Explanatory Memorandum
(Circulated by the authority of the Minister for Indigenous Affairs, Senator the Hon Nigel Scullion)Schedule 2 - HELP information management
Summary
Schedule 2 amends the Higher Education Support Act to allow the Department of Education and Training to access TFNs for VET FEE-HELP debtors, consistent with arrangements that apply for administering all other types of HELP debts. This is accomplished by requiring students to notify the Secretary and their VET provider of their TFN upon application for a HELP loan, as well as through provisions to enable the ATO to provide the Department of Education and Training with TFNs for existing HELP debtors. The aim is to streamline and improve the efficiency of transmission of data between the Department of Education and Training and the ATO, which will simplify administration, reduce the potential for fraud, and improve data accuracy and reliability. Amendments made to Division 180 to the Higher Education Support Act will authorise the Secretary to disclose HESA information that includes TFNs to the Commissioner of Taxation. HELP program Commonwealth officers will be authorised to disclose HESA information (other than a person's TFN) to other HELP program Commonwealth officers who may use that information for purposes specified in the Act.
Background
Under Division 187 of the Higher Education Support Act (the TFN requirements for assistance under Chapter 3), students are required to notify the appropriate officer of their higher education provider, or Open Universities Australia, and the Secretary of their TFN. Under Division 190 (notification of TFNs), the Commissioner can currently give written notice of the TFN of a student to a higher education provider, Open Universities Australia and the Secretary. This contrasts with arrangements for VET FEE-HELP in Schedule 1A to the Higher Education Support Act, which do not currently require VET students to provide their TFNs to the Secretary of the Department of Education and Training, nor allow the Commissioner to provide TFNs to the Secretary.
Explanation of the changes
Part 1 - Amendments
Amendments to the Higher Education Support Act 2003
Items 1, 2 and 18
Division 180 authorises the use and disclosure of certain types of information obtained or created for the purposes of the Higher Education Support Act, including some types of personal information. This information is collectively defined in section 180-5 as Higher Education Support Act information (HESA information).
Items 1, 2 and 18 make amendments to provisions in Division 180 of the Higher Education Support Act and a related definition. The amendments are intended to support the HELP data improvement project that will link data held by the Department of Education and Training with data held by the ATO. This project will improve the ability to analyse HELP debt and debtors, better understand factors affecting the loan program, assess the impact of policy changes over time, and assist in future administration of that program.
Item 1 amends paragraph (d) of the definition of HESA information in section 180-5 by adding, "or the purposes referred to in subsection 180-28(5)".
This amendment supports the operation of new section 180-28, inserted by item 2, by clarifying that HESA information includes information obtained or created by a Commonwealth officer for the purposes referred to in new subsection 180-28(5). The purpose of this amendment is to ensure that the information created as part of the HELP data improvement project can be disclosed back to officers of the Department of Education and Training under new subsection 180-28(1), to be used by those officers for the purposes set out in new subsection 180-28(5).
Item 2 inserts a new section 180-28 in Division 180 to authorise the use and disclosure of HESA information for certain purposes.
New subsection 180-28(1) provides that a HELP program Commonwealth officer may disclose HESA information (other than a person's TFN) to another HELP program Commonwealth officer for the purposes referred to in new subsection (5).
New subsection 180-28(2) authorises the Secretary to disclose a person's TFN to the Commissioner for the purposes referred to in new subsection (5).
New subsection 180-28(3) authorises a HELP program Commonwealth officer to use HESA information (other than a person's TFN) for the purposes referred to in subsection (5).
New subsection 180-28(4) provides that if a person's TFN is disclosed under new subsection (2), the Commissioner may use that TFN for the purposes referred to in subsection (5).
New subsection 180-28(5) provides that the purposes are to assist in the development of the HELP program, or the administration, or future administration of the HELP program, including by:
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- policy formation; and
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- financial planning and projection; and
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- program design; and
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- conducting research.
New subsection 180-28(6) defines the HELP program as the program consisting of:
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- grants to higher education providers under Part 2-2; and
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- assistance provided to students under Chapter 3 or Schedule 1A; and
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- repayment of debts under Chapter 4 incurred in relation to that assistance.
New subsection 180-28(7) defines a HELP program Commonwealth officer as:
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- the Secretary; or
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- the Commissioner; or
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- a Commonwealth officer specified to be a HELP program Commonwealth officer under new subsection (8).
New subsection 180-28(8) provides that the Minister may, by legislative instrument, specify that a Commonwealth officer, or a Commonwealth officer in a specified class, is a HELP program Commonwealth officer for the purposes of new paragraph (7)(c). This provision will enable the Minister to specify that persons are HELP program Commonwealth officers so that they may use and disclose HESA information for the purposes set out in new subsection 180-28(5), such as carrying out actuarial analysis of HELP debts.
Item 18 inserts two new definitions in the Dictionary of the Higher Education Support Act (clause 1 of Schedule 1 to the Higher Education Support Act).
It provides that 'HELP program' has the meaning provided for in new subsection 180-28(6).
It provides that 'HELP program Commonwealth officer' has the meaning given by new subsection 180-28(7).
Item 3
Item 3 amends the text of the introduction to Part 5-5 of Higher Education Support Act, to add 'the Secretary' to the persons the Commissioner of Taxation can currently notify of matters relating to TFNs. This amendment is a consequence of amendments to Division 190 of the Higher Education Support Act made by Schedule 3 to the Education Legislation Amendment (Overseas Debt Recovery) Act 2015.
Item 4
Paragraphs 187-5(1)(a) and (2)(a) of the Higher Education Support Act are intended to require students to notify their provider or Open Universities Australia, as well as the Secretary, of their TFN within 21 days of it being issued by the Commissioner of Taxation.
Item 4 amends these provisions by omitting 'notifies' and substituting it with 'must notify'. This is intended to clarify that it is mandatory that a student meet this requirement.
Item 5
Division 15 of Schedule 1A to the Higher Education Support Act sets out the TFN requirements for assistance under Part 2 of Schedule 1A to the Higher Education Support Act (i.e. VET FEE-HELP assistance).
As a consequence of amendments to Division 15 to Schedule 1A made by items 8 to 17, item 5 amends the second paragraph of the overview of Division 15 at clause 79 to reflect that the Commissioner of Taxation may notify the Secretary of matters relating to TFNs.
Item 6
Subclause 80(1) of Schedule 1A to the Higher Education Support Act provides that a student who is enrolled, or proposes to enrol, with a VET provider in a VET unit of study meets the TFN requirements for VET FEE-HELP assistance if:
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- the student notifies his or her TFN to an appropriate officer of the provider, and the provider is satisfied (in accordance with subclause 80(4)) that this number is a valid TFN; or
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- the student gives the officer a certificate from the Commissioner of Taxation stating that the student has applied to the Commissioner to issue a TFN to the student.
Item 6 repeals and replaces paragraph 80(1)(a) so that the student must also notify his or her TFN to the Secretary.
Item 7
Paragraph 82(a) requires students applying for VET FEE-HELP assistance to notify their provider of their TFN within 21 days of it being issued by the Commissioner of Taxation.
Item 7 amends this paragraph to also require students to notify their TFNs to the Secretary.
Items 8 to 17
Subdivision 15-C of Schedule 1A to the Higher Education Support Act sets out the circumstances in which the Commissioner of Taxation can notify a VET provider of a student's TFN.
The purpose of the amendments to Subdivision 15-C of Schedule 1A made by items 8 to 17 is to enable the Commissioner of Taxation to notify the Secretary of matters relating to students' TFNs. Subdivision 15-C of Schedule 1A will therefore operate in the same fashion as the equivalent provisions in Division 190 of the Higher Education Support Act (which were amended with effect from 1 January 2016 by Schedule 3 to the Education Legislation Amendment (Overseas Debt Recovery) Act 2015).
Item 8 repeals and substitutes the heading for Subdivision 15-C so that it reads, Who can the Commissioner notify of tax file number matters?
The Commissioner of Taxation can notify a student's VET provider of the student's TFN in a number of circumstances:
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- when TFNs are issued (clause 83)
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- when TFNs are altered (clause 84)
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- when TFNs are incorrectly notified for students with TFNs (clause 85)
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- when TFNs are incorrectly notified for students without TFNs (clause 86)
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- when applications for TFNs are refused or cancelled (clause 87).
Items 9 to 17 amend these clauses, by inserting references to the Secretary. This will enable the Commissioner to notify the Secretary of the student's TFN or information about the student's TFN (as the case may be) in each of these circumstances.
Income Tax Assessment Act 1936
Item 19
Item 19 amends paragraph 202(c) of the Income Tax Assessment Act so that it captures the Higher Education Support Act in its entirety, including those parts of the Higher Education Support Act providing for VET FEE-HELP assistance.
This amendment is intended to ensure that those parts of the Higher Education Support Act providing for VET FEE-HELP assistance can permit the recording, use and communication of TFNs that would otherwise be prohibited under section 8WB of the Taxation Administration Act.
This amendment is necessary to ensure that the Department of Education and Training is able use and disclose the TFNs of VET students in accordance with the provisions in the Higher Education Support Act. This will, for example, make it possible for the Department of Education and Training to remove the HELP debts of students who were misled into taking out loans.
Part 2 - Application and transitional provisions
Item 20 (application provision)
Item 20 is an application provision which provides that the TFN amendments made by Schedule 2 to Subdivisions 15-A and 15-B of Schedule 1A to the Higher Education Support Act (i.e. items 5 to 7) do not apply in relation to a student and a VET course of study if, immediately before the commencement of Schedule 2, the student met the TFN requirements in relation to a VET course of study. That is, a student who already met the TFN requirements prior to commencement of the amendments made by items 5 to 7 continues to meet the TFN requirements after commencement, and does not need to meet the amended TFN requirements.
Items 21 and 22 (transitional provisions)
Items 21 and 22 are both transitional provisions, empowering the Secretary to require the Commissioner to provide the Department of Education and Training with the TFNs of students that met TFN requirements for VET FEE-HELP assistance, and the other forms of HELP assistance under Chapter 3, prior to the amendments made by this Schedule 2, and Schedule 3 to the Education Legislation Amendment (Overseas Debt Recovery) Act 2015.
Subitem 21(1) provides that item 21 applies in relation to a student who, immediately before the commencement of Schedule 2, met the TFN requirements for assistance under Part 2 of Schedule 1A to Higher Education Support Act in relation to a VET course of study.
Subitem 21(2) provides that the Secretary may require the Commissioner of Taxation to provide a Commonwealth officer with the student's TFN for the purposes of:
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- Division 5A of Part 1, or Part 2, of Schedule 1A; or
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- Chapter 4 of that Act, to the extent that it relates to Schedule 1A.
A note to this subitem provides that when obtained by the officer, a student's TFN becomes VET personal information and cross-refers to clause 72 of that Schedule.
Subitem 21(3) provides that the Commissioner of Taxation has the general administration of item 21. A note to subitem 21(4) provides that one effect is that item 21 is a taxation law for the purposes of the Taxation Administration Act. This provision has been included to ensure that the Commissioner's disclosure of TFNs to the officers of the Department of Education and Training pursuant to item 21 is permitted for the purposes of subsection 8WB(1A) of the Taxation Administration Act.
Subitem 21(4) provides that despite subsection 13.3(3) of the Criminal Code, in a prosecution for an offence against an Act of which the Commissioner of Taxation has the general administration, the defendant does not bear an evidential burden in relation to whether item 21 applies to a communication of VET personal information. Thus, for example, a defendant would not have to lead evidence to prove that a TFN provided to the Department of Education and Training in purported compliance with subitem 21(2) was the TFN of a student to whom subitem 21(1) applied; or that the Secretary had required the Commissioner to provide the TFN under subitem 21(2). The prosecution would have to lead evidence of those matters.
Subitem 22(1) provides that Item 22 applies in relation to a student who, immediately before the commencement of Schedule 3 to the Education Legislation Amendment (Overseas Debt Recovery) Act 2015 (i.e. 1 January 2016), met the TFN requirements for assistance under Chapter 3 of the Higher Education Support Act in relation to a course of study.
Subitem 22(2) provides that the Secretary may require the Commissioner of Taxation to provide a Commonwealth officer with the student's TFN for the purposes of Chapter 2, or Chapters 3 and 4, of the Higher Education Support Act.
A note to this subitem provides that when obtained by the officer, the student's TFN becomes personal information and cross-refers to section 179-5 of that Act.
Subitem 22(3) provides that the Commissioner of Taxation has the general administration of item 22. A note to subitem 22(3) provides that one effect is that Item 22 is a taxation law for the purposes of the Taxation Administration Act.
This provision has been included to ensure that the Commissioner's disclosure of TFNs to the officers of the Department of Education and Training pursuant to these items is permitted for the purposes of subsection 8WB(1A) of the Taxation Administration Act.
Subitem 22(4) provides that despite subsection 13.3(3) of the Criminal Code, in a prosecution for an offence against an Act of which the Commissioner of Taxation has the general administration, the defendant does not bear an evidential burden in relation to whether item 22 applies to a communication of personal information. Thus, for example, a defendant would not have to lead evidence to prove that a TFN provided to the Department of Education and Training in purported compliance with subitem 22(2) was the TFN of a student to whom subitem 22(1) applied; or that the Secretary had required the Commissioner to provide the TFN under subitem 22(2). The prosecution would have to lead evidence of those matters.
Item 23
Item 23 enables the Secretary to delegate all or any of his or her powers under items 21 and 22, to an APS employee. The delegate must comply with any directions of the Secretary.