House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Amanda Vanstone)

Outline and financial impact statement

This Bill gives effect to most of the Family and Community Services and Veterans' Affairs 2003 Budget measures that require legislation. The Bill also gives effect to a 2001 Budget measure upon which the 2003 measure relating to recovery of overpayments arising from lump sum foreign pension payments depends. Finally, the Bill makes a small number of non-Budget minor policy or technical changes.

Budget measures

Excluding payments for National Socialist persecution from income

Currently, payments made under the laws of Germany or Austria, by way of compensation to victims of National Socialist persecution, are excluded from income under the social security and veterans' entitlements income tests. More countries are now making such payments, eg, France, the Netherlands and Belgium. This Bill will extend the current income exclusion to any such payment, regardless of the country making it, so that this beneficial treatment under the income test is available to all who receive the payment.

Commencement: Royal Assent

Access to information by Centrelink

The main cause of incorrect social security payments is failure to disclose income and assets, including in cases of serious fraud. Most undisclosed earnings are detected by the comprehensive data matching arrangements that are currently in place. Centrelink's compliance activities are to be enhanced under this Bill to allow limited access to newly available data sources relating to taxation and financial transaction activities, but only for the purpose of the administration of the social security law.

Commencement: Royal Assent

Assurances of support

Amendments are made to improve the operation of the Assurance of Support Scheme and simplify arrangements for people who provide an assurance of support.

Under the new arrangements, the Department of Immigration and Multicultural and Indigenous Affairs will continue to determine which new migrants are subject to an assurance of support. However, once this determination is made, the assurance of support will be issued under the social security law and Centrelink will administer the Scheme, on behalf of the Department of Family and Community Services. The new arrangement will enable Centrelink, as a single point of contact, to provide people giving assurances with more comprehensive information regarding the implications of their commitment to provide financial support to the new migrant. Assurers will benefit from easy access to clear advice provided in their preferred language through the Centrelink network.

Improved administration of the Scheme will result in fewer migrants claiming income support during their assurance of support period and, if claims are made, in improved recovery of assurance of support debts from the assurers.

Commencement: 1 July 2004

Stopping payment for people absent from Australia without notice and comparable foreign payment debt recovery

Amendments are made to strengthen the arrangements for ceasing payment to people travelling overseas who do not notify their departure. Under the new rules, there would be capacity to suspend payment where a person leaves Australia without notifying the departure and the Secretary finds out about the departure before the end of the person's portability period. The person's entitlement to payment would then be reviewed and, depending on the outcome of the review, payment would be either fully restored or cancelled.

This Bill also amends the social security debt recovery provisions to allow for the full recovery of overpayments that arise when a foreign pension payment is made as a lump sum in arrears. Amendments are made to enable recovery from the person who receives the lump sum foreign pension payment and from the person's partner (where relevant).

Commencement: 1 July 2004

Reducing portability period

This Bill reduces the allowable period of temporary overseas absence for portable social security payments from 26 weeks to 13 weeks. The new portability period will also apply to disability support pension although there will be capacity to grant an unlimited portability period to a severely disabled disability support pensioner in defined circumstances.

A person's rate of family tax benefit is subject to modification if the person or an FTB child of the person is absent from Australia for longer than 26 weeks. Amendments are made to reduce this allowable period of absence to 13 weeks.

Commencement: 1 July 2004

Related or other non-Budget measures

Access to information by the Child Support Agency

This Bill restores access by the Child Support Agency (part of the Department of Family and Community Services) to financial transaction information held in the AUSTRAC database. The Agency lost this access when it ceased to be part of the Australian Taxation Office following the 1998 changes in administrative arrangements. The restored access is, as it was previously, only for the administration of the child support legislation, including in cases of substantial avoidance of child support liabilities.

Commencement: Royal Assent

Technical corrections

This Bill also contains some minor technical amendments, commencing at various times as appropriate. There is no financial impact from these.