House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, the Hon Mal Brough MP)

Schedule 1 - Amendments relating to Child Care Management System

Summary

Amendments are made to the family assistance law for the purposes of a new online-based Child Care Management System (CCMS). The CCMS will standardise and simplify CCB administration, reduce the time required for making payments to approved child care services, reduce the administrative burden on services, and improve the management of child care information relevant to the determination of individuals' CCB entitlement.

Amendments are also made to the absence provisions, the provisions relating to the way hours of care are calculated for CCB purposes, and the part-time % rate component of CCB.

Further amendments will introduce three new sanctions for failure of an approved child care service to comply with conditions of continued approval.

(a) Child Care Management System

Background

In the 2006-07 Budget, the Government announced measures to ensure that the Government's investment in child care is supported by more responsive management, quality and compliance systems to provide better service to parents using child care. The measures include establishment of a national, online-based system, the CCMS.

The CCMS will bring all approved child care services online to standardise and simplify CCB administration, including the lodgement of child care information by services, and to reduce the time it takes to make payments to services.

Generally, the main features of the CCMS are as follows:

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child care services will be required - as a condition of their continued approval for family assistance purposes - to provide relevant child care information using a purpose-built electronic facility (an electronic interface);

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the provision of information by the Secretary to approved child care services will occur via the electronic interface;

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approved child care services will be required to provide via the electronic interface notification of an enrolment for each child in the care of the service;

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in respect of each enrolment, approved child care services will be required to provide, via the electronic interface, weekly child care usage information relevant to the calculation of ongoing CCB fee reductions for eligible individuals and the determination of eligibility for, and entitlement to be paid, CCB for care provided to all enrolled children; information relating to a particular week will be required to be provided within the following two weeks;

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approved child care services will no longer need to calculate CCB fee reductions for care provided by the service; instead, services will be required to apply fee reductions calculated by the Secretary on the basis of the weekly child care usage information provided by the services;

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if services provide the required child care information relating to a week as soon as the week ends, the payment to services of the fee reduction amounts by which the services will be required to reduce eligible individuals' fees for the week will be delivered in the following week;

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the Secretary will have the power to recalculate fee reductions where the service corrects or withdraws an attendance record, or where an error occurred in the original calculation;

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the new system of payment of fee reduction amounts to services weekly in arrears will replace the current system of payment to services of quarterly advance amounts that the services acquit in the subsequent calendar quarter;

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a refundable payment, an enrolment advance, will be made available to services in connection with any new eligible enrolment for the duration of the enrolment;

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services will be required to interact with the department using software that is registered, by the Secretary, for CCMS purposes.

The amendments commence, generally, on 1 July 2007. The amendments made by this Schedule will apply to an approved child care service from the day specified by the Secretary as the commencing day for that service, not later than 1 July 2009.

The application of the amendments to individual approved child care services will be preceded by a pilot of the CCMS system, of a few months duration, starting after 1 July 2007, with services participating on a voluntary basis.

Following the pilot, approved child care services will be moved progressively from the current system to the new CCMS system during the transition period, ending on 30 June 2009.

During the transition period, there will be a dual CCB system in operation, with the legislation as currently in force and the legislation as amended applying at the same time to individual services, depending on whether or not they have made the transition to CCMS.

Explanation of the changes

New CCMS process - overview of main changes

The amendments made in this Schedule mainly affect the process relevant to the calculation of fee reductions for care provided by an approved child care service to a child of an individual in respect of whom a determination of conditional eligibility for CCB by fee reduction is in force. Amendments also affect the way in which the payments of fee reduction amounts are made to services.

Currently, the process is as follows.

If an approved child care service provides care to a child of an individual in respect of whom a determination of conditional eligibility is in force, the service is required (under section 219A of the Family Assistance Administration Act) to calculate fee reductions for sessions of care provided to the child, as provided by the family assistance law, using various determinations (the CCB %, schooling %, limit of hours, special grandparent rate, etc) made by the Secretary under the family assistance law, about which the service is notified by the Secretary. The service is then obligated to reduce the fees to be paid for the sessions by the amount as calculated. The service can charge a conditionally eligible individual only reduced fees.

After each calendar quarter the service is obligated to provide a report that includes information relating to hours of care provided to the child, and all other children in the service's care, and the amount of fee reductions the service provided in respect of each child.

The service is paid an advance amount at the beginning of each quarter for the anticipated fee reductions the service will provide. Once the report for the quarter is provided by the service, the advance amounts paid for that quarter are compared with the total fee reduction amounts provided in that quarter and the difference is either offset from, or added to, as the case may be, the advance amount for the next quarter.

After the end of an income year during which a service provided fee reductions to an individual, the Secretary makes a determination of entitlement for the individual for that income year. The amount of the entitlement is compared with the total fee reductions provided and reported by the service. Any difference is paid to the individual as a top-up, or constitutes a debt, as the case may be.

As the result of the amendments in this Schedule, the process will be as follows.

As a condition of continued approval for the purposes of the family assistance law, all approved child care services will be required to notify the Secretary online of any new enrolment of a child for care by the service (amendments made by item 82 refer).

Following the notification of an enrolment by a service, and the electronic confirmation of the enrolment by the Secretary, the service will be required, as a condition of its continued approval, to report to the Secretary, online, weekly information about the enrolled child, including information relevant to the calculation of fee reductions (for individuals who are conditionally eligible for CCB by fee reductions) and CCB entitlement for care provided to the child (whether entitlement for CCB by fee reductions or CCB for a past period) (amendments made by item 87 refer).

Once the Secretary has received the service's report relating to a particular week and a particular child, the Secretary will calculate, for conditionally eligible individuals, the rate and amount of fee reductions for sessions of care provided to the child in that week and pay the amount to the service (amendments made by items 18 and 90 refer). Services will not calculate fee reductions, as is currently the case.

As this process will generally deliver the payment of fee reduction amounts to services in the week following the submission of the relevant weekly information by services, the current quarterly advance payments designed to cover services' fee reduction expenses during the calendar quarter will no longer be provided (amendments made by item 90 refer).

Once the Secretary has calculated the amount of fee reductions for a particular week for an individual and an enrolled child, the service will be required, as a condition of its continued approval, to pass the fee reduction amount as calculated for the week on to the individual (amendments made by item 83 refer). This obligation will apply regardless of whether the service has, or has not, already charged the individual for care provided to the child for that week.

Certain enrolments will attract a refundable payment, an enrolment advance, payable to the service on the confirmation of the enrolment by the Secretary. Once the enrolment for which an enrolment advance was paid has ended, the enrolment advance amount paid in respect of that enrolment will be recovered via an offset from any amount subsequently due to be paid to the service (amendments made by item 90 refer).

Part 1 - Amendments

Amendments to the Family Assistance Act

Items 1 and 2 are explained under the heading Absences .

Items 3 and 4 are explained under the heading Counting hours towards an individual's limit of hours .

Item 5 is explained under the heading Part - time %.

Amendments to the Family Assistance Administration Act

Items 6 and 7 insert new definitions of 'enrolled' and 'ceases' into subsection 3(1). The definition of 'enrolled' refers the reader to the meaning given by new subsections 219A(2) and 219AA(2) inserted by item 82 , and the definition of 'ceases' refers to the meaning given by new section 219AD inserted by item 82 . The meaning of 'enrolled' and 'ceases' is explained in the context of the amendments made by those items.

Items 8, 9 and 10 make amendments to section 4. Section 4 provides for approval of the use of electronic equipment, etc, to do things for the purposes of the family assistance law. Amendments made in this Schedule include a number of provisions authorising the Secretary to approve the form, manner or way of providing information, for example, a notice of enrolment to be given by a service (new subsection 219AB(1) inserted by item 82 ) or a weekly report to be given by the service (new subsection 219N(3) inserted by item 87 ).

The amendments made by items 8 and 9 to section 4 ensure that the approval may extend to requiring the doing of things, for example, the provision of enrolments or reports by a service, by the use of software registered by the Secretary.

Item 10 inserts new subsections 4(2) and 4(3). New subsection 4(2) provides for application by a person to have software registered by the Secretary for the purposes of a particular application, claim or other thing or for a class of those. New subsection 4(3) provides the Secretary with a discretionary power to register software for use under CCMS.

The amendments made to section 4, together with other amendments providing for approval by the Secretary of the form, manner or way of doing things, operate to the effect that, if the Secretary approves the use of registered software for a particular purpose, for example, for notification of enrolments under new section 219AB or for the provision of weekly reports under new section 219N, failure to comply with this requirement will constitute a breach of the service's condition of continued approval for the purposes of the family assistance law. As a result, a sanction under section 200 may be imposed on the service, including suspension or cancellation of the service's approval.

Item 11 substitutes a new section 48. This section provides an overview of the main elements of the fee reduction process, which applies when an individual claims CCB by fee reduction. New section 48 reflects the changes to the process resulting form the CCMS amendments. It refers to the following elements of the process:

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an approved child care service is required to notify the Secretary about an enrolment of a child in child care by an individual (new subsection 48(1) refers);

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following the notification of enrolment, and its confirmation by the Secretary, the service is required to provide to the Secretary weekly reports about care provided to the child (new subsection 48(2) refers);

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following the provision of a weekly report, if the report relates to the child of an individual who is determined to be conditionally eligible for CCB by fee reductions, the Secretary calculates an amount of fee reductions for care provided to the child in the week, by which the service has to reduce its fees (new subsection 48(3) refers);

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the amount of fee reductions is the amount calculated in the same way, using the same legislative provisions, that the individual's entitlement for CCB for care provided to the child would be calculated if a determination of entitlement for CCB by fee reduction (which will be made after the end of the income year) were in force while the fee reduction calculation is made (new subsection 48(4) refers);

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following the calculation of fee reductions, the service is required to pass on to the individual the amount calculated (new subsection 48(5) refers);

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when the determination of entitlement is made in respect of an income year and the entitlement amount is greater that the total amount of fee reductions received by the individual during the income year, the individual's entitlement includes the amount of the difference (new subsection 48(6) refers);

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when the determination of entitlement is made in respect of an income year and the entitlement amount is less than the total amount of fee reductions received by the individual during the income year, the individual's entitlement is the amount of fee reductions minus the difference (new subsection 48(7) refers);

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fee reduction payments are made to the service by the Secretary under new Division 2 of Part 8A inserted by item 90 to enable the service to pass on to the individual the amount of fee reductions as calculated (new subsection 48(8) refers).

Items 12 to 17 make amendments to various notice provisions. Currently, services are required by section 219A to calculate fee reductions for conditionally eligible individuals, applying the relevant CCB %, a weekly limit of hours, schooling % and the special grandparent rate (where applicable), as determined by the Secretary. To do so, the services need to be notified of those determinations, subsequent variations of those determinations and any review decisions relating to those determinations. Therefore, the relevant provisions relating to those determinations require that notice be given to the approved child care service providing care to the child.

As the CCMS amendments provide for the calculation of fee reductions by the Secretary, not by a service, it is no longer necessary to give to an approved child care service notice of these decisions relating to an individual whose child is in the care of the service.

Therefore, item 12 removes this requirement from subsection 50L(8), relating to the cessation of the determination of conditional eligibility; item 14 - from subsection 50M(1), relating to determination of conditional eligibility under section 50F, of a weekly limit of hours under section 50H, of CCB % under section 50J, and schooling % under section 50K; and item 16 - from subsection 50V(1) relating to a determination of special grandparent rate under section 50T.

Under the CCMS, an approved child care service will be required to notify the Secretary of the enrolment of each child in the care of the service. An enrolment record will be subsequently created for the enrolled child on the electronic interface, containing some of the information relevant to the calculation of fee reductions for care provided by the service to the child. The information will include a limit of eligible hours of care, CCB % and the special grandparent rate where relevant. This information will be accessible electronically to the service providing care to the child.

The following amendments authorise the Secretary to make notices of these decisions, and some other decisions specified in the amending provisions, available using an electronic interface, or otherwise, to an approved child care service or services providing care to the child. Item 13 inserts for this purpose new subsection 50L(10), relating to the cessation of the determination of conditional eligibility; item 15 inserts new subsection 50M(4), relating to determination of conditional eligibility under section 50F, of a weekly limit of hours under section 50H, of CCB % under section 50J, and schooling % under section 50K; and item 17 inserts new subsection 50V(4), relating to determination of special grandparent rate under section 50T.

Item 18 inserts new Subdivision CB after Subdivision CA of Division 4 of Part 3, dealing with the calculation by the Secretary of the rate and amount of fee reductions. A corresponding amendment to section 219A made by item 90 removes the current requirement for approved child care services to calculate fee reductions.

New Subdivision CB - Calculating the rate and amount of fee reductions

New sections 50Z and 50ZA are relevant to the calculation of fee reductions in a situation when an individual is conditionally eligible for CCB by fee reductions.

New section 50Z - Calculating the rate and amount of fee reductions - individual conditionally eligible

New subsection 50Z(1) imposes on the Secretary a requirement to calculate the rate, and the amount of fee reductions, applicable to an individual and a child in respect of care provided to the child by an approved child care service in a week.

The Secretary is required to make such a calculation only for sessions of care provided while a determination of conditional eligibility is in force in respect of the individual and the child (new paragraph 50Z(1)(a) refers).

The requirement to calculate fee reductions for sessions of care provided to a child in a particular week is contingent upon the service giving a report under section 219N (as modified by amendments made by item 87 ) in respect of an enrolled child and a week (new paragraph 50Z(1)(b) refers). The meaning of 'enrolled' is given in new subsection 219A(2) inserted by item 82 . A 'week' for CCB purposes is defined in section 3 as starting on a Monday. The report contains the information necessary for the calculation of fee reductions, for example, the number of hours of care provided to the child in a week. If the service does not provide the report for a child for a week, the calculation of fee reductions for that child for care in that week cannot occur.

The calculation of rate, and the amount of fee reductions for a week, is based on the determinations relevant to the individual and the child made under the Family Assistance Act and the Family Assistance Administration Act in force in that week (new paragraph 50Z(2)(a) refers). Therefore, the Secretary is required to take into account the relevant determination of a weekly limit of hours under section 50H, CCB % under section 50J, schooling % under section 50K, the special grandparent rate under section 50T (if applicable), any determination of a limit of hours under sections 54, 55 or 56 of the Family Assistance Act, a determination of rate under section 81 of that Act, any variations of those determinations, and any other determinations relevant to the individual, the child and the week.

In certain situations (for example, when a child is at risk of abuse or neglect), an approved child care service is authorised by the legislation to certify that, for a period certified by the service, a particular weekly limit of hours is applicable to the individual and the child in a week (subsections 54(1), 55(6) and 56(3) of the Family Assistance Act refer) at a particular certified rate (subsection 76(1) of the Family Assistance Act refers).

If a service gives a certificate to this effect in respect of a period, and the week in respect of which the Secretary calculates fee reductions for the individual and the child falls within that period, the Secretary is required to calculate fee reductions using the certified limit of hours and the certified rate (new paragraphs 50Z(2)(b) and (c) refer).

These requirements ensure that the Secretary's calculations of fee reductions for a week result in an amount as close as possible to the actual CCB entitlement of the individual for this week, to be calculated after the end of the income year.

The Secretary is required to notify the service of the rate and amount calculated in respect of the individual, the child and the week (new subsection 50Z(3) refers). The notification is relevant to the service's obligation in new section 219B inserted by item 83 to pass on fee reductions for the week on to the individual.

New subsection 50Z(4) provides that the notice must be given in the form, manner or way approved by the Secretary. As a result of the operation of section 4, which allows for approval of the use of electronic equipment for doing things required or permitted to be done for the purposes of the family assistance law, new subsection 50Z(4) enables the Secretary to approve an electronic way of notification of the rate and amount of calculated fee reductions.

It is intended that, in line with the CCMS principle of electronic communication between the Secretary and the services, an approved child care service providing a weekly report in respect of an enrolled child will be notified of the rate and amount of fee reductions calculated by the Secretary by making this information available to the service via an electronic interface, to which the service, through their software, will have access. A service is taken to have been given the notice on the day on which the information is made available to the service. New subsection 50Z(5) operates to this effect.

New section 50ZA - Revising the rate and amount calculation

New section 50ZA allows the Secretary to recalculate the previously calculated rate or the amount of fee reductions, or both. The recalculation may be necessary as a result of a service changing the previously provided report in respect of a week or to correct an erroneous calculation on the Secretary's part. The Secretary can only recalculate fee reductions in respect of a week if an entitlement determination under section 51B has not been made in respect of the individual, the child and the income year in which the week falls (new subsection 50ZA(1) refers).

As fee reductions are made in lieu of the individual's CCB entitlement to be determined in respect of the income year, once a determination of entitlement is made under section 51B, and the total amount of fee reductions provided during that year is reconciled (where the amount of the entitlement differs from that amount of fee reductions, a top-up payment is made to the individual or there is a debt to be paid by the individual), any future information that may be relevant to care provided during a week occurring in that income year affects the individual's entitlement for that year, not fee reductions. Any change to an amount of entitlement determined under section 51B can only be made via review of the determination of entitlement under Part 5 of the Family Assistance Administration Act.

Where a recalculation occurs under the new subsection 50ZA(1), the Secretary is required to notify a service of the recalculated rate and amount (new subsection 50ZA(2) refers).

The Secretary is not required to notify a service of the recalculated amount if the Secretary revises downwards the calculation of a fee reduction amount for a week for a reason other than the change of the service's report (new subsection 50ZA(3) refers). Notification of this lower amount is not required because the service's obligation under new section 219B inserted by item 83 , to pass fee reductions for the week on to the individual, does not extend to passing on the lower amounts calculated in this situation.

The requirements in new subsections 50ZA(4) and (5), relating to giving notice of the recalculated amount in the form, manner or way approved by the Secretary, and making the information available to the service using an electronic interface, are the same as the requirements explained in the context of new subsections 50Z (4) and (5).

New section 50ZB - Calculating the amount of child care benefit by fee reduction - service eligible

New subsection 50ZB(1) imposes on the Secretary a requirement to calculate the rate, and the amount of CCB by fee reduction, applicable in respect of care provided to a child at risk by an approved child care service in a week.

The Secretary is required to make such a calculation only for sessions of care provided while a service is so eligible under section 47 of the Family Assistance Act (new paragraph 50ZB(1)(a) refers).

The requirement to calculate fee reductions for sessions of care provided to a child at risk in a particular week is contingent upon the service giving a report under section 219N (as modified by amendments made by item 87 ) in respect of an enrolled child and a week (new paragraph 50ZB(1)(b) refers). The meaning of 'enrolled' is given for this purpose in new subsection 219AA(2) inserted by item 82 . A 'week' for CCB purposes is defined in section 3 as starting on a Monday.

The report contains the information relevant to the calculation of the amount of fee reductions for the service for the week, for example, the weekly limit of hours certified by the service in respect of the child under section 54, 55 or 56 of the Family Assistance Act, the rate certified by the service under section 76 of the Family Assistance Act, and the number of hours of care provided to the child in the week. If the service does not provide the report for a child for a week, the calculation of fee reductions for the service in respect of care provided to the child in that week cannot occur.

The calculation of the rate and the amount of CCB by fee reduction for a week is based on the determinations relevant to the service and the child made under the Family Assistance Act and the Family Assistance Administration Act in force in that week (new paragraph 50ZB(2)(a) refers). Therefore, the Secretary is required to take into account any relevant determinations in force, that is, a determination of rate made by the Secretary under section 81 of the Family Assistance Act or a determination of a limit of hours under section 54, 55 or 56 of the Family Assistance Act and any variation of those determinations relevant to the service, the child and the week.

In the situation when a child is at risk, an approved child care service is authorised by the legislation to certify that, for a period certified by the service, a particular weekly limit of hours is applicable to the individual and the child in a week (subsections 54(10), 55(6) and 56(4) of the Family Assistance Act) at a particular certified rate (subsection 76(2) of the Family Assistance Act refers).

If a service gives a certificate to this effect in respect of a period, and the week in respect of which the Secretary calculates CCB for the service and the child falls within that period, the Secretary is required to calculate CCB using the certified limit of hours and the certified rate (new paragraphs 50ZB(2)(b) and (c) refer).

These requirements ensure that the Secretary's calculations of a service's CCB by fee reductions for a week results in an amount as close as possible to the actual CCB entitlement of the service for this week to be calculated after the end of the income year.

The Secretary is required to notify the service of the amount calculated in respect of the child at risk and the week (new subsection 50ZB(3) refers). The notification is relevant to the service's obligation in new section 219BA inserted by item 83 to pass on to itself the amount calculated by the Secretary for the week.

The requirements in new subsections 50ZB(4) and (5), relating to the giving of notice of the calculated amount in the form, manner or way approved by the Secretary, and making the information available to the service using an electronic interface, are the same as the requirements explained in the context of new subsections 50Z(4) and (5).

New section 50ZC - Revising the rate and amount calculation

New section 50ZC allows the Secretary to recalculate a previously calculated amount of a service's CCB by fee reduction. The recalculation may be necessary as a result of a service changing the previously provided report in respect of a week or to correct an otherwise erroneous calculation on the Secretary's part. The Secretary can only recalculate fee reductions in respect of a week if an entitlement determination under section 54B has not been made in respect of the service, the child and the income year in which the week falls (new subsection 50ZC(1) refers).

As the Secretary's calculation of a service's CCB by fee reductions during an income year under new subsection 50ZB is made in lieu of the service's CCB entitlement to be determined in respect of the income year, once a determination of entitlement is made under section 54B, and the total amount of CCB by fee reductions provided during that year is reconciled (where the amount of the entitlement differs from that amount of fee reductions, a top-up payment is made to the service or there is a debt to be paid by the service), any future information that may be relevant to care provided during a week occurring in that income year affects the service's entitlement for that year. Any change to an amount of entitlement determined under section 54B can only be made via review of the determination of entitlement under Part 5 of the Family Assistance Administration Act.

The Secretary is required to notify the service of the recalculated rate and amount (new subsection 50ZC(2) refers).

The Secretary is not required to notify a service of the recalculated amount if the Secretary revises downwards the calculation of the fee reduction amount for a week for a reason other than the change of the service's report (new subsection 50Z(3) refers). Notification of this lower amount is not required because the service's obligation in new section 219BA inserted by item 83 , to pass on to itself the amount calculated for the week, does not extend to passing on the lower amounts calculated in this situation. The same administrative rule is applicable in this situation, regardless of whether the amounts for a week are recalculated for an individual conditionally eligible for CCB by fee reduction or for an approved child care service eligible for CCB by fee reduction for a child at risk.

The requirements in new subsections 50ZC(3) and (4) relating to the giving of notice of the recalculated amount in the form, manner or way, approved by the Secretary, and making the information available to the service via the electronic interface, are the same as the requirements explained in the context of new subsections 50Z(4) and (5).

Item 19 amends section 51E, dealing with notice of determination of entitlement to be paid CCB by fee reduction where an individual was conditionally eligible during an income year.

After each income year during which an individual is conditionally eligible for CCB by fee reduction in respect of a child, a determination of entitlement to be paid CCB by fee reduction is made under section 51B for the income year.

Section 51E requires the Secretary to give notice of this determination to the individual concerned stating, among other things, 'the total amount of fee reductions made by an approved child care service' providing care to the child, in respect of sessions of care provided to the child during the income year (subparagraph 51E(1)(c)(iii) refers).

Item 19 amends the wording of this requirement to reflect a new obligation of an approved child care service specified in new section 219B inserted by item 83 to pass on to the claimant the amount of fee reductions calculated by the Secretary.

Item 20 amends section 54D, dealing with notice of a determination of entitlement to be paid CCB by fee reduction when the service is eligible for fee reductions in respect of a child at risk.

After each income year during which an approved child care service is eligible for CCB by fee reduction in respect of a child at risk, a determination of entitlement to be paid CCB by fee reduction is made under section 54B for the income year, the service and the child.

Section 54D requires the Secretary to give notice of this determination to the service stating, among other things, 'the total amount already received by the claimant in respect of the financial year from one or more payments of an amount of advance paid to reimburse the claimant'.

As a result of the amendments made by item 90 , advance amounts currently paid quarterly to approved child care services under Division 2 of Part 8A will no longer be provided. Item 20 amends, therefore, the wording of the requirement in paragraph 54D(1)(c) to reflect this change and to reflect the new obligation of an approved child care service specified in new section 219BA inserted by item 83 to pass on to itself the amount of CCB fee reductions calculated by the Secretary.

Item 21 amends section 56, dealing with payment in respect of a claim for CCB by fee reduction if the claim is made by an individual.

Section 56 is relevant to the entitlement determination made under section 51B. If the total amount of fee reductions made for an individual during an income year by an approved child care service for care provided to a child is less that the amount of the individual's CCB entitlement for that year and the child, section 56 requires that the amount of the difference be paid to the individual.

Item 21 amends the wording of paragraphs 56(1)(b) and (c) to reflect the new obligation of an approved child care service specified in new section 219B inserted by item 83 to pass on to the individual the fee reduction amount calculated by the Secretary.

The amendment made by this item to paragraph 56(1)(c) makes it clear that the amount to be paid is the difference between the entitlement amount for the particular income year and the total amount of fee reductions that the service is obliged to pass on to the claimant under new section 219B for sessions of care provided to the child during the income year.

Under new section 219B, a service must pass on to the claimant any amount calculated by the Secretary under new section 50Z, and notified as provided by new subsection 50Z(3), and any amount recalculated under new section 50ZA and notified as provided by new subsection 50ZA(2). However, if the recalculation occurred for a reason other than the change of a report for a week by the service and the recalculated amount is lower than the previously calculated or recalculated amount, that lower amount is not required to be passed on to the individual (new subsection 219B(3) refers).

In the situation referred to in new subsection 219B(3), the previously calculated (or recalculated, as the case may be) higher amount is the amount the service was obliged to pass on to the claimant, not the lower recalculated amount. Therefore, the higher amount the service was obliged to pass on to the individual is taken into account for the purposes of the calculation under new paragraph 56(1)(c) of the difference between the full entitlement amount (the amount the individual should receive) and the total fee reductions amount (the amount the individual was provided with during the income year).

Item 22 amends section 56B, dealing with payment in respect of a claim for CCB by fee reduction if the claim is made by an approved child care service.

Section 56B is relevant to the entitlement determination made under section 54B. If the total amount of CCB by fee reductions for which the service was reimbursed by the way of quarterly advances paid under Division 2 of Part 8A to an approved child care service during an income year for care provided to a child at risk is less that the amount of the service's CCB entitlement for that year in respect of the care, section 56B requires that the amount of the difference be paid to the service.

Item 22 amends the wording of paragraph 56B(1)(b) to reflect the new obligation of an approved child care service specified in new section 219BA inserted by item 83 to pass on to itself the fee reduction amount calculated by the Secretary.

The amendment made by this item to insert new paragraph 56B(1)(c) makes it clear that the amount to be paid is the difference between the service's entitlement amount for the particular income year for care provided to a child and the total amount of fee reductions that the service is obliged to pass on to itself under new section 219BA for sessions of care provided to the child during the financial year.

Under new section 219BA, a service must pass on to itself any amount calculated by the Secretary under new section 50ZB and notified as provided by new subsection 50ZB(3), and any amount recalculated under new section 50ZC and notified as provided by new subsections 50ZC(2) and (3). However, if the recalculation occurred for a reason other than the change of a weekly report by the service and the recalculated amount is lower than the previously calculated or recalculated amount, that lower amount is not required to be passed on (new subsection 219BA(3) refers).

In the situation referred to in new subsection 219BA(3), the previously calculated (or recalculated, as the case may be) higher amount is the amount the service was obliged to pass on to itself, not the lower recalculated amount. Therefore, the higher amount the service was obliged to pass on is taken into account for the purposes of the calculation under new paragraph 56B(1)(c) of the difference between the full entitlement amount (the amount the service should receive) and the total fee reductions amount (the amount the service was provided with during the financial year).

Item 23 inserts new section 57G in Subdivision L of Division 4 of Part 3 (Secretary's powers).

New subsection 57G(1) authorises the Secretary to give a notice to an approved child care service, requiring the service to provide specified information in relation to a child or any aspect of care provided by the service to the child. The Secretary may require the provision of such information only if the service submitted an enrolment for this child under new section 219A or 219AA inserted by item 82 and the enrolment was confirmed by the Secretary under new section 219AE inserted by item 82 (new subsection 57G(1) refers).

The Secretary must specify in the notice either the period (past or future) in respect of which information must be provided or, for an ongoing requirement, must specify the intervals at which the information must be provided (new subsection 57G(2) refers).

The notice is required to be given in the form, manner or way approved for this purpose by the Secretary (new subsection 57G(3) refers). As a result of the operation of section 4, the Secretary may approve the giving of the notice by electronic means. The Secretary may approve notification of the information by making the notice available to services using an electronic interface. Services will be taken to have been given the notice on the day on which the notice becomes so available (new subsection 57G(4) refers).

The required information must be provided by the service in the form, manner or way approved for this purpose by the Secretary. As a result of the operation of section 4, the Secretary may approve the provision of the information by electronic means.

If the Secretary notifies a service of the requirement under new section 57G, the service will be required to comply with this requirement as a condition of its continued approval (new section 219NB inserted by item 88 refers).

Items 24 to 30 make amendments to various notice provisions. Currently, services are required by section 219A to calculate fee reductions of conditionally eligible individuals, applying the relevant CCB %, a weekly limit of hours, schooling % and the special grandparent rate (where applicable) determined by the Secretary. To do so, the services need to be notified of those determinations, subsequent variations of those determinations and the review decisions relating to those determinations. Therefore, the relevant provisions relating to those determinations require that notice of these determinations be given to the approved child care service providing care to the child.

As the CCMS provides for the calculation of fee reductions by the Secretary, not by a service, it is no longer necessary to give to an approved child care service notice of a decision relating to an individual whose child is in care of the service.

Therefore, items 24 and 25 remove this requirement from section 63, relating to a variation of determination of conditional eligibility, CCB % , a weekly limit of hours, schooling % and the special grandparent rate under Subdivisions M, N, P, Q, R and S of Division 4 of Part 3 of the Family Assistance Administration Act; item 27 - from section 64E, relating to a variation of determination of a limit of hours under Subdivision U of Division 4 of Part 3 of the Family Assistance Administration Act; and item 29 - from subsection 65E(1), relating to a variation of conditional eligibility, CCB %, a weekly limit of hours, schooling % and the special grandparent rate under Subdivision V of Division 4 of Part 3 of the Family Assistance Administration Act.

Under the CCMS, an approved child care service will be required to notify each enrolment of a child in the care of the service. An enrolment record will be subsequently created for the enrolled child using an electronic interface, containing some of the information relevant to the calculation of fee reductions for care provided by the service to the child. The information will include a limit of hours of care, CCB % and the special grandparent rate (where relevant). This information will be accessible electronically to the service providing care to the child.

The following amendments authorise the Secretary to make notices of these decisions, and some other decisions specified in the amending provisions, available on the electronic interface, or otherwise, to an approved child care service or services providing care to the child. Item 26 inserts for this purpose new subsection 63(4), relating to a variation of determination of conditional eligibility, CCB %, a weekly limit of hours, schooling % and the special grandparent rate under Subdivisions M, N, P, Q, R and S of Division 4 of Part 3 of the Family Assistance Administration Act; item 28 inserts new subsection 64E(3), relating to a variation of determination of a limit of hours under Subdivision U of Division 4 of Part 3 of the Family Assistance Administration Act; item 30 inserts new subsection 65E(3), relating to a variation of conditional eligibility, CCB %, a weekly limit of hours, schooling % and the special grandparent rate under Subdivision V of Division 4 of Part 3 of the Family Assistance Administration Act.

Items 31 to 33 amend section 66 (Protection of payments under this Part). Section 66 protects the payments identified in this section by specifying that they are absolutely inalienable. Quarterly advance payments made under section 219R are specified in paragraph 66(1)(f).

As quarterly advance payments will not be available (as a result of the amendment made by item 90 ), item 31 repeals paragraph 66(1)(f) and substitutes new paragraphs (f) and (fa), referring to fee reduction payments under new section 219Q or new subsection 219QA(2) and payments of enrolment advances under new section 219RA (all inserted by item 90 ), making these new payments inalienable.

Subsection 66(2) ensures that certain actions specified in this subsection, which affect the amount of the payment, do not offend the inalienability requirement.

Item 32 amends this subsection to specify debt recovery actions under section 87A as amended by item 42 (setting off debts against the payment of enrolment advances under section 219RA) and under new section 87B as inserted by item 44 (setting off debts against payments under section 219Q or subsection 219QA(2) in respect of fee reductions.

Item 33 further amends subsection 66(2) to add direct offsetting actions under new section 219Q inserted by item 90 (setting off a recalculated fee reduction amount against a fee reduction payment or an enrolment payment) and under new section 219RC inserted by item 90 (setting off an enrolment advance amount against another enrolment advance payment or a fee reduction payment).

Item 34 amends subsection 68(1A), which defines the meaning of 'amount paid to a person' for the purposes of debt recovery provisions. Subsection 68(1A) is directly relevant to the operation of section 71C, which creates a debt out of the difference between the amount paid to a person (the amount the person received) and the amount the person should have received. Subsection 68(1A) ensures that the amount paid to an individual includes fee reduction amounts provided to an individual by an approved child care service during an income year, and that the amount paid via advance amounts to an approved child care service eligible for CCB by fee reductions in respect of care provided to a child at risk includes CCB amounts paid during an income year to the service.

The amendments made by item 34 modify the language of subsection 68(1A) to reflect the fact that the payment of fee reductions to an individual, or the payment of CCB to an eligible service, is no longer underpinned by the payment of quarterly advances to a service and will occur as a result of services' new obligation to pass on any fee reduction amount calculated by the Secretary.

Item 35 substitutes a new section 71B.

Subsection 71B(1) creates a debt, due by the claimant for CCB by fee reductions, out of the amounts of fee reductions made to the individual by an approved child care service during an income year where the individual was not entitled to the amount, and out of CCB amounts paid during an income year to an approved child care service via quarterly advances where the individual was not entitled to the amount. Subsection 71B(1) is modified by the amendment in item 35 to reflect the fact that the payment of fee reductions to an individual, or the payment of CCB to an eligible service, is no longer underpinned by the payment of quarterly advances to a service and will occur as a result of services' new obligation to pass on any fee reduction amount calculated by the Secretary.

Subsection 71B(2) creates a debt due by an approved child care service out of advance amounts paid to the service when the service was not entitled to receive the amount. This debt has been substituted by the amended subsection 71B(2), which creates a debt out of an enrolment advance paid to a service under new section 219RA inserted by item 90 when the service was not entitled to the amount.

Subsection 71B(3) creates a debt out of quarterly advance amounts paid to an incorrect account. This debt has been substituted by the amended subsection 71B(3), which creates a debt out of an enrolment advance paid under new section 219RA inserted by item 90 or fee reduction amounts paid under new section 219Q or subsection 219QA(2) and deposited in the incorrect account. The debt in this situation is due to the Commonwealth by the person, or jointly and severally by the persons, as the case may be, in whose name the incorrect account was kept.

Item 36 inserts new section 71CA.

New section 71CA creates a debt in the situation where an approved child care service was required under new section 219QB inserted by item 90 to remit a fee reduction amount that it was not reasonably practicable for the service to pass on and the service did not remit the amount. The amount is a debt due to the Commonwealth by the service.

Item 37 repeals and substitutes a new section 71G.

Section 71G creates a debt due by an approved child care service if an amount was paid to the service by way of advances (quarterly advances) in respect of a period (under section 219R) to reimburse the service for the provision of fee reductions during the period and the service's approval for the purposes of the family assistance law was suspended, cancelled or the service ceased to operate. In this situation, the difference between the higher advance amount paid for the period and the lower amount used by the service to reimburse itself for the provision of fee reductions during the period before the suspension, cancellation or cessation of operation is a debt.

As quarterly advances will not be paid as a result of amendments made by item 90 , the current section 71G debt associated with these payments is repealed.

New subsection 71G(1) creates a debt out of the amount of fee reduction payments made to a service under new section 219Q inserted by item 90 if the payments related to sessions of care or periods occurring after suspension (any case of suspension under the Family Assistance Administration Act) or cancellation of the service's approval under section 200 or after the cessation of the service's approval. For the purposes of this new subsection, fee reduction amounts that would be paid but for the fact that a debt was recovered from this amount under subsection 82(2) or another amount was set off against this amount under section 219QA or 219RC inserted by item 90 , are included in the amounts that are to be repaid (new subparagraph 71G(1)(a)(ii) refers). Fee reduction amounts that would be paid but for a suspension sanction imposed under new paragraph 200(1)(h) inserted by item 78 are not treated as amounts paid for the purpose of this subsection (are not recoverable).

New subsection 71G(2) creates a debt in the situation where an amount of fee reductions that should have been set off against another fee reduction amount or against an enrolment amount, under new subsection 219QA(3) inserted by item 90 , was not set off before the service's approval has been suspended under the Family Assistance Administration Act (any case of suspension under this Act) or cancelled under section 200 or before the service's cessation of operation. The amount of fee reductions that should have been set off is a debt due by the service.

New subsection 71G(3) creates a debt out of an amount of enrolment advance paid to a service under new section 219RA inserted by item 90 if the amount has not already been set off under new section 219RC inserted by item 90 before the service's approval has been suspended under the Family Assistance Administration Act (any case of suspension under this Act) or cancelled under section 200 or before the cessation of the service's approval.

For the purposes of this new subsection, enrolment amounts that would be paid but for the fact that a debt was recovered from this amount under subsection 82(2) or another amount was set off against this amount under section 219QA or 219RC inserted by item 90 , are included in the amounts that are to be repaid (new subparagraph 71G(3)(a)(ii) refers). Enrolment amounts that would be paid but for a withholding sanction imposed under new paragraph 200(1)(f) inserted by item 78 are not treated as amounts paid for the purpose of this subsection (are not recoverable).

Item 38 inserts new section 71GA. The amendment made by this item is explained under the heading New sanctions .

Item 39 substitutes a new subsection 82(2). This subsection specifies methods of debt recovery available when a debt is owed by an approved child care service.

One of the ways in which a service's debt may currently be recovered is via setting off a debt amount against a payment of an advance amount under section 219R. As advance amounts will no longer be paid to approved child care services, as a result of amendments made by item 90 , the amendments made by item 39 repeal this method of recovery of a service's debt.

New subsection 82(2) provides two new methods of recovery of a debt owed by an approved child care service: by setting off the amount of the debt against one or more fee reduction payments made to the service under new section 219Q or subsection 219QA(2) inserted by item 90 and by setting off the amount of the debt against one or more amounts of enrolment advances paid to the service under new section 219RA inserted by item 90 .

Item 40 makes consequential amendments to paragraph (a) of the definition of 'debt' in subsection 82(3) to insert references to new debt creation sections 71CA and 71GA inserted by items 36 and 38 respectively.

Item 41 makes a consequential amendment to section 86, dealing with time limits on recovery action to include a reference to new section 87B inserted by item 44 and to change the section's heading accordingly.

Item 42 amends section 87A, which sets out the process relevant to setting off a debt amount owed by a service against an advance amount paid to the service under section 219R. The process requires the Secretary to determine the amount by which each amount to be paid to the service is to be reduced by and requires that the amount be so reduced until the sum of the reductions under this section equals the amount of the debt. As advance amounts will not be paid to approved child care services, as a result of amendments made by item 90 , but enrolment advance amounts will instead be paid to services under new section 219RA inserted by item 90, item 42 amends subsection 87A(1) so the process specified in this section applies to setting off an amount of a debt owed by a service against amounts of enrolment advance to be paid to the service under new section 219RA.

Item 43 further amends section 87A to ensure that, if a debt amount is being recovered by a set off against enrolment advance amounts under this section and against fee reduction amounts under new section 87B, the reductions under this section are made until the sum of the amounts recovered under both sections (from advance amounts and fee reduction amounts) equals the amount of the debt.

Item 44 inserts new section 87B. The new section sets out the process relevant to setting off a debt amount owed by a service against an amount of fee reductions to be paid to the service under new section 219Q or new subsection 219QA(2) inserted by item 90 . The relevant process is substantially the same as the setting off process applicable under section 87A as amended by items 42 and 43 .

Items 45 and 46 make consequential amendments to sections 88 and 90 to include a reference to new section 87B in paragraph 88(6)(b)(i) and 90(5)(b)(i) respectively.

Item 47 amends paragraph (b) of the definition of 'family assistance payment' in subsection 93A(6). Section 93A sets out the relevant processes applicable to recovery from a financial institution of amounts of family assistance payments paid to the credit of an account kept with the institution by someone for whom the payment was not intended or paid to the credit of an account kept with the institution by someone who died before the payments were made. The amendment made by this item includes in the definition of 'family assistance payment' references to a fee reduction payment under new section 219QA or new subsection 219QA(2) and an enrolment advance under new section 219RA (these sections and the subsection are inserted by item 90 ).

Items 48 to 50 amend section 95 dealing with the Secretary's ability to write off a debt. The Secretary may write off a debt in situations specified in subsection 95(2), which include the debt not being recoverable at law and the debtor having no capacity to repay the debt.

Subsection 95(3) specifies when a debt is taken to be irrecoverable at law. One of the relevant considerations is that the debt cannot be recovered by the means of recovery provided for in this Act and specified in subsection 95(3). Item 48 substitutes the reference in this subsection to the setting off a debt against advances paid under section 219R (as this method will no longer be available as a result of amendments made by item 90 ) with references to setting off under section 87A against enrolment advances and under new section 87B (as inserted by item 44 ) against payments of fee reductions.

Subsection 95(4) is relevant to the consideration of a person's capacity to repay the debt. This subsection provides that, unless repayment of the debt would cause the person severe financial hardship, the person is taken to have capacity to repay the debt if a debt is recoverable by the means specified in this subsection, including setting off under section 87A against advances paid under section 219R.

Items 49 and 50 make amendments that substitute in effect the reference in this subsection to setting off a debt against advances paid under section 219R (as this method will no longer be available as a result of amendments made by item 90 ) with references to setting off under section 87A against enrolment advances and under new section 87B (as inserted by item 44 ) against payments of fee reductions.

Items 51 and 52 amend section 99 dealing with waiver of small debts, less than $200. Subsection 99(2) prevents the Secretary from waiving a debt that is at least $50 if the debt could be recovered by the means specified in this subsection, including setting off under section 87A against advances paid under section 219R. Items 51 and 52 make amendments that substitute in effect the reference in this subsection to setting off a debt against advances paid under section 219R (as this method will no longer be available as a result of amendments made by item 90 ) with references to setting off under section 87A against enrolment advances and under new section 87B (as inserted by item 44 ) against payments of fee reductions.

Item 53 amends section 104, which provides for internal review by the Secretary on his/her own initiative of decisions under the family assistance law except for the decisions specified in subsection (1). Currently, a decision under Division 2 of Part 8A relating to advances (quarterly) to an approved child care service is not reviewable. As quarterly advances will no longer be available as a result of amendments made by item 90, item 53 repeals the reference to decisions relating to those advances and substitutes references to decisions relating to calculation of fee reduction amounts under new section 50Z or 50ZB or recalculation under new section 50ZA or 50ZC (new sections were inserted by item 18 and decisions relating to payment of those amounts under new section 219Q or new subsection 219QA(2) (inserted by item 90 ).

A similar amendment is made by item 56 to subsection 108(1) that specifies the decision which cannot be reviewed by the Secretary on application made by an applicant.

As a result of the amendments made by items 53 and 56 , decisions relating to the calculation and payment to services of fee reductions will not be reviewable in the merit review process under the family assistance law, in the same way calculations of fee reductions by approved child care services are not currently reviewable. This is because these are high frequency, high volume interim calculations, in lieu of the actual entitlement that is required to be determined by the Secretary after the end of each income year during which an individual (or a service) is eligible for fee reductions.

In the entitlement determination process, the difference between the annual entitlement and the total fee reductions provided during the year is reconciled (where the amount of the entitlement differs from that amount of fee reductions resulting in a top-up amount paid to the claimant or a debt being created to be repaid by the claimant).

The entitlement determination is a decision reviewable by the Secretary (sections 105 and 109A), the Social Security Appeals Tribunal (section 111) and the Administrative Appeals Tribunal (section 142).

Items 54 and 57 , respectively, remove the requirement to give notice to a service from subsection 106(1), relating to the Secretary's review on his/her own initiative, and from subsection 109B(2), relating to internal review on application. However, amendments made by these items preserve the current requirement in subparagraphs 106(1)(c)(v) and 109B(2)(c)(v) respectively to give notice to a service of a review decision relating to a determination of the special rate under subsection 81(2) of the Family Assistance Act made in respect of an individual in a 'hardship' situation, which will continue to be provided to both the claimant and the service, as required by subsection 81(8) of the Family Assistance Act. The rationale for these amendments is explained in the context of similar amendments made to other notice provisions by items 12 to 17 .

Item 55 further amends section 106 relating to the Secretary's review on his/her own initiative. This item inserts new subsections 106(1A) and (1B). New subsection 106(1A) provides the Secretary with a discretion to notify an approved child care service about the decision in respect of which the Secretary must, as a result of the amendments made by item 54 , give notice to the applicant. The Secretary may notify the service providing care to the child by making the information available using an electronic interface or otherwise.

New subsection 106(1B) provides the Secretary with a discretion to give the notice of the decision that the Secretary must give to the service, as a result of the amendments made by item 54 , by making the notice available using an electronic interface.

Item 58 amends similarly section 109B, relating to the Secretary's review on application. This item inserts new subsections 109(2A) and (2B). New subsection 109B(2A) provides the Secretary with a discretion to notify an approved child care service about the decision in respect of which the Secretary must, as a result of the amendments made by item 57 , give notice to the applicant. The Secretary may notify the service providing care to the child by making the information available using an electronic interface or otherwise.

New subsection 109B(2B) provides the Secretary with a discretion to give the notice of the decision that the Secretary must give to the service, as a result of the amendments made by item 57 , by making the notice available using an electronic interface.

Items 59 and 60 amend section 111 providing for application for review by the Social Security Appeals Tribunal (SSAT). This is a consequential amendment.

Subsection 111(2) specifies decisions that are not reviewable by the SSAT. Paragraph 111(2)(a) refers to all decisions under the family assistance law about the manner and form of claims or things that are required to be done under that law. The amendment made by item 59 preserves the current references to the decisions concerning the form and manner of things and adds new references to exclude from review by the SSAT the decisions of the Secretary relating to approving the manner, form, etc, of things (for example, the way in which a particular notice is given to an approved child care service or is to be provided by a service) under new powers in new subsections 50Z(4), 50ZA(3),50ZB(4), 50ZC(3),57G(2), 219AE(4), 219AF(2), 219N(3) and 219RA(4) or under new paragraph 219AB(1)(a), 219QB(4)(a) or 219R(2)(a) inserted by items 18, 23, 82, 83, 87 and 90 .

Item 60 further amends section 111 to exempt from review by the SSAT the Secretary's request made under new section 57G inserted by item 23 that an approved child care service must provide additional information in relation to aspects of care provided to enrolled children.

Items 61, 62 and 63 make amendments to section 141A dealing with notices of review of certain decisions specified in this section that the Secretary is required to give to an approved child care service. The rationale for these amendments is the same as for other amendments relating to notices of decisions made by items 12 to 17 and 54 to 55 . As a result of the amendments, the Secretary's obligation to give notice of the review decision to an approved child care service is preserved only if the decision relates to a determination specified in subparagraph (b)(iii) of section 141A - decision of rate under subsection 81(2) or (3) of the Family Assistance Act when an individual is in hardship or a child is at risk. In relation to other decisions affecting a conditionally eligible individual referred to in section 111, the Secretary will have the discretion to notify the service providing care to the child and will be able to make the information available to the service by using an electronic interface or otherwise.

Item 64 amends section 144. This amendment is described in the context of the amendments referred to under the heading New sanctions .

Items 65 and 66 amend section 162 to authorise the obtaining of protected information by any person for the purposes of the CCMS pilot to be conducted after 1 July 2007 over the course of several months, as well as the use and disclosure of this information for the purposes of the pilot. The persons involved in the pilot would be officers of the department, Centrelink, operators of approved child care services or third party software providers participating in the pilot on a voluntary basis and their staff or contractors.

Further amendments for the protection of personal information in the course of the pilot are made by item 99 .

Item 67 amends section 173, creating an offence for making a false statement that affects a person's rate, amount and generally entitlement to a family assistance payment including CCB (as specified in this section). The amendment ensures that a false statement affecting the rate and amount of fee reductions calculated by the Secretary ( item 18 inserts new provisions relating to the calculation of fee reductions by the Secretary) is also an offence.

Items 68 to 71 amend section 175A. Generally, this section creates an offence if an individual obtains fee reductions while the individual has not been determined to be conditionally eligible for CCB by fee reductions or obtains an incorrect amount. It also creates an offence if an approved child care service obtained advance amounts paid under section 219R to reimburse itself for fee reductions for care provided to a child at risk while the service was not eligible for that payment under section 47 of the Family Assistance Act (the service itself makes the decision of that eligibility) or if a service obtains an incorrect amount. Strict liability applies to specific elements of the offences, as specified in section 175A.

Advances under section 219R (quarterly advance payments) to reimburse services for fee reductions provided will not be available to services, as a result of amendments made by item 90 , but services will be paid amounts of fee reductions under new section 219Q or subsection 219QA(2) inserted by item 90 . The amendments therefore ensure that section 175A creates an offence if an approved child care service obtains an amount of fee reductions in relation to its eligibility for care provided to a child at risk while the service was, in fact, not so eligible or if a service obtained an incorrect amount. Items 69 and 71 specify the elements of the offence to which strict liability applies. Strict liability is an appropriate basis for the offences because of the difficulty the prosecution would have in proving fault (especially knowledge or intention) in this case; the fact that the offences are of a similar nature to the offences in current section 175A; and the fact that the offences do not involve dishonesty or serious imputation affecting a person's reputation.

Items 72 and 74 amend section 176, which creates an offence if an approved child care service obtains an amount of advance paid under section 219R to reimburse the service for the provision of fee reductions by means of impersonation or by fraudulent means or as a result of a reckless false or misleading statement . As advances under section 219R (quarterly advance payments) to reimburse services for fee reductions provided will not be available to services, as a result of amendments made by item 90 , but services will be paid amounts of fee reductions under new section 219Q or subsection 219QA(2) and enrolment advances under new section 219RA (all these sections are inserted by item 90 ), the amendments ensure that section 176 creates an offence if an approved child care service obtains a payment of fee reductions or an enrolment advance by means of impersonation or by fraudulent means or a reckless false or misleading statement.

Items 73 and 75 make consequential amendments to subsections 176(2) and (4), specifying the elements relevant to the offence relating to payment of fee reduction amounts and enrolment advance amounts, to which strict liability applies. The rationale for strict liability is the same as in relation to offences under section 175A.

Item 76 makes a consequential amendment to section 178. This section provides that, if a person is convicted for contravention of an offence provision under Subdivision B, for example, for contravention of section 176, the court may order the person to repay to the Commonwealth an amount equal to the amount of family assistance, fee reductions or advance paid because of the offence. The amendment ensures that a court order extends to the repayment of amounts made to an approved child care service in respect of enrolment advances paid under new section 219RA inserted by item 90 .

Items 77 to 81 make amendments to sections 200 and 201. These amendments are explained under the heading New sanctions .

Item 82 repeals section 219A, which imposes an obligation on services to act on various notices received and certificates given under the family assistance law with respect to conditional eligibility for CCB by fee reductions and inserts new sections 219A, 219AA, 219AB, 219AC, 219AD, 219AE, 219AF and 219AG, which detail the obligations imposed on services, the manner in which services are to perform those obligations, the types of offences that services commit if they fail to comply with those obligations and the applicable penalties.

New section 219A - Obligation to notify Secretary of enrolment of a child by an individual

New subsection 219A(1) imposes an obligation on the service to notify the Secretary of the enrolment of a child by an individual for care by the service.

New subsection 219A(2) defines the meaning of 'enrolled' child. It provides that a child is enrolled by an individual for care by an approved service if the individual has entered into an arrangement with the service for the provision of care to the child by the service.

New subsection 219A(3) deals with the situation where an individual enters into an arrangement with the service for care to a child, that enrolment ceases under new section 219AD, for example, as a result of a break in the provision of care of a particular duration, and the care continues after the break under the arrangement, same or new, with the same individual. New subsection 219A(3) provides that the care after the cessation of enrolment under new section 219A(3) is taken to have been provided under a new arrangement.

A note at the end of new subsection 219A(3) informs the reader that the new arrangement constitutes a new enrolment that the service has to notify.

New section 219AA - Obligation to notify Secretary of enrolment where approved child care service eligible

New section 219AA(1) deals with the obligation of the service to notify the Secretary of an enrolment where the service is eligible for CCB by fee reduction for a child at risk under section 47 of the Family Assistance Act and the service has given a certificate under section 76 of that Act.

New subsection 219AA(2) provides that a child is 'enrolled' for care when the first session(s) of care begin(s) (for which the service is eligible).

New section 219AB - When and how notice to be given

New section 219AB deals with the time and manner in which a notice must be given under new sections 219A and 219AA. The notice must be in the form, manner or way approved by the Secretary and must contain any information required by the Secretary. The notice must be given within a specified timeframe: where the child's enrolment occurs after the day on which the Secretary approves the service, the notice must be given before the end of the week that follows the first week in which care is provided; where the child's enrolment occurs before the day on which the Secretary approves the service but after the day from which the approval is expressed to operate, the notice of the enrolment must be given seven days after the day on which the approval is given; where a service's approval is suspended during the child's enrolment for care and the suspension is later revoked, the notice must be given within seven days after the suspension is revoked.

New section 219AC - Offence for failure to notify

New section 219AC provides that a service commits an offence if it is under an obligation to provide a notice under new sections 219A and 219AA and it fails to provide the notice in accordance with new section 219AB. The penalty is 60 penalty units. Offences under this section are strict liability offences, as are the most of the offences relating to services' obligations in Part 8A of the Family Assistance Administration Act. Strict liability is an appropriate basis for the offence because of the difficulty the prosecution would have in proving fault (especially knowledge or intention) in this case and the fact that the offence does not involve dishonesty or serious imputation affecting a person's reputation.

New section 219AD - When enrolment ceases

New section 219AD deals with four different situations when an enrolment ceases.

Under new paragraph 219AD(1)(a), an enrolment under an arrangement with an individual ceases if the arrangement with the service for the provision of care ceases.

Under paragraph 219AD(1)(b), an enrolment under an arrangement with an individual ceases if the service becomes eligible for CCB by fee reductions for a child at risk (section 47 of the Family Assistance Act refers).

Under new subsection 219AD(2), an enrolment resulting from a service becoming eligible for CCB by fee reduction for care provided to a child at risk is taken to have ceased when the period under the section 76 certificate issued by the service under the Family Assistance Act ends, or a subsequent period of rate in respect of the child specified by the Secretary under section 81 of that Act ends, or, if the Secretary makes a determination of rate for the child in circumstances referred to in paragraph 81(4)(b)(ii) of that Act, the period specified for that rate ends.

New subsection 219AD(3) provides that any enrolment is taken to have ceased if sessions of care are not reported by the service over the number of weeks specified by the Secretary in a legislative instrument. New subsection 219AD(4) allows for different periods to be specified in the instrument for different kinds of services or types of care.

New section 219AE - Secretary to confirm receipt of notice

New section 219AE deals with the obligation of the Secretary to confirm the receipt of the notice of enrolment given by the service under new sections 219A or 219AA (new subsection (1) refers).

New subsection 219AE(2) provides that the Secretary need not provide that confirmation in circumstances where the notice is given under new section 219A and the information in the notice is inconsistent with information contained in a claim or document that accompanies the claim made by an individual in relation to care provided by the service to the child.

If the Secretary confirms the enrolment, the Secretary is required to include in the confirmation details of the record, which the Secretary maintains for the enrolment of the child (new subsection 219AE(3) refers).

The confirmation must be provided in the form, manner or way approved for that purpose by the Secretary.

New section 219AF - Obligation to update enrolment information

New section 219AF deals with the obligation of the service to update enrolment information where that information (which is required to be given under new sections 219A and 219AB or new sections 219AA and 219AB) becomes incorrect or information becomes subsequently available, which, had it been available at the time the notice of enrolment was given, should have been included in the notice, or, had it been available at the time the notice of enrolment was given, would have required the notice to be given in a different form. The updated information must be provided to the Secretary within 7 days after the information becomes incorrect or becomes available.

The notice of the updated information must be provided in the form, manner or way approved for that purpose by the Secretary.

New section 219AG - Offences for failure to update enrolment information

New section 219AG provides that a service commits an offence if it is required to notify the Secretary under new section 219AF of a correction of information and it fails to provide this notice in accordance with section 219AF. The penalty for this offence is 60 penalty units. This is a strict liability offence, as is the offence under new section 219AC, imposing the primary obligation to notify enrolments. The rationale is therefore the same as for the offence in new section 219AC.

Item 83 repeals section 219B, which deals with the obligation to reduce fees of individuals when an approved child care service is eligible for CCB by fee reduction for care provided to a child at risk, and substitutes new section 219B.

New section 219B - Obligation to pass on fee reductions where individual conditionally eligible

New subsection 219B(1) imposes an obligation on the service to pass on fee reductions where the individual (the claimant) is determined to be conditionally eligible under section 50F for CCB by fee reductions for sessions of care provided to a child in a week, and the Secretary has either calculated or recalculated the amount of fee reductions under new section 50Z or 50ZA that are applicable for the sessions of care provided in the week, and the Secretary has notified the service of either of those amounts in accordance with new subsections 50Z(3) or 50ZA(2).

New subsection 219B(2) requires the service to pass on to the claimant the calculated or recalculated amount of fee reductions (as notified) within 14 days after being notified by the Secretary of this amount.

The penalty for failing to pass on this amount is 60 penalty units. New subsection 219B(6) states that it is an offence of strict liability (as is the case with the current section 219A, which this new obligation replaces). The rationale for strict liability is the same as for the offence under new section 219AC. The penalty does not apply if the service remits the amount that the service is required to remit to the Secretary under new section 219QB.

A note under new subsection 219B(2) informs the reader that the amount calculated or recalculated as specified is required to be passed on even if the payment of the fee reductions to the service has been suspended under new paragraph 200(1)(h).

New subsection 219B(3) provides that, if the Secretary reduces the amount of fee reductions applicable for a particular week on the recalculation under new section 50ZA for a reason other than a correction by the service of a report given under section 219N, and the amount is reduced, then the service is required to pass on the previously calculated higher amount.

A note at the end of new subsection 219B(3) informs the reader that, in this situation, the fact that a higher amount was passed on to the claimant will be taken into account when a determination of entitlement to be paid CCB by fee reduction will be made after the end of the income year in respect of the individual and the child.

New subsection 219B(4) provides that a service is taken to have passed on to the claimant an amount equal to the anticipated fee reduction for a particular week if the service reduces the amount of fees it charges the claimant for that week in anticipation of the Secretary's calculation of the fee reduction amount applicable for that week.

New subsection 219B(5) provides that the amount passed on to the claimant is taken to have been passed on to the claimant the day the Secretary notified the service of the amount in accordance with subsection 50Z(3).

New section 219BA - Obligation to pass on fee reductions where approved child care service eligible

New subsection 219BA(1) imposes an obligation on the service to pass on to itself CCB by fee reductions where the service is eligible under section 47 of the Family Assistance Act for CCB by fee reduction for a session of care provided to a child at risk, and the Secretary has either calculated or recalculated the amount applicable to the service, the child and the week under new section 50ZB or 50ZC, and has notified the service of either of those amounts in accordance with new subsections 50ZB(3) or 50ZC(2).

New subsection 219BA(2) requires the service to pass on the calculated or recalculated amount to itself within 14 days after being notified by the Secretary of this amount.

New subsection 219BA(3) provides that, if the Secretary reduces the amount on the recalculation under new section 50ZC and the amount is reduced for a reason other than a correction by the service of a report given under new section 219N, then the service must pass on the previously calculated higher amount.

A note at the end of new subsection 219BA(3) informs the reader that, in this situation, the fact that a higher amount was passed on to the individual will be taken into account when a determination of entitlement to be paid CCB by fee reduction will be made after the end of the income year in respect of the service and the child.

New subsection 219BA(4) provides that a service is taken to have passed on to itself an amount equal to the anticipated fee reduction for a particular week if the service reduces the amount of fees it charges the claimant for that week in anticipation of the Secretary's calculation of the fee reduction amount applicable for that week.

New subsection 219BA(5) provides that the amount passed on to the claimant is taken to have been passed on to the claimant the day the Secretary notified the service of the amount in accordance with subsection 50ZB(3).

New section 219BB - Obligation to charge no more than usual fee - rate determined by child care service or Secretary

New section 219BB replicates the obligation inserted into the table in section 219A of the Family Assistance Administration Act by item 28 in Schedule 3 and the obligation inserted into section 219B by item 30 in Schedule 3 . New section 219BB is required because section 219A is repealed by item 82 and section 219B is repealed by item 83 .

New subsection 219BB(1) imposes an obligation on a service to ensure that, if an individual is eligible for fee reductions because the individual is experiencing hardship or the child for which child care is being provided is at risk of serious abuse or neglect, or the service is eligible for CCB by fee reduction for care provided by the service to a child at risk, the fees set by the service for a session of care provided to the child do not exceed the amount of fees that the service would charge another individual who was not eligible for the special rate. Failure to comply with the requirements of new subsection 219BB(1) constitutes an offence for which a penalty of 60 penalty units applies. New subsection 219BB(2) provides that new subsection 219BB(2) is an offence of strict liability, as is the case under the current provision that is being replicated, the underlying basis for which is not changing.

New section 219BC - Obligation to charge no more than usual fee - special grandparent rate

New section 219BC replicates the obligation that is imposed on services in table items 3A, 3B and 9A in section 219A of the Family Assistance Administration Act. Section 219A is repealed by item 82 . New subsection 219BC(1) places an obligation on a service to charge no more than their usual fee when an individual is eligible for the special grandparent rate. Failure to comply with the requirements of new subsection 219BC(1) constitutes an offence for which a penalty of 60 penalty units applies. New subsection 219BC(2) provides that new subsection 219BC(1) is an offence of strict liability, as is the case under the current provisions that are being replicated, the underlying basis for which is not changing.

New section 219BD - Obligation to charge no more than usual fee

New section 219BD replicates the obligation that is placed on services by the insertion of subsections 219A(1A) and 219A(1B) by item 26 in Schedule 3 . New section 219BD is required because section 219A is repealed by item 82 . New subsection 219BD(1) imposes an obligation on services to set fees for individuals who are eligible for Jobs, Education and Training (JET) Child Care fee assistance that do not exceed the amount of fees the individual would charge individuals who are not eligible for Jobs, Education and Training (JET) Child Care fee assistance.

A penalty of 60 penalty units applies for failure to comply with this obligation. New subsection 219A(3) provides that new subsection 219BD(1) is an offence of strict liability as is the case under the provisions that are being replicated, the underlying basis for which is not changing.

New subsection 219A(2) defines Jobs, Education and Training (JET) Child Care fee assistance as the payment of the same name that is paid by the Commonwealth.

Item 84 repeals section 219C, which imposes an obligation on the service to pass on further fee reductions to individuals if notice of the service's entitlement shows the entitlement is greater than the fee reductions calculated by the service for which the service reimbursed itself from advance amounts paid to the service under section 219R. This provision is repealed as it has become obsolete (there are no situations to which the provision may be applied).

Item 85 repeals section 219D, which imposes an obligation on the service to cease to reduce fees as provided for in section 219A and 219B where the service's approval is suspended or cancelled, and to start reducing fees as provided for in section 219A and 219B where the service's suspension has been revoked. As fee reductions will be calculated by the Secretary, not the service, and fee reductions will not be calculated when a service's approval is suspended or cancelled, this provision is no longer required.

Item 86 repeals subsection 219E(1), which deals with the obligation on the service to provide receipts where the service has reduced its fees as provided by section 219A and 219B. This item substitutes a new subsection 219E(1), which provides that a service must issue a receipt for a fee charged by the service for an enrolment which has been confirmed under new section 219AE. The receipt must be issued at the time the fee is paid and must state the amount paid, the amount of fee reductions that the service is required to pass on to the individual under new sections 219B and 219BA and any other information the Secretary specifies in the rules made under subsection (2). A penalty of 60 penalty units applies for contravention of this requirement. This is an offence of strict liability (as is the case with the current subsection 219E(1), which this offence replaces). The rationale for strict liability is the same as for the previous offence.

Item 87 repeals section 219N and substitutes a new section 219N. Section 219N deals with the obligation of the service to give reports to the Secretary, when the reports are to be made, the form they should take, the manner in which they are to be provided and the information that should be included, depending on whether the individual is conditionally eligible for CCB by fee reduction under section 50F of the Family Assistance Act, or the service is eligible for CCB by fee reductions under section 47 of that Act, or there is no individual conditionally eligible for the child and the service is also not eligible under section 47 for the child.

New subsection 219N(1) provides that the service must give a report to the Secretary for each week where a session of care has been provided to a child and the enrolment for that child has been notified to the Secretary in accordance with section 219A and 219AB and confirmed by the Secretary in accordance with section 219AE. The requirement under this section is relevant to an enrolment when an individual has made arrangement for care to a child by the service.

New subsection 219N(2) provides that the service must give a report to the Secretary for each week where a session of care has been provided to a child and the enrolment for that child has been notified to the Secretary in accordance with section 219AA and 219AB and confirmed by the Secretary in accordance with section 219AE. The requirement under this section is under section 47 of the Family Assistance Act for care provided to a child at risk.

The report must be made in the form, manner or way approved by the Secretary and must include information relevant to determining the rate and amount of fee reductions for care provided by the service to the enrolled child and to the entitlement or no entitlement in relation to the care, and any other information the Secretary requires (new subsections 219N(3) and (4) refer).

The report in respect of a week of care must be given by the end of the second week immediately following the week of care. In respect of the weeks of care occurring before the confirmation of enrolment by the Secretary, the reports must be given within 7 days after the day on which the enrolment was confirmed (new subsection 219N(5) refers).

If a service does not provide a report as required by new section 219N, the service commits an offence for which a penalty of 60 penalty units applies (new subsection 219N(6) refers).

A service may update its report (substitute a new report with updated information) or withdraw a report that was not required to be given (new subsection 219N(7) refers).

Item 88 inserts a new section 219NB relating to the obligation to provide further information about enrolled children. If the Secretary makes a request under new section 57G inserted by item 23 for the provision of additional information about enrolled children, the service must comply with the notice.

A penalty of 60 penalty units applies for failure to comply with this obligation.

Item 89 repeals section 219P, which deals with the obligation of a former operator of an approved child care service to report the service's final reporting period immediately before the service ceases to be approved and substitutes a new section 219P.

New section 219P is relevant in the situation where a service's approval was suspended or cancelled. It imposes a requirement on an operator of a service, whose approval was suspended or cancelled, to fulfil the specified obligation that applied to the service while the service was approved. Specifically, the former operator of an approved child care service must ensure that the service's obligations (relating to, for example: the requirement to notify enrolments occurring before suspension/cancellation: updating the enrolment information; providing reports for the enrolments for sessions of care before cessation/cancellation; passing on fee reductions calculated for periods before suspension/cancellation; and remitting the amounts not passed on) are fulfilled.

A penalty of 60 penalty units applies for failure to comply with this obligation.

Item 90 repeals Division 2 of Part 8A, which deals with quarterly advances to approved child care services, and substitutes a new Division 2, which deals with weekly fee reduction payments to approved child care services, and a new Division 3, which deals with enrolment advances.

New Division 2 - Weekly payments in respect of fee reduction to approved child care services

New section 219Q - Weekly payments in respect of fee reductions

New subsection 219Q(1) provides that the Secretary must pay into a nominated bank account maintained by the service the amount of fee reductions calculated by the Secretary under new sections 50Z and 50ZB in respect of care provided by a service to a child in a week.

New subsection 219Q(2) provides that the Secretary must pay into a nominated bank account maintained by the service any increase in the amount of fee reductions recalculated by the Secretary under new sections 50ZA or 50ZC in respect of the child and the week.

New subsection 219Q(3) makes this new section subject to the provisions in Part 4, which deal with overpayments and debt recovery; new section 219QA, which deals with set off where the amount of applicable fee reduction is reduced on recalculation; new section219RC, which deals with set off where enrolment ceases; and new paragraph 200(1)(h), which deals with suspension of payment under new section 219Q or subsection 219QA(2) in respect of fee reduction.

New section 219QA - Payments and set offs where calculation results in reduced fee reductions

New section 219QA applies where the Secretary recalculates the amount of fee reductions applicable to a child and a week as a result of the substitution or withdrawal by the service of a report given under section 219N in respect of the child and the week, and the amount applicable for the child and the week is reduced.

Subsection 219QA(2) requires the Secretary to pay the last recalculated amount (the lower amount) to the service and to set off the previously calculated or recalculated amount (the higher amount) against any future payment to the service of a fee reduction amount (whether paid under new section 219Q or new subsection 219QA(2)) or any enrolment advance to be paid to the service.

New section 219QB - Remitting amounts that cannot be passed on

New section 219QB requires the service to remit any fee reduction amount paid to the service under new section 219Q or that would be paid but for a set off under subsection 82(2) (debt recovery), new section 219QA (set off of a previously calculated higher amount) or new section 219RC (set off of an enrolment advance) if it is not reasonably practicable for the service to pass on that amount to the individual or the service itself within the time required under new subsections 219B(2) or 219BA(2) (within 14 days after being notified of the amount calculated or recalculated).

The amount is to be remitted immediately (new subsection 219QB(1) refers).

The penalty for contravention of new section 219QB is 60 penalty units (new subsection 219QB(1) refers).

The amount must be remitted in the form, manner or way approved by the Secretary. The Secretary must be notified by the service of the remittal, in the form, manner or way approved by the Secretary. The notice must include information required by the Secretary. (New subsections 219QB (2), (3) and (4) refer).

New Division 3 - Enrolment advances

New Division 3 (new sections 219R, 219RA, 219RB and 219RC) deals with enrolment advances.

New section 219R - Election to receive enrolment advance

New section 219R provides that an approved child care service may elect to receive an enrolment advance in relation to a particular enrolment. An occasional care service is not entitled to make the election and cannot receive an enrolment advance (new subsection 219R(1) refers).

The election must be made at the time of giving notice in accordance with new section 219A (new section 219A inserted by item 82 requires an approved child care service to notify enrolment of a child in care of the service).

The election must be given in the form, and in the manner or way approved for this purpose by the Secretary (new paragraph 219R(2)(a) refers). Section 4 operates to the effect that the electronic means of making the election may be specified. The election must include any information the Secretary requires (paragraph 219R(2)(b)).

New section 219RA - Enrolment advance must be paid if service elects to receive it

New section 219RA provides that the Secretary must pay the amount of the enrolment advance if an approved child care service makes an election in accordance with new section 219R in respect of an enrolment and the Secretary confirms the enrolment in accordance with new section 219AE inserted by item 82 (new subsection 219RA(1) refers).

The enrolment advance cannot be paid if the election is not made in the approved manner, form or way or it does not include the information the Secretary requires.

The amount must be paid to the credit of a bank account nominated and maintained by the service (new subsection 219R(1) refers).

New subsection 219RA(2) specifies the following provisions that may affect the payment: Part 4 (overpayments and debt recovery); section 219QA (set off where amount of applicable fee reduction reduced on recalculation); section 219RC (set off when enrolment ceases); and paragraph 200(1)(f) (withholding of enrolment advances).

The Secretary must notify the service about the payment in the form, manner or way approved for this purpose by the Secretary (new subsections 219RA(3) and (4) refer).

New section 219RB - Amount of enrolment advances

New section 219RB provides the Secretary with the authority to determine the amount of the enrolment advance that may be paid in respect of enrolments of a specified class, and to provide for indexation of the amount determined.

New section 219RC - Setting off enrolment advance when enrolment ceases

An enrolment advance amount paid is recoverable when the enrolment to which it relates ceases (an enrolment ceases in the circumstances specified in new section 219AD inserted by item 82 ). If the enrolment ceases, new section 219RC requires the Secretary to set off the amount of the advance against any other enrolment amount to be paid to the service or any fee reduction amount to be paid to the service, whether fee reductions relate to this particular enrolment or not.

An enrolment advance amount that would have been paid but for the fact that a debt was recovered from this amount under subsection 82(2), or a set off under section 219QA or 219RC occurred against this amount, is also recoverable in full by a set off under new section 219RC.

For clarity, it is not intended for the set off to apply in respect of an enrolment amount that would be paid but for the withholding of the amount as a sanction under new paragraph 200(1)(f) inserted by item 78 .

If an enrolment advance was not set off before the service's approval was suspended or cancelled under section 200, or the service ceased to operate, the enrolment amounts paid to the service become a debt due to the Commonwealth by the service. (New subsection 71G(3) inserted by item 37 makes a debt in these circumstances out of the enrolment amount paid or the amount that would be paid but for a set off under subsection 82(2) or new subsections 219QA or 219RC.)

Part 2 - Application and transitional provisions

Items 91 to 99 give effect to various transitional arrangements relevant to the amendments made in Schedule 1 for CCMS purposes.

Application of the amendments to an individual approved child care service

While the amendments made in Schedule 1 generally commence on 1 July 2007, immediately after the commencement of amendments made in Schedule 2 , the application of the amendments in Schedule 1 to an individual approved child care service will occur from the day determined for this purpose by the Secretary.

An individual application day determined for a specific approved child care service recognises that the transition of all services from the current administrative system to an electronic, computer-based system requires a carefully managed rollout process to ensure the ability of individual services to transition successfully.

Item 91 therefore provides the Secretary with the power to determine a service's application day. The day may be a day on or after 1 July 2007 but before 1 July 2009 ( subitem 91(2) and paragraph 91(1 )( b ) refer).

If the Secretary does not specify a day as an application day for a particular approved child care service, the service's application day is 1 July 2009 ( paragraph 91(1 )( a ) refers).

The Secretary is provided with a discretionary power to specify a day later than 1 July 2009 as a particular service's application day, but only if the Secretary is satisfied that the service will be unable to satisfy the requirements imposed under the amendments made by Schedule 1 on 1 July 2009 because of technical difficulties, beyond the service's control, in relation to accessing the electronic interface by which those requirements are to be met ( subitem 91(3 ) refers). If the Secretary specifies a later application day, the 1 July 2009 deadline does not apply; rather, the later application day applies to that service ( paragraph 91(1 )( c ) refers).

Electronic communications

Item 92 specifies that this Part is taken to form part of the family assistance law for the purposes of section 4, that is, for the purposes of approving electronic means of doing things relevant to this Part.

Application of the amendments in Schedule 1

Item 93 is a general application provision. It provides that the amendments made by Schedule 1 , which relate to the enrolment of a child for care provided by an approved child care service, apply to an enrolment that occurs on or after the service's application day ( paragraph 93(a ) refers). For example, the new requirement in section 219A inserted by item 82 , that a service notifies any enrolment of a child in care by a particular service, applies to an enrolment occurring on or after the service's application day.

Otherwise (if an amendment does not relate to an enrolment, for example, an amendment relating to absences from care made by item 1 ), the amendments apply to sessions of care provided by an approved child care service to a child during a week falling wholly after the application day for the service ( paragraph 93(b ) refers).

Children already enrolled on the application day

Item 94 imposes a transitional requirement on approved child care services in respect of children already enrolled for care by the service on the service's application day.

This item makes the requirement of new sections 219A to 219B inserted by item 82 , to notify the enrolment of any child, applicable to the enrolments that occurred before a service's application day and that are current on the application day.

As a result of this requirement operating in conjunction with new sections 219A to 219B, an approved child care service will be required, as a condition of its continued approval, to notify enrolments of all children in its care on the application day. The service will have to notify the enrolments within 7 days after its application day ( paragraph 94(a ) refers).

Once the enrolments are notified, all other amendments made in Schedule 1 (for example, the confirmation of the enrolment, the service's obligation to provide reports under new section 219N in relation to the enrolment, etc) apply to those enrolments in the same way as they would apply if the enrolments were to occur on or after the service's application day ( paragraph 94(b ) refers).

Notification of email address

Item 95 imposes a transitional requirement on an approved child care service to provide to the Secretary its email address within seven days from the service's application day ( subitem 95(1 ) refers).

The service will have complied with this requirement where it provides its email address prior to its application day and this address does not change. ( paragraph 95(2 ) refers).

The notice of an email address must be provided by the service in the form and manner approved for this purpose by the Secretary. As a result of the amendment made by item 92 , section 4 of the Family Assistance Administration Acts will allow the Secretary to approve an electronic form of the notification.

Obligation to give reports to the Secretary for sessions of care before application day

Item 96 provides for a transitional arrangement relating to the requirement under section 219N to provide reports for a reporting period by the end of the following period.

The reports provide, among other things, information about fee reductions provided for a child during a reporting period and about the hours of care provided to the child. The information about fee reductions is relevant to acquittal of advances paid under section 219R to a service in respect of the reporting period; the information about hours of care provided to the child is relevant to the determination of the individual's entitlement to CCB by fee reductions in respect of care provided during that period.

Item 96 is relevant to the reporting period during which amendments made under Schedule 1 started applying to the service (because the Secretary determined the application day for the service). It operates to the effect that, after a service's application day, the service is required to provide the Secretary with the reports for the period during which the application day occurred, by the end of the period that would have been a reporting period if section 219N had not been repealed ( paragraph 96(b ) refers).

In other words, under item 96 , a service will be required to provide reports for the quarter during which the service's application day occurred by the end of the following quarter.

The requirement to provide the reports within the specified timeframe relates only to the reports concerning children in respect of whom an individual was conditionally eligible for CCB by fee reduction or the service was eligible under section 47 of the Family Assistance Act for CCB by fee reduction ( paragraphs 96(a) and (d ) refer).

The reports are to be provided for that period for sessions of care that occurred before the service's application day ( paragraph 96(e ) refers).

The reports will need to be provided in the same form as approved by the Secretary for the purpose of subsection 219N(2) as in force immediately before the application day.

As compliance with section 219N is a service's condition of continued approval (as provided for in subsection 196(2)), and item 96 imposes on the service the requirement of further compliance with section 219 in respect of the last reporting period, failure to comply with the requirement to provide the reports for that period within the specified deadline will constitute a breach of the service's condition of continued approval, for which a sanction under section 200 may be imposed on the service.

Acquittal of advances paid to an approved child care service before application day

Item 97 provides the Secretary with the authority to acquit, after an approved child care service's application day, quarterly advance amounts not acquitted before that day, paid in respect of any reporting period that occurred before the service's application day, and including the period during which the application day occurred ( paragraph 97(1 )( a ) refers). In relation to the reporting period in which the service's application day occurred, the period relevant to the acquittal is the part of the reporting period before the application day ( paragraph 97(1 )( b ) refers).

The acquittal process prescribed in subitems 97(2 ), 97(3) and 97(4 ) equates to the process currently applying to the acquittal of quarterly advance amounts. The total of advance amounts for a particular reporting period is to be compared with the fee reductions the service reported as provided to conditionally eligible individuals in respect of sessions of care provided by the service during the reporting period ( subitem 97(2 ) refers).

If the amount of the advance is more than the total of the fee reductions provided, the difference is a debt due to the Commonwealth by the service. The debt is recoverable, as currently, by the debt recovery methods specified in subsection 82(2) as substituted by item 39 (subitem 97(4 ) refers).

If the amount of the advance is less than the total of the fee reductions provided, the difference is to be paid to the service ( subitem 97(5 ) refers).

If a service does not provide a report for a particular reporting period within the relevant deadline applicable to the provision of the report for that period, the Secretary may assume for the purposes of the acquittal of the period that no fee reductions were provided by the service during that period ( subitem 97(3 ) refers). This would result in a debt being created under subitem 97(4 ) out of the whole amount of the advance for the period for which a report has not been provided. Ultimately, under subitem 97(4 ), a debt equals the difference between the higher amount of advance and the lower amount of fee reductions; the debt created out of the whole amount of advance would be subject to recalculation if the service provided a subsequent report on fee reductions passed on during the relevant reporting period.

Subitems 97(6) and (7 ) require the Secretary to give a notice to the service of any debt or payment resulting from acquittal, in the form and manner approved for this purpose by the Secretary (including the electronic form, as provided for under section 4, as a result of the operation of item 92 ).

Notice where individual not conditionally eligible and approved child care service not eligible

Item 98 imposes a transitional requirement for approved child care services in relation to the provision of reports relating to child care usage of the children for whom neither an individual was conditionally eligible for CCB by fee reductions nor the service was eligible under section 47 of the Family Assistance Act for CCB by fee reductions. In practical terms, the requirement relates to reports relevant to full fee paying customers ( paragraph 98(1 )( b ) refers).

Item 98 relates to the provision of reports for the reporting period (meaning a reporting period under section 219N as immediately before the service's application day) during which the service's application day occurred and for any other period determined by the Secretary for this purpose ( paragraph 98(1 )( a ) refers).

The information to be provided in the report is specified in subitem 98(2 ) and includes, generally, the name of the child, the number of hours relevant to the individual's entitlement to CCB for the care provided to the child and any other information required in the form approved for this purpose by the Secretary ( subitem 98(2 ) refers).

The report must be provided to the Secretary not later than the end of the second financial year following the year during which the service's application day occurred. If the Secretary requested a service to give the report earlier, the service must provide the report within 30 days after the request was made ( paragraph 98(3 )( a ) refers).

The report must be provided in the form, manner or way approved by the Secretary under paragraph 219N(2)(b).

The Secretary may make the request for a report in the form, manner or way approved by the Secretary ( subitem 98(4 ) refers).

The requirement of item 98 replaces the requirement under section 219N as in force before the commencement of Schedule 1 relating to the provision of reports in relation to a child referred to in paragraph 98(1 )( b ).

The requirement of item 98 is a condition of continued approval of the service. Failure to comply with this requirement may result in a sanction being imposed on the service under section 200.

Information other than protected information obtained for the purposes of the Child Care Management System Pilot

Item 65 makes amendments to section 162, authorising obtaining of protected information for the purposes of the Child Care Management System Pilot. 'Protected information' is defined in section 3 and includes information about a person held by the department or the agency (as defined).

Item 99 authorises a person to obtain information other than protected information for the purposes of the Child Care Management System Pilot ( subitems 99(1 ) refers). Subitem 99(2 ) prohibits a person from making a record of such information, disclosing it or using it other than for the purposes of the pilot or as otherwise authorised by law.

A penalty of 2 years imprisonment applies for contravention of subitem 99(2).

Item 99 makes it lawful for a departmental officer to obtain from an operator of an approved child care service, for the purposes of the pilot, personal information relating to a child obtained by the service operator in the course of his or her business.

Subitem 99(3) authorises an approved child care service or any person engaged in the conduct of the service to make a record of personal information relating to the child for whom the service provides care or the individual who enrolled the child for care by the service obtained by the service, and to disclose such information for the purposes of the Child Care Management System Pilot.

'Personal information' referred to in this subitem has the same meaning as in the Privacy Act 1988 .

Saving provisions in relation to item 2

Item 100 makes saving provisions in relation to item 2 , which are explained under the heading Absences .

Transitional regulations

Item 101 authorises the making of regulations, prescribing matters of a transitional nature, including saving or application provisions, and including modifications or adaptations of this amending Act, the Family Assistance Act and the Family Assistance Administration Act.

(b) Absences

Background

Under the current rules, CCB is paid in respect of an individual and a child for sessions of care that the child attends at an approved child care service (other than an approved occasional care service). CCB is also paid for certain absences from care. Currently, CCB continues to be payable, if the care would otherwise have been provided to the child and the absence:

•

is due to a reason set out in subparagraphs 10(2)(b)(i) - 10(2)(b)(iv) of the Family Assistance Administration Act; for example, where the child is ill and covered by a medical certificate or the absence is due to the child's attendance at pre-school; or

•

occurs on a 'permitted absence day' (subparagraph 10(2)(b)(v) of the Family Assistance Act).

Subsection 10(3) of the Family Assistance Act defines a permitted absence day as a day during the period when the service is providing care; care would otherwise have been provide to the child; the reason for the absence is not covered by subparagraphs 10(2)(b)(i) to (iv); and, before the day, not more than 29 permitted absence days in relation to the child have elapsed in the same financial year. For example, a family holiday, which occurs between the 24th and 29th days of absence, would be included in the 30 permitted absence days.

Amendments will be made so that a service will be taken to have provided a session of care to a child for the first 42 absence days without the individual who is eligible for CCB for the child providing evidence, for example, a medical certificate, of why the absence has occurred. An absence will only be counted towards the 42 day limit if CCB is paid for one or more of the hours of care in the session from which the child is absent. The limit of 42 initial absence days is derived from the 30 permitted absence days that are currently in the legislation plus 12 public holidays, which are currently included as an absence for which a service is taken to have provided care by virtue of the permitted circumstances made under section 11.

After the initial 42 absence days without evidence have been utilised, sessions of care will be taken to have been provided if any of circumstances that are set out in subparagraphs 10(2)(b)(i) to (iv) are met and the session of care would otherwise have been provided to the child by an approved child care service.

Explanation of the changes

Part 1 - Amendments

Item 1 repeals subsection 10(2), which deals with absences from all of a session of care and substitutes new subsection 10(2). Item 1 also repeals subsection 10(3), which deals with permitted absence days and substitutes new subsection 10(3).

Under new subsection 10(2), a session of care will be taken to have been provided to a child if the child is absent from a session of care that would otherwise have been provided to the child by an approved child care service, the day falls during the period in which the service is providing care, one or more of the hours in the session is counted toward the individual's weekly limit of hours, and less than 42 days have elapsed in the same financial year on which a session of care is taken to have been provided to the child.

Under the new subsection 10(3), a session of care will be taken to have been provided to a child, after the initial 42 absence days, where the session of care would otherwise have been provided to the child by an approved child care service and the absence occurs in specific circumstances such as illness of the child supported by a medical certificate or the absence is due to the child attending pre-school.

The policy intent behind this amendment is to simplify administration for both individuals and child care services with regards to absences by enabling individuals to claim the first 42 absence days in a year without the need to obtain or provide evidence for the reason for the child's absence from care for the first 42 absence days in a year. In addition, an absence will only be counted towards the 42 day limit if CCB is paid for at least one hour in the session from which the child is absent. Under the new processing rules which will be made under section 57A of the Family Assistance Act, absences will be the last hours to be counted towards an individual's limit of hours, to enable the most beneficial outcome for the individual.

Item 2 is consequential to item 1 and amends section 11 so that it refers to the correct subparagraph of the amended section 10 for which the determination of specified circumstances as permitted circumstance is made.

Part 2 - Application and transitional provisions

Item 100 is a saving provision consequential on the amendment made by item 2 to section 11 of the Family Assistance Act. This item is relevant to the permitted circumstances determination made by the Minister under section 11 before the commencement of the amendments made by items 1 and 2 . This item provides that the determination continues in force after the commencement of the amendments as if the determinations had been made under the new provisions of the Act.

(c) Counting hours towards an individual's limit of hours

Background

Section 52 of the Family Assistance Act limits the number of hours in a week for which an individual or service is eligible for CCB. Under subsection 57A(1) of the Family Assistance Act, the Minister must determine rules relating to which of the hours in sessions of care in a week are to count towards the limit of 24, 50, or more than 50, hours that might apply to a claimant in a week.

Subsection 57A(2) limits the rules made under subsection 57A(1) to sessions of care other than those for which the standard hourly rate applies (which is set out in item 1 of the table in subclause 4(1) of Schedule 2) and the part-time % is 100% (under subclause 2(2) of Schedule 2).

Amendments will allow the Minister to determine the order in which all hours in sessions of care provided by a child care service, or child care services, (including standard hours) are to count towards an individual's hours of eligibility for CCB.

Explanation of the changes

Item 3 changes subsection 57A(1) into section 57A. This amendment is consequential on item 4 .

Item 4 repeals subsection 57A(2).

Subsection 57A(2) was included in the Family Assistance Act so that the sessions of care that would be the subject of the Minister's determination are those in the higher cost category, which attract a higher rate.

Under the new measure, the Secretary, not services, will be calculating fee reductions. To enable the Secretary to calculate fee reductions for a child in a week, each service will be required to submit a record of usage information. The records from each service will not be received or processed at the same time.

Repealing subsection 57A(2) will allow the Minister to determine rules relating to how all of the hours in sessions of care provided by a child care service or child care services are to count towards a claimant's limit of hours. This amendment addresses difficulties in processing the hours of a claimant where the child for whom they are eligible utilises two or more services.

(d) Part-time %

Background

An individual's rate of CCB is worked out using Schedule 2 to the Family Assistance Act and equals their standard hourly rate (worked out using clause 4 of Schedule 2), multiplied by the individual's adjustment percentage (worked out using clause 2 of Schedule 2).

An individual's adjustment percentage equals:

CCB % × Schooling % × Part-time %.

Under subclause 2(2) of Schedule 2, an individual's part-time %, where the care provided to the child is by one or more approved centre based long day care services, varies as follows:

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less than 34 hours at one or more approved centre based long day care services gives a part-time % of 110% (subparagraph 2(2)(a)(iii) of Schedule 2 to the Family Assistance Act);

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34 or more, but less than 35, hours at one or more approved centre based long day care services gives a part-time % of 108% (subparagraph 2(2)(b)(iii) of Schedule 2 to the Family Assistance Act);

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35 or more, but less than 36, hours at one or more approved centre based long day care services gives a part-time % of 106% (subparagraph 2(2)(c)(iii) of Schedule 2 to the Family Assistance Act);

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36 or more, but less than 37, hours at one or more approved centre based long day care services gives a part-time % of 104% (subparagraph 2(2)(d)(iii) of Schedule 2 to the Family Assistance Act);

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37 or more, but less than 38, hours at one or more approved centre based long day care services gives a part-time % of 102% (subparagraph 2(2)(e)(iii) of Schedule 2 to the Family Assistance Act);

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in any other case, the part-time % is 100% (subparagraph 2(2)(f) of Schedule 2 to the Family Assistance Act).

Therefore, an individual's rate of CCB for a session of care provided to a child who attends long day care is affected by the number of hours that the child attends care.

As a result of the amendments contained in this Schedule, the definition of part-time % will refer to the total number of hours provided to a child by an approved centre based long day care service in the week concerned.

This amendment addresses difficulties in administering this provision where a family utilises two or more centre based long day care services. This is because, if the provision applies across all centre based long day care services, the Secretary would have to wait until the information regarding attendance was received from all the services concerned before the Secretary could determine the applicable part-time % and calculate the fee reductions for the individual. This amendment enables the Secretary to determine the part-time % for the hours a child attends a service once the Secretary has the information regarding the hours from that service.

Explanation of the changes

Item 5 replaces references to 'one or more approved centre based long day care services' in the definition of part-time % in subclause 2(2) of Schedule 2 (subparagraphs (a)(iii), (b)(iii), (c)(iii), (d)(iii) and (e)(iii)) with references to 'the approved centre based long day care service' to give effect to the part-time % applying within a service rather than across all services that a child attends.

(e) New sanctions

Background

Subsection 200(1) of the Family Assistance Administration Act contains sanctions that the Secretary may impose on an approved child care service that has not complied, or is not complying, with a condition for the continued approval of the service. Under subsection 200(1), the Secretary may vary the conditions of continued approval of the service imposed under subsection 199(2); impose additional conditions for the continued approval of the service; reduce the number of places allocated to the service under section 208; suspend the service's approval; or cancel the service's approval.

If the Secretary does any of the things listed in subsection 200(1), notice must be given to the service (subsection 200(2)). The process that must be followed prior to the imposition of a sanction is set out in subsection 201(1).

The amendments will introduce three new sanctions for failure of an approved child care service to comply with conditions of continued approval. The sanctions will allow the payment of enrolment amounts to be withheld, or the return of enrolment amounts already paid, or the payment of fee reductions to be suspended for a maximum of three weeks.

Explanation of the changes

Item 38 inserts new section 71GA after section 71G. This section provides that, if the Secretary imposes a sanction that requires a service to remit enrolment advances under new paragraph 200(1)(g), which is inserted by item 78 , the amount equal to the advances that the service is required to remit is a debt due to the Commonwealth.

By virtue of the amendments made by item 38 , debts arising in respect of remittal or enrolment advances under paragraph 200(1)(g) will be recoverable by the means set out in new subsection 82(2), inserted by item 39 .

Item 64 amends paragraph 144(1)(c) to substitute the reference to 'paragraphs 200(1)(a) to (e)' with 'paragraphs 200(1)(a) to (h)' and is consequential on the amendment made to subsection 200(1) by item 78 .

Item 77 amends subparagraph 195(2)(b)(i) to substitute the reference to 'paragraphs 200(1)(a) to (e)' with 'paragraphs 200(1)(a) to (h)' and is consequential on the amendment made to subsection 200(1) by item 78 .

Item 78 inserts new paragraphs 200(1)(f), 200(1)(g) and 200(1)(h) at the end of subsection 200(1).

Subsection 200(1) lists sanctions that may be imposed by the Secretary if a service breaches conditions of continued approval.

New paragraph 200(1)(f) will allow the Secretary to withhold the payment of enrolment amounts that will be due to the service in the future. When this sanction is in place the service will not be paid any enrolment amounts.

New paragraph 200(1)(g) will allow the Secretary to impose a sanction that will require services to repay the enrolment amounts that have been paid to the service for enrolments that have not ceased. The enrolment amounts that the service will have to repay will become a debt by virtue of the amendments made by item 38 and can be recovered by the methods listed in section 82 of the Family Assistance Administration Act.

Under new paragraph 200(1)(h), the Secretary may suspend, for a maximum of three weeks, payment of fee reductions to a service. When the Secretary imposes this sanction, the service is expected to continue to comply with all of its other obligations under the Family Assistance Administration Act, including the obligation to submit attendance records and pass on the fee reductions calculated by the Secretary.

Item 79 amends subsection 200(2) to substitute the reference to 'paragraphs 200(1)(a) to (e)' with 'paragraphs 200(1)(a) to (h)' and is consequential on the amendment made to subsection 200(1) by item 78 .

Item 80 inserts new subsections 200(3A) and 200(3B) after subsection 200(3).

New subsection 200(3A) provides that the Secretary may revoke the imposition of the sanction of withholding the payment of enrolment advances to a service at any time. The revocation is to be done by notice and has effect from the day specified in the notice.

New subsection 200(3B) provides that the Secretary may, at any time by notice to a service, revoke the suspension of payment in respect of fee reductions. If the suspension of the sanction is revoked, all payments that would have been paid under section 219Q or subsection 219QA(2) but for the suspension must be paid to the service.

Item 81 amends subsection 201(1) to substitute the reference to 'paragraphs 200(1)(a) to (e)' with 'paragraphs 200(1)(a) to (h)' and is consequential on the amendment made to subsection 200(1) by item 78 .