Explanatory Memorandum
(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, Minister for Disability Reform, the Hon Jenny Macklin MP)Schedule 4 - Carer allowance
Summary
As announced on 3 August 2011 in the Government's National Carer Strategy , this Schedule gives certain carer allowance recipients, who care for a disabled adult, access to bereavement payments on the death of the care receiver.
Background
Carer allowance is an income supplement available to people who provide care and attention on a daily basis to an adult or child who has a physical, intellectual or psychiatric disability which is permanent and likely to affect the person for an extended period.
The Social Security Act currently provides for a bereavement payment to be made to a person receiving carer allowance for care of a disabled child on the death of that child, but not to a person receiving carer allowance for care of a disabled adult on the death of that adult. These amendments will extend bereavement payments to cover the latter case.
The amendments made by this Schedule commence on 1 July 2012.
Explanation of the changes
Amendments to the Social Security Act
Item 1 repeals and substitutes the heading of Division 10 of Part 2.19 of the Social Security Act.
Item 2 inserts new Subdivision BA of Division 10 of Part 2.19 of the Social Security Act. This new Subdivision allows a person receiving an income support payment (other than carer payment), as well as carer allowance for care of a disabled adult, to remain qualified for carer allowance during the bereavement rate continuation period. This provides for a bereavement payment for a person receiving carer allowance, for the death of a disabled adult to whom they were providing daily care and attention, when they are not qualified for any other bereavement payment (under another provision of the Social Security Act or the Veterans' Entitlements Act) for the death of the disabled adult.
Example 1
Tara receives carer payment and carer allowance for her care of Mario, a disabled adult. Mario dies, and Tara remains qualified for carer payment for the bereavement period because of the carer payment bereavement payment provisions. In this case, Tara does not remain qualified for carer allowance for the bereavement period because she qualifies for another payment in respect of Mario's death (the carer payment bereavement payment).
Example 2
Sean receives carer allowance for his care of Tim, a disabled adult, as well as disability support pension. Tim dies, and Sean remains qualified for disability support pension, but does not qualify for a disability support pension bereavement payment because Sean and Tim were not a couple. In this case, Sean remains qualified for carer allowance for the bereavement period because he does not qualify for another bereavement payment in respect of Tim's death.
Example 3
Lance receives carer allowance for his care of Sally, a disabled adult. Lance receives no other social security payments. Sally dies. In this case, Lance does not remain qualified for carer allowance for the bereavement period because he did not, prior to Sally's death, receive an income support payment as well as the carer allowance.
The rate at which carer allowance is to be paid during the bereavement rate continuation period is the rate at which the allowance was payable to the carer allowance recipient immediately before the day on which the disabled adult died (new section 992LA refers).
A lump sum is payable in some circumstances (new section 992LB refers).
Items 3, 4, 5, 6, 7 and 8 make consequential amendments to section 992M (Death of recipient) of the Social Security Act, to cover the contingency of the recipient of bereavement payments under new Subdivision BA dying. In that situation, the person's partner (if the deceased carer was a member of a couple) or such person as the Secretary thinks appropriate (if the deceased carer was not a member of a couple) is entitled to the amount of payment that would have been payable to the person (that is, the deceased carer) under new Subdivision BA had the person not died.
Item 9 provides that the amendments made by this Schedule apply in relation to deaths occurring on or after the commencement of this Schedule.
Items 10 and 11 make consequential amendments to the Income Tax Assessment Act. These amendments provide a tax exemption for the new carer allowance bereavement payments. This will ensure consistency in the tax treatment of bereavement payments made to surviving members of a couple.