House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 4 - Payment of grants and benefits

Outline of Chapter

4.1 This Chapter explains the provisions dealing with claims and the assessment and payment of grants and benefits. These provisions are contained in Part 4 of the PGBA Bill.

Detailed explanation of Part 4

Claim periods

4.2 Grants and benefits are payable for claim periods applicable to each grant or benefit scheme. Claim periods for each grant or benefit must be determined by the Commissioner [subclause 14(1)] . The Commissioner may also determine the claim period for a particular entity or kind of entity in relation to a grant or benefit scheme [subclauses 14(2) and 14(3)] .

Advances on account of grants or benefits

4.3 The Commissioner will be authorised to make advances on account of a grant or benefit that may become payable. [Subclause 13(1)]

4.4 If you receive an advance of a grant or benefit that may become payable you must repay an amount if:

•

the amount of the advance is greater than the actual amount of the grant or benefit; or

•

you do not make a claim for the grant or benefit within 28 days after the end of the relevant payment period.

[Subclauses 13(2) and (3)]

4.5 In the former case, the excess amount is due and payable at the time you make the claim. In the latter, the entire amount of the advance is due and payable on the 28th day after the end of the relevant payment period. [Subclause 13(4)]

4.6 The Commissioner must not make an advance unless requested to do so and the amount must not exceed the amount requested. [Subclause 13(5)]

4.7 The Commissioner will be able to make written guidelines for deciding whether to make advances of grants or benefits. The Commissioner will be legally bound by those guidelines. [Clause 14]

Claims

4.8 Your entitlement to a grant or benefit does not crystallise until you make a claim for payment [subclause 15(1)] . Your claim must be made in the form approved by the Commissioner and contain such information as may be prescribed in the regulations [subclause 15(2)] . Your registration does not override the requirements for making claims [subclause 15(3)] .

4.9 A claim must be signed unless it is transmitted electronically in which case it must contain an electronic signature approved by the Commissioner [paragraph 15(2)(d) and subclause 15(6)] . Only one claim can be made for each claim period, although you can request the Commissioner to make an amended assessment to correct an assessment based on an incorrect claim [subclause 15(4)] . A claim must be made within 2 years after the end of the claim period in which the act or transaction giving rise to the grant or benefit entitlement occurred [paragraph 15(2)(e)] .

4.10 The Commissioner may request further information about your claim within 28 days after the claim was made. The Commissioner need not consider your claim until the information is provided. [Clause 16]

Assessment of claim

4.11 The Commissioner must make an assessment of your claim [clause 17] and give you notice of that assessment. However, failure to give you notice does not affect the validity of the assessment [subclause 19(1)] . The Commissioner may give the notice to you in an electronic form if you made your claim electronically [subclause 19(2)] .

4.12 The Commissioner may rely on statements, made by or on behalf of a claimant, in a claim or otherwise [clause 18] , and is able to amend an assessment at any time [subclause 20(1)] . If you are liable to pay an amount as a result of an amended assessment that amount is taken to have been due and payable at the time of the original assessment [subclause 20(3)] . This means that the GIC will accrue from that time.

4.13 You can request the Commissioner to make an amended assessment, for instance, if you later discover an error made on a claim form [subclause 21(1)] . The Commissioner must comply with the request if it is made within 2 years of the end of the relevant claim period, or such further time as the Commissioner allows [subclause 21(2)] .

4.14 The production of an assessment notice is conclusive evidence that the assessment was properly and correctly made, except when the assessment itself is the subject of review proceedings. [Clause 22]

Payments

4.15 If you are entitled to a grant or benefit in respect of a payment period, that grant or benefit is a debt due to you by the Commonwealth and you may sue to recover it. [Subclause 23(1)]

4.16 Grants and benefits are payable to you in the manner determined by the Commissioner. [Subclause 23(2)]

Scheme debts

4.17 If a payment made to you exceeds your entitlement to the grant or benefit, the extent to which it exceeds your entitlement is an 'overpaymentdebt' payable to the Commissioner [clause 5 definition of overpayment debt] . An overpayment debt is categorised as a 'scheme debt'. A scheme debt may also include an amount of penalty that has been assessed, for example, if you made a false or misleading statement in a claim or to an officer performing functions in relation to the grant or benefit scheme [clause 5 definition of scheme debt] .

Recovery by set-off

4.18 If an entity has a scheme debt and is also entitled to one or more other grants or benefits the amount of the outstanding scheme debt may be offset against the entity's entitlement to those other grants or benefits. If the Commissioner applies an amount of grant or benefit in satisfaction of a scheme debt the grant or benefit so applied is taken to have been paid to the entity. [Clause 24]

4.19 The RBA provision in Part IIB of the TAA 1953 provide for credits to be allocated against other tax debts and any GIC amount outstanding. Similarly, an RBA surplus may be allocated against a scheme debt.