Explanatory Memorandum
(Circulated by the authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP)Schedule 3 - 2008 one-off payments to carers
Summary
In broad terms, this Schedule introduces new one-off payments for certain carers, which will be paid as a lump sum payment generally before 30 June 2008. The bonuses are to be paid to people who will have received targeted payments in an instalment period that includes 13 May 2008. It will also be paid to those people who have lodged a claim, or have contacted Centrelink about and indicated an intention to apply, for a targeted payment on or shortly before 13 May 2008 and are subsequently granted that payment in respect of that claim or contact.
Background
This Schedule provides for a one-off payment to eligible carers that will be paid automatically and without the need for a claim.
Specifically, and subject to qualification, a payment of $1,000 will be paid to people who are paid an instalment of:
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- carer payment in respect of a period that includes 13 May 2008;
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- wife pension in respect of a period that includes 13 May 2008 where that person is also paid an instalment of carer allowance in respect of a period that includes that same date;
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- partner service pension under the Veterans' Entitlements Act in respect of a period that includes 13 May 2008 where that person is also paid an instalment of carer allowance in respect of a period that includes that same date; and
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- carer service pension under the Veterans' Entitlements Act in respect of a period that includes 13 May 2008.
Further, and subject to qualification, carers will be entitled to $600 in respect of each care receiver in relation to whom the person receives an instalment of carer allowance for a period that includes 13 May 2008. Where the care of the care receiver is shared, the $600 will also be shared. Where qualification for an instalment of carer allowance depends on the person providing care for two care receivers, the payment will also be $600.
Explanation of the changes
Part 1 - Main amendments
Amendments of the Social Security Act
Item 1 inserts new Divisions 12, 13, 14 and 15 at the end of Part 2.5A of Chapter 2 of the Social Security Act. It is noted that carers who qualify for one-off payments under this item may also qualify for another one-off payment under item 2 of this Schedule.
New Division 12 contains the provisions relevant to the 2008 one-off payment to carers eligible for carer payment.
New section 269 provides that a person is qualified for a one-off payment if the person has been paid an instalment of carer payment in respect of a period that includes 13 May 2008 and the person was paid that instalment because of a claim the person made on or before 13 May 2008.
New section 270 provides that the amount of the 2008 one-off payment is $1,000. The note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
New Division 13 contains the provisions relevant to the 2008 one-off payment to certain carers eligible for wife pension.
New section 271 provides that a person is qualified for a one-off payment if the person has been paid an instalment of wife pension and an instalment of carer allowance, both in respect of a period that includes 13 May 2008, where three conditions are satisfied in relation to one or more instalments of carer allowance that have been paid to the person. These conditions are that: the instalment was in respect of a period that includes 13 May 2008; the reason that the instalment covered 13 May 2008 was not only because of clause 16 or 17 of Schedule 2 to the Social Security Administration Act; and the person was paid that instalment because of a claim the person made on or before 13 May 2008. The second requirement is not to be taken to limit the third requirement in any way.
New section 272 provides that the amount of the 2008 one-off payment is $1,000. The note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
New Division 14 contains the provisions relevant to the 2008 one-off payment to certain carers eligible for partner service pension.
New section 273 provides that a person is qualified for a one-off payment if the person has been paid an instalment of partner service pension under Part 3 of the Veterans' Entitlements Act and an instalment of carer allowance, both in respect of a period that includes 13 May 2008 where three conditions are satisfied in relation to one or more instalments of carer allowance that have been paid to the person. These conditions are that: the instalment was in respect of a period that includes 13 May 2008; the reason that the instalment covered 13 May 2008 was not only because of clause 16 or 17 of Schedule 2 to the Social Security Administration Act; and the person was paid that instalment because of a claim the person made on or before 13 May 2008. The second requirement is not to be taken to limit the third requirement in any way.
New section 274 provides that the amount of the 2008 one-off payment is $1,000. The note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
New Division 15 contains the provisions relevant to the 2008 one-off payment to carers eligible for carer service pension.
The only people receiving carer service pension are those whose entitlement to carer service pension was preserved under savings and transitional provisions under subclause 8(2) or (4) of Schedule 5 to the Veterans' Entitlements Act. This is because the Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 made changes that removed all carer provisions from the Veterans' Entitlements Act, allowing the recipients to transfer to carer payments that were available at that time under the Social Security Act. Because, at the time of these changes, it was recognised that a number of people would be adversely affected by those changes, they could elect to remain on the carer service pension rather than transferring to carer payment.
New section 275 provides that a person is qualified for a one-off payment if the person has been paid an instalment of carer service pension as a result of the operation of subclause 8(2) or (4) of Schedule 5 to the Veterans' Entitlements Act and the person was paid the instalment because of a claim the person made on or before 13 May 2008.
New section 276 provides that the amount of the 2008 one-off payment is $1,000. The note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.
Item 2 inserts new Division 5 into Part 2.19A of Chapter 2 of the Social Security Act.
New Division 5 of Part 2.19A contains the provisions relevant to the 2008 one-off payment to people eligible for carer allowance. It is noted that people who qualify for a one-off payment under this item may also qualify for another one-off payment under item 1 of this Schedule.
New section 992WD sets out the criteria to be satisfied for a person to qualify for a 2008 one-off payment to carers (carer allowance related). In effect, subsection 992WD(1) sets out three requirements that must be met in relation to one or more instalments of carer allowance that have been paid to the person. The first requirement is that the instalment of carer allowance was paid to the person in respect of a period that includes 13 May 2008. The second requirement is that the operation of clause 16 or 17 of Schedule 2 to the Social Security Administration Act (which deal with backdating) must not be the reason that the instalment covered 13 May 2008. The third requirement is that the person was paid the instalment because of a claim the person made on or before 13 May 2008. The second requirement is not to be taken to limit the third requirement in any way.
The effect of subsection 992WD(2) is that each instalment that meets all three requirements of subsection 992WD(1) is a 'qualifying instalment'.
The broad operation of the scheme is that a qualified person will receive payment in respect of each 'eligible care receiver' in relation to the person. The concept of who is an 'eligible care receiver' is dealt with in new section 992WE. Subsection 992WE(1) essentially provides for the general rule that, where providing care to a person gives rise to a qualifying instalment of carer allowance, that person is an 'eligible care receiver' in relation to the qualified person. However, there are situations where a person's qualification for an instalment of carer allowance arises on account of the care the person provides for two disabled children (subsection 953(2) of the Social Security Act). Accordingly, subsection 992WE(2) qualifies the general rule by providing that, where subsection 953(2) applies in relation to the qualifying instalment, the two disabled children are treated as a single 'eligible care receiver'.
New section 992WF is concerned with working out the amount of the one-off payment. Subsection 992WF(1) provides that the amount is worked out by adding together the amounts applicable for each eligible care receiver. Subsection 992WF(2) provides that the applicable amount for an eligible receiver is $600 unless subsection 992WF(3) applies. Subsection 992WF(3) is concerned with situations where two people are qualified for carer allowance because they share the care of a care receiver (or care receivers). In those circumstances, subsection 981(1) of the Social Security Act provides for the Secretary to make a written determination specifying the share of carer allowance that each of the two people is to receive. The effect of subsection 992WF(3) is that, where the qualifying instalment was paid on the basis of a determination as to a particular share of carer allowance, the amount applicable for an eligible care receiver in relation to a qualified person is that same share of $600.
Item 3 is concerned with determining whether a person has made a claim, or should be taken to have made a claim, on or before 13 May 2008. In determining whether this has occurred, the effect of section 12 and section 15 of the Social Security Administration Act is to be disregarded.
In relation to section 12, subitem 3(a) provides that a person should not be paid a one-off payment where he or she has claimed a payment (for example, age pension), has subsequently become qualified for another payment (for example, carer payment), and, after 13 May 2008, is transferred to that latter payment by virtue of section 12 of the Social Security Administration Act.
In relation to section 15, subitem 3(b) clarifies that the effect of a decision of the Secretary made after 13 May 2008 for the purposes of section 15 of the Social Security Administration Act (dealing with certain incorrect or inappropriate claims) is to be disregarded. This is intended to restrict access to the one-off payments to cases where the relevant decision for the purposes of section 15 is made before or on 13 May 2008.
Items 4 to 6 deal with overpayment arising in respect of the five 2008 one-off payments. These amendments ensure that section 1223ABA of the Social Security Act (which applies in relation to the payments made under the 2004 One-off Payments Act, the 2005 One-off Payments Act, the 2006 One-off Payments Act, and the 2007 One-off Payments Act) will also apply to the 2008 one-off payments. Section 1223ABA, in very broad terms, provides that a one-off payment (or part of a one-off payment) will be a overpayment where it is established that the recipient knowingly made a false or misleading statement (or provided false information) and, if the true circumstances had been known, the determination in relation to the relevant instalment (which gave rise to the qualification for the one-off payment) would not have been made.
Item 7 repeals sections 12AA, 12AB, 12AC and 12AD of the Social Security Administration Act and substitutes new section 12AA. New section 12AA consolidates previous sections 12AA, 12AB, 12AC and 12AD, which provided that a claim is not required in order to be paid: the one-off payments to carers; the 2005 one-off payments to carers; the 2006 one-off payments to carers; or the 2007 one-off payments to carers. New section 12AA, in paragraphs 12AA(n), (o), (p), (q) and (r), also provides that a claim is not required in order to be paid any of the five 2008 one-off payments.
Item 8 inserts a reference to the five new one-off payments into the existing definition of 'lump sum benefit' contained in subsection 47(1) of the Social Security Administration Act.
Item 9 repeals sections 47B, 47C, 47D and 47E of the Social Security Administration Act and substitutes new section 47B. New section 47B consolidates old sections 47B, 47C, 47D and 47E, which provided that the Secretary must pay: the one-off payments to carers; the 2005 one-off payments to carers; the 2006 one-off payments to carers; and, the 2007 one-off payments to carers; in a single lump sum on the date that the Secretary determines is the earliest reasonably practicable date on which to do so, and in the manner by which the Secretary considers is appropriate. New section 47B, in paragraphs 47(2)(p), (q), (r), (s) and (t), also provides that the 2008 one-off payments to carers contained in this schedule are to be paid in the same way as previous one-off payments.
Item 10 is an application provision, which provides that the amendment made by item 9 does not entitle a person to be paid a one-off payment to carers, a 2005 one-off payment to carers, a 2006 one-off payment to carers or a 2007 one-off payment to carers if such a payment has already been paid to the person under section 47B, 47D, 47D or 47E of the Social Security Act as in force before the commencement of this item.
Part 2 - Related amendments
Amendments of the Income Tax Assessment Act 1936
The Separate Net Income (SNI) of the dependants of a taxpayer is used to determine the taxpayer's eligibility for certain dependant offsets. SNI is income and other specified amounts earned, derived or received, less certain expenses incurred in earning that income. A payment of carer allowance is not included as part of SNI. As it is not intended that any of the 2008 one-off payments to carers form part of SNI, items 11 and 12 make the necessary amendments to the Income Tax Assessment Act 1936.
Item 13 amends the Income Tax Assessment Act 1936 to provide that payment to carers made under the administrative scheme determined under Schedule 4 to this bill is not included as part of SNI.
Amendments of the Income Tax Assessment Act 1997
The 2008 one-off payments to carers, and a payment made under the scheme determined under Schedule 4 to this bill, will be exempt from income tax. Amendments are made to section 52-10 of the Income Tax Assessment Act 1997 to achieve this effect ( items 15, 31 and 32 ).
A consequential amendment is also made to the table in section 11-15 to add in references to the 2008 one-off payments to carers and a payment made under the scheme determined under Schedule 4 to this bill ( item 14 ).
Items 16 to 30 amend subsection 52-10(1D) and are consequential to the amendments made by items 35 to 67 , which consolidate various parts of the Social Security Act.
Amendments of the Social Security Act
Item 33 inserts a new paragraph 8(8)(jaf) into the Social Security Act. This ensures that any payment made under the administrative scheme determined under Schedule 4 to this bill, does not count as income for the purposes of the social security law.
Items 34 to 57 consolidate Parts 2.5A, 2.5B, 2.5C, 2.5D, 2.5E, 2.5F, 2.5G, 2.5H, 2.5J, and 2.5K of the Social Security Act into new Part 2.5A. New Part 2.5A will contain the following Divisions (in addition to the Divisions added by this Schedule):
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- Division 1 - One-off payment to carers eligible for carer payment;
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- Division 2 - 2005 one-off payment to carers eligible for carer payment;
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- Division 3 - 2005 one-off payment to carers eligible for carer service pension;
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- Division 4 - 2006 one-off payment to carers eligible for carer payment;
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- Division 5 - 2006 one-off payment to carers eligible for wife pension;
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- Division 6 - 2006 one-off payment to carers eligible for partner service pension;
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- Division 7 - 2006 one-off payment to carers eligible for carer service pension;
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- Division 8 - 2007 one-off payment to carers eligible for carer payment;
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- Division 9 - 2007 one-off payment to carers eligible for wife pension;
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- Division 10 - 2007 one-off payment to carers eligible for partner service pension; and
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- Division 11 - 2007 one-off payment to carers eligible for carer service pension.
Items 58 to 67 consolidate Parts 2.19A, 2.19B, 2.19C and 2.19D into new Part 2.19A of the Social Security Act. New Part 2.19A will contain the following Divisions (in addition to the Divisions added by this Schedule):
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- Division 1 - One-off payment to carers eligible for carer allowance;
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- Division 2 - 2005 one-off payment to carers eligible for carer allowance;
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- Division 3 - 2006 one-off payment to carers eligible for carer allowance; and
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- Division 4 - 2007 one-off payment to carers eligible for carer allowance.
Amendments of the 2007 One-off Payments Act
Item 68 amends paragraph 1(2)(a) of Schedule 4 to the 2007 One-Off Payments Act. Item 68 is consequential to the amendments made by items 50 to 57 and items 66 and 67 .
Amendments of the 2006 One-off Payments Act
Item 69 amends paragraph 1(2)(a) of Schedule 2 to the 2006 One-Off Payments Act. Item 70 is consequential to the amendments made by items 42 to 49 and items 64 and 65
Amendments of the 2005 One-off Payments Act
Item 70 amends paragraph 1(2)(a) of Schedule 4 to the 2005 One-Off Payments Act. Item 69 is consequential to the amendments made by items 37 to 41 and items 62 and 63 .
Amendments of the Veterans' Entitlements Act
Item 71 inserts a new paragraph 5H(8)(zze) into the Veterans' Entitlements Act. This ensures that any payment made under the administrative scheme determined under Schedule 4 to this bill, does not count as income for the purposes of the Veterans' Entitlements Act.