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 22 MESSAGE FROM THE SENATE—FAMILY ASSISTANCE LEGISLATION AMENDMENT (EXTENSION OF TIME LIMITS) BILL 2003

Message No. 455, 31 March 2004, from the Senate was reported returning the Family Assistance Legislation Amendment (Extension of Time Limits) Bill 2003 and acquainting the House that the Senate has considered message No. 547 of the House relating to the Bill.

The Senate does not further press its requests for amendments which the House has not made and has agreed to the Bill with amendments and requests the concurrence of the House in the amendments made by the Senate.

Ordered—That the amendments be considered forthwith.


On the motion of Mr Pyne (Parliamentary Secretary to the Minister for Family and Community Services), the amendments were disagreed to, after debate.

Mr Pyne presented reasons, which were circulated, and are as follows:

Reasons of the House of Representatives for disagreeing to the amendments of the Senate

Senate amendment 1

This amendment provides that an overpayment arising solely from administrative error where the recipient did not contribute to the error and received the amount in good faith should not be a debt.

The House of Representatives does not accept this amendment because the process of income reconciliation ensures that all customers receive the amount of family tax benefit (FTB) that they are entitled to. However, if a customer has been overpaid as a result of administrative error and received the payments in good faith and can show that severe financial hardship will result if the debt is recovered, the debt can be waived under existing law.

Senate amendments 2 and 7

These amendments limit the capacity of the Commonwealth to negotiate a rate of repayment to half the rate at which the overpayment was received and over a period of twice as long as the period over which the overpayment was received. The customer can agree to a different repayment rate.

The House of Representatives does not accept these amendments for the following reasons.

The current debt recovery arrangements for FTB reconciliation debts are already flexible and responsive to individual circumstances. Customers with a debt are given the choice of paying the debt off in full, repaying the debt through withholdings from their fortnightly FTB payments or contacting Centrelink to negotiate a different arrangement.

These Senate amendments would simply impose an additional administrative burden for no better outcome for customers.

Senate amendments 3 and 4

These amendments provide the customer with a choice of recovery methods and 10 working days in which to make the choice. They also have the effect of ensuring that tax refunds are only offset against an FTB debt if the customer chooses this recovery option.

The House of Representatives does not accept these amendments for reasons set out in relation to Senate amendments 5 and 6 below and also the following reasons.

These Senate amendments would give customers less time to decide on their repayment method than the current administrative arrangements. Currently, if a reconciliation debt cannot be recovered from a customer's tax refund, a notice is sent to the customer giving the customer 28 days to contact Centrelink about repayment arrangements. The letter advises that the customer can pay the debt off in full, repay the debt through withholdings from their fortnightly FTB payments or contact Centrelink to negotiate a different arrangement.

The current reconciliation debt recovery arrangements for FTB debt are both flexible and fair.

Senate amendments 5 and 6

These amendments would require consent to be obtained before a customer's tax refund could be offset against an FTB reconciliation debt. However, consent would not be required where the debt arose due to deliberate misrepresentation or omission.

The House of Representatives does not accept these amendments for the following reasons.

FTB is part of the tax system. Recovery of FTB debts by tax offsetting was an original feature of the family assistance law.

Tax offsetting is a very efficient method of recovery of FTB overpayments.

Currently, tax refunds are used to offset other Commonwealth debts besides FTB debts without the consent of the taxpayer. Creating concessional treatment for FTB debts raises equity concerns.

On the motion of Mr Pyne, the reasons were adopted.