House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Employment Participation and Childcare, the Honourable Kate Ellis MP)

Schedule 1 - Set off and recovery of amounts

Summary

Set off and recovery of amounts

This Schedule makes amendments to the Family Assistance Administration Act to enable:

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the setting off of amounts paid to an approved child care service under the family assistance law against amounts paid to the service under the CCMS Act, a payment to be made to the service under the Jobs Education and Training (JET) Child Care fee assistance and against other payments made to the service under a scheme or program administered by the Department; and

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recovery of a debt due by an approved child care service to the Commonwealth under the family assistance law by setting off the amount of the debt against amounts paid to the service under the CCMS Act, a payment to be made to the service under the Jobs Education and Training (JET) Child Care fee assistance and against other payments made to the service under a scheme or program administered by the Department; and

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the setting off of amounts paid to an approved child care service and a debt of an approved child care service against fee reduction payments, enrolment advances, payments made under the CCMS Act, payments under the Jobs Education and Training (JET) Child Care fee assistance and payments under a scheme or program administered by the Department to be made to another approved child care service operated by the same operator.

Enrolment advances

Amendments are also made by this Schedule to the Family Assistance Administration Act to:

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ensure that enrolment advance payments are not required to be made to an approved child care service after the operator of an approved child care service has notified the operator's decision to cease operating the service; and

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enable the set off, following the notification, of enrolment advance payments already made to the service but not yet recovered.

The Schedule also makes a technical amendment to correct a misdescribed amendment in the Family Assistance Legislation Amendment (Child Care) Act 2010 .

Background

Amendments relating to set off and recovery of amounts

Payments to approved child care services

An approved child care service is, or may be, paid various amounts under the Family Assistance Administration Act, the CCMS Act and under non-legislative schemes or programs administered by the Department.

The Family Assistance Administration Act provides for payment of the following to an approved child care service:

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under sections 219Q and 219QA: weekly payments of fee reduction amounts that the service is required to pass onto the individuals using the service who are conditionally eligible for CCB by fee reduction (or to itself if the service is so eligible); and

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under section 219RA: enrolment advance amounts, paid for the benefit of the service, in relation to an enrolment of a child notified by the service and confirmed by the Secretary;

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under section 219RD: business continuity payments, paid in certain circumstances for the benefit of the service.

Subitems 97(5) and 97A(5) of the CCMS Act provide for payment to an approved child care service of an amount resulting from an acquittal under the CCMS Act of quarterly advance amounts paid to the service under the Family Assistance Administration Act as in force before 29 June 2007.

Further, an approved child care service is, or may be paid, amounts under non-legislative schemes or programs administered by the Department. Some of these payments are paid for the benefit of individuals using the care of the service and some are paid for the benefit of the service. For example:

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under the Jobs Education and Training (JET) Child Care Fee Assistance Program, a payment for an individual undergoing training is made directly to the service providing care to the individual's child. This is to cover the difference between the individual's CCB fee reductions and the total amount of child care fees charged by the service for that care; and

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under the Child Care Services Support Program, payments are made to services via funding agreements to assist the services with the provision of care in accordance with the outcomes specified in the agreements.

Set off

The Family Assistance Administration Act requires the Secretary to set off, in specified circumstances, the amounts of fee reductions, enrolment advances and business continuity payments paid to a service against any amount of fee reduction or enrolment advances that are to be paid to the service.

A business continuity payment paid to a service can be also set off against an acquittal payment made to the service under subitems 97(5) or 97A(5) of the CCMS Act.

As a result of the amendments made by this Schedule, all amounts that the Family Assistance Administration Act required to be set off in respect of a service (the first service) will also be able to be set off against:

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an acquittal payment to be made to the service under subitems 97(5) or 97A(5) of the CCMS Act; and

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a payment to be made to the service under the Jobs Education and Training (JET) Child Care fee assistance; and

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any other payment made to the service under a scheme or program administered by the Department specified for this purpose by the Minister in a legislative instrument; and

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payments of fee reduction amounts, enrolment advances, payments made under the CCMS Act, payments under the Jobs Education and Training (JET) Child Care fee assistance and payments under a scheme or program administered by the Department to be made to another approved child care service operated by the same operator that operates the first service.

Debt recovery

Part 4 of the Family Assistance Administration Act contains provisions specifying the circumstances in which amounts of fee reductions, enrolment advances or business continuity payments become a debt due to the Commonwealth by an approved child care service. It includes section 71G, which creates a debt relevant to those payments when a service's approval for the purposes of the family assistance law is suspended or cancelled.

A debt due by a service to the Commonwealth can be recovered by one or more of the means specified in subsection 82(2). This includes setting off the debt against payments to the service of fee reduction amounts or enrolment amounts. As a result of the amendments made by this Schedule, a debt of a service (the first service) will be also recoverable by setting off the amount of the debt against:

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an acquittal payment to be made to the service under subitem 97(5) or 97A(5) of the CCMS Act; and

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a payment to be made to the service under the Jobs Education and Training (JET) Child Care fee assistance; and

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any other payment made to the service under a scheme or program administered by the Department, that the Minister specifies for this purpose in a legislative instrument; and

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payments of fee reduction amounts and enrolment advances, payments made under the CCMS Act, payments under the Jobs Education and Training (JET) Child Care fee assistance, and payments made under a scheme or program administered by the Department to be made to another approved child care service operated by the same operator that operates the first service.

Amendments relating to enrolment advances

An enrolment advance is an amount paid to an approved child care service to support the service's cash flow before the payment of fee reductions commence for a child whose enrolment the service has notified. It is required to be paid to the service once the service has elected to receive the advance and the Secretary confirms the enrolment (section 219RA). The requirement to pay the advance operates even if the enrolment notification is received immediately before the cancellation of the service's approval for the purposes of the family assistance law (for example, when the operator of the service ceases the operation).

Once the enrolment for which an advance was paid ceases (the care has stopped), the amount of the advance paid for the child is required to be set off against any subsequent payment of enrolment advance or fee reduction that is to be paid to the service (section 219RC).

Once a service's approval for the purposes of the family assistance law is suspended or cancelled, all advance amounts that have not been offset by that time (including advances for children whose enrolments have not ceased before the service's suspension or cancellation of approval) become a debt due by the service to the Commonwealth (subsection 71G(2)). That debt is recoverable from any enrolment advance and fee reduction amounts that may yet be paid to the service in connection with the care that occurred before the suspension/cancellation (subsection 82(2)).

One of the reasons for cancellation of a service's approval is where the person who operates the service (the person on whose application the service was approved) ceases to operate the service (eg closes the service or transfers the operation to another operator). The operator of the service in this situation is required to notify the decision to cease the operation of the service at least 42 days before the cessation (section 219M).

At the time a service ceases to operate there may be a greater amount of enrolment advance to be recovered than the amount of fee reduction payments due to the service, from which the enrolment advance debt may be recovered. If a service closes due to financial difficulties, for example, when insolvent, the Commonwealth may not be able to recover the debt.

Under the current legislation, a service is obliged to notify the Secretary of all new enrolments occurring before the service's cancellation of approval. Therefore, the service is paid enrolment advances for those enrolments even in the days leading up to the service's cessation of operation, adding to the amount of the service's debt arising on cancellation of approval.

This adds to the amount of a service's debt arising on cancellation of the service's approval and undermines the effectiveness of the recovery of the debt.

Amendments made by this Schedule ensure that enrolment advances are not required to be paid to the service after the operator has notified the decision to cease operating the service. The amendments also ensure that the enrolment advances that have been paid to a service (the first service), but have not been yet set off, will be able to be set off after the notification against the following payments:

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fee reductions, enrolment amounts, and an acquittal payment under subitem 97(5) or 97A(5) of the CCMS Act to be made to the service; and

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a payment to be made to the service under the Jobs Education and Training (JET) Child Care fee assistance; and

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any another payment made to the service under a scheme or program administered by the Department, specified for this purpose by the Minister in a legislative instrument; and

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payments of fee reduction amounts, enrolment advances, payments made under the CCMS Act and payments under a scheme or program administered by the Department to be made to another approved child care service operated by the same operator that operates the first service.

Explanation of the changes

Part 1 - Main amendments

A New Tax System (Family Assistance) (Administration) Act 1999

Items 1 and 2 - Subsection 3(1) and After subsection 3(4)

Subsection 3(1) defines certain terms used in the Family Assistance Administration Act. Item 1 inserts a new definition, of child care service payment , into subsection 3(1). The child care service payment means:

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a payment under section 219Q or subsection 219QA(2) in respect of fee reduction; or

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an enrolment advance under section 219RA; or

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a payment under subitem 97(5) of Schedule 1 to the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Act 2007 or subitem 97A(5) of that Schedule (as modified by the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Regulations 2009 ); or

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the payment known as Jobs Education and Training (JET) Child Care fee assistance that is paid by the Commonwealth; or

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a payment specified in an instrument under subsection 3(4A).

Item 2 inserts new subsection 3(4A). New subsection 3(4A) permits the Minister to specify, by legislative instrument, a payment for the purposes of paragraph 3(1)(e) of the definition of child care service payment in subsection 3(1). New subsection 3(4A) provides that the payment that the Minister may specify must be one made to child care services under a scheme or program (however described) administered by the Department.

The new definition of child care service payment is relevant to the amendments made by Items 8, 23, 29, 30 and 32 .

Items 3, 4, 5 and 6 - Paragraphs 66(2)(bb), 66(2)(bc), 66(2)(cb) and 66(2)(cc)

Subsection 66(1) provides for the inalienability of certain payments, including fee reductions and enrolment advance amounts paid to an approved child care service, from any sale, assignment, charge, execution, bankruptcy or otherwise. Subsection 66(2) sets out a number of provisions of the Family Assistance Administration Act that affect the amounts of those payments.

Items 3 and 4 make amendments to paragraphs 66(2)(bb) and (bc) consequential to the amendment made by Item 10 , which substitutes new section 87A for sections 87A and 87B. Item 3 makes a consequential amendment to the description of new section 87A in paragraph (bb) and Item 4 repeals the redundant paragraph (bc) referring to section 87B.

Item 5 amends paragraph 66(2)(cb) to correct the description of section 219QA, as a consequence of the amendment made to section 219QA by Item 23 .

Item 6 amends paragraph 66(2)(cc) to correct the description of section 219RC, as a consequence of the amendment made to section 219RC by Item 27 .

Items 7 and 8 - Subsection 82(2) and Paragraphs 82(2)(a) and (b)

Subsection 82(2) sets out the methods by which a debt owed by an approved child care service is recoverable by the Commonwealth (setting off against fee reductions and enrolment advances paid to the service, by instalments through arrangements under section 91, through legal proceedings or through garnishee notices).

Items 7 and 8 amend subsection 82(2) to broaden the range of payments against which a debt of a service, referred to as 'the first service' (as a result of an amendment made by Item 7 ), may be set off.

Item 8 repeals paragraphs 82(2)(a) and (b) referring to fee reductions and enrolment advance payments, and substitutes a new paragraph 82(a) which provides for setting off the amount of the debt against one or more child care service payments that are to be made to the first service or to another approved child care service operated by the person who operates the first service.

A note is inserted at the end of subsection 82(2) which refers the reader to subsection 3(1) for a definition of child care service payment (inserted by Item 1 ).

Item 9 - Section 86

Item 9 amends section 86 to remove any reference to section 87B repealed by the amendment made by Item 10 .

A note in this item informs the reader that the heading to section 86 is altered by omitting '87A and 87B' and substituting 'and 87A'.

Item 10 - Sections 87A and 87B

Sections 87A and 87B, respectively, provide for the setting off of an approved child care service's debt against an amount of enrolment advances or fee reductions.

Item 10 repeals sections 87A and 87B and substitutes a new section 87A. New section 87A takes into account the fact that, as a result of the amendment made by Item 7 to subsection 82(2), a debt of a service may be set off against not only fee reductions and enrolment advances, but also against advance acquittal payments made under subitems 97(5) and 97A(5) of Schedule 1 to the CCMS Act and against a child care service payment as defined in subsection 3(1) inserted by Item 1 .

New subsection 87A(2) requires the Secretary to determine the amount by which a payment is to be reduced. New subsection 87A(3) provides that a determination under new subsection 87A(2) may cover one or more payments and make different provision for different payments. New subsection 87A(4) permits the Secretary to vary the determination made under new subsection 87A(2). New subsection 87A(5) provides that, if a payment is reduced by way of a set off in accordance with new section 87A, the amount of the debt is reduced by an amount equal to the set off amount.

New subsection 87A(6) states that a determination of an amount under new subsection 87A(2) is not a legislative instrument. New subsection 87A(6) is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

Items 11, 12, 14, 16 and 18 - Subparagraphs 88(6)(b)(i), 90(5)(b)(i) and 95(3)(a)(iib) and paragraphs 95(4)(e) and 99(2)(d), respectively

Items 11, 12, 14, 16 and 18 amend subparagraphs 88(6)(b)(i), 90(5)(b)(i) and 95(3)(a)(iib) and paragraphs 95(4)(e) and 99(2)(d), respectively, to remove redundant references to section 87B repealed by Item 10 .

Items 13 and 15 - Subparagraph 95(3)(a)(iia) and paragraph 95(4)(d)

These amendments are consequential to the amendment made to section 87A by Item 10 .

Section 95 deals with the circumstances in which the Secretary may write off a debt which is recoverable by the Commonwealth under Division 2. Paragraphs 95(2)(a) and (b) respectively provide that the Secretary may decide to write off a debt under subsection 95(1) if the debt is irrecoverable at law, or the debtor has no capacity to repay the debt.

Subsection 95(3) sets out when a debt is taken to be irrecoverable at law. This includes the situation specified in subparagraph 95(3)(a)(iia) where a debt cannot be recovered by setting off under section 87A against enrolment advances. As a consequence of the amendment made by Item 10 , which substitutes a new section 87A dealing with setting off debts against the payments referred to in paragraph 82(2)(a) (as amended by Item 8 ) (which include but are not limited to enrolment advances), Item 13 amends subparagraph 95(3)(a)(iia) to omit the reference to enrolment advances and substitutes a reference to the payments referred to in paragraph 82(2)(a). As a result of the amendment made by Item 13 , a debt will be irrecoverable at law if the debt cannot be recovered by setting off under section 87A against the payments referred to in that section.

Subsection 95(4) qualifies the application of paragraph 95(2)(b). Subsection 95(4) provides that a person is taken to have capacity to repay a debt unless recovery by the means set out in subsection 95(4), including setting off under section 87A against enrolment advances, would cause the person severe financial hardship. As a consequence of the amendment made by Item 10 , which substitutes a new section 87A dealing with setting off debts against the payments referred to in paragraph 82(2)(a) (as amended by Item 8 ) (which include but are not limited to enrolment advances), Item 15 amends paragraph 95(4)(d) to omit the reference to enrolment advances and substitutes a reference to the payments referred to in paragraph 82(2)(a). As a result of the amendment made by Item 15 , a person is taken to have capacity to repay a debt if recovery of the debt by means of setting off under section 87A against a payment referred to in paragraph 82(2)(a) would not cause the person severe financial hardship.

Item 17 - Paragraph 99(2)(c)

This amendment is consequential to the amendment made to section 87A by Item 10 .

Subsection 99(1) requires the Secretary to waive the right to recover a debt if the debt is or is likely to be less than $200 and it is not cost effective for the Commonwealth to take action to recover the debt. Paragraph 99(2)(c) provides that subsection 99(1) will not apply if the debt is at least $50 and could be recovered by setting off under section 87A against enrolment advances. As a consequence of the amendment made by Item 10 , which substitutes a new section 87A dealing with setting off debts against the payments referred to in paragraphs 82(2)(a) (as amended by Item 8 ) (which include but are not limited to enrolment advances), Item 17 amends paragraph 99(2)(c) to omit the reference to enrolment advances and substitutes a reference to the payments referred to in paragraph 82(2)(a). As a result of the amendment made by Item 17 , subsection 99(1) will not apply if the debt is at least $50 and could be recovered by setting off under section 87A against a payment referred to in paragraph 82(2)(a).

Item 19 - After paragraph 108(2)(da)

Subsection 108(2) sets out the exceptions to the rule provided in subsection 108(1) that a decision of an officer under the family assistance law must be reviewed on application under section 109A (internal review). Subsection 108(2) lists the decisions which are not reviewable on application under section 109A.

Item 19 amends subsection 108(2) to include in the list of the decisions that may not be reviewed a decision made under new subsection 219RA(1A) not to pay an enrolment advance to an approved child care service in the period after the operator has notified the Secretary that the operator will cease operating the service (new subparagraph 108(2)(daaa) refers) and before the cancellation of the service's approval for the purposes of the family assistance law. As at the time of the cancellation of approval, all amounts of enrolment advances paid to the service become a debt due by the service/operator to the Commonwealth (section 71G refers). A decision not to pay an enrolment advance before the cancellation of approval reduces the total amount of a debt that would otherwise arise. It is not necessary for such decisions to be reviewable given that, even if the review resulted in the decision to pay the advance, the amount paid would immediately become recoverable as a debt.

Items 20 and 21 - After subparagraph 111(2)(a)(xv) and After subparagraph 111(2)(a)(xvi)

Subsection 111(2) provides that a person cannot apply to the Social Security Appeals Tribunal under subsections 111(1) or 111(1A) for review of a decision made under any of the provisions set out in paragraph 111(2)(a) relating to the form and manner of claims and notices etc. Items 20 and 21 insert two new subparagraphs into paragraph 111(2)(a). New subparagraph 111(2)(a)(xva) operates to the effect that a person cannot apply for review under subsections 111(1) or 111(1A) of a decision made under subparagraphs 219RA(1A)(b), (1B)(b) or (1C)(b). New subparagraph 111(2)(a)(xvia) provides that a person cannot apply for review of a decision made under paragraph 219RC(3)(d). The decisions in question are the Secretary's decisions approving the form, manner or way of notification of the operator's decision to continue operating the service.

Item 22 - Paragraph 219Q(3)(c)

Item 22 is a technical amendment consequential to the amendment made to section 219RC by Item 27. Item 22 amends paragraph 219Q(3)(c) referring to section 219RC to reflect the change of the heading to section 219RC effected by Item 27 .

Item 23 - At the end of subsection 219QA(3)

Subsection 219QA(3) requires the Secretary to set off a higher fee reduction amount paid to an approved child care service in respect of a week and a child if the amount of fee reduction for that week was reduced as a result of recalculation of the amount under sections 50ZA or 50ZC. The higher amount paid is required to be set off against any fee reduction or enrolment advance amounts to be paid to the service.

Item 23 amends subsection 219QA(3) to require a higher fee reduction amount paid to a service to be set off against one or more child care service payments that are to be made to the first service or to another approved child care service operated by the person who operates the first service.

A note at the end of subsection 219QA(3) refers the reader to subsection 3(1) for a definition of child care service payment inserted by Item 1 .

Item 24 - After subsection 219RA(1)

Subsection 219RA(1) provides that the Secretary must pay the amount of an enrolment advance if an approved child care service (other than an approved occasional care service) makes an election to receive the enrolment advance in relation to a particular enrolment (in accordance with section 219R) and the Secretary confirms the enrolment (under section 219AE).

Item 24 inserts new subsections (1A), (1B) and (1C) into section 219RA. These new subsections serve to qualify the requirement of subsection 219RA (1) to pay an enrolment advance.

New subsection 219RA(1A) provides that the Secretary may decide not to pay an enrolment advance to an approved child care service under subsection 219RA(1) if, before the day the Secretary proposes to pay the advance, the operator of the service notifies the Secretary under subsection 219M(1) of the operator's decision to cease operating the service and, before that day, the operator has not notified the Secretary (in the form, and in the manner or way, approved by the Secretary) of the operator's decision to continue operating the service.

New subsection 219RA(1B) provides that, if the Secretary does not pay an enrolment advance to the service as a result of the notification of the operator's decision to cease operating the service, and the operator of the service notifies the Secretary (in the form, and in the manner or way, approved by the Secretary) of the operator's decision to continue operating the service and the enrolment concerned has not ceased before that notification of continuation, the Secretary must pay the amount of the advance to the credit of a bank account nominated and maintained by the service.

New subsection 219RA(1C) is relevant to a set off of an enrolment advance amount under new subsection 219RC(3) inserted by Item 30 that requires the Secretary to set off a service's enrolment advance amounts once the operator of the service has notified the Secretary of the operator's decision to cease operating the service.

New subsection 219RA(1C) provides that, if, in respect of an enrolment paid to a service, the Secretary sets off an amount under subsection 219RC(3) against a payment to this service or another service operated by the same operator (because the operator of the service notified the decision to cease operating the service) and, after the set off, the operator notifies the Secretary (in the form, and in the manner or way, approved by the Secretary) of the operator's decision to continue operating the service and the enrolment has not ceased before that notification, then the Secretary may pay an enrolment advance in respect of that enrolment to the credit of a bank account nominated and maintained by the service. The amount to be paid equals the amount that was set off.

A note at the end of Item 24 informs the reader that the heading to section 219RA is replaced by the heading 'Payment of enrolment advance'.

Item 25 - Paragraph 219RA(2)(c)

Item 25 is a technical amendment consequential to the amendment made by Item 27 that changes the heading of section 219RC. Item 25 amends paragraph 219RA(2)(c) that refers to section 219RC, to reflect the change to the heading of section 219RC.

A note at the end of Item 25 inserts a heading to subsection 219RA(2), 'Interpretation'.

Item 26 - Subsection 219RA(3)

Item 26 is an amendment consequential to the amendments to section 219RA made by Item 24. Item 24 provides the Secretary with a discretion to repay, in certain circumstances, a previously set off enrolment advance. Item 26 amends subsection 219RA(3) to make it clear that the Secretary must give the service notice of any payment made under this section.

A note at the end of this item informs the reader that a heading 'Notice of Payment' is inserted in subsection 219RA(3).

Items 27, 28, 29 and 30 - Section 219RC, Paragraph 219RC(a), Section 219RC and At the end of section 219RC

An enrolment advance amount paid to an approved child care service is recoverable when the enrolment to which it relates ceases (in the circumstances specified in section 219AD). If the enrolment ceases, 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 the fee reductions relate to a particular enrolment or not. Items 27, 28, 29 and 30 amend section 219RC.

Item 27 makes technical amendments consequential to the amendments made by Item 30. Item 27 inserts a reference to '(1)' in front of the current text of section 219RC, turning it into subsection 219RC(1).

Note 1 in Item 27 informs the reader that the heading to section 219RC is altered by adding at the end 'or decision to cease operating service is notified'. The altered heading will read: ' Setting off enrolment advance when enrolment ceases or decision to cease operating service is notified.'

Note 2 in Item 27 inserts a heading to the new subsection 219RC(1), ' Enrolment ceases.'

Items 28 and 29 amend section 219RC (which became subsection 219RC(1) as a result of Item 27 ) with the effect that, if an enrolment of a child for care by a service (the first service) ceases, the Secretary must set off the amount of an enrolment advance paid to the service for the enrolment against one or more child care services' payments that are to be made to the first service or to another approved child care service operated by the person who operates the first service.

A note at the end of paragraph 219RC(a) refers the reader to subsection 3(1) for a definition of child care service payment as inserted by Item 1 .

Item 30 inserts new subsections 219RC(2) and (3).

New subsection 219RC(2) provides that subsection 219RC(1) does not apply in relation to an enrolment advance if subsection 219RC(3) has applied in relation to the advance. This new subsection ensures that an enrolment advance that has been set off under new subsection 219RC(3), because the operator of the service notified the Secretary of the operator's decision to cease operating the service, is not set off again under subsection 219RC(1) when the enrolment relevant to the advance ceases after the set off.

New subsection 219RC(3) provides that if:

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an operator of an approved child care service (the applicable service ) notifies the Secretary under subsection 219M(1) of the operator's decision to cease operating that service; and

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either an enrolment advance was paid to the applicable service in respect of an enrolment, or an enrolment advance would have been paid but for a set off under subsection 82(2), section 219QA, this section or section 219RE or for the imposition of a sanction under paragraph 200(1)(f); and

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the enrolment advance has not been set off under subsection 219RC(1); and

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the operator has not notified the Secretary (in the form, and in the manner or way, approved by the Secretary) of the operator's decision to continue operating the service

the Secretary must set off an amount equal to the amount of the advance against one or more child care service payments that are to be made to the applicable service or to another approved child care service operated by the person who operates the applicable service.

A note at the end of new subsection 219RC(3) refers the reader to subsection 3(1) for a definition of child care service payment inserted by Item 1 .

As a result of this amendment, enrolment advances that would constitute a debt recoverable only after the applicable service's approval has been cancelled (following the notification of cessation of operation by the operator), will be able to be recovered via a set off under new subsection 219RC(3) against the specified payments yet to be made to the service, or against those payments to be made to another approved child care service operated by the person who operates the applicable service, immediately after the operator's notification of the decision to cease operating has been received by the Secretary.

Items 31 and 32 - Section 219RE

Section 219RE provides that, if a business continuity payment is made to an approved child care service under section 219RD, the Secretary must set off an amount equal to that payment against an amount of fee reductions or enrolment advances or a transitional advance acquittal payment(s) to be made to the service under subitem 97(5) of Schedule 1 of the Child Care Management System Act or subitem 97A(5) of that Schedule (as modified by the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Regulations 2009 .

Items 31 and 32 amend section 219RE with the effect that, if a business continuity payment is made to an approved child care service (the first service) under section 219RD, the Secretary must set off an amount equal to that payment against one or more child care service payments that are to be made to the first service or to another service operated by the person who operates the first service.

A note at the end of subsection 219QA(3) refers the reader to subsection 3(1) for a definition of child care service payment inserted by Item 1 .

Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Act 2007

Item 33 - Subitem 97C(1) of Schedule 1

This amendment is consequential to the amendments made to subsections 82(2), 219QA(3) and 219RC by Items 8, 23 and 29 , respectively, which extend the range of payments against which a child care service's debt and amounts of fee reductions and enrolment advances are set off, to include transitional acquittal payments made to approved child care services under subitems 97(5) and 97A(5) of Schedule 1 to the CCMS Act.

Item 33 amends subitem 97C(1) of Schedule 1 to the CCMS Act, which provides that payments under subitems 97(5) and 97A(5) are subject to a set off under section 219RE of the Family Assistance Administration Act (set off of business continuity payment). Item 33 repeals subitem 97C(1) and substitutes a new subitem 97C(1) to reflect the extended range of payments that are to be set off against the payments under subitems 97(5) and 97A(5).

New subitem 97C(1) provides that subitem 97(5) and subitem 97A(5) of Schedule 1 to the CCMS Act are subject to the following provisions of the Family Assistance Administration Act:

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paragraph 82(2)(a) (about set off of debts);

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subsection 219QA(3) (about set off where the amount of applicable fee reduction is reduced on recalculation);

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section 219RC (about set off of enrolment advances); and

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section 219RE (about set off of business continuity payments).

Item 34 - Application and saving

Item 34 includes application and saving provisions.

Subitem 34(1) provides that the amendments made to paragraphs 82(2)(a) and (b, subsection 219QA(3) and sections 219RC and 219RE of the Family Assistance Administration Act by Items 8, 23, 29 and 32 respectively, extending a range of payments against which a service's debt and fee reductions, enrolment advances and business continuity payments can be set off, apply in relation to payments that are to be made on or after the commencement of those items (the day after the Royal Assent).

Subitem 34(2) provides that new subsection 87A(1) of the Family Assistance Administration Act, substituted by Item 10 , dealing with setting off of a service's debt against child care service payments, applies in relation to debts arising on or after the commencement of Item 34 (the day after the Royal Assent) and to debts arising before that commencement, to the extent that the debts were outstanding immediately before that commencement.

Subitem 34(3) provides that the amendment made by Item 10 , which repeals sections 87A and 87B of the Family Assistance Administration Act and substitutes new section 87A, does not affect the validity of any debt recovery action taken under section 87A or 87B before the commencement of Item 10 (the day after the Royal Assent).

Subitem 34(4) provides that subparagraphs 88(6)(b)(i) and 90(5)(b)(i) of the Family Assistance Administration Act, as amended by Items 11 and 12 to remove a redundant reference to section 87B repealed by Item 10 , apply on and after the commencement of Item 34 (the day after the Royal Assent) as if a reference in those subparagraphs to section 87A included a reference to sections 87A and 87B as in force at any time before that commencement. This ensures that any debt recovery action taken before the commencement of this item under section 87A or 87B as in force before that commencement has effect for the purposes of subparagraphs 88(6)(b)(i) and 90(5)(b)(i) (legal proceedings and time limits on recovery action by garnishee notice) as if it was an action under new section 87A.

Subitem 34(5) provides that subsections 219RA(1A) and 219RC(3) of the Family Assistance Administration Act as amended by Items 24 and 30 , about not paying an enrolment advance after a notice of the decision to cease operating a service was given by the operator of the service, and about setting off the service's enrolment advances after the notice was given by the operator, apply in relation to notices of the decision to cease operating an approved child care service given by operators under subsection 219M(1) on or after the commencement of Item 34 (the day after the Royal Assent).

Part 2 - Technical amendment

Family Assistance Legislation Amendment (Child Care) Act 2010

Item 35 - Item 5 of Schedule 5

Item 35 corrects a misdescribed amendment made by item 5 of Schedule 5 of the Family Assistance Legislation Amendment ( Child Care ) Bill 2010 to subitem 97B(1) of Schedule 1 to the Family Assistance Legislation Amendment ( Child Care Management System and Other Measures ) Act 2007 . The amendment omits the word 'item' from the reference to 'item 97'.

A note at the end of this item informs the reader that this item corrects a misdescribed amendment.