Explanatory Memorandum
(Circulated by authority of the Minister for Early Childhood Education, Childcare and Youth the Honourable Kate Ellis MP)Schedule 2 - Obligation on approved child care services to provide statements
Summary
This Schedule amends the Family Assistance Administration Act to modify the current obligation of an approved child care service relating to the provision of 4-weekly statements to the individuals who are conditionally eligible for CCB by fee reduction for a child. The modifications are intended to provide services with greater flexibility in the manner in which they may provide statements. In particular, a service will be able to provide a statement for all the individuals at the same time, for any period chosen by the service not exceeding 3 months.
Background
Currently, section 219E of the Family Assistance Administration Act requires an approved child care service, as a condition of continued approval of the service, to give 4-weekly statements to individuals using the service, who are conditionally eligible for CCB by fee reduction. The 4-week statement period starts on a day specific to each child, or group of children, as the case may be (subsection 219E(4) refers). The statement provides a vehicle by which the individuals in question are informed about, among other things, the amount of fee reductions calculated for them by the Secretary, in respect of the statement period.
The obligation to provide statements on a child-specific, 4-weekly cycle is of considerable concern to child care services as this obligation may not align with the service's usual accounting or business practices. This affects services' compliance with the current statement requirements.
The amendments made by this Schedule provide greater flexibility for approved child care services in the way they provide the statements, and parents or families continue to receive the information for the whole period that they are using care.
Explanation of the changes
A New Tax System (Family Assistance)(Administration) Act 1999
Item 1 - Subsection 3(1)(at the end of paragraph (h) of the definition of civil penalty provision)
Item 1 amends the definition of civil penalty provision in subsection 3(1) by including a reference to new subsection 219E(7) (inserted by item 5 of this Schedule). Further explanation is provided in the context of the amendment made by Item 5 .
Item 2 - Subsection 219E(1)
Section 219E deals with the obligation of approved child care services to provide a statement for a statement period to an individual who is conditionally eligible for CCB by fee reduction for a child or to some other person specified under rules made under subsection 219E(6).
Currently, if a service is required under section 219B to pass on to the individual an amount of fee reduction in respect of a session or sessions of care occurring during a statement period, subsection 219E(1) requires the service to give the individual (or the other person), a statement for the statement period within four weeks of the end of the statement period. Item 2 amends subsection 219E(1) to allow a service to give the statement before the end of one month starting on the day after the end of the statement period. This amendment, in the context of section 219E as amended, operates to the effect that, if sessions of care are provided to a child during the entire statement period, the service will be required to provide the statement for that period after the end of the period, within one month from the end of the period. If a child leaves the service before the end of the statement period and the service is certain that it will not provide any more sessions of care for a child in that period, the service will be able to provide the statement relating to that child at any time after the cessation of care and before the end of one month after the end of the statement period (for example, immediately after the cessation of care irrespective of when during the statement period the care has ceased).
Item 3 - Paragraph 219E(2)(d)
Subsection 219E(2) is an offence provision for a service's failure to comply with the obligation to provide a statement for a statement period at the time specified in subsection 219E(1). It is an offence of strict liability (subsection 219E(3) refers).
Item 3 makes a consequential amendment to paragraph 219E(2)(d) referring to the time-frame for the provision of a statement specified in subsection 219E(1), so that it refers to the time-frame as amended by Item 2 .
Item 4 - Subsection 219E(4)
Subsection 219E(4) determines the frequency with which a service must give a statement to an individual. It also specifies a start date of any statement period. Currently subsection 219E(4) requires a service to provide a statement on a 4- weekly cycle, potentially different for each child in care of the service.
Item 4 amends subsection 219E(4) to change the duration of the period for which a statement must be given from the 4 week period to a 3 month period or any period shorter than 3 months. It also provides that the start of the statement period is specific to the service, so that the statements for all the relevant children in care of the service are provided at the same time.
New paragraph 219E(4)(a) provides that the first statement period for the service is the 3-month period that commences on the day (further referred to as the initial day) that is:
- (i)
- the day on which Schedule 2 to the Family Assistance Legislation Amendment (Child Care) Act 2010 commences; or
- (ii)
- if the Secretary approves the service (under section 195) on a day later than that commencement day, that later day.
That is, if, on the day of the commencement of these amendments, a child care service is approved under section 195 for the purposes of the family assistance law, the service's first statement period starts on the commencement day. If a service is approved after the commencement day, the service's statement period starts on the day on which the approval is given. This day may not necessarily be the same day from which a service's approval is expressed to operate. If, for example, a service's approval is expressed to operate retrospectively, the service is not required to provide a statement for the periods of care occurring before the day on which the approval was given.
Alternatively, paragraph 219E(4)(a) also provides that if (before or during the 3-month period) the service chooses a period shorter than the 3-month period starting on the initial day, then the shorter period is the first statement period.
New paragraph 219E(4)(b) provides that each of the subsequent statements periods is either:
- (i)
- the 3-month period commencing on the day after the end of the immediately preceding statement period; or
- (ii)
- if the service has chosen a shorter period, the shorter period.
Item 5 - At the end of section 219E
Item 5 inserts new subsections 219E(7) and (8).
Section 50ZA of the Family Assistance Administration Act allows the Secretary to recalculate the rate and amount of fee reductions which the Secretary considers is applicable in respect of any sessions of care provided to a service for a child in a week.
New subsection 219E(7) provides that, if a service has already given an individual or some other person a statement under subsection 219E(1) relating to any sessions of care provided by a service to a child in the statement period, the service is required to give an individual/person a revised statement if the service has been notified on a day (the notification day) of a recalculated rate or amount (under section 50ZA) in respect of any of those sessions of care. The service must, before the end of the first statement period starting after the notification day, give the individual/person either a statement taking account of the recalculation or a statement amending the earlier statement so as to take account of the recalculation.
A note at the end of new subsection 219E(7) informs the reader that subsection 219E(7) is a civil penalty provision and that Part 8C provides for pecuniary penalties for breaches of civil penalty provisions. Item 1 amends the civil penalty provision definition in section 3 to include new subsection 219E(7). This means that the consequences for failure to comply with the obligation under subsection 219E(1) to give a statement for a statement period, which is currently subject to civil penalties, and the consequences for failure to correct or reissue the statement previously given, are the same.
New subsection 219E(8) provides that a service commits an offence if the service has given a statement under subsection 219E(1) relating to sessions of care provided during a statement period, is notified of recalculation of fee reductions under section 50Z in respect of any of the sessions falling within the statement period and the service fails to give a corrected statement or fails to reissue the statement as required by new subsection 219E(7). The penalty is 60 penalty units; the same penalty currently applies in relation to an offence for failure to give the statement required under subsection 219E(1) (subsection 219E(2) refers). This offence is a strict liability offence, as is the offence for the failure to give the statement required under subsection 219E(1) (subsection 219E(2) refers). 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.
Item 6 - Saving provision
Item 6 is a saving provision. It operates to the effect that the current requirements of section 219E relating to the provision of a statement continue to apply in relation to any statement period which started before commencement of this Schedule.