House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Family and Community Services, Senator the Hon Kay Patterson)

Outline and financial impact

Outline

This Bill makes several amendments to the family assistance law, and further amendments to the social security law and the Veterans' Entitlements Act 1986 in a number of family assistance related measures, as set out below.

Method of calculating Part B rate for those who return to paid work after the birth of a child etc.

As provided by the 2004 Budget, the bill makes amendments to protect family tax benefit Part B for a secondary earner in a family returning to the workforce after the birth of a child.

Maternity payment

In a 2005 Budget measure, the maternity payment eligibility criteria are being expanded for adopting parents to cover children adopted under age two, including from overseas. Amendments are also being made to clarify that maternity payment is not available if the former maternity allowance has already been paid for the child.

Family assistance amendments

Several family assistance measures are addressed:

•

ensure that a 'non-lodger' debt that arises because the relevant tax returns have not been lodged for a particular entitlement year can be set aside if the customer separates from his or her partner in the second income year after the end of the entitlement year and provided it is only the ex-partner's tax return that has not been lodged - the customer's family tax benefit entitlement (including supplement) would be determined under an interim reconciliation on the basis of the customer's actual and ex-partner's estimate of income for the entitlement year;

•

provide for the write-off of a family tax benefit or child care benefit non-lodger debt where separation occurs more than two years after the end of the entitlement year and reconciliation cannot occur for the entitlement year solely because the ex-partner has not lodged a tax return;

•

clarify the meaning of 'partner' as used in the non-lodger provision applicable to child care benefit, consistent with the equivalent family tax benefit provision;

•

ensure that eligibility for rent assistance in a lump sum claim made in the second lodgment year after the relevant income year is treated the same as in a claim made in the first lodgment year, that is, the claimant would only be eligible for rent assistance for a past period if fortnightly payments of FTB are claimed at the same time;

•

preclude a family tax benefit advance for certain child support debtors; and

•

introduce an order of reduction rule for family tax benefit Part B, whereby the application of the income test affects the components of the Part B rate in a specified sequence.

Rent assistance

The bill addresses two measures relating to rent assistance:

•

prevent duplicate payments of rent assistance between family tax benefit on the one hand and social security or veterans' entitlements payments on the other; and

•

provide for cancellation of the rent assistance portion of a person's family tax benefit or social security payment for failing to submit a rent certificate review (rather than cancellation of the whole payment as currently provided).

Financial impact statement

Schedule 1 - Method of calculating Part B rate for those who return to paid work after the birth of a child etc.

Commencement: 1 July 2005

Financial impact:

Schedule 2 - Maternity payment

Age extension

Commencement: 1 July 2005

Financial impact:

No maternity payment if maternity allowance paid

Commencement: Royal Assent

Financial impact: nil

Schedule 3 - Family assistance amendments

Setting aside certain non-lodger debts

Commencement: 1 January 2006

Financial impact:

Writing off non-lodger debts

Commencement: 1 January 2006

Financial impact:

Clarify meaning of 'partner'

Commencement: Royal Assent

Financial impact: Total resourcing - nil

Rent assistance and claims for FTB for a past period

Commencement: 1 July 2005

Financial impact: Total resourcing - nil

Precluding FTB advance for child support debtor

Commencement: 1 January 2006 (part), Royal Assent (remainder)

Financial impact: Total resourcing - nil

Order of reductions for FTB Part B rates

Commencement: 1 January 2005

Financial impact: Total resourcing - nil

Schedule 4 - Rent assistance

Duplicate rent assistance payments

Commencement: 1 July 2005 or Royal Assent, whichever later

Financial impact:

Rent certificates

Commencement: Royal Assent

Financial impact: Total resourcing - nil