Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)SCHEDULE 3-AMENDMENTS RELATING TO YOUTH ALLOWANCE
Summary of proposed changes
This measure gives effect to the 2000-01 Budget initiative to provide that 75% (instead of the existing 50%) of the value of a persons interest in farm and business assets will be disregarded under the youth allowance family assets test. In doing so, this will directly increase the Government's support of families, particularly those from rural areas.
Explanation of the changes
The youth allowance assets test is provided by Subdivision AB of Division 2 of Part 2.11 of the Social Security Act 1991 . If a person is not independent, a family assets test applies through the higher assets value limit and the provision to count the value of the assets of the persons family members (see paragraphs 547C(1)(a) and 547D(c)).
If paragraph 547D(c) applies, ie, if the family assets test applies because the person is not independent, there is a special provision in section 547G on how to value the assets of a business in which the person or a family member is engaged. Under subsection 547G(2), 50% of the value of those assets is currently disregarded.
Under this measure, this exemption is increased to 75%, as provided by item 1 . Families in general, and rural families in particular, will benefit from this measure. Youth allowance will now be payable to young people previously excluded from the payment. Furthermore, fares allowance and the higher (category 1 student) level of student financial supplement may be available, if the young person is a full-time tertiary student.
This amendment commences on 1 January 2001.
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