Explanatory Memorandum
(Circulated by the authority of the Assistant Treasurer,Senator the Hon Jim Short)Overview
1.1 Items 1 to 14, 18 to 20 and 26 to 28 of Schedule 1 of the Bill will amend the Child Support (Assessment) Act 1989 ( the Assessment Act) to delete references to the repealed Social Security Act 1947 . The amendments substitute equivalent provisions from the Social Security Act 1991 (the Social Security Act). The amendments will also update references to the revised family payment provisions introduced in the Social Security Legislation Amendment (Family Measures) Act 1995 (the Family Measures Act).
Summary of the amendments
1.2 The purpose of the proposed amendments is to ensure that references in the Assessment Act to the Social Security Act are up to date.
1.3 The amendments will apply from the 28th day after the day on which the Act receives Royal Assent.
Background to the legislation
Changes to family payments in 1995
1.4 A range of amendments were made in the Social Security Legislation Amendment (Family Measures) Act 1995 which included a merging of basic family payments and additional family payments into a single family payment structure. There were a number of consequential changes to the Assessment Act which were included in that Act involving replacing the term 'additional family payment' in paragraph 89(4)(b), and subparagraphs 91A(1)(b)(ii) and 92(4)(a)(ii) of the Assessment Act with the term 'more than the minimum rate of family payment'. However, consequential amendments to the Assessment Act were not made at the time to all references to 'additional family payment'.
1.5 As there is no longer any such payment as 'additional family payment' in the Social Security Act the definition of that term in section 5 of the Assessment Act is no longer required. The definition of 'claimant' in section 5 is also being amended by omitting the term 'additional'.
Replacing obsolete references to the Social Security Act 1947
1.6 Section 39 of the Assessment Act still refers to provisions in the repealed Social Security Act 1947 as the source for determining the liable parent's exempted income amount in the child support formula. Provisions in the Social Security Act 1991 are the appropriate references which need to be reflected in the Assessment Act. This also requires that the new concepts of the Social Security Act also need to be reflected in the Assessment Act.
Explanation of the amendments
Changes to family payments in 1995
1.7 The proposed amendments will repeal the now obsolete definition of 'additional family payment' in section 5 and also amend the definition of 'claimant' in section 5. [Item 1 - repeals definition in section 5; Item 2 - amend definition of "claimant" in section 5]
Definition of "relevant partnered rate of Social Security pension"
1.8 There were a number of relevant expressions which were replaced during the 1991 rewrite of the Social Security Act on the basis that they were potentially misleading and which need to be changed in the Assessment Act:
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- 'member of a couple' replaces 'married person' (existing definition of married person specifically includes people who are living together but not legally married) [Item 3 - repeals definition of 'married person' in section 5; Item 4 - new definition of 'member of couple' in section 5; Item 6 - amend definition of relevant dependant child in section 5; Item 12 - amended paragraph 12(1)(e)]
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- 'partnered' replaces 'married' [Item 19 - amended subparagraph 39(1)(b)(i); Item 27 - amended paragraph 155(b)]
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- 'partner' replaces 'spouse' [Item 5 - insert definition of 'partner''; Item 14- amended paragraph 25(1)(b)]
1.9 The proposed amendments insert a new definition of 'relevant partnered rate of Social Security pension' to replace the previous 'relevant married rate of Social Security pension' which was drawn from similar definitions in the Social Security Act 1947. The new definition of 'relevant partnered rate of Social Security pension' provides the reference to the applicable rate in the appropriate Pension Rate Calculator in order to arrive at a liable parent's exempt income [Item 7 - repeal definition of 'relevant married rate of Social Security pension' in section 5; Item 8 - new definition of 'relevant partnered rate of Social Security']
Definition of 'relevant unpartnered rate of Social Security pension'
1.10 There were a number of relevant expressions which were replaced during the 1991 rewrite of the Social Security Act on the basis that they were potentially misleading. These expressions also need to be changed:
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- 'not a member of a couple' replaces 'unmarried person' [Item 11 - repeal definition of 'unmarried person' in section 5; Item 13 - subparagraph 24(a)(iii)]
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- 'unpartnered' replaces 'single' [Item 18 -amended paragraph 39(1)(a); Item 26 - amended paragraph 155(b)]
1.11 The proposed amendments insert a new definition of 'relevant unpartnered rate of Social Security pension' to replace the previous definition of 'relevant single rate of Social Security pension' which was drawn from similar definitions in the Social Security Act 1947. The new definition of 'relevant unpartnered rate of Social Security pension' provides the reference to the applicable rate in the appropriate Pension Rate Calculator, in order to arrive at a liable parent's exempt income. [Item 9 - definition of 'unmarried rate of Social Security pension' in section 5 repealed; Item 10 - new definition inserted in section 5]
Additional exempted income amount for each relevant dependent child
1.12 The liable parent's exempted income, based on the relevant partnered rate of Social Security pension includes an additional amount for each relevant dependent child. The amount depends on the age of the child and is currently determined by reference to provisions in the Social Security Act 1947 .
1.13 The new provision alters the previous order of presentation in subsection 39(2), by providing for children over 16 in the first paragraph and replacing the previous equation of 25 percent of twice the annual amount of the relevant partnered rate with the simpler 50 percent of annual amount of the relevant partnered rate.
1.14 Because of changes to the structure of the Social Security Act it is no longer possible to refer to one subparagraph to locate the additional amount for relevant children under 16. The new provision provides a formula for arriving at this amount by referring to definitions and rates in the Social Security Act 1991. Paragraph 39(2)(b) requires that the appropriate standard family rate for each child under 16 be determined and deduct from this amount the minimum family payment child rate as defined, to arrive at the additional amount for each child [Item 20 - new subsection 39(2); Item 28 - amended paragraph 155(d)]