Explanatory Memorandum
(Circulated by the authority of the Minister for Education and Training, Senator the Hon Simon Birmingham)Schedule 4 - Application, saving and transitional provisions
Part 1 - Introduction
Item 1 sets out definitions for some terms specifically for the purposes of the application, savings and transitional provisions in Schedule 4 of the Bill. Notably, the "commencement day" is the day that Schedule 1 commences and the "pre - commencement period" is taken to be (approximately) the six month period leading up to that day.
Part 2 - Child care subsidy and Additional Child Care Subsidy
Item 2 is essentially an application provision which puts beyond doubt that a person is only able to be eligible for (and therefore be paid) CCS or ACCS for a session of care provided on or after commencement day, and not before.
Item 3 is a provision that ensures that individuals who had been in receipt of CCB by fee reduction, or who had claimed CCB prior to commencement day, are taken to have made a claim for CCS after commencement day. This provision aims to ensure a smooth transition into the new CCS system for existing CCB recipients/claimants by ensuring that they do not need to make a new claim for assistance with their child care. However it is intended that the Secretary will require individuals, through her information gathering powers, to provide information that they will be eligible.
Item 4 is another provision that aims to ensure a smooth transition to the new CCS system by allowing amounts of CCS to be paid promptly after commencement day. Under this provision, individuals can make early claims for CCS, and the Secretary, through her delegates, can exercise certain powers and functions in anticipation of making CCS and ACCS payments. A provision at the end of the item clarifies that these powers and functions can only be exercised subject to the application provision in item 2, about how a person can only be eligible for CCS and ACCS after commencement day.
Item 5 ensures that the effective first indexation day for certain new CCS amounts that are subject to indexation is 1 July 2018. This means that relevant dollar amounts provided for in the Bill will be deemed to have been indexed from commencement in line with consumer price index movement.
Item 6 ensures that the new requirement for arrangements (contracts with child care providers) to be in writing will apply to arrangements that are already in force on commencement day. This means, among other things, that any verbal contracts for the provision of child care need to be set out in writing for a person to be eligible and entitled to CCS following commencement day.
Part 3 - Child care benefit and Child Care Rebate
Item 7 puts beyond doubt that from commencement day onwards, eligibility (and therefore entitlement) for CCB and CCR is no longer possible in relation to child care that occurs from that day onwards.
Item 8 saves the operation of legislation and instruments as they were prior to amendments made by Schedule 1 of the Bill to ensure that eligibility and entitlement for CCB or CCR can still be determined and reviewed in respect of child care that occurred prior to commencement day.
Part 4 - Providers of child care services
Item 9 ensures continuity for operators of child care services prior to commencement day. Under this provision operators are taken to be "providers" under the new CCS system on and from commencement day.
The provision also provides the Secretary the power to determine that an approved child care service is a service of a type listed in subitem 9(2). The Secretary's determination will be a legislative instrument where it is expressed to apply in relation to a class of approved child care services.
Where the Secretary's determination relates to a particular approved child care service, it will not be a legislative instrument for the purposes of the Legislation Act 2003.
The provisions are beneficial in nature as they support existing operators to transition into the new CCS approval regime without having to make a new application for approval, as well as to assist continuity of business. Where a class determination is made, it will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments.
Where a determination is made in relation to a particular service, the determination itself is not amenable to merits review, given its purpose is to efficiently and effectively transition currently approved services into the new system. However, there is nothing to prevent a provider who wishes to hold CCS approval for a service or services from making a new application for approval under section 194B of the Family Assistance Administration Act. The primary consequences of being deemed a certain service type relate to the kinds of conditions of continued approval which apply to that service type (see Part 8 of the Family Assistance Administration Act), as well as the hourly rate cap that will apply to sessions of care provided by that service (see table in subclause 2(3) of Schedule 2 of the Family Assistance Act). Once transitioned, the obligations set out under the family assistance law, will apply without any differentiation between transitioned services, and services approved under the new CCS regime. Merits review will continue to be available in respect of any further decisions made under the family assistance law which affect the provider as a consequence of their transition.
Item 10 saves the previous effect of the family assistance law to ensure that: liability for debts under the old law continues; new debts can arise under the old debt rules in relation to CCB and CCR payments; debts can be recovered under the recovery powers in the family assistance law as amended by Schedule 1 of this Bill; and old decisions are still reviewable.
Part 5 - Miscellaneous
Item 11 is declaratory and clarifies that the amendment of the delegation power in the family assistance law does not affect a delegation (or power exercised in reliance on one) previously in effect.
Item 12 gives the Minister a power to make rules dealing with transitional issues. This power is worded broadly in order to ensure that any unforeseen and unintended consequences of repealing and amending legislation can be remedied promptly and flexibly by legislative instrument. Although the power is broad and allows the Minister to modify the effect of principal legislation, the power is intended to be limited to ensuring the smooth transition into the new CCS and ACCS system and the framing of this power means that any rules that attempt to modify the principal legislation other than to assist transition would be beyond power and ineffective. The power is intended to be relied on to ensure beneficial outcomes for providers, services and individuals who may otherwise be affected by unanticipated scenarios that arise at transition. The power to modify principal legislation is also limited to a two year period from commencement in light of the expectation that no further transitional issues will arise after that time. Any rules made under this power will be subject to further parliamentary scrutiny through the disallowance process for legislative instruments, which means that Parliament is able to disallow any rules that are considered non - beneficial or otherwise unfair. In addition, to avoid doubt, there is no ability to convict a person of an offence, or impose a pecuniary penalty, in relation to conduct which took place prior to registration of the rules, where the conduct would not have been unlawful but for any retrospective effect of rules made under this provision.