Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)OUTLINE AND FINANCIAL IMPACT STATEMENT
As part of the Government's plan for a new tax system, the structure and administration of family assistance is being simplified from 1 July 2000.
The package of Bills that will give effect to the new family assistance regime are:
A New Tax System (Family Assistance) Bill 1999;
A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 1) 1999;
A New Tax System (Family Assistance) (Administration) Bill 1999; and
A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 2) 1999.
The first two Bills are currently before the Parliament. In broad terms, these Bills repeal the 12 existing forms of assistance for families and outline the eligibility conditions for, and rates of payment of, three new payment types, family tax benefit (Part A), family tax benefit (Part B) and child care benefit (CCB). In addition, maternity allowance (MAT) and maternity immunisation allowance (MIA), being family related payments, are incorporated into the new family assistance regime.
The A New Tax System (Family Assistance) (Administration) Bill 1999 contains administrative, procedural and technical rules that will apply in relation to the administration of family tax benefit (FTB) and CCB. The Bill provides for new and simpler administrative arrangements for the delivery of FTB and CCB. As MAT and MIA will also form part of the new family assistance regime, this Bill covers similar issues as they relate to those payments.
The matters covered in this Bill include claims processes, payment options, internal and external review of decisions, debt recovery, information management including information gathering powers, confidentiality of information, offences and other matters of an administrative nature.
The A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 2) 1999 makes consequential amendments to the following Acts:
- •
- Social Security Act 1991;
- •
- A New Tax System (Family Assistance) Act 1999 (when enacted);
- •
- Child Care Act 1972;
- •
- Child Support (Assessment) Act 1989;
- •
- Data-matching Program (Assistance and Tax) Act 1990 ;
- •
- Farm Household Support Act 1992;
- •
- Health Insurance Commission Act 1973;
- •
- Health Insurance Act 1973;
- •
- Veterans Entitlement Act 1986;
- •
- Fringe Benefits Tax Assessment Act 1986;
- •
- Income Tax Assessment Act 1936;
- •
- Income Tax Assessment Act 1997;
- •
- Income Tax Rates Act 1986;
- •
- Income Tax Rates Amendment Act (No. 1) 1997;
- •
- Income Tax (Transitional Provisions) Act 1997;
- •
- Medicare Levy Act 1986;
- •
- Taxation Administration Act 1953;
- •
- Bankruptcy Act 1966;
- •
- Safety, Rehabilitation and Compensation Act 1988; and
- •
- Seafarers Rehabilitation and Compensation Act 1992.
These Acts refer to concepts and terms that are relevant under the existing family assistance structure. These references will be repealed or amended to reflect the new family assistance regime. In addition, amendments are made to allow a tax deduction for fees related to family tax benefit claimed through the tax system.
Other related amendments are made to the A New Tax System (Family Assistance) Act 1999 (when enacted) and the A New Tax System (Family Assistance) (Consequential and Related Measures) Act (No. 1) 1999 (when enacted) as follows:
- •
- an amendment is made to ensure that FTB (Part A) recipients in receipt of income support (or whose partners receive income support) have their FTB (Part A) calculated under Method 1 (Schedule 1, Part 2, Division 4);
- •
- an amendment is made to ensure that a CCB amount for an instalment period is calculated not only with reference to a CCB rate that applies in normal circumstances (under the CCB Rate Calculator in Schedule 2) but also with reference to a CCB rate that applies in special circumstances (under section 71);
- •
- an amendment is made to allow the use or disclosure of information by or between the three agencies (Centrelink, the Australian Taxation Office and the Health Insurance Commission) involved in the transition to the new family assistance regime, for the purpose of identifying shared customers (so that customers receive only one letter instead of, potentially, three);
- •
- provide for other minor technical amendments.
The total cost to revenue of the family package is $2.4 billion in 2000-01, $2.5 billion in 2001-02, and $2.6 billion in 2002-03.
REGULATION IMPACT STATEMENT
The Government, in its tax reform package Tax Reform: not a new tax, a new tax system (ANTS) of 13 August 1998, stated its intention to reform the income tax and social security systems from 1 July 2000. As part of this reform, extra assistance will be provided to families, work incentives will be improved and the structure and delivery of family assistance will be simplified as twelve forms of family assistance, currently available under the tax and social security systems, are reduced to three.
The three new family payments which will be available to families under the new A New Tax System (Family Assistance) Bill 1999 are family tax benefit part A, family tax benefit part B and child care benefit.
Tax delivery for family assistance
The sole parent rebate, dependant spouse rebate (with child) and family tax assistance, which are benefits currently provided to families under the taxation system, are being replaced under the restructure of family assistance. Taxpayers may anticipate their entitlement to a sole parent rebate and/or family tax assistance by reducing their tax instalments taken from their salary or wages under the Pay-As-You-Earn (PAYE) system.
To anticipate the sole parent rebate and family tax assistance through reduced tax instalment deductions (TIDs) employees must first complete an employment declaration and give it to their employer. The employer must then give the employment declaration to the Commissioner. The employment declaration remains in force until the employee ceases employment or another employment declaration is lodged with the employer. The Commissioner may, by a notice published in the Gazette, determine that all or part of the employment declaration ceases to have effect from a certain date.
Delivery for assistance with child care
Child care assistance is paid for child care services provided by approved child care organisations, and is claimed by and paid to the service provider, who then reduces the fees paid by families.
Identification of implementation options
Delivery of family tax benefit Parts A and B
Taxpayers who choose to claim family tax benefit parts A and/or B through the taxation system by reducing their TIDs will need to lodge a new declaration under the proposed new withholding system for individuals which is also proposed to commence on 1 July 2000. The withholding component of the new system, known as Pay-As-You-Go (PAYG), will incorporate tax deductions from salary or wages, as well as deductions from a range of other payments. The PAYG arrangements will be broader that existing PAYE arrangements and will cover payers other than employers who pay salary or wages.
A number of options were considered for ceasing the current reduction of TIDs from salary or wages of individual taxpayers for sole parent rebate and family tax assistance after 30 June 2000. It is considered that the most appropriate option, in terms of administrative and compliance impacts, is to publish in the Gazette a notice stating that all claims in an employment declaration for a rebate and, or, family tax assistance will cease to have effect after 30 June 2000.
This option will impact on all individuals who have claimed a reduction in TIDs for rebates, including rebates not directly affected by the family assistance reform. This impact stems from the fact that it is not always possible for employers to distinguish the type of the rebate being claimed from employment declarations. Therefore all rebate claims through reduced TIDs will have to cease.
Delivery of child care benefit
Under the new child care benefit system, the person whose child is in care will generally make claims. When care is provided by approved child care services, payment of child care benefit will be made to the child care service. When a family accesses informal care, child care benefit will be paid to the family direct by the Family Assistance Office (FAO) on presentation of receipts. For families to access child care benefit for informal care, the carer must be registered with the FAO.
Assessment of impacts (costs and benefits) of the implementation
The proposal will affect the following groups:
- •
- individuals;
- •
- payers;
- •
- Australian Taxation Office (ATO); and
- •
- child care service providers.
Delivery of family tax benefit Parts A and B
Compliance costs - Individuals
It is expected that a majority of the 2 million claimants of family tax benefit will choose the benefit as direct payments, as they already receive direct payments of family allowance from Centrelink under the existing system. Claimants choosing delivery through the tax system by way of reduced TIDs may incur additional costs in learning about the new changes and completing declarations. However it is assumed that most individuals will complete their declarations at work and therefore the cost will be borne by the payer.
From 1 July 2000, individual taxpayers who previously claimed their entitlement to rebates and, or, family tax assistance through reduced TIDs will have TIDs deducted at the normal marginal rates of tax until a new declaration is lodged under the new withholding arrangements. Therefore, individuals wishing to claim the zone rebate, spouse rebate (without child), housekeeper, child housekeeper, invalid relative and parent rebates through reduced TIDs after 30 June 2000, will have to lodge new declarations with their payers. It is not possible to reliably estimate how many of these individuals will be claiming their entitlements through reduced TIDs under the new withholding arrangements.
As in the case of those seeking to receive family tax benefit Parts A and/or B through reduced TIDs, the cost of preparing a new declaration will tend to fall on payers assuming that these declarations are completed during working hours.
New employees will not be affected by the change.
Payers will bear most of the compliance costs associated with the measure. They will have to learn about the changes, receive declarations from those individuals affected by the changes, work out the new rates of TIDs and remit the deductions to the ATO.
It is not possible to accurately estimate the number of individuals affected by the proposed measure. But it is likely that all group employers will be affected. The ATO estimates that by 1 July 2000 there will be 760,000 employers. The average cost to payers is estimated to be $10 per payee that lodges a new declaration.
Compliance Costs - Delivery of child care benefit
Under the new system, there will be minimal alteration in the way that funding is made available for formal child care service providers. A familys child care benefit will be paid direct to their nominated service/s to enable them to reduce the fee which the family is required to pay.
As families will now have the choice of receiving their child care benefit as an end of year lump sum payment, service providers will be required to keep records on, and provide information in respect of, all the children in their care; currently this is only required in respect of children for whom child care assistance is paid. Additionally, the new method of calculating the rate of child care benefit will require providers to train staff in the new arrangements.
The ATO will need to design, print and distribute new declaration forms and instructional materials. It is expected that families identified as being affected by the new family assistance reforms will be written to and advised of the new arrangements. The changes will also need to be publicised so that payers and individuals understand the new changes and know what is required of them.
The ATO, Health Insurance Commission and Centrelink, operating jointly as the FAO, will answer inquiries about the changed arrangements and will provide assistance to taxpayers in determining their TID reductions for family tax benefit.
The changes to declarations will have a minimal effect on the ATOs recurrent costs.
The total cost to revenue of the family package is $2.4 billion in 2000-01, $2.5 billion in 2001-02, and $2.6 billion in 2002-03.
Individuals who wish to anticipate family tax benefit through the tax system will be able to choose whether they receive the benefit during the year by way of a reduction in their TIDs or whether they wish to wait for a lump sum at the end of the year.
To reduce their TIDs, a person will have to lodge an appropriate declaration with their employer or other payer. Existing employment declarations serve more than one purpose. First, they allow for the tax free threshold to be taken into account in working out TIDs. People who dont lodge an employment declaration have tax deducted at a higher rate. Secondly, people can use an employment declaration to reduce their TIDs in anticipation of certain rebates. Individuals who currently anticipate the sole parent rebate and family tax assistance through reduction in TIDs will have to make new declarations in order to receive family tax benefits through reduced TIDs. However, the part of an employment declaration that allows the tax free threshold to be taken into account in working out the amount of a persons TIDs, will continue to remain in force until a declaration under the new withholding arrangements is lodged with their payer. Payers will therefore be able to continue to deduct TIDs from affected individuals payments at the applicable marginal rates of tax rather than the higher rates that would otherwise apply if the whole declaration was negated.
Consultation was undertaken with various interest groups including professional and business associations and other taxpayer bodies. For example, the ATO consulted with the Australian Society of Certified Practicing Accountants, the Institute of Chartered Accountants in Australia, National Institute of Accountants, H&R Block and the Council of Small Business Organisations of Australia. These bodies expressed concern over the extra burden the TID option would place on payers.
Consultations with families and child care providers revealed widespread support from both the child care sector and families for a continuation of payments to service providers. The availability of a lump sum payment would provide a possible option for those families with lower entitlements and those who choose to access informal care only. There was also widespread support for simplifying the eligibility process and improving electronic commerce between the Government and providers.
Allowing primary carers to receive direct payments of family tax benefit Parts A and/or B, to claim them as a lump sum payment at the end of the financial year and to access them via a reduction in their TIDs allows families more choice than the existing family assistance system. This flexibility enables individuals to minimise the costs of applying for and receiving family assistance, albeit at some cost to payers (notably, employers) and employees eligible for other rebates who utilise existing TID arrangements.
The proposed option for implementing child care benefit should minimise compliance costs, and ensure that those eligible for child care benefit are not discouraged from applying for, and receiving, it.
The ATO and Treasury will monitor this measure, as part of the whole taxation system, on a continuing basis.
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (ADMINISTRATION) BILL 1999
OVERVIEW OF THE ADMINISTRATION OF THE NEW FAMILY ASSISTANCE REGIME
The new family assistance regime will comprise family tax benefit Parts A and B (FTB), child care benefit (CCB), maternity allowance (MAT) and maternity immunisation allowance (MIA).
A new 'Family Assistance Office' will be set up to help families
The new Family Assistance Office (FAO) will deliver FTB, CCB, MAT and MIA. The law does not refer to the FAO as it will use the existing infrastructure of Centrelink, the ATO and HIC (Medicare Offices). It is expected that all ATO offices, all Centrelink offices and all Medicare offices will have a FAO as part of their office. The extended network of sites will ensure families have a greater choice about the way in which they access assistance.
In order to give families these choices, the Secretary of the Department of Family and Community Services will have the power to delegate his or her powers to constituent agencies of the new FAO. The heads of these agencies and their staff, as delegates of the Secretary, will be able to process claims, make payments and perform other functions under the family assistance law.
The primary carer will be able to make a claim for FTB in one of the following ways:
- •
- lodge a claim with the FAO (through Centrelink) for fortnightly payments; or
- •
- claim a lump sum payment at the end of the year (through the taxation system), either through the primary carers tax return or their partners tax return. Families will have a further option to reduce their (or their partner's) tax instalment deductions (TIDs) during the year in anticipation of their end of year FTB lump sum entitlement.
Families will be able to claim CCB for formal care (in approved child care services) in one of the following ways:
- •
- as instalmentpayments paid directly to their nominated child care service to enable the service to reduce the fees that the family will pay (current arrangements under which child care assistance advance payments are made to child care services will be preserved for CCB purposes); or
- •
- as a lump sum afterthe end of the financial year (from the FAO).
CCB for informal care will be claimed as a lump sum for a period of care of up to 12 months and paid via the FAO.
CCB will not be delivered through the tax system because of the complexity of the information parents would need to retain to be able to correctly assess their entitlement.
Making a claim for MAT and MIA
Families will be able to claim single, one-off payments of MAT and MIA from the FAO (through Centrelink).
Like CCB, MAT and MIA will not be delivered through the tax system.
Families will receive their correct entitlement to family assistance
Families who choose to receive fortnightly payments will estimate their income for the current financial year. Their estimated income will be compared with their actual income at the end of the year. Families who have overestimated their income during the year and have been underpaid will receive a top up payment at the end of the year. On the other hand, families who have underestimated their income and have been overpaid, will be required to pay back the amount they were overpaid during the year. This is much fairer than the current arrangements for family allowance where families who underestimate their income are required to pay back the amount they were overpaid but families who overestimate their income during the year do not receive a top up payment. It is also fairer than the current arrangement for child care assistance where families do not receive a top up payment if they are underpaid, and are not required to pay back overpaid amounts.
Administrative arrangements for MAT and MIA
The administration of these payment will not change significantly under the new family assistance regime.
Administrative arrangements for FTB and CCB will be simplified
Simpler rules will be administered by one agency
Rather than dealing with potentially 12 forms of assistance with different eligibility rules and payment arrangements through three different agencies, families will now have to deal with only 3 payments with similar eligibility rules and with one agency, the FAO.
There will be one set of rules for all families regardless of how they choose to receive family assistance. For FTB, this means that regardless of whether families receive fortnightly payments or as an end of year lump sum claimed with their tax returns, they will all be subject to the same eligibility criteria, rate calculators and administrative arrangements under the family assistance law. For CCB, regardless of whether families receive ongoing payments or lump sum payments from the FAO (through Centrelink), the same eligibility rules and rates will apply.
Under the new arrangements, decisions made by the Secretary regarding entitlement to, or eligibility for, FTB and CCB will be reviewable by the Secretary, or an authorised review officer, regardless of delivery option. It is expected that where FTB is paid through the tax system, the Commissioner, as delegate of the Secretary, will carry out the review functions for those customers. There will be further rights of appeal to the Social Security Appeals Tribunal (SSAT), Administrative Appeals Tribunal (AAT) and the Federal Court. Rules explaining the process for review of decisions are set out in Part 5 of this Bill and will be kept separate from the ATO appeal and review process. Determinations made by approved child care services regarding CCB in special circumstances will not be reviewable. Approved child care services and registered carers will also have the right to appeal to the AAT about the Secretarys decisions affecting them, except where the decision is the result of a Commonwealth planning strategy affecting the distribution of child care places.
It will be easier for families to repay overpayments
As FTB is partly administered through the tax system, overpayments of FTB will be recovered from a claimant's tax refund where possible. This Bill will also allow another person, for example the claimant's partner, to make his or her income tax refund available to offset a claimant's FTB debt. In such cases, where consent is given, the Commissioner will apply the partner's income tax refund to reduce or extinguish the claimant's FTB debt. The new administrative arrangements for recovering overpayments of FTB, will make it much easier for families to repay a FTB debt. Where it is not possible to recover overpayments of FTB from the taxation system, and for overpayments of CCB, these will be recovered by the FAOunder existing Centrelink arrangements.
Since CCB will not be delivered through the tax system, tax refunds and debts will not be applied against CCB debts and payments. Also other family assistance overpayments will not be recoverable from CCB. However, CCB overpayments will be recoverable from FTB or from social security payments.
FTB paid through the tax system will be a payment not a tax rebate or an increase in tax free threshold
Although claimants will be able to lodge claims for FTB and receive lump sum and top up payments through the taxation system, the FTB entitlement will not be in the form of a tax rebate or an increase in a person's tax free threshold.
Traditionally, measures like FTB (such as the family tax assistance) have been provided as tax rebates or as an increase in a person's threshold where the rate of family assistance is calculated by the ATO and offset against tax payable.
A similar approach was not adopted for FTB because the administrative mechanism of delivering FTB through a person's income tax assessment would have been very complicated and families would not have been able to benefit from the simpler structure and administrative arrangements of the proposed system (for example, it would not have been possible to ensure that all families receive their correct entitlement regardless of delivery option) which is the main feature of family assistance reform.
Part 1 - Preliminary
Section 1 of the A New Tax System (Family Assistance) (Administration) Bill 1999 (the Bill) sets out how the Act is to be cited.
Section 2 provides for the commencement of the Act. Sections 1 and 2 and subsection 236(5) commence on the day of Royal Assent. The remaining provisions commence immediately after the commencement of the A New Tax System (Family Assistance) Act 1999 (1 July 2000).
Several abbreviated terms will be used widely throughout this Explanatory Memorandum in relation to this Bill. The abbreviations are:
- •
- the Social Security Act 1991 (the Social Security Act); and
- •
- the A New Tax System (Family Assistance) Act 1999 , currently still a Bill before the Parliament (the Family Assistance Act).
Part 2 - Interpretation
Section 3 provides definitions for expressions used in the Bill. These definitions will be explained in the context in which they appear in the Bill.
Expressions used in the Bill that are defined in the Family Assistance Act will have the same meaning as in that Act.
Section 4 enables the Secretary or another officer to approve the making or withdrawing of any application or claim or the doing of any other thing required or permitted by or under the family assistance lawby use of a telecommunications system or other electronic equipment.
Part 3 - Payment of family assistance
Division 1 - Family Tax Benefit
Individuals or approved care organisations who want to claim FTB will be able to choose from one of two delivery mechanisms:
- •
- fortnightly payments for a current period, paid directly from the Family Assistance Office (FAO); or
- •
- a lump sum payment for a past period, either paid through the tax system or from the FAO when making a claim for fortnightly payments.
Customers choosing delivery via the tax system will also have the option of reducing their tax instalment deductions (TIDs) in anticipation of their end of year lump sum FTB entitlement. In such cases, the lump sum FTB payment will be applied against any tax debt resulting from the TID reduction.
Under section 5 , in order to become entitled for payment of FTB a person must make a claim in accordance with the rules outlined in Division 1 .
According to section 6 , only individuals or approved care organisations can claim FTB. If the relevant eligibility conditions are met (eg, the person or organisation has an FTB child), a determination can then be made that the person or organisation is entitled to be paid FTB.
Under section 7 , an individual or approved care organisation (a claimant) may make a claim for FTB by way of:
1. fortnightly instalments for a current period;
2. a lump sum payment for a past period; or
3. a single payment where an FTB child or another person dies.
1. Claim for a current period via instalments
A claimant may make a claim for a current period via FAO/Centrelink. (Centrelink pays FTB to claimants who are currently eligible for FTB on a fortnightly basis).
A claimant may make a claim for a past period in one of two ways.
First, an individual can claim a lump sum payment through the tax system by lodging a claim for FTB with the individuals tax return. A lump sum claimant may also reduce their TIDs in anticipation of their end of year FTB entitlement but this is not a claim for FTB. The person's FTB entitlement will be worked out at the end of the year when they lodge a claim for FTB with their tax return. The FTB entitlement will be offset against any tax shortfall caused by the reduction of tax instalment deductions.
Second, a claim may be made for a past period from FAO/Centrelink when making a claim for fortnightly payments. For example, if a person, while making a claim for fortnightly instalments, realises that he or she was also eligible for a past period, the person may claim a lump sum for the time (up to 2 years) that they were not paid. It is important to note that a claim for a past period cannot be made unless it is accompanied by a claim for ongoing fortnightly payments.
Claim for FTB by single payment/in substitution because of the death of another individual
This type of claim covers two situations.
First, where an FTB child dies, a person remains eligible for FTB for the child for up to 14 weeks after the death. The person has the option, however, of claiming FTB for the deceased child as a single payment. This situation is addressed in section 32 of the Family Assistance Act.
Second, if a person who is, or would be, eligible for FTB in respect of an FTB deceased child dies before being paid their FTB entitlement, another person can claim "in substitution" under section 33 of the Family Assistance Act. Similarly, if a person who is eligible for FTB for a child in normal circumstances dies before being paid their entitlement, then another person can claim "in substitution".
To be effective, a claim for FTB must be made in a form (which may be electronic) and manner approved by the Secretary. The claim must contain any information and be accompanied by any supporting documents required by the Secretary ( subsection 7(2) refers). This means the Secretary may specify what information is to be provided in claims, how claims are to be made and where they are to be lodged.
A claim must also meet the tax file number requirements set out in section 8 of the Bill in order to be effective ( subsection 7(2) refers).
A person who wants to receive their FTB through the tax system will be expected to lodge their claim with their tax return. Individuals who have varied their TIDs in anticipation of their FTB lump sum entitlement will also be expected to lodge an end of year claim for a lump sum payment with their tax return.
Information required from claimants will vary for different delivery options
Information required in the claim form will vary depending on the individual's circumstances. A person making a claim for fortnightly payments for a current period will be asked for information relevant at the time. Claims through the tax system, on the other hand, will ask for information and changes to circumstances (where applicable) for a period in the past.
Past period claims through the tax system will need to be lodged each financial year
Individuals claiming through the tax system will be required to lodge a FTB claim each financial year. Fortnightly recipients however, will have their payment continued without the need for a new claim. (Fortnightly recipients will be obliged to notify the FAO of change(s) to circumstances. There will also be periodic reviews to ensure that changes affecting a person's entitlement are taken into account.)
In recognition of the fact that many taxpayers use a tax agent to prepare their tax returns and are, therefore, likely to ask their agents to help prepare claims for FTB through the tax system, a new provision will be inserted in the Income Tax Assessment Act 1997 to allow a tax deduction for fees or commission paid to a recognised tax adviser for advice in relation to FTB claims. (This is consistent with the current practice of allowing a deduction for tax agent fees related to tax return preparation and other tax related advice.) This amendment is contained in the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No.2) 1999 and explained later in this explanatory memorandum.
As part of the claim process, a claimant will be subject to a tax file number (TFN) requirement. "Tax file number" is defined in section 3 of the Bill as having the same meaning as in Part VA of the Income Tax Assessment Act 1936 . The rules relating to this requirement are set out in section 8 .
Each TFN claim person is subject to the TFN requirement. A "TFN claim person" is defined in section 3 as meaning the claimant, the claimant's current partner or, where the claim is for a past period, any partner of the claimant during the past period.
The TFN requirement can be satisfied in several ways.
First, the claimant can provide his or her TFN and the TFN of any partner (past or current) that is a TFN claim person as defined.
Second, the claimant can provide a statement to the effect that the claimant has a TFN but does not know what it is, that the claimant has asked the Commissioner of Taxation for the TFN and authorises the Commissioner to tell the Secretary whether the claimant has a TFN and, if so, the number. If the claimant has or had one or more partners who are a TFN claim persons, then the claimant must provide a similar statement made by each TFN claim person.
Third, the claimant can provide a statement to the effect that the claimant has applied for a TFN and authorises the Commissioner for Taxation to tell the Secretary whether the application is refused or withdrawn or, if a TFN is issued to the claimant, that number. Again, if the claimant has or had one or more partners who are a TFN claim persons, then the claimant must provide a similar statement made by each TFN claim person.
There will be situations where a claimant cannot satisfy the TFN requirement because the claimant cannot obtain a relevant statement from, a current or previous partner who is a TFN claim person. In these circumstances, the Secretary will have a discretion to exempt the claimant from the TFN requirement.
An example where the Secretary might use the discretion would be where the claimant has a well based reason to believe that that he or she would be subject to violence from the partner or there are other concerns for the safety of the claimant or a child of the claimant if the partner were approached for a relevant statement.
Restriction on instalment claims
Under section 9 , a claim for FTB is not effective if:
- •
- the claimant has previously claimed FTB by instalment but the claim has not yet been determined; or
- •
- the claimant is already entitled to be paid FTB by instalment; or
(The term entitled to be paid by instalment is defined in section 3 of the Bill to mean a person in respect of whom a determination under section 16 is in force under which the person is entitled to be paid FTB at or after a particular time.)
- •
- the claimants determination under section 16 has been varied by determination under paragraph 27(5), 29(2) or 30(2) so that the claimant is not entitled to FTB at the determination time or at any later time and the determination time is before the end of the income year following the one in which the variation determination took effect.
Restrictions on claims for FTB for a past period
There are some restrictions on past period claims for FTB. These restrictions are set out in section 10 .
A claim is not effective if the claimant has previously made a claim for any of the past period.
A claim is not effective if the claimant was or would have been entitled to FTB by instalments for a day in or after the past period.
A claim is not effective if a determination under section 16 was in force at some time in the past period, that determination was varied under paragraph 27(5), 29(2) or 30(2) with the effect that the claimant is not entitled to FTB for the past period and the claim is made before the end of the income year following the one in which the variation determination took effect.
A claim must fall wholly within one income year.
A claim must be made before the end of the next income year.
A claim for a past period that occurs in the income year of the claim must be accompanied by an instalment claim if, at the time of claiming, the claimant is also eligible for payment of FTB by instalment. Otherwise, the claim is ineffective.
A claim for a past period that occurs in the income year before the one in which the claim is made must be accompanied by an instalment claim if:
- •
- the claimant is receiving a social security pension or benefit or a service pension at the time of claim and was receiving such a payment at any time during the past period; and
- •
- when the claim is made, the claimant is also eligible for payment of FTB by instalment.
Otherwise the past period claim is ineffective.
Tax clients (or their partners) who have reduced their TIDs in anticipation of their FTB entitlement cannot make a claim in the same income year in which the past period occurs. The practical effect of this provision will be that where a claimant, or their partner, reduce their TIDs during the year in anticipation of their end of year FTB entitlement, they will not be able to claim for that past period until that income year has ended, that is, when they lodge a tax return for that year.
Restrictions on bereavement claims
Bereavement claims can be made in the following situations.
First, where an FTB child dies, a person remains eligible for FTB for the child for up to 14 weeks after the death. The person has the option, however, of claiming FTB for the deceased child as a lump sum. This situation is addressed in section 32 of the Family Assistance Act.
The reference in section 11 to a claim for payment of FTB by single payment is a reference to this first type of claim.
Second, if a person who is, or would be, eligible for FTB in respect of a deceased child dies before being paid their FTB entitlement, another person can claim "in substitution" under section 33 of the Family Assistance Act. Similarly, if a person who is eligible for FTB for a child in normal circumstances dies before being paid their entitlement, then another person can claim "in substitution".
The reference in section 11 to a claim for payment of FTB in substitution is a reference to a claim arising under the second set of scenarios.
Subsection 11(1) provides that a claim for payment of FTB by single payment/in substitution is not effective if the claimant has previously claimed FTB on the same basis. It is irrelevant whether or not the claim has been determined.
Under subsection 11(2) , a claim for payment of FTB by single payment/in substitution where eligibility is based in subsection 32(2) or section 33 of the Family Assistance Act must be made before the end of the financial year after the year in which the person died. Otherwise, the claim is not effective.
Under section 12 , a claim can be withdrawn or varied ( in a manner determined by the Secretary) before it is determined.
A claim that is withdrawn is taken not to have been made. This means that the Secretary is not in the position of having to determine an unwanted claim.
Subdivision B - Determination of claims etc
Secretary must determine claim
Section 13 deals with the determination of claims.
If a claim is effective, then it must be determined by the Secretary in accordance with
sections 16 to 19 . If the claim is not effective, it is taken not to have been made.
The Secretary is required to determine an effective claim by having regard to only the information provided in the claim or to a combination of information provided in the claim and any other relevant information or documents.
Restrictions on determining a claim
There are two situations where the Secretary can defer determining a claim.
The first is where a person makes a past period claim for the previous income year, the person is required to lodge a tax return in relation to that previous year and, at the time the claim is made, an assessment of the person's taxable income has not been made. In this situation, the claim can only be determined when the assessment is made.
This rule, contained in section 14 , enables the Secretary to determine the claim and the amount of the person's entitlement for that previous year based on the person's actual income. In cases where a claimant has reduced his or her TIDs in anticipation of FTB entitlement at the end of the year, this provision also allows the claimants FTB entitlement to be offset against the claimants taxation liability.
The second situation, addressed in section 15 , relates to the TFN requirements that apply when a claim for FTB is made. If a claimant provides the relevant TFN's at the time of claim, then the claim can be determined. If, however, a TFN claim person makes a statement under subsection 8(5) (that the TFN claim person does not know his or her TFN number etc), the Secretary can only determine the claim if:
- •
- within 28 days of the claim, the Commissioner for Taxation tells the Secretary the person's TFN; or
- •
- 28 days passes without the Commissioner telling the Secretary that the person does not have a TFN.
If a TFN claim person makes a statement under subsection 8(6) (that the TFN claim person has applied for a TFN), then the Secretary can only determine the claim if:
- •
- within 28 days of the claim, the Commissioner for Taxation tells the Secretary the person's TFN; or
- •
- 28 days passes without the Commissioner telling the Secretary that the person has not applied for a TFN or that the application has been refused by the Commissioner or withdrawn by the person.
Determination of instalment entitlement claim
Section 16 provides for the determination of a claim for FTB by instalment.
If a claim is made for payment of FTB by instalment and the claimant is eligible under the normal rules in Subdivisions A or C of Division 1 of Part 3 of the Family Assistance Act, then the Secretary must determine that the claimant is entitled to be paid FTB for each day on which the determination is in force, at a daily rate for which the person is eligible ( subsection 16(2) refers). This rule applies to both individual s and approved care organisations who claim FTB by instalment.
If, however, a pattern of care exists in relation to an FTB child with the effect that the claimant is eligible for FTB for regular but broken periods while the child is in the claimant's care, then subsection 16(2) allows the Secretary to make a determination that the claimant is entitled to be paid FTB for those days on which the claimant has the care of the child. This rule only applies to individuals who claim payment of FTB by instalment.
This provision enables a single determination to remain in force in cases where a person shares the care of an FTB child and there is a pattern of care in relation to the child. Without such a provision, a person would need to reclaim FTB each time the person resumed care of the child and the entitlement determination would need to be "cancelled" for loss of eligibility each time the child left the care of the person.
Subsections 16(2) and (3) provide for the making of a entitlement determination that is in force from the day of the determination. Because the day on which a determination is made may not be the same as the claim day, subsection 16(4) enables the claimant to be paid for the period between claim and determination if, during that period or part of the period, the claimant was eligible for FTB under the normal rules in Subdivisions A or C of Division 1 of Part 3 of the Family Assistance Act. The rule in subsection 16(4) applies to both individuals and approved care organisations who claim FTB by instalment.
Subsections 16(5) and (6) deal with the situation where a person claims FTB by instalment at a time when the person is eligible for FTB under section 31 of the Family Assistance Act. Section 31 covers eligibility for FTB during a bereavement period (ie, a period of 14 weeks after the death of an FTB child). At the end of the bereavement period, if the person has other FTB children, eligibility would be determined under the normal rules in Subdivision A of Division 1 of Part 3 of the Family Assistance Act.
Under subsection 16(5) , if the claimant is eligible for FTB under section 31 of the Family Assistance Act and has one or more FTB children that would attract eligibility for the person under the normal rules in Subdivision A of Division 1 of Part 3 of that Act, then the Secretary must determine that the person is entitled to be paid FTB at an appropriate rate for each day in the bereavement period and thereafter for each day while the determination is in force.
Under subsection 16(6) , if the claimant is eligible for FTB under section 31 of the Family Assistance Act but does not have any FTB children that would attract eligibility for the person under the normal eligibility rules, then the Secretary must determine that the person is entitled to be paid TFB at an appropriate rate for each day in the bereavement period.
Determination of past period entitlement claim
Where a claimant is eligible for FTB for a past period, the Secretary must determine that the claimant is entitled to be paid for the past period ( section 17 refers).
A past period claim through the tax system can relate to an income year or one or more periods in an income year (during which the individual believes that he or she is eligible for FTB). The individuals lump sum payment for that past period will be calculated by reference to those days in the income year during which the individual was eligible for FTB and the individuals circumstances on each day in the period.
An example which shows how an individual's lump sum payment may consist of more than one period of entitlement is where a claimant has a baby (her second child) on say, 1 January and is entitled to a higher daily rate of FTB for the second half of the tax year. The lump sum paid to the claimant would comprise the claimant's FTB entitlement for two separate periods - a lower daily rate for the first period when she had one child and a higher daily rate when she had two children.
Determination of bereavement entitlement claim
Under section 18 , if a claim is made for FTB by single payment/in substitution and the claimant is eligible for FTB under section 32 or 33 of the Family Assistance Act, the Secretary must determine that the claimant is to be paid the FTB.
Determination that no entitlement
If the Secretary is not satisfied that a claimant is eligible for payment of FTB by instalment, for a past period or because of the death of another individual, then the Secretary must make a determination to that effect ( section 19 refers).
Determination of rate may be based on an estimate
An individual's rate of FTB is calculated on the basis of the individual's taxable income for the current income year. If the individual is a member of a couple, the partner's taxable income for the current income year is also relevant. Where a claim is made for FTB by instalment, an individual's taxable income for the income year will not be known until the end of the income year. A similar issue also arises in relation to claims for a past period.
Accordingly, section 20 allows the Secretary to use a reasonable estimate of the amount provided by the individual for the purposes of calculating the person's rate of FTB.
The estimate used to calculate the individuals rate or amount of FTB will then be reconciled against their actual income for the relevant income year when it becomes known and any adjustment to the persons payment made accordingly.
When determination is in force
The general rule is that a determination comes into force when it is made and continues in force at all times afterwards ( subsection 21(1) refers).
Subsection 21(2) deals with the possibility of overlapping determinations. This can occur where, for example, a review is pending on a decision that a claimant is not entitled to FTB by instalment, a claim is subsequently made and determined in favour of the claimant and the outcome of the review is that the claimant was, in fact, entitled to be paid FTB by instalment in the first instance.
If a determination that a claimant is entitled or not entitled to be paid FTB by instalment is in force, then that determination ceases to be in force if another determination is made in relation to an instalment claim or a past period claim that overlaps with the first determination.
Under subsection 21(3) , a determination that the claimant is entitled to be paid FTB on a particular day or a later day can also cease to be in force on request from a claimant, provided the claimant is not receiving a social security pension, social security benefit or a service pension (these terms are defined in subsection 23(1) of the Social Security Act.
The Secretary is required, under section 22 , to notify a claimant of the outcome of his or her claim, that is, whether the claimant is entitled to be paid FTB by instalment or for a past period, the daily rate or amount of payment and how the payment is to be made. The determination must also inform the claimant of his or her right of review in relation to the determination.
The determination is not ineffective if these notice requirements are not complied with.
Payment of family tax benefit by instalment
Under subsection 23(1) , if a claimant is entitled to be paid FTB by instalment, then the Secretary must pay the "instalment amount" to the claimant after each "instalment period" after the determination is made.
"Instalment amount" is defined in subsection 23(2) to mean the amount accruing for the days in the instalment period on which the claimant is entitled to be paid under the determination. "Instalment period" is generally the period of 14 days beginning on the day the Secretary considers appropriate and each successive period of 14 days.
The Secretary can change the day on which an instalment period begins under subsection 23(3) . This might be done where the claimant requests, for good reason, that he or she receive payments on a different day.
While the general rule is that the person entitled to FTB is to be paid the benefit at such time and in such manner as the Secretary considers appropriate, there may be occasions when it is appropriate for the Secretary to pay someone else on behalf of the entitled person. The power to do so is contained in subsection 23(4) . This may happen where the entitled person is incapable of looking after his or her own affairs or in cases where the entitled person asks the Secretary to make such a direction. It is envisaged that the discretion in subsection 23(4) would be used infrequently where the entitled person does not consent to the direction. A decision by the Secretary under this provision is subject to review.
Subsection 23(5) contains a regulation making power to deal with the timing and manner of making payments.
The payment provisions in section 23 are subject to overpayment and debt recovery provisions in Part 4 and the offsetting rules in sections 226 to 229 .
Other payments of family tax benefit
If a claimant is entitled to be paid FTB for a past period or by single payment/in substitution because of the death of another person, then the Secretary must pay the person the amount to which they are entitled ( subsection 24(1) refers).
As is the case with payment of FTB by instalment, the Secretary has a discretion, under subsection 24(2) , to pay the whole or part of the amount to another person on behalf of the claimant. For example, payment of FTB for a past period may, on direction of the claimant, be made to a tax agent on behalf of the claimant.
Subsection 24(3) contains a regulation making power to deal with the timing and manner of making payments.
The payment provisions in section 24 are also subject to overpayment and debt recovery provisions in Part 4 and the offsetting rules in sections 226 to 229 .
Obligation to notify changes of circumstances
A claimant who becomes entitled to be paid FTB by instalment will be subject to certain notification obligations. These obligations are to ensure that payments are reassessed in a timely manner.
Under section 25, a claimant is required to notify the Secretary if anything happens (or is likely to happen) that may cause the claimant to cease to be eligible for FTB or which may impact on the claimant's rate of payment. There is a penalty for failing to comply with these obligations.
Secretary's power to request tax file number
Under section 8 , a claimant is subject to certain TFN requirements before a claim can be determined. Similar requirements apply under section 26 if a determination is in force under which a claimant is entitled to be paid FTB by instalment or for a past period. These TFN requirements apply in relation to a "TFN determination person", defined in section 3 as meaning:
- •
- in relation to a determination that a claimant is entitled to be paid FTB by instalment - the claimant or any partner of the claimant at any time since the determination was made; or
- •
- in relation to a determination that a claimant is entitled to be paid FTB for a past period - the claimant or any partner of the claimant during that past period.
Section 26 might be used where, for example, a claimant becomes a member of a couple at a time when a determination that the claimant is entitled to be paid FTB by instalment is in force.
The consequences of failing to meet the TFN requirements set out in this provision are outlined in section 27 .
Subdivision C - Variation of determinations
Variation of instalment and past period determination where failure to provide tax file number
Section 27 sets out the circumstances in which the TFN requirements in section 26 are not satisfied and the consequences of failing to satisfy those requirementswithin 28 days of being requested to do so. The TFN requirements are not satisfied if:
- •
- within 28 days of the request, the claimant gives the Secretary a statement by the TFN determination person that the person does not know his or her TFN and the Commissioner for Taxation tells the Secretary that the person does not have a TFN ( subsection 27(3) refers); or
- •
- within 28 days of the request, the claimant gives the Secretary a statement by the TFN determination person that the person has applied for a TFN and the Commissioner for Taxation tells the Secretary that the person has not applied for a TFN or that the application has been refused by the Commissioner or withdrawn by the person ( subsection 27(4) refers).
If the TFN requirements are not satisfied then, under subsection 27(5) , the consequences are as follows:
- •
- where an instalment determination is in force in relation to the claimant, the determination is varied with the effect that the claimant is not entitled to be paid FTB by instalment from the day after the end of the last instalment period before the variation; or
- •
- where a past period determination is in force in relation to the claimant - the determination is varied with the effect that the claimant is not entitled to be paid FTB for any day in the past period.
However, the Secretary has the discretion not to apply the consequences set out in subsection 27(5) if the TFN determination person is the claimant's partner and the claimant cannot obtain the partner's TFN or relevant statement under subsection 26(2), (3) or (4) . This rule is set out in subsection 27(2) .
The consequence in subsection 27(5) can be undone in certain circumstances. These are as follows:
If an instalment determination has been varied under paragraph 27(5)(a) and the Secretary finds out the TFN number of the relevant person before the end of the income year in which the variation took effect, then the effect of the variation is undone.
If a past period determination is varied under paragraph 27(5)(b) and the Secretary finds out the TFN number of the relevant person at any time after the variation took effect, then the effect of the variation is undone.
These rules are contained in subsection 27(6) .
Variation of instalment and past period entitlement determination where income tax return not lodged
Section 28 deals with the situation where an instalment or past period entitlement determination is in force, for one or more days in the previous income year the claimant is entitled to FTB under the determination, the claimant or the claimant's partner or both are required to lodged a tax return for that previous income year but have not done so and an income tax assessment has not been made in relation to each relevant person. If this happens, subsection 28(2) provides the entitlement determination must be varied with the effect that claimant is not entitled to be paid FTB in the previous income year. For customers who are being paid FTB by instalment, this would mean that the amount of FTB paid during the previous income year would be a debt, recoverable under Part 4 . The outcome is similar where a customer has been paid FTB for a past period based on the claimants actual income and a partners estimated income, and the partner does not lodge a tax return as required.
This provision supports the end of year income reconciliation process. Although FTB can be paid on the basis of an estimate, the rate of FTB is ultimately based on a person's actual income in a relevant income year. This amount cannot be known until a return is lodged and an assessment made. It is only then that a person's "real" entitlement can be determined.
If the Commissioner for taxation subsequently makes an assessment in relation to each relevant person, then, under subsection 28(3) , the determination must again be varied with the effect that the claimant is entitled to be paid the lesser of:
- •
- the actual amount of FTB to which the claimant is entitled; or
- •
- the amount that the claimant was entitled to be paid before the variation in subsection 28(2) .
Variation of instalment entitlement determination where failure to provide information
Section 29 operates where an instalment entitlement determination is in force in relation to a claimant, the Secretary requires the claimant or claimant's partner, under Division 1 of Part 6 , to give information or provide documents concerning the claimants eligibility or rate and the requirement is not complied with.
Where this happens, the instalment determination may be varied by the Secretary under subsection 29(2) with the effect that the claimant is not entitled to be paid FTB by instalment from the day after the end of the last instalment period before the variation.
Under subsection 29(3) , if the claimant subsequently gives the information or produces the documents by the end of the income year following the one in which the variation took effect, the Secretary must undo the variation determination under subsection 29(2) .
Variation of instalment entitlement determination where failure to notify change of address
Subsection 30(1) enables the Secretary to vary an instalment entitlement determination that is in force where there is reason to believe that the claimant's address has changed and the Secretary, after taking reasonable steps to find out the new address, is unable to do so.
Where this happens, the Secretary may vary the determination under subsection 30(2) with the effect that the claimant is not entitled to be paid FTB by instalment from the day after the end of the last instalment period before the variation.
If the Secretary subsequently finds out that the claimant's address has not changed or finds the claimant's new address before the end of the income year following the year in which the determination took effect, then the Secretary must vary the determination to undo the effect of the previous variation ( subsection 30(3) refers).
Variation of instalment entitlement determination to reflect later changes in eligibility
Subsection 31(1) enables the Secretary to vary an instalment entitlement determination at any time after its making to take account of changes in the claimant's circumstances that impact on eligibility for, or rate of, FTB. A determination can be varied so that it has effect at all times after the change in circumstances. Subject to the rule in subsection 31(2) , the effect of the variation determination can be prospective or retrospective.
This provision is required because the review provisions in Part 5 only allow for the review of a decision with effect from the date of that decision. For example, a determination is in force on day 1 and a change in circumstances subsequently occurs on day 20 which affects the claimant's rate of FTB and the Secretary is notified of the change on day 25. The effect of the change is that the claimant's rate of FTB should be increased from day 20. The only decision that can be reviewed under Part 5 is the original entitlement determination. This is not appropriate in the given scenario. What is needed is a power to vary the determination from day 20. Section 31 allows this type of variation to be made. A variation under section 31 is a "decision" that can be reviewed under Part 5 .
By contrast, if the original determination was incorrect, the Secretary would have the power under the review provisions in Part 5 to set aside the incorrect original decision and substitute a new decision with effect from day 1. Similarly, the claimant could seek review of the original determination.
Subsection 31(2) limits the effect of a beneficial variation determination in certain circumstances. If:
- •
- the Secretary does not become aware of a claimants change in circumstances and the claimant does not notify the Secretary of the change until after the end of the income year following the one in which the change occurred; and
- •
- the Secretary would be required under subsection 31(1) to increase the claimants entitlement to FTB as a result of the change,
then the Secretary is required to increase the claimants entitlement from the beginning of the income year that precedes the year in which the Secretary becomes aware of the change.
Under subsection 31(3) , if a variation under section 27, 28, 29 or 30 is in force when the Secretary varies a determination under section 31 , then the variation under section 27, 28, 29 or 30 prevails. This provision ensures that the variation power in section 31 cannot override the effect of those other provisions.
Notice of variation determination
Under section 32 , the Secretary must notify the claimant of any variation determination that is made under Subdivision C , including the effect of the variation, and inform the claimant of his or her review rights.
A variation determination is not ineffective if the notice does not comply with these requirements.
Division 2 - Payment of family tax benefit advances
Determination of entitlement to family tax benefit advance
Subsection 33(1) provides that the Secretary may determine that an individual is entitled to be paid FTB for a standard advance period. Standard advance period is defined in section 3 of the Family Assistance Act as a period starting on 1 January and ending on the following 30 June, or starting on 1 July and ending on the following 30 December. The Secretary may determine that the individual is entitled to be paid FTB for the advance period where:
- •
- on the advance assessment day:
- -
- the individual is entitled to be paid FTB by instalment;
- -
- the individuals Part A rate is calculated under Part 2 of Schedule 1to the Family Assistance Act (where income does not exceed the higher income free area); and
- -
- the individuals Part A rate is equal to or exceeds twice the individuals FTB advance rate (FTB advance rate is defined in section 3 of the Family Assistance Act);
- •
- the individual has requested payment of an FTB advance for the period; and
- •
- the request is made before the end of the period.
Subsection 33(2) defines an individuals advance assessment day as either the first day in the standard advance period, or, if the individual is not entitled to FTB by instalment on that day but becomes entitled on a later day of the period due to the birth of a child, the day on which the individual becomes entitled to FTB.
Subsection 33(3) provides that the request for an advance may operate for a particular standard advance period only, or for subsequent periods as well. Subsection 33(4) provides that where the request applies for subsequent periods, the individual may withdraw the request at any time for standard advance periods for which FTB advance has not yet been paid.
Subsection 33(5) provides that an individual cannot become entitled to more than one FTB advance for a standard advance period.
Amount of family tax benefit advance
Section 34 sets out the method of calculating the amount of the FTB advance. The FTB advance rate is converted to a daily rate by dividing the rate by 365, and the result is then multiplied by the number of days in the individuals FTB advance period. An individuals FTB advance period is the standard advance period, except:
- •
- where it is not practicable on the first day in the standard advance period to adjust the individuals payment of FTB to take account of the advance, the individuals FTB advance period starts at the beginning on the first instalment period on which it is practicable to adjust the payment; and
- •
- the Secretary may determine that an individuals FTB advance period is to end before the end of the standard advance period, if the Secretary considers that this is appropriate having regard to the individuals eligibility for FTB and the rate of FTB to which the individual is entitled.
Payment of family tax benefit advance
Section 35 provides that the advance is to be paid as such time and in such manner as the Secretary considers appropriate, subject to Part 4 of the Act (overpayments and recovery).
Division 3 - Maternity allowance and maternity immunisation allowance
Division 3 sets out the claims and payment rules that apply to maternity allowance (MAT) and maternity immunisation allowance (MIA). These rules are similar to the claims and payment rules which currently apply to the maternity allowances under the Social Security Act.
A person can only become entitled to be paid MAT/MIA if a person makes a claim for the payment in accordance with the rules set out in Division 3 . Section 36 provides for this rule.
Only individuals can claim MAT/MIA ( section 37 refers).
According to section 38 , a person can claim MAT/MIA in normal circumstances (ie, where the person meets the eligibility conditions set out in section 36 of the Family Assistance Act) or in situations where an eligible person dies before being paid MAT/MIA (ie, where section 38 of the Family Assistance Act applies).
In either of these cases, a claim must be made in a form and manner approved by the Secretary. The claim must also contain any information or be accompanied by any documents required by the Secretary.
If these conditions are not met, the claim is not effective.
There are a number of situations in which a claim for MAT or MIA will not be effective. These are outlined in section 39 .
In relation to a "normal circumstances" claim, the following rules apply.
A claim is not effective where the claimant has previously claimed MAT or MIA on the basis of the same circumstances.
A person is required to claim MAT within 26 weeks of the birth of a child in respect of whom the person is claiming MAT or within 26 weeks from the time the child is entrusted to the person's care (whichever is relevant). Claims for MAT outside these time limits will generally not be effective. The exception, which is at the discretion of the Secretary, is where the person is unable to claim MAT for the child within the 26 week time limit because of severe illness associated with the birth of the child (for example post natal depression). In this situation, the 26 week time limit can be extended.
A person is required to claim MIA in respect of a child before the child reaches the age of 2. If the child dies before that time, MIA must be claimed within 13 weeks of the death of the child or within 2 years of the birth of the child, whichever is the later.
If a person who is eligible for MAT or MIA dies before being paid their entitlement, then another person may claim the payment. Such a claim is effective only if the claimant has not previously claimed MAT or MIA because of the death of the first person.
Under section 40 , a claim can be withdrawn or varied (in a manner determined by the Secretary) before it is determined.
A claim that is withdrawn is taken not to have been made. This means that the Secretary is not put in the position of having to determine an unwanted claim.
Secretary must determine claim
Section 41 deals with the determination of claims.
If a claim is effective, then it must be determined by the Secretary. If the claim is not effective, it is taken not to have been made (see subsection 41(1) ).
Under subsection 41(2) , the Secretary is required to determine an effective claim by having regard to only the information provided in the claim or to a combination of information provided in the claim and any other relevant information or documents.
Ordinarily, a claim reflects existing circumstances and is made at a time when the claimant believes he or she may be entitled to payment. The claim is then determined within a reasonable time after it is made. Without specific provision to the contrary, a claim for payment in anticipation of future eligibility would be determined in the negative.
In relation to MAT and MIA, provision is made to allow early claims (at a time when the claimant is not eligible) in certain circumstances. The early claims provisions applicable to MAT and MIA are as follows.
Under subsection 41(3) , a person can claim MAT up to 13 weeks before becoming eligible for the payment provided the reason for the ineligibility is not that the child to whom the claim relates has not yet been born and the Secretary is satisfied that the person will be eligible for MAT within 13 weeks of claiming. In this situation, subsection 41(4) provides that the claim is to remain undetermined until the claimant becomes eligible for MAT (provided that occurs within the 13 week period) or 13 weeks after the claim is made.
An example of where this provision might apply would be where a persons income will be reduced from a known time such that the person will be eligible for FTB (Part A) and therefore MAT.
Under subsection 41(5) , a person can claim MIA at a time when the person is not eligible for that payment provided the following conditions are met:
- •
- the person must claim MAT and MIA at the same time;
- •
- the person is eligible for MAT in respect of the child; and
- •
- the person is eligible for family tax benefit (Part A) in respect of the child.
Where the conditions in subsection 41(5) are met, subsection 41(6) provides that the claim is to remain undetermined until the claimant becomes eligible for MIA (provided that occurs within 2 years of the birth of the child for whom MIA is claimed) or 2 years after the child was born.
Determination of "normal circumstances" entitlement claim
Under section 42 , if a person claims MAT/MIA in respect of a child and the Secretary is satisfied that the person is eligible for MAT/MIA under the relevant eligibility provisions in the Family Assistance Act, then the Secretary must determine that the person is entitled to be paid MAT/MIA.
Determination of "bereavement" entitlement claim
If a person claims MAT/MIA because of the death of another person (who was eligible for MAT/MIA but never paid their entitlement) and the Secretary is satisfied that the person is eligible for MAT/MIA under the relevant eligibility provisions in the Family Assistance Act, then the Secretary must determine that the person is entitled to be paid MAT/MIA. This rule is in section 43 .
Determination that no entitlement
If the Secretary is not satisfied that a person is entitled to be paid MAT/MIA, then the Secretary must make a determination to that effect ( section 44 refers).
When determination is in force
Section 45 provides that a determination comes into force when it is made and remains in force thereafter.
It should be noted that an MAT/MIA determination is a decision that can be reviewed or appealed against. The determination can therefore be affirmed, varied or set aside in accordance with the review of decisions provisions in Part 5 .
The Secretary is required, under section 46 , to notify the claimant of a determination. The notice must tell the claimant:
- •
- whether he or she is entitled to MAT/MIA;
- •
- if the claimant is entitled, the amount of allowance and how it is to be paid; and
- •
- that the claimant has rights of review.
The determination is not ineffective if the notice does not comply with these requirements.
Payment of maternity allowance or maternity immunisation allowance
Section 47 provides for the payment of MAT and MIA.
The general rule is that the person entitled to MAT/MIA is to be paid the allowance at such time and in such manner as the Secretary considers appropriate. Both MAT and MIA are paid as lump sums, generally into an account nominated by the person.
There may be occasions, however, when it is appropriate for the Secretary to pay someone else on behalf of the entitled person. This may happen where the entitled person is incapable of looking after his or her own affairs or in cases where the entitled person asks the Secretary to make such a direction. It is envisaged that the discretion in subsection 47(2) would be used infrequently where the entitled person does not consent to the direction.
A decision by the Secretary under this provision is subject to review under Part 5 .
Division 4 - Child care benefit
Division 4 provides regulation-making powers in relation to determinations of eligibility for, or entitlement to, child care benefit (CCB), and how payments are to be made.
Section 48 provides an overview of the Division.
Determinations about eligibility for child care benefit
Sections 49 to 53 provide that regulations may prescribe circumstances in which, and procedures (including the making of claims) by which, the Secretary is to determine:
- •
- conditional eligibility, under section 41 of the Family Assistance Act, of an individual for CCB paid by instalment to an approved child care service in respect of child care provided by the service;
- •
- if an individual is conditionally eligible for CCB paid by instalment to an approved child care service and is eligible for CCB under section 42 of the Family Assistance Act, entitlement of the individual to have CCB paid to the service;
- •
- entitlement of an individual who is eligible, under section 43, for CCB for past periods of care provided by an approved child care service to be paid lump sum CCB.
- •
- entitlement of an approved child care service to be paid CCB amounts if the service is eligible, under section 45 of the Family Assistance Act, for CCB in special circumstances (eligibility for the first 13 week);
- •
- conditional eligibility, under section 46 of the Family Assistance Act, of an approved child care service for CCB in special circumstances paid by instalment (eligibility for more than 13 weeks);
- •
- if an approved child care service is conditionally eligible for CCB paid by instalment and is eligible for CCB under section 47 of the Family Assistance Act, entitlement of the service to have CCB paid;
- •
- entitlement of an individual who is eligible, under section 49 of the Family Assistance Act, for CCB for past periods of care provided by a registered carer to be paid lump sum CCB;
- •
- entitlement of an individual who, because of death of another person, is eligible, under section 57 of the Family Assistance Act, for a CCB lump sum amount under Subdivision B (CCB for past periods for care provided by an approved child care service) or D (CCB for past periods for care provided by a registered carer) of the Family Assistance Act.
Family Assistance Act is defined in section 3 as the A New Tax System (Family Assistance) Act 1999 .
Section 49(2) provides that, if regulations are made under section 49(1)(a) (which relates to determinations that an individual is conditionally eligible for CCB by instalment in respect of child care provided by an approved child care service), the regulations may provide for the conditional eligibility to cease if the child does not meet the immunisation requirements. The meaning of meeting the immunisation requirements is set out in section 6 of the Family Assistance Act and related provisions are contained in sections 3, 4, 5 and 7 of that Act. The immunisation requirements are described in detail in the explanatory memorandum relating to section 39 of that Act.
Estimates of adjusted taxable income
Section 54 provides that regulations may provide for the use of estimates of adjusted taxable income in determining CCB entitlements. Section 3 of the Family Assistance Act defines adjusted taxable income by reference to clause 2 of Schedule 3 to that Act which sets out the components which combine to make up an individuals adjusted taxable income.
Section 55 provides that regulations may make provision for the amount, timing and manner of making of CCB payments (these regulations may deal, for example, with such issues as paying CCB instalment amounts to approved child care services and paying CCB lump sum amounts to individuals). This includes the power to provide for an individual who is entitled to be paid CCB amounts to nominate another individual to receive the amounts.
Variation etc. of determinations
Section 56 provides that regulations may make provision for the variation, suspension or cancellation of determinations.
In particular, subsection 56(2) provides that where estimates of adjusted taxable income have been used in determining an individuals CCB entitlement for an income year, the regulations may provide for the entitlement determinations to be varied, suspended or cancelled as a result of the process of reconciliation of the individuals entitlements undertaken after the end of the income year, or in other situations, when the actual taxable income has been assessed. It is proposed to reconcile routinely CCB entitlements based on estimated taxable income once actual taxable income for the relevant income year is known.
Subsection 56(3) provides that regulations under subsection 56(2) may provide exemptions from variations etc. of determination of CCB entitlements resulting from the assessment of taxable income if the entitlement relates to CCB in special circumstances.
Passing on child care benefit by way of reduced charges etc.
Subsection 57(1) provides that regulations may make provision for approved child care services who are paid amounts of CCB (whether as CCB advance payments or CCB entitlements of individuals) to pass on the benefit of the CCB to the person who pays or would normally be liable to pay the child care charges. The regulations may provide for the benefit to be passed on either by reducing the amounts that the service would otherwise charge, or by making cash payments to the persons who have paid the charges.
Subsection 57(2) provides that the regulations under this section may also provide for child care services to give to the person who would normally pay the charges a document setting out the amount of the charges or that there were no charges, what the charges would have been without the reduction, how much CCB was passed on in reducing the charges, and any other specified information.
Section 58 provides that regulations may make provision for approved child care services to maintain records in relation to:
- •
- the services eligibility for CCB;
- •
- payments received by the services under this Act;
- •
- the services compliance with conditions for continued approval:
- •
- any other specified matters.
The regulations may provide for the records to be retained for a specified period, and for the records to be produced to the Secretary in specified circumstances.
Provision of information to the Secretary
Subsection 59(1) provides that regulations may make provision for individuals or approved child care services to provide information to the Secretary about changes in circumstances that may be relevant to their entitlement, or their address. Subsection 59(2) provides that regulations may provide for individuals to advise the Secretary about changes in the child care service used, and subsection 59(3) provides that the regulations may provide for child care services to give the Secretary information in relation to their services, including the names of all the children to whom sessions of care have been provided, the number of hours in those sessions of care and the amount of CCB that the services have been or will be paid for the sessions of care provided.
Provision of tax file numbers to the Secretary in claims or in documents given together with claims
Section 60 provides that, if regulations under section 49, 50, 52 or 53 provide for the making of claims for CCB, those regulations may provide for the claimant, or his or her partner, to provide a statement:
- •
- of the individuals tax file number ( subsection 60(2) refers);
- •
- that the individual does not know his or her tax file number and has asked the Commissioner of Taxation to inform the Secretary of the number, and which authorises the Commissioner of Taxation to tell the Secretary the number ( subsection 60(3) refers);
- •
- that the individual has a tax file number application pending, and which authorises the Commissioner of Taxation to tell the Secretary the outcome of the application ( subsection 60(4) refers).
Subsection 60(5) provides that the regulations may also provide for the Secretary to exempt claimants from the requirements of this section if the claimant cannot obtain from his or her partner the statement required.
Subsection 60(6) provides that the regulations under this section may provide for determinations on claims not to be made where statements have been made under subsections 60(3) or (4) .
Secretarys power to request tax file numbers
Section 61 provides that regulations may make provision for the Secretary to request (but not compel) an individual to give the Secretary, within 28 days, a statement of the kind set out in section 60 (tax file numbers). The Secretary may request that the statement be made by the individual concerned, or by his or her partner or former partner. The regulations may provide for entitlement or conditional eligibility to CCB to be removed if the individual does not comply with the request.
Enforcement of information etc. requirements
Section 62 provides that the regulations may provide for the Secretary to vary determinations under this Subdivision (for instance a determination as to entitlement to CCB) where information requirements or other aspects of the regulations are not complied with.
Section 63 provides that regulations may make provision for:
- •
- the giving of notices of determinations under this Subdivision, and the content of such notices;
- •
- the period for which determinations are to be in force;
- •
- the reduction of payments of CCB on account of CCB debts owed to the Commonwealth;
- •
- the making of CCB advance payments to approved child care services (to be set off against later CCB entitlements);
- •
- any other incidental matters.
Provision of instalment statements where individual conditionally eligible for child care benefit by instalment
Section 64 provides that, where a determination is in force that an individual is conditionally eligible for CCB by instalment, the approved child care service must give the Secretary, during the next instalment period, the statement and information required by paragraph 42(1)(b) (statement of amounts of CCB etc.) of the Family Assistance Act. The penalty for contravention of this provision, without reasonable excuse, is a fine not exceeding 60 penalty units.
Provision of instalment statements where approved child care service conditionally eligible for child care benefit by instalment
Section 65 provides that, where a determination is in force that an approved child care service is conditionally eligible for CCB by instalment, the approved child care service must give the Secretary, during the next instalment period, the statement and information required by paragraph 47(1)(b) (statement of amount of CCB etc.) of the Family Assistance Act. The penalty for contravention of this provision, without reasonable excuse, is a fine not exceeding 20 penalty units.
The term instalment period used in sections 64 and 65 is defined in section 3 as having the meaning given by subsections 42(4) or 47(2) (as the case may be) of the Family Assistance Act.
Family Assistance Act is defined in section 3 as the A New Tax System (Family Assistance) Act 1999 .
Division 5 - Payment protection and garnishee orders
Protection of payment of family tax benefit, maternity allowance and maternity immunisation allowance
Section 66 provides for a payment of FTB (including FTB advances), MAT, MIA, CCB or certain advance payments prescribed by the regulations to be absolutely inalienable whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy, or otherwise.
This rule is subject to exceptions where:
- •
- payment is made to someone else on a persons behalf;
- •
- deductions are made from the payment to repay a debt;
- •
- a person consents to deductions from his or her payment to repay the debt of another person;
- •
- deductions are made from the payment to pay the Commissioner of Taxation;
- •
- family assistance entitlement is set off against a tax liability;
- •
- entitlement to arrears of family assistance is set off against a debt;
- •
- a person consents to deductions from his or her entitlement to arrears of family assistance to repay the debt of another person.
Effect of garnishee etc. order
Section 67 covers the same payments that are protected under the inalienability rule in section 66 . These are listed in subsection 66(1) . Section 67 protects a saved amount of these payments in a persons bank account from being garnisheed by third party creditors. The saved amount is calculated by working out the total amount of those payments credited to the person's account in the 4 week period immediately before the court order came into force, and deducting from that amount the total amount withdrawn from the account during the same period.
Part 6 - Overpayments and debt recovery
Division 1 - Preliminary
Meaning of amount paid to person
Section 68 specifies the meaning of "amount paid to a person".
Subsection 68(1) specifies that an amount of CCB that is paid to a child care service pursuant to a claim may be taken to have been paid to a person who is liable, under the regulations, for repayment of CCB debts under this Act. The regulations will state the procedure by which the person is taken to be liable for CCB debts.
Subsection 68(2) provides that an amount of family assistance is taken to have been paid to a person if it has been applied against their own or another persons liability for primary tax or a debt under this Act or the Social Security Act 1991.
Special provisions relating to child care benefit
Subsection 69(1) provides that a reference to an amount being paid to the operator of a child care service, includes a reference to an amount being paid to a former approved child care service, or to a child care service that has since ceased to provide the service concerned.
Division 2 - Amounts recoverable under this Act
Section 70 provides that if an amount has been paid by way of family assistance, it is only considered a debt due to the Commonwealth if a provision of this Act or the Data-matching Program (Assistance and Tax) Act 1990 expressly provides that it is.
Subsection 71(1) provides that an amount is a debt due to the Commonwealth if an amount of family assistance in respect of a period or event has been paid to a person who was not entitled to the family assistance in respect of that period or event.
Subsection 71(2) provides that if CCB is paid on behalf of a person to the operator of a child care service, and that payment is in respect of a period which occurred when the operator had ceased to provide care for the FTB child, the amount paid is a debt due by the child care service, and not the person.
Subsection 71(3) specifies that a debt may arise in cases where there is a duplicate instalment of family assistance. Where an amount of family assistance is paid to a person by way of an instalment, and another amount is paid to the person in respect of the same instalment, and the other amount is neither a payment of arrears or otherwise a debt due to the Commonwealth, it is a debt due to the Commonwealth by the person.
Subsection 71(4) modifies the effect of subsection 71(3) . It provides that where an amount is paid twice to a child care service, as opposed to the person, in respect of the same instalment, the second amount is a debt due to the Commonwealth by the operator of the child care service, not the person.
Subsection 71(5) provides that if an amount (the received amount) has been paid to a person by way of family assistance, and the received amount is greater than the amount of family assistance (the correct amount) that should have been paid to the person, then the difference between the received amount and the correct amount is a debt due to the Commonwealth. The reason for the discrepancy is not relevant.
Subsection 71(6) specifies circumstances where an individual will be liable to pay a debt due to the incorrect payment of special circumstances CCB. This will be the case where paragraphs 71(6)(a) to (c) are satisfied.
These paragraphs apply where an amount of CCB is paid for a session of care provided by a child care service to an FTB child of the individual or the individuals partner, and the individual has knowingly made a false statement or misrepresentation to the child care service. Paragraph (c) applies where, because of that false statement or misrepresentation, the child care service is eligible for CCB for the session of care, or the rate of CCB for the session of care is an amount certified by the service under subsections 71(1), (2) or (4) of the Family Assistance Act. In the circumstances specified in paragraphs (a) to (c) , the difference between the amount paid and the amount that would have been paid if the individual had not made the false statement or misrepresentation to the child care service is a debt due by the Commonwealth to the individual.
Subsection 71(7) specifies that, for the purposes of subsection 71(6) , the amount that would have been paid if the individual had not made the false statement or misrepresentation to the service may be nil.
Subsection 71(8) deals with overpayments where CCB is paid at the special circumstances rate when the service is not satisfied that special circumstances exist.
Subsection 71(8) will apply in cases where an approved child care service gives a certificate under subsection 71(1) of the Family Assistance Act, and the child care service is not satisfied that the child is at risk of serious abuse or neglect, or that the individual is experiencing hardship of a kind specified in a determination in force under subsection 48(1) of the same Act.
In this case, the difference between the amounts paid to the individual and the amounts that would have been paid to the individual if the service had not given the certificate, is a debt due to the Commonwealth by the service.
Section 72 provides that a payment of maternity allowance or maternity immunisation allowance to a person who is ineligible for the payment, will not result in a debt if the lack of eligibility resulted from the person's Part A rate of FTB being nil and either:
- •
- the person's nil Part A rate resulted from an event or change in circumstances that occurred after the payment of maternity allowance or maternity immunisation allowance was made; or
- •
- the following apply:
- -
- the persons nil Part A rate resulted from the amount the persons adjusted taxable income year for the relevant income year;
- -
- maternity allowance or maternity immunisation allowance was made on the basis of a determination of the persons Part A rate that was based on an incorrect estimate by the person of the income component of the persons adjusted taxable income;
- -
- at the time when the estimate was made the person did not know, and had no reason to suspect, that the estimate was incorrect.
Debts arising from AAT stay orders
Section 73 deals with debts arising from Administrative Appeals Tribunal (AAT) stay orders. It provides that when a person seeks review of a decision by the AAT and, as a result of the AAT stay order under subsection 41(2) of the Administrative Appeals Tribunal Act 1975, the amount of family assistance that has been paid to the person is greater than the amount that the review established the person was entitled to, the difference between the amounts is a debt due to the Commonwealth.
Person other than payee obtaining payment of a cheque
Section 74 provides that if an instalment of family assistance is paid by cheque, and a person other than the payee obtains value for the cheque without the payees endorsement, the amount of the cheque becomes a debt due to the Commonwealth by the person.
Debts arising from conviction of a person for involvement in contravention of this Act by debtor
Section 75 provides that if a person (the recipient) is liable to repay an amount paid to them under this Act, and the amount was paid to them because they contravened this Act, and another person is convicted of an offence under section 5, 7A or 86 of the Crimes Act 1914 , the recipient and the other person are jointly and severally liable to pay the debt.
Data-matching Program (Assistance and Tax) Act debts
Section 76 provides for the recovery of an amount that has been paid to a person by way of family assistance payment if the amount is a debt due to the Commonwealth under subsection 11(6) of the Data-matching Program (Assistance and Tax) Act 1990 .
While the ability to utilise data-matching cycles has been maintained, Centrelink and the Australian Taxation Office (ATO) will rely primarily on the information gathering powers of the Secretary under Part 6 and the secrecy provisions of the Income Tax Assessment Act 1936 (ITAA36). The secrecy provisions of the ITAA36 will be amended to allow the ATO to give information to Centrelink and the HIC, who are partners with the ATO in the Family Assistance Office joint venture. This will result in a more timely and efficient process which will ensure that families receive correct entitlements.
Interest payable on debt for failure to enter agreement to pay debt
Section 77 sets out circumstances when interest may be payable on a debt if a person fails to enter an agreement to pay the debt.
Subsection 77(1) covers the situation where a person owes a debt to the Commonwealth under Part 4 and does not receive instalments of family assistance, or does not receive group payments (if a person is the operator of an approved child care service), and fails to negotiate or enter into an agreement with the Commonwealth to repay the debt within a specified period. In these circumstances, the Secretary may give the person a notice stating the amount of the debt and informing the person that, unless, within 14 days, the person pays the whole of the debt or enters into an agreement to pay the debt by reasonable instalments, interest may be payable on the debt. The notice is to also indicate how any interest is to be calculated.
Subsection 77(2) provides that if the whole of the debt is not paid within 14 days after the person is given the notice, or within 14 days the person fails to agree to pay the debt, interest is payable on the debt as a penalty. The amount of interest is to be worked out according to subsection 77(4) .
Subsection 77(3) gives the Secretary a discretionary power to determine that interest is not payable on the debt if the Secretary is satisfied that the person intends to pay the debt as soon as it is reasonably practicable.
Subsection 77(4) provides that interest is payable on the amount of the debt remaining after the end of the 14-day period and that it is payable at the penalty interest rate.
Subsection 77(5) provides that if interest is payable on the debt and payments are made in satisfaction of the debt and the interest, the amount paid is to be applied first in satisfaction of the amount of the debt (excluding interest) that is due when the payment is made, then, after the debt (excluding interest) is fully paid, in satisfaction of the interest that had become payable on the debt before the debt was fully paid.
Subsection 77(6) provides that a person entering into an agreement to pay the debt by reasonable instalments is not liable to pay penalty interest from the day on which the agreement is entered into.
Subsection 77(7) creates a debt out of the amount of interest payable on the debt.
Interest payable on debt for breach of agreement to pay debt
Section 78 provides for the payment of interest on a debt as a result of breach of an agreement to repay the debt.
Subsection 78(1) covers the situation where a person who owes a debt to the Commonwealth under Part 4 and who does not receive instalments of family assistance or does not receive group payments (if a person an approved child care service) enters into an agreement with the Commonwealth to repay the debt and does not pay an instalment. In these circumstances, the Secretary may give the person a notice stating the amount of the debt and informing the person that, unless, within 14 days, the person pays the instalment, interest may be payable on the debt. The notice is to also indicate how any interest is to be calculated.
Subsection 78(2) provides that if the instalment is not paid within 14 days after the person is given the notice, interest is payable on the debt as a penalty. The amount of interest is to be worked out according to subsection 78(5) .
Subsection 78(3) gives the Secretary a discretionary power to determine that interest is not payable on the debt if the Secretary is satisfied that the person intends to pay the instalment as soon as reasonably practicable.
Subsection 78(4) provides that interest payable on the amount of the debt ceases to accrue on and from the day the person next pays the instalment due under an agreement or enters into a new agreement, whichever occurs first.
Subsection 78(5) provides that interest is payable on the amount of the debt (excluding interest) as remains due from time to time on and from the day after the 14 day period ends and that it is payable at the penalty interest rate.
Subsection 78(6) provides that if interest is payable on the debt and payments are made in satisfaction of the debt and the interest, the amount paid is to be applied first in satisfaction of the amount of the debt (excluding interest) that is due when the payment is made, then, after the debt (excluding interest) is fully paid, in satisfaction of the interest that had become payable on the debt before the debt was fully paid.
Subsection 78(7) creates a debt out of the amount of interest payable on the debt.
Subsection 79(1) sets the penalty interest rate at 20% per year, unless the Minister determines in writing, under subsection 79(2) , a rate of interest for the purposes of sections 77 and 78 that is lower than 20% per year.
Subsection 79(3) provides that the Minister's determination is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .
Debt from failure to comply with garnishee notice
Section 80 deals with the situation in which a person who is given a garnishee notice (the garnishee debtor) in respect of a debt due by another person (the original debtor) fails to comply with the notice to the extent that he or she is capable of complying with it.
In this situation, subsection 80(1) creates a debt out of the amount of the outstanding debt calculated under subsection 80(2) that is recoverable from the garnishee debtor by means of legal proceedings or garnishee notice.
Subsection 80(2) specifies that the amount of the debt outstanding is the lesser of:
- •
- as much of the amount specified in the garnishee notice under section 89 as the garnishee debtor was able to pay;
- •
- as much of the debt due by the original debtor at the time when the notice was given as remains due from time to time.
Subsection 80(3) provides that if the Commonwealth recovers the whole or part of the debt due by the garnishee debtor under subsection 80(1) or the whole or part of the debt due by the original debtor, then both debts are reduced by the amount that the Commonwealth has so recovered. Consequently, the amount stated in the garnishee notice under section 89 is taken to be reduced by the recovered amount.
Subsection 80(4) provides that this section applies in spite of any law of a State or Territory that would have made the amount inalienable.
Subsection 80(5) provides that this section binds the Crown in right of the Commonwealth, of each of the State, of the Australian Capital Territory, of the Northern Territory and of Norfolk Island.
Overseas application of provisions
Section 81 extends the application of sections 60 to 75 to acts, omissions, matters and things done outside Australia and to all persons irrespective of their nationality or citizenship.
Section 82 specifies the means by which a debt owed by a person, other than a child care service may be recovered. Subsection 82(1) specifies that if a debt is owed by a person, it may be recovered by means of:
- •
- deductions of family assistance payable to the person; or
- •
- if section 92 (Deductions by consent from family assistance of person who is not a debtor) applies to another person to whom family assistance is payable - deductions from that other persons family assistance; or
- •
- application of an income tax refund owed to the person; or
- •
- if section 93 (Application of income tax refund owed to another person) applies to another person to whom an income tax is owed - application of that refund; or
- •
- legal proceedings; or
- •
- garnishee notice.
However, not all debts can be recovered by all of these means. In particular, a CCB debt cannot be recovered by means of the application of an income tax refund owed to the person or under section 93 of this Act.
Subsection 82(2) specifies that if a debt is owed by the operator of an approved child care service, it may be recovered by means of:
- •
- if group payments are being made to the service - deductions from those payments; or
- •
- legal proceedings; or
- •
- garnishee notice.
Subsection 82(3) defines the term debt for the purposes of this section.
Division 3 - Methods of recovery
Subsection 83(1) states that sections 84, 85 and 92 provide for debt recovery by deductions from family assistance. The scenarios to which these sections apply are listed.
Subsection 83(2) provides that a person is taken to be receiving a family assistance payment even if the person is only entitled to be paid a single payment, such as, for example, a lump sum payment in respect of a retrospective claim.
Deduction from debtors family assistance
Section 84 makes provision for the recovery of a debt from a debtors family assistance. Subsection 84(1) provides that a debt may be recovered from a debtors family assistance if, under section 82 , the debt is recoverable by the Commonwealth by means of deductions from a persons family assistance, or if the amount is a debt under the Social Security Act.
Subsection 84(2) specifies how the debt is to be recovered from payments of family assistance. It provides that the Secretary is to determine the amount by which the payment of family assistance to the person is to be reduced, and that each payment of family assistance is to be reduced by the amount determined by the Secretary until the sum is equal to the debt. This provision does not allow deductions to be made under this Act and the Social Security Act at the same time. Subsection 84(2) also allows for the Secretary to vary, from time to time, the amount by which payments of family assistance are to be reduced.
Subsection 84(3) specifies when a debt can be recovered from a persons CCB. The debt can be recovered by means of deductions from a persons payment of CCB only in cases where the debt arose from a payment of CCB, and at the time the decision is taken to recover the debt, it is not possible to recover the debt by means of deductions from family assistance (excluding CCB). Further, it must be the case that it is not possible to recover the debts under Chapter 5of the Social Security Act from a social security payment.
Subsection 84(4) provides that, subject to section 86 (Time limits on recovery action under sections 84 and 85 ) the debt must be deducted from a persons family assistance unless the Secretary takes action under Division 4 (Non-recovery of debts) in relation to the amount, or the amount is recovered by the Commonwealth under another provision of this Division, or under the Social Security Act.
Deductions from group payments made to operator of approved child care service
Subsection 85(1) applies to a person if, under section 82 , the debt is recoverable by means of deductions from group payments being received by the operator of an approved child care service.
Subsection 85(2) specifies how the debt is to be deducted from group payments being received by an approved child care service. It provides that the Secretary is to determine the amount by which each group payment is to be reduced, and each group payment to the service is to be reduced by the amount determined by the Secretary until the sum of those amounts is equal to the debt. The Secretary may from time to time vary the amount by which the group payments are to be reduced.
Subsection 85(3) provides that, subject to section 86 (Time limits on recovery action under sections 84 and 85 ) the debt must be deducted from a persons family assistance unless the Secretary takes action under Division 4 (Non-recovery of debts) in relation to the amount, or the amount is recovered by the Commonwealth under another provision of this Division.
Time limits on recovery under sections 84 and 85
Subsection 86(1) imposes a general limitation period on the recovery of debt under sections 84 and 85 . Action for the recovery of a debt under those sections is not to be commenced after the end of the period of 6 years starting on the day on which the debt arose, subject to subsections 86(2) to (5) .
Subsection 86(2) provides that if the debt arose because the person owing the debt made a false statement or representation, or contravened a provision of this Act, then action may be commenced under section 84 for recovery of the debt. However, the recovery action may only be commenced at any time within the period of 6 years. The period starts on the first day on which an officer become aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
Subsections 86(3), (4) and (5) all apply to situations where either subsection 86(1) or (2) applies so that action for the recovery of a debt must be commenced within a particular period, as follows:
- •
- if, within that particular period, part of the amount owing is paid, then action under either of those sections for the recovery of the balance of the debt may be commenced within the period of 6 years starting on the day of payment ( Subsection 86(3) refers).
- •
- if, within that period, the person who owes the amount acknowledges that he or she owes it, then action under that section for the recovery of the debt may be commenced within the period of 6 years starting on the day of acknowledgment ( subsection 86(4) refers).
- •
- if, within that period, action is taken under either this section, section 88 (legal proceedings) or section 89 (garnishee notice) for the recovery of the debt, or, a review of a file relating to action for the recovery of the debt occurs, or other internal departmental activity relating to action for the recovery of the debt occurs, then action under section 84 or 85 for the recovery of the debt may be commenced within the period of 6 years after the end of the action, review or activity ( subsection 86(5 ) refers).
Application of tax refund owed to person
This provision allows the Commissioner of Taxation to apply an income tax refund to reduce or extinguish a persons family assistance debt.
An income tax refund is an amount that the Commissioner of Taxation would be required to pay to a person resulting from an overpayment of income tax, Medicare levy, a Higher Education Contribution Scheme debt, or Supplement Loan Scheme debt.
Subsection 87(1) provides that if, under section 82 , a debt owed by a person is recoverable by the Commonwealth by means of application of an income tax refund payable to the person, the Commissioner of Taxation may apply the whole or part of the refund to the debt. However, due to the operation of subsection 82(1), a CCB debt that is owed by a person cannot be recovered by the Commonwealth by means of application of an income tax refund that is owed to the person.
Subsection 87(2) provides that the amount of the refund and the amount of the debt are reduced accordingly.
Subsection 87(3) provides that action for the recovery of a debt under this section must not be taken after the end of a period of six years starting on the day on which the debt arose. An exception to this rule is specified in subsection 87(4) which provides that if:
- •
- action is taken under this section to recover a debt owed by a person from an income tax refund that relates to a particular income year, and
- •
- the action is taken within 6 years starting on the day on which the debt arose, and
- •
- the amount of the refund is not sufficient to reduce the amount to nil,
action may be taken to apply an income tax refund that is payable to the person for an income year beyond the six year period.
Subsection 88(1) provides that where a debt is recoverable under section 82 by means of legal proceedings, the debt may be recovered in a court of competent jurisdiction.
Subsection 88(2) imposes a general limitation period of six years, beginning on the day on which the debt arose, for instituting legal proceedings for recovery. This general limitation period is subject to subsections 88(3), (4), (5) and (6) .
Subsection 88(3) imposes a specific limitation period on debts that arise because the person owing the debt made a false statement or representation or contravened a provision of this Act. The subsection provides that, in these cases, the time period within which legal proceedings for recovery must be instituted is 6 years from the day on which an officer became aware (or could reasonably be expected to heave become aware) of the circumstances giving rise to the debt.
Subsection 88(4) provides that where the limitation period applies and some of the debt owed is paid during that time, then the limitation period on the Commonwealth taking action to recover the balance of the debt is 6 years from the day of the debt repayment.
Subsection 88(5) covers the situation where the limitation period applies and the person acknowledges that he or she does in fact owe the amount of the debt to the Commonwealth. In these circumstances the limitation period on the Commonwealth taking legal proceedings for recovery is 6 years from the day of the acknowledgment of the debt.
Subsection 88(6) provides that the limitation period in relation to legal proceedings does not run while any of the following activities are in progress:
- •
- action is being taken under this section or under section 84 (Deductions from debtors family assistance), section 85 (Deductions from group payments made to child care service), or section 89 (Garnishee notice) for the recovery of the debt, or
- •
- the file relating to the recovery action is being reviewed, or
- •
- other internal activity of the Department relating to the recovery of the debt.
In these circumstances, action for recovery of the debt may be commenced within the period of 6 years after any of the above activities have been completed.
Section 89 provides for recovery of a debt that is recoverable by the Commonwealth by means of a garnishee notice.
Subsection 89(1) provides that the Secretary may serve written notice on another person (not the debtor) who owes money to the debtor or is holding money for the debtor. The person to whom the notice is given would be required to pay to the Commonwealth the amount stated in the notice that should not exceed the amount required to be paid by the third person to the debtor. Payment to the Commonwealth may be demanded as a lump sum, or where the third person makes ongoing payments to the debtor, by instalment expressed as a set amount or percentage figure.
Subsection 89(2) provides that the notice should stipulate a time within which payment must be made. However, payment must not be demanded before the money becomes due or is held by the other person, or before the end of the period of 14 days after the notice is given.
Subsection 89(3) makes it an offence for a person not to comply with a garnishee notice, to the extent that the person is able to comply with the notice. The penalty for such non-compliance is set at imprisonment for 12 months.
Subsection 89(4) provides that a copy of the garnishee notice must be given to the debtor.
Subsection 89(5) provides that a payment made to the Commonwealth in compliance with a garnishee notice is taken to be made with the authority of either the debtor or of any other person concerned.
Subsection 89(6) deals with the situation where a garnishee notice is served on someone and another person pays an amount in reduction of the debt. In these circumstances the Secretary is to notify the person who received the garnishee notice that an amount has been paid and the amount stated in the notice is to be reduced by the amount already paid.
Subsection 89(7) provides that where a condition has to be fulfilled before money becomes due to the person being served with the notice, the money is taken to have become due, for the purposes of this section, even if the condition has not been fulfilled.
Subsection 89(8) stipulates that this section applies to money in spite of any law of a State or Territory (however expressed) under which the amount is inalienable.
Subsection 89(9) states that this section binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory, of the Northern Territory and of Norfolk Island.
Time limits on recovery action under section 89
Section 90 stipulates a general limitation period for recovery of a debt by way of garnishee notice of 6 years, beginning on the day on which the debt arose.
Subsection 90(2) imposes a specific limitation period on debts that arise because the person made a false statement or representation or contravened a provision of the family assistance law. In this case, the time period within which garnishee proceedings for recovery must be instituted is 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
Subsection 90(3) provides that where the limitation period applies and some of the debt owed is paid during that time, then the limitation period on the Commonwealth taking action to recover the balance of the debt by way of garnishee proceedings, is six years from the day of the debt repayment.
Subsection 90(4) covers the situation where the limitation period applies and the person acknowledges that he or she does in fact owe the amount of the debt to the Commonwealth. In these circumstances, the limitation period on the Commonwealth taking garnishee proceedings for recovery is 6 years from the day of the acknowledgment of the debt.
Subsection 90(5) provides that the limitation period in relation to garnishee proceedings does not run while any of the following activities are in progress:
- •
- action is being taken under this section, or under section 84 (Deductions from debtors family assistance), section 85 (Deductions from group payments made to approved child care service) or section 88 (Legal proceedings) for recovery of the debt;
- •
- the file relating to the recovery action is being reviewed;
- •
- other internal activity of the Department relating to the recovery of the debt.
In these circumstances, action for recovery of the debt or overpayment may be commenced within the period of 6 years after any of the above activities have been completed.
Secretary may allow payments by instalments
Section 91 enables the Secretary to decide that a person may repay the debt by means of instalments ( subsection 91(1) refers). The Secretary's decision is to take effect on the day stated in the notice. If no day is stated, the decision is to take effect on the day the decision is made ( subsection 91(2) refers). Subsection (3) states that the term 'debt' used in subsection (1) means a debt recoverable by the Commonwealth under Division 3 .
Deductions by consent from family assistance of a person who is not a debtor
Section 92 provides that a debt owed to the Commonwealth by a person who incurs a debt under this Act may be deducted from another person's family assistance if the other person so consents. If such deductions occur, then subsection 92(2) provides that the debtor's debt is reduced by an amount equal to the amount deducted from the consenting person's family assistance. Subsection 92(3) provides that the consenting person may revoke the consent at any time.
Application of income tax refund owed to another person
As provided in section 87 a persons income tax refund may be applied to reduce or extinguish his or her outstanding family assistance debt. Section 93 extends this concept to include a consenting person. For example, a person may allow the Commissioner of Taxation to apply his or her income tax refund to reduce or extinguish his or her spouses family assistance debt.
However, a debt owed in relation to CCB is not recoverable by means of the application of a consenting persons income tax refund ( subsection 82(1) refers).
Subsection 93(1) provides that if a person incurs a debt under this Act and another person (the consenting person) is entitled to an income tax refund, the consenting person may consent to the application of an amount from their tax refund to the debt by the Commissioner of Taxation.
Subsection 93(2) provides that the amount of the refund and the debt are reduced accordingly.
Subsection 93(3) specifies that the consenting person may revoke the consent at any time.
Division 4 - Non-recovery of debts
Section 94 defines the term debt for the purposes of this Division as a debt that is recoverable by the debt under Division 2 .
Subsection 95(1) specifies that the Secretary may decide to write off a debt on behalf of the Commonwealth in relation to a stated period or otherwise.
However, the Secretary's power to write off a debt is limited by subsection 95(2). This subsection specifies that the Secretary may only write off a debt if:
- •
- the debt is irrecoverable at law, or
- •
- if the debtor has no capacity to repay the debt, or
- •
- after all reasonable efforts have been made to locate the debtor, the debtor's whereabouts are unknown; or
- •
- the debt cannot be recovered by deductions under this Act or the Social Security Act and it is not cost effective for the Commonwealth to take action to recover the debt.
Subsection 95(3) specifies when a debt is taken to be irrecoverable at law. This occurs when (and only when):
- •
- the debt cannot be recovered, because the relevant time limit for recovery has lapsed, by means of:
- -
- deductions from payment ( sections 84 and 85 refer)
- -
- the application of an income tax refund ( section 87 refers)
- -
- legal proceedings ( section 88 refers)
- -
- garnishee notice ( section 89 refers)
- •
- it would be impossible to sustain legal proceedings for the recovery of the debt because there is no proof of the debt; or
- •
- the debtor is discharged from bankruptcy and the debt was incurred before the discharge and was not incurred by fraud; or
- •
- the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.
The term capacity to repay the debt in paragraph 95(2)(b) is explained further in subsection 95(4 ). If the debt is recoverable by means of deductions under section 84 or by the application of an income tax refund under section 87 , the person is taken to have the capacity to repay the debt unless recovery by those means would cause the person severe financial hardship. If the debt is recoverable by means of deductions under section 85 , the person is taken to have the capacity to repay the debt, regardless of whether this would cause them financial hardship.
A decision to write off a debt takes effect as specified by subsection 95(5). Under this subsection, if a day is specified in the decision, the decision takes effect on the day stated in the decision. If the decision does not state such a day, then the decision takes effect on the day on which the decision is made. It should be noted that subsection 95(6) specifies that nothing in section 95 prevents the subsequent recovery of a debt that has been written off under this section.
Power to waive Commonwealths right to recover debt
Section 96 covers the waiver of the whole or the part of a debt. In particular, subsection (1) specifies that the decision to waive a debt on behalf of the Commonwealth lies with the Secretary and only occurs in accordance with the sections named in this section.
A waiver of debt takes effect in accordance with subsection 96(2). Under this subsection, if a day is specified in the decision, the waiver takes effect on the day stated in the decision. However, if the decision does not state such a day, then the decision to waive takes effect on the day on which the decision was made. A note to this subsection indicates that, if the Secretary waives the Commonwealth's right to recover a debt, this is a permanent bar to recovery of the debt. As a result, the debt (or part of the debt) ceases to exist.
Waiver of debt arising from error
Subsection 97(1) compels the Secretary to waive the right to recover the proportion of a debt that is attributable to administrative error, if the conditions in either subsections 97(2) or (3) are satisfied.
Subsection 97(2) provides that the Secretary will waive the debt if:
- •
- the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and
- •
- the person would suffer severe financial hardship if it were not waived.
Subsection 97(3) provides that the Secretary will waive the debt if the payments were made in respect of the debtors eligibility for family assistance for a period or event, and the debt is not raised within the period specified in paragraph 97(3)(b), and the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.
Subsection 97(4) states that for the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.
Waiver of debt relating to an offence
Section 98 applies where a person has incurred a debt, been convicted of an offence in relation to the debt, and had a longer custodial sentence imposed on them because they were unable or unwilling to pay the debt. In such a case, the Secretary must waive the right to recover the proportion of the debt that arose in connection with the offence.
Subsection 98(2) makes it clear that references to "a proportion of a debt" can be taken to include the entire debt.
Section 99 applies to small debts, which are defined as being (or being likely to be) less than $200. In this case, and if it is not cost effective for the Commonwealth to take action to recover the debt, the Secretary must waive the right to recover the debt.
However, if the debt is at least $50 and could be recovered by deductions under sections 84 or 85 , then subsection 99(2) provides that section 99 does not apply to the debt.
Waiver in relation to settlements
This section relates to the waiver of debts where there has been a settlement agreed, either through civil action or before the Administrative Appeals Tribunal.
Subsection 100(1) applies to settlement of civil action. If the Commonwealth agrees to settle a civil action against a debt for less than the full amount of the debt, then the Secretary must waive the right to recover the difference between the debt and the amount that is the subject of the settlement.
Subsection 100(2) applies where there has been a settlement agreement before the Administrative Appeals Tribunal. If the debtor has repaid at least 80% of the original value of the debt, and is unable to repay a greater proportion of the debt, the Commonwealth and the debtor may agree that the amount recovered is in full satisfaction of the debt. In such a case, subsection 100(3) provides that the Secretary must waive the remainder of the debt.
Where there is an agreement between the Secretary and a debtor to the effect that the debtor's debt will be fully satisfied if the debtor pays the Commonwealth an agreed amount less than the amount of the debt outstanding at the time of the agreement, subsection 100(4 ) provides that the Secretary must waive the right to recover the difference between the unpaid amount and the agreed amount.
However, under subsection 100(5) , the Secretary must not make an agreement to which subsection 100(4) applies, unless the Secretary is satisfied that:
- •
- the debtor cannot repay more of the debt than the agreed amount; and
- •
- the agreed amount is at least the 'present value of the unpaid amount' repaid in instalments whose amount and timing is determined by the Secretary; and
- •
- it would take at least a year to recover the unpaid amount under Part 2 if subsection 100(4) did not apply.
The term present value of the unpaid amount is defined in subsection 100(6).
Subsection 100(7) provides that a determination for the purposes of the definition of 'interest' in subsection 100(6) is a disallowable instrument.
Waiver in special circumstances
The Secretary is provided with a discretionary power in section 101 to waive a debt in special circumstances. This power may be exercised where the debt did not arise as a result of a false statement or false representation being knowingly made, or a person knowingly failing or omitting to comply with the Act. In addition, there must be special circumstances (aside from financial hardship alone) which make it desirable to waive the debt and finally, it must be more appropriate to waive the debt than to write it off.
Secretary may waive debts of a particular class
Section 102 states that the Minister may specify, by determination in writing, a class of debts and that the Secretary may, on behalf of the Commonwealth, waive the Commonwealth's right to recover those debts.
A decision under section 102 will take effect as specified by subsection (2). According to this subsection, if a day is specified in the decision, it will take effect on the day stated in the decision (regardless of whether that day is before, after or on the day on which the decision is made). However, if the decision does not state such a day, then the decision would take effect on the day on which the decision is made.
Subsection 102(3) specifies that the determination of the Minister referred to above is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .
Determination that penalty interest not payable in relation to particular periods
Subsection 103(1) specifies that this section deals with the making of determinations that interest is not payable in certain circumstances (ie, determinations under subsections 77(3) and 78(3) ).
The determination made under subsections 77(3) and 78(3) may relate to a period before the making of the determination ( subsection 103(2) refers). Moreover, subsection 103(3) states that the determination may be expressed to be subject to the person complying with special conditions.
The Secretary must also give the person affected a copy of the determination as soon as is practicable ( subsection 103(4) refers). However, a failure to do so does not invalidate the determination ( subsection 103(5) refers). If the person that the determination relates to is required to comply with specified conditions and the person contravenes a condition, then subsection 103(6 ) specifies that the determination ceases to have effect.
Subsection 103(7) provides that the Secretary may cancel or vary the determination referred to above, by written notice to the person.
Part 5 - Review of decisions
Division 1 - Internal Review
Internal review may be initiated in two ways. The Secretary may initiate the review or the applicant may initiate the review. Section 104 covers situations where the Secretary has initiated the review of a decision.
Subsection 104(1) specifies the grounds on which the Secretary may initiate the review of a decision. It provides that the Secretary may, if he or she is satisfied that there is sufficient reason to do so, review a decision of any officer under the family assistance law. A child care service is not an officer for the purposes of the family assistance law. Consequently, the Secretary cannot review a decision that is made by a child care service.
Subsection 104(2) provides that the Secretary may review the decision even if an application for review of the decision has been made to the Social Security Appeals Tribunal (SSAT) or the Administrative Appeals Tribunal (AAT).
Subsection 104(3) provides that the Secretary must not review the decision, or must cease reviewing the decision, for as long as a review of the decision is taking place under section 105 . Subsection (3) ensures that there is no confusion as to who is conducting the review at the internal review level.
Subsection 104(4) provides that, when the Secretary reviews a decision, he or she may:
- -
- affirm the decision, or
- -
- vary the decision, or
- -
- set the decision aside and substitute a new decision.
Subsection 104(5) imposes a notification requirement when the Secretary makes a decision under paragraph 104(4)(b) or (c ). Here, the Secretary must give notice of the decision to the person whose entitlement, or possible entitlement, is affected by the decision. The notice must state the effect of the decision and that the person may apply for review of the decision involved in the manner set out in Part 5 . This will involve making an application for review under section 105 .
Subsection 104(6) provides that if the Secretary fails to notify a person as required by subsection (5), the decision of the Secretary remains valid.
Subsection 104(7) provides that, where the Secretary decides to do one of the things in paragraphs 104(4)(b) and (c), and by the time the Secretary makes that decision, the person has applied to the SSAT or AAT for review of the decision that was reviewed by the Secretary, the Secretary must give written notice of the Secretarys decision the Executive Director of the SSAT or the Registrar of the AAT (as the case requires). The notice requirement for other people is covered by subsection 104(5) .
Subsection 104(8) provides that if the Secretary sets aside a decision under subsection (4), and the Secretary is satisfied that an event that did not occur would have occurred if the decision had not been made, the Secretary may, if he or she is satisfied that it is reasonable to do so, deem the event to have occurred for the purposes of the family assistance law.
Review initiated by the applicant
Section 105 covers situations where the applicant has initiated the review of a decision.
Subsection 105(1) provides that a person who is affected by a decision of an officer under the family assistance law may apply to the Secretary for a review of the decision. However, if the Secretary has made the decision personally, the person may not apply for review.
Subsection 105(2) provides that if the person makes an application for review under subsection (1), the Secretary must either review the decision and:
- -
- affirm the decision, or
- -
- vary the decision, or
- -
- set the decision aside and substitute a new decision,
or arrange for an authorised review officer, nominated under section 106 , to do so.
Subsection 105(3) provides that the decision reviewer, who may be either the Secretary or an authorised review officer, must give the applicant written notice of his or her decision to do one of the things under subsection (2). Section 109 details the information that the notice is to contain.
Subsection 105(4) provides that if the decision reviewer sets aside a decision under subsection (2), and the decision reviewer is satisfied that an event that did not occur would have occurred if the decision had not been made, the decision reviewer may, if he or she is satisfied that it is reasonable to do so, deem the event to have occurred for the purposes of the family assistance law.
Subsection 105(5) provides that if a person who may apply for a review of a decision under subsection (1) has not done so, and the person applies to the SSAT for review of the decision, the person is taken to have applied to the Secretary for a review of the decision under subsection (1), on the day on which they applied to the SSAT.
Section 106 details the way in which officers are appointed as authorised review officers.
Subsection 106(1) provides that the Secretary must authorise officers to be authorised review officers for the purposes of this Division.
Subsection 106(2) provides that, where the officer belongs to an agency other than the Department, the Secretary can only appoint such an officer as an authorised review officer with the consent of the head of the relevant agency.
Review applications - time limits and withdrawal
Subsection 107(1) provides that an application for review must be made no later than 52 weeks after the person was notified of the decision. An exception to this time limit is stated in subsection 107(2) .
Under subsection 107(2), if there are special circumstances, an application for review may be made after the 52 weeks. The Secretary is to determine what the special circumstances are. The determination is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .
Subsection 107(3) states that regulations may prescribe circumstances in which an application may be made after the 52 weeks mentioned in subsection (1) . The regulations will limit the date of effect of certain determinations outside the 52 week period.
Subsection 107(4) provides that an applicant for review under section 105 may, in writing or in any other manner approved by the Secretary, withdraw the application at any time before the decision reviewer does any of the things in subsection 107(3). If the person withdraws their application, it is taken never to have been made ( subsection (5) refers).
Secretary may continue payment pending outcome of application for review
Subsection 108(1) provides that where an adverse decision is made and that decision is based on the exercise of a discretion, and the person has applied to the Secretary for review of that decision, the Secretary may declare that the persons entitlement to family assistance will continue as if the adverse decision had not been made. The payment will continue pending the outcome of the review.
Subsection 108(2) provides that this Act will apply as if the adverse decision was not made only for as long as the Secretarys declaration is in force.
Subsection 108(3) specifies when the declaration commences and ceases. The declaration starts to have effect on the day on which it was made, or on an earlier day if this is specified in the declaration. The declaration stops having effect on the day that:
- -
- the application for review of the adverse decision is withdrawn, or
- -
- the review of the adverse decision is determined, or
- -
- the declaration is revoked.
Subsection 108(4) defines adverse family assistance decision as any decision having the effect that an entitlement to family assistance under the determination is reduced or ceases.
Notification of further rights of review
Subsection 109(1) specifies the requirements for a notice sent to a person under subsection 105(3). The notice must inform the person of their right to appeal to the SSAT and the AAT, and include a statement about the decision makers decision that:
- -
- sets out the reason for the decision, and
- -
- sets out the findings by the decision reviewer, and
- -
- refers to the evidence or other material on which those findings were based.
The notice must also include a statement to the effect that if the applicant is dissatisfied with the SSATs decision, the applicant may apply to the AAT for review of the SSATs decision.
Subsection 109(2) states that a contravention of subsection (1) in relation to a decision does not affect the validity of the decision.
Division 2 - Review by the Social Security Appeals Tribunal
Subdivision A - Review by the SSAT
Section 110 requires the SSAT to pursue, in carrying out its functions, the objective of providing a mechanism of review that is fair, just, economical, informal and quick.
Application for review by the SSAT
Subsection 111(1) states that a person can apply to the SSAT for the review of a decision only if that decision has been reviewed under Division 1 (Internal review).
Subsection 111(2) provides that a person cannot apply to the SSAT for review of specified decisions.
Time limit for applying for review by the SSAT
Section 112 states that a person has 28 days from when they are notified of the internal review decision, to apply to the SSAT for review of that decision. However, if the SSAT is satisfied that special circumstances exist for doing so, it may extend the period of 28 days.
Secretary may continue payment pending outcome of application for review
Section 113 enables the Secretary to declare in writing that payment of a persons social security payment is to continue while an application to the SSAT for review of an adverse decision that affects the persons payment is under way, regardless of that adverse decision. This applies where the adverse decision depends on someone exercising a discretion or holding an opinion.
Subsection 113(2) states that while the declaration is in force in relation to the adverse decision, this Act (other than this Division) applies as if the adverse decision had not been made.
Subsection 113(3) specifies the period for which the declaration will be in force.
Subsection 113(4) defines what is meant by adverse decision for the purposes of this section.
Subsection 114(1) sets out the powers of the SSAT on review of a decision.
The SSAT must either affirm or vary the decision or set it aside. Where a decision is set aside, the SSAT must either substitute a new decision or send the matter back to the Secretary for reconsideration in accordance with the SSATs directions or recommendations.
Subsection 114(2) requires the SSAT, if it sets aside and substitutes a decision that a person is entitled to a social security payment, to assess the rate of that payment or ask the Secretary to assess the rate. The latter might be done, for example, where complex rate calculations are involved.
Subsection 114(3) enables an event that did not occur to be deemed to have occurred if a decision has been set aside by the SSAT and the Secretary or the SSAT (as the case may be) is satisfied that the event would have occurred but for the decision having been taken in the first place.
Section 115 provides that the SSAT may, for the purpose of reviewing a decision under the family assistance law, exercise all the powers and discretions that are conferred.
Date of effect of SSAT decisions
Subsection 116(1) states the general proposition that, subject to this section, a decision of the SSAT comes into operation immediately on the giving of the decision.
Subsection 116(2) states that the if the SSAT specifies that the decision is to come in to operation on a later day that is specified in the decision, then the decision comes into operation on that later day.
Subsection 116(3) states that if the SSAT varies or sets aside and substitutes a decision that is under review, the date of effect of the review decision is taken to be the date of effect that would have applied if the original decision maker had made the review decision.
However, subsection (3) only has effect subject to subsection (4) and any regulations under subsection 236(4).
Subsection 116(4 ) states that the SSAT may declare that subsection (3) does not apply to a decision by the SSAT on review and that subsections (1) and (2) apply instead.
Subsection 117(1) states that applications to the SSAT may be made in writing and sent to an office of the SSAT, the Department or an office of an approved agency. Alternatively, an application can be made orally at, or by telephoning, an office of the SSAT.
Subsection 117(2) provides that if a person receives an oral application, the person is required to make a written record of that application, including the date of the application. Such a written record is deemed to be a written application delivered to the SSAT on the day of the oral application.
Subsection 117(3) states that person may include a statement of reasons for seeking a review of the decision in his or her application for review.
Variation of decision before review completed
Subsection 117(1) provides that any variation by an officer to a decision that is being reviewed by the SSAT does not deprive the SSAT of its jurisdiction to hear the matter. The application to review the decision proceeds as if it were an application for review of the varied decision.
Subsection 117(2) makes a similar provision to subsection (1) except that it applies where an officer sets a decision aside and substitutes a new one.
Subsection 117(3) provides that a person may either proceed with the review or withdraw the application where a decision is varied or set aside and substituted by an officer while the application for review is before the SSAT. This provision contemplates cases where an applicant will be satisfied with the decision after it is varied or set aside and there will be no longer any reason to proceed with the review by the SSAT.
Subsection 119(1) details who may be a party to a review. It provides that the head of an agency may be a party in cases where an officer of their respective agency has made the decision that is subject to review.
Any person whose interests are affected by a decision that is the subject of an application for review may apply in writing to the Executive Director to be made a party to the review. The Executive Director may order that that person be joined as a party to the review ( subsections 119(2) to (4) refer).
Division 3 - Procedures for review by the SSAT
Subdivision A - Preliminary procedures
Procedure on receipt of application for review by SSAT
Subsection 120(1) provides that, where an application for review is sent to an office of the Department or another agency, the Secretary is responsible for ensuring that it is sent to the SSAT as soon as practicable but in any case no later than 7 days after the Department or Agency received it.
Subsection 120(2) provides that the Executive Director must give both the applicant and the Secretary written notice that an application has been received.
Subsection 120(3) requires the Secretary to provide the SSAT with a statement about the decision under review. The statement must set out the findings of fact, refer to the evidence and give the reasons for the decision. The Secretary is also required to provide the Executive Director with all documents relevant to the decision under review. This will, in practice, be a transfer of the applicants file. These requirements have to be complied with within 28 days of the Secretary receiving a notice of the application for review.
Subsection 120(4) provides that, where the Executive Director asks the Secretary to send the statement and documents earlier than the date specified in subsection 120(3), the Secretary must take reasonable steps to comply with this request. The Executive Director might issue a request under this subclause in cases in which financial hardship could occur pending the determination of the appeal.
Subsection 120(5) provides for the situation where relevant documents come into the Secretarys possession after the statement has been prepared and sent, with the file, to the Executive Director. The Secretary is required to send a copy of the later documents to the Executive Director as soon as practicable after receiving them.
Parties to be given a statement about the decision under review
Subsection 121(1) requires the Executive Director to give each party to the review (other than the Secretary) a copy of the Secretarys statement of reasons. This does not extend to documents supplied by the Secretary.
Subsection 121(2) enables the Executive Director to order the person receiving the above copy not to disclose any information from the statement or any information other than as specified in the order.
Subsection 121(3) requires this order to be in writing and subsection 121(4) binds the person to comply with the order. A penalty of imprisonment for 2 years applies for a failure to comply with the order.
Arrangement for hearing of an application
Subsection 122(1) requires the Executive Director to fix a date, time and place for the hearing of an application for review.
Under subsection 122(2), this must be done as quickly as possible if a declaration under section 113 is in force.
Subsection 122(3) and (4) require the Executive Director to give written notice to the applicant about the details of the hearing a reasonable time before the date fixed.
Notice of application to person affected by a decision
Subsection 123(1) provides that reasonable steps must be taken by the Executive Director to give written notice of the application to another person whose interests are, in the Executive Directors opinion, affected by the decision.
Subsection 123(2) requires the above notice, which may be given at any time before the review is determined, to also set out the persons right to be joined as a party under section 119 . Under subsection 122(3), each party is to be given a copy of the notice.
Subdivision B - How the SSAT informs itself about the decision under review
Submissions to SSAT by parties other than agency heads
Section 124 sets out how submissions to the SSAT by parties to a review of a decision, other than agency heads, may be made.
Subsection 124(2) allows a party to the review to make submissions either orally or in writing or both. This subsection is subject to section 126 (hearings on written submissions only).
Subsection 124(3) allows a party to have another person make submissions to the SSAT on his or her behalf.
Subsection 124(4) enables the Executive Director to accept submissions by either the party or their representative by telephone or other electronic communications equipment.
Subsection 124(5) outlines some of the situations where the Executive Director may decide that submissions may be made by telephone or other electronic communications equipment.
Subsection 124(6) provides that if a party is not proficient in English, the Executive Director may direct that communication proceed through an interpreter.
Submissions to SSAT by agency heads
Section 125 provides that a head of an agency that is party to a review of a decision may make written submissions only to the SSAT.
SSAT hearings on written submissions only
Subsection 126(1) provides that the Executive Director may direct that the hearing proceed without oral submissions from the parties who would normally be allowed to make oral submissions, if the Executive Director considers that the review hearing could be determined fairly on the basis of all the parties written submissions.
If the Executive Director gives a direction that the hearing is to proceed without oral submissions, the Executive Director must give each of the parties to the review a written notice informing them of that direction, invite each party to make written submissions and specify the address to which such submissions are to be delivered and by when. Parties must be given a reasonable period to make written submissions ( subsections 126(2) and (3) ).
Despite subsection 126(1) , the SSAT, as constituted for the hearing, may, if it considers it necessary after considering the written submissions, make an order allowing the parties (other than the head of an agency) to make oral submissions ( subsection 126(4) ).
SSAT hearings without oral submissions by party
Section 127 provides for hearings without oral submissions from a party to a review of a decision (other than the head of an agency).
Subsection 127(2) provides that the SSAT may proceed without oral submissions from a party where that party has advised that he or she does not intend making oral submissions.
Subsection 127(3) provides that the Executive Director may authorise the SSAT to proceed without oral submissions from a party where the Executive Director had decided to have oral submissions from that party by telephone or other electronic communications equipment and the presiding member had made reasonable efforts to contact the party or the partys representative but was unable to do so.
Subsection 127(4) provides that the Executive Director may authorise the SSAT to proceed without oral submissions from a party where there has been no determination that submissions from that party may be made by telephone or other electronic communications equipment and the party does not attend the hearing.
Subsection 127(5) provides that the SSAT may proceed to hear the application where the Executive Director has given an authorisation under either subsection 127(3) or (4) .
Subsection 127(6) allows the Executive Director to revoke an earlier authorisation made under subsection 127(3) or (4) . This may arise where contact is made with a party after the authorisation was made.
Evidence on oath or affirmation
Section 128 enables the SSAT to take evidence on oath or affirmation for the purposes of a review of a decision.
Provision of further information by Secretary
Section 129 enables the Executive Director to ask the Secretary to provide any further information or a document that is in the Secretarys possession that is relevant to the review. The Secretary must comply as soon as practicable, and in any event within 14 days.
Exercise by the Secretary of powers under section 155
Section 130 enables the Executive Director to ask the Secretary to take all reasonable steps to obtain information from a person by issuing a notice under section 155 (Secretarys general power to obtain information) where the Executive Director is satisfied that a person has information or has custody or control of a document that is relevant to the review. The Secretary must comply as soon as practicable, and in any event within 7 days.
Section 131 provides that the SSAT is not bound by technicalities, legal forms or rules of evidence, and is to act as speedily as possible but still ensure that the review receives proper consideration, having regard to the SSAT objectives set out in section 110 . The SSAT is also free to inform itself on any matter relevant to a review in any manner it considers appropriate.
Subsection 132(1) sets out the general rule that the hearing of a review is to be in private.
Subsection 132(2) provides the Executive Director with a discretion to issue directions in writing or otherwise as to who may be present at any hearing of a review.
Subsection 132(3) provides that the Executive Director, in exercising his discretion under subsection 132(2) , must have regard to the wishes of the parties and the need to protect their privacy.
Subsection 133(1) provides that if an applicant for a review provides the SSAT with evidence that was not available to the original decision-maker, or to a person who reviewed that original decision, the SSAT may refer the decision to the Secretary for review and may adjourn the hearing.
Subsection 133(2) provides that if the SSAT is satisfied that the applicant had reasonable grounds for not providing such information to the original decision-maker or a person who reviewed the original decision, the SSAT may determine the review.
Restrictions on disclosure of information obtained at hearing
Subsection 134(1) gives the Executive Director a power to make orders that persons who are present at a hearing are not to disclose information obtained in the course of the hearing, or may only disclose information as specified in the order.
Subsection 134(2) provides that a person must not contravene such an order. The penalty for failure to comply is 2 years imprisonment.
Subdivision D - Other procedural matters
Subsection 135(1) gives the SSAT the power to adjourn a hearing from time to time.
The factors that may, among others, be relevant to a decision to refuse to adjourn are set out in subsection 135(2) .
Withdrawal of application for review
Subsection 136(1) provides that an applicant for a review of a decision may withdraw the application at any time.
Subsection 136(2) provides that where the withdrawal is in writing, it may be sent to an office of the Department or the SSAT, or an office of another agency where the Secretary has approved the office for this purpose, and, where the withdrawal is oral, it may be communicated to the SSAT either personally or by telephone.
Subsection 136(3) requires the person to whom the oral withdrawal is communicated to make a written record of that withdrawal, including the date of the withdrawal.
Subsection 136(4) provides that where the withdrawal is lodged at an office of an agency, the head of the agency must send the Executive Director a written notice of the withdrawal. This must be done as soon as practicable and, in any case, within 7 days.
Subsection 137(1) gives the Executive Director the power to dismiss an application where he or she is satisfied that the applicant does not intend to proceed with the application, either after the applicant has communicated an intention not to proceed with the application, or if the Executive Director has made reasonable attempts to contact the applicant and there has been no contact.
Subsection 137(2) states that an application dismissed under this section is taken to have been withdrawn on the date of the dismissal.
Chairperson for each SSAT hearing
Section 138 sets out who is to preside at a hearing.
Decisions of questions before SSAT
Section 139 provides that questions before the SSAT are to be decided by majority. Where the opinions of the members are equally divided, the presiding member will decide the question.
Directions as to procedure for hearings
Section 140 provides for directions to be given as to the procedures to be adopted by the SSAT on reviews. The directions may be general, or specific to a particular review.
Subsection 141(1) sets out the general rule that each party must bear their own expenses incurred in connection with the review.
Subsection 141(2) provides that the SSAT may specify in a determination that a party is to be reimbursed by the Commonwealth for reasonable costs that are incurred by the party for travel and accommodation expenses in relation to the review.
Subsection 141(3) provides that the SSAT may determine that the Commonwealth pay the costs of a medical service that the SSAT arranges for a party to a review.
Subsection 141(4) provides that where a determination is made under subsection 141(2) or (3) , the costs specified in the determination are payable by the Commonwealth.
Subdivision E - Notification of decisions
Procedure following SSAT decision
Subsection 142(1) requires the SSAT, after it makes its decision, to prepare a statement which sets out the decision, the reasons for the decision and the findings on material questions of fact, and refers to the evidence or other material on which the findings are based.
This statement must be given to all parties to the review within 14 days after the making of the decision, and the documents provided by the Secretary must be returned. Copies of any other documents containing information on which the findings of fact are based must also be provided to the Secretary.
Subsection 142(2) requires the Executive Director to give to each party (other than the head of an agency) a notice to the effect that, if still dissatisfied, the party may appeal to the AAT. However, subsection 142(3) provides that the validity of a decision by the SSAT is not affected by a failure to comply with subsection 142(2) .
Division 4-Review by the Administrative Appeals Tribunal
This Division is substantially the same as the equivalent provisions in the Social Security (Administration) Bill 1999. The only major difference is that this Division specifically provides for certain decisions, relating to the approval of child care services and registered carers for child care benefit, to be reviewable by the AAT. This is necessary because such decisions are not reviewable by the SSAT, and therefore do not come within the jurisdiction of the AAT through the usual review provisions.
Subdivision A-Right to review by AAT
Subsection 143(1) provides that an application for review may be made to the AAT in respect of a decision that has been affirmed, varied or set aside by the SSAT.
Subsection 143(2) clarifies that the decision made by the SSAT as referred to above is to be taken to be the decision as varied or affirmed, or the new decision if the original one was set aside, or the directions or recommendations of the SSAT if the decision was sent back to the Secretary.
Subsection 143(3) clarifies that subsection 143(1) is subject to section 29 of the Administrative Appeals Tribunal Act 1975 (the AAT Act).
Subsection 143(4) applies to decisions set aside by the AAT under this section and allows the Secretary to deem an event to have occurred if satisfied that it would have occurred if not for the decision reviewed.
Variation of decision under section 143 before AAT review completed
Subsection 144(1) provides that, where a decision is varied by an officer after an application for review has been made to the AAT under section 143 but before the application is determined, the application is to be treated as if the decision as varied had been affirmed by the SSAT and the decision under review is the varied decision rather than the original decision.
Subsection 144(2) has the same effect for decisions set aside and substituted.
Subsection 144(3) makes it clear that an applicant has a choice as to whether to proceed with the application for review under section 143 or to withdraw where an officer varies the decision under review or sets the decision aside and substitutes a new decision.
Review by AAT of other decisions
As mentioned in the introduction to this Division, subsection 145(1) provides that applications for review may be made to the AAT in respect of certain decisions relating to the approval of child care services and registered carers for child care benefit. This is necessary because such decisions are not reviewable internally, nor by the SSAT, and therefore do not come within the jurisdiction of the AAT through section 143 .
Subsection 145(2) clarifies that subsection 145(1) is subject to section 29 of the AAT Act.
Subsection 145(3) applies to decisions set aside by the AAT under this section and allows the Secretary to deem an event to have occurred if satisfied that it would have occurred if not for the decision reviewed.
Variation of decision under section 145 before AAT review completed
Subsection 146(1) provides that, where a decision is varied by an officer after an application for review has been made to the AAT under section 145 but before the application is determined, the application is to be treated as if the decision as varied had been affirmed by the SSAT and the decision under review is the varied decision rather than the original decision.
Subsection 146(2) has the same effect for decisions set aside and substituted.
Subsection 146(3) makes it clear that an applicant has a choice as to whether to proceed with the application for review under section 145 or to withdraw where an officer varies the decision under review or sets the decision aside and substitutes a new decision.
Settlement of proceedings before the AAT
Subsection 147(1) provides that, if AAT proceedings relate to the recovery of a debt, the Secretary and the other parties to the proceedings may agree to settle the matter. Any agreement must be in writing.
Subsection 147(2) provides that, if the proceedings are settled and the Secretary gives the AAT a copy of the agreement to settle the proceedings, the application for review that is the subject of the proceedings is taken to have been dismissed.
Subdivision B-Modification of Administrative Appeals Tribunal Act in relation to section 143 review applications
Notice of application for review
Section 148 modifies subsection 29(11) of the AAT Act for the purposes of an application under section 143 so that all parties to the SSAT review of the decision, except the party making the application to the AAT, receive notice that there has been an application to the AAT for review of the decision made by the SSAT.
Parties to a review by the AAT
This section modifies paragraph 30(1)(b) of the AAT Act so that the parties to a review by the AAT under section 143 are the same as the parties to the review by the SSAT.
Lodgment of documents with the AAT
Subsection 150(1) modifies section 37 of the AAT Act for the purposes of an application under section 143 so that the original decision maker will be responsible for providing the AAT with a statement of reasons and documents.
Subsection 150(2) provides that, for the purposes of the Secretary meeting his or her obligations under paragraph 37(1)(a) of the AAT Act in respect of an application under section 143 , the statement provided by the SSAT under paragraph 142(1)(a) will be sufficient.
Subsection 150(3) clarifies that the AATs powers under section 38 of the AAT Act to obtain an additional statement is not limited by the operation of subsection 150(2) .
Power of AAT to obtain additional information
Section 151 modifies section 38 of the AAT Act so that the person who is required to provide any additional statements under that section to the AAT is the Executive Director.
Operation and implementation of the decision under review
Subsection 152(1) modifies subsection 41(4) of the AAT Act for the purposes of an application under section 143 so that, where a party applies to the AAT for an order staying or otherwise affecting the operation or implementation of a decision made by the SSAT, each party to the review before the SSAT will be able to make submissions to the AAT.
Subsection 152(2) clarifies that the decision referred to in section 41 of the AAT Act for the purposes of an application under section 143 is to be taken to be the original decision and: the decision as varied by the SSAT if it was varied; the new decision if the original one was set aside; or any decision made as a result of the matter being sent back to the Secretary with directions or recommendations.
Subsection 152(3) clarifies that, for this purpose, original decision means the decision reviewed by the SSAT.
Section 153 modifies subsection 42A(2) of the AAT Act so that the AAT may not prevent the Secretary from being a party to proceedings before the AAT.
Part 6-Provisions relating to information
Division 1-Information gathering
In broad terms, Division 1 of Part 6 enables the Secretary to gather information from family assistance customers and third parties that is relevant in determining a persons eligibility for, or entitlement to, family assistance and for debt recovery purposes.
The information gathering powers are a means of verifying information provided by a claimant or customer to ensure that correct entitlements are paid or to obtain additional information relevant to a persons past or ongoing eligibility or entitlement.
For example, FTB customers will, from time to time, have their present entitlement reviewed. Review forms, requesting information about a customers circumstances for the purposes of confirming their continuing entitlement, will be issued under section 155.
The provisions in Division 1 are closely modelled on social security information gathering provisions.
Section 154 provides that this Division binds the Crown in all its capacities This will ensure that all Commonwealth departments, authorities and agencies (Commonwealth, State, Territory and Norfolk Island) are bound to comply with this Division.
The section also extends the operation of the Division to acts, omissions, matters and things outside Australia, whether or not in a foreign country; and all persons, irrespective of their nationality or citizenship.
However, a person is not required to comply with this Division to the extent that doing so would contravene a law of the Commonwealth (other than a law of a Territory).
The Division does not make the Crown liable to be prosecuted for an offence.
General power to obtain information
Section 155 provides that the Secretary may request a person to give information, or to produce a document that is in his or her custody or control, to an officer.
The Secretary may only make such a request if it is considered that the information or document may be relevant to a persons current or past entitlement to be paid family assistance.
Family assistance is defined in section 3 of the Bill as meaning family tax benefit, child care benefit, maternity allowance and maternity immunisation allowance.
Power to obtain information from a person who owes a debt to the Commonwealth
Section 156 allows the Secretary to obtain certain information from a person who owes a debt to the Commonwealth under or as a result of the family assistance. Such a person may be requested to give an officer information, or to produce documents that are in the persons custody or control, concerning the persons financial situation. The person may also be required to notify of a change of address (if relevant) within 14 days of moving to the new address.
Obtaining information about a person who owes a debt to the Commonwealth
Section 157 deals with information or documents that would help the FAO locate a person who owes a debt under or as a result of the family assistance law or that is relevant to the debtors financial situation. The Secretary may require a person who may have such information or documents to give the information or documents to an officer.
Family assistance law is defined in section 3 as meaning this Bill and the Family Assistance Act.
Obtaining information to verify claims etc.
Subsection 158(1) enables the Secretary to obtain certain information about a class of persons for the purposes of detecting cases where amounts of family assistance have been paid to persons not entitled to them and to verify the eligibility of persons who have made claims for family assistance.
Subsection 158(2) specifies the types of information that may be requested about a person included in a class of persons. The list specified in this subsection is the maximum extent of information that may be sought.
The types of information included in the list are matters relevant in determining a persons entitlement to family assistance. Student details, for example, are relevant in determining whether an individual is an FTB child for the purposes of eligibility for FTB.
The Secretary may specify a class of persons in the notice regardless of whether or not the Secretary can identify any of the persons in that class as being person who have been paid, are entitled to or have made claims for family assistance ( subsection 158(3) refers).
Subsection 158(4) gives the Secretary 13 weeks in which to decide which (if any) of the information is relevant to the matters specified in subsection 158(1) . Under
subsections 158(5) and (6) , the information must be destroyed if the information is not found to be relevant or if a decision has not been made as to its relevance.
Any requirement made of a person under this Division must be made in writing ( subsection 159(1) refers).
Subsections 159(2) to (5) inclusive set out the requirements of the notice.
The notice may be given personally or by post or by any other manner approved by the Secretary. The notice must specify how the person is to give the information or produce the document to which the requirement relates, within what period of time, to whom and the authority for the notice.
A person must be given at least 14 days within which to provide the information requested.
The notice may require a person to give the information by appearing before a specified officer to answer questions. If this is the case, a person may not be required to attend before the end of 14 days after the notice is given.
Offence-failure to comply with requirement
Under section 160 , a person must not refuse or fail to comply with a notice to the extent that the person is able to comply. The penalty for such a refusal or failure is imprisonment for 12 months.
Obligations not affected by State or Territory laws
Section 161 provides that no State or Territory law may operate to prevent a person from giving information, producing a document or giving evidence, that the person is required to give or produce to an officer for the purposes of the family assistance law.
Division 2 - Confidentiality
Under the new family assistance regime, personal information about customers (protected information) will be confidential and therefore protected against unauthorised recording, disclosure and use. Division 2 protects personal customer information by restricting what can be done with such information and providing offences for unauthorised recording, disclosure or use of customer information. These rules need to be read in conjunction with additional rules on personal information contained in the Privacy Act 1988 .
The provisions in Division 2 are closely modelled on social security confidentiality provisions.
Section 162 provides that nothing in the Division prevents a person from disclosing information to another person if it is disclosed for the purposes of the Child Support (Registration and Collection) Act 1988 or the Child Support (Assessment) Act 1989 .
This section also provides that the provisions of the Division relating to the disclosure of information dont affect the operation of the Freedom of Information Act 1988 .
Protection of personal information
The definition of protected information for the purposes of the confidentiality provisions in this Bill is modelled on a similar definition in the Social Security Act . It relates to information about a person as held in the records of a number of agencies and is in effect all encompassing beyond the definition of personal information as defined in the Privacy Act 1988 . The adoption of a common definition across these agencies will afford this information a consistent level of protection under family assistance and social security laws.
Protected information is defined in section 3 of this Bill as meaning information about a person that was or is held in the records of the Department or Centrelink and information about a person that was or is held in the records of the Australian Tax Office and the Health Insurance Commission that was collected for the purposes of the family assistance law. Information that there is no information about a person is also protected information within this definition.
There are, however, some purposes for which protected information can be obtained, recorded, disclosed or used.
Protected information can only be obtained for the purposes of the family assistance law ( subsection 163(1) refers).
Protected information can be recorded, disclosed or used for the purposes of the family assistance law and other prescribed purposes, that is, disclosure for the purposes of sections 168 (production of documents or disclosure of information to a court, tribunal, authority or person for the purposes of the family assistance law) or section 169 (disclosure by the Secretary in the public interest, to the head of another agency or by express or implied authority from the customer).
Section 163 enables officers from the agencies involved in the administration of the family assistance law (Centrelink, the ATO and HIC) to obtain information from the pool of protected information for the purposes of performing their duties or exercising their powers and functions under the family assistance law. This, in effect, allows the interchange of protected information between the agencies involved in administering the new family assistance regime if the interchange is for the purposes of the family assistance law.
Unauthorised access to information
It is an offence for a person to intentionally obtain information that the person is not authorised under the family assistance law or any other lawful authority to obtain, and the person knows or ought reasonably to know that the information is protected information ( section 164 refers ).
Unauthorised use of protected information
It is an offence for a person to intentionally record, disclose or otherwise make use of information that the person is not authorised or required under the family assistance law to record, disclose or use, and the person knows or ought reasonably to know that the information is protected information ( section 165 refers).
Soliciting disclosure of protected information
It is an offence for a person to solicit the disclosure of protected information where the disclosure would be in contravention of this Division and the person knows or ought reasonably to know that the information is protected information ( section 166 refers).
Under this provision, it makes no difference whether any protected information is actually disclosed.
Offering to supply protected information
Under section 167 , it is an offence for a person to:
- •
- offer to supply (whether to a particular person or otherwise) information, knowing it to be protected information;
- •
- hold himself or herself out as being able to supply (whether to a particular person or otherwise) information, knowing that the information is protected information.
An officer acting in the exercise or performance of his or her duties, functions or powers under the family assistance law cannot be guilty of an offence under this provision.
Protection of certain documents etc from production to court etc
Section 168 prevents an officer from having to respond to a request to divulge information collected as part of his or her duties where the request is made by a court, tribunal, authority or person that has the power to request the production of documents or other information and that request is not for the purposes of the family assistance law.
This provision ensures, for example, that confidential customer information cannot be used in civil proceedings such as debt recovery.
Disclosure of information by Secretary
Section 169 allows information to be released in certain circumstances even though the release would normally be barred.
The grounds for release are:
- •
- if the Secretary certifies that it is in the public interest to do so - in the public interest; or
- •
- to the Secretary or head of a Commonwealth Department or authority for the purposes of that Department or authority; or
- •
- with the express or implied authority of the person to whom the information relates.
Examples of a public interest releases of information that can occur under similar provisions in the Social Security Actare where a police authority requires the whereabouts of a person suspected of committing a serious indictable criminal offence (such as armed robbery) or where disclosure of the information would assist in locating an abducted child or protecting the well being or health of a child. It is envisaged that similar releases of protected information would allowed under section 169 .
The Secretary when giving certificates allowing releases of information in the public interest, is required to act in accordance with guidelines that have been issued by the Minister under section 170 .
Similarly, when disclosing information to the Secretary or head of a Commonwealth Department or authority; the Secretary is required to act in accordance with guidelines that have been issued by the Minister under section 170 .
Guidelines for exercise of Secretarys disclosure powers
Section 170 obliges the Minister to set guidelines for the exercise of the Secretarys power to give certificates to allow releases of personal information on grounds of public interest or to allow releases of personal information to a Secretary or head of a Commonwealth Department or authority for the purposes of that Department or authority.
The provision also allows the Minister to revoke or vary those guidelines.
The guidelines are subject to disallowance by the Parliament.
Section 171 provides that an officer must make a declaration in a form approved by the Minister or Secretary if required to do so by the Minister or Secretary. The declaration in section 171 relates to the confidentiality provisions and ensures that officers are made aware of their obligations regarding protected information.
Division 3 - False Statements etc
Division 3 of the Bill deals with offences under the family assistance law. It is divided into Divisions that deal with preliminary matters, the offences themselves, the applicable penalties, procedural matters and the liability of corporations, employers and principals for offences.
The provisions are closely modelled on the offence provisions contained in Part 8.1 of the Social Security Act.
Section 172 provides for the extra-territorial application of Division 3.
Subdivision B contains offence provisions relating to the giving of information or production of documents and payment related offences.
A person commits an offence if the person:
- •
- knowingly or recklessly makes a false or misleading statement in connection with, or in support of, a claim by the person or someone else for family assistance (section 173);
(An example of another person committing an offence is where a tax agent, when making a claim for his/her client for family assistance through the taxation system, knowingly or recklessly makes a false or misleading statement in relation to that claim.)
- •
- knowingly or recklessly makes a false or misleading statement in order to deceive an officer acting under the family assistance law or to affect an entitlement to, or the rate of, a family assistance payment ( section 174 ); or
- •
- knowingly or recklessly makes or presents to an officer a statement, or document, that is false in any way ( section 175 ).
Under section 176 , a person must not knowingly or recklessly obtain any family assistance payment (including a payment of FTB by instalment) to which the person has no entitlement, or only a partial entitlement.
Under section 177 , it would be an offence for a person knowingly or recklessly to obtain any family assistance payment by means of a false or misleading statement made knowingly or recklessly; impersonation, or fraud.
Penalty for contravention of Division 2
The penalty for a person who contravenes any of the provisions of Subdivision C is
12 months imprisonment ( section 178 refers).
Repayment of family assistance
If a person is convicted of an offence against section 178 , section 179 provides that a court may impose a penalty and also order the person to pay reparation to the Commonwealth for the amount of family assistance paid as a consequence of the act, failure or omission that constituted the offence. In this sense, an amount of family assistance is taken to be paid to a person even if the amount is used to reduce or extinguish a person's, or another person's, primary tax liability, a family assistance or social security debt.
The new section would, however, prevent the imprisonment of a person who fails to comply with a reparation order made under its authority.
Penalty where person convicted of more than one offence
Section 180 provides that, if a person is convicted of more than one offence against section 178 , the court may choose to impose one penalty for all of the offences involved. However, the penalty must not exceed the total of the maximum penalties that could have been imposed if each offence were dealt with separately.
Subdivision D - Procedural matters
Section 181 enables more than one charge against a person for offences against section 178 to be dealt with as one complaint, information or declaration. However, this may only occur if those charges either: are founded on the same facts; form a series of offences of the same or similar character; or are part of a series of offences of the same or similar character.
Under section 182 , if two or more charges are set out in the same complaint, information or declaration, the particulars of each offence charged must be set out in a separate paragraph.
Section 183 provides that, if charges are joined, they must be tried together, unless the court considers that it would be just to try them separately and makes an order to that effect.
Evidentiary effect of Secretarys certificate
Section 184 stipulates that, for the purposes of the courts power to order the payment of reparation, a certificate signed by the Secretary is evidence of the matters set out in the certificate. The certificate would specify the person to whom an amount of family assistance has been paid in consequence of an act, failure or omission for which any person has been convicted of an offence under section 178 , the amount concerned and the act, failure or omission concerned.
Enforcement of court certificate as judgment
Section 185 makes it clear that, if a reparation order under these provisions is filed by certificate in any court that has civil jurisdiction to the extent of the reparation amount (including the court that made the order), it is enforceable for all purposes as a final judgment of that court.
Part 7 - Liability of corporations, employers and principals for offences
The provisions in Part 7 work in conjunction with the offence provisions in the Bill. In proceedings against corporations and non-corporations, these provisions operate to identify individuals who are to be responsible for the actions or omissions of those bodies and, where an offence involves consideration of the state of mind of a person, the individuals to whom that consideration is relevant.
Division 1 - Interpretation
Section 186 elaborates on the meaning of a persons state of mind, according to standard Commonwealth criminal law principles.
Under section 187 , a director of a corporation includes, for this Division, a constituent member if the corporation is incorporated for a public purpose under Commonwealth, State or Territory law.
Again, this section 188 provides a standard Commonwealth criminal law rule to the effect that a reference to engaging in conduct includes a reference to failing or refusing to engage in conduct.
Section 189 makes it clear that a reference in this Division to an offence against the Family Assistance Administration Act includes a reference to offences created by any of the specified Crimes Act 1914 provisions as applicable to the Family Assistance Act.
Division 2 - Proceedings against corporations
Under section 190 , the state of mind of a corporation, in relation to conduct engaged in by the corporation, may be established, in proceedings for an offence against the Family Assistance Act, by showing that a director, employee or agent of the corporation: engaged in the conduct; in doing so, acted within authority; and had the state of mind.
Conduct of officer of corporation
Similarly, this section 191 provides that conduct engaged in by a director, employee or agent of a corporation, on behalf of the corporation and within authority, is regarded for these purposes as conduct engaged in by the corporation. However, this would not be so if the corporation could establish that it took due measures to avoid the conduct.
Division 3 - Proceedings against non-corporations
Section 192 is the equivalent for a person other than a corporation of section 190 for a corporation. The state of mind of the person, in relation to conduct engaged in by the person, may be established, in proceedings for an offence against the Family Assistance Act, by showing that an employee or agent of the person: engaged in the conduct; in doing so, acted within authority; and had the state of mind.
Section 193 is the equivalent for a person other than a corporation of section 191 for a corporation. Conduct engaged in by an employee or agent of the person, on behalf of the person and within authority, is regarded for these purposes as conduct engaged in by the person. However, this would not be so if the person could establish that he or she took due measures to avoid the conduct.
Exclusion of imprisonment as penalty for certain offences
Under section 194 , imprisonment is ruled out as a penalty for an offence if the person would not have been convicted but for sections 192 and 193 .
Part 8 - Approval of child care services and registered carers
Eligibility for child care benefit (CCB) under Subdivisions A, B and C of the Family Assistance Act depends on sessions of care being provided by an approved child care service and eligibility for CCB under Subdivision D of that Act depends on sessions of care being provided by a registered carer.
Part 8 includes provisions dealing with the approval of child care services (in Division 1 ) and registered carers (in Division 2 ).
Division 1 - Approval of child care services
Division 1 deals with the approval procedures, conditions of approval, sanctions for breaches of the conditions of approval and with allocations of child care places.
Section 195 covers the procedure for the application, by a person (an individual or a body) who operates, or proposes to operate, a child care service, for approval as a service of one of the four kinds - a centre based long day care service, a family day care service, an occasional care service or an outside school hours care service.
Approved child care service, approved centre based long day care service, approved family day care service, approved occasional care service and approved outside school hours care service are defined in section 3 in Part 2 . The other terms are defined by reference to approval under Division 1 of Part 8 .
Subsection 195(2) prevents registered carers from applying for approval as an approved child care service. Registered carer is defined in section 3 in Part 2 by reference to approval under Division 2 of Part 8 .
Subsection 195(3) provides that the application for approval as an approved child care service must be made in a form and manner required by the Secretary, must state which kind of child care service the service is, and must be accompanied by any information, documents and fees (if any) required by the Secretary. Fees may only be prescribed in respect of applications lodged during the period of time during which a determination under section 207 is in force (under section 207 , the Minister may determine guidelines relating to the allocation of child care places). Subsection 236(2) provides that regulations may prescribe fees for the making of application under section 195 (the fees must not be such as to amount to taxation).
Approval of child care services
Section 196 specifies the requirements that a child care service has to meet to become approved as a service of a particular kind.
The common requirements are that a service has to make an application for approval, be of the kind stated in the application, and satisfy rules, determined by the Minister under section 206 , relating to the eligibility of child care services to become approved as a service of a particular kind ( paragraphs (a), (b) and (c) refer). Eligibility rules are defined in section 3 in Part 2 as rules made under subsection 206(1) .
If a service applies for approval when a ministerial determination under section 207 (relating to the allocation of child care places) is in force, the pre-requisite is that the service will have child care places allocated by the Secretary under section 208 ( paragraph (d) refers). If the Secretary would not allocate child care places to the service, had the service been approved, the service cannot be approved as an approved child care service.
Subsection 196(2 ) provides that the Secretary may refuse to approve a service as an approved child care service of a particular kind if the service was previously approved and, while previously approved, the service was convicted of an offence under this Act or the Secretary took action against the service under section 201(1) ( section 201(1) specifies the consequences of a breach of conditions of approval).
Subsection 196(3) provides that if the Secretary approves the service, the Secretary must give the applicant a certificate of approval, stating the kind of child care service that has been approved.
Conditions for continued approval
Sections 197 to 200 specify conditions that have to be met by an approved child care service to continue to be approved.
Subsection 197(1) imposes a condition that an approved child care service satisfy any eligibility rules determined by the Minister under paragraph 206(1)(b) , relating to the eligibility of child care services to continue to be approved as a service of a particular kind. Eligibility rules are defined in section 3 in Part 2 as rules made under subsection 206(1) .
Subsection 197(2) imposes a common condition that the service comply with obligations imposed on the service by the family assistance law. Family assistance law is defined in section 3 in Part 2 as this Act, the Family Assistance Act or regulations under this Act (Family Assistance Act is defined in section 3 in Part 2 as the A New Tax System (Family Assistance) Act 1999 ).
Subsection 197(3) imposes a common condition that the service must meet the requirements of the laws of the Commonwealth, or of the State or Territory, relating to child care.
Section 198 provides that if a ministerial determination under section 207 (relating to the allocation of child care places) is in force, it is a condition of continuing approval that the service has child care places allocated to it by the Secretary under section 208 and does not exceed the allocation.
Section 199 allows the Minister to determine conditions for continued approval for a class of child care services; the services must comply with the determination.
Section 200 allows the Secretary to impose conditions for continued approval on individual child care services; the services must comply with the conditions.
Consequences of breach of conditions for continued approval
Section 201 lists sanctions that may be imposed by the Secretary if a service breaches conditions of continued approval.
Under subsection 201(1) , the Secretary may vary the conditions imposed under subsection 200(2) , impose additional conditions, reduce the number of places allocated to the service under section 208 and suspend or cancel the services approval. Subsection 201(2) provides that the Secretary must give notice to the service of any sanction imposed under subsection 201(1) .
Subsection 201(3) provides that the suspension of approval may be revoked by the Secretary with effect from the day specified by the Secretary.
In exercising his powers in relation to the imposition of sanctions or revocation of suspension of a services approval, subsection 201(4) requires the Secretary to have regard to ministerial determinations under subsection 201(5) . Subsection 201(5) allows the Minister to determine factors to be taken into account in imposing sanctions and in specifying the date of effect of a revocation of suspension.
Procedure for imposing a sanction
Section 202 specifies procedure to be followed by the Secretary before a sanction is imposed on a service. Under subsection 202(1) the Secretary must notify the service that a sanction is being considered, and set out the grounds for this and summarise the evidence on which the grounds are based. The Secretary must also summarise the effect of the sanction on entitlement to CCB and give the service an opportunity to make written submissions on why the sanction should not be imposed.
Under subsection 202(2) the Secretary must have regard to any submissions made by the service in deciding whether to impose the sanction.
Section 203 lists further circumstances in which a services approval may or must be cancelled.
An approval must be cancelled if the Secretary is satisfied that the service should not have been approved or if the service fails to provide child care for a continuous period of 3 months unless special circumstances exist ( subsections 203(3) and (4) refer, respectively).
Subsection 203(5) provides that the Secretary must give notice to a child care service of a cancellation of approval under this section.
The Secretary may cancel an approval on a services request ( subsection 203(2) refers). If, under subsection 203(7) , the Minister determines factors to be taken into account in determining whether to grant the request, the Secretary has to have regard to those factors ( subsection 203(6) refers).
Section 204 sets out the procedure to be followed before cancellation of an approval under subsections 203(3) or (4) . Under subsection 204(1) the Secretary must notify the service that cancellation is being considered, and set out the grounds for this and summarise the evidence on which the grounds are based. The Secretary must also summarise the effect of the notice on entitlement to CCB and give the service an opportunity to make written submissions on why the approval should not be cancelled.
Under subsection 204(2) the Secretary must have regard to any submissions made by the service in deciding whether to cancel the approval.
Notification of matters affecting eligibility for approval
Section 205 imposes an obligation on an approved child care service to notify the Secretary of any matter occurring before the services approval as a result of which the service should not have been approved or of any matter occurring after the services approval as a result of which a condition of approval has been breached.
The notification has to be made in writing and as soon as practicable after the service becomes aware of the occurrence of the matter. The penalty for non-compliance with the obligation under this section is 20 penalty units.
Eligibility rules for child care services
Section 206 deals with eligibility rules.
Subsection 206(1) allows the Minister to determine rules relating to the eligibility of any of the four kinds of child care services to become approved and rules relating to eligibility to continue to be so approved.
Subsection 206(2) provides that the rules under subsection 206(1) may specify requirements to be met by operators and staff of child care services, including requirements relating to individual suitability to provide child care. The rules may also specify requirements to be met by the operator if the service is transferred to another operator.
Subsection 206(3) gives the Secretary power to exempt a child care service, or a class of child care services from one or more eligibility rules.
Guidelines for allocation of child care places to approved child care services
Section 207 provides the Minister with a discretionary power to determine guidelines in relation to the allocation of child care places. In particular, the Minister may determine procedures relating to the allocation of child care places, matters to be taken into account (by the Secretary under section 208 ) in working out the number (if any) of places to be allocated to an approved child care service and the maximum number of places that can be allocated to approved child care services in a specified class (eg the number of centre based long day care places in a particular locality).
Secretary to allocate child care places
If the Minister makes a determination under section 207 , the Secretary must make an allocation of child care places (initial allocation) to each approved child care service in accordance with the Ministers determination ( subsection 208(1) refers).
A service which has an initial allocation of places may apply to the Secretary for an additional allocation of places ( subsection 208(2) refers).
Subsection 208(3) provides that the application for additional allocation of places must be made in a form and manner required by the Secretary, and must be accompanied by any information, documents and fees (if any) required by the Secretary. Subsection 236(2) provides that regulations may prescribe fees for the making of application under section 208 (the fees must not be such as to amount to taxation).
The Secretarys decision relating to the additional allocation of places is to be made in accordance with the Ministers determination under section 207 ( subsection 208(4) refers). The Secretary must give the applicant notice of the decision, and if the decision is to grant the application, the Secretary must allocate the additional places to the applicant ( subsection 208(5) refers).
Section 209 provides that determination under subsections 199(2), 201(5), 203(7) , or 206(1) , paragraph 206(3)(b) or section 207 is a disallowable instrument for the purposes of the Acts Interpretation Act 1901.
Division 2 - Approval as registered carers
Division 2 deals with approval procedures, conditions of approval and sanctions for breaches of conditions of approval for registered carers.
Application for approval as registered carer
Section 210 specifies who may apply for approval as a registered carer and how an application is made.
Subsection 210(1 ) provides that that an individual who provides care or proposes to provide care, for a child or children may apply to the Secretary to be approved as a registered carer.
Subsection 210(2) prevents an individual from applying for approval as a registered carer if the individual operates an approved child care service or provides child care under a contract with an approved family day care service. This subsection also provides a bar on application by an individual who operates a child care service which receives Commonwealth funding to assist with its operational costs, and the funding is administered by the Department.
Subsection 210(3) provides that the application for approval must be made in a form and manner required by the Secretary and must be accompanied by any information or documents required by the Secretary.
Section 211 specifies the circumstances in which the Secretary must approve an individual as a registered carer ( subsection 211(1) refers).
The Secretary must approve an individual as a registered carer if the individual has made an application for approval, has turned 18 (or the age specified by the Minister in a determination under subsection 211(3) ), or meets qualification requirements specified by the Minister under subsection 211(4) , and the Secretary is satisfied that the individual meets the tax file number requirement under section 212 .
If the Secretary approves the individual, subsection 211(5) requires the Secretary to issue a certificate of approval.
Statement that applicant has tax file number
Section 212 sets out the tax file number requirements which must be met by an applicant seeking approval as a registered carer. Applicants are not required to quote their tax file number but they must have a tax file number. The Secretary may ask the Commissioner of Taxation for information on whether a person has a tax file number.
When approval comes into force
Section 213 provides that the approval of an individual as a registered carer takes effect from the day on which the Secretary considers that the applicant was first eligible to be approved but not earlier than 12 months before the day of the application for approval. If an applicant seeks approval for a past period and the Secretary is satisfied that that the applicant was not eligible for approval during a period or periods in the past, the Secretary may determine that the approval is not to have had effect during that period or those periods.
Conditions of continued approval
Section 214 deals with conditions of continued approval as a registered carer.
Subsection 214(1) imposes a condition that the provision of care by an individual meets the requirements of the laws of the Commonwealth, or of the State or Territory, relating to child care.
Subsection 214(2) allows the Secretary to impose other conditions on the continued approval of an individual.
Subsection 214(3) allows the Minister to impose other conditions for the continued approval of all registered carers.
Consequences of breach of conditions for continued approval
Section 215 lists sanctions that may be imposed by the Secretary if a registered carer breaches conditions of continued approval.
Under subsection 215(1) , the Secretary may vary the conditions imposed under subsection 214(2) , impose additional conditions, suspend or cancel the carers approval. Subsection 215(2) provides that the Secretary must give notice to the carer of any sanction imposed under subsection 215(1) .
Subsection 215(3) provides that the suspension of approval may be revoked by the Secretary with effect from the day specified by the Secretary.
In exercising his powers in relation to the imposition of sanctions or revocation of suspension of a carers approval, subsection 215(4) requires the Secretary to have regard to ministerial determinations under subsection 215(5) . Subsection 215(5) allows the Minister to determine factors to be taken into account in imposing sanctions and in specifying the date of effect of a revocation of suspension.
Procedure for imposing a sanction
Section 216 specifies procedure to be followed by the Secretary before a sanction is imposed on a registered carer. Under subsection 216(1) the Secretary must notify the carer that a sanction is being considered, and set out the grounds for this and summarise the evidence on which the grounds are based. The Secretary must also summarise the effect of the sanction on entitlement to CCB and give the carer an opportunity to make written submissions on why the sanction should not be imposed.
Under subsection 216(2) the Secretary must have regard to any submissions made by the carer in deciding whether to impose the sanction.
Section 217 lists further circumstances in which a carers approval must be cancelled.
An approval must be cancelled if the carer requests the cancellation of the carers approval or if Secretary is satisfied that the carer should not have been approved ( subsections 217(2) and (3) refer, respectively).
Subsection 217(4) provides that the Secretary must give notice to a carer of a cancellation of approval under this section.
Procedure for cancellation under subsection 217(3)
Section 218 sets out the procedure to be followed before cancellation of an approval under subsections 217(3) . Under subsection 218(1) the Secretary must notify the carer that cancellation of the approval is being considered, and set out the grounds for this and summarise the evidence on which the grounds are based. The Secretary must also summarise the effect of the notice on entitlement to CCB and give the carer an opportunity to make written submissions on why the approval should not be cancelled.
Under subsection 218(2) the Secretary must have regard to any submissions made by the carer in deciding whether to cancel the approval.
Notification of matters affecting eligibility for approval
Section 219 imposes an obligation on a registered carer to notify the Secretary of any matter occurring before the carers approval as a result of which the carer should not have been approved or of any matter occurring after the carers approval as a result of which a condition of approval has been breached.
The notification has to be made in writing and as soon as practicable after the carer becomes aware of the occurrence of the matter. The penalty for non-compliance with the obligation under this section is 20 penalty units.
Section 220 provides that a determination under subsections 211(3) or (4), 214(3) or 215(5) is a disallowable instrument for the purposes of the Acts Interpretation Act 1901 .
Part 9 - Other Matters
General administration of family assistance law
Under section 221 , the Secretary to the Department of Family and Community Services is responsible for the general administration of the family assistance law (ie, the Family Assistance Act and this Bill). Accordingly, most of the powers and functions under the family assistance law rest with the Secretary.
The exercise of this responsibility is subject to any direction of the Minister for Family and Community Services.
The Family Assistance Office, comprising officers from Centrelink, the ATO and HIC (Medicare offices), will administer the family assistance law. To enable this to happen, the Secretary is given the power to delegate the Secretarys powers under the family assistance law to officers ( section 222 refers).
An officer is defined to mean the head, an officer or employee of an agency or any other person engaged by an agency under contract or otherwise. Notably, an agency includes Centrelink, the ATO and HIC as well as the Department of Family and Community Services. The relevant definitions are contained in section 3 .
The exercise of the delegation power will, for example, allow the Commissioner of Taxation, as delegate of the Secretary, to accept claims, make payments and perform other functions under this Bill.
The Secretary is required to consult with the head of an agency before delegating powers under the family assistance law to an officer or employee of that agency (see subsection 222(2) ).
The only restriction on the Secretarys power of delegation relates to the Secretarys power to release confidential customer information to the head of another agency under paragraph 169(1)(b) . Due to the sensitive nature of that power, it can only be delegated to the head of an agency by virtue of subsection 222(3) .
Section 223 provides that decisions made under the family assistance law must be in writing, and that a decision under the family assistance law is to be taken to be in writing if it is made or recorded by means of a computer.
Section 224 deals with the situation where a computer program generates a decision about a persons rate of payment or their entitlement to be paid a family assistance payment. Where this happens, the computer decision is taken to be a decision of the Secretary at the time the change was made.
This provision ensures that a computer generated decision is subject to review by deeming it to be a decision by the Secretary.
Section 225 makes it clear that a notice of a decision affecting a persons entitlement to be paid family assistance (such as a decision that a person is entitled to be paid FTB by instalment or a variation decision) is to be taken to have been given to the person if it is delivered to the person personally, or left at, or sent by prepaid post to, the address of the place of residence or business of the person last known to the Secretary.
A notice of a decision affecting a persons entitlement to be paid family assistance may be given to a person by properly addressing, prepaying and posting the document as a letter. If this procedure is followed, then the notice is taken to have been given to the person at the time at which the notice would be delivered in the ordinary course of post unless the contrary is proved.
Other notices of decision (such as a notice requiring a person to provide information) will be subject to the rules in sections 28A and 29 of the Acts Interpretation Act 1901 .
Payments to Commissioner of Taxation
Section 226 obliges the Secretary to make deductions from family assistance payments made to a person if section 218 of the Income Tax Assessment Act 1936 applies. Section 218 of that Act gives the Commissioner of Taxation the discretionary power to require a person who owes money to, or holds money on behalf of, a taxpayer to pay to the Commissioner the amount due by the taxpayer.
Setting off family assistance entitlement against primary tax liability
Section 227 allows the Commissioner of Taxation to apply some or all of a persons family assistance entitlement (with the exception of child care benefit) to reduce or extinguish his or her primary tax debt. This provision mirrors section 87 , which allows the Commissioner of Taxation to apply an income tax refund to reduce or extinguish a persons family assistance debt.
A primary tax debt is any amount due to the Commonwealth directly under a taxation law and includes any such amount that is not yet payable.
Subsection 227(1) provides that if a person is entitled to an amount of family assistance (other than child care benefit), and the person is also liable for an amount of primary tax, then the Commissioner of Taxation may offset the family assistance payment against the primary tax liability.
Subsection 227(2) provides that where the Commissioner offsets the family assistance payment under subsection (1) , the amount of the persons entitlement and liability are reduced accordingly. Also, where there has been an offset under subsection (1), the person is taken to have paid the amount credited by the Commissioner, at the time when the Commissioner credits the amount, or at any earlier time that the Commissioner determines. The amount credited by the Commissioner refers to family assistance credits. The effect of this subsection is that the person is taken to have paid the amount of the primary tax liability that is offset by the amount of the family assistance entitlement.
Subsection 227(3) states that this section has effect in spite of anything in any other Act or any other law of the Commonwealth.
Setting off arrears against debt owed
Subsection 228(1) provides that if a person is entitled to an amount by way of arrears of family assistance, and the person incurs a debt under this Act, then the Secretary may determine that the whole or a part of the entitlement to arrears is to be set off against the debt.
Subsection 228(2) makes special provision for child care benefit. It provides that under subsection (1), the Secretary may offset a persons arrears of child care benefit only against a debt that the person incurs in relation to child care benefit.
Subsection 228(3) provides that if the Secretary makes a determination under subsection (1), the amount of the persons entitlement to an amount of arrears of family assistance and the amount of the debt are reduced accordingly.
Setting off arrears of person who is not a debtor
Subsection 229(1) provides that where a person (the debtor) incurs a debt under this Act, and another person (the consenting person) is entitled to an amount by way of arrears of family assistance, and for the purposes of the recovery of the debtors debt, the consenting person consents to the deduction of an amount from their arrears, the Secretary may determine that the whole or a part of the entitlement to arrears is to be set off against the debt.
Subsection 229(2) makes specific provision for child care benefit. It provides that where the consenting person is entitled to an amount of arrears of child care benefit, the Secretary cannot offset the debtors debt against this amount.
Subsection 229(3) provides that if the Secretary makes a determination under subsection (1), the persons entitlement to an amount of arrears of family assistance and the amount of the debt are reduced accordingly.
Subsection 229(4) provides that the consenting person may revoke their consent at any time.
Judicial notice of certain matters
Subsection 230(1) requires all courts to accept a signature that purports to be attached or appended to any official document if the signature is of a person who is or was an officer. The term officer is defined in section 3 to include the head of an agency.
Subsection 230(2) requires all courts to accept that such a signature signifies that the person is or was in fact an officer.
Subsection 231(1) establishes a general evidentiary rule requiring all courts to accept official documents signed by an officer as prima facie evidence of the facts and statements contained within the documents.
Subsection 231(2) establishes the evidentiary rule that a written statement, signed by an officer, that a person was entitled to, or had received, a family assistance payment on a certain date and of a particular amount shall be received by the courts as prima facie evidence that the person was entitled to, or in receipt of, the payment at that time and at that rate.
Application of family assistance law to unincorporated bodies
Section 232 provides that a person for the purposes of the family assistance law, includes an unincorporated body. The provision also identifies individuals within the unincorporated body on which obligations can be imposed, who can discharge those obligations and who is to be responsible for any offences committed under the family assistance law. An individual will not be held to be responsible for an offence if he or she was not involved in any way (by act or omission) in the commission of the offence.
The need for this provision arises because a person as defined in the Acts Interpretation Act 1901 does not include an unincorporated body.
A number of provisions in the Bill are expressed to apply in relation to a person. The Secretary has the power, for example, to require a person to provide information relevant in determining entitlement to FTB. Also, there are offences where a person provides false or misleading information. These and other provisions should have the potential to apply to unincorporated bodies as well as other persons.
Section 233 provides that, as soon as practicable after 30 June each year, the Secretary must prepare and give to the Minister a report on the administrative operation of the family assistance law during the year that ends on that 30 June.
The Minister is obliged to make sure that a copy of the report is presented to each House of Parliament within 15 sitting days of that house after the day on which the Minister receives the report.
Section 234 provides that payments of family assistance, must be made out of the Consolidated Revenue Fund, which is appropriated accordingly.
Agreements on administrative arrangements
FTB will be administered by the Family Assistance Office comprising officers from three agencies, the Centrelink, the ATO and HIC. The Secretary to the Department of Family and Community Services is responsible for the administration of the new family assistance regime. In view of this structure, subsections 235(2) and (3) provide for the making of administrative arrangements between the Secretary and Commissioner for Taxation and Managing Director of the HIC so that respective roles and responsibilities are clear. Similar administrative arrangement can be incorporated into the Service Agreement between the Department and Centrelink.
Subsection 235(1) enables the Secretary and the Executive Director of the Social Security Appeals Tribunal to enter into administrative arrangements regarding the administration of the review and appeals provisions in this Act.
Section 236 provides that the Governor General may make regulations that are consistent with the provisions in this Act setting out matters that are:
- •
- required or allowed by this Act to be prescribed; or
- •
- necessary or convenient for carrying out or giving effect to provisions in this Act.
The regulations may prescribe penalties up to a specified maximum number of penalty units for any breach of the regulations.
The regulations may also prescribe fees that apply in relation to an application for:
- •
- approval as an approved child care service; and
- •
- additional allocation for child care places.
The regulations may deal with matters relating to the proof of making or withdrawing a claim or application or the doing of any other thing that is required or permitted to be done under the family assistance law.
The regulations may provide for specified decisions of the Secretary, an authorised review officer, the SSAT or the AAT only to have effect from a specified day before the decision is made. This regulation power in subsection 236(4) applies to decisions which create or increase an entitlement to FTB. The effect of the provision is that the regulations may provide that that such decisions may only be backdated for a limited period.
Subsection 236(5) provides that if regulations for the making of determinations under paragraph 49(1)(a) (conditional eligibility for CCB by instalment to an approved child care service) are made before the provisions under which the regulations are made come into operation, the determinations may be made as soon as the regulations have been made. However, the determinations cannot have effect before the substantive commencement of the provisions under which the regulations are made. The effect of this is to enable determinations relating to conditional eligibility for CCB to be made in advance, in preparation for the introduction of the new child care payment.
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (No. 2) 1999
PRELIMINARY
Clause 1 of the A New Tax System (Family Assistance) (Consequential and Related Measures) Bill (No. 2) 1999 sets out how the amending Act is to be cited.
Clause 2 provides for the commencement of the amending Act and the Schedules in the amending Act. The various provisions generally start either on Royal Assent or on the commencement of other family assistance amendments, or related legislative amendments, on which the provisions in the amending Act depend or to which they are linked in some technical way. One transitional provision (inserted by item 2 of Schedule 11 ) could start as early as 1 January 2000 - this is to enable the correspondence with current customers about the transition to the new scheme to be handled in sufficient time for the commencement of the new arrangements. Clause 3 provides that each Act that is specified in a Schedule to the amending Act is amended or repealed in accordance with the applicable items in those Schedules.
Several abbreviated terms will be used widely throughout this Explanatory Memorandum in relation to this Bill. The abbreviations are:
- •
- the Social Security Act 1991 (the Social Security Act);
- •
- the A New Tax System (Family Assistance) Act 1999 , currently still a Bill before the Parliament (the Family Assistance Act);
- •
- the A New Tax System (Family Assistance) (Administration) Act 1999 , currently still a Bill before the Parliament (the Family Assistance Administration Act);
- •
- the A New Tax System (Family Assistance) (Consequential and Related Measures) Act (No. 1) 1999 , currently still a Bill before the Parliament (the First Consequential Act).
Other abbreviations used not so widely will be indicated in relevant parts of the Explanatory Memorandum.
Schedule 1 - Social Security Act 1991
This Schedule amends the Social Security Act to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families. The Schedule is divided into Parts that group related amendments together.
Part 1 - Amendments relating to family allowance
Items 1, 27 to 45, 48, 51, 53, 54, 56, 59, 60, 62, 63, 65, 66, 67, 69, 71, 72, 73, 75, 76, 79, 80, 81, 83, 84, 85, 88, 89, 90, 92, 94, 95, 96, 98, 99, 101, 103, 104, 105, 106, 107, 109, 110, 111, 112 and 113 are to omit existing references in the Social Security Act relating to family allowance and substitute equivalent references to the new family assistance structure. Generally, the Part A rate of family tax benefit under the Family Assistance Act will take the place of family allowance. The amendments made by items 62, 83, 84, 98, 103 and 110 to rent assistance provisions also clarify the operation of the provisions in the case of a person who is a member of an illness separated couple, a respite care couple or a temporarily separated couple. Such people should have their rent assistance qualification assessed independently from the rent assistance qualification of their partners.
In a related vein, items 2 to 14, 22, 23, 24, 25, 26, 46, 47, 49, 50, 52, 53 (note only), 55, 57, 58, 64, 70, 77, 78, 86, 87, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 127, 128, 129, 130, 132, 133, 134, 135, 136, 137, 138, 141, 142, 143, 144 and 145 are simply to omit references to family allowance and maternity allowance in provisions in the Social Security Act in which they will no longer be appropriate because of the family assistance changes, or to omit whole provisions that have been relevant only for payments that will now be covered by the family assistance legislation. Some of these omissions are of notes or examples, which are no longer required in the Social Security Act to the extent that they have been previously.
Items 15, 126, 131, 139 and 140 make amendments for the purposes of the method statement in point 1210-A1 of the Social Security Act. This deals with the calculation of a persons international agreement portability rate and relies in part on the persons notional family allowance rate. This is currently specified to be the amount worked out by adding the standard family allowance rate and the guardian allowance and subtracting the minimum standard family allowance rate. Rather than try to preserve this link by translating the concept to the family assistance equivalent (because this would be difficult to achieve accurately), the link is to be severed and replaced with a specific amount that will perform the same function and preserve international undertakings.
Accordingly, new steps 5 and 6 of the method statement will now deal with the persons additional child amount or amounts to the same effect in the method statement as the current notional family allowance rate construction. These additional child amounts will be provided by new point 1210-A1A. Instead of being reached by link to the family assistance structure, the three amounts, ranging from $37.00 to $105.10, are specified in a table and differ depending on the age of the child and on whether the person concerned has a partner. These amounts as specified in the Bill are correct as at the time of introduction. However, a special transitional indexation provision allows the rates to be updated ready for the commencement of the new rule should this need to happen because of movement in the source family assistance figures on which the amounts are based.
In the longer term, provision is made for the routine indexation of the amounts so that they keep pace with the source figures.
Items 16, 17, 18, 19, 20, 21 and 61 add to appropriate provisions in the Social Security Act new references to family assistance payments and concepts, including definitions of those new elements and legislative references. In particular, item 18 adds to subsection 23(1) the definition family assistance law as an abbreviated way of referring to both principal pieces of family assistance legislation - the Family Assistance Act and the Family Assistance Administration Act.
Items 68, 74, 82, 91, 97, 100, 102, 108 and 114 insert a new remote area allowance provision in each rate calculator to allow an additional amount of remote area allowance to be paid in respect of an FTB child who has died, for 14 weeks after the death. This rule replaces an existing family allowance rule, which increases the amount of bereavement payment for a deceased child if the family allowance recipient also received remote area allowance when the child died. This rule has not been incorporated into the bereavement provisions that apply to family tax benefit.
Item 146 repeals clauses 50, 51, 52, 53, 54 and 69 of Schedule 1A to the Social Security Act. These are current savings provisions that are either no longer applicable because of the repeal of family allowance or that are no longer appropriate under the new family assistance regime, the object of which is to rationalise and make more equitable programs for payments to families. Some of those pensioners affected by the repeal of clause 54 may be able to opt for an agreement payment that would include the additional child amount. The savings currently provided by clauses 52 and 53 will be reinstituted through a regulation to be made under section 4 of the First Consequential Act.
Part 2 - Amendments relating to family tax payment
The amendments made by this Part are to omit references to family tax payment in provisions in the Social Security Act in which they will no longer be appropriate because of the family assistance changes, or to omit whole provisions that have been relevant only for family tax payment.
Part 3 - Amendments relating to maternity allowances
This Part contains two amendments that are to omit a reference to maternity allowance and a whole paragraph relating to maternity allowance and maternity immunisation allowance from provisions in the Social Security Act that will no longer need to reflect those payments because of their movement to the family assistance structure.
Part 4 - Amendments relating to parenting payment
The three items in this Part omit some existing references to PP (partnered) and replace them with references to benefit PP (partnered). This is done because one of the two elements of the existing PP (partnered), non-benefit PP (partnered), is being removed as part of the family assistance measures, leaving only benefit PP (partnered), which may now be spelled out in full in the relevant provisions. Two of the amendments are of provisions inserted by the Further 1998 Budget Measures Legislation Amendment (Social Security) Act 1999 , currently still a Bill before the Parliament (see item 14 of Schedule 2 and item 53 of Schedule 3).
Part 5 - Amendments relating to the introduction of child care benefit
As the heading to this Part indicates, the amendments contained in this Part generally relate to the introduction of the child care benefit element of family assistance.
Item 157 amends the definition of protected information in subsection 23(1) of the Social Security Act, which is used for the confidentiality provisions. This is to make the definition mirror the equivalent definition that is to apply for the family assistance confidentiality provisions.
Essentially, the pool of information to be accessed, and protected, both by the family assistance and by the social security confidentiality provisions will be the same. It will comprise information about a person that is or was held in the records of the Department or Centrelink, or information about a person obtained by an officer under the family assistance law that is or was held in the records of the Australian Taxation Office or the Health Insurance Commission. It will also cover information that there is no information about a person held in the records of any one or more of these bodies. However, it will be possible to obtain, disclose, record or otherwise use that information only for relevant purposes (ie, generally, for the purposes of either of the two legislative systems).
Item 158 makes a minor technical correction to section 1261.
Items 159, 160, 161, 162, 164, 165 and 166 make minor amendments to several confidentiality provisions in the Social Security Act to remove reference to the Child Care Payments Act 1997 , which will be repealed by the First Consequential Act. In these cases, it is not necessary to replace this reference with a reference to the new family assistance equivalent - the revised definition of protected information (see item 157 above) will have the effect of protecting child care benefit information, along with other family assistance information, so that it may be obtained, recorded, disclosed or otherwise used only for relevant social security purposes.
However, item 163 does replace the Child Care Payments Act 1997 reference in paragraph 1312B(b) with a reference to the family assistance law. This is to make sure that a person performing family assistance duties does not technically commit an offence under section 1312B of the Social Security Act in disclosing protected information (which, under the revised definition discussed under item 157 above may include information obtained under the family assistance law) if that disclosure is authorised or required by the family assistance law. Again, this mirrors the equivalent family assistance confidentiality provision.
Part 6 - Amendments relating to overpayments and debt recovery
This Part contains two amendments that include reference to the new family assistance structure in relevant debt recovery provisions in the Social Security Act.
The first, made by item 167 , is to make sure that a persons family assistance debt may be recovered by deductions from the persons social security entitlement if he or she has one (consistent with the treatment of debts under various other Acts and schemes).
The second, made by item 168 , is complementary to this, recognising that recovery by deductions from a persons social security entitlement does not have to be pursued if the amount is recovered under the family assistance debt recovery provisions.
Part 7 - Amendments relating to commencement of the Youth Allowance Consolidation Act 1999
This Part makes amendments to provisions inserted into the Social Security Act, or substituted, by the Youth Allowance Consolidation Act 1999 , currently still a Bill before the Parliament (the YA Act). (The YA Act is expected to commence before the family assistance package.)
Items 169 to 174 are to adjust concepts used in the youth allowance family actual means test inserted into the Social Security Act by Schedule 3 to the YA Act (the test formerly having been provided by regulation).
The family actual means test relies in part on identifying the value of the increase in the tax free threshold that is available to the family of a young person affected by the test. However, the family assistance changes remove this increase as a method of assisting families and replace it with direct family assistance. Accordingly, these items reflect the family assistance changes as they affect the test.
Items 175 and 176 amend section 1127 (relating to the disposal of assets more than 5 years ago), after it is repealed and substituted by item 25 of Schedule 4 to the YA Bill. The amendments are simply to remove references to family allowance since it will no longer be a payment under the Social Security Act.
Part 8 - Miscellaneous amendment
This Part contains only one amendment. It is to omit a no longer relevant parenting allowance reference in section 1190 relating to indexation.
Schedule 2 - A New Tax System (Family Assistance) Act 1999
This Schedule amends the Family Assistance Actto clarify certain aspects of the new family assistance structure.
Item 1 amends the definition of family assistance contained in the Family Assistance Act to include reference to the family tax benefit advance, which is provided by the Family Assistance Administration Act.
Item 2 repeals a definition that was set up in the Family Assistance Act but that is no longer necessary for the family assistance provisions.
Items 3 to 8, 10, 34 and 35 make technical changes to references in the Family Assistance Act to the various types of child care service that will be relevant for the new child care benefit. The changes are basically to add the word approved to the descriptions of the various types of service. This is to align the references already included in the earlier legislation with the later drafting of the substantive provisions in the Family Assistance Administration Act relating to the approval of these services.
A number of provisions in the Family Assistance Act relating to eligibility for CCB and affecting an individuals entitlement to CCB refer to a calendar year. As, in most cases, the calculation of a CCB rate is based on an individuals (and his/her partners) taxable income, amendments are made to align the working of the CCB rate and eligibility provisions so that they operate in respect of the same period. To achieve this, items 9, 18, 19, 22, 24, 30 and 31 amend paragraphs 10(4)(c), 45(2)(a), 46(1)(a), subsections 53(6), 53(7), 55(4, 55(5) and paragraphs 71(3)(c) and 71(4)(b) respectively to change the references to calendar year occurring in those provisions to financial year.
Items 11 and 26 make minor technical corrections to the drafting of subsection 24(5) and paragraphs 66(b) and 67(b).
Item 12 amends subsection 30(1) of the Family Assistance Act by omitting the words at the same time and replacing them with on the same day. This amendment clarifies that only one individual is eligible for family tax benefit in respect of a child on any given day. A consequential amendment is also made to the heading of section 30 to reflect the provision as amended.
Section 33 of the Family Assistance Act deals with the situation where, due to the death of an individual, there is an unpaid amount of FTB. The provision allows another individual to be eligible for that unpaid amount in certain circumstances. Items 13 to 15 provide that the other individual cannot claim any unpaid amounts relating to a period before the beginning of the income year preceding the income year in which the individual died. This is consistent with the restrictions on claiming that would have applied to the deceased person had that person not died and a claim for the unpaid amount was made.
Item 16 repeals and replaces subsection 42(2). The new subsection provides that the statement under paragraph 42(1)(b) (statement of amount of CCB for eligibility by instalment) must set out the amount of CCB applicable under section 70 (rate of CCB for care provided by an approved child care service). If the amount is calculated in a case where Schedule 2 applies (CCB rate in normal circumstances), the CCB percentage specified in the determination under paragraph 42(1)(a) is to be used (the CCB percentage is not used for calculation of the special circumstances CCB rate).
Item 17 repeals and replaces paragraph 42(3)(b). The new paragraph provides that the sessions of care which are relevant for the purposes of the calculation under subsection 42(2) are sessions for which a person would be eligible for CCB under section 43 (eligibility for past periods), disregarding the aspects of section 43 which are not relevant to eligibility under section 42 (immunisation requirements and the requirement that a person must not be conditionally eligible for CCB for the same period).
Items 20 and 21 amend section 52, which provides for a 20 hours per week CCB eligibility limit.
Item 20 amends subsection 52(1) to provide that the CCB eligibility limit of 20 hours child care per week does not apply to sessions of care provided outside school hours.
Under subsection 52(2), the Secretary determines which sessions of care in the week will give rise to eligibility for CCB. Item 21 amends subsection 52(2) to provide that, where the length of sessions of care provided in a week exceeds 20 hours, a person is only eligible for CCB for sessions of care worked out in accordance with a Ministerial determination under subsection (2A). The new subsection 52(2A) requires the Minister to determine how to work out which sessions of care in the week will give rise to eligibility for CCB.
Item 23 amends section 54, which provides for a 50 hour per week CCB eligibility limit. Under subsection 54(2), the Secretary determines which sessions of care in the week will give rise to eligibility for CCB. The amended subsection 54(2) now provides that, where the length of sessions of care provided in a week exceeds 50 hours, a person is only eligible for CCB for sessions of care worked out in accordance with a Ministerial determination under subsection (2A). The new subsection 54(2A) requires the Minister to determine how to work out which sessions of care in the week will give rise to eligibility for CCB.
Item 25 repeals and replaces section 56, which requires determinations to be made in accordance with rules made by the Minister under subsection 56(2). The new section 56 applies to determinations of the Secretary or an approved child care service. The section no longer applies to determinations of the Minister, as it is not necessary for this provision to apply to Ministerial determinations. Item 25 also inserts a new section 56A, which replaces the previous subsection 56(3). New section 56A provides that a determination under subsection 52(2A), 53(1), 54(2A) or 56(2) is a disallowable instrument.
Items 27 to 29 and 32 amend section 71 (CCB rate in special circumstances). Item 27 amends paragraph 71(1)(a) to cross-refer to subsection 42(2) (section 42 deals with eligibility of an individual for CCB by instalment). This is to make it clear that section 71 does not apply in calculating the CCB rate in cases of eligibility under section 43 for lump sum CCB for a past period.
Items 28 and 29 makes consequential amendments to paragraph 71(1)(b) to make it clear that the child or individual referred to in the provision is the child or individual in respect of whom the CCB rate is calculated under section 42.
Item 32 makes a further consequential amendment to subparagraph 71(4)(c)(iii) which inserts a cross-reference to subparagraph (1)(b)(ii) (as amended by item 29 ). Again this is to make it clear that the provision only applies where an individual is the individual in respect of whom the CCB rate is calculated under section 42.
Item 33 effectively exempts a person whose adjusted taxable income exceeds the higher income free area (under clause 2 of Schedule 1 to the Family Assistance Act) from the income test during any period of receipt by the person or partner of a social security pension, a social security benefit or a service pension.
This is done by providing in the substituted paragraphs (a) and (b) of subclause 1(2) of that Schedule that an individuals Part A rate of family tax benefit is worked out under Part 2 of the Schedule if the individual or partner is receiving income support, regardless of the individuals income. Clause 17 of that Part will then operate automatically to exempt the individual from the income test.
Items 36 and 37 add an extra indexation provision for child care benefit, relating to the $11 and $32 multiple child loadings that form part of the calculation of the rate of child care benefit (see the Maximum weekly benefit table in clause 11 of Schedule 2 to the Family Assistance Act). These loadings will now be indexed along with other components of the child care benefit rate calculation process that are already accommodated in the indexation provisions.
Schedule 3 - Child Care Act 1972
This Schedule amends the Child Care Act 1972 (the Child Care Act) to make amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families.
The Child Care Act will continue in force despite the family assistance changes. It will continue to deal with matters relating to capital grants to child care providers. One of the portions of the Act that will still operate is Part IIIA relating to confidentiality. There are several provisions in this Part that refer to a person or an officer being authorised or required to disclose information, or performing duties or functions, under a specified law. The law specified in each case is this Act or the Social Security Act.
The amendments made by this Schedule remove references to the Social Security Act that appear throughout these provisions. This reference is no longer appropriate, given the reduced scope of the Child Care Act and new administrative arrangements.
Instead of this reference, the amendments insert reference to the family assistance law, defined to mirror the term used in the family assistance legislation. This is because information about the approval of child care services for the purposes of the new family assistance legislation will also be relevant for the capital grant function of the Child Care Act - information must be allowed to flow accordingly.
Schedule 4 - Child Support (Assessment) Act 1989
This Schedule amends the Child Support (Assessment) Act 1989 (the Child Support Act) to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families.
The amendments made by this Schedule are to replace current references to family allowance in the Child Support Act with equivalent references to family tax benefit under the new family assistance structure, to maintain the effect of the Act. This includes referring, as appropriate, to new structures within the family assistance provisions such as standard FTB rate and base FTB rate.
Furthermore, certain notes in the current legislation that are no longer necessary are simply to be repealed.
Schedule 5 - Data-matching Program (Assistance and Tax) Act 1990
This Schedule amends the Data-matching Program (Assistance and Tax) Act 1990 (the Data-matching Act) to make amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families.
Items 1 and 2 amend the definition of income data in subsection 3(1) of the Data-matching Act to exclude reference to family tax assistance since family tax assistance is being abolished and replaced by family tax benefit, one of the forms of the new family assistance.
Item 3 amends the definition of personal assistance in the same subsection, which lists various income support-type payments for the purposes of the Act. The amendments make sure that family assistance will be covered as a form of personal assistance under the Act. They also make it clear that the two superseded forms of assistance with child care costs are properly reflected in the definition. (Even though these will no longer exist under the new system, the data-matching program still needs to cover them, consistent with the position on superseded forms of social security payment, for example.)
Schedule 6 - Farm Household Support Act 1992
This Schedule amends the Farm Household Support Act 1992 (the Farm Household Support Act) to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families.
This Schedule makes several amendments as a consequence of the repeal of family allowance and basic parenting payment.
Family allowance is currently used as a reference point in the Farm Household Support Act in working out one of the components of the rate of exceptional circumstances relief payment under subsection 24A(1) (see paragraph (c)). Under the new family assistance structure, it is appropriate merely to repeal that paragraph. As a consequence, certain definitions that operate solely for that paragraph are also to be repealed.
Also, amendments are made to the definition of income support payment rate in each of subsections 24A(1A) and 24B(2), the latter section applying to the rate of restart income support. The amendments are to repeal the paragraph in each case referring to non-benefit PP (partnered).
These amendments will achieve the correct conversion to the family assistance structure for these Farm Household Support Act programs.
Schedule 7 - Health Insurance Act 1973
This Schedule amends the Health Insurance Act 1973 (the Health Insurance Act) to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families.
This Schedule makes several amendments as a consequence of the repeal of family Allowance.
Family Allowance is currently used as a reference point in the Health Insurance Act 1973 (the HIA) in working out who should be declared as a disadvantaged person. The purpose of these amendments is to ensure that the changes achieved by the A New Tax System (Family Assistance) Bill 1999 (the Family Assistance Bill) do not have the undesired consequence that:
- •
- people who meet the current criteria of a disadvantaged person become ineligible; and
- •
- people who do not currently meet the criteria are declared eligible.
The amendments change terms and definitions contained in HIA that were relevant prior to the abolition of family allowance. Those provisions are changed so that the terms and definitions now reflect those introduced by the Family Assistance Bill.
Schedule 8 - Health Insurance Commission Act 1973
This Schedule amends the Health Insurance Commission Act 1973 (the HIC Act) to make various amendments that are consequential on the child care benefit element of the new family assistance structure.
The HIC Act contains several references to the Commissions child care cash rebate functions. These functions currently arise (through section 8BA of the HIC Act) under the Childcare Rebate Act 1993 , which is to be repealed altogether under the family assistance package (see item 3 of Schedule 2 to the First Consequential Act).
Because of that repeal, this Schedule also repeals the references in the HIC Act to those functions.
Although there will still be some transitional functions for the Commission in this area for a number of months after the commencement of the family assistance package, this will be dealt with by regulation, along with other transitional matters.
Schedule 9 - Veterans Entitlements Act 1986
This Schedule amends the Veterans Entitlements Act 1986 (the Veterans Act) to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families.
The amendments made by this Schedule are to replace existing references in the Veterans Act relating to family allowance with equivalent references under the new family assistance structure, to omit various provisions or references to family allowance that will no longer be appropriate, or to add to appropriate provisions in the Veterans Act new references to family assistance payments and concepts, including definitions of those new elements and legislative references.
Schedule 10 - Income tax laws
The Family Assistance Actcontains the eligibility criteria and rate calculators used for determining the amount of family tax benefit a family is eligible to claim from the Family Assistance Office (FAO). The FAO is a joint venture between the Australian Taxation Office (ATO), Centrelink and the Health Insurance Commission (HIC).
The First Consequential Act, which accompanied the Family Assistance Act, contains amendments relating to the repeal of the various tax, child care and social security benefits that are being replaced by the new family assistance payments. Specifically, the First Consequential Act repeals family tax assistance, dependent spouse rebate (with child), sole parent rebate, child care rebate, child care assistance, family tax payment, family allowance, maternity allowance, maternity immunisation allowance and part of the parenting payment.
The proposed amendments contained in Schedule 10 to this Bill, which are explained here, are consequential to the replacement of the tax, child care and social security benefits with payments under the new family assistance scheme. The Bill also contains amendments to correct technical errors that occurred in the Child Care Payments (Consequential Amendments and Transitional Provisions) Act 1997 and the A New Tax System (Bonuses for Older Australians) Bill 1999.
Claims for family tax benefit through the tax system
People entitled to family tax benefit who choose to obtain their benefit through the tax system in a lump sum may also choose to claim reduced fortnightly tax instalment deductions (TIDs) in anticipation of their benefit at the end of the year of income. Under the current law, provisional tax is a counterpart to the TID system. Generally, where a taxpayer is able to reduce their TIDs in anticipation of a benefit, they may also have the benefit taken account of in the determination of their provisional tax liability.
As foreshowed by the Government on 13 August 1998 in its tax reform policy document, Tax Reform: not a new tax, a new tax system: The Howard Governments Plan for a New Tax System, the provisional tax system will be replaced by the income tax instalment aspects of the new Pay-As-You-Go (PAYG) system from 1 July 2000. On account of this, consequential amendments to the provisional tax provisions in the Income Tax Assessment Act 1936 have not been made. However, the new system will allow taxpayers claiming the family tax benefit through the tax system to have the benefit taken into account in determining their PAYG instalment liability.
Amendments to the Fringe Benefits Tax Assessment Act 1986 (FBTAA)
Section 47 of the FBTAA specifically exempts a number of residual benefits from fringe benefits tax. Certain recreational or child care facilities provided by employers, or an associate of an employer, for the benefit of employees, and certain contributions to secure priority of access to child care facilities, are exempt residual benefits under section 47.
Items 1 to 6 amend paragraph 47(8)(a) as a result of the repeal of the Child Care Payments Act 1997 and replace the types of care covered by the exemption with relevant references to the Family Assistance Administration Act. The proposed amendments ensure that the provision of residual benefits in the form of priority access to child care facilities under both the former child care scheme and the new family assistance scheme remain exempt from fringe benefits tax.
Amendments to the Income Tax Assessment Act 1936 (ITAA36)
Item 8 inserts new paragraph 16(4)(fb) to enable the Commissioner, Second Commissioner, Deputy Commissioner or person authorised by him to communicate information relating to income tax to the Secretary of the Department of Family and Community Services for the purpose of the administration of the Family Assistance Administration Act.
New paragraph 16(4)(fb) will allow the ATO to give information to Centrelink and the HIC, who are partners with the ATO in the FAO joint venture, for the purpose of administering the new family assistance scheme.
The free flow of information between participating joint venture agencies will ensure that the new scheme is administered efficiently and accurately by the FAO. For example, there is an income test for the new family assistance that is based on taxable income. Since taxable income cannot be accurately determined until after the end of a tax year, claims made during a year can use an estimate of taxable income. This then requires a reconciliation of actual taxable income against the estimate to work out whether a person was paid too little, or too much, family assistance. Details of taxable income ascertained by the ATO after processing of tax returns will be used to reconcile payments at the end of the income year to which claims relate.
Item 7 amends paragraph 16(4)(fa) to correct a technical error which occurred as a result of amendments to this paragraph by the Child Care Payments (Consequential Amendments and Transitional Provisions) Act 1997 . The amendment will restore paragraph 16(4)(fa) to its former position by allowing the Commissioner to provide information to the HIC as to whether a registered carer within the meaning of the Childcare Rebate Act 1993, or an application for registration as a registered carer has a tax file number. The paragraph does not authorise the provision of tax file numbers to the HIC.
The proposed amendment also ensures information in relation to registered carers under the former childcare rebate scheme will be able to be provided to the HIC despite the repeal of the childcare rebate.
Amendments resulting from the repeal of family tax assistance
Items 9 to 16 propose to amend section 23AF, section 23AG and section 156 to exclude references in those sections to family tax assistance, since family tax assistance is being abolished and replaced by the new family tax benefit.
Separate net income is a concept used in tax law (different from taxable income) in relation to dependant and certain other rebates. A taxpayers entitlement to certain rebates (such as the medical expenses rebate) will depend, amongst other things, on the level of separate net income of the taxpayers dependants.
Items 17 to 21 make consequential amendments to the definition of separate net income in subsection 159J(6) of the ITAA36 as a result of the replacement of certain social security payments listed in the definition by the new family assistance payments.
Item 18 specifically excludes family assistance payments, that is, child care benefit, family tax benefit, maternity allowance and maternity immunisation allowance, from the definition of separate net income. The amendment ensures that a payment of family assistance to a taxpayers spouse will not be included in the calculation of the spouses separate net income for the purpose of determining the taxpayers entitlement to other rebates such as the medical expenses and zone rebates.
Items 17, 18, 19, 20 and 21 further amend the definition of separate net income to enable amounts of family tax payment, maternity allowance, maternity immunisation allowance, family allowance, family allowance supplement, non-benefit PP (partnered) and certain exempt parts of benefit PP (partnered) paid after 1 July 2000, for a period of entitlement before this date, to continue to be excluded from the definition of separate net income. Item 20 also repeals references to child care assistance and child care rebate paid under the Child Care Payments Act 1997 from the definition as these benefits were never paid under this Act.
Tax file numbers and family assistance
Item 22 inserts new paragraph 202(m) to allow a tax file number system to be established to facilitate the administration of the Family Assistance Administration Act. This will allow the FAO to collect tax file numbers from persons who lodge a claim for family assistance payments. The use of tax file numbers will facilitate data-matching of information between the ATO, Centrelink and the HIC.
The sharing of information between the joint venture agencies will ensure the seamless operation of the FAO. It will also facilitate the reconciliation of family assistance payments after the end of the income year to ensure that correct payments have been made.
Tax file number and bonuses for older Australians
Item 22 also inserts new paragraph 202(n) to allow a tax file number system to be established to facilitate the administration of the A New Tax System (Bonuses for Older Australians) Act 1999 (the Bonus Act). The proposed amendment corrects the omission of the amendment in the Bonus Act. That Act (which is still in the form of a Bill presently before Parliament) will provide for the payment of special bonuses to older Australians to preserve the value of their savings. There are three agencies that will pay bonuses, the ATO, Centrelink and the Department of Veterans Affairs. This amendment will allow tax file numbers to be collected with claims for bonuses. Subsequent data-matching between the ATO, Centrelink and the Department of Veterans Affairs will ensure that claims are not made with more than one agency.
Currently, subsection 251R(5) of the ITAA36 establishes that where parents of a child are living separately the child is treated as a dependant of the parent who is entitled to receive family allowance. Item 23 amends this subsection to replace the reference to family allowance with the new family tax benefit. The amendment will ensure that where parents of a child are living separately, the child will be treated as a dependant for Medicare levy purposes of the parent who is entitled to receive family tax benefit.
Amendments to the Income Tax Assessment Act 1997 (ITAA97)
Items 28 and 29 amend the list of tax offsets in section 13-1 of the ITAA97 to exclude the references to the sole parent rebate as a consequence of the repeal of the rebate.
Exempt income refers to amounts of ordinary income and statutory income which are specifically excluded from income tax. Item 46 inserts new Subdivision 52-G in the ITAA97. New section 52-150 provides that payments of family tax benefit, child care assistance, maternity immunisation allowance and maternity allowance are exempt from income tax.
Section 11-15 contains a list of ordinary income and statutory income which is exempt if derived by certain entities. Item 24 amends this section to include references to the new family assistance payments which are exempt from income tax under new section 52-150.
The table contained in section 52-10 outlines the income tax treatment of social security payments. Section 52-15 contains a table which helps you work out the exempt portion of supplementary amounts of social security payments. The table contained in section 52-40 lists the provisions of the Social Security Actunder which exempt or partially exempt social security payments are made.
Items 31 to 44 amend the tables in sections 52-10, 52-15 and 52-40 to delete references to family allowance, family tax payment, parenting payment (non-benefit PP (partnered)), maternity allowance, maternity immunisation allowance and certain amounts of parenting payment (benefit PP (partnered)) as a consequence of their replacement with the new family assistance payments. Sub-item 69(1) ensures that if any of these payments are received after 30 June 2000 in respect of an entitlement before that date, the amount will remain exempt from income tax.
Section 53-10 and paragraph 53-15(c) provide that so much of the part of an exceptional circumstances relief payment as is included because of paragraph 24A(1)(c) of the Farm Household Support Act 1992 , which related to family allowance, is exempt from income tax. Items 47 and 48 repeal paragraph 53-15(c) as a result of the repeal of paragraph 24A(1)(c) of the Farm Household Support Act 1992 . Sub-item 69(1) ensures that where one of these payments is received after 30 June 2000 in respect of an entitlement before that date, the amount will remain exempt from income tax.
Section 52-120 currently provides that payments of child care assistance and child care rebate under the Child Care Payments Act 1997 are exempt from income tax. Item 45 proposes to repeal this section as these payments were never made under this Act. As explained earlier, the child care benefit, which replaces these two payments, will be exempt from income tax by proposed new section 52-150. As the table in section 11-15 currently includes references to these payments, items 25 and 26 propose to omit these references.
Tax deductibility of fees and commissions to recognised tax advisers
One option for people entitled to the new family assistance is to obtain their benefit through the tax system. Many taxpayers use tax advisers to help them lodge their tax returns. Fees for tax return preparation and for advice related to a persons tax affairs more generally, are tax deductible. It is proposed to provide a tax deduction for fees related to family tax benefit claimed through the tax system.
Item 30 , inserts proposed new section 25-7 in the ITAA97. Section 12-5 of the ITAA97 list the provisions that contain rules about specific types of deductions. Item 27 amends this section to insert a reference to new section 25-7. This will direct a user to new section 25-7 when they wish to know if they are able to claim a deduction for advice in relation to family tax benefit.
New section 25-7 will allow taxpayers to claim a tax deduction in respect of a fee or commission they incur for obtaining advice from a recognised tax adviser in relation to their claim for family tax benefit. To be entitled to the deduction the claim must be lodged with the ATO for determination.
The cost of obtaining advice from a recognised tax adviser in relation to a review of a determination for family tax benefit made by the ATO will also be deductible under the new section.
A recognised tax adviser is defined in section 995-1 of the ITAA97 and includes a registered tax agent, a solicitor and a barrister enrolled with the federal court, or a court of a state or territory.
Amendments resulting from the repeal of the various tax, child care and social security benefits
Items 47 to 52 omit references to family tax assistance from the primary producer averaging provisions in Division 392 of the ITAA97.
Items 53 and 54 amend section 405-5, which provides for a special rate of income tax on above-average special professional income, to omit a reference to family tax assistance.
Amendments to the Income Tax Rates Act 1986 (ITRA)
Items 55 to 62 make consequential amendments to the ITRA to omit references to family tax assistance as a result of its repeal.
Amendments to the Income Tax Rates Amendment Act (No. 1) 1997 (ITRAA)
Item 63 corrects a technical error that occurred in an amendment to paragraph 12(8)(a) of the ITRA in the ITRAA. The amendment commences immediately after the commencement of item 2 of Schedule 1 to the ITRAA. This enables the further amendment contained in item 56 to the definition of B in paragraph 12(8)(a) of the ITRA to be made.
Amendments to the Income Tax (Transitional Provisions) Act 1997
Item 64 repeals section 52-5 which relates to the exemption of payments of child care assistance and child care rebate under the Child Care Payments Act 1997 under section 52-120. As previously explained, section 52-120 is being repealed by item 45 .
Amendments to the Medicare Levy Act 1986 (MLA)
Section 8 of the MLA provides relief to certain low income earners from the Medicare levy. Item 65 amends subsection 8(6) of the MLA to replace the reference to family allowance with family tax benefit. This amendment will allow sole parents to increase the family income threshold by $2,100 for each child or student considered a dependant under section 159J of the ITAA36 for whom they receive family tax benefit.
Amendments to the Taxation Administration Act 1953 (TAA)
A penalty is imposed under sections 8WA and 8WB of the TAA for the unauthorised collection, recording, use or disclosure of a tax file number, unless the use of a tax file number is specifically authorised under these sections.
Items 66 and 67 make consequential amendments to paragraphs 8WA(1)(b), 8WB(1)(d) and 8WB(1)(e) of the TAA as a result of insertion of proposed new paragraphs 202(m) and 202(n) in the ITAA36 by item 22 .
As explained earlier,paragraph 202(m) will allow a tax file number system to be established to facilitate the administration of the Family Assistance Administration Act. Paragraph 202(n) will allow a tax file number system to be established to facilitate the administration of the A New Tax System (Bonuses for Older Australians) Act 1999 .
The proposed amendments to sections 8WA and 8WB will ensure that officers of the FAO joint venture agencies and the Department of Veterans Affairs, family tax claimants, bonus claimants and recognised tax advisers who record, collect, use or disclose tax file numbers for the purposes of administering or complying with obligations under the family assistance and bonuses for older Australians schemes will not be in breach of sections 8WA and 8WB.
The amendments, except for those relating to the provision of information to the HIC, apply to assessments in relation to the 2000-2001 year of income and later years of income. [Sub-item 68(1)]
Sub-item 68(2) ensures that the Commissioner can continue to provide information to the HIC relating to registered carers under the childcare rebate scheme after 8 December 1997, which is the date from which the technical error in paragraph 16(4)(fa) applied. As discussed in the preceding paragraphs relating to item 7, the proposed amendment ensures the Commissioner will be able to continue to provide information to the HIC to maintain the effective administration of the childcare rebate scheme.
Schedule 11 - Other Acts
This Schedule amends four other Acts to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families, and to make two specific transitional provisions.
A New Tax System (Family Assistance) (Consequential and Related Measures) Act (No. 1) 1999
Item 1 adds a new paragraph (c) to section 4 of the First Consequential Act, which is the transitional regulation making provision for the family assistance package. The new paragraph is to put beyond doubt that transitional regulations may be made in respect of the making of regulations under the Family Assistance Administration Act as well as in respect of the enactment of that Act (and the amendments made by, or enactment of, the three other Acts specified in section 4).
Item 2 inserts a new section 5 into the First Consequential Act.
The new section provides a special rule to give legal authority to the use or disclosure of information about a person, but only if this is done for the purposes of the transition to the new family assistance package. Such legal authority will prevent a breach of the Information Privacy Principles set out in the Privacy Act 1988 in the transitional period for family assistance. Certain information may need to be exchanged between the three agencies that will be involved in setting up the new family assistance structure (Centrelink, the Australian Taxation Office and the Health Insurance Commission). These agencies may need to compare current customer lists to identify customers who are shared between one or more of the agencies so that those customers receive only one letter about the new structure instead of, potentially, three.
This new section will commence earlier than the rest of the family assistance package to enable the transitional correspondence to be handled in sufficient time for the commencement of the new arrangements. It will commence either on 1 January 2000, immediately after the commencement of section 4 of the First Consequential Act or on Royal Assent to this Bill, whichever happens later.
Item 3 omits some words from the definition of income in section 139L of the Bankruptcy Act 1966 . The words, relating to family allowance, occur in the provisions relating to the income contributions scheme. Under this scheme, bankrupts who earn income above a threshold amount are required to contribute to their bankrupt estate. In determining this amount, certain amounts are currently excluded - one of them is a payment of family allowance.
This amendment simply omits that reference. A regulation under paragraph (b)(v) of the definition of income in section 139L will deal with the question of which forms of family assistance should be excluded from income for this purpose. This regulation will be made and tabled before the commencement of the family assistance package.
Safety, Rehabilitation and Compensation Act 1988
Item 4 repeals a paragraph in this Act referring to family allowance and substitutes a paragraph referring to the equivalent under the family assistance structure, family tax benefit Part A.
Seafarers Rehabilitation and Compensation Act 1992
Item 5 repeals a paragraph in this Act referring to family allowance and substitutes a paragraph referring to the equivalent under the family assistance structure, family tax benefit Part A. It also repeals and substitutes two adjacent paragraphs to make the provisions work correctly.