Explanatory Memorandum
(Circulated by authority of the Minister for Early Childhood Education, Childcare and Youth the Honourable Kate Ellis MP)Schedule 6 - Transitional payments relating to the Child Care Management System
Summary
Schedule 1 of the Child Care Management System Act provides for acquittals of advance amounts that were paid to an approved child care service before the service's transition to the Child Care Management System. The advance amounts were paid to reimburse the service for the amount of CCB fee reduction the service was required to make to the individuals eligible for CCB by fee reduction.
This Schedule amends Part 2 of Schedule 1 of the Child Care Management System Act to provide for an appropriation of funds for the purposes of a payment required to be made to an approved child care service as a result of an acquittal under Part 2 of Schedule 1 of that Act.
Background
Part 1 of Schedule 1 of the Child Care Management System Act amended the Family Assistance Administration Act, with effect from 29 June 2007, to provide for the introduction of the Child Care Management System.
The Family Assistance Administration Act, as in force before the amendments, provided for the payment to approved child care services of quarterly advance amounts to reimburse the services for the amount of CCB fee reduction the services were required to make to the individuals using the service who were eligible for CCB by fee reduction. The advance amounts paid for a quarter were acquitted after a service submitted a report relating to fee reductions made by the service in that quarter. The advance amounts were acquitted by determining the difference between the amount of advance paid to the service and the amount of fee reductions provided by the service for that quarter. If the amount of advance paid to the service was less than the total amount of fee reductions made by the service during the quarter, the amount of the difference was required to be paid to the service.
As the quarterly advances were not available under the Child Care Management System, the amendments made by Schedule 1 of the Child Care Management System Act repealed the provisions relating to payment of advances. However, Part 2 of that Schedule, dealing with transitional arrangements, provided for acquittal of advance amounts paid to an approved child care service for periods before its transition to the Child Care Management Systems to be carried out after the service's transition to the Child Care Management System (transitional acquittals). If, as a result of such an acquittal, it is determined that the advance amount paid for a quarter is less than the amount of fee reductions made by the service in that quarter, subitems 97(5) and 97A(5) of Part 2 of Schedule 1 of the Child Care Management System Act requires that the amount of the difference be paid to the service.
While the Child Care Management System Act clearly authorises the payment of the amounts resulting from the transitional acquittals, the Act itself does not contain any specific appropriation provision.
For avoidance of doubt, this Schedule makes an amendment to the Child Care Management System Act to insert an appropriation power relating to payments resulting from the transitional acquittals.
Explanation of the changes
Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Act 2007
Item 1 - At the end of Part 2 of Schedule 1
Item 1 inserts new item 102 into Part 2 of Schedule 1. New item 102 provides for the appropriation of funds from the Consolidated Revenue Fund for the purposes of making payments to services under this Part, that is, in respect of acquittals occurring under this Part.
Item 2 - Application
Item 2 is an application provision. It provides that the amendment made by Item 1 applies in relation to payments made on or after the commencement of that item.