxable income for 2011-12, the individual’s Part A rate and Part B rate of family tax benefit would be greater than nil on one or more days in 2012-13.

                   Under subsection (2), subsection 32AF(2) is taken not to have prevented the individual from being entitled, on and after 1 July 2012, to be paid family tax benefit worked out on an estimated income basis.

Current year is later than that of exclusion day

             (3)  If the current year is later than the income year in which the exclusion day occurs, then:

                     (a)  if this section applies in relation to the Part A rate of family tax benefit—paragraph 32AF(2)(a) ceases to apply in relation to the individual on 1 July of the current year; and

                     (b)  if this section applies in relation to the Part B rate of family tax benefit—paragraph 32AF(2)(b) ceases to apply in relation to the individual on 1 July of the current year.

Example:    Assume that under section 32AF the consecutive years are 2010-11 and 2011-12. Assume that the individual is not entitled, on and after 1 July 2012, to be paid the Part A rate and Part B rate of family tax benefit worked out on an estimated income basis. The exclusion day is 1 July 2012.

                   Assume that the individual is not eligible for family tax benefit for the whole of 2012-13 (the applicable year). Assume that in 2013-14 (the current year) the individual makes a claim for family tax benefit for 2013-14.

                   Assume that the Secretary is satisfied that, if the Secretary were to take into account the individual’s final adjusted taxable income for 2012-13, the individual’s Part A rate and Part B rate of family tax benefit would be greater than nil on one or more days in 2013-14.

                   Under subsection (3), subsection 32AF(2) ceases to prevent the individual from being entitled, on and after 1 July 2013, to be paid family tax benefit worked out on an estimated income basis.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

32AI   Exception—income support payments

Scope

             (1)  This section applies if, on a day (the income support day ) after the later of the consecutive years, the individual, or the individual’s partner (if any), is receiving support ( income support ), in the form of a social security pension, a social security benefit, a service pension or income support supplement.

Trigger day is on or before exclusion day

             (2)  If the trigger day is on or before the exclusion day, subsection 32AF(2) is taken not to apply to the individual.

Trigger day is after exclusion day

             (3)  If the trigger day is after the exclusion day, subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

Trigger day for income support payments

             (4)  In this section:

trigger day means the later of:

                     (a)  the earliest income support day; and

                     (b)  1 July of the income year the Secretary becomes aware that the individual, or the individual’s partner, is receiving the income support.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

32AJ   Exception—new FTB child

Scope

             (1)  This section applies if, on a day (the FTB child day ) after the later of the consecutive years:

                     (a)  the individual has an FTB child; and

                     (b)  the child was not an FTB child of the individual at any time during the consecutive years.

Trigger day is on or before exclusion day

             (2)  If the trigger day is on or before the exclusion day, subsection 32AF(2) is taken not to apply to the individual.

Trigger day is after exclusion day

             (3)  If the trigger day is after the exclusion day, subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

Trigger day for new FTB child

             (4)  In this section:

trigger day means the later of:

                     (a)  the earliest FTB child day; and

                     (b)  1 July of the income year the Secretary becomes aware of the existence of the FTB child.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

32AK   Exception—couple separates

Scope

             (1)  This section applies if:

                     (a)  at the end of the later of the consecutive years, the individual is a member of a couple; and

                     (b)  on any later day (a separation day ) the individual ceases to be a member of that couple.

Note:          Paragraph (b) may apply more than once, for example if the couple separates, then reconciles, then again separates.

Trigger day is on or before exclusion day

             (2)  If the trigger day is on or before the exclusion day, subsection 32AF(2) is taken not to apply to the individual.

Trigger day is after exclusion day

             (3)  If the trigger day is after the exclusion day, subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

Reconciliation of separated couple

             (4)  However, if on any day (the reconciliation day ) after a separation day, the individual again becomes a member of that couple, then subsection 32AF(2) applies in relation to the individual as if the reconciliation day were the exclusion day.

Note:          This subsection may apply more than once, for example if the couple separates, then reconciles, then again separates and reconciles.

Trigger day for separation

             (5)  In this section:

trigger day , in relation to a particular separation day, means the later of:

                     (a)  the separation day; and

                     (b)  1 July of the income year the Secretary becomes aware that the individual has (on that separation day) ceased to be a member of that couple.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

32AL   Exception—special circumstances

Scope

             (1)  This section applies if the Secretary is satisfied that:

                     (a)  on a day (the special circumstances day ) after the later of the consecutive years, special circumstances exist in relation to the individual, the individual’s partner (if any) or both; and

                     (b)  those circumstances did not exist at the end of the later of the consecutive years; and

                     (c)  those circumstances make it inappropriate to prevent the individual from being entitled to be paid the Part A rate and the Part B rate of family tax benefit worked out on an estimated income basis.

Trigger day is on or before exclusion day

             (2)  If the trigger day is on or before the exclusion day, the Secretary must determine that subsection 32AF(2) is taken not to apply to the individual.

Trigger day is after exclusion day

             (3)  If the trigger day is after the exclusion day, the Secretary must determine that subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

Secretary’s determinations—general

             (4)  A determination under subsection (2) or (3):

                     (a)  has effect in accordance with its terms; and

                     (b)  is not a legislative instrument.

Trigger day for special circumstances

             (5)  In this section:

trigger day means the later of:

                     (a)  the special circumstances day; and

                     (b)  1 July of the income year the Secretary becomes aware of the existence of the special circumstances.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

32AM   Exception—determined circumstances

Scope

             (1)  This section applies if the Secretary is satisfied that:

                     (a)  on a day (the determined circumstances day ) after the later of the consecutive years, circumstances determined in an instrument under subsection (2) exist in relation to the individual, the individual’s partner (if any) or both; and

                     (b)  the determined circumstances make it inappropriate to prevent the individual from being entitled to be paid the Part A rate and the Part B rate of family tax benefit worked out on an estimated income basis.

             (2)  The Minister may, by legislative instrument, determine circumstances for the purposes of paragraph (1)(a).

Trigger day is on or before exclusion day

             (3)  If the trigger day is on or before the exclusion day, the Secretary must determine that subsection 32AF(2) is taken not to apply to the individual.

Trigger day is after exclusion day

             (4)  If the trigger day is after the exclusion day, the Secretary must determine that subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

Secretary’s determinations—general

             (5)  A determination under subsection (3) or (4):

                     (a)  has effect in accordance with its terms; and

                     (b)  is not a legislative instrument.

Trigger day for determined circumstances

             (6)  In this section:

trigger day means the later of:

                     (a)  the determined circumstances day; and

                     (b)  1 July of the income year the Secretary becomes aware of the existence of the determined circumstances.

Note:          For the meaning of consecutive year , see subsection 32AF(1). For the meaning of exclusion day , see subsection 32AF(3).

9  Paragraphs 65J(2)(b) and (3)(b)

Omit “the basis referred to in subsection 20(1), (2A) or (3) of this Act”, substitute “an estimated income basis”.

10  Application

(1)       Paragraph 32AF(1)(a) of the A New Tax System (Family Assistance) (Administration) Act 1999 , as inserted by this Schedule, applies in relation to the 2009-10 income year and later income years.

(2)       Paragraph 32AF(1)(c) of the A New Tax System (Family Assistance) (Administration) Act 1999 , as inserted by this Schedule, applies in relation to determinations made before, on or after the commencement of this item.