Explanatory Memorandum
(Circulated by authority of the Minister for Families, Community Services and Indigenous Affairs, the Hon Mal Brough MP)Schedule 3 - 2007 one-off payments to carers
Summary
In broad terms, this Schedule introduces new one-off payments for certain carers, which will be paid as a lump sum payment generally before 30 June 2007. The bonuses are to be paid to people who will have received targeted payments in an instalment period that includes 8 May 2007. It will also be paid to those people who have lodged a claim, or have contacted Centrelink about and indicated an intention to apply, for a targeted payment on or shortly before 8 May 2007 and are subsequently granted that payment in respect of that claim or contact.
Background
This Schedule provides for a one-off payment to eligible carers that will be paid automatically and without the need for a claim.
Specifically, and subject to qualification, a payment of $1,000 will be paid to persons who are paid an instalment of:
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- carer payment in respect of a period that includes 8 May 2007;
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- wife pension in respect of a period that includes 8 May 2007 where that person is also paid an instalment of carer allowance in respect of a period that includes that same date;
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- carer service pension under the Veterans' Entitlements Act in respect of a period that includes 8 May 2007; and
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- partner service pension under the Veterans' Entitlements Act in respect of a period that includes 8 May 2007 where that person is also paid an instalment of carer allowance in respect of a period that includes that same date.
Further, and subject to qualification, carers will be entitled to $600 in respect of each care receiver in relation to whom the person receives an instalment of carer allowance for a period that includes 8 May 2007. Where the care of the care receiver is shared, the $600 will also be shared. Where qualification for carer allowance depends on the person providing care for two or more eligible care receivers, the payment will also be $600.
Explanation of the changes
Amendments of the Social Security Act
Item 1 inserts new Parts 2.5H, 2.5J, 2.5K and 2.5L into Chapter 2 of the Social Security Act. It is noted that people who qualify for one-off payments under this item may also qualify for another one-off payment under item 2 of this Schedule.
New Part 2.5H applies to the 2007 one-off payment to people eligible for carer payment.
New section 261 provides that a person is qualified for a one-off payment if the person has been paid an instalment of carer payment in respect of a period that includes 8 May 2007 and the person was paid that instalment because of a claim the person made on or before 8 May 2007.
New section 262 provides that the amount of the 2007 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
New Part 2.5J applies to the 2007 one-off payment to certain carers eligible for wife pension.
New section 263 provides that a person is qualified for a one-off payment if the person has been paid an instalment of wife pension and an instalment of carer allowance, both in respect of a period that includes 8 May 2007, where three conditions are satisfied in relation to one or more instalments of carer allowance that have been paid to the person. These conditions are that: the instalment was in respect of a period that includes 8 May 2007; the reason that the instalment covered 8 May 2007 was not only because of clause 16 or 17 of Schedule 2 to the Social Security Administration Act; and the person was paid that instalment because of a claim the person made on or before 8 May 2007. The second requirement is not to be taken to limit the third requirement in any way.
New section 264 provides that the amount of the 2007 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
New Part 2.5K applies to the 2007 one-off payment to certain carers eligible for partner service pension.
New section 265 provides that a person is qualified for a one-off payment if the person has been paid an instalment of partner service pension under Part 3 of the Veterans' Entitlements Act and an instalment of carer allowance, both in respect of a period that includes 8 May 2007 where three conditions are satisfied in relation to one or more instalments of carer allowance that have been paid to the person. These conditions are that: the instalment was in respect of a period that includes 8 May 2007; the reason that the instalment covered 8 May 2007 was not only because of clause 16 or 17 of Schedule 2 to the Social Security Administration Act; and the person was paid that instalment because of a claim the person made on or before 8 May 2007. The second requirement is not to be taken to limit the third requirement in any way.
New section 266 provides that the amount of the 2007 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
New Part 2.5L applies to the 2007 one-off payment to people eligible for carer service pension.
The only people receiving carer service pension are those whose entitlement to carer service pension was preserved under savings and transitional provisions under subclause 8(2) or (4) of Schedule 5 to the Veterans' Entitlements Act). This is because the Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 made changes that removed all carer provisions from the Veterans' Entitlements Act, allowing the recipients to transfer to carer payments that were available at that time under the Social Security Act. Because, at the time of these changes, it was recognised that a number of people would be adversely affected by those changes, they could elect to remain on the carer service pension rather than transferring to carer payment.
New section 267 provides that a person is qualified for a one-off payment if the person has been paid an instalment of carer service pension as a result of the operation of subclause 8(2) or (4) of Schedule 5 to the Veterans' Entitlements Act and the person was paid the instalment because of a claim the person made on or before 8 May 2007.
New section 268 provides that the amount of the 2007 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
Item 2 inserts a new Part 2.19D into Chapter 2 of the Social Security Act.
Part 2.19D applies to the 2007 one-off payment to people eligible for carer allowance. It is noted that people who qualify for a one-off payment under this item may also qualify for another one-off payment under item 1 of this Schedule.
New section 992WA sets out the criteria to be satisfied in order for a person to qualify for a 2007 one-off payment to carers (carer allowance related). In effect, subsection 992WA(1) sets out three requirements that must be met in relation to one or more instalments of carer allowance that have been paid to the person. The first requirement is that the instalment of carer allowance was paid to the person in respect of a period that includes 8 May 2007. The second requirement is that the operation of clause 16 or 17 of Schedule 2 to the Social Security Administration Act (which deal with 'backdating') must not be the reason that the instalment covered 8 May 2007. The third requirement is that the person was paid the instalment because of a claim the person made on or before 8 May 2007. The second requirement is not to be taken to limit the third requirement in any way.
The effect of subsection 992WA(2) is that each instalment that meets all three requirements of subsection 992WA(1) is a 'qualifying instalment'.
The broad operation of the scheme is that a qualified person will receive payment in respect of each 'eligible care receiver' in relation to the person. The concept of who is an 'eligible care receiver' is dealt with in new section 992WB. Subsection 992WB(1) essentially provides for the general rule that, where providing care to a person gives rise to a qualifying instalment of carer allowance, that person is an 'eligible care receiver' in relation to the qualified person. However, there are situations where a person's qualification for an instalment of carer allowance arises on account of the care the person provides for two disabled children (subsection 953(2) of the Social Security Act). Accordingly, subsection 992WB(2) qualifies the general rule by providing that, where subsection 953(2) applies in relation to the qualifying instalment, the two disabled children are treated as a single 'eligible care receiver'.
New section 992WC is concerned with working out the amount of the one-off payment. Subsection 992WC(1) provides that the amount is worked out by adding together the amounts applicable for each eligible care receiver. Subsection 992WC(2) provides that the applicable amount for an eligible receiver is $600 unless subsection 992WC(3) applies. Subsection 992WC(3) is concerned with situations where two people are qualified for carer allowance because they share the care of a care receiver (or care receivers). In those circumstances, subsection 981(1) of the Social Security Act provides for the Secretary to make a written determination specifying the share of carer allowance that each of the two people is to receive. The effect of subsection 992WC(3) is that, where the qualifying instalment was paid on the basis of a determination as to a particular share of carer allowance, the amount applicable for an eligible care receiver in relation to a qualified person is that same share of $600.
Item 3 is concerned with determining whether a person has made a claim, or should be taken to have made a claim, on or before 8 May 2007. In determining whether this has occurred, the effect of section 12 and section 15 of the Social Security Administration Act is to be disregarded.
In relation to section 12, subitem 3(a) provides that a person should not be paid a one-off payment where he or she has claimed a payment (for example, age pension), subsequently become qualified for another payment (for example, carer payment) and after 8 May 2007 is transferred to that latter payment by virtue of section 12 of the Social Security Administration Act.
In relation to section 15, subitem 3(b) clarifies that the effect of a decision of the Secretary made after 8 May 2007 for the purposes of section 15 of the Social Security Administration Act (dealing with certain incorrect or inappropriate claims) is to be disregarded. This is intended to restrict access to the one-off payments to cases where the relevant decision for the purposes of section 15 is made before or on 8 May 2007.
Items 4 to 6 deal with overpayment arising in respect of the five 2007 one-off payments. These amendments ensure that section 1223ABA of the Social Security Act (which applies in relation to the payments made under the Family Assistance Legislation Amendment (More Help for Families - One-off Payments) Act 2004 and under the Social Security Legislation Amendment (One-off Payment for Carers) Act 2005 ) will also apply to the 2007 one-off payments. Section 1223ABA, in very broad terms, provides that a one-off payment (or part of a one-off payment) will be a overpayment where it is established that the recipient knowingly made a false or misleading statement (or provided false information) and, if the true circumstances had been known, the determination in relation to the relevant instalment (which gave rise to the qualification for the one-off payment) would not have been made.
Item 7 inserts new section 12AD into the Social Security Administration Act. It provides that a claim is not required in order to be paid any of the five 2007 one-off payments
Item 8 inserts a reference to the five new one-off payments into the existing definition of 'lump sum benefit' contained in subsection 47(1) of the Social Security Administration Act.
Item 9 inserts new section 47E. In broad terms, it provides that the Secretary must pay the payments provided for by this Schedule on the date that the Secretary determines is the earliest reasonably practicable date on which to do so. The manner of payment is that manner which the Secretary considers is appropriate.
Amendments of the Income Tax Assessment Act 1936
The Separate Net Income (SNI) of the dependants of a taxpayer is used to determine the taxpayer's eligibility to certain dependant offsets. SNI is income and other specified amounts earned, derived or received, less certain expenses incurred in earning that income. A payment of carer allowance is not included as part of SNI. As it is not intended that any of the 2007 one-off payments to carers form part of SNI, items 10 and 11 make the necessary amendments to the Income Tax Assessment Act 1936 .
Item 12 amends the Income Tax Assessment Act 1936 to provide that payment to carers made under the administrative scheme determined under Schedule 4 of this Bill is not included as part of SNI.
Amendments of the Income Tax Assessment Act 1997
The 2007 one-off payments to carers, and a payment made under the scheme determined under Schedule 4 to this Bill, will be exempt from income tax. Amendments are made to section 52-10 of the Income Tax Assessment Act 1997 to achieve this effect ( items 14 to 16 ).
A consequential amendment is also made to the table in section 11-15 to add in references to the 2007 one-off payments to carers and a payment made under the scheme determined under Schedule 4 to this Bill ( item 13 ).
Amendments of the Social Security Act
Item 17 inserts a new paragraph 8(8)(jae) into the Social Security Act. This ensures that any payment made under the administrative scheme determined under Schedule 4 to this Bill, do not count as income for the purposes of the social security law.
Amendments of the Veterans' Entitlements Act
Item 18 inserts a new paragraph 5H(8)(zzd) in the Veterans' Entitlements Act. This ensures that any payment made under the administrative scheme determined under Schedule 4 to this Bill, do not count as income for the purposes of the Veterans' Entitlements Act.