House of Representatives

Explanatory Memorandum

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

SCHEDULE 4-MISCELLANEOUS AMENDMENTS

Summary of proposed changes

The following amendments are made by Schedule 4 :

•

the period for data-matching of income details between the Australian Taxation Office and Centrelink will be extended from 2 to 4 years; and

•

the terms of the Social Security Agreement between the United Kingdom and Australia will be preserved for new Australian residents who arrived in Australia on or before 1 March 2000.

Explanation of the changes

Period for data-matching of income details

The Data-matching Program (Assistance and Tax) Act 1990 (the Data-matching Act) provides for the matching agency (in this case Centrelink on behalf of the Department of Family and Community Services) to run a Data-matching Program against data from a source agency (in this case the tax agency) under Part 2 of the Data-matching Act.

Section 6 provides for the matching of data in accordance with the Data-matching Program made up of data matching cycles the steps in which are set out in section 7. Section 7 provides for six steps to be followed in a data matching cycle.

At present, matching of income details is limited to the two most recently completed financial years. However, as a tax assessment can be delayed or maybe reassessed beyond this period, matching is being extended from 2 to 4 years in alignment with the period for Australian Tax Office taxable income reassessments.

Accordingly, item 1 amends step 3 in section 7 of the Data-matching Act to replace the existing reference to "2 financial years with a reference to "4 financial years.

This amendment commences on 1 January 2001.

Social Security Agreement with the United Kingdom

On 13 July 1999, the Minister for Family and Community Services announcedAustralia's intention of terminating the international agreement on social security between Australia and the United Kingdom of Great Britain and Northern Ireland (the Agreement).

Under Article 26 of the Agreement, the Australian Government provided the United Kingdom Government, through the diplomatic channel, with a notice of its intention to terminate the Agreement. The note was received by the United Kingdom Government on 1 March 2000. The Agreement will therefore terminate from 1 March 2001. The last operative day of the Agreement will be 28 February 2001.

Article 26 provides that the Agreement will continue to have effect for all persons who by virtue of the Agreement are in receipt of benefits at the date of termination, or who have lodged a claim and would be entitled to receive benefits at the date of termination.

In addition, the Government has decided that people who migrated to Australia on or before 1 March 2000 and who would, if the Agreement had not been terminated, have been able to access the Australian social security system under the Agreement should continue to have that access as if the Agreement was still in force.

The protection provision inserted into Part 2 of the Social Security (International Agreements) Act 1999 by item 2 achieves this outcome. This amendment commences on 1 March 2001.