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Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015

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2013-2014-2015

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

FAMILY ASSISTANCE LEGISLATION AMENDMENT

(JOBS FOR FAMILIES CHILD CARE PACKAGE) BILL 2015

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 (Circulated by the authority of the

Minister for Education and Training, Senator the Hon Simon Birmingham)



FAMILY ASSISTANCE LEGISLATION AMENDMENT

(JOBS FOR FAMILIES CHILD CARE PACKAGE) BILL 2015

 

 

OUTLINE

 

The purpose of the Bill is to introduce key aspects of the Jobs for Families Child Care Package announced in the 2015-16 Budget.  The Bill will, through the introduction of a new Child Care Subsidy (CCS), and enhancements to the operating requirements of approved child care providers, support improved affordability, accessibility and flexibility to child care for families and support families’ engagement with the workforce. 

 

Recognising the needs of vulnerable and disadvantaged families, and the benefits that a quality child care and early learning can have on children’s early development, the Bill also introduces the Additional Child Care Subsidy (ACCS).  ACCS provides improved and targeted support to those families who require it most, such as: families with children at risk of serious abuse or neglect; families experiencing temporary financial hardship; grandparent carers; parents seeking to return to work; and low-income households.

 

The Bill comprises:

  • Schedule 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 through:

  • a new simpler Child Care Subsidy (CCS) to improve affordability.  The CCS will replace the current poorly targeted child care subsidies with the objective of supporting parents who want to work or work more. 
  • provisions for Additional Child Care Subsidy elements of the Child Care Safety Net which will improve accessibility for disadvantaged or vulnerable families.

Amendments to the A New Tax System (Family Assistance) (Administration) Act 1999 will improve the availability of flexible care arrangements to suit the needs of families by ensuring greater access and choice in care options from a broader range of service types (including for example provisions that could enable the capacity to pay subsidies in future for care provided by nannies following the Nanny Pilot Programme).

  • Schedule 2—Contingent and consequential amendments

 

This Schedule contains amendments contingent on the passage of other Bills currently before Parliament.

 

This Schedule also 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.

 

  • Schedule 3—other amendments

 

This Schedule contains amendments that commence on Royal Assent or from 1 July 2016.  Among other matters, the Schedule enables the Secretary to reassess service approvals at any time from 1 July 2016.  Schedule 3 also closes enrolment advances and allows for their recovery.

 

  • Schedule 4—Application, saving and transitional amendments

 

This Schedule contains provisions relating to: the cessation date of eligibility to CCB and CCR and the commencement of CCS and ACCS; 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 services to transition to the CCS system from 3 July 2017.

 

FINANCIAL IMPACT STATEMENT

 

The measures in this Bill form part of the Government’s $40 billion Jobs for Families Child Care Package , which includes $3.2 billion of additional expenditure over the forward estimates. 

 

Jobs for Families legislative measure

Funding

Years

Child Care Subsidy

$21 billion

Over two years from 2017-18

Additional Child Care Subsidy

$178.3 million

Over two years from 2017-18

 

 

REGULATION IMPACT STATEMENT

 

The Regulation Impact Statement for the Jobs for Families Child Care Package appears at the end of this explanatory memorandum ( Attachment A ).

 

 



Table of Contents

 

Statement of Compatibility with Human Rights . 5

 

NOTES ON CLAUSES .. 10

 

Schedule 1 - Main Amendments . 11

 

Schedule 2—Contingent and consequential amendments . 62

 

Schedule 3—Other amendments . 63

 

Schedule 4—Application, saving and transitional provisions . 64

 

Attachment A—Regulation Impact Statement 66

 

 

 



Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

FAMILY ASSISTANCE LEGISLATION AMENDMENT

(JOBS FOR FAMILIES CHILD CARE PACKAGE) BILL 2015

 

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the Bill

 

The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015 will introduce key aspects of the Jobs for Families Package that was announced in the 2015-16 Budget.  The objective of the Jobs for Families Package is to help parents who want to work, or who want to work more, by providing a simpler, more affordable, more flexible and more accessible child care system.  To support the implementation of the Jobs for Families Package, the Australian Government has committed $3.2 billion.

 

The Bill proposes to introduce the Child Care Subsidy (CCS), a single, means-tested subsidy that will be better targeted to provide more assistance to low to middle-income families and to replace current child care payments.  The CCS will be supplemented by the Additional Child Care Subsidy (ACCS), in recognition that extra support is needed for some disadvantaged and vulnerable children and the significant benefits that quality child care and early learning can have on children’s early development.  The ACCS will provide support for children at risk of abuse or neglect, families experiencing temporary financial hardship, grandparent carers on income support, parents seeking to return to work, low-income families and low income families utilising child care in high cost services.

 

Human rights implications

 

The right to work

 

Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) requires that State Parties recognise the right to work, including through developing policies and techniques to achieve steady economic, social and cultural development and full and productive employment. This right goes to the core objective of the Bill, to help parents who want to work, or who want to work more.  It is estimated that the Package will encourage more than 230,000 families to increase their involvement in paid employment.

 

The rights of parents and children

 

Article 3 of the Convention of the Rights of the Child (CRC) recognises that in all actions concerning children, the best interests of the child shall be a primary consideration.  The Bill provides for a generous CCS that provides a higher rate of assistance to low and middle income families compared to the current child care assistance, and the supplementary ACCS that will increase the access of children to quality child care.  Early childhood education and care plays a vital role in the development of Australian children and their preparation for school.  Access to early childhood education and care is also one of the most effective early intervention strategies to break the cycle of poverty and intergenerational welfare dependence.  Additionally, ACCS payments will ensure vulnerable children have access to the benefits of child care. 

 

Article 18 of the CRC mandates that State Parties shall use their best efforts to ensure recognition of the principle that both parents have common responsibilities for the upbringing and development of the child, and to provide appropriate assistance, in particular to ensure that children of working parents have the right to benefit from child care services and facilities for which they are eligible. This Bill will support the introduction of a simpler, more affordable, more flexible and more accessible child care system.

 

Article 19 of the CRC requires that appropriate measures are taken to protect the child from all forms of physical or mental violence, injury or abuse, neglect or negligent treatment, maltreatment or exploitation. The Article also requires that measures be taken to identify, report, refer, investigate, treat and follow-up any instances of abuse. Under the Bill, if an individual or child care provider is eligible for the ACCS at risk payment, the provider must make the Secretary and / or State and Territory authorities aware of the child’s circumstances. This information sharing is considered a justifiable limitation on the right to privacy.

 

The right to an adequate standard of living

 

Article 27 of the CRC requires that State Parties recognise the right of every child to a standard of living adequate for the child’s physical, mental, spiritual, moral and social development. The Bill advances this right through the CCS and the ACCS which will address barriers to accessing childcare to ensure all children, regardless of parental income, have access to an adequate amount of child care to aid socialisation and development.

 

The right to social security

 

Article 9 of the ICESCR recognises the right of everyone to social security. Under the Bill all families who meet basic eligibility criteria will be eligible for some fee assistance through the CCS, so long as they also meet an activity test.  Additionally, children at risk, families experiencing temporary financial hardship and families transitioning from income support to work will be eligible for further support through ACCS payments that will ensure all children have access to an adequate child care, regardless of circumstances.

 

The right to be not discriminated against

 

Article 26 of the International Covenant on Civil and Political Rights (ICCPR) and Article 2 of the CRC requires that persons are equal before the law and that the law shall provide equal and effective protection against discrimination on any grounds. The Bill sets out a range of eligibility criteria for the CCS and the ACCS in relation to age of the child, residency requirements, immunisation status of children and for grandparents.

Using a child’s age as a criterion to determine eligibility is considered legitimate differential treatment as those children 13 and under are particularly vulnerable and require close care and supervision on a constant basis, compared with older children.

Using residency requirements as a criterion to determine eligibility is a proportionate limitation on the right to be free from discrimination, because it is important for the Secretary to reconcile payments against residents’ tax assessment information, noting also that residency requirements are not applied to children at risk of abuse or neglect, in relation to whom a provider can be eligible for ACCS regardless of the child’s residency status.  

Using immunisation status as a criterion to determine eligibility is legitimate differential treatment as Article 14 of the CRC allows for limitations on one’s freedom to beliefs when it is necessary to protect public health and safety in a facility responsible for the care or protection of children. The immunisation eligibility criterion is a necessary limitation to encourage parents to better protect children from diseases. The exemption on medical grounds constitutes a safeguard to protect the individual safety of the child. 

The ACCS (grandparents) payment is considered legitimate differential treatment as it is a special measure intended to further support a group who are already vulnerable and in receipt of income support.  This payment is also an early intervention strategy to break the cycle of poverty and intergenerational welfare dependence by providing disadvantaged families with adequate access to child care. 

The right to be presumed innocent

Article 14 of the ICCPR requires that in the determination of any criminal charge, everyone shall be entitled to a set of minimum guarantees and that anyone convicted will have the right to review and compensation if the conviction is not upheld. Under the Bill there are both civil penalties and criminal penalties.  These penalties are part of a multi-pronged approach to further deter fraud and ensure the integrity of payments, and also protect children from harm, in line with obligations under Article 19 of the CRC.  The Bill adheres to these minimum guarantees and allows for anyone charged with a penalty to seek a review.

Article 14 of the ICCPR also requires that anyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to the law. Under the Bill there are strict liability offences that apply to factual scenarios.  These offences are proportionate to the value of maintaining adequate safeguards in relation to public money.  It is considered reasonable in these cases to impose strict liability offences to ensure the integrity of payments.  It is intended that prosecution action will only be taken in relation to strict liability offences in serious or repeated cases.

The right to privacy

 

Article 17 of the ICCPR and Article 16 of the CRC requires that no one shall be subject to arbitrary or unlawful interference with privacy. Under the Bill, as part of administering the CCS and the ACCS, information will be collected and stored on a new IT system that will be built to meet legislative requirements. This information collection and storage will be subject to the Privacy Act 1988 as well as the existing and stringent secrecy provisions in the family assistance law.

Under the Bill, if a child care provider is suspected of breaching obligations that are subject to monitoring powers, the Secretary may deem it necessary to visit the facility without advising the operator beforehand of its intention to do so. However, the provider retains their right to refuse to allow entry (such a refusal can only be overcome through the issue of a warrant). This limitation of the providers’ and clients’ right to privacy is in response to the Australian National Audit Office finding that the Australian Government is losing an estimated $700 million a year on misleading or fraudulent child care practices. Given the scale of the breaches this interference is not considered arbitrary, but a reasonable and proportionate response to protect Government expenditure and uphold the integrity of payments.

Conclusion

 

The Bill is compatible with human rights. The current system is complex and difficult for families to navigate. It is inflexible and does not effectively meet families’ workforce participation needs. The Bill supports and advances articles under the ICCPR, the CRC and the ICESCR which will ultimately enable parents who wish to work, or to work more, by providing a simpler, more affordable, more flexible and more accessible child care system. To the extent that the proposed Bill may limit some rights, those limitations are reasonable, necessary and proportionate.

 

Senator the Hon Simon Birmingham, Minister for Education and Training

 



 

 

FAMILY ASSISTANCE LEGISLATION AMENDMENT

(JOBS FOR FAMILIES CHILD CARE PACKAGE) BILL 2015

 

 

NOTES ON CLAUSES

 

Abbreviations used in this explanatory memorandum

 

  • ACCS means Additional Child Care Subsidy;

 

  • ATI means adjusted taxable income;

 

  • 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 ;

 

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

 

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

 

 

Clause 1 sets out how the new Act proposed by this Bill is to be cited - that is, as the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Act 2015.

 

Clause 2 provides a table setting out the commencement dates of the various sections in, and Schedules to, the new Act.

 

Clause 3 , for the avoidance of doubt, provides that each Act that is specified in a Schedule is amended or repealed as set out in that Schedule.

 



 

Schedule 1 - Main Amendments

 

 

Summary

 

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

 

  • Cease Child Care Benefit (CCB) and Child Care Rebate (CCR);

 

  • Introduce, from 1 July 2017, a new Child Care Subsidy (CCS), which is subject to both an income and activity test;

 

  • Introduce various rates of Additional Child Care Subsidy (ACCS) that are available to individuals (and in one case, child care providers) in various circumstances;

 

  • 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 Schedule, 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 child care services to be approved to receive child care payments on behalf of families and places obligations on approved child care services.

 

Prior to these reforms, further fee assistance for child care is provided through the Jobs, Education and Training Child Care Fee Assistance (JETCCFA).  This payment is available to eligible parents undertaking an approved activity.  The payment is not made under the Family Assistance Act.  However, the amount of JETCCFA received by families is taken into account when calculating entitlement for the CCR and has been part of the existing complex child care payment system.    

 

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 to:

 

·          children at risk of serious abuse or neglect;

·          families experiencing temporary financial hardship;

·          families transitioning to work from income support;

·          grandparent carers on income support; and

·          low income families in certain circumstances.

 

This Schedule 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 Education and Care Services National Law Act 2010 (Vic) (the National Law).

 

The amendments made by this Schedule commence on 1 July 2017 (noting that other Schedules of this Bill 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, 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 also 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 family tax benefit.  This outcome is now achieved more directly through a new provision ( section 85EE inserted by item 40 ), which specifies a maximum period of eligibility for CCS or ACCS during an individual’s absence from Australia. 

 

The definition of FTB child for child care purposes otherwise retains its link to FTB child as defined for family tax benefit 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 low income threshold is the household income point below which families are able to receive 85 per cent of 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 clause 3 of Schedule 2 to the Family Assistance Act.

 

Items 11, 28 and 29 amend the definition of “paid work”.  This definition applies for family tax benefit 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 add references to CCS provisions that refer to paid work to exclude those CCS provisions from the scope of the definition.

 

Item 14 substitutes paragraph (b) of 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.

 

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 in that section.  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 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 paragraph 6(1)(a) with a reference to individual eligibility to CCS in paragraph (a), and provider eligibility to ACCS (at risk) in paragraph (aa). 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 (at risk).

 

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.

 

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 these guidelines are 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 to 18 and substitutes a new section 10.

 

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 subsection 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.

 

New subsections 10(2) and (3) allow a child to be taken to attend a session of care in certain circumstances.  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 subsection 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 % in the CCB rate calculator.  This definition is no longer required as there is no schooling % 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 change 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 and rate of CCS and ACCS.  This structural change places eligibility and rate provisions for CCS and ACCS closer together.

 

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 CCS and ACCS.

 

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.

 

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);

(iii)          the child meets immunisation requirements;

(iv)          the individual, or the individual’s partner, meet the residency requirements.

 

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).

 

Division 5 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 concepts defined for family tax benefit 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 family tax benefit.

 

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

 

Eligibility for ACCS (at risk)

 

Subsection 85CA(1) provides when an individual is eligible for ACCS (at risk) for a session of care provided to a child by an approved child care service.  ACCS (at risk) 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 (at risk) for the session of care.

 

The additional criteria for ACCS (at risk) is that an “at risk certificate” given by the approved provider of the service (under section 85CB), or an “at risk 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.

 

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

 

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

 

An approved provider can only be eligible for ACCS (at risk) 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 (at risk) 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;

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

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

·                    an “at risk certificate” or an “at risk determination” 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.

 

Subject to amendments to immunisation requirements in the Social Services Legislation Amendment (No Jab, No Pay) Bill 2015 coming into effect, the requirement for the child to meet immunisation requirements at the time the session of care is provided will also apply for provider eligibility (see contingent amendments in Schedule 2 of this Bill).

 

Subsection 85CA(3) 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 an ability for the law to favourably adapt to changes in the understanding and definition of “abuse” and “neglect” going forward.  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 “at risk” assistance is targeted to those children who are genuinely at risk of serious abuse or neglect.  The rules will be made after having regard to “risk” criteria used by each State/Territory.

 

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

 

An approved provider can give an “at risk certificate” if it considers that a child is at risk of serious abuse or neglect.

 

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.  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, “at risk 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 an “at risk certificate” if it would result in more than a specified percentage of the children cared for by the service in relation to which the certificate is given being at risk on any one day.  The specified percentage is 50%.  A different percentage can be specified in the Secretary’s rules, and in exceptional 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 Legislative Instruments Act 2003 .

 

Subsection (5) enables the Minister’s rules to specify other circumstances when a certificate given by a provider is not effective.

 

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 to 167).  

 

If an approved provider considers a child to be at risk 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 an “at risk 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 limit the extent to which providers can backdate information on which ACCS entitlement is based without intervention by the Secretary.

 

Section 85CD allows the Secretary to vary or cancel an “at risk certificate” given by an approved provider if the Secretary is not satisfied the child to whom the certificate relates is at risk during a week for which the certificate has effect.  Notice of the variation or cancellation must be given to the approved provider and 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 an “at risk 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 an “at risk 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/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.  Subsection (4), states that if the Secretary does not make a decision, the application is taken to be refused—however this provision is included to deal with the unlikely event that the Secretary does not meet the obligation in subsection (3) to clarify the status of the application in that event.  The Secretary will make every effort to deal with applications in a timely manner.  A deemed refusal is reviewable (at internal review and the AAT), but the Secretary is not required to give notice of the deemed refusal.

 

If the Secretary decides to determine the child to be at risk, 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.  Each week for which the certificate has effect must include at least one day when the child is at risk.  While a determination is in effect under this section, if the Secretary is satisfied the child will continue to be at risk 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 Legislative Instruments 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 an “at risk determination” if the Secretary is no longer satisfied the child to whom the determination relates is at risk 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 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 their involvement due to the cost because an exceptional circumstance or event has compromised a family’s short-term financial situation and thus their capacity to pay child care fees.

 

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 (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 favourably adapt to unforeseen circumstances.  

 

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 determination on 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.  ACCS (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 Legislative Instruments 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 make decision within 28 days of receiving the application, the Secretary is deemed to have refused the application.  This provision is not intended to be relied on—it has been included simply to ensure that the status of an application in this unusual circumstance 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.

 

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 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 the individual 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 (have 65% or greater care); and the individual or their partner is receiving an income support payment as listed in paragraph 85CJ(1)(d).

 

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.

 

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 died on 1 August 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.

 

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).  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.

 

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 this subsection (2) is not a legislative instrument.  It is merely declaratory and included to assist readers. It is not an exemption from the Legislative Instruments 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 (at risk)
  2. ACCS (grandparent)
  3. ACCS (temporary financial hardship)
  4. ACCS (transition to work).

 

Note that ACCS (transition to work) does not need to be listed in this section, as only the ACCS types that can take priority over another need to be listed for it to operate to produce the hierarchy listed 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 (at risk) and also eligible for ACCS (temporary financial hardship) for a session of care, she is taken to be eligible for ACCS (at risk) 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 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 ensure that care arrangements considered to be designed to exploit the child care payment system (such as where a family day carer places their own child in the care of another family day carer) cannot entitle an individual to payments of CCS.

 

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 existing family tax benefit provisions.

 

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.

 

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 (at risk), 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 (at risk) for a week for a child to be worked out under Part 4 of Schedule 2.

 

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 subsection (1)(b).

 

Section 85GB enables the Minister to make the Minister’s rules and enables the Secretary to make the Secretary’s rules.

 

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 (but payments can be made weekly).

 

A CCS fortnight is defined in subsection 3(1) of the Family Assistance Act as the 2 week period beginning on Monday 3 July 2017 and each subsequent two week period.  CCS fortnights are fixed for everyone, with the first CCS fortnight being 3 July 2017 to 16 July 2017, the second CCS fortnight being 17 July 2017 to 30 July 2017, the third CCS fortnight being 31 July 2017 to 13 August 2017 and so on.

 

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

 

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.  The amounts are intended to be calculated in the order in which the services submit attendance reports under section 204B of the Family Assistance Administration Act.

 

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;
  2. If the annual cap applies, work out whether the annual cap has been reached;
  3. Identify all sessions of care provided by the service in the week to the child for which the individual is eligible for CCS;
  4. Work out the hourly rate of CCS for each session of care;
  5. Work out the activity-tested amount of CCS for the sessions of care;
  6. If the annual cap applies, adjust the activity-tested amount for the annual cap.

 

Step 1:

 

The activity test result is the maximum number of hours of CCS the individual and their partner can be paid in a CCS fortnight for a child.  This will usually depend on the amount of activity the individual and their partner 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 are not applied.  If the activity test result is more than zero, the calculation proceeds to step 2.

 

Step 2:

 

The annual cap 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 2017-18 income year the annual cap threshold is $185,710.  The threshold 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.

 

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.

 

The ability to prescribe service types in the Minister’s rules provides flexibility to add more service types in the future without amendments to the Family Assistance Act.  

 

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 (at risk), ACCS (temporary financial hardship) or ACCS (grandparent) for an individual

 

Clause 5 sets out the method for calculating an individual’s amount of ACCS (at risk), 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(3);

·          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 Legislative Instruments 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(3);

·          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 (at risk) for an approved provider

 

Clause 8 sets out the method statement for calculating an approved provider’s amount of ACCS (at risk) (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;
  2. Identify all sessions of care provided by the service in the week to the child for which the provider is eligible for ACCS (at risk);
  3. Work out the hourly rate of ACCS for each session of care;
  4. 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.  There are some exceptions explained below under “Part 5 - Activity Test”.

 

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 (e.g. 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 (at risk) 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

At risk child result (clause 15)

 

At risk child result (clause 15)

5

Exceptional circumstances result

Exceptional circumstances result

Exceptional circumstances result

 

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

 

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).

 

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 the additional assistance to low income families that do not meet the CCS activity test to be provided under the Child Care Safety Net.

 

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.

 

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 at risk period for the child ended.

 

An extended at risk period is a continuous period of at least 6 months during which an at risk certificate or at risk determination was in effect in relation to the child.

 

If the at risk child 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.

 

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 Legislative Instruments 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 (at risk) or ACCS (temporary financial hardship) in the other week of the fortnight.  In this case, the higher activity test result that applies for ACCS (at risk) or ACCS (temporary financial hardship) is maintained for the whole CCS fortnight. 

 

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).

 

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 Legislative Instruments Act 2003 .

 

Amendments to Schedule 3—Adjusted taxable income

 

Items 42 and 43 amend Schedule 3 of the Family Assistance Act to replace references to CCB with references to CCS.

 

Amendments to Schedule 4—Indexation and adjustment of amounts

 

Items 44 and 45 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.

 

Item 46 repeals subclauses in Schedule 4 relating to CCB and CCR. 

 

 

 

 

 



Amendments to the Family Assistance Administration Act

 

Definitions

 

Items 47 to 80 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 81 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 which is being repealed .   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 82 to 87 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 family tax benefit).  Provisions relating to the payment of CCS and ACCS will be contained in new Part 3A , as inserted by item 88 .

 

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” 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 ).

 

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.

 

Another requirement that must be met for a claim to be effective is the tax file number requirements as set out in section 67BH .  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,
  • 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 (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 Legislative Instruments 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 is self-explanatory.

 

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. 

 

Note that subsection (4) of this provision 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 can never become entitled again.

 

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);
  • an individual has been determined to be not entitled to be paid CCS or ACCS for at least 52 consecutive weeks; or
  • the child ceased to meet the immunisation requirements in section 6 of the Family Assistance Act more than 63 days ago.

 

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 subparagraph 85BA(1) since the beginning of 2017.  He makes a claim for CCS on Tuesday 1 August 2017.  Tuesday 4 July 2017 is the 28th day before the day the claim was made.  A CCS fortnight is defined in s3(1) of the Family Assistance Act to mean the period of 2 weeks beginning on Monday 3 July 2017 or each subsequent period of two weeks.  The determination that Rhys is eligible for CCS by fee reduction will take effect on Monday 17 July 2017, 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.

 

Time for making determination

 

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

 

The Secretary must make an entitlement determination if all of the following conditions are satisfied, and must not make an entitlement determination unless all of the following conditions satisfied:

(a)   a determination that an individual is eligible for CCS by fee reduction for the child is in effect in relation to any day of the week;

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

(c)   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

(d)   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.

 

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 (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 (at risk) or ACCS (temporary financial hardship)

 

Subsection (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 (at risk) 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 (at risk) or ACCS (temporary financial hardship) in relation to those sessions of care; no provider has been determined to be eligible for ACCS (at risk) for those sessions of care; and the individual meets the information requirements for the week. 

 

Entitlement to be paid ACCS (grandparent)

 

Subsection (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 (at risk) 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 (grandparents).

 

Entitlement to be paid ACCS (transition to work)

 

Subsection (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 for that payment; has not been determined to be entitled to be paid ACCS (at risk) 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 (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 (8) provides that if the Secretary is not satisfied that an individual meets the conditions of entitlement for either CCS, ACCS (at risk), 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.

 

Immunisation grace period

 

Subsection (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: Emma ceased to meet immunisation requirements on 1 July 2018 and starts to meet immunisation requirements again on 1 October 2018.  Her father Jeff meets all other eligibility and entitlement requirements for CCS during this period.  Sunday 2 September 2018 would be the 63rd day after the day Emma ceased to meet the immunisation requirements.  Subsection (9) means that the days following 1 July 2018 up to Sunday 2 September 2018 would fall within the immunisation grace period.  In accordance with paragraphs (2)(a) and (9)(b) of section 67CD, Emma’s father Jeff would be determined to be entitled to CCS for sessions of care up to the end of the week beginning on Monday 27 August 2018.  Jeff would be determined not to be entitled to CCS from the week beginning 3 September 2018.

 

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.

 

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 (at risk).

 

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 of risk of serious abuse or neglect, or a determination of 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 (at risk) 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 (at risk) and the amount of the entitlement.  Conversely, if the Secretary cannot be satisfied that the provider is eligible, the Secretary must determine that the provider is not eligible.

 

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



Division 4 - Estimates

 

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

 

Section 67DB provides that where the actual adjusted taxable income 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)   The policy intent of this provision is to give individuals an option to avoid the possibility of incurring large debts in case they underestimate their income, because, in most cases, the applicable percentage will be increased on review after an individual’s combined ATI is known—although it is still possible that small debts could accrue after an individual meets the reconciliation conditions, where an underestimate of income has led to an election for an applicable percentage higher than the percentage that should have applied (however this scenario will only occur in relation to households with incomes above $250,000).

 

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.

 

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 Legislative Instruments Act 2003 .

 

Section 67EC replaces existing section 56B, with consequential modifications to reflect new machinery provisions supporting the administration of CCS and ACCS.

 

This provision 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.

 

The provision gives the Secretary the discretion to defer paying the above amount until after the individual meets the CCS reconciliation conditions in section 105C.

 

Section 67ED, which provides for the payment of CCS or ACCS in substitution for an individual who has died, replaces existing section 56A with consequential modifications.

 

Section 67EE deals with payments to providers who are eligible in their own right to ACCS (at risk), 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.

 

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 about future income years.  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.  The Secretary may prescribe in Secretary’s rules, the kinds of information that may be requested.

 

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 89 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 90 and 91 are minor technical amendments.

 

Items 92 and 93 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 ( section 71B );

 

  • An overpayment of CCS or ACCS is received ( section 71C );

 

  • A provider fails to pass on an amount of CCS 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 (at risk) 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 94 and 95 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 96 to 104, 106, 107 and 109 are technical amendments consequential upon the introduction of CCS and ACCS.

 

Item 105 deals with the time for recovering certain CCS debts.  This provision 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.

 

Item 108 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 110 inserts new Division 1A, which deals with preliminary matters in relation to child care decisions.

 

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). 

 

Sections 103B and 103C define the “first deadline” and “second deadline” for the purposes of provisions relating to meeting the CCS reconciliation conditions.

 

Item 111 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).

 

Item 112 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.

 

Items 113 to 118 are minor technical amendments.

 

Item 119 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.

 

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 120, 121 and 122 make consequential amendments to section 107 to maintain the existing law with respect to family tax benefit.

 

Item 123 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 cannot be earlier than the beginning of the income year before the income year during which the review decision was made.

 

Items 124 to 129 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 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 130 and 131 (as well as the minor amendments made by items 132 and 133 ) 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 .

 

Items 134, 135 and 136 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”.

 

Item 137 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 138 to 144 are related technical amendments.

 

Item 145 provides a longer period in which internal reviews can be requested where the decision on review is made because a person’s adjusted taxable income 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.  This provision adapts existing subsection 109D(4) to CCS.

 

Items 146 and 147 make minor technical amendments.

 

Item 148 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 149 ) 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 150 to 153 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 154 to 160 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 (such as in relation to “form and manner” requirements for notices or forms).  Item 160 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).

 

Items 162 and 163 make 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).   Item 161 makes a related technical amendment.

 

Items 164 to 169 make minor technical amendments.

 

Item 170 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 171 inserts new section 125C 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 172 amends section 128 of the Family Assistance Administration Act, which deals with “AAT second review”.  The amendments adding subsection (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 173 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 174 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 175 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 176 and 177 (and item 178 , 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 .

 

Item 179 repeals a Division that is no longer requires because of the cessation of CCR.

 

Part 6 - Provisions relating to information

 

Item 180 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 181 to 184 make technical amendments to an information gathering power consequential upon the cessation of CCB and the introduction of CCS and ACCS.

 

Item 185 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 186 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 187 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 188 adds to the list of legislative schemes that protected information can be disclosed for the purposes of, by adding the Education and Care Services 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 189 is a minor technical amendment.

 

Item 190 is a consequential amendment required because of the cessation of CCB.

 

Items 191 and 192 amend section 172 to ensure that references to claims for family assistance in this provision include certain applications in relation to ACCS.

 

Item 193 makes a consequential amendment to paragraph 173(1)(d), required because of the cessation of CCB and CCR.

 

Items 194, 195, 196 and 197 are minor technical amendments.

 

Item 198 consolidates offences that had applied to CCB and CCR into a single provision that operates in respect of payments obtained by fraud.

 

Items 199, 200 and 201 are minor consequential amendments required because of the cessation of CCB and because of the introduction of CCS and ACCS.

 

Part 8—Approvals

 

Item 202 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 they 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.

 

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).

 

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 unforseen 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 Legislative Instruments 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 backdated in their effect to a date in the past, individuals and providers may not be able to meet certain requirements (such as the requirement to provide reports under section 204B) within the time specified in legislation.  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.

 

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.

 

Division 1—Requirements in relation to enrolments

 

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.

 

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 section 200A, 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” 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(4) 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 to give 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.  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.  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 who is of a class in respect of whom no one is eligible (under 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 6 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 Bill, 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 Bill 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 (by the Secretary) 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 206 and 207 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 208 replaces the provision that deals with notice requirements by referring to “providers”, which is a new concept introduced by this Bill.

 

Items 209, 210 and 211 are minor and technical amendments consequential upon the introduction of CCS and ACCS.

 

Item 212 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 213, 214 and 215 further clarify the effect of the family assistance law in respect of partnerships and unincorporated bodies.

 

Items 216 and 217 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. 

 

Item 218 is a minor technical amendment.

 



Schedule 2—Contingent and consequential amendments

 

Part 1—Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Act 2015

 

Item 1 is contingent on the passage of the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 because it amends a provision that deals with the immunisation requirements (section 6 of the Family Assistance Act) that is also being proposed to be amended by that Bill.

 

Part 2—Other consequential amendments

 

Items 2 and 3 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 Schedule 1 of this Bill.

 

Items 4 and 5 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 Schedule 1 of this Bill.

 

Item 6 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 Schedule 1 to this Bill.

 

Items 7, 8 and 9 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 Schedule 1 of this Bill.  The overall approach to the tax treatment of child care payments, however, remains unchanged.



 

Schedule 3—Other amendments

 

Part 1—Amendments commencing day after Royal Assent

 

Items 1 and 2 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.

 

Part 2—Amendments commencing 1 July 2016

 

Items 3 and 4 allow the Minister to prescribe circumstances in which applications (made after 1 July 2016) for approval of a child care service are taken to not have been 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.  

 

Items 5 and 6 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 7 and 8 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 Schedule 1 of this Bill, to review the approval of approved providers.

 

Items 9 to 18 make amendments related to the cessation of enrolment advances.  These amendments ensure that no new enrolment advances received from 1 July 2016 are payable and will ensure that where, from 1 July 2016, enrolment advances were paid in relation to enrolments that occurred more than four years beforehand, the Secretary is able to begin recovery of those advances. 

 



Schedule 4—Application, saving and transitional provisions

 

Part 1—Introduction

 

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

 

Part 2—Child care subsidy and Additional Child Care Subsidy

 

Item 2 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 3 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 4 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 2 , about how a person can only be eligible for CCS and ACCS after commencement day.

 

Item 5 ensures that the first indexation day for certain new CCS amounts that are indexed is 1 July 2018, to ensure that indexation will not occur until a year following commencement day.

 

Item 6 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.

 

Part 3—Child care benefit and Child Care Rebate

 

Item 7 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 8 saves the operation of legislation and instruments as they were prior to amendments made by Schedule 1 of the Bill 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. 

 

Part 4—Providers of child care services

 

Item 9 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.

 

Item 10 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 Schedule 1 of this Bill; and old decisions are still reviewable.

 

Part 5—Miscellaneous

 

Item 11 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 12 gives the Minister a broad power to make rules, particularly dealing with transitional issues.  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.  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.

 

 

 

 

 



Attachment A—Regulation Impact Statement

 

Jobs for Families Child Care Package November 2015