Explanatory Memorandum
(Circulated by authority of the Minister for Social Services, the Hon Christian Porter MP)Statements of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Schedule 1 - Portability of family tax benefit
This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
The Schedule will reduce the portability of family tax benefit Part A from 56 weeks to six weeks, from 1 January 2016. Recipients of family tax benefit Part A who are already overseas on 1 January 2016 will keep the 56-week period until they return to Australia. However, all future overseas travel after 1 January 2016 will be affected by the new six-week rule.
The Secretary will retain the discretion to extend the six-week period under section 24 of the A New Tax System (Family Assistance) Act 1999 for individuals who are members of the Australian Defence Force or Australian Federal Police and who are deployed overseas, assisted by the Medical Treatment Overseas Program, or unable to return to Australia for a specified reason (such as a serious accident, or natural disaster).
Due to family tax benefit's links to other payments, this amendment will have flow-on effects to other payments that rely on family tax benefit eligibility including child care benefit and child care rebate.
Human rights implications
These amendments are likely to engage the following human right:
Right to social security
The amendment to reduce the temporary period of absence to six weeks continues to allow families to access family payments for a reasonable period of time while overseas.
The amendments also continue to allow for a reasonable period of access while overseas as families can become eligible for these payments again if they return to Australia for six weeks or more. The six-week time period will generally align with the maximum six-week portability period allowed for most other working age income support payments for a person who is overseas.
Current extension provisions to the six-week rule will allow certain individuals who are temporarily absent from Australia to remain eligible for family payments for up to three years. Extensions may apply to individuals who are members of the Australian Defence Force or Australian Federal Police who are on an overseas deployment. Extensions for family assistance may also apply to individuals accessing Government-funded medical treatment under the Medical Treatment Overseas Program, and individuals who are unable to return to Australia due to circumstances out of their control.
Conclusion
These amendments are compatible with human rights because they do not limit or preclude people from gaining or maintaining access to social security in Australia and, to the extent that these changes limit access to family payments, these limitations are reasonable and proportionate.
Schedule 2 - Large family supplement
This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule amends the A New Tax System (Family Assistance) Act 1999 to cease payment of the large family supplement - a component of family tax benefit Part A - from 1 July 2016.
Human rights implications
These amendments engage the following human rights:
Right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights recognises the right of everyone to benefit from social security, while article 11 recognises the right of everyone to an adequate standard of living for an individual and their family, including adequate food, clothing and housing, and the continuous improvement of living conditions.
Rights of the child
Article 26 of the Convention on the Rights of the Child requires countries to recognise the right of the child to benefit from social security. Benefits should take into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child.
The United Nations Committee on Economic, Cultural and Social Rights has stated that a social security scheme should be sustainable and that the conditions for benefits must be reasonable, proportionate and transparent.
To the extent that ceasing the large family supplement limits the right to social security, this is reasonable and proportionate as the majority of these families would continue to receive adequate assistance through the standard payment rates of family tax benefit Part A to meet everyday costs. The large family supplement is only a small component of family tax benefit Part A, which is currently paid at a rate of $324.85 per year (or $12.46 per fortnight) for the fourth and each subsequent FTB child in a family. Those families who will no longer receive family tax benefit Part A as a result of this change would have been entitled to a small amount of payment which is less than the value of the large family supplement.
The cessation of large family supplement is consistent with research evidence indicating that larger families do not require additional assistance compared with other families. Reports by the National Centre for Social and Economic Modelling in 2002, 2007 and 2013 consistently found that additional children cost less than a first child. The reason for this is that families experience 'economies of scale' in which fixed costs are spread among more children. After a first child, many items have already been purchased and can be reused by subsequent children.
Ceasing large family supplement also aligns with recommendations put forward following the 2014 National Commission of Audit and the 2010 Henry Tax Review, which both highlighted the lack of policy rationale for large family supplement. This change therefore achieves a legitimate objective of better targeting family payments.
Despite the reduced costs associated with successive children, families would still continue to receive family tax benefit Part A - a per-child payment - to account for the costs of each FTB child. Family tax benefit Part A is currently paid at a maximum rate of $179.76 per fortnight for each FTB child up to 12 years of age, and $233.94 for each child aged 13 and over (until the end of the calendar year that a child turns 19 and is in secondary school). The base rate of family tax benefit Part A is currently $57.68 per fortnight.
Conclusion
This amendment is compatible with human rights because it advances the protection of human rights and, to the extent that this change limits access to family payments, these limitations are reasonable and proportionate and families are otherwise provided for.