Explanatory Memorandum
(Circulated by authority of the Minister for Community Services, the Hon Larry Anthony MP)Schedule 5 - Administrative arrangements
Summary of proposed changes
This measure will make changes in child support, taxation and social security legislation to reflect the fact that the child support function has moved from the Treasury portfolio to that of Family and Community Services. In particular, the Child Support Registrar will no longer be the Commissioner of Taxation. However, close links between the child support and taxation functions will be maintained so that the child support assessment, collection and enforcement activities continue undisrupted.
Explanation of the changes
The thrust of these amendments is to preserve as much as possible the current operation of the relevant child support, taxation and social security legislation at the same time as formally separating the child support function from the taxation function.
The existing functions of the Child Support Registrar that are of an administrative nature (ie, the general administration of the Assessment Act and the Registration and Collection Act, and providing annual reports) will become functions of the Secretary to the Department of Family and Community Services.
Otherwise, the role of Registrar will continue for all other functions under the two Acts. However, the Registrar will no longer be the Commissioner of Taxation as currently provided, but will be the person holding or acting in the position known as the General Manager of the Child Support Agency. If such a position should not exist at some time in the future, the Registrar will be a person in the public service, at Senior Executive Service level, who holds or is acting in a position specified in writing by the Secretary.
These changes are made to the Assessment Act by items 13 and 14 , and to the Registration and Collection Act by items 38, 39 and 41 .
The office of Deputy Registrar is no longer required. The provision in the Registration and Collection Act providing for Deputy Registrars is repealed by item 40 .
The rest of the amendments made by this Schedule are consequential on the main changes described above. The most important of these are set out below.
The secrecy provisions in the Assessment Act are amended by items 16 to 29 , in the Registration and Collection Act by items 44 to 56 , and in the Income Tax Assessment Act 1936 by item 68 .
Now that the Registrar will no longer be the Commissioner, provisions are being inserted into the Assessment Act by item 30 , and into the Registration and Collection Act by item 57 , that achieve the following:
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- The Registrar will be able to ask clients to provide their tax file numbers. Also, there will be provision (in the Assessment Act only) for the effect of failure to provide such a number. These provisions are modelled on sections 75 and 76 of the Social Security (Administration) Act 1999 and section 8 of the A New Tax System (Family Assistance) (Administration) Act 1999 .
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- The Registrar will be able to require the Commissioner to provide information, in the possession of the Commissioner, about people (including tax file numbers). Information may be required in this way only for the purposes specified in the new provisions. For the Assessment Act, the purposes relate to the administrative assessment of child support and child support terminating events under the Act. For the Registration and Collection Act, the purposes relate to the recovery of debts due to the Commonwealth under the Act. Furthermore, for both Acts, information may be required so as to identify a person for the purposes specified. These provisions are modelled on section 204A of the Social Security (Administration) Act 1999 .
Section 202 of the Income Tax Assessment Act 1936 is amended by item 69 to record that the administration of the Assessment Act and the Registration and Collection Act are objects of the tax file number system.
Section 8WD of the Taxation Administration Act 1953 is to be repealed by item 73 - it is no longer appropriate that the Assessment Act and the Registration and Collection Act be regarded as taxation laws. However, the effect of that repeal is that a person carrying out child support duties will no longer be exempt from the offences contained in sections 8WA and 8WB. To overcome this, those two sections are amended by items 71 and 72 to refer to the new provision within section 202 of the Income Tax Assessment Act 1936 (inserted by item 69 ) relating to the objects of the tax file number system.
These secrecy and tax file number amendments are to ensure that the flow of information between the Child Support Agency and the Australian Taxation Office that is integral to the child support function continues to operate effectively.
Section 72 of the Registration and Collection Act currently allows a child support debt of a person to be recovered, wholly or partly, from a tax refund owing to the person. Because the Registrar and the Commissioner will no longer be one and the same, this provision needs to be more elaborate, although the effect will be essentially the same. The Registrar will be able to require the Commissioner to pay an amount not exceeding the amount of the child support debt to the Registrar to be offset against the child support debt (see item 58 ).
The new section 72 will apply if the Commissioner would otherwise be required, under section 8AAZLF of the Taxation Administration Act 1953 , to refund an amount to a person who also owes a child support debt. Note that an amount will be refundable under that specified section only if all tax debts of the person are already dealt with under the running balance account system in the taxation legislation.
If the Registrar requires the Commissioner to pay an amount in these circumstances, the Commissioner must pay the required amount as soon as practicable, and the Registrar must apply the amount against the child support debt. Should the child support debt have been discharged, wholly or partly, in between the Registrar requiring the amount to be paid by the Commissioner and receiving the payment, then the amount, or any residual amount, is to be paid by the Registrar to the person.
The new section also operates to reduce, by force of law, the amount that the Commissioner is required to refund to the person, under section 8AAZLF, by the amount paid to the Registrar.
This measure commences on Royal Assent.