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Community Affairs Legislation Committee
14/06/2012

McBRIDE, Mr Paul, Group Manager, Social Policy, Department of Families, Housing, Community Services and Indigenous Affairs

MOUFARRIGE, Mr Philip, Acting Branch Manager, Social Security Relationships and International, Department of Families, Housing, Community Services and Indigenous Affairs

WHITECROSS, Mr Andrew, Branch Manager, Family Payments and Child Support, Department of Families, Housing, Community Services and Indigenous Affairs

[11:00]

CHAIR: I welcome representatives from the Department of Families, Housing, Community Services and Indigenous Affairs to today's hearing. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I remind witnesses that the Senate has resolved that an officer of a department of the Commonwealth or of state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

The committee has your submission, thank you. I do note, as I put on record earlier, that the committee did have the departmental submission in good time, which gave us an opportunity to have that basis of knowledge, so thank you very much. I invite any or all of you to make an opening statement and at the end of that we will go to questions. Does anyone have an opening statement?

Mr McBride : No.

CHAIR: Senator Siewert, would you like to start questions.

Senator SIEWERT: I am not going to go back over some of the questions I asked in estimates, but I apologise in advance if I forget and go over the same thing. I will start with a question about the savings on the changes to portability and the issue that the Welfare Rights Network brought up about the basis on which the savings are estimated. Their proposal, as you heard, was that people will come back from 13 weeks to being away for six weeks and so will not stay over that length of time.

Mr McBride : I will let Mr Moufarrige go into the detail. Based on the current situations where people do overstay the 13 weeks already, even though it means that their payments will be curtailed, there is an expectation that that will continue.

Senator SIEWERT: How many overstay the 13 weeks?

Mr Moufarrige : Last financial year there were approximately 51,000 people who overstayed the 13-week portability period.

Senator SIEWERT: What were the proportions for the various pensions and allowances?

Mr Moufarrige : I have numbers.

Senator SIEWERT: That is fine.

Mr Moufarrige : The numbers are: Austudy, 756 people; carer payment, 1,686; carer allowance, 3,684; disability support pension, 6,239; parenting payment partnered, 2,228; parenting payment single, 1,540; partner allowance, 160; widows allowance, 728; wife pension age, 181; wife pension disability support, 77; youth allowance, 5,491; seniors supplement, 2,761; FTB part A above the base rate, 11,007; and FTB part B, 14,113.

Senator SIEWERT: Thank you.

Senator BOYCE: What does the total come to?

Mr Moufarrige : 50,651.

CHAIR: Some of those would cross over—there could well be someone on a couple of those payments?

Mr Moufarrige : Yes.

CHAIR: They are individual payments, not necessarily individual citizens?

Mr Moufarrige : Payment overstays, yes.

Senator SIEWERT: Your savings are based on that nearly 51,000 overstays—you are expecting you will get the same?

Mr McBride : That is based on the system as it is now; they are the people who overstay the 13 weeks. The saving is based on an expectation that when it comes down there will still be people who overstay the now six-week provision.

Senator BOYCE: How many people have you based that on? How many people are you expecting to overstay?

Mr Moufarrige : There is an expectation that those people who are currently overstaying the 13-week portability period will also overstay the new six-week portability period. The average period of time a person currently overstays the 13-week portability period is 4½ weeks. In making our estimates we anticipated that there would be a similar overstay of 4½ weeks for those people on income support payments, because there is an assumption that they rely on that income support payment to survive and that they most probably would not stay much longer than that.

Senator BOYCE: So you are estimating that on average they overstay 4½ weeks, so they are away 10½ weeks.

Mr Moufarrige : Yes.

Senator SIEWERT: Could I just be clear: it is based on the 51,000 and a 4½ week overstay.

Mr Moufarrige : Yes. And there is a second component to it as well. There are people who currently stay between seven and 13 weeks, and there are approximately 120,000 of those people.

Senator BOYCE: That is the figure I was looking for.

Mr Moufarrige : So there are approximately 120,000-odd people who stay for periods of between six and 13 weeks. The presumption in terms of the estimates was that the majority of those people would alter their behaviour to the new six-week portability period, but approximately 10 per cent would overstay the six-week portability period by an average of three weeks. That was based on what was currently happening.

Senator SIEWERT: Did you say 10 per cent?

Mr Moufarrige : Yes.

Senator SIEWERT: Ten per cent of the 120,000.

Mr Moufarrige : That is correct: 12,216, to be exact.

Senator SIEWERT: So it is the 51,000 plus the 12,000.

Mr Moufarrige : That is correct.

Senator SIEWERT: Is that it—about how you worked it out?

Mr Moufarrige : Yes, but there is—

Senator SIEWERT: There is a third bit?

Mr Moufarrige : No, there is not a third bit, but obviously income support recipients are a little bit different to family assistance recipients. An income support recipient is more inclined to alter their behaviour to come back. For those people on family assistance, we estimated the overstay at the full seven-week period.

Senator SIEWERT: So they would overstay seven weeks.

Mr Moufarrige : Yes.

Senator SIEWERT: Is that a separate number of people, on top of the 12,000?

Mr Moufarrige : No, that is included in that number as well.

Senator SIEWERT: Okay, but they were included for a slightly longer period.

Mr Moufarrige : Yes, that is correct. For those family assistance customers overstaying the 13-week portability period at the moment, we assumed that they would overstay by the full seven weeks. For those family assistance customers who were staying presently between six and 13 weeks, we estimated 10 per cent of them would overstay by four weeks under the new rules.

Senator SIEWERT: Thank you. That is all I had on portability, because I did cover the severe disability quite extensively during estimates.

CHAIR: Following up from the Welfare Rights evidence, which you heard: they put forward a view that some of the savings could be calculated on people dropping off completely. Was that one element of the savings estimates? Mr Richardson made that comment, when he was estimating what the estimates could be based on. He was saying that the Welfare Rights Network had a view that it could be based on people who would then stay overseas and not reclaim payment at all. Was that one element of proposed savings?

Mr Moufarrige : No.

Senator BOYCE: I have a couple of questions on portability.

CHAIR: We might stick with portability and then go onto the other things.

Senator BOYCE: Can you just explain to me how, as a citizen intending to go overseas and in receipt of one of these payments, I know that I can only stay away six weeks? What is the current process for my knowing that?

Mr Moufarrige : There are a couple of processes. One, if you are in receipt of an income support payment, you are required to notify Centrelink if there is anything that may affect the amount that you may get paid. In fact, a person going overseas, their departure, is a notifiable event to Centrelink. They should notify Centrelink that they are going overseas. In notifying Centrelink that they are going overseas, Centrelink has a portability script which, as part of that script, they advise people of their portability entitlements. Also Centrelink has on their website, 'What if I am going overseas?' that provides information by payment type regarding the portability provisions.

Senator BOYCE: Do you have any statistics on the number of people who would claim not to have been aware of the current rules when returning to Australia?

Mr Moufarrige : No.

Senator BOYCE: Would Centrelink have anything on that, if those statistics exist?

Mr McBride : We could check with Centrelink.

Senator BOYCE: If you could, please. The other thing was that you would have heard the Welfare Rights people raise the issue of documentary, getting the right evidence to satisfy Centrelink. Difficulty—were people hospitalised when there was a requirement at this end that they be hospitalised; whether a disease is chronic or sudden, et cetera. How often are those criteria reviewed and by whom?

Mr Moufarrige : We were responsible for the policy guidelines in regard to the criteria. In fact, the criteria are listed in the Social Security Act, what constitutes an event for the purposes of a portability extension. They are quite defined within the act. We provide policy guidelines to Centrelink around how they use those things.

Senator BOYCE: But you would appreciate that point about providing evidence of someone being hospitalised or even that someone can be extraordinarily ill and need support without being hospitalised, particularly in a developing country—when were these last reviewed?

Mr Moufarrige : I could not tell you that.

CHAIR: Can you take that on notice.

Mr Moufarrige : Yes, I can.

Senator BOYCE: Could you take it on notice and also provide any sort of sense of how flexible and receptive those criteria are to changing circumstances, which of course is going to be quite different in different countries in different environments.

Mr Moufarrige : Yes, we can.

Senator BOYCE: Thank you; that is all.

Senator SMITH: Could you just explain to me how the portability arrangements in Australia might compare with other OECD countries?

Mr McBride : It is difficult in the sense that our income support payments function differently from most of the OECD countries in that they contribute to our social security system that they can then draw from if they need; whereas ours does not operate that way. New Zealand is one comparator, and my understanding is their portability provisions are less generous than ours.

Senator SMITH: I would be interested in knowing, of other OECD countries, which are the most comparable and how they compare to Australia's portability arrangements. Moving on, I have a query just in regards to paid parental leave: when the scheme was introduced, it was described by the minister as 'adding to the workplace entitlements for working parents'. If the paid parental leave scheme was not intended as a welfare measure, why is it included amongst the measures to which the portability requirements apply?

Mr Whitecross : I cannot actually answer your question, Senator, because I am not responsible for paid parental leave, so I think we would need to come back to you with advice on that.

CHAIR: Take that on notice, Mr Whitecross.

Senator SMITH: Just keeping with that point—and I accept that you might also take this on notice—I am just keen to understand what the effect of the budget's estimated savings in each year of the forward estimates are when you exclude paid parental leave from the tighter portability restrictions.

Mr Whitecross : So that was the savings in relation to the PPL element of the portability measure?

Senator SMITH: That is right, if you exclude the PPL from the tighter portability restrictions.

Mr Whitecross : Sure.

Senator SMITH: I am quite conscious of the submission from welfare rights, and we have had a discussion around the mechanism for achieving exemptions et cetera and the suggestion that some citizens, particularly those of a more significant age, might find it difficult meeting the evidential burden requirements. I am curious to know what consideration the department might have given to assisting overcoming that for those significantly older people, particularly refugees, who might be required to travel abroad in those exceptional circumstances at such late notice.

Mr McBride : If they are of aged pension age, they are allowed to be overseas 26 weeks and then, depending on how long they have lived in Australia, that affects their entitlement beyond that. So there is an acknowledgment. The driving force behind a lot of this is that, for people in receipt of income support payments who are of working age or who can work or should be in a position to make themselves available for work, it is more restrictive; but for those who are disabled to the extent that they have no prospect of working or are of aged pension age—once again, not a requirement to work—then the system is more generous. For those of aged pension age, the system will work to be more generous to them.

Senator SMITH: That is why someone who is disabled and being cared for, if their carer is required to be overseas then that is exempted—great. One last question: the entitlement is up to six weeks. Do the majority of people claim the six weeks or do some claim two, three? I am keen to know the disbursement, if you like, within that six-week period. You talked about people that overstay—I accept that—but within that six-week entitlement, where do most people sit in terms of what they apply for? I am keen to get an understanding of what the disbursement is in between that zero and six-week entitlement.

Mr Moufarrige : You do not actually have to apply; you can say that you are going overseas. You do not have to tell Centrelink how long you are going for. At present a person can stay, one, two, three, five, up to 13 weeks. As long as they are back in the country once the 13-week period, there is no stop to their income support payments. Centrelink would be able to get statistics, I suspect, on what you have just asked but there is no requirement to specify a period of time that you are going to be outside of the country.

Senator SMITH: So the requirement is just to notify that you are leaving the country.

Mr Moufarrige : Yes.

Senator SMITH: So if the requirement was to notify but also perhaps to provide an intention of time you expect to be away, surely that might then trigger a better understanding amongst citizens that, if they intend to be away longer than six weeks, then their entitlement might be affected.

Mr Moufarrige : Yes, and my understanding is Centrelink advises the portability period. I think there might have been a bit of confusion: a portability extension is not something that is granted while the person is still in Australia; to obtain a portability extension for a payment that has a defined portability period which is currently for those payments, which is 13 weeks, there has to be an event that occurs while the person is overseas that is of significance that prevents them from returning. If they are in Australia and they are advised that they have a very sick relative overseas, and they want to go overseas to visit that relative, they cannot advise Centrelink, 'I want X number of weeks on top of the portability period.' But if they do go and visit that relative and, unfortunately, the relative dies then they may be able to get a portability extension to attend the funeral and other matters.

Senator SMITH: Excellent. Thank you.

CHAIR: Mr Moufarrige, I have one technical question, and that is to do with when someone under the current process—the new change has not come in—goes to Centrelink and says they are going overseas. Do we trigger a review at 13 weeks to see whether those people have come back into the country or not? I am interested in that data on the 51,000. How many of those people were found to have been overstayers by means of their advising the department that they were going to be overstayers, and how many were found not to have been back in the country at the end of 13 weeks? It is just a technical point, because all the pension payments and the family payments do not require a stimulus to be paid. How do we know that someone is not back?

Mr Moufarrige : Centrelink does know when a person returns, because there is data matching with—

CHAIR: So they data-match on the 13 weeks.

Mr Moufarrige : Yes, with DIAC.

CHAIR: I know the departments do regular data matching, but I just wanted to find out whether it was stimulated by someone actually notifying the department they were going overseas and then, automatically in the system, there being a data match at the end of the allowable time.

Mr Moufarrige : Obviously for some family assistance payments, which may be quite small for some customers, it may not be in their mind to notify Centrelink that they are going overseas.

CHAIR: They have never even thought about it.

Mr Moufarrige : Yes, but they will get picked up through the matching system. Those people that are on income support payments, particularly age pensioners who may be affected by proportionalisation, often notify Centrelink to get an understanding about the payments and the proportionality that occurs at 26 weeks.

CHAIR: That is also the familiarity with the system.

Mr Moufarrige : Yes.

CHAIR: They are already in the system, so they understand it.

Mr Whitecross : Just in relation to that question, my understanding of how it works for family payments is that there is real-time updating between DIAC and the family assistance system on departures and arrivals, which means that we would be able to automatically adjust the payments to take account of departures and arrivals. There is also a weekly data match which is designed to pick up people who are not picked up in the real-time data.

CHAIR: Okay. That is the technical side. You heard in the evidence from the Welfare Rights Network that ethnic community councils stated that they were unaware of the changes that had been proposed in the budget. I am interested to know what interaction of communication there has been with core groups that would be identified as having particular interest in this area. We have had this discussion in a number of inquiries. One would think that anything to do with portability would automatically trigger a need to talk with groups that have links with overseas citizens and interaction in that way. So, once the budget proposal had gone through—we all understand that there is no consultation per se around budget decisions—and once the budget was made public, what efforts have been made to ensure that organisations such as FECCA, ethnic communities councils and refugee organisations are aware of this proposed change?

Mr Moufarrige : We have not approached those organisations as yet.

CHAIR: Okay.

Mr McBride : It is worth noting that this does not commence till 1 January next year, so there is still time for the understanding of how these provisions will change to filter through to the community.

CHAIR: But not time for people to be able to lobby to have change, because of the parliamentary process. Yes. It is not a yes/no; it is a yes.

Mr McBride : That is correct, yes. We are not consulting on the legislation.

CHAIR: The other point I made was to do with the natural disaster example that was identified by Welfare Rights Network. In a natural disaster emergency such as we have had, unfortunately, many times in the last few years, where Australian citizens have been caught up in natural disasters, it was my understanding that DFAT with Centrelink and other agencies had an emergency response. From the FaHCSIA point of view and from a portability point of view, is it something that is part of that emergency response to actually look at citizens who are on a welfare payment in Australia who are caught up in a natural disaster? Does someone talk with them about that? It may be something that I will have to put on notice and put to DFAT.

We get lots of very positive propaganda about how Australians look after Australians when they are caught up in things like tsunamis, earthquakes and so on, but I want to know whether one of the boxes that is ticked when you are talking with Australians in that situation is that there welfare situation is taken into account.

Mr McBride : That is certainly my understanding that that particular circumstance lends itself to the extension provisions.

CHAIR: I would hope so, but—

Mr McBride : It is always difficult to look at a cameo and work out what actually happened.

CHAIR: People slip through the cracks. Actually that was a very unfortunate comment considering the example that was used, and I do apologise to everybody. But, generally speaking, if you were caught up in a natural disaster there would be that immediacy of support? So, amidst all the other things that you are struggling to cope with, wondering about whether your pension is going to be cut off should not be the No. 1 thing that is on your mind?

Mr Moufarrige : Correct.

CHAIR: Do you want to take that on notice, Mr McBride and go back to your areas, rather than us going—

Mr McBride : We can check with DFAT—

CHAIR: That would be very useful.

Mr McBride : to the extent that they serve various regions and if it was a remote region of a country. Once again, it is hard to tell from the details that we were given about how it would work.

CHAIR: Sure, and it could be anywhere, but just in terms of allaying our concerns as a committee that there is a policy response to such a situation.

Mr McBride : Yes.

CHAIR: As there are no further questions around portability, we will move to family payments.

Senator BOYCE: I do not have any questions on family payments. The only other area I have questions was that issue of actual care versus formal arrangements.

Senator McKENZIE: I have a question around single mothers and the family tax benefit payment and its interaction with the maintenance income test and some of the comments made by that particular group around how it kicks in and decreases at a rate of 50c a dollar. I am just wondering whether the department has done any work looking at that particular mechanism.

Mr Whitecross : We are aware of the recommendation in the report of the ministerial task force on child support. We do look at the operations of the different parameters of the family payment system, including the maintenance income test from time to time to understand how they are operating. So, yes.

Senator McKENZIE: When was the last time that was looked at?

Mr Whitecross : I guess what I am saying is that it is part of our ongoing responsibility of managing the program to look at how the different parameters of the program are working, including the maintenance income test.

Senator McKENZIE: Thank you.

CHAIR: Is there still an advisory group to government on that? Post Parkinson there was a formal advisory group. Do you know whether that quite formal advisory group still has a role?

Mr Whitecross : We share with the Department of Human Services a national stakeholder engagement group which consists of a range of people, including representatives of various customer interests—for example, separated families—and others who are engaged in these cases, such as legal centres, the Ombudsman, DHS and ourselves. So we do have those, and they meet three times a year. We discuss a range of issues to do with the policy but also the administration of the child support and family assistance systems and how they impact on families who have experienced separation.

CHAIR: Several of the issues raised by Ms Edwards today, I know, have been raised at that group; they are ongoing issues.

Mr Whitecross : Yes, that is right. They are certainly issues that we do discuss with them. Some of the measures in the bill, particularly the maintenance action test measure is a measure which was raised in that forum, and we have developed a policy response based on issues that were raised in that forum. The consultative process leads to a change in the policy.

Senator SIEWERT: Can I just double-check on the background to the maintenance income test and the point that was around the difference between the cut-off. What was the original reason for that?

Mr Whitecross : The differences between the maintenance income test and the family income test?

Senator SIEWERT: Yes.

Mr Whitecross : I am not sure I could exactly tell you the original reasons but I think there are a couple of things to reflect on about the reason why we have a maintenance income test. The rationale for a maintenance income test is that it is the responsibility of the parents of the child to contribute to the costs of the child as the first port of call for meeting those costs; and that government assistance is then contributed where the means available to the parents is not considered to be sufficient to meet the costs of the child. Where parents are separated, we look at the income of the parent who is providing the care to the child but we still expect a parent who is living elsewhere to be contributing to the costs of the child. We do not do that by adding the parents' income into the family income test; we do that by looking at what child support they are transferring. It is appropriate to provide a different test for that rather than just adding their total income, which may not all be available for the child, into the family income test.

It is important to recognise that child support is qualitatively different from normal income, because child support is a post-tax amount, not a pre-tax amount. The child support amount transferred is wholly for the purpose of meeting the costs of the child, whereas the dollar of income earned by a parent, apart from paying tax, is intended to meet a range of costs in the household, not just the costs of the child in the household. It is also available to meet the costs of the parent, the partner and others, not just the cost of the child. The two are not exactly comparable pieces of money. There are reasons why the tests are different.

I think the issue that was raised in the ministerial council report related specifically to the issue of a low-income family who were intact may attract the maximum rate of family tax benefit because the family income was under the $45,000. But, after separation and where one of the parents is now contributing to the cost of the child through child support, the same family might then attract a lower level of family tax benefit. They were suggesting in the ministerial council that it might be more appropriate for the rules to be designed so that a family in that situation received the same level of assistance after separation as before separation—that was their issue.

CHAIR: Mr Whitecross, can we get anything from you? Is there an information sheet or something that spells out some of the information you have just given us? Whilst I know that that it is not absolutely linked to this piece of legislation, it has been raised in evidence. I think it would be useful for the committee to have something about a direct comparison from the point of view of the department or the government on those different income tests. Would that be useful?

Senator SIEWERT: Yes. I must admit that it does my head in.

Mr Whitecross : I will see what is available.

CHAIR: That would be really useful.

Mr Whitecross : Off the top of my head, I cannot pinpoint a product that would exactly meet those needs, but I will have a look and see what we have.

CHAIR: It has been raised in particular by two groups in terms of the evidence. Whilst this piece of legislation does not talk about the income test specifically, it is part of the environment of the concerns about the changes. I think that is fair. That would be very useful.

Mr Whitecross : No, I understand that.

Senator SIEWERT: Have we dealt with the WA stuff?

CHAIR: No, we have not.

Senator SIEWERT: Can we deal with that.

Mr McBride : We will try.

CHAIR: Senator Boyce, I have not forgotten your question. We will come back to you later.

Senator SIEWERT: Can you just take me through the specific stuff around the West Australian situation. I think I may then have a supplementary question.

Mr McBride : I will do my best. The person that understands this was not able to come today. WA has a fuel card scheme and another measure that helps seniors. In the pension reforms in 2009, there was a concern that those measures would form part of an income test. At the time, the government agreed that they should not form part of the income test until 30 June 2012. What the government did in the budget is extend that indefinitely so that those WA-specific measures to assist pensioners will not be counted for income test purposes.

Senator SIEWERT: I understand that the West Australian budget some further changes. I am not sure if it was to that, but for example they had their Hardship Utilities Grant Scheme and things like that. Have any of those ever been counted or looked at?

Mr McBride : Not to my knowledge.

Senator SIEWERT: It would not be counted, so it is not an issue?

Mr McBride : It is not specifically exempted as far as I am aware, so it may be counted. I would have to check.

Senator SIEWERT: If you could, that would be appreciated.

Mr McBride : Yes.

Senator SIEWERT: Thank you.

Senator BOYCE: I was just getting back to the provision to change payment arrangements where the formal care and the actual care are not in sync. I was surprised that the National Council of Single Mothers and their Children was of the view that this would be a much-used provision by mothers seeking to change or to get changes to arrangements acknowledged. What was the department's intention with this change? What sort of views do you anticipate would be taken of this change?

Senator McKENZIE: Sorry, I missed all of that.

Senator BOYCE: I am sorry; I was on speaker. I was just asking what the department's view was on the National Council of Single Mothers and their Children's suggestion that there be a change so that you did not have to wait 14 weeks for an actual care arrangement and a formal care arrangement to match.

Senator McKENZIE: Yes, thank you.

Mr Whitecross : There may have been some confusion in the earlier evidence between two different rules. I just want to go back over that. Back in 2010, I believe, we introduced an alignment-of-care measure which means that, in calculating child support and in calculating family tax benefit, we look at the actual care arrangements that are in place for children, not the court ordered arrangements. Obviously, the intention of the court orders or care agreements is that the care would be in accordance with those orders or agreements but we recognise that in some cases that is not the way it happens in practice and where in practice the care arrangement is different we think it appropriate that the resources which have been earmarked for the care of the child should be directed to the person who has the care of the child so that the child can benefit from those resources, whether it is the child support or the family tax benefit. So that rule already applies. So it is not necessary for a parent to go back to court and get a change to the court order in order to receive family tax benefit or to receive child support. However, there may be benefits in securing a revised agreement or a court order in order to recognise the way care is actually being provided. What can happen, and this is where the 14-week rule comes in, is that sometimes parents have a care order or a care agreement in place and then at some point the care arrangement changes from the arrangement that was specified in the order or the agreement, so one parent is now providing a higher level of care than originally specified and the other parent is providing a lower level of care than originally specified. In that situation the policy is that the child support and the family assistance would be recalculated based on the actual care arrangements, as I said before. However, sometimes the parent who is losing care in that situation where there has been a departure from an order or an agreement is not happy with the change to the care arrangement and believes that it should not have happened and the 14-week rule then comes in and we maintain the existing family assistance and child support arrangements for 14 weeks, which is meant to provide a grace period, if you like, for the parents to try to sort out what the care arrangement should be, whether it is going to revert to the previous order or agreement or whether it is going to continue as it is currently changed. So that was the policy that existed.

What this measure does is basically say a parent who has a reduced level of care cannot rely on the grace period to continue to receive family tax benefit and to continue to pay a lower level of child support during that 14 weeks where there are special circumstances whereby they have contributed to the change in care. So, for example, if a parent throws their child out as a result of an argument or if there is some sort of violence which leads to the child leaving the care of that parent, that parent cannot then say, 'Well, I'm not happy about the change in care so I should continue to receive family tax benefits and continue to pay a lower level of child support for the 14 weeks in those circumstances.' And in those circumstances we would immediately apply the actual care percentages rather than waiting the 14 weeks. That is what the change is as proposed. We would not actually expect this to have come up very often. We would think it to be a relatively rare event.

Senator BOYCE: That perhaps is what I would have been surprised about, so I am asking you.

Mr Whitecross : I think it is quite common for care arrangements to change over time from the arrangements as originally ordered or agreed and in a lot of those cases that change happens with the consent and agreement of the parties. It is not necessarily the case, wherever a change in care deviates from a previous order or agreement, that it is in dispute. But, obviously, sometimes it is and the 14-week rule would apply. In a very small number of cases we think that there might be special circumstances which mean that the 14-week rule should not be able to be relied on by the parent losing the care—and that is what this change does.

Senator BOYCE: Would it be possible for that provision to be used also in circumstances where grandparents are being required to take on the children because of violence or unusual behaviour on the part of their adult children?

Mr Whitecross : The policy does not really distinguish between parents and grandparents. Where a child goes into the care of a grandparent, once again they are providing the care, so the family tax benefit would flow through to them. Child support is a slightly different issue but, in the case of family tax benefit, they would be able to access the family tax benefit based on—

Senator BOYCE: Who makes the decision about the facts of the case? I can imagine that if it is being claimed there are special, violent, circumstances there would be a dispute about the facts.

Mr Whitecross : Indeed. As in a lot of these difficult cases, the Department of Human Services has to do their best to—

Senator BOYCE: Centrelink in the first instance?

Mr Whitecross : Yes. The Department of Human Services has to do their best to collect the available information and make a judgment.

Senator BOYCE: And then that would go to the AAT et cetera if need be?

Mr Whitecross : Yes, that is right.

Senator SIEWERT: I want to double check. I asked a question during estimates around the number of people who do or do not notify when they are going overseas. Do you have that number?

Mr Whitecross : We checked with DHS about where they were up to on that and they are still working on answering that question. As I said before, we did confirm that there is real-time data matching with Immigration—

Senator SIEWERT: Yes, I remember you saying that.

Mr Whitecross : so we have a pretty good idea about what is going on. I am not aware of anyone having been sanctioned for failing to notify, but there is an obligation to notify and we are checking how many of the parents actually do that.

Senator SIEWERT: I will be very interested to know.

Senator McKENZIE: I want to clarify something. I am referring to the portability stuff. With the 10 per cent of people who would still overstay, do you have a way of distilling where that is a conscious choice or where it is an omission?

Mr Moufarrige : The short answer is no. We expect that it is a combination of people who have things to do for specific periods of time and those people who can afford to stay a little bit longer overseas on other means after their income support runs out.

CHAIR: Mr McBride, I am looking at you because you are in the middle. There were a number of questions put on notice. We are due to report on Monday under the current scheme, so we will need answers back tomorrow. If there is any reason that we cannot get them, if there is a hold-up or whatever, can you please let us know? A couple of those were quite specific questions about things like the Paid Parental Leave scheme and how that operates. In terms of schedule 2, it specifically says paid parental leave 2010. I am interested in paid parental leave that is still being paid through that system as opposed to being paid through the employer. Just how will that operate? It has been lumped in with the others. That is something that we are keen to know, and there are a number of other questions. If there is a problem with getting it back to us, could you give the secretariat a buzz tomorrow?

Mr McBride : There is a slight concern with having to go to DFAT and whether we will be able to get it back from them.

Senator SIEWERT: I can follow up with them and get a statement as well through the ministerial process. I am mostly concerned about the questions that you can handle within your own policy area.

Mr McBride : Given the time frame, the WA payment that you were interested in—

Senator SIEWERT: It was called the HUGS program, but they have changed it in the budget. It may be too early to know, and I honestly cannot remember what they have called it now, but they have sort of stopped some and then changed some others. It is about the hardship payments.

Mr McBride : Did they form part of the income test beforehand?

Senator SIEWERT: That is what I am asking you. If they did not, I suspect that the changes will not have any impact.

Mr McBride : That would be my guess, but we will do our best. My concern is the DFAT payment. We can get detail on the WA payment, but on the other questions we will certainly do our best to get back to you within the timeframe.

Senator SIEWERT: Sure.

Mr Whitecross : There were two things that came up in evidence earlier that I just wanted to clarify while I was here. One thing was that Ms Edwards was giving evidence in relation to the 24 per cent rule in the child support formula, which I know is not subject to the bill. She was talking about that in the context of the reforms. I wanted to emphasise that, in the context of the reforms, when the 24 per cent rule was brought in—and it did replace the capacity of payers previously to use non-agency payments and other things to reduce the amount of child support they transferred—a change that came in at the same time was that majority carers whose ex-partners had regular care could then get 100 per cent of the FTB instead of only a part-rate of the FTB. So, while the 24 per cent rule may for some of those families have changed the amount of child support transferred, they also are likely to have benefited from increased amounts of family tax benefit part A.

The other thing—and this came up in the evidence of the representatives of the National Welfare Rights Network—related to families who are failing the youth allowance means test. The evidence appeared to suggest that young people would not be able to access youth allowance where the family income exceeded $47,000.

CHAIR: Yes, I picked up on that before.

Mr Whitecross : But the actual cut-out for the parental income test in youth allowance is $80,000 for one child and $115,000 for two children, and the $115,000 is actually higher than the cut-out for family tax benefit for a family with two children.

Senator BOYCE: Is that for parental income or for family income?

Mr Whitecross : Parental income is what they call it in the youth allowance system, but it is basically in both cases the income of the parents.

Senator BOYCE: Yes.

Mr Whitecross : I just wanted to clarify that because I did not want to leave—

CHAIR: There was a statement about the combination of the 70 and the 45 in that context. One of the witnesses was making that comment, and I did not understand it either. But you are saying, Mr Whitecross, that, for a person claiming individually for youth allowance, the calculation of their parental income is the figures that you have given; it is not 48 and it is not 70.

Mr Whitecross : That is right. There is a threshold of about 46, after which the parental income starts to reduce their payments. But the cut-out is the $80,000 for one child and the $115,000 for two children, for an 18-year-old.

Senator SIEWERT: Under the scenario you just articulated, where the 24 per cent kicks in, you can get increased FTB. Do you know if that is happening? Or is it automatic?

Mr Whitecross : The FTB calculation would be made automatically.

Senator SIEWERT: All right. This might be too difficult a question to answer in a short time: since that rule has been introduced, have you kept any data on how much FTB has gone up in response to that?

Mr Whitecross : I think that was not there at one stage. It is something that we can monitor from time to time, but I do not have any figures to hand on that. There would be a number of people who would have benefited from higher rates of family tax benefit there. Not all the families who would have benefited from that rule would have received a high rate of FTB, because in some cases the minority carer may have waived their claim for FTB so that the majority carer could claim the full amount, which you cannot do any more. Instead you have this 35 per cent rule, so you have to get over 35 per cent to be able to get a share of FTB.

CHAIR: Thank you very much. We will now adjourn this session, and at this stage we are due to report on this legislation on Monday.

Committee adjourned at 11:55