Explanatory Memorandum
(Circulated by authority of the Minister for Education and Youth, the Honourable Alan Tudge MP)OUTLINE
The purpose of the Family Assistance Legislation Amendment (Early Childhood Education and Care Coronavirus Response and Other Measures) Bill 2021 (the Bill) is to respond to the impacts of the COVID-19 pandemic on the early childhood education and care (ECEC) sector and families, by expanding the circumstances in which the Commonwealth can pay business continuity payments (BCPs) to approved child care providers, ameliorating the child care subsidy (CCS) debt consequences of tax return lodgement deadlines on families, and supporting the ECEC Relief Package.
To extend the range of strategies available to the Government to respond to emergencies and disasters that adversely affect the delivery of child care to children of essential workers and others, the Bill will expand the circumstances in which business continuity payments (BCPs) can be paid to approved child care providers.
Amendments to the A New Tax System (Family Assistance) (Administration) Act 1999 (Family Assistance Administration Act) in Part 1 of Schedule 1 to the Bill allow the Secretary to make payments of BCPs where a child care service has been adversely affected by an emergency or disaster that has been declared for the purposes of payment of Disaster Recovery Allowance or Australian Government Disaster Recovery Payments, or that has been specified in the Child Care Subsidy Minister's Rules 2017 (Minister's Rules). The Minister's Rules will be able to specify any additional requirements relating to those emergency BCPs, including whether CCS is or is not payable in addition to the BCPs, the period during which the BCPs are payable, and the way in which the BCPs are calculated.
The amendments in Part 7 of Schedule 1 to the Bill will allow the amount of CCS that an individual was entitled to for a financial (income) year to be reconciled by reference to their adjusted taxable income (ATI) for that year, where they finally have their ATI assessed after the 'second deadline' of that year (normally, 2 years after the end of the relevant income year). Currently, this reconciliation process can only occur before the second deadline, and if it is not done by that time, the individual is taken never to have been entitled to CCS for the relevant income year - resulting in the individual owing a debt for the entire year's worth of CCS.
This post-second deadline reconciliation process will enable the individual's debt to be reduced, including to nil, although it will not entitle the individual to any additional payments of CCS for the relevant income year.
To address the threat to the ECEC sector posed by the COVID-19 pandemic, the Government instituted an emergency relief payments scheme under the ECEC Relief Package in place of the normal CCS and additional child care subsidy (ACCS). The emergency relief payments scheme operated from 6 April to 12 July 2020. Payments were paid as BCPs under Division 6 of Part 8A of the Family Assistance Administration Act, and during this period no CCS or ACCS was payable.
Payment of CCS and ACCS resumed from 13 July 2020, and the Government put in place additional temporary measures to provide additional support to the ECEC sector and assist families to access affordable child care.
The provisions in Part 6 of Schedule 1 will support the operation of the ECEC Relief Package, by:
- •
- ensuring that BCPs paid during the period of the package (6 April to 12 July 2020 - the "relevant period") do not need to be automatically recovered from approved providers by setting them off against future CCS payments to those providers;
- •
- allowing the Minister's Rules to specify circumstances in which BCPs paid to providers during the relevant period are to be debts (for example, where they were overpayments or paid to providers who were ineligible);
- •
- ensuring that the relevant period does not count towards the 14-week period of non-attendance after which the enrolment of a child at a service automatically ceases; and
- •
- relieving approved providers of the obligation under the Family Assistance Administration Act to provide weekly session reports during the relevant period.
Finally, the Bill will make minor amendments to the family assistance law to:
- •
- clarify that debts are raised against providers whose approvals are cancelled and who are subsequently paid amounts of CCS (fee reduction amounts) during external review of the cancellation decisions that are ultimately unsuccessful;
- •
- clarify that all decisions under the family assistance law in relation to approved providers are subject to single review by the Administrative Appeals Tribunal (AAT);
- •
- enable the Secretary to delegate their powers to administer child care grant agreements to the departments administering the Australian Government's Grants Hubs;
- •
- address minor drafting errors in amendments made by the Family Assistance Legislation Amendment (Improving Assistance for Vulnerable and Disadvantaged Families) Act 2020 that will commence on 1 July 2021; and
- •
- enable the Secretary to back-date the start of child care provider approvals to a date before the provider made a valid application for approval, in special circumstances.
FINANCIAL IMPACT STATEMENT
The Bill expands the power to make BCPs for disasters and emergencies prescribed by Minister's Rules, which do not need to be offset against future CCS payments. It is not possible to quantify the financial impact of this expanded power as the parameters for future BCPs (e.g. amount, rate and period and eligible recipients) will be determined by future Minister's Rules (being a disallowable instrument).