House of Representatives

Explanatory Memorandum

Jenny Macklin Mp (Minister for Families, Housing, Community Services and Indigenous Affairs)

OUTLINE

This bill will amend the social security law, the family assistance law, the Income Tax Assessment Act 1936 , the Income Tax Assessment Act 1997 , the Farm Household Support Act 1992 and the Veterans' Entitlements Act 1986 . Primarily, it will provide for household stimulus payments in the form of a single income family bonus, a back to school bonus, a training and learning bonus (including an education entry payment supplement), and a farmers hardship bonus. The bonus in each case is $950, except for the single income family bonus, which is $900.

The bonuses are a further substantive step towards supporting the Australian community and economy during the current global financial crisis.

Training and learning bonus and farmers hardship bonus

The bill provides for a training and learning bonus and farmers hardship bonus of $950. Recipients of youth allowance, austudy payment, special benefit, sickness allowance, ABSTUDY payment and education allowance under the Veterans' Children Education Scheme or the Military Rehabilitation and Compensation Act Education and Training Scheme may qualify for the training and learning bonus. There are also provisions to qualify certain individuals who receive family tax benefit Part A, who are not entitled to a back to school bonus, but have children aged between 21 and 24 who are full-time students, to receive the training and learning bonus. Additionally, people in receipt of certain financial assistance to farmers and farm-related small business will also be eligible for a farmers hardship bonus of $950.

Education entry payment

The bill will reduce the qualification period for the education entry payment from 12 months to four weeks of continuous receipt of income support payments, and will enable recipients of youth allowance (other) to access education entry payments. The bill also provides for an education entry payment supplement of $950 payable to people eligible for the education entry payment under the Social Security Act 1991 or the Veterans' Entitlements Act 1986 . These measures are taken to have commenced on 1 January 2009, and they will end on either 30 June 2010 or a date determined by the Minister.

Back to school bonus and single income family bonus

The bill will provide for two new lump sum payments for families.

A back to school bonus of $950 will be available for each FTB child in a family aged 4 to 18 who attracts family tax benefit (FTB) Part A for 3 February 2009. This bonus will also be available to people who receive disability support pension or carer payment for 3 February 2009 where the recipient is aged less than 19 on that date.

A single income family bonus of $900 will be available for a family that is entitled to FTB Part B for 3 February 2009, regardless of the age of the children.

If FTB for 3 February 2009 is shared between two people under the usual rules for that payment, the relevant new lump sum payment will be similarly shared.

Administrative scheme for household stimulus payments

The bill includes provisions to enable administrative schemes to be established. In broad terms, the purpose of each administrative scheme will be to provide payments in circumstances where the statutory regime of household stimulus package payments provided for in Schedules 1, 2, and 3 does not necessarily produce an appropriate result. The relevant Minister is able to determine the details of the scheme by legislative instrument.

Other amendments

The bill will amend certain Acts to provide further consequential amendments relating to the household stimulus package payments provided for in this bill. Notably, the amendments ensure that the payments will not count as income for social security, family assistance, farm household support and veterans' entitlements purposes, and will be income tax-free. The amendments will also ensure that, where an individual is subject to income management, any household stimulus package payment they receive will be income managed at 100 per cent.

Financial impact statement

Resourcing